LSU ISDS 3115 Final

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. It is too expensive when volumes are low or flexibility is required. d. It is widely used for the manufacture of steel. e. Its costs are often known only after a job is done.

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

A Type II error occurs when a. a good lot is rejected b. a bad lot is accepted c. the population is worse than the LTPD d. the proportion of defectives is very small e. none of the above

b. a bad lot is accepted

Statistical process control charts a. display the measurements on every item being produced b. display upper and lower limits for process variables or attributes, and signal when a process is no longer in control c. indicate to the process operator the average outgoing quality of each lot d. indicate to the operator the true quality of material leaving the process e. none of the above

b. display upper and lower limits for process variables or attributes, and signal when a process is no longer in control

True/False: In MRP, a "bucket" refers to a fixed order quantity, such as an EOQ.

False

True/False: Increasing inventory exposes variability in production processes.

False

True/False: Process-oriented layouts typically have low levels of work-in-process inventory.

False

True/False: Work-in-process inventory is devoted to maintenance, repair, and operations.

False

In the make-or-buy decision, which of the following is a reason for making an item? a. management can focus on its primary business b. lower production cost c. inadequate capacity d. reduce inventory costs e. None of the above is a reason for making an item.

b. lower production cost

Producer's risk is the probability of a. accepting a good lot b. rejecting a good lot c. rejecting a bad lot d. accepting a bad lot e. none of the above

b. rejecting a good lot

A firm can effectively use its operations function to yield competitive advantage via all of the following except a. customization of the product b. setting equipment utilization goals below the industry average c. speed of delivery d. constant innovation of new products e. maintain a variety of product options

b. setting equipment utilization goals below the industry average

The number of kanbans is a. one b. the ratio of the reorder point to container size c. the same as EOQ d. one full day's production e. none of the above

b. the ratio of the reorder point to container size

The expected activity time in PERT analysis is calculated as a. the simple average of the optimistic, pessimistic, and most likely times b. the weighted average of a, m, and b, with m weighted 4 times as heavily as a and b c. the sum of the optimistic, pessimistic, and most likely times d. the sum of the optimistic, pessimistic, and most likely times, divided by six e. the sum of the activity variances, divided by six

b. the weighted average of a, m, and b, with m weighted 4 times as heavily as a and b

Production and/or shipping costs are always considered in which of the following location decision methods? a. factor rating method b. transportation method c. locational break-even analysis d. center-of-gravity method e. crossover analysis

b. transportation method

Which of the following is most likely to affect the location strategy of a manufacturing firm? a. appearance/image of the area b. utility costs c. purchasing power of drawing area d. competition in the area e. parking availability

b. utility costs

Which one of the following is not a benefit of the implementation of JIT? a. cost reduction b. variability increase c. rapid throughput d. quality improvement e. rework reduction

b. variability increase

Which of the following is an illustration of employee empowerment? a. UPS drivers are trained to perform several motions smoothly and efficiently. b. Unionization of the work place brings better morale and therefore better quality. c. "No one knows the job better than those who do it." d. all of the above e. none of the above

c. "No one knows the job better than those who do it."

A project being analyzed by PERT has 60 activities, 13 of which are on the critical path. If the estimated time along the critical path is 214 days with a project variance of 100, the probability that the project will take 224 days or more to complete is a. near zero b. 0.0126 c. 0.1587 d. 0.8413 e. 2.14

c. 0.1587

A manager wishes to build a 3σ range chart for a process. The sample size is five, the mean of sample means is 16.01, and the average range is 5.3. From Table S6.1, the appropriate value of D3 is 0, and D4 is 2.115. The UCL and LCL for this range chart are a. 33.9 and 11.2 b. 33.9 and 0 c. 11.2 and 0 d. 6.3 and 0 e. 31.91 and 0.11

c. 11.2 and 0

A certain type of computer costs $1,000, and the annual holding cost is 25%. Annual demand is 10,000 units, and the order cost is $150 per order. What is the approximate economic order quantity? a. 16 b. 70 c. 110 d. 183 e. 600

c. 110

Each R requires 2 of component S and 1 of part T. The lead time for assembly of R is 3 days. The lead time for the manufacture of S is 5 days. The lead time for the manufacture of T is 10 days. The cumulative lead time for R is _____ days. a. 6 b. 9 c. 13 d. 17 e. cannot be determined

c. 13

If daily demand is normally distributed with a mean of 15 and standard deviation of 5, and lead time is constant at 4 days, 90 percent service level will require safety stock of approximately a. 7 units b. 10 units c. 13 units d. 16 units e. 26 units

c. 13 units

In the basic EOQ model, if D=6000 per year, S=$100, H=$5 per unit per month, the economic order quantity is approximately a. 24 b. 100 c. 141 d. 490 e. 600

c. 141

The MPS calls for 110 units of Product M. There are currently 30 of Product M on hand. Each M requires 4 of Component N. There are 20 units of N on hand. The net requirements for N are a. 150 b. 170 c. 300 d. 320 e. 440

c. 300

Given forecast errors of -1, 4, 8, and -3, what is the mean absolute deviation? a. 2 b. 3 c. 4 d. 8 e. 16

c. 4

True/False: Cross-training is a common JIT tactic to improve flexibility.

True

True/False: In general, the lot-for-lot approach should be used whenever economical.

True

True/False: Intermittent processes are organized around processes.

True

True/False: One phase of a large project is scheduling.

True

True/False: Reducing distance is a common JIT goal.

True

True/False: The quantity required of a dependent demand item is computed from the demand for the final products in which the item is used.

True

True/False: The quarterly "make meeting" of Lexus dealers is an example of a sales force composite forecast.

True

A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next four years. If the cost of capital is 5 percent, the net present value of this investment is approximately a. $20,920 b. $26,160 c. $49,840 d. $70,920 e. $106,990

a. $20,920

In the Office Relationship Chart, which rating reflects the highest importance for two departments' closeness to each other? a. A b. E c. I d. O e. X

a. A

Which of the following is specifically characterized by continuous and forced problem solving via a focus on throughput and reduced inventory? a. Just-in-time (JIT) b. Toyota Production System (TPS) c. Lean operations d. Material requirements planning (MRP) e. kanban

a. Just-in-time (JIT)

A Type I error occurs when a. a good lot is rejected b. a bad lot is accepted c. the number of defectives is very large d. the population is worse than the AQL e. none of the above

a. a good lot is rejected

By convention, the top level in a bill of material is a. level 0 b. level 1 c. level T d. level 10 e. level 100

a. level 0

Which of the following is a location analysis technique typically employed by a manufacturing organization? a. transportation method b. queuing theory c. correlation analysis and traffic counts d. simulation e. demographic analysis

a. transportation method

The three stages of vendor selection, in order, are a. vendor evaluation, vendor development, and negotiations b. vendor development, vendor evaluation, and vendor acquisition c. introduction, growth, and maturity d. vendor evaluation, negotiations, and vendor development e. EDI, ERP, and ASN

a. vendor evaluation, vendor development, and negotiations

Which of the following statements regarding Amazon.com is false? a. The company was opened by Jeff Bezos in 1995. b. The company was founded as, and still is, a "virtual retailer" with no inventory. c. The company is now a world-class leader in warehouse management and automation. d. The company uses both United Parcel Service and the U.S. Postal Service as shippers. e. Amazon obtains its competitive advantage through inventory management.

b. The company was founded as, and still is, a "virtual retailer" with no inventory.

What does TPS stand for? a. Total Production Streamlining b. Toyota Production System c. Taguchi's Production S's d. Total Process Simplification e. None of the above

b. Toyota Production System

The type of inspection that classifies items as being either good or defective is a. variable inspection b. attribute inspection c. fixed inspection d. all of the above e. none of the above

b. attribute inspection

An approach to location analysis that includes both qualitative and quantitative considerations is a. locational cost-volume b. factor rating c. transportation model d. assignment method e. make or buy analysis

b. factor rating

Which of the following is not an operations strategic decision? a. maintenance b. price c. layout design d. quality e. inventory

b. price

The assumption of stability of demand is important for justifying which of the following layout types? a. fixed-position layout b. product-oriented layout c. process-oriented layout d. all of the above e. none of the above

b. product-oriented layout

A product-oriented layout would be most appropriate for which one of the following businesses? a. fast food b. steel-making c. insurance sales d. clothing alterations e. a grocery store

b. steel-making

One dollar saved in purchasing is a. equivalent to a dollar earned in sales revenue b. worth even more than a dollar earned in sales revenue c. worth slightly more than a dollar earned because of taxes d. worth from 35% in the technical instrument industry to 70% in the food products industry e. only worthwhile if you are in the 50% tax bracket and still have a low profit margin

b. worth even more than a dollar earned in sales revenue

Given an actual demand of 103, a previous forecast value of 99, and an alpha of .4, the exponential smoothing forecast for the next period would be a. 94.6 b. 97.4 c. 100.6 d. 101.6 e. 103.0

c. 100.6

Which of the following is an example of globalization of operations strategy? a. Boeing's Dreamliner has engines with higher fuel/payload efficiency. b. Ford's new auto models have dent-resistant panels. c. A Chinese manufacturer, Haier, now operates plants in the United States. d. Hard Rock Café provides an "experience differentiation" at its restaurants. e. All of the above are examples.

c. A Chinese manufacturer, Haier, now operates plants in the United States.

Which distribution system is the fastest growing mode of shipping? a. railroads b. trucks c. airfreight d. waterways e. pipelines

c. airfreight

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

Which one of the following performance measures is not true of a world class firm? a. short time placing an order b. high percentage of accepted material c. large lead time d. high percentage of on-time deliveries e. low number of shortages per year

c. large lead time

The impact of strategies on the general direction and basic character of a company is a. short range b. medium range c. long range d. temporal e. minimal

c. long range

Gradual, long-term movement in time series data is called a. seasonal variation b. cycles c. trends d. exponential variation e. random variation

c. trends

Which one of the following technologies is used only for material handling, not actual production or assembly? a. robots b. CNC c. CAD d. AGVs e. FMS

d. AGVs

Which of the following will more likely locate near their customers? a. an automobile manufacturer b. an aluminum manufacturer c. an insurance company headquarters d. a medical clinic e. All of the above will tend to locate near their customers.

d. a medical clinic

Which of these organizations is likely to have the most important inventory decisions? a. a marketing research firm b. a lobbying agency c. a management consulting firm d. an aluminum manufacturer e. a law firm

d. an aluminum manufacturer

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

A job shop is an example of a(n) a. repetitive process b. continuous process c. line process d. intermittent process e. specialized process

d. intermittent process

Contract requirements state that a project must be completed within 180 working days, or it will incur penalties for late completion. Analysis of the activity network reveals an estimated project time of 145 working days with a project variance of 400. What is the probability that the project will be completed before the late-payment deadline? a. 0.0401 b. 0.4599 c. 0.8056 d. 0.9599 e. near 1.0000, or almost certain

d. 0.9599

Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a naive forecast? a. 0 b. 1 divided by the number of periods c. 0.5 d. 1.0 e. cannot be determined

d. 1.0

Which one of the following is not a requirement of JIT systems? a. quality deliveries on time b. low setup time c. training support d. strong job specialization e. employee empowerment

d. strong job specialization

A time series trend equation is 25.3 + 2.1 X. What is your forecast for period 7? a. 23.2 b. 25.3 c. 27.4 d. 40.0 e. cannot be determined

d. 40.0

The service industry makes up approximately what percentage of all jobs in the United States? a. 12% b. 40% c. 66% d. 79% e. 90%

d. 79%

What describes a system that stores and displays information that can be linked to a geographic location? a. AIS b. LOC c. GLOC d. LIS e. GIS

e. GIS

What was the name of the construction project to rebuild the Pentagon after the terrorist attacks on Sept. 11, 2001? a. Project Panther b. Project Pit Bull c. Project Python d. Project Piranha e. Project Phoenix

e. Project Phoenix

Which category of inventory holding costs is much higher than average for rapid-change industries such as PCs and cell phones? a. housing costs b. material handling costs c. labor cost d. parts cost e. pilferage, scrap, and obsolescence

e. pilferage, scrap, and obsolescence

True/False: "Phantom bills" are bills of material for subassemblies that do not exist in reality.

False

True/False: A decision tree for analyzing capacity would have future demands or market favorability as the decision alternatives.

False

True/False: Activity times should not be included in a service blueprint.

False

True/False: CRAFT is software for balancing assembly lines.

False

True/False: The economic part period is a fraction of a time bucket.

False

True/False: The shortest of all paths through the network is the critical path.

False

True/False: Work Breakdown Structure is a useful tool in project management because it addresses the timing of individual work elements.

False

True/False: X-bar charts are used when we are sampling attributes.

False

Which of the following is not a reason for variability? a. Employees, machines, and suppliers produce units late. b. Customer demand is unknown. c. Employees, machines, and suppliers produce units that conform to standards. d. Engineering drawings are inaccurate. e. Drawings or specifications are incomplete.

c. Employees, machines, and suppliers produce units that conform to standards.

Which of the following statements regarding FedEx is true? a. Its hub in Memphis, Tennessee, was selected because of its low cost. b. Memphis, Tennessee, is the only hub in the company's global flight network. c. FedEx believes the hub system helps reduce mishandling and delays due to better controls. d. FedEx uses a hub system in the U.S., but a city-to-city network in other countries. e. Memphis is FedEx's only hub airport in the United States.

c. FedEx believes the hub system helps reduce mishandling and delays due to better controls.

Which of the following is true? a. Corporate mission is shaped by functional strategies. b. Corporate strategy is shaped by functional strategies. c. Functional strategies are shaped by corporate strategy. d. External conditions are shaped by corporate mission. e. Functional area missions are merged to become the organizational mission.

c. Functional strategies are shaped by corporate strategy.

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 demand is expected to be 10 million units, which plant offers the lowest total cost?

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

Which of the following statements regarding Gantt charts is true? a. Gantt charts give a timeline and precedence relationships for each activity of a project. b. Gantt charts use the four standard spines of Methods, Materials, Manpower, and Machinery. c. Gantt charts are visual devices that show the duration of activities in a project. d. Gantt charts are expensive. e. All of the above are true.

c. Gantt charts are visual devices that show the duration of activities in a project.

Which of the following activities takes place once the mission has been developed? a. The firm develops alternative or back-up missions in case the original mission fails. b. The functional areas develop their functional area strategies. c. The functional areas develop their supporting missions. d. The ten OM decision areas are prioritized. e. Operational tactics are developed.

c. The functional areas develop their supporting missions.

Which of the following is not one of the Seven Wastes? a. overproduction b. transportation c. assignment d. defective product e. motion

c. assignment

The word "kanban" means a. low inventory b. employee empowerment c. card d. continuous improvement e. lot size of one

c. card

The percent of variation in the dependent variable that is explained by the regression equation is measured by the a. mean absolute deviation b. slope c. coefficient of determination d. correlation coefficient e. intercept

c. coefficient of determination

Budgeting, paying the bills, and collection of funds are activities associated with the a. management function b. control function c. finance/accounting function d. production/operations function e. staffing function

c. finance/accounting function

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

Average outgoing quality (AOQ) usually a. worsens with inspection b. stays the same with inspection c. improves with inspection d. may either improve or worsen with inspection e. is the average quality before inspection

c. improves with inspection

The service sector has lower productivity improvements than the manufacturing sector because a. the service sector uses less skilled labor than manufacturing b. the quality of output is lower in services than manufacturing c. services usually are labor-intensive d. service sector productivity is hard to measure e. none of the above

c. services usually are labor-intensive

The two most basic inventory questions answered by the typical inventory model are a. timing and cost of orders b. quantity and cost of orders c. timing and quantity of orders d. order quantity and service level e. ordering cost and carrying cost

c. timing and quantity of orders

Which is not a characteristic of exponential smoothing? a. smoothes random variations in the data b. easily altered weighting scheme c. weights each historical value equally d. has minimal data storage requirements e. none of the above; they are all characteristics of exponential smoothing

c. weights each historical value equally

True/False: A bill of material lists all components, ingredients, and materials needed to produce one unit of an end item.

True

True/False: A c-chart is appropriate to plot the number of flaws in a bolt of fabric.

True

True/False: A fast-food retailer that acquired a spice manufacturer would be practicing backward integration.

True

True/False: A firm's process strategy is its approach to transforming resources into goods and services.

True

True/False: Category management is the use of computer software to evaluate the profitability of merchandising plans.

True

True/False: Changes in capacity may lead, lag, or straddle the demand.

True

True/False: Channel assembly, which sends components and modules to be assembled by a distributor, treats these distributors as manufacturing partners.

True

True/False: Closed-loop MRP systems allow production planners to move work between time periods to smooth the load or to at least bring it within capacity.

True

True/False: Cycle time is the maximum time that the product is allowed at each work station.

True

True/False: Cycles and random variations are both components of time series.

True

True/False: DRP is a time-phased stock-replenishment plan for all levels of a distribution network.

True

True/False: Demand (sales) forecasts serve as inputs to financial, marketing, and personal planning.

True

True/False: Design capacity is the theoretical maximum output of a system in a given period under ideal conditions.

True

True/False: Ethical issues which can arise in projects include bid rigging, bribery, and "low balling."

True

True/False: Every network has at least one critical path.

True

True/False: Expected output is sometimes referred to as rated capacity.

True

True/False: Finite capacity scheduling, unlike MRP, recognizes the capacity limitations of departments and machines when building schedules.

True

True/False: Firms may discover that, rather than adapting ERP to the way they do business, they have to adapt the way they do business to accommodate the ERP software.

True

True/False: Gantt charts give a timeline for each of a project's activities, but do not adequately show the interrelationships of activities.

True

True/False: Gross material requirements do not take into account the amount of inventory on hand.

True

True/False: Hidden problems are generally uncovered during the process of reducing inventory.

True

True/False: If 100 units of Q are needed and 10 are already in stock, then the gross requirement is 100 and the net requirement is 90.

True

True/False: If X consists of one A and one B, and each A consists of one F and two Gs, then A is the "parent" component of G.

True

True/False: If a forecast is consistently greater than (or less than) actual values, the forecast is said to be biased.

True

True/False: If parts and subassemblies common to a variety of products are managed through the supermarket concept, formal order releases for such parts are not necessary.

True

True/False: In ABC analysis, "A" Items are the most tightly controlled.

True

True/False: In statistical process control, the range often substitutes for the standard deviation.

True

True/False: In trend projection, the trend component is the slope of the regression equation.

True

True/False: Inventory has only one positive aspect, which is availability; inventory has several negatives, including increased material handling, obsolescence, and damage.

True

True/False: JIT suppliers have concerns that the JIT firm's demands for small lot sizes are simply a way of transferring holding cost from manufacturer firm to the supplier firm.

True

True/False: Job lots are groups or batches of parts processed together.

True

True/False: Keiretsus offer a middle ground between few suppliers and vertical integration.

True

True/False: Lead times, inventory availability, and purchase orders outstanding are among the five things operations managers must know for effective use of MRP.

True

True/False: Linear-regression analysis is a straight-line mathematical model to describe the functional relationships between independent and dependent variables.

True

True/False: Lists have been developed that rank countries on issues such as "competitiveness" and "corruption."

True

True/False: Logistics management can provide a competitive advantage through improved customer service.

True

True/False: Lower average inventory is feasible only if setup times are short.

True

True/False: MRP is generally practiced on items with dependent demand.

True

True/False: Manufacturers may want to locate close to their customers, if the transportation of finished goods is expensive or difficult.

True

True/False: Many service firms use point-of-sale computers to collect detailed records needed for accurate short-term forecasts.

True

True/False: Many suppliers feel that having a variety of customers is better than being tied to long-term contracts with one customer.

True

True/False: McDonald's "Made for You" kitchen system represents a strategic layout decision even though an obvious benefit of the system is a dramatic reduction in the inventory of food prepared in advance.

True

True/False: Mean charts and range charts complement one another, one detecting shifts in process average, the other detecting shifts in process dispersion.

True

True/False: Mistakes stemming from workers' inadequate training represent an assignable cause of variation.

True

True/False: Most forecasting techniques assume that there is some underlying stability in the system.

True

True/False: One advantage of cycle counting is that it maintains accurate inventory records.

True

True/False: One advantage of exponential smoothing is the limited amount of record keeping involved.

True

True/False: One classic type of negotiation strategy is the market-based price model.

True

True/False: One drawback of a product-oriented layout is that work stoppage at any one point ties up the whole operation.

True

True/False: One essential ingredient of mass customization is modular design.

True

True/False: One function of inventory is to take advantage of quantity discounts.

True

True/False: One goal of JIT partnerships is the removal of in-plant inventory by delivery in small lots directly to the using department as needed.

True

True/False: One guideline for a retail layout is to locate high-draw items around the periphery of the store.

True

True/False: One reason for global operations is to gain improvements in the supply chain.

True

True/False: One reason to globalize is to learn to improve operations.

True

True/False: One reason to study operations management is to learn how people organize themselves for productive enterprise.

True

True/False: One responsibility of a project manager is to make sure that the project meets its quality goals.

True

True/False: One use of camera-and-computer-based vision systems is to replace humans doing tedious and error-prone visual inspection activities.

True

True/False: Operations managers are finding online auctions a fertile area for disposing of discontinued inventory.

True

True/False: Optical checkout scanners and ATMs are examples of technology's impact on services.

True

True/False: Outsourcing is a form of specialization that allows the outsourcing firm to focus on its critical success factors.

True

True/False: Outsourcing refers to transferring a firm's activities that have traditionally been internal to external suppliers.

True

True/False: Planning bills of material are bills of material for "kits" of inexpensive items such as washers, nuts, and bolts.

True

True/False: Price changes are useful for matching the level of demand to the capacity of a facility.

True

True/False: Process control is the use of information technology to monitor and control a physical process.

True

True/False: Processes can be environmentally friendly and socially responsible while still contributing to profitable strategies.

True

True/False: Product storage is an example of waste, in the sense that no value is added.

True

True/False: Project managers have their own code of ethics, established by the Project Management Institute.

True

True/False: Reduced inventory levels and faster response to market changes are both benefits of MRP.

True

True/False: Service level is the complement of the probability of a stockout.

True

True/False: Starbucks Coffee's use of geocoded demographic and consumer data in site selection decisions is an example of the use of a Geographic Information System, or GIS.

True

True/False: The Toyota Production System requires that activities have built-in, automatic tests so that gaps between expectations and actuality are immediately evident.

True

True/False: The assembly line is a classic example of a repetitive process.

True

True/False: The best way to forecast a business cycle is by finding a leading variable.

True

True/False: The graphic approach to location break-even analysis displays the range of volume over which each location is preferable.

True

True/False: The reorder point is the inventory level at which action is taken to replenish the stocked item.

True

True/False: The term 'focused processes' refers to the quest for increased efficiency, whether in goods or services, that results from specialization.

True

True/False: Unfavorable exchange rates can offset other savings in a location decision.

True

True/False: When implemented as a comprehensive manufacturing strategy, JIT, TPS, and lean systems sustain competitive advantage and result in increased overall returns.

True

True/False: When innovation replaces cost as a firm's focus for location decisions, the presence of other state-of-the-art firms is a plus, not a negative, for the firm's competitiveness.

True

True/False: When safety stock is deemed absolutely necessary, the usual policy is to build it into the projected on-hand inventory of the MRP logic.

True

True/False: While ERP may provide a strategic advantage over competitors, it is so complex that many companies cannot adjust to it.

True

If an activity whose normal duration is 15 days can be shortened to 10 days for an added cost of $2,000, the crash cost per period is a. $400 b. $2,000 c. $10,000 d. $20,000 e. $30,000

a. $400

The MPS calls for 50 units of Product A and 60 of B. There are currently 25 of Product B on hand. Each A requires 2 of Part C; each B requires 5 of C. There are 160 units of C available. The net requirements for C are a. 115 b. 175 c. 240 d. 690 e. 700

a. 115

An activity on a PERT network has these time estimates: optimistic = 2, most likely = 3, and pessimistic = 8. Its expected time and variance (if it is a critical activity) are a. 3.67; 1 b. 3.67; 6 c. 4.33; 1 d. 4.33; 6 e. none of these

a. 3.67; 1

A specific product has demand during lead time of 100 units, with a standard deviation of 25 units. What safety stock (approximately) provides a 95% service level? a. 41 b. 55 c. 133 d. 140 e. 165

a. 41

Which of the following is the best example of competing on low-cost leadership? a. A firm produces its product with less raw material waste than its competitors. b. A firm offers more reliable products than its competitors. c. A firm's products are introduced into the market faster than its competitors' products. d. A firm's research and development department generates many ideas for new products. e. A firm advertises more than its competitors.

a. A firm produces its product with less raw material waste than its competitors.

Factory X is trying to use level use scheduling. If their first target were to cut the current lot size in half, by what proportion must setup cost change? a. Setup cost must be cut to one fourth its current value. b. Setup cost must also be cut in half from its current value. c. Setup cost must double from its current value. d. cannot be determined e. none of the above

a. Setup cost must be cut to one fourth its current value.

A simple CPM network has three activities, A, B, and C. A is an immediate predecessor of B and of C. B is an immediate predecessor of C. The activity durations are A=4, B=3, C=8. a. The critical path is A-B-C, duration 15. b. The critical path is A-C, duration 12. c. The critical path is A-B-C, duration 13.5 d. The critical path cannot be determined without knowing PERT expected activity times. e. The network has no critical path.

a. The critical path is A-B-C, duration 15.

Which of the following techniques uses variables such as price and promotional expenditures, which are related to product demand, to predict demand? a. associative models b. exponential smoothing c. weighted moving average d. simple moving average e. time series

a. associative models

To set x -chart upper and lower control limits, one must know the process central line, which is the a. average of the sample means b. total number of defects in the population c. percent defects in the population d. size of the population e. average range

a. average of the sample means

The ______ is the input to material requirements planning which lists the assemblies, subassemblies, parts, and raw materials needed to produce one unit of finished product. a. bill of material b. master production schedule c. inventory records d. assembly time chart e. net requirements chart

a. bill of material

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

A drawing of the movement of material, product, or people is a a. flow diagram b. process chart c. service blueprint d. process map e. none of the above

a. flow diagram

An organization whose capacity is on that portion of the average unit cost curve that falls as output rises a. has a facility that is below optimum operating level and should build a larger facility b. has a facility that is above optimum operating level and should build a smaller facility c. is suffering from diseconomies of scale d. has utilization higher than efficiency e. has efficiency higher than utilization

a. has a facility that is below optimum operating level and should build a larger facility

A code of ethics especially for project managers a. has been established by the Project Management Institute b. has been formulated by the Federal government c. has been formulated by the World Trade Organization d. is inappropriate, since everyone should use the same guidance on ethical issues e. does not exist at this time

a. has been established by the Project Management Institute

Which of the following is not one of the essential ingredients for mass customization? a. high machine utilizations b. personnel and facility flexibility c. reliance on modular design d. rapid throughput e. very effective scheduling

a. high machine utilizations

The list of 5S's, although it looks like a housekeeping directive, supports lean production by a. identifying non-value items and removing them, in the "sort/segregate" item b. reducing inventory, in the "standardize" item c. increasing variability through standardized procedures, in the "standardize" item d. eliminating wasted motion through ergonomic studies, in the "support" item e. building good safety practices, in the "shine/sweep" item

a. identifying non-value items and removing them, in the "sort/segregate" item

A manufacturing firm finds a location that has a significant cost advantage over alternatives, but rejects that location because the educational infrastructure was insufficient to train the firm's workers in its special production technologies. The firm's action illustrates the link between __________ and location. a. innovation b. clustering c. tax incentives d. globalization e. proximity

a. innovation

Which time series model below assumes that demand in the next period will be equal to the most recent period's demand? a. naive approach b. moving average approach c. weighted moving average approach d. exponential smoothing approach e. none of the above

a. naive approach

Local optimization is a supply chain complication best described as a. optimizing one's local area without full knowledge of organizational needs b. obtaining very high production efficiency in a decentralized supply chain c. the prerequisite of global optimization d. the result of supply chains built on suppliers with compatible corporate cultures e. the opposite of the bullwhip effect

a. optimizing one's local area without full knowledge of organizational needs

Which of the following is a location analysis technique typically employed by a service organization? a. purchasing power analysis b. linear programming c. queuing theory d. crossover charts e. cost-volume analysis

a. purchasing power analysis

What is the time required to move orders through the production process, from receipt to delivery? a. throughput b. manufacturing cycle time c. pull time d. push time e. queuing time

a. throughput

"Automatic placement and withdrawal of parts and products into and from designated places in a warehouse" describes a. AGV b. CAD/CAM c. CIM d. ASRS e. FMS

d. ASRS

A seasonal index for a monthly series is about to be calculated on the basis of three years' accumulation of data. The three previous July values were 110, 150, and 130. The average over all months is 190. The approximate seasonal index for July is a. 0.487 b. 0.684 c. 1.462 d. 2.053 e. cannot be calculated with the information given

b. 0.684

A project whose critical path has an estimated time of 120 days with a variance of 100 has a 20% chance that the project will be completed before day ______ (rounded to nearest day). a. 98 b. 112 c. 120 d. 124 e. 220

b. 112

A manager wants to build 3σ control limits for a process. The target value for the mean of the process is 10 units, and the standard deviation of the process is 6. If samples of size 9 are to be taken, the UCL and LCL will be a. -8 and 28 b. 16 and 4 c. 12 and 8 d. 4 and 16 e. 8 and 12

b. 16 and 4

A production order quantity problem has daily demand rate = 10 and daily production rate = 50. The production order quantity for this problem is approximately 612 units. The average inventory for this problem is approximately a. 61 b. 245 c. 300 d. 306 e. 490

b. 245

An activity on a PERT network has these time estimates: optimistic = 2, most likely = 5, and pessimistic = 10. Its expected time is a. 5 b. 5.33 c. 5.67 d. 17 e. none of these

b. 5.33

What is the average capacity utilization in the motor carrier (trucking) industry? a. 25% b. 50% c. 75% d. 95% e. 99%

b. 50%

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 in use, the program has become more complex, so that 1050 now represents the most employees that can be trained per year. In the past year, 950 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; 1050 employees e. 110.5 percent; 114.3 percent

b. 90.5 percent; 79.2 percent

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.

Which of the following is true regarding the concept of flexibility? a. It is the ability to change production rates with little penalty in time, cost, or customer value. b. It can be accomplished with sophisticated electronic equipment. c. It may involve modular, movable, even cheap equipment. d. All of the above are true. e. None of the above is true.

d. All of the above are true.

The acronym MNC stands for a. Mexican National Committee (for international trade) b. Maquiladora Negates Competition c. Maytag- Nestlé Corporation d. Multinational Corporation e. none of the above

d. Multinational Corporation

If demand is not uniform and constant, then stockout risks can be controlled by a. increasing the EOQ b. placing an extra order c. raising the selling price to reduce demand d. adding safety stock e. reducing the reorder point

d. adding safety stock

The three classic types of negotiation strategies are a. vendor evaluation, vendor development, and vendor selection b. Theory X, Theory Y, and Theory Z c. many suppliers, few suppliers, and keiretsu d. cost-based price model, market-based price model, and competitive bidding e. None of the above is correct.

d. cost-based price model, market-based price model, and competitive bidding

Cost minimization is an appropriate strategy in which stage of the product life cycle? a. introduction b. growth c. maturity d. decline e. retirement

d. decline

Which of the following constitutes a major trend influencing office layouts? a. downsizing b. globalization c. environmental issues d. off-site employees e. health issues

d. off-site employees

The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is a. a standard use of the make or buy decision b. not allowed by the ethics code of the Supply Management Institute c. offshoring d. outsourcing e. keiretsu

d. outsourcing

Understanding competitors' strengths and weaknesses, understanding current and prospective technological issues, and understanding product life cycle are examples of a. what is important to the transnational strategy but not the multidomestic strategy b. SWOT analysis c. elements in the formulation of an organization's mission d. preconditions to establishing and implementing a strategy e. the critical decision area of supply chain analysis

d. preconditions to establishing and implementing a strategy

Which of the following is not a condition that favors the success of vertical integration? a. availability of capital b. availability of managerial talent c. required demand d. small market share e. All of the above favor the success of vertical integration.

d. small market share

Analysis of a PERT problem shows the estimated time for the critical path to be 108 days with a variance of 64. There is a .90 probability that the project will be completed before approximately day ______. a. 98 b. 108 c. 109 d. 115 e. 118

e. 118

Which of the following is not a goal of JIT partnerships? a. removal of unnecessary activities b. removal of in-plant inventory c. removal of in-transit inventory d. obtain improved quality and reliability e. All of the above are goals of JIT partnerships.

e. All of the above are goals of JIT partnerships.

Which of the following are examples of transnational firms? a. Nestlé b. Asea Brown Boveri c. Reuters d. Citicorp e. All of the above are transnationals.

e. All of the above are transnationals.

The technique known as level schedules a. requires that schedules be met without variation b. processes many small batches rather than one large one c. is known as "jelly bean" scheduling d. is based on meeting one day's demand with that day's production e. All of the above are true regarding level scheduling.

e. All of the above are true regarding level scheduling.

Which one of the following statements is true about the kanban system? a. The quantities in the containers are usually large to reduce setup costs. b. It is associated with a push system. c. It is useful to smooth operations when numerous quality problems occur. d. The supplier workstation signals the customer workstation as soon as a batch is completed. e. The customer workstation signals to the supplier workstation when production is needed.

e. The customer workstation signals to the supplier workstation when production is needed.

What term is used to describe the outsourcing of logistics? a. E-Logistics b. Shipper Managed Inventory (SMI) c. Hollow Logistics d. Sub-Logistics e. Third-Party Logistics

e. Third-Party Logistics

Which of the following has made the least progress along its product life cycle? a. drive-thru restaurants b. Internet search engines c. iPods d. LCD & plasma TVs e. Xbox 360

e. Xbox 360

Distortion in MRP systems can be minimized when safety stock is held at the a. purchased component or raw material level b. work-in-process level c. finished goods level d. a and b e. a and c

e. a and c

Taco Bell's unique employee scheduling practices are partly the result of using a. point-of-sale computers to track food sales in 15 minute intervals b. focus forecasting c. a six-week moving average forecasting technique d. multiple regression e. a and c are both correct

e. a and c are both correct

Cost cutting in international operations can take place because of a. lower taxes and tariffs b. lower wage scales c. lower indirect labor costs d. less stringent regulations e. all of the above

e. all of the above

Ethical and environmentally friendly processes include which of the following? a. emission controls b. recycling c. efficient use of resources d. reduction of waste by-products e. all of the above

e. all of the above

When done correctly, mass customization a. increases pressure on supply chain performance b. helps eliminate the guesswork that comes with sales forecasting c. drives down inventories d. increases pressure on scheduling e. all of the above

e. all of the above

ABC analysis divides on-hand inventory into three classes, generally based upon a. item quality b. unit price c. the number of units on hand d. annual demand e. annual dollar volume

e. annual dollar volume

When making a location decision at the country level, which of these would be considered? a. corporate desires b. land/construction costs c. air, rail, highway, waterway systems d. zoning restrictions e. location of markets

e. location of markets

Demand for dishwasher water pumps is 8 per day. The standard deviation of demand is 3 per day, and the order lead time is four days. The service level is 95%. What should the reorder point be? a. about 18 b. about 24 c. about 32 d. about 38 e. more than 40

e. more than 40

Which of the following industries is likely to have low equipment utilization? a. auto manufacturing b. commercial baking c. television manufacturing d. chemical processing e. restaurants

e. restaurants

Caterpillar and Texas Instruments are two firms that have benefited from the use of a. the multidomestic strategy option. b. the multinational corporation strategy. c. the transnational strategy option. d. the maquiladora system in Europe. e. the global strategy option.

e. the global strategy option.

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 at which 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

True/False: The operations manager performs the management activities of planning, organizing, staffing, leading, and controlling of the OM function.

True

Gibson Valves produces cast bronze valves on an assembly line, currently producing 1600 valves each 8-hour shift. If the productivity is increased by 10%, it would then be a. 180 valves/hr b. 200 valves/hr c. 220 valves/hr d. 880 valves/hr e. 1760 valves/hr

c. 220 valves/hr

Illiteracy and poor diets have been known to cost countries up to what percent of their productivity? a. 2% b. 5% c. 10% d. 20% e. 50%

d. 20%

A foundry produces circular utility access hatches (manhole covers). Currently, 120 covers are produced in a 10-hour shift. If labor productivity can be increased by 20%, it would then be a. 14.4 covers/hr b. 24 covers/hr c. 240 valves/hr d. 1200 covers/hr e. none of the above

a. 14.4 covers/hr

Walter Shewhart, in the _____, provided the foundations for ______ in operations management. a. 1920s; statistical sampling b. United Kingdom; mass production c. U.S. Army; logistics d. nineteenth century; interchangeable parts e. none of the above

a. 1920s; statistical sampling

Typical differences between goods and services do not include a. cost per unit b. ability to inventory items c. timing of production and consumption d. customer interaction e. knowledge content

a. cost per unit

All of the following decisions fall within the scope of operations management except for a. financial analysis b. design of goods and processes c. location of facilities d. managing quality e. All of the above fall within the scope of operations management.

a. financial analysis

The largest contributor to productivity increases is ________, estimated to be responsible for _____ of the annual increase. a. management; over one-half b. Mr. Deming; one-half c. labor; two-thirds d. capital; 90% e. technology; over one-half

a. management; over one-half

The "Father of Scientific Management" is a. Henry Ford b. Frederick W. Taylor c. W. Edwards Deming d. Frank Gilbreth e. just a figure of speech, not a reference to a person

b. Frederick W. Taylor

Three commonly used productivity variables are a. quality, external elements, and precise units of measure b. labor, capital, and management c. technology, raw materials, and labor d. education, diet, and social overhead e. quality, efficiency, and low cost

b. labor, capital, and management

The factor responsible for the largest portion of productivity increase in the U.S. is a. labor b. management c. capital d. all three combined; it is impossible to determine the contribution of individual factors e. none of these; most productivity increases come from investment spending

b. management

The person most responsible for popularizing interchangeable parts in manufacturing was a. Frederick Winslow Taylor b. Henry Ford c. Eli Whitney d. Whitney Houston e. Lillian Gilbreth

c. Eli Whitney

Which of the following statements about trends in operations management is false? a. Job specialization is giving way to empowered employees. b. Local or national focus is giving way to global focus. c. Environmentally-sensitive production is giving way to low-cost focus. d. Rapid product development is partly the result of shorter product cycles. e. All of the above statements are true.

c. Environmentally-sensitive production is giving way to low-cost focus.

The Dulac Box plant produces 500 cypress packing boxes in two 10-hour shifts. Due to higher demand, they have decided to operate three 8-hour shifts instead. They are now able to produce 600 boxes per day. What has happened to production? a. It has increased by 50 sets/shift. b. It has increased by 37.5 sets/hr. c. It has increased by 20%. d. It has decreased by 8.3%. e. It has decreased by 9.1%.

c. It has increased by 20%.

Which of the following is not a typical attribute of goods? a. output can be inventoried b. often easy to automate c. aspects of quality difficult to measure d. output can be resold e. production and consumption are separate

c. aspects of quality difficult to measure

Henry Ford is noted for his contributions to a. standardization of parts b. statistical quality control c. assembly line operations d. scientific management e. time and motion studies

c. assembly line operations

Which of the following inputs has the greatest potential to increase productivity? a. labor b. globalization c. management d. capital e. none of the above

c. management

An operations manager is not likely to be involved in a. the design of goods and services to satisfy customers' wants and needs b. the quality of goods and services to satisfy customers' wants and needs c. the identification of customers' wants and needs d. work scheduling to meet the due dates promised to customers e. maintenance schedules

c. the identification of customers' wants and needs

Which of the following statements concerning growth of services is true? a. Services now constitute the largest economic sector in postindustrial societies. b. The number of people employed in manufacturing has more or less held steady since 1950. c. Each manufacturing employee now produces about 20 times more than in 1950 d. All of the above are true. e. None of the above is true.

d. All of the above are true.

Which of the following is not an element of the management process? a. controlling b. leading c. planning d. pricing e. staffing

d. pricing

Operations management is applicable a. mostly to the service sector b. to services exclusively c. mostly to the manufacturing sector d. to all firms, whether manufacturing and service e. to the manufacturing sector exclusivel

d. to all firms, whether manufacturing and service

Current trends in operations management include all of the following except a. just-in-time performance b. rapid product development c. mass customization d. empowered employees e. All of the above are current trends.

e. All of the above are current trends.

Which of the following is not a current trend in operations management? a. just-in-time performance b. global focus c. supply chain partnering d. mass customization e. All of the above are current trends.

e. All of the above are current trends.

One new trend in operations management is a. global focus b. mass customization c. empowered employees d. rapid product development e. All of the above are new trends in operations management.

e. All of the above are new trends in operations management.

A business's stakeholders, whose conflicting perspectives cause ethical and social dilemmas, include a. lenders b. suppliers c. owners d. employees e. all of the above

e. all of the above

Among the ethical and social challenges facing operations managers are a. honoring community commitments b. maintaining a clean environment c. efficiently developing and producing safe quality products d. providing a safe workplace e. all of the above

e. all of the above

At Hard Rock Café, tasks that reflect operations or operations management include a. designing meals b. testing meals (recipes) c. analyzing meals for the cost of ingredients d. preparing employee schedules e. all of the above

e. all of the above

True/False: Productivity is more difficult to improve in the service sector.

True

True/False: Some of the operations-related activities of Hard Rock Café include designing meals and analyzing them for ingredient cost and labor requirements.

True

True/False: Students wanting to pursue a career in operations management will find multidisciplinary knowledge beneficial.

True

True/False: The World Trade Organization has helped to significantly reduce tariffs around the world.

True

True/False: The World Trade Organization helps provide governments and industries around the world with protection from firms that engage in unethical conduct.

True

Which of the following is not a typical service attribute? a. intangible product b. easy to store c. customer interaction is high d. simultaneous production and consumption e. difficult to resell

b. easy to store

Gibson Valves produces cast bronze valves on an assembly line. If 1600 valves are produced in an 8-hour shift, the productivity of the line is a. 2 valves/hr b. 40 valves/hr c. 80 valves/hr d. 200 valves/hr e. 1600 valves/hr

d. 200 valves/hr

Who among the following is associated with contributions to quality control in operations management? a. Charles Babbage b. Henry Ford c. Frank Gilbreth d. W. Edwards Deming e. Henri Fayol

d. W. Edwards Deming

The five elements in the management process are a. plan, direct, update, lead, and supervise b. accounting/finance, marketing, operations, and management c. organize, plan, control, staff, and manage d. plan, organize, staff, lead, and control e. plan, lead, organize, manage, and control

d. plan, organize, staff, lead, and control

True/False: A decision tree indicates at what quantity profit changes from negative to positive.

False

True/False: A dependent demand item is so called because its demand is dependent on customer preferences.

False

True/False: A fabrication line and an assembly line are both types of repetitive and product-focused layout, but only the fabrication line utilizes workstations.

False

True/False: A focused work center is well suited to the production of a large family of products requiring similar processing, even if their demands are not very stable.

False

True/False: A lot that is accepted by acceptance sampling is free of defects.

False

True/False: A normal distribution is generally described by its two parameters: the mean and the range.

False

True/False: A p-chart is appropriate to plot the number of typographic errors per page of text.

False

True/False: A process is said to be in statistical control when assignable causes are the only sources of variation.

False

True/False: A process map with the addition of a time axis becomes a process chart.

False

True/False: A process that is in statistical control will always yield products that meet their design specifications.

False

True/False: A project organization works best for an organization when the project resides in only one of its functional areas.

False

True/False: A push system means providing the next station with exactly what is needed when it is needed.

False

True/False: A reduction in inventory costs is one reason for making rather than buying.

False

True/False: ABC analysis classifies inventoried items into three groups, usually based on annual units or quantities used.

False

True/False: ABC analysis is based on the presumption that carefully controlling all items is necessary to produce important inventory savings.

False

True/False: According to the global company profile, Amazon.com's advantage in inventory management comes from its almost fanatical use of economic order quantity and safety stock calculations.

False

True/False: An example of the postponement strategy for improving service productivity is having the customer wait until you have sufficient time to serve the customer.

False

True/False: At the economic order quantity, holding costs are equal to purchasing costs.

False

True/False: Because most services cannot be inventoried, there is little place for JIT to help service organizations achieve competitive advantage.

False

True/False: Because service firms do not acquire goods and services externally, their supply chain management issues are insignificant.

False

True/False: Because the supply chain has become so electronic and automated, opportunities for unethical behavior have been greatly reduced.

False

True/False: Break-even analysis identifies the volume at which fixed costs and revenue are equal.

False

True/False: Break-even analysis is a powerful analytical tool, but is useful only when the organization produces a single product.

False

True/False: Building an additional warehouse is an incremental expansion, not a one-step expansion.

False

True/False: By convention, the top level in a bill of material is designated level 1.

False

True/False: Capacity decisions are based on technological concerns, not demand forecasts.

False

True/False: Critical success factors and core competencies are synonyms.

False

True/False: Customer demand will always remain an unknown, so it is not considered a source of variation.

False

True/False: Cycle counting is an inventory control technique exclusively used for cyclical items.

False

True/False: Dell's approach to personal computer manufacturing is to use a product focus, which gives the company its low-cost competitive advantage.

False

True/False: Developing long-term, "partnering" relationships with a few suppliers is a long-standing American purchasing strategy.

False

True/False: Employee empowerment is unnecessary in the Toyota Production System, because automation and powerful information systems reduce the need for employee creativity and decision making.

False

True/False: Even though a firm may have a low cost strategy, supply chain strategy can select suppliers primarily on response or differentiation.

False

True/False: FedEx chose Memphis, Tennessee, for its central location, or "hub," primarily because of the incentives offered by the city of Memphis and the state of Tennessee.

False

True/False: Firms using the global strategy can be thought of as "world companies."

False

True/False: For a location decision, labor productivity may be important in isolation, but low wage rates are a more important criterion.

False

True/False: Forecasts of individual products tend to be more accurate than forecasts of product families.

False

True/False: Generally, the objective of the location decision is to maximize the firm's profit.

False

True/False: Harley-Davidson, because it has so many possible combinations of products, utilizes the process strategy of mass customization.

False

True/False: Heuristics are problem-solving procedures that mathematically optimize the solution.

False

True/False: If a quarterly seasonal index has been calculated at 1.55 for the October-December quarter, then raw data for that quarter must be multiplied by 1.55 so that the quarter can be fairly compared to other quarters.

False

True/False: If the process average is in control, then the process range must also be in control.

False

True/False: Improvements in security, especially regarding the millions of shipping containers that enter the U.S. each year, are being held back by the lack of technological advances.

False

True/False: In a JIT system, product inspection adds value by identifying defective items.

False

True/False: In location decisions, intangible costs are easier to measure than tangible costs.

False

True/False: In the quantity discount model, the cost of acquiring goods (product cost) is not a factor in determining lot size.

False

True/False: In the simple EOQ model, if annual demand were to increase, the EOQ would increase proportionately.

False

True/False: In the simple EOQ model, if the carrying cost were to double, the EOQ would also double.

False

True/False: In the vendor evaluation phase, most companies will use the same list of criteria and the same criteria weights.

False

True/False: In trend projection, a negative regression slope is mathematically impossible.

False

True/False: Industrial location decisions often assume that costs are relatively constant for a given area.

False

True/False: Insurance and taxes on inventory are part of the costs known as setup or ordering costs.

False

True/False: JIT brings about competitive advantage by faster response to the customer regardless of cost.

False

True/False: JIT systems carry inventory just in case something goes wrong.

False

True/False: Level scheduling means producing at a constant rate, regardless of customer demands.

False

True/False: Location decisions are based on many things, including costs, revenues, incentives, attitudes, and intangibles, but not on ethical considerations.

False

True/False: MRP can be effective only if very accurate lot sizes are calculated in advance.

False

True/False: MRP is an excellent tool for scheduling products with variable lead times.

False

True/False: McDonald's was able to utilize existing plants and transportation systems in preparing the supply chain for opening its stores in Moscow.

False

True/False: Mean Squared Error and Coefficient of Correlation are two measures of the overall error of a forecasting model.

False

True/False: Operations splitting sends pieces to the next operation before the entire lot is completed on the previous operation.

False

True/False: PERT, but not CPM, has the ability to consider the precedence relationships in a project.

False

True/False: Process maps use distance, but not time, to show the movement of material, product, or people through a process.

False

True/False: Product-oriented layouts tend to have high levels of work-in-process inventories.

False

True/False: Production technology has had a major impact on services, but as yet there has been little reduction in service labor requirements.

False

True/False: Professional services typically require low levels of labor intensity.

False

True/False: SWOT analysis identifies those activities that make a difference between having and not having a competitive advantage.

False

True/False: Safety stock in inventory systems depends only on the average demand during the lead time.

False

True/False: Shortening the project's duration by deleting unnecessary activities is called "project crashing."

False

True/False: Since MRP is quite detailed in nature, it has no influence on the longer-range, less detailed aggregate planning.

False

True/False: Starbucks Coffee's approach to choosing new café locations is largely based on executive intuition, not sophisticated models and site selection technology.

False

True/False: Successful process redesign focuses on departmental areas where small, continuous improvements can be made.

False

True/False: Supply chain decisions are not generally strategic in nature, because purchasing is an ordinary expense to most firms.

False

True/False: TPS stands for Total Production Streamlining.

False

True/False: The Aggregate Plan, derived from the Master Production Schedule, specifies in more detail how much of which products is to be made at what times.

False

True/False: The EOQ model is best suited for items whose demand is dependent on other products.

False

True/False: The PERT pessimistic time estimate is an estimate of the minimum time an activity will require.

False

True/False: The Wagner-Whitin algorithm is the most widely used MRP lot-sizing technique.

False

True/False: The X-bar chart indicates that a gain or loss of uniformity has occurred in dispersion of a production process.

False

True/False: The acceptable quality level (AQL) is the average level of quality we are willing to accept.

False

True/False: The balancing of work cells uses the same procedures as the balancing of an assembly line.

False

True/False: The biggest advantage of a product layout is its flexibility to handle a varied product mix.

False

True/False: The center-of-gravity method finds the location of a centralized facility, such as a distribution center, that will maximize the organization's revenue.

False

True/False: The critical path can be determined by use of either the "forward pass" or the "backward pass."

False

True/False: The dominant problem associated with the fixed-position layout is that workers are fixed in position, and cannot be reassigned.

False

True/False: The fundamental difference between PERT and CPM is that PERT uses the beta distribution for crashing projects while CPM uses cost estimates.

False

True/False: The key to effective supply chain management is to get many suppliers to compete with each other, in order to drive down prices.

False

True/False: The larger the number of periods in the simple moving average forecasting method, the greater the method's responsiveness to changes in demand.

False

True/False: The larger the standard error of the estimate, the more accurate the forecasting model.

False

True/False: The layout approach that addresses trade-offs between space and material handling is called the fixed position layout.

False

True/False: The location decisions of goods-producing firms will generally pay more attention to parking, access, and traffic counts than will service location decisions.

False

True/False: The master production schedule is a forecast of demand for families of products.

False

True/False: The minimum number of workstations depends upon the set of task times and the precedence chart, but not the number of units scheduled.

False

True/False: The multidomestic OM strategy maximizes local responsiveness while achieving a significant cost advantage.

False

True/False: The net present value of $10,000 to be received in exactly three years is considerably greater than $10,000.

False

True/False: The number of kanbans decreases as safety stock is increased.

False

True/False: The probability of rejecting a good lot is known as consumer's risk.

False

True/False: The purpose of process control is to detect when natural causes of variation are present.

False

True/False: The quality management tool called poka-yoke is not relevant to JIT systems.

False

True/False: The standard deviation of project duration is the average of the standard deviation of all activities on the critical path.

False

True/False: The supply chain for a brewery would include raw ingredients such as hops and barley but not the manufactured goods such as bottles and cans.

False

True/False: The supply chain management opportunity called postponement involves delaying deliveries to avoid accumulation of inventory at the customer's site.

False

True/False: The transportation model calculates an optimal shipping system between a central facility and several outlying customers.

False

True/False: The typical full-service restaurant uses a product-focused process.

False

True/False: The work cell layout, a special arrangement of machinery and equipment to focus on the production of a single product or group of related products, is for manufacturing applications and has no relevance to services.

False

True/False: The x-bar chart, like the c-chart, is based on the exponential distribution.

False

True/False: To measure the voltage of batteries, one would sample by attributes.

False

True/False: Utilization is the number of units a facility can hold, receive, store, or produce in a period of time.

False

True/False: Utilization of the total "cube" is the dominant consideration in office layout.

False

True/False: Vertical integration, whether forward or backward, requires the firm to become more specialized.

False

True/False: Waterways are an attractive distribution system when speed is more important than shipping cost.

False

True/False: When using the low-cost strategy for supply chain management, the firm should invest aggressively to reduce production lead time.

False

True/False: Which item to order and with which supplier the order should be placed are the two fundamental issues in inventory management.

False

True/False: With level schedules, a few large batches, rather than frequent small batches, are processed.

False

True/False: With the growth of just-in-time practices, railroads have made large gains in the share of the nation's transport that they haul.

False

True/False: With the many-suppliers strategy, the order usually goes to the supplier that offers the best quality.

False

True/False: A kanban system requires little variability in lead time because shortages have their impact on the entire productive system.

True

True/False: A major challenge in inventory management is to maintain a balance between inventory investment and customer service.

True

True/False: A multinational corporation has extensive international business involvements.

True

True/False: A naive forecast for September sales of a product would be equal to the sales in August.

True

True/False: A process range chart illustrates the amount of variation within the samples.

True

True/False: A process-oriented layout is the traditional way to support a product differentiation strategy.

True

True/False: A scheduler may find that freezing the portion of the schedule closest to the due dates allows the production system to function and the schedule to be met.

True

True/False: A time-series model uses a series of past data points to make the forecast.

True

True/False: A trend projection equation with a slope of 0.78 means that there is a 0.78 unit rise in Y for every unit of time that passes.

True

True/False: A useful tactic for increasing capacity is to redesign a product in order to get more throughput.

True

True/False: A value-stream map includes both (1) inventory quantities, and (2) symbols for customers and suppliers.

True

True/False: Acceptance sampling accepts or rejects an entire lot based on the information contained in the sample.

True

True/False: An acceptance sampling plan must define "good lots" and "bad lots" and specify the risk level associated with each one.

True

True/False: An example of an intangible cost, as it relates to location decisions, is the quality of education.

True

True/False: Automated storage and retrieval systems are commonly used in distribution facilities of retailers.

True

True/False: Averages of small samples, not individual measurements, are generally used in statistical process control.

True

True/False: Bar code and radio frequency technology, like that used to track UPS or FedEx packages on their global journeys, can also be used to track objects within the boundaries of a warehouse or shop.

True

True/False: Benchmark firms have driven down costs of supply chain performance.

True

True/False: Blanket orders are a long-term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship.

True

True/False: By their very nature, projects have a limited lifetime, and that sets project management apart from the management of more traditional activities.

True

True/False: Critical Success Factors are those activities that are key to achieving competitive advantage.

True

True/False: Cross-docking processes items as they are received, rather than placing them in storage; this helps explain why "warehouses" are now called "distribution centers."

True

True/False: Drop shipping results in time and shipping cost savings.

True

True/False: Errors made within the location decision area may overwhelm efficiencies in other areas.

True

True/False: Ethical and social dilemmas arise because stakeholders of a business have conflicting perspectives.

True

True/False: Experience differentiation is an extension of product differentiation, accomplished by using people's five senses to create an experience rather than simply providing a service.

True

True/False: Fixed costs are those costs that continue even if no units are produced.

True

True/False: Flexible manufacturing systems, because of easily changed control programs, are able to perform such tasks as manufacturing one-of-a-kind parts economically.

True

True/False: Focus forecasting tries a variety of computer models and selects the best one for a particular application.

True

True/False: For the greatest chance of success, an organization's operations management strategy must support the company's strategy.

True

True/False: Forecast including trend is an exponential smoothing technique that utilizes two smoothing constants: one for the average level of the forecast and one for its trend.

True

True/False: If setup costs are reduced by substantial reductions in setup time, the production order quantity is also reduced.

True

True/False: If setup times and costs can be reduced enough, the JIT ideal of "Lot Size = 1" can be achieved.

True

True/False: In PERT analysis, the identification of the critical path can be incorrect if a noncritical activity takes substantially more than its expected time.

True

True/False: In acceptance sampling, a manager can reach the wrong conclusion if the sample is not representative of the population it was drawn from.

True

True/False: In cycle counting, the frequency of item counting and stock verification usually varies from item to item depending upon the item's classification.

True

True/False: In process-focused facilities, equipment utilization is low.

True

True/False: In project management, crashing an activity must consider the impact on all paths in the network.

True

True/False: In selecting new equipment and technology, decision-makers look for flexibility—the ability to respond with little penalty in time, cost, or customer value.

True

True/False: In several industries, online exchanges have been created by buyers.

True

True/False: In the past half-century, the number of people employed in manufacturing has more or less held steady, but each manufacturing employee is manufacturing about 20 times as much.

True

True/False: In the production order quantity (POQ) model, inventory does not arrive in a single moment but flows in at a steady rate, resulting in a larger lot size than in an otherwise identical EOQ problem.

True

True/False: In the quantity discount model, it is possible to have a cost-minimizing solution where annual ordering costs do not equal annual carrying costs.

True

True/False: Labor cost and labor availability often drive the location decision in the call center industry.

True

True/False: NAFTA seeks to phase out all trade and tariff barriers among Canada, Mexico, and the United States.

True

True/False: One guideline for determining the arrangement and space allocation of a retail store is to place high-impulse and high-margin items such as housewares and beauty aids in prominent locations.

True

True/False: One limitation of the net present value approach to investments is that investments with identical net present values may have very different cash flows.

True

True/False: One reason for a firm locating near its competitors is the presence of a major resource it needs.

True

True/False: Operations management is the set of activities that create value in the form of goods and services by transforming inputs into outputs.

True

True/False: Production processes are being dispersed to take advantage of national differences in labor costs.

True

True/False: Retail inventory that is unaccounted for between receipt and time of sale is known as shrinkage.

True

True/False: Savings in the supply chain exert more leverage as the firm has a lower net profit margin.

True

True/False: Seasonal indexes adjust raw data for patterns that repeat at regular time intervals.

True

True/False: Service blueprinting is a process analysis technique that focuses on the customer and the provider's interaction with the customer.

True

True/False: Service firms choose locations based, in part, on the revenue potential of a site.

True

True/False: Servicescape refers to the physical surrounding in which the service is delivered.

True

True/False: Slack is the amount of time an activity can be delayed without delaying the entire project.

True

True/False: Smoothing a resource requirements profile to stay within capacity limits may increase setup costs.

True

True/False: Some degree of variability is present in almost all processes.

True

True/False: Southwest Airlines' core competence is operations.

True

True/False: Supply chain management faces additional challenges, such as those related to quality production and distribution systems, when companies enter growing global markets.

True

True/False: TPS stands for Toyota Production System.

True

True/False: The 5S's—sort/segregate, simplify/straighten, shine/sweep, standardize, and sustain/self discipline—are important to lean production because they act as a means to reduce waste.

True

True/False: The Central Limit Theorem states that when the sample size increases, the distribution of the sample means will approach the normal distribution.

True

True/False: The Cpk index measures the difference between desired and actual dimensions of goods or services produced.

True

True/False: The ES of an activity that has only one predecessor is simply the EF of that predecessor.

True

True/False: The PIMS study indicated that high ROI firms tend to have high product quality.

True

True/False: The bullwhip effect refers to the increasing fluctuations in orders that often occur as orders move through the supply chain.

True

True/False: The demand for automobiles would be considered an independent demand.

True

True/False: The factor-rating method can consider both tangible and intangible costs.

True

True/False: The first step in reducing setup times is the separation of setup into preparation activities and actual setup, so that as much work as possible can be done while the machine or process is operating.

True

True/False: The fixed-period inventory model can have a stockout during the review period as well as during the reorder period, which is why fixed-period models require more safety stock than fixed-quantity models.

True

True/False: The forecasting time horizon and the forecasting techniques used tend to vary over the life cycle of a product.

True

True/False: The higher the process capability ratio, the greater the likelihood that process will be within design specifications.

True

True/False: The lot-for-lot lot-sizing technique is particularly appropriate when demand is not very smooth and set up cost is small compared to holding cost.

True

True/False: The most common tactic to arrange departments in a process-oriented layout is to minimize material handling costs.

True

True/False: The objective of layout strategy is to develop an effective and efficient layout that will meet the firm's competitive requirements.

True

True/False: The objective of the make-or-buy decision is to help identify the products and services that can be obtained externally.

True

True/False: The ratio of labor cost per day to productivity, in units per day, is the labor cost per unit.

True

True/False: The sales force composite forecasting method relies on salespersons' estimates of expected sales.

True

True/False: The steeper an OC curve, the better it discriminates between good and bad lots.

True

True/False: The supply chain systems that result from using ERP in the grocery industry are called efficient consumer response (ECR) systems.

True

True/False: The time phased product structure, unlike the bill of material, adds the concept of lead times.

True

True/False: The tool that calculates which process has the lowest cost at any specified production volume is a crossover chart.

True

True/False: The work cell improves process layouts by reducing floor space and by reducing direct labor cost.

True

True/False: Time fences divide that segment of the MPS that can be revised from that section that is "frozen."

True

True/False: Time-function mapping is a flow diagram with time added to the horizontal axis.

True

True/False: Tracking limits should be within ± 8 MADs for low-volume stock items.

True

True/False: Units of safety stock are additions to the reorder point that allow for variability in the rate of demand, the length of lead time, or both.

True

True/False: Variability in manufacturing can occur because engineering drawings or specifications are incomplete or inaccurate.

True

True/False: Vendor Managed Inventory is a form of outsourcing.

True

True/False: Waste is anything that does not add value, such as storage or inspection of items; waste also includes any activity that does not add value from the consumer's perspective.

True

True/False: Wheeled Coach obtains competitive advantage through MRP in part because of their excellent record integrity and insistence on record accuracy.

True

If an activity whose normal duration is 13 days can be shortened to 10 days for an added cost of $1,500, the crash cost per period is a. $500 b. $750 b. $1,500 d. $13,000 e. $15,000

a. $500

Which of the following values of alpha would cause exponential smoothing to respond the most slowly to forecast errors? a. 0.10 b. 0.20 c. 0.40 d. 0.80 e. cannot be determined

a. 0.10

A contractor's project being analyzed by PERT has an estimated time for the critical path of 120 days. The sum of all activity variances is 81; the sum of variances along the critical path is 64. The probability that the project will take 130 or more days to complete is a. 0.1056 b. 0.1335 c. 0.8512 d. 0.8943 e. 1.29

a. 0.1056

A product sells for $5, and has unit variable costs of $3. This product accounts for $20,000 in annual sales, out of the firm's total of $60,000. The weighted contribution of this product is approximately a. 0.133 b. 0.200 c. 0.40 d. 0.667 e. $1.667

a. 0.133

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. The crossover point between process A and process B is a. 50 units b. 200 units c. $2,500 d. $5,000 e. $9,500

a. 50 units

Demand for a certain product is forecast to be 800 units per month, averaged over all 12 months of the year. The product follows a seasonal pattern, for which the January monthly index is 1.25. What is the seasonally-adjusted sales forecast for January? a. 640 units b. 798.75 units c. 800 units d. 1000 units e. cannot be calculated with the information given

a. 640 units

Which of the following statements is most correct? a. CSFs are often necessary, but not sufficient for competitive advantage. b. CSFs are often sufficient, but not necessary for competitive advantage. c. CSFs are neither necessary nor sufficient for competitive advantage. d. CSFs are both necessary and sufficient for competitive advantage. e. None of the above statements is correct.

a. CSFs are often necessary, but not sufficient for competitive advantage.

Which of the following best differentiates material requirements planning (MRP) from finite capacity scheduling (FCS)? a. FCS recognizes the finite nature of capacity while MRP does not. b. FCS works in services while MRP does not. c. MRP requires time buckets while FCS does not. d. FCS is an input into traditional MRP systems. e. FCS uses the Wagner-Whitin algorithm while MRP uses lot-for-lot and EOQ.

a. FCS recognizes the finite nature of capacity while MRP does not.

Which of the following is true of a focused factory? a. It may be focused in ways other than by product or layout. b. It may be focused only by processing requirements. c. It is much like a product facility within an otherwise process facility. d. All of the above are true. e. None of the above is true.

a. It may be focused in ways other than by product or layout.

Which one of the following is an example of JIT being used for competitive advantage? a. Jones Company has decreased the number of job classifications to just a few. b. Lafourche Metals increases the number of its suppliers to be less dependent on just a few. c. Houma Fabricators is proud to announce that incoming goods are inspected. d. Acme Company tells its maintenance department to intervene only if a machine breaks down. e. Caro Specialty Metals, Inc. has built a new, huge warehouse to store inventory.

a. Jones Company has decreased the number of job classifications to just a few.

A simple CPM network has three activities, D, E, and F. D is an immediate predecessor of E and of F. E is an immediate predecessor of F. The activity durations are D=4, E=3, F=8. a. The critical path is D-E-F, duration 15. b. The critical path is D-F, duration 12. c. Slack at D is 3 units d. Slack at E is 3 units e. Both a and c are true

a. The critical path is D-E-F, duration 15.

Which of the following statements regarding PERT times is true? a. The optimistic time estimate is an estimate of the minimum time an activity will require. b. The optimistic time estimate is an estimate of the maximum time an activity will require. c. The probable time estimate is calculated as t = (a + 4m + b). d. Pessimistic time estimate is an estimate of the minimum time an activity will require. e. Most likely time estimate is an estimate of the maximum time an activity will require.

a. The optimistic time estimate is an estimate of the minimum time an activity will require.

Which of the following statements about acceptance sampling is true? a. The steeper an OC curve, the better it discriminates between good and bad lots. b. Acceptance sampling removes all defective items. c. Acceptance sampling of incoming lots is replacing statistical process control at the supplier. d. Acceptance sampling occurs continuously along the assembly line. e. All of the above are true.

a. The steeper an OC curve, the better it discriminates between good and bad lots.

Which of the following best describes a gross material requirements plan? a. a schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started b. an intermediate range plan for the scheduling of families of products c. a chart illustrating whether capacity has been exceeded d. a table that corrects scheduled quantities for inventory on hand e. a schedule showing which products are to be manufactured and in what quantities

a. a schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started

The fixed-period inventory model requires more safety stock than the fixed-quantity models because a. a stockout can occur during the review period as well as during the lead time b. this model is used for products that have large standard deviations of demand c. this model is used for products that require very high service levels d. replenishment is not instantaneous e. setup costs and holding costs are large

a. a stockout can occur during the review period as well as during the lead time

If demand exceeds capacity at a new facility, an organization can use which of the following to move demand to an existing facility? a. aggressive marketing b. lower prices at all facilities c. build a facility of the correct size d. add a complementary product e. reduce lead times

a. aggressive marketing

The three major variations of online catalogs are a. catalogs by vendors, catalogs by intermediaries, and exchanges provided by buyers b. EDI, ERP, and ASN c. cost-based, market-based, and competitive bidding d. drop shipping, channel assembly, and postponement e. all auction-based

a. catalogs by vendors, catalogs by intermediaries, and exchanges provided by buyers

Concerning relationships with suppliers, which of the following combinations is critical to the success of JIT? a. close relationships with trust b. close relationships with skepticism c. distant relationships with trust d. distant relationships with skepticism e. none of the above

a. close relationships with trust

Computer-integrated manufacturing (CIM) includes manufacturing systems that have a. computer-aided design, a flexible manufacturing system, inventory control, warehousing and shipping integrated b. transaction processing, management information systems, and decision support systems integrated c. automated guided vehicles, robots, and process control d. robots, automated guided vehicles, and transfer equipment e. all of the above

a. computer-aided design, a flexible manufacturing system, inventory control, warehousing and shipping integrated

A location decision for an appliance manufacturer would tend to have a(n) a. cost focus b. labor focus c. revenue focus d. environmental focus e. education focus

a. cost focus

What type of negotiating strategy requires the supplier to open its books to the purchasers? a. cost-based price model b. market-based price model c. competitive bidding d. price-based model e. none of the above

a. cost-based price model

The three steps of the operations manager's job, in order, are a. develop the strategy, establish the organizational structure, find the right staff b. develop the strategy, find the right staff, establish the organizational structure c. find the right staff, establish the organizational structure, develop the strategy d. find the right staff, develop the strategy, establish the organizational structure e. establish the organizational structure, find the right staff, develop the strategy

a. develop the strategy, establish the organizational structure, find the right staff

Which of the following has progressed the furthest along its product life cycle? a. drive-thru restaurants b. Internet search engines c. iPods d. LCD & plasma TVs e. Xbox 360

a. drive-thru restaurants

The fundamental difference between cycles and seasonality is the a. duration of the repeating patterns b. magnitude of the variation c. ability to attribute the pattern to a cause d. all of the above e. none of the above

a. duration of the repeating patterns

A firm is seeking a new factory location, and is considering several countries worldwide. In some of these countries, child labor is prevalent; in others, working conditions and worker safety are inferior to conditions in the U.S. An operations manager paying attention to __________will factor these issues into the location decision. a. ethical and social responsibility issues b. critical success factors c. factor rating systems d. geographic information systems e. regression models

a. ethical and social responsibility issues

Evaluating location alternatives by comparing their composite (weighted-average) scores involves a. factor rating analysis b. cost-volume analysis c. transportation model analysis d. linear regression analysis e. crossover analysis

a. factor rating analysis

The term maquiladora is most synonymous with a. free trade zones b. Chinese forced labor camps c. home-based or cottage industry d. areas that do not meet U.S. standards for workplace safety and pollution e. none of the above

a. free trade zones

The usual purpose of an R-chart is to signal whether there has been a a. gain or loss in dispersion b. change in the percent defective in a sample c. change in the central tendency of the process output d. change in the number of defects in a sample e. none of the above

a. gain or loss in dispersion

Which of the statements below best describes office layout? a. groups workers, their equipment, and spaces/offices to provide for movement of information b. addresses the layout requirements of large, bulky projects such as ships and buildings c. seeks the best personnel and machine utilization in repetitive or continuous production d. allocates shelf space and responds to customer behavior e. deals with low-volume, high-variety production

a. groups workers, their equipment, and spaces/offices to provide for movement of information

A characteristic of JIT partnerships with respect to quality is to a. help suppliers meet quality requirement b. inspect all incoming parts c. maintain a steady output rate d. impose maximum product specifications on the supplier e. draw up strict contracts ensuring that all defectives will be immediately replaced

a. help suppliers meet quality requirement

In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, the EOQ will a. increase by about 41% b. increase by 100% c. increase by 200% d. increase, but more data is needed to say by how much e. either increase or decrease

a. increase by about 41%

Which of the following represents an aggressive approach to demand management in the service sector when demand and capacity are not particularly well matched? a. inexpensive rates for weekend phone calls b. appointments c. reservations d. first-come, first-served e. none of the above

a. inexpensive rates for weekend phone calls

Which of the international operations strategies involves low cost reductions and low local responsiveness? a. international strategy b. global strategy c. transnational strategy d. multidomestic strategy e. none of the above

a. international strategy

Which of the international operations strategies uses import/export or licensing of existing products? a. international strategy b. global strategy c. transnational strategy d. multidomestic strategy e. none of the above

a. international strategy

A six-month moving average forecast is better than a three-month moving average forecast if demand a. is rather stable b. has been changing due to recent promotional efforts c. follows a downward trend d. follows a seasonal pattern that repeats itself twice a year e. follows an upward trend

a. is rather stable

A big advantage of a process-oriented layout is a. its flexibility in equipment and labor assignments b. its low cost c. the simplified scheduling problem presented by this layout strategy d. the ability to employ low-skilled labor e. its high equipment utilization

a. its flexibility in equipment and labor assignments

Which of the following OM strategic decisions pertains to sensible location of processes and materials in relation to each other? a. layout design b. goods and service design c. supply chain management d. inventory e. scheduling

a. layout design

What lot-sizing technique is generally preferred when inventory holding costs are extremely high? a. lot-for-lot b. EOQ c. part-period balancing d. the Wagner-Whitin algorithm e. All of the above are appropriate for the situation.

a. lot-for-lot

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

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 modestly skilled d. high fixed costs, low variable costs e. raw material inventories are high relative to the value of the product

a. low volume, high variety

In MRP, system nervousness is caused by a. management's attempt to continually respond to minor changes in production requirements b. the use of the lot-for-lot approach c. management's marking part of the master production schedule as "not to be rescheduled" d. the use of phantom bills of material e. management's attempt to evaluate alternative plans before making a decision

a. management's attempt to continually respond to minor changes in production requirements

The ______ is (are) the MRP input detailing which end items are to be produced, when they are needed, and in what quantities. a. master production schedule b. gross requirements c. inventory records d. assembly time chart e. bill of material

a. master production schedule

If a sample of items is taken and the mean of the sample is outside the control limits the process is a. out of control and the cause should be established b. in control, but not capable of producing within the established control limits 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. producing high quality products

a. out of control and the cause should be established

The phases of project management are a. planning, scheduling, and controlling b. planning, programming, and budgeting c. planning, organizing, staffing, leading, and controlling d. different for manufacturing projects than for service projects e. GANTT, CPM, and PERT

a. planning, scheduling, and controlling

Keeping a product generic as long as possible before customizing is known as a. postponement b. keiretsu c. channel assembly d. forward integration e. backward integration

a. postponement

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. none of the above

a. process control

The type of layout which features departments or other functional groupings in which similar activities are performed is a. process-oriented b. product-oriented c. fixed-position d. mass production e. unit production

a. process-oriented

Which layout type assumes an adequate volume for high equipment utilization? a. product-oriented layout b. process-oriented layout c. fixed-position layout d. retail layout e. warehouse layout

a. product-oriented layout

The two general approaches to forecasting are a. qualitative and quantitative b. mathematical and statistical c. judgmental and qualitative d. historical and associative e. judgmental and associative

a. qualitative and quantitative

By which distribution system is 90 percent of the nation's coal shipped? a. railroads b. trucks c. waterways d. pipelines e. none of the above

a. railroads

Industrial location analysis typically attempts to a. reduce costs b. maximize sales c. focus more on human resources d. be environmentally friendly e. none of the above

a. reduce costs

Strategies for improving productivity in services are 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. none of the above

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

Forecasts are usually classified by time horizon into three categories a. short-range, medium-range, and long-range b. finance/accounting, marketing, and operations c. strategic, tactical, and operational d. exponential smoothing, regression, and time series e. departmental, organizational, and industrial

a. short-range, medium-range, and long-range

Reduction of in-transit inventory can be encouraged through use of a. supplier location near plants b. low setup costs c. low carrying costs d. use of trains, not trucks e. low-cost, global suppliers

a. supplier location near plants

Which of the following is not one of McDonald's "seven major innovations"? a. the Happy Meal b. drive-through windows c. breakfast menus d. play areas e. a kitchen system to facilitate mass customization

a. the Happy Meal

Takt time is a. the total work time available divided by units required by the consumer b. the units required divided by workers required c. a fictional time increment similar to a therblig d. the same thing as cycle time in a process layout e. an important consideration in balancing an assembly line

a. the total work time available divided by units required by the consumer

LaQuinta Motor Inns has a competitive edge over its rivals because it a. uses regression analysis to determine which variables most influence profitability b. picks better locations than its rivals c. picks larger locations than its rivals d. builds only along interstate highways e. all of the above

a. uses regression analysis to determine which variables most influence profitability

A product has demand of 4000 units per year. Ordering cost is $20 and holding cost is $4 per unit per year. The EOQ model is appropriate. The cost-minimizing solution for this product will cost _____ per year in total annual inventory costs. a. $400 b. $800 c. $1200 d. zero; this is a class C item e. cannot be determined because unit price is not known

b. $800

A local project being analyzed by PERT has 42 activities, 13 of which are on the critical path. If the estimated time along the critical path is 105 days with a project variance of 25, the probability that the project will be completed in 95 days or less is a. -0.4 b. 0.0228 c. 0.3444 d. 0.9772 e. 4.2

b. 0.0228

A project being analyzed by PERT has 38 activities, 16 of which are on the critical path. If the estimated time along the critical path is 90 days with a project variance of 25, the probability that the project will be completed in 88 days or less is a. 0.0228 b. 0.3446 c. 0.6554 d. 0.9772 e. 18

b. 0.3446

An activity on a PERT network has these time estimates: optimistic = 1, most likely = 2, and pessimistic = 5. Its expected time is a. 2 b. 2.33 c. 2.67 d. 8 e. none of these

b. 2.33

A product has demand of 4000 units per year. Ordering cost is $20 and holding cost is $4 per unit per year. The cost-minimizing solution for this product is to order a. all 4000 units at one time b. 200 units per order c. every 20 days d. 10 times per year e. none of the above

b. 200 units per order

The Dulac Box plant works two 8-hour shifts each day. In the past, 500 cypress packing boxes were produced by the end of each day. The use of new technology has enabled them to increase productivity by 30%. Productivity is now approximately a. 32.5 boxes/hr b. 40.6 boxes/hr c. 62.5 boxes/hr d. 81.25 boxes/hr e. 300 boxes/hr

b. 40.6 boxes/hr

Each R requires 4 of component S; each S requires 3 of part T. The lead time for assembly of R is 1 week. The lead time for the manufacture of S is 2 weeks. The lead time for the procurement of T is 6 weeks. The cumulative lead time for R is ______ weeks. a. 6 b. 9 c. 12 d. 18 e. 28

b. 9

An acceptance sampling plan is to be designed to meet the organization's targets for product quality and risk levels. Which of the following is true? a. n and c determine the AQL. b. AQL, LTPD, α and β collectively determine n and c. c. n and c are determined from the values of AQL and LTPD. d. α and β are determined from the values of AQL and LTPD. e. None of the above is true.

b. AQL, LTPD, α and β collectively determine n and c.

Which of the following statements about Bechtel is true? a. Even though Bechtel is over 100 years old, the Kuwaiti oil fields was its first "project." b. Bechtel is the world's premier manager of massive construction and engineering projects. c. Bechtel's competitive advantage is supply chain management. d. While its projects are worldwide, its network of suppliers is largely in the U.S. e. All of the above are true.

b. Bechtel is the world's premier manager of massive construction and engineering projects.

The _____ distribution is used by PERT analysis to calculate expected activity times and variances. a. Normal b. Beta c. Alpha d. Gaussian e. Binomial

b. Beta

Which of the following statements regarding time-cost tradeoffs in CPM networks is false? a. "Project Crashing" shortens project duration by assigning more resources to critical tasks. b. Crashing sometimes has the reverse result of lengthening the project duration. c. Crashing must consider the impact of crashing an activity on all paths in the network. d. Activities not on the critical path can become critical after crashing takes place. e. All of the above are true.

b. Crashing sometimes has the reverse result of lengthening the project duration.

Which of the following statements regarding Dell Computer is false? a. Dell is a practitioner of the mass customization process. b. Dell builds its computers overseas in order to gain a low-cost advantage. c. Dell keeps very little inventory of finished goods. d. Dell utilizes a global supply chain, but assembles its computers in the U.S. e. Dell's research focuses on manufacturing issues, not computer part design.

b. Dell builds its computers overseas in order to gain a low-cost advantage.

Which of the following is not a step in the forecasting process? a. Determine the use of the forecast. b. Eliminate any assumptions. c. Determine the time horizon. d. Select forecasting model. e. Validate and implement the results

b. Eliminate any assumptions.

Which of the following is the best example of the proximity rule that, for service firms, proximity to market is the most important location factor? a. Soft drinks are bottled in many local plants, where carbonated water is added to proprietary syrups that may have been shipped long distances. b. Few people will travel out-of state for a haircut. c. Patients will travel very long distances to have their hernia surgeries performed at Shouldice Hospital. d. Furniture makers choose to locate near the source of good hardwoods, even though it means locating near other furniture manufacturers. e. Metal refiners (smelters) locate near mines to accomplish significant weight reduction near the metal's source.

b. Few people will travel out-of state for a haircut.

An inventory decision rule states "when the inventory level goes down to 14 gearboxes, 100 gearboxes will be ordered." Which of the following statements is true? a. One hundred is the reorder point, and 14 is the order quantity. b. Fourteen is the reorder point, and 100 is the order quantity. c. The number 100 is a function of demand during lead time. d. Fourteen is the safety stock, and 100 is the reorder point. e. None of the above is true.

b. Fourteen is the reorder point, and 100 is the order quantity.

If the goals of JIT partnerships are met, which of the following is a result? a. For incoming goods, receiving activity and inspection are outsourced. b. In-transit inventory falls as suppliers are located closer to facilities. c. The number of suppliers increases. d. In-plant inventory replaces in-transit inventory. e. All of the above are consequences of meeting the JIT partnership goals.

b. In-transit inventory falls as suppliers are located closer to facilities.

Which of the following is not a characteristic of simple moving averages? a. It smoothes random variations in the data. b. It has minimal data storage requirements. c. It weights each historical value equally. d. It lags changes in the data. e. It smoothes real variations in the data.

b. It has minimal data storage requirements.

Which one of the following statements is true regarding JIT inventory? a. It exists just in case something goes wrong. b. It is the minimum inventory necessary to keep a perfect system running. c. It hides variability. d. It is minimized with large lot production. e. It increases if setup costs decrease.

b. It is the minimum inventory necessary to keep a perfect system running.

Which of the following statements regarding the production order quantity model is true? a. It applies only to items produced in the firm's own production departments. b. It relaxes the assumption that all the order quantity is received at one time. c. It relaxes the assumption that the demand rate is constant. d. It minimizes the total production costs. e. It minimizes inventory.

b. It relaxes the assumption that all the order quantity is received at one time.

Which of the following is true regarding the process capability index Cpk? a. A Cpk index value of 1 is ideal, meaning all units meet specifications. b. The larger the Cpk, the more units meet specifications. c. The Cpk index can only be used when the process centerline is also the specification centerline. d. Positive values of the Cpk index are good; negative values are bad. e. None of the above is true.

b. The larger the Cpk, the more units meet specifications.

A sample of parts is measured. The mean of this sample is in the middle of the control limits, but some individual parts measure too low for design specifications and other parts measure too high. Which of the following is true? a. The process is out of control, and the cause should be established. b. The process is in control, but not capable of producing within the established control limits. c. The process is within the established control limits with only natural causes of variation. d. The process is outside the established control limits with only natural causes of variation. e. The process is in control, and there is nothing to worry about.

b. The process is in control, but not capable of producing within the established control limits.

Which of the following statements is true about the MRP plan when using lot-for-lot ordering? a. The quantity of gross requirements for a child item is always equal to the quantity of planned order releases for its parent. b. The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly. c. The quantity of gross requirements for a child item is always equal to the quantity of gross requirements for its parent. d. The quantity and gross requirements for a child item is always equal to the quantity of net requirements for its parent. e. All of the above are true.

b. The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly.

A simple CPM network has five activities, A, B, C, D, and E. A is an immediate predecessor of C and of D. B is also an immediate predecessor of C and of D. C and D are both immediate predecessors of E. a. There are two paths in this network. b. There are four paths in this network. c. There are five paths in this network. d. There are 25 paths through this network. e. None of these statements is true.

b. There are four paths in this network.

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 lot-sizing is true? a. EOQ principles should be followed whenever economical. b. Too much concern with lot-sizing results in false accuracy. c. Lot-for-lot cannot be modified for scrap allowance or process constraints. d. The Wagner-Whitin algorithm simplifies lot size calculations. e. All of the above are true.

b. Too much concern with lot-sizing results in false accuracy.

Which of the following is specifically characterized by a focus on continuous improvement, respect for people, and standard work practices? a. Just-in-time (JIT) b. Toyota Production System (TPS) c. Lean operations d. Material requirements planning (MRP) e. kanban

b. Toyota Production System (TPS)

If the Cpk index exceeds 1 a. the AQL must be smaller than the LTPD b. V must be less than one-third of the difference between the specification and the process mean c. the x-bar chart must indicate that the process is in control d. the process is capable of Six Sigma quality e. the process is characterized as "not capable"

b. V must be less than one-third of the difference between the specification and the process mean

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 of the following statements best characterizes delivery reliability? a. a company that always delivers on the same day of the week b. a company that always delivers at the promised time c. a company that delivers more frequently than its competitors d. a company that delivers faster than its competitors e. a company that has a computerized delivery scheduling system

b. a company that always delivers at the promised time

Vertical integration appears particularly advantageous when the organization has a. a very specialized product b. a large market share c. a very common, undifferentiated product d. little experience operating an acquired vendor e. purchases that are a relatively small percent of sales

b. a large market share

Distribution resource planning (DRP) is a. a transportation plan to ship materials to warehouses b. a time-phased stock replenishment plan for all levels of a distribution network c. a shipping plan from a central warehouse to retail warehouses d. material requirements planning with feedback loop from distribution centers e. a material requirements planning package used exclusively by warehouses

b. a time-phased stock replenishment plan for all levels of a distribution network

Computer monitoring of tracking signals and self-adjustment if a signal passes a preset limit is characteristic of a. exponential smoothing including trend b. adaptive smoothing c. trend projection d. focus forecasting e. multiple regression analysis

b. adaptive smoothing

Which of the following is not one of the requirements of cellular production? a. test (poka-yoke) at each station in the cell b. adequate volume for high equipment utilization c. a high level of training, flexibility, and empowerment of employees d. being self-contained, with its own equipment and resources e. identification of families of products, often through the use of group technology codes

b. adequate volume for high equipment utilization

In trend-adjusted exponential smoothing, the forecast including trend (FIT) consists of a. an exponentially smoothed forecast and an estimated trend value b. an exponentially smoothed forecast and a smoothed trend factor c. the old forecast adjusted by a trend factor d. the old forecast and a smoothed trend factor e. a moving average and a trend factor

b. an exponentially smoothed forecast and a smoothed trend factor

Forecasts a. become more accurate with longer time horizons b. are rarely perfect c. are more accurate for individual items than for groups of items d. all of the above e. none of the above

b. are rarely perfect

Balancing a work cell is done a. before the work cell equipment is sequenced b. as part of the process of building an efficient work cell c. before takt time is calculated d. so that each assembly line workstation has exactly the same amount of work e. to minimize the total movement in a process layout

b. as part of the process of building an efficient work cell

In a PERT network, non-critical activities that have little slack need to be monitored closely a. because PERT treats all activities as equally important b. because near-critical paths could become critical paths with small delays in these activities c. because slack is undesirable and needs to be eliminated d. because they are causing the entire project to be delayed e. because they have a high risk of not being completed

b. because near-critical paths could become critical paths with small delays in these activities

The local newspaper receives several complaints per day about typographic errors. Over a seven day period, the publisher has received calls from readers reporting the following number of errors: 4, 3, 2, 6, 7, 3, and 9. Based on these data alone, what type of control chart(s) should the publisher use? a. p-chart b. c-chart c. x -chart d. R-chart e. x - and R-charts

b. c-chart

Effective capacity is the a. maximum output of a system in a given period 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

b. capacity a firm expects to achieve given the current operating constraints

The c-chart signals whether there has been a a. gain or loss in uniformity b. change in the number of defects per unit c. change in the central tendency of the process output d. change in the percent defective in a sample e. change in the AOQ

b. change in the number of defects per unit

Given the position of the iPod in the growth stage of its life cycle, which of the following OM Strategy/Issues should the makers of iPods be least concerned with at the current time? a. forecasting b. cost cutting c. increasing capacity d. product and process reliability e. enhancing distribution

b. cost cutting

Which of the following is not an advantage of work cells? a. reduced direct labor cost b. decreased use of equipment and machinery c. heightened sense of employee participation d. reduced raw material and finished goods inventory e. reduced investment in machinery and equipment

b. decreased use of equipment and machinery

The fundamental purpose of an organization's mission statement is to a. create a good human relations climate in the organization b. define the organization's purpose in society c. define the operational structure of the organization d. generate good public relations for the organization e. define the functional areas required by the organization

b. define the organization's purpose in society

The main issue in designing process layouts concerns the relative positioning of a. safety devices b. departments c. raw materials d. entrances, loading docks, etc. e. supervisors to their employees

b. departments

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

According to the authors, which of the following strategic concepts allow firms to achieve their missions? a. productivity, efficiency, and quality leadership b. differentiation, cost leadership, and quick response c. differentiation, quality leadership, and quick response d. distinctive competency, cost leadership, and experience e. differentiation, distinctive competency, quality leadership, and capacity

b. differentiation, cost leadership, and quick response

A furniture maker has delivered a dining set directly to the end consumer rather than to the furniture store. The furniture maker is practicing a. postponement b. drop shipping c. channel assembly d. passing the buck e. float reduction

b. drop shipping

The three major types of forecasts used by business organizations are a. strategic, tactical, and operational b. economic, technological, and demand c. exponential smoothing, Delphi, and regression d. causal, time-series, and seasonal e. departmental, organizational, and territorial

b. economic, technological, and demand

A bill of material must be updated with the corrected dimensions of a part. The document that details this change is a(n) a. modular bill b. engineering change notice c. resource requirements profile d. lead time-offset product structure document e. planning bill

b. engineering change notice

The extension of MRP which extends to resources such as labor hours and machine hours, as well as to order entry, purchasing, and direct interface with customers and suppliers is a. MRP II b. enterprise resource planning c. the master production schedule d. closed-loop MRP e. not yet technically possible

b. enterprise resource planning

Which one of the following is not a layout tactic in a JIT environment? a. work cells for families of products b. fixed equipment c. minimizing distance d. little space for inventory e. poka-yoke devices

b. fixed equipment

Which of the following is true for process layouts, but false for product-oriented layouts? a. low in-process inventories b. flexibility in equipment and labor assignments c. low variety of products d. high volume of output e. often solved by assembly line balancing

b. flexibility in equipment and labor assignments

If a casual-dining restaurant is attempting to practice JIT and lean operations, which of the following would not be present? a. close relationship with the restaurant's suppliers of food, utensils, and equipment b. food preparation in large batches c. a kitchen set up to minimize wasteful movements d. lean inventories of food e. All of the above should be present.

b. food preparation in large batches

A rice mill in south Louisiana purchases the trucking firm that transports packaged rice to distributors. This is an example of a. horizontal integration b. forward integration c. backward integration d. current transformation e. keiretsu

b. forward integration

Standard Register a. has dozens of U.S. plants in its Forms Division b. groups people and machines into departments that perform specific activities c. utilizes a product strategy to keep production volume high d. obtains its low-cost advantage by not spending money on CAD systems e. obtains its low-cost advantage by specializing in a relatively small number of products

b. groups people and machines into departments that perform specific activities

Globalization of the location decision is the result of all of the following except a. market economics b. higher quality of labor overseas c. ease of capital flow between countries d. high differences in labor costs e. more rapid, reliable travel and shipping

b. higher quality of labor overseas

In most acceptance sampling plans, when a lot is rejected, the entire lot is inspected and all defective items are replaced. When using this technique the AOQ a. worsens (AOQ becomes a larger fraction) b. improves (AOQ becomes a smaller fraction) c. is not affected, but the AQL is improved d. is not affected e. falls to zero

b. improves (AOQ becomes a smaller fraction)

A product whose EOQ is 400 experiences a 50% increase in demand. The new EOQ is a. unchanged b. increased by less than 50% c. increased by 50% d. increased by more than 50% e. cannot be determined

b. increased by less than 50%

Experience Differentiation a. isolates the consumer from the delivery of a service b. is an extension of product differentiation in the service sector c. uses only the consumer's senses of vision and sound d. keeps consumers from becoming active participants in the service e. is the same as product differentiation, but applied in the service sector

b. is an extension of product differentiation in the service sector

E-procurement a. works best in long-term contract situations, and is not suited for auctions b. is the same thing as Internet purchasing c. represents only the auction and bidding components of Internet purchasing d. is illegal in all states except Nevada and New Jersey e. All of the above are true of e-procurement.

b. is the same thing as Internet purchasing

Assignable variation a. is a sign that a process is under control b. is to be identified and eliminated c. is the same as random variation d. is variation that cannot be traced to a specific cause e. leads to a steep OC curve

b. is to be identified and eliminated

Japanese manufacturers often take a middle ground between purchasing from a few suppliers and vertical integration. This approach is a. kanban b. keiretsu c. samurai d. poka-yoke e. kaizen

b. keiretsu

Characteristics of just-in-time partnerships do not include a. removal of in-transit inventory b. large lot sizes to save on setup costs and to gain quantity discounts c. long-term contracts d. few suppliers e. buyer helps supplier to meet the quality requirements

b. large lot sizes to save on setup costs and to gain quantity discounts

With reference to cultural and ethical issues, the World Trade Organization has a. succeeded in providing equal protection of intellectual property among nations b. made progress in providing equal protection of intellectual property among nations c. phased out all trade and tariff barriers between the United States and Mexico d. eliminated slave labor and child labor e. played little role in addressing cultural and ethical issues among nations

b. made progress in providing equal protection of intellectual property among nations

Among the ethical and social challenges facing operations managers are a. honoring financial commitments b. maintaining a clean environment c. developing low-cost products d. providing an efficient workplace e. all of the above

b. maintaining a clean environment

The purchasing approach that holds the suppliers responsible for maintaining the necessary technology, expertise, and forecasting ability plus cost, quality, and delivery competencies is a. few suppliers b. many suppliers c. Keiretsu d. vertical integration e. virtual companies

b. many suppliers

In assembly line balancing, cycle time (the ratio of available production time to scheduled production) is the a. minimum time that a product is allowed at each workstation b. maximum time that a product is allowed at each workstation c. optimum time that a product is allowed at each workstation d. desired cycle time that a product is allowed at each workstation e. all of the above

b. maximum time that a product is allowed at each workstation

A forecast with a time horizon of about 3 months to 3 years is typically called a a. long-range forecast b. medium-range forecast c. short-range forecast d. weather forecast e. strategic forecast

b. medium-range forecast

The typical goal used when developing a process-oriented layout strategy is to a. minimize the distance between adjacent departments b. minimize the material handling costs c. maximize the number of different tasks which can be performed by an individual machine d. minimize the level of operator skill necessary e. maximize job specialization

b. minimize the material handling costs

The transportation method, when applied to location analysis a. minimizes total fixed costs b. minimizes total production and transportation costs c. minimizes total transportation costs d. maximizes revenues e. minimizes the movement of goods

b. minimizes total production and transportation costs

Firms making many different final products use __________ to facilitate production scheduling. a. planning bills b. modular bills c. phantom bills d. overdue bills e. none of the above

b. modular bills

Visibility throughout the supply chain is a requirement among supply chain members for a. mutual agreement on goals b. mutual trust c. compatible organizational cultures d. local optimization e. the bullwhip effect

b. mutual trust

A product whose EOQ is 40 experiences a decrease in ordering cost from $90 per order to $10. The revised EOQ is a. three times as large b. one-third as large c. nine times as large d. one-ninth as large e. cannot be determined

b. one-third as large

Which of the following is not present in a time series? a. seasonality b. operational variations c. trend d. cycles e. random variations

b. operational variations

A manufacturer uses statistical process control to control the quality of the firm's products. Samples of 50 of Product A are taken, and a defective/acceptable decision is made on each unit sampled. For Product B, the number of flaws per unit is counted. What type(s) of control charts should be used? a. p-charts for A and B b. p-chart for A, c-chart for B c. c-charts for both A and B d. p-chart for A, mean and range charts for B e. c-chart for A, mean and range charts for B

b. p-chart for A, c-chart for B

Which one of the following products is most likely made in a job shop environment? a. a daily newspaper b. paper forms c. television sets d. cigarettes e. canned vegetables

b. paper forms

Governmental attitudes toward issues such as private property, intellectual property, zoning, pollution, and employment stability may change over time. The term associated with this phenomenon is a. bureaucratic risk b. political risk c. legislative risk d. judicial risk e. democratic risk

b. political risk

The basic break-even model can be modified to handle more than one product. This extension of the basic model requires a. price and sales volume for each product b. price and variable cost for each product, and the percent of sales that each product represents c. that the firm have very low fixed costs d. that the ratio of variable cost to price be the same for all products e. sales volume for each product

b. price and variable cost for each product, and the percent of sales that each product represents

Great Lakes Barge and Baggage Company makes, among other things, battery-operated bilge pumps. Which of the following activities is not part of JIT? They a. communicate their schedules to suppliers b. produce in long production runs to reduce the impact of setup costs c. use a pull system to move inventory d. continuously work on reducing setup time e. produce in small lots

b. produce in long production runs to reduce the impact of setup costs

Cycle counting a. is a process by which inventory records are verified once a year b. provides a measure of inventory accuracy c. provides a measure of inventory turnover d. assumes that all inventory records must be verified with the same frequency e. assumes that the most frequently used items must be counted more frequently

b. provides a measure of inventory accuracy

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

With the growth of JIT, which of the following distribution systems has been the biggest loser? a. trucking b. railroads c. airfreight d. waterways e. pipelines

b. railroads

Which of the following layouts generally has the best machine utilization? a. fixed-position layout b. repetitive and product-oriented layout c. process-oriented layout d. office layout e. warehouse layout

b. repetitive and product-oriented layout

For the lot-sizing technique known as lot-for-lot to be appropriate a. future demand should be known for several weeks b. setup cost should be relatively small c. annual volume should be rather low d. item unit cost should be relatively small e. the independent demand rate should be very stable

b. setup cost should be relatively small

Which of the following is not among the eight components of revenue and volume for a service firm? a. quality of the management b. shipment cost of finished goods c. purchasing power of the customer-drawing area d. uniqueness of the firm's and the competitor's locations e. competition in the area

b. shipment cost of finished goods

The time an activity will take assuming very unfavorable conditions is a. the optimistic time b. the pessimistic time c. the activity variance d. the minimum time e. exactly twice as long as the expected time

b. the pessimistic time

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 material or not

b. the quantity and timing of planned order releases

ABC analysis is based upon the principle that a. all items in inventory must be monitored very closely b. there are usually a few critical items, and many items which are less critical c. an item is critical if its usage is high d. more time should be spent on class "C" items because there are more of them e. an item is critical if its unit price is high

b. there are usually a few critical items, and many items which are less critical

An advantage of the fixed-period inventory system is that a. the supplier will be more cooperative b. there is no physical count of inventory items when an item is withdrawn c. no inventory records are required d. orders usually are for smaller order quantities e. the average inventory level is reduced

b. there is no physical count of inventory items when an item is withdrawn

In the make-or-buy decision, which of the following is not a reason for buying? a. inadequate capacity b. to obtain desired quality c. patents or trade secrets d. lower inventory costs e. All of the above are reasons for buying.

b. to obtain desired quality

Which of the following is not an advantage of a virtual company? a. speed b. total control over every aspect of the organization c. specialized management expertise d. low capital investment e. flexibility

b. total control over every aspect of the organization

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 the above are assumptions in the basic break-even model.

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

For a certain item, the cost-minimizing order quantity obtained with the basic EOQ model was 200 units and the total annual inventory (carrying and setup) cost was $600. The inventory carrying cost per unit per year for this item is a. $1.50 b. $2.00 c. $3.00 d. $150.00 e. not enough data to determine

c. $3.00

In a safety stock problem where both demand and lead time are variable, demand averages 150 units per day with a daily standard deviation of 16, and lead time averages 5 days with a standard deviation of 1 day. The standard deviation of demand during lead time is approximately a. 15 units b. 100 units c. 154 units d. 500 units e. 13,125 units

c. 154 units

The MPS calls for 110 units of Product A. There are currently 60 of Product A on hand. Each A requires 4 of Part B. There are 20 units of B available. The net requirements for B are a. 20 b. 120 c. 180 d. 240 e. 440

c. 180

The assumptions of the production order quantity model are met in a situation where annual demand is 3650 units, setup cost is $50, holding cost is $12 per unit per year, the daily demand rate is 10 and the daily production rate is 100. The production order quantity for this problem is approximately a. 139 b. 174 c. 184 d. 365 e. 548

c. 184

A Cpk index of 1.00 equates to a defect rate of a. five percent b. 3.4 defects per million c. 2.7 per 1,000 items d. 97.23 percent e. one percent

c. 2.7 per 1,000 items

If x = 23 ounces, σ = 0.4 ounces, and n = 16, the ±3σ control limits will be a. 21.8 to 24.2 ounces b. 23 ounces c. 22.70 to 23.30 ounces d. 22.25 to 23.75 ounces e. none of the above

c. 22.70 to 23.30 ounces

Gibson Valves produces cast bronze valves on an assembly line, currently producing 1600 valves per shift. If the production is increased to 2000 valves per shift, labor productivity will increase by a. 10% b. 20% c. 25% d. 40% e. 50%

c. 25%

Fred's Fabrication, Inc. wants to increase capacity by adding a new machine. The firm is considering proposals from vendor A and vendor B. The fixed costs for machine A are $90,000 and for machine B, $70,000. The variable cost for A is $9.00 per unit and for B, $14.00. The revenue generated by the units processed on these machines is $20 per unit. The crossover between machine A and machine B is a. 4,000 units, with A more profitable at low volumes b. 4,000 dollars, with A more profitable at low volumes c. 4,000 units, with B more profitable at low volumes d. 4,000 dollars, with B more profitable at low volumes e. none of the above

c. 4,000 units, with B more profitable at low volumes

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 85%. What is the expected weekly output of cranks for this company? a. 5100 b. 5700 c. 4845 d. 969 e. 6783

c. 4845

If daily demand is constant at 10 units per day, and lead time averages 12 days with a standard deviation of 3 days, 95 percent service requires a safety stock of approximately a. 28 units b. 30 units c. 49 units d. 59 units e. 114 units

c. 49 units

Given an actual demand of 61, a previous forecast of 58, and an of .3, what would the forecast for the next period be using simple exponential smoothing? a. 45.5 b. 57.1 c. 58.9 d. 61.0 e. 65.5

c. 58.9

Each X requires 2 of component Y; each Y requires 4 of part Z. The lead time for assembly of X is 1 week. The lead time for the manufacture of Y is 1 week. The lead time for the procurement of Z is 6 weeks. The cumulative lead time for X is _____ weeks. a. 6 b. 7 c. 8 d. 10 e. cannot be determined

c. 8

A project whose critical path has an estimated time of 820 days with a variance of 225 has a 20% chance that the project will be completed before day ______ (rounded to nearest day). a. 631 b. 689 c. 807 d. 833 e. 1009

c. 807

Which of the following is an example of competing on quick response? a. A firm produces its product with less raw material waste than its competitors. b. A firm offers more reliable products than its competitors. c. A firm's products are introduced into the market faster than its competitors' products. d. A firm's research and development department generates many ideas for new products. e. A firm advertises more than its competitors.

c. A firm's products are introduced into the market faster than its competitors' products.

Which of the following is true regarding the relationship between AOQ and the true population percent defective? a. AOQ is greater than the true percent defective. b. AOQ is the same as the true percent defective. c. AOQ is less than the true percent defective. d. There is no relationship between AOQ and the true percent defective. e. The relationship between these two cannot be determined.

c. AOQ is less than the true percent defective.

Which of the following statements regarding JIT in services is true? a. Restaurants do not use JIT layouts because they interfere with creation of a good servicescape. b. Excess customer demand in services such as air travel is met by dipping into safety stocks. c. All of the JIT techniques for dealing with suppliers, layout, inventory, and scheduling are used in services. d. Scheduling is not relevant to effective use of JIT in services. e. All of the above are false.

c. All of the JIT techniques for dealing with suppliers, layout, inventory, and scheduling are used in services.

Which of the following statements regarding control of service inventories is true? a. Service inventory is a fictional concept, because services are intangible. b. Service inventory needs no safety stock, because there's no such thing as a service stockout. c. Effective control of all goods leaving the facility is one applicable technique. d. Service inventory has carrying costs but not setup costs. e. All of the above are true.

c. Effective control of all goods leaving the facility is one applicable technique.

Which of these assumptions is not associated with strategies for goods-producing location decisions? a. Most major costs can be identified explicitly for each site. b. Focus on identifiable cost. c. High customer contact issues are critical. d. Intangible costs can be evaluated. e. Location is a major determinant of cost.

c. High customer contact issues are critical.

Which of the following is false concerning enterprise resource planning (ERP)? a. It attempts to automate and integrate the majority of business processes. b. It shares common data and practices across the enterprise. c. It is inexpensive to implement. d. It provides and accesses information in a real-time environment. e. All of the above are true.

c. It is inexpensive to implement.

Which of the following is specifically characterized by the elimination of waste through a focus on exactly what the customer wants? a. Just-in-time (JIT) b. Toyota Production System (TPS) c. Lean operations d. Material requirements planning (MRP) e. kanban

c. Lean operations

MRP II is accurately described as a. MRP software designed for services b. MRP with a new set of computer programs that execute on microcomputers c. MRP augmented by other resource variables d. an enhancement of MRP that plans for all levels of the supply chain e. a new generation of MRP software that extends MRP to planning and scheduling functions

c. MRP augmented by other resource variables

Which of the following statements regarding ethical and environmentally friendly processes is true? a. Operations managers can be environmentally sensitive, but they must avoid following a low cost strategy. b. Processes can be environmentally friendly or socially responsible, but not both. c. Operations managers can be environmentally sensitive and still follow a low cost strategy. d. Using energy-efficient lighting saves so little that it should not be labeled environmentally friendly. e. The only business strategy consistent with ethical and environmentally sensitive management is the differentiation strategy.

c. Operations managers can be environmentally sensitive and still follow a low cost strategy.

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; there is no crossover point. 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; there is no crossover point.

The Ten Critical Decisions of Operations Management include a. Finance/accounting b. Advertising c. Process and capacity design d. Pricing e. all of the above

c. Process and capacity design

Which of the following statements regarding project management is false? a. Gantt charts give a timeline for each of a project's activities, but do not adequately show the interrelationships of activities. b. A project organization works best for a project that is temporary but critical to the organization. c. Project organization works well when the work contains simple, independent tasks. d. Gantt charts and PERT/CPM are never used together. e. None of the above is true.

c. Project organization works well when the work contains simple, independent tasks.

When safety stock is deemed absolutely necessary, the usual policy is to build it into which category of the MRP logic? a. Gross Requirements b. Scheduled Receipts c. Projected On Hand d. Net Requirements e. Planned Order Receipts

c. Projected On Hand

Which of the following statements is true regarding the leverage of supply chain savings? a. Supply chain leverage is about the same for all industries. b. Supply chain savings exert more leverage as the firm's purchases are a smaller percent of sales. c. Supply chain savings exert more leverage as the firm has a lower net profit margin. d. Supply chain leverage depends only upon the percent of sales spent in the supply chain. e. None of the above is true.

c. Supply chain savings exert more leverage as the firm has a lower net profit margin.

Which of the following statements about time series forecasting is true? a. It is based on the assumption that future demand will be the same as past demand. b. It makes extensive use of the data collected in the qualitative approach. c. The analysis of past demand helps predict future demand. d. Because it accounts for trends, cycles, and seasonal patterns, it is more powerful than causal forecasting. e. All of the above are true.

c. The analysis of past demand helps predict future demand.

Which of the following statements regarding Starbucks Coffee is false? a. The firm plans to open three new cafes per day around the world. b. The firm uses GIS to evaluate every site decision. c. The firm's cafes are exclusively in traditional settings: malls, tourist areas, and airports. d. The firm places cafes into ever more innovative locations. e. The firm put cafes in Japan, even though that country had no GIS data available.

c. The firm's cafes are exclusively in traditional settings: malls, tourist areas, and airports.

Activity M on a CPM network has predecessors N and R, and has successor S. M has duration 5. N's late finish is 18, while R's is 20. S's late start is 14. Which of the following is true? a. M is critical and has zero slack. b. M has no slack but is not critical. c. The last start time of S is impossible. d. N is a critical activity. e. S is a critical activity.

c. The last start time of S is impossible.

Which of the following statements regarding PERT times is true? a. Expected time is an estimate of the time an activity will require if everything goes as planned. b. The optimistic time estimate is an estimate of the maximum time an activity will require. c. The probable time estimate is calculated as t = (a + 4m + b)/6. d. Pessimistic time estimate is an estimate of the minimum time an activity will require. e. Most likely time estimate is an estimate of the maximum time an activity will require.

c. The probable time estimate is calculated as t = (a + 4m + b)/6.

Which of the following statements about organizational missions is false? a. They reflect a company's purpose. b. They indicate what a company intends to contribute to society. c. They are formulated after strategies are known. d. They define a company's reason for existence. e. They provide guidance for functional area missions.

c. They are formulated after strategies are known.

Which of the following statements regarding Tupperware's forecasting is false? a. Tupperware's fifty profit centers generate the basic set of projections. b. Tupperware uses at least three quantitative forecasting techniques. c. Tupperware uses only quantitative forecasting techniques. d. "Sales per active dealer" is one of three key forecasting variables (factors). e. "Jury of executive opinion" is the ultimate forecasting tool used at Tupperware.

c. Tupperware uses only quantitative forecasting techniques.

Which of the following is true about business strategies? a. An organization should stick with its strategy for the life of the business. b. All firms within an industry will adopt the same strategy. c. Well defined missions make strategy development much easier. d. Strategies are formulated independently of SWOT analysis. e. Organizational strategies depend on operations strategies.

c. Well defined missions make strategy development much easier.

Which of the following statements regarding Wheeled Coach is false? a. Wheeled Coach has found competitive advantage through MRP. b. Wheeled Coach builds ambulances in a repetitive process. c. Wheeled Coach's MRP system allowed the company to meet tight schedules, but caused inventory to rise. d. Wheeled Coach's MRP system maintains excellent record integrity. e. Low inventory and high quality are two positive outcomes of Wheeled Coach's use of MRP.

c. Wheeled Coach's MRP system allowed the company to meet tight schedules, but caused inventory to rise.

Low level coding means that a. a final item has only a few levels in the BOM structure b. it is the code for the lowest level in the BOM structure c. a component item is coded at the lowest level at which it appears in the BOM structure d. the top level of the BOM is below level zero and that BOMs are not organized around the finished product e. none of the above

c. a component item is coded at the lowest level at which it appears in the BOM structure

Traffic counts and purchasing power analysis of drawing area are techniques associated with a. an industrial location decision b. a manufacturing location decision c. a retail or professional service location decision d. the factor rating method e. the transportation method

c. a retail or professional service location decision

Which one of the following is not common to repetitive and product-oriented layouts? a. a high rate of output b. specialization of labor c. ability to adjust to changes in demand d. low unit costs e. All are common to product-oriented layouts.

c. ability to adjust to changes in demand

The major problem addressed by the warehouse layout strategy is a. minimizing difficulties caused by material flow varying with each product b. requiring frequent contact close to one another c. addressing trade-offs between space and material handling d. balancing product flow from one work station to the next e. none of the above

c. addressing trade-offs between space and material handling

Which one of the following distribution systems offers quickness and reliability when emergency supplies are needed overseas? a. trucking b. railroads c. airfreight d. waterways e. pipelines

c. airfreight

The Central Limit Theorem a. is the theoretical foundation of the c-chart b. states that the average of assignable variations is zero c. allows managers to use the normal distribution as the basis for building some control charts d. states that the average range can be used as a proxy for the standard deviation e. controls the steepness of an operating characteristic curve

c. allows managers to use the normal distribution as the basis for building some control charts

Product Focused processes a. allow more customization, but are not very efficient b. are desirable because resource needs increase slowly with the complexity of a process c. are processes that are specialized for relatively few products or customer groups d. apply only to service firms, not to manufacturers e. are profitable because customers demand flexibility, not specialization

c. are processes that are specialized for relatively few products or customer groups

Control charts for variables are based on data that come from a. acceptance sampling b. individual items c. averages of small samples d. averages of large samples e. the entire lot

c. averages of small samples

A fried chicken fast-food chain that acquired feed mills and poultry farms has performed a. horizontal integration b. forward integration c. backward integration d. current transformation e. job expansion

c. backward integration

A nationwide parcel delivery service keeps track of the number of late deliveries (more than 30 minutes past the time promised to clients) per day. They plan on using a control chart to plot their results. Which type of control chart(s) would you recommend? a. x - and R-charts b. p-charts c. c-charts d. x -, but not R-charts e. both p- and c-charts

c. c-charts

The Beta distribution is used in project management to a. determine which activity should be crashed b. calculate the probability that a project will be completed within its budget c. calculate expected activity times d. calculate slack for activities on the critical path e. none of the above

c. calculate expected activity times

Making environmentally sound products through efficient processes a. is unprofitable, as long as recyclable materials prices are soft b. is known as lean manufacturing c. can still be profitable d. is easier for repetitive processes than for product-focused processes e. none of the above

c. can still be profitable

A regional bookstore chain is about to build a distribution center that is centrally located for its eight retail outlets. It will most likely employ which of the following tools of analysis? a. assembly line balancing b. load-distance analysis c. center-of-gravity model d. linear programming e. all of the above

c. center-of-gravity model

The purpose of an X chart is to determine whether there has been a a. gain or loss in uniformity b. change in the percent defective in a sample c. change in the central tendency of the process output d. change in the number of defects in a sample e. change in the AOQ

c. change in the central tendency of the process output

The x-bar chart tells us whether there has been a a. gain or loss in dispersion b. change in the percent defective in a sample c. change in the central tendency of the process output d. change in the number of defects in a sample e. none of the above

c. change in the central tendency of the process output

The PIMS program has identified the a. operations decisions all organizations must make b. distinctive competencies any company needs c. characteristics of firms with high "ROI" d. corporate decisions any company needs to make e. all of the above

c. characteristics of firms with high "ROI"

Geographic Information Systems can assist the location decision by a. automating center-of-gravity problems b. computerizing factor rating analysis c. combining geography with demographic analysis d. updating transportation method solutions e. giving good Internet placement for virtual storefronts

c. combining geography with demographic analysis

A bill of material 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

For which of the following operations would a fixed-position layout be most appropriate? a. assembling automobiles b. producing TV sets c. constructing a highway tunnel or bridge d. refining of crude oil e. running an insurance agency

c. constructing a highway tunnel or bridge

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

Which of the following methods best considers intangible costs related to a location decision? a. crossover methods b. locational break-even analysis c. factor rating analysis d. the transportation method e. the assignment method

c. factor rating analysis

One of the major advantages of process-oriented layouts is a. high equipment utilization b. large work-in-process inventories c. flexibility in equipment and labor assignment d. smooth and continuous flow of work e. none of the above

c. flexibility in equipment and labor assignment

A system using an automated work cell controlled by electronic signals from a common centralized computer facility is called a(n) a. adaptive control system b. robotics c. flexible manufacturing system d. automatic guided vehicle (AGV) system e. manufacturing cell

c. flexible manufacturing system

"Operators simply load new programs, as necessary, to produce different products" describes a. CAD b. automated guided vehicles c. flexible manufacturing systems d. vision systems e. process control

c. flexible manufacturing systems

An operating characteristics curve shows a. upper and lower product specifications b. product quality under different manufacturing conditions c. how the probability of accepting a lot varies with the population percent defective d. when product specifications don't match process control limits e. how operations affect certain characteristics of a product

c. how the probability of accepting a lot varies with the population percent defective

A fundamental distinction between trend projection and linear regression is that a. trend projection uses least squares while linear regression does not b. only linear regression can have a negative slope c. in trend projection the independent variable is time; in linear regression the independent variable need not be time, but can be any variable with explanatory power d. linear regression tends to work better on data that lack trends e. trend projection uses two smoothing constants, not just one

c. in trend projection the independent variable is time; in linear regression the independent variable need not be time, but can be any variable with explanatory power

For a given product demand, the time series trend equation is 53 - 4 X. The negative sign on the slope of the equation a. is a mathematical impossibility b. is an indication that the forecast is biased, with forecast values lower than actual values c. is an indication that product demand is declining d. implies that the coefficient of determination will also be negative e. implies that the RSFE will be negative

c. is an indication that product demand is declining

If the actual order quantity is the economic order quantity in a problem that meets the assumptions of the economic order quantity model shown below, the average amount of inventory on hand Q* = √(2∙D∙S)/H a. is smaller the smaller is the holding cost per unit b. is zero c. is one-half of the economic order quantity d. is affected by the amount of product cost e. All of the above are true.

c. is one-half of the economic order quantity

Acceptance sampling a. is the application of statistical techniques to the control of processes b. was developed by Walter Shewhart of Bell Laboratories c. is used to determine whether to accept or reject a lot of material based on the evaluation of a sample d. separates the natural and assignable causes of variation e. all of the above

c. is used to determine whether to accept or reject a lot of material based on the evaluation of a sample

The forecasting model that pools the opinions of a group of experts or managers is known as the a. sales force composition model b. multiple regression c. jury of executive opinion model d. consumer market survey model e. management coefficients model

c. jury of executive opinion model

The Japanese concept of a company coalition of suppliers is a. poka-yoke b. kaizen c. keiretsu d. dim sum e. illegal

c. keiretsu

A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next four years. If the cost of capital is 5 percent, the net present value of this investment is a. greater than $80,000 b. greater than $130,000 c. less than $30,000 d. impossible to calculate, because no interest rate is given e. impossible to calculate, because variable costs are not known

c. less than $30,000

Forecasts used for new product planning, capital expenditures, facility location or expansion, and R&D typically utilize a a. short-range time horizon b. medium-range time horizon c. long-range time horizon d. naive method, because there is no data history e. all of the above

c. long-range time horizon

Which of the following supply chain strategies creates value by allowing suppliers to have economies of scale? a. suppliers becoming part of a company coalition b. vertical integration c. long-term partnering with a few suppliers d. negotiating with many suppliers e. developing virtual companies

c. long-term partnering with a few suppliers

All of these preconditions affect an operations management strategy except a. external economic and technological conditions b. competitors' strengths and weaknesses c. maintenance policies d. knowledge of the company's strategy e. knowledge of each product's life cycle

c. maintenance policies

Standardization is an appropriate strategy in which stage of the product life cycle? a. introduction b. growth c. maturity d. decline e. retirement

c. maturity

The stage in the product life cycle at which it is a poor time to change quality is a. introduction b. growth c. maturity d. decline e. incubation

c. maturity

Which of the following does not support the retail layout objective of maximizing customer exposure to products? a. locate high-draw items around the periphery of the store b. use prominent locations for high-impulse and high-margin items c. maximize exposure to expensive items d. use end-aisle locations e. convey the store's mission with the careful positioning of the lead-off department

c. maximize exposure to expensive items

Drop shipment a. is equivalent to cross-docking b. is the opposite of a blanket order c. means the supplier will ship directly to the end consumer, rather than to the seller d. is the same thing as keiretsu e. is a good reason to find a new firm to ship your products

c. means the supplier will ship directly to the end consumer, rather than to the seller

The primary purpose of the mean absolute deviation (MAD) in forecasting is to a. estimate the trend line b. eliminate forecast errors c. measure forecast accuracy d. seasonally adjust the forecast e. all of the above

c. measure forecast accuracy

Which of the following is not a heuristic rule for assigning tasks to workstations in a product layout? a. longest tasks first b. in order of most number of following tasks c. median tasks first d. shortest tasks first e. in accordance with positional weight

c. median tasks first

Up to three standard deviations above or below the centerline is the amount of variation that statistical process control allows for a. Type I errors b. about 95.5% variation c. natural variation d. all types of variation e. assignable variation

c. natural variation

Which type of layout is specifically designed to encourage employees to interact? a. warehouse b. job shop c. open office d. retail e. repetitive/continuous

c. open office

A jewelry store is more likely than a jewelry manufacturer to consider __________ in making a location decision. a. transportation costs b. cost of raw materials c. parking and access d. climate e. taxes

c. parking and access

Which of the following is most likely to affect the location decision of a service firm rather than a manufacturing firm? a. energy and utility costs b. attitude toward unions c. parking and access d. cost of shipping finished goods e. labor costs

c. parking and access

Linking a part requirement with the parent component that caused the requirement is referred to as a. net requirements planning b. a time fence c. pegging d. kanban e. leveling

c. pegging

Three 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

The normal application of a p-chart is in a. process sampling by variables b. acceptance sampling by variables c. process sampling by attributes d. acceptance sampling by attributes e. none of the above

c. process sampling by attributes

Which of the following transformations generally has the highest equipment utilization? a. process-focused process b. repetitive process c. product-focused process d. specialized process e. modular process

c. product-focused process

Which one of the following is a concern expressed by suppliers? a. elimination of in-plant inventory b. delivery to the point of use c. production with zero defects d. large lot sizes e. customers' infrequent engineering changes

c. production with zero defects

The Institute for Supply Management a. establishes laws and regulations for supply management b. is an agency of the United Nations charged with promoting ethical conduct globally c. publishes the principles and standards for ethical supply management conduct d. prohibits backward integration into developing economies e. All of the above are true.

c. publishes the principles and standards for ethical supply management conduct

Which of the following is not an attribute of lean operators? a. eliminating almost all inventory through just-in-time techniques b. minimizing space requirements by reducing the distance a part travels c. pushing responsibility to the highest level possible through centralized decision making d. educating suppliers to accept responsibility for helping meet customer needs e. All of the above are attributes of lean producers.

c. pushing responsibility to the highest level possible through centralized decision making

Which of the following does not represent reasons for globalizing operations? a. reduce costs b. improve supply chain c. reduce responsiveness d. attract and retain global talent e. All of the above are valid reasons for globalizing operations.

c. reduce responsiveness

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

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

A location decision for a traditional department store (Macy's) would tend to have a(n) a. cost focus b. labor focus c. revenue focus d. environmental focus e. education focus

c. revenue focus

Traffic counts and demographic analysis of drawing areas are associated with a. industrial location decisions b. manufacturing location decisions c. service location decisions d. the transportation method e. none of the above

c. service location decisions

When decision trees are used to analyze capacity decisions, a. "do nothing" is not a possible decision alternative b. probabilities must be assigned to each of the decision alternatives c. states of nature are often demand-based, as in "market favorability" d. states of nature must be known with certainty e. fixed costs are not relevant

c. states of nature are often demand-based, as in "market favorability"

Which of the following did the authors not suggest as a reason for globalizing operations? a. reduce costs b. improve the supply chain c. stockholder approval ratings d. attract new markets e. All of the above were suggested.

c. stockholder approval ratings

A firm makes numerous models of mowers, garden tractors, and gasoline powered utility vehicles. Some assemblies and parts are common to many end items. To relieve the MPS of performing order releases on these common parts, the firm might choose to use the __________ technique. a. Wagner-Whitin b. economic part period c. supermarket d. gross material requirements e. resource requirements profile

c. supermarket

Characteristics of JIT partnerships with respect to suppliers include a. competitive bidding encouraged b. buyer plant pursues vertical integration to reduce the number of suppliers c. support suppliers so they become or remain price competitive d. most suppliers at considerable distance from purchasing organization e. All of the above are characteristics of JIT partnerships.

c. support suppliers so they become or remain price competitive

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

Which of the following uses three types of participants: decision makers, staff personnel, and respondents? a. executive opinions b. sales force composites c. the Delphi method d. consumer surveys e. time series analysis

c. the Delphi method

A material requirements plan contains information with regard to all of the following except a. quantities and required delivery dates of all subassemblies b. quantities and required delivery dates of final products c. the capacity needed to provide the projected output rate d. inventory on hand for each final product e. inventory on hand for each subassembly

c. the capacity needed to provide the projected output rate

Which of the following preconditions does not affect the formulation of an OM strategy? a. knowledge of each product's life cycle b. external economic and technological conditions c. the company's employment benefits d. competitors' strengths and weaknesses e. knowledge of the company's strategy

c. the company's employment benefits

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 which 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 process map is that a. the process chart uses a time dimension while a process map is not time-oriented b. the process chart includes the supply chain, while the process map stays within an organization c. the process chart is more like a table, while the process map 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 process map does not deal directly with the customer e. None of these is true, because a process chart and a process map are the same thing.

c. the process chart is more like a table, while the process map is more like a schematic diagram

If a load report (resource requirements profile) shows a work center scheduled beyond capacity a. the company must add capacity by enlarging the facility b. the company must add capacity by such tactics as overtime and subcontracting c. the work center's load may be smoothed by such tactics as operations splitting or lot splitting d. the aggregate plan must be revised e. the Wagner-Whitin algorithm should be used to rebalance the load

c. the work center's load may be smoothed by such tactics as operations splitting or lot splitting

One of the tools that is particularly useful in reducing the system nervousness in the MRP system is (are) a. modular bills b. time phasing c. time fences d. lot sizing e. closed loop system

c. time fences

Which of the following best describes vertical integration? a. to sell products to a supplier or a distributor b. to develop the ability to produce products which complement the original product c. to produce goods or services previously purchased d. to develop the ability to produce the specified good more efficiently than before e. to build long-term partnerships with a few suppliers

c. to produce goods or services previously purchased

Most inventory models attempt to minimize a. the likelihood of a stockout b. the number of items ordered c. total inventory based costs d. the number of orders placed e. the safety stock

c. total inventory based costs

Which of the international operations strategies involves high cost reductions and high local responsiveness? a. international strategy b. global strategy c. transnational strategy d. multidomestic strategy e. none of the above

c. transnational strategy

The center-of-gravity method does not take into consideration the a. location of markets b. volume of goods shipped to the markets c. value of the goods shipped d. combination of volume and distance e. center-of-gravity method considers none of the above

c. value of the goods shipped

The assumptions necessary for a successful product layout include all of the following except a. adequate volume for high equipment utilization b. standardized product c. volatile product demand d. All of the above are appropriate assumptions. e. None of the above is an appropriate assumption.

c. volatile product demand

Which of the following is not an advantage of the "few suppliers" concept? a. suppliers' willingness to participate in JIT systems b. trust c. vulnerability of trade secrets d. creation of value by allowing suppliers to have economies of scale e. suppliers' willingness to provide technological expertise

c. vulnerability of trade secrets

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

Jars of pickles are sampled and weighed. Sample measures are plotted on control charts. The ideal weight should be precisely 11 oz. Which type of chart(s) would you recommend? a. p-charts b. c-charts c. x - and R-charts d. x -, but not R-charts e. both p- and c-charts

c. x - and R-charts

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

According to the text, the most common choice of limits for control charts is usually a. ± 1 standard deviation b. ± 2 standard deviations c. ± 3 standard deviations d. ± 3 standard deviations for means and ± 2 standard deviations for ranges e. none of the above

c. ± 3 standard deviations

A PERT project has 45 activities, 19 of which are on the critical path. The estimated time for the critical path is 120 days. The sum of all activity variances is 64, while the sum of variances along the critical path is 36. The probability that the project can be completed between days 108 and 120 is a. -2.00 b. 0.0227 c. 0.1058 d. 0.4773 e. 0.9773

d. 0.4773

Fabricators, Inc. wants to increase capacity by adding a new machine. The fixed costs for machine A are $90,000, and its variable cost is $15 per unit. The revenue is $21 per unit. The break-even point for machine A is a. $90,000 dollars b. 90,000 units c. $15,000 dollars d. 15,000 units e. cannot be calculated from the information provided

d. 15,000 units

What is the approximate forecast for May using a four-month moving average? Nov. 39 Dec. 36 Jan. 40 Feb. 42 Mar. 48 April 46 a. 38 b. 42 c. 43 d. 44 e. 47

d. 44

The Academic Computing Center has five trainers available in its computer labs to provide training sessions to students. Assume that the capacity of the system is 1900 students per semester and the utilization is 90%. If the number of students who actually got their orientation session is 1500, what is the efficiency of the system? a. 1350 students b. 1710 students c. 75% d. 87.7% e. 90%

d. 87.7%

Which one of the following scenarios represents the use of a kanban to reduce inventories? a. A supervisor tells the operators to stay busy and start producing parts for next month. b. A "supplier" work center signals the downstream workstation that a batch has been completed. c. A supervisor signals to several work centers that the production rate should be changed. d. A "customer" work center signals to the "supplier" workstation that more parts are needed. e. An operator asks the next station's operator to help him fix his machine.

d. A "customer" work center signals to the "supplier" workstation that more parts are needed.

Which of the following is an example of competing on the basis of differentiation? a. A firm manufactures its product with less raw material waste than its competitors do. b. A firm's products are introduced into the market faster than its competitors' products are. c. A firm's distribution network routinely delivers its product on time. d. A firm offers more reliable products than its competitors do. e. A firm advertises more than its competitors do.

d. A firm offers more reliable products than its competitors do.

Which of the following statements about ABC analysis is false? a. ABC analysis is based on the presumption that controlling the few most important items produces the vast majority of inventory savings. b. In ABC analysis, "A" Items are tightly controlled, have accurate records, and receive regular review by major decision makers. c. In ABC analysis, "C" Items have minimal records, periodic review, and simple controls. d. ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings. e. All of the above statements are true.

d. ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings.

Which of the following is true regarding the average outgoing quality level? a. An AOQ value of 1 is ideal, because all defects have been removed. b. AOQ is always greater than AQL but less than LTPD. c. AOQ rises (worsens) following inspection of failed lots. d. AOQ is very low (very good) for extremely poor quality lots. e. None of the above is true.

d. AOQ is very low (very good) for extremely poor quality lots.

Which of the following statements regarding CPM is true? a. The critical path is the shortest of all paths through the network. b. The critical path is that set of activities that has positive slack. c. Some networks have no critical path. d. All activities on the critical path have their LS equal their predecessor's EF. e. All of the above are false.

d. All activities on the critical path have their LS equal their predecessor's EF.

Which of these statements about the production order quantity model is false? a. The production order quantity model is appropriate when the assumptions of the basic EOQ model are met, except that receipt is noninstantaneous. b. Because receipt is noninstantaneous, some units are used immediately, not stored in inventory. c. Average inventory is less than one-half of the production order quantity. d. All else equal, the smaller the ratio of demand rate to production rate, the larger is the production order quantity. e. None of the above is false.

d. All else equal, the smaller the ratio of demand rate to production rate, the larger is the production order quantity.

A disadvantage of product-oriented layout is that a. there is a lack of flexibility in handling a variety of products or production rates b. high volume is required because of the large investment needed to set up the process c. work stoppage at any one point ties up the whole operation d. All of the above are disadvantages of product-oriented layouts. e. None of the above is a disadvantage of product-oriented layouts.

d. All of the above are disadvantages of product-oriented layouts.

Which of the following is true regarding vision systems? a. They are consistently accurate. b. They are modest in cost. c. They do not become bored. d. All of the above are true. e. None of the above is true.

d. All of the above are true.

Which of the following statements on acceptance sampling is true? a. Acceptance sampling draws samples from a population of items, tests the sample, and accepts the entire population if the sample is good enough, and rejects it if the sample is poor enough. b. The sampling plan contains information about the sample size to be drawn and the critical acceptance or rejection numbers for that sample size. c. The steeper an operating characteristic curve, the better its ability to discriminate between good and bad lots. d. All of the above are true. e. All of the above are false.

d. All of the above are true.

Which of the following is true regarding fabrication lines? a. They are the same thing as assembly lines. b. They are the same thing as focused factories. c. They are a special type of process-oriented layout. d. Balancing their assembly line is more technological than worker oriented. e. None of the above is true.

d. Balancing their assembly line is more technological than worker oriented.

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. All of the above are true.

d. Capacity may only be added in large chunks.

Which one of the following does not exemplify JIT used for competitive advantage? a. Acme Foods decides to decrease the number of its suppliers to just a few. b. Ajax, Inc. is proud to announce that incoming goods are delivered directly to the point of use. c. Ardoyne Builders has a scheduled preventive maintenance program. d. Cheramie Trucking trains workers to specialize and become very efficient in one job. e. Cajun Contractors has reduced the amount of space for inventory.

d. Cheramie Trucking trains workers to specialize and become very efficient in one job.

Which of these statements regarding time-cost tradeoffs in CPM networks is true? a. Crashing is not possible unless there are multiple critical paths. b. Crashing a project often reduces the length of long-duration, but noncritical, activities. c. Activities not on the critical path can never be on the critical path, even after crashing. d. Crashing shortens the project duration by assigning more resources to one or more of the critical tasks. e. None of the above is true.

d. Crashing shortens the project duration by assigning more resources to one or more of the critical tasks.

Activity D on a CPM network has predecessors B and C, and has successor F. D has duration 6. B's earliest finish is 18, while C's is 20. F's late start is 26. Which of the following is true? a. B is a critical activity. b. C is completed before B. c. D has no slack but is not critical. d. D is critical, and has zero slack. e. All of the above are true.

d. D is critical, and has zero slack.

Which of the following statements comparing the weighted moving average technique and exponential smoothing is true? a. Exponential smoothing is more easily used in combination with the Delphi method. b. More emphasis can be placed on recent values using the weighted moving average. c. Exponential smoothing is considerably more difficult to implement on a computer. d. Exponential smoothing typically requires less record keeping of past data. e. Exponential smoothing allows one to develop forecasts for multiple periods, whereas weighted moving averages does not.

d. Exponential smoothing typically requires less record keeping of past data.

Which is not true regarding differences between goods and services? a. Services are generally produced and consumed simultaneously; tangible goods are not. b. Services tend to be more knowledge-based than products. c. Services tend to have a more inconsistent product definition than goods. d. Goods tend to have higher customer interaction than services. e. None of the above is true.

d. Goods tend to have higher customer interaction than services.

Which of these companies is most apt to have quality standards that are relatively subjective? a. Chrysler b. Dell Computer c. Sanyo Electronics d. Harvard University e. Whirlpool

d. Harvard University

Which of the following statements regarding CPM networks is true? a. There can be multiple critical paths on the same project, all with different durations. b. The early finish of an activity is the latest early start of all preceding activities. c. The late start of an activity is its late finish plus its duration. d. If a specific project has multiple critical paths, all of them will have the same duration. e. All of the above are true.

d. If a specific project has multiple critical paths, all of them will have the same duration.

Which of the following statements about the basic EOQ model is false? a. If the setup cost were to decrease, the EOQ would fall. b. If annual demand were to increase, the EOQ would increase. c. If the ordering cost were to increase, the EOQ would rise. d. If annual demand were to double, the EOQ would also double. e. All of the above statements are true.

d. If annual demand were to double, the EOQ would also double.

A manufacturer took the following actions to reduce inventory. Which of these is generally not accepted as a JIT action? a. It used a pull system to move inventory. b. It produced in ever smaller lots. c. It required deliveries directly to the point of use. d. It picked the supplier that offered the lowest price based on quantity discounts. e. It worked to reduce the company's in-transit inventory.

d. It picked the supplier that offered the lowest price based on quantity discounts.

Which of the following statements concerning the operations management decision is relevant to services? a. There are many objective quality standards. b. The customer is not involved in most of the process. c. The work force's technical skills are very important. d. Labor standards vary depending on customer requirements. e. Ability to inventory may allow the leveling of the output rates.

d. Labor standards vary depending on customer requirements.

Which of the following is not one of The Ten Critical Decisions of Operations Management? a. Layout strategy b. Maintenance c. Process and capacity design d. Mass customization e. Supply chain management

d. Mass customization

Which of the following statements regarding critical paths is true? a. The shortest of all paths through the network is the critical path. b. Some activities on the critical path may have slack. c. Every network has exactly one critical path. d. On a specific project, there can be multiple critical paths, all with exactly the same duration. e. The duration of the critical path is the average duration of all paths in the project network.

d. On a specific project, there can be multiple critical paths, all with exactly the same duration.

Which of the following statements regarding PERT analysis is true? a. Each activity has two estimates of its duration. b. Project variance is the sum of all activity variances. c. Project standard deviation is the sum of all critical activity standard deviations. d. Only critical activities contribute to the project variance. e. None of the above is true.

d. Only critical activities contribute to the project variance.

Which of the following statements regarding a pull system is true? a. Large lots are pulled from upstream stations. b. Work is pulled to the downstream stations before it is actually needed. c. Manufacturing cycle time is increased. d. Problems become more obvious. e. None of the above is true of a pull system.

d. Problems become more obvious.

Which of the following is not an assumption of the economic order quantity model shown below? Q* = √(2∙D∙S)/H a. Demand is known, constant, and independent. b. Lead time is known and constant. c. Quantity discounts are not possible. d. Production and use can occur simultaneously. e. The only variable costs are setup cost and holding (or carrying) cost.

d. Production and use can occur simultaneously.

Which one of the following statements about purchasing is true? a. The cost of purchases as a percent of sales is often small. b. Purchasing provides a major opportunity for price increases. c. Purchasing is always more efficient than making an item. d. Purchasing has an impact on the quality of the goods and services sold. e. Competitive bidding is a major factor in long-term cost reductions.

d. Purchasing has an impact on the quality of the goods and services sold.

Which of the following technologies would 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 statements regarding MRP in services is true? a. MRP is for manufacturing only, and is not applicable to services. b. MRP can be used in services, but only those that offer very limited customization. c. MRP does not work in services because there is no dependent demand. d. Services such as restaurant meals illustrate dependent demand, and require product structure trees, bills-of-material, and scheduling. e. None of the above is true.

d. Services such as restaurant meals illustrate dependent demand, and require product structure trees, bills-of-material, and scheduling.

Which of the following is the author of the phrase "Inventory is evil"? a. Poka Yoke b. Pat "Keiretsu" Morita c. Kanban Polka d. Shigeo Shingo e. none of the above

d. Shigeo Shingo

Which of the following statements about quantity discounts is false? a. The cost-minimizing solution may or may not be where annual holding costs equal annual ordering costs. b. In inventory management, item cost becomes relevant to inventory decisions only when a quantity discount is available. c. If carrying costs are expressed as a percentage of value, EOQ is larger at each lower price in the discount schedule. d. The larger annual demand, the less attractive a discount schedule will be. e. The smaller the ordering cost, the less attractive a discount schedule will be.

d. The larger annual demand, the less attractive a discount schedule will be.

Which of the following statements concerning CPM activities is false? a. The early finish of an activity is the early start of that activity plus its duration. b. The late finish is the earliest of the late start times of all successor activities. c. The late start of an activity is its late finish less its duration. d. The late finish of an activity is the earliest late start of all preceding activities. e. The early start of an activity is the latest early finish of all preceding activities.

d. The late finish of an activity is the earliest late start of all preceding activities.

Which of the following is true of a p-chart? a. The lower control limit is found by subtracting a fraction from the average number of defects. b. The lower control limit indicates the minimum acceptable number of defects. c. The lower control limit may be below zero. d. The lower control limit may be at zero. e. The lower control limit is the same as the lot tolerance percent defective.

d. The lower control limit may be at zero.

Which of these organizations is likely to have the most complex inventory decisions? a. a marketing research firm b. a stock brokerage firm c. a management consulting firm d. a computer manufacturing company e. a high school

d. a computer manufacturing company

The fixed-position layout would be most appropriate in which of the following settings? a. a fast-food restaurant b. a doctor's office c. a casual dining restaurant d. a cruise ship assembly facility e. none of the above

d. a cruise ship assembly facility

Which of the following is not an information requirement for solving a load-distance problem? a. a list of departments or work centers b. a projection of work flows between the work centers c. the distance between locations d. a list of product cycle times e. the cost per unit of distance to move loads

d. a list of product cycle times

In assembly line balancing, the minimum number of workstations is a. the ratio of the sum of all task times to cycle time b. always (when a fraction) rounded upward to the next larger integer value c. not always possible to reach when tasks are actually assigned to stations d. all of the above e. none of the above

d. all of the above

Intangible costs include which of the following? a. quality of prospective employees b. quality of education c. availability of public transportation d. all of the above e. none of the above

d. all of the above

Response-based competitive advantage can be a. flexible response b. reliable response c. quick response d. all of the above e. none of the above

d. all of the above

Among the advantages of cycle counting is that it a. makes the annual physical inventory more acceptable to management b. does not require the detailed records necessary when annual physical inventory is used c. does not require highly trained people d. allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventory e. does not need to be performed for less expensive items

d. allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventory

An acceptance sampling plan's ability to discriminate between low quality lots and high quality lots is described by a. a Gantt chart b. the Central Limit Theorem c. a process control chart d. an operating characteristics curve e. a range chart

d. an operating characteristics curve

Enterprise resource planning (ERP) a. seldom requires software upgrade or enhancement b. does not integrate well with functional areas other than operations c. is inexpensive to implement d. automates and integrates the majority of business processes e. all of the above

d. automates and integrates the majority of business processes

The last four weekly values of sales were 80, 100, 105, and 90 units. The last four forecasts were 60, 80, 95, and 75 units. These forecasts illustrate a. qualitative methods b. adaptive smoothing c. slope d. bias e. trend projection

d. bias

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

The purpose of safety stock is to a. replace failed units with good ones b. eliminate the possibility of a stockout c. eliminate the likelihood of a stockout due to erroneous inventory tally d. control the likelihood of a stockout due to the variability of demand during lead time e. protect the firm from a sudden decrease in demand

d. control the likelihood of a stockout due to the variability of demand during lead time

Franz Colruyt has achieved low-cost leadership through a. effective use of voice mail b. plastic, not paper, shopping bags c. background music that subtly encourages shoppers to buy more d. converting factories, garages, and theaters into retail outlets e. use of the Euro, not the currency of each European country

d. converting factories, garages, and theaters into retail outlets

The degree or strength of a linear relationship is shown by the a. alpha b. mean c. mean absolute deviation d. correlation coefficient e. RSFE

d. correlation coefficient

Acceptance sampling's primary purpose is to a. estimate process quality b. estimate lot quality c. detect and eliminate defectives d. decide if a lot meets predetermined standards e. determine whether defective items found in sampling should be replaced

d. decide if a lot meets predetermined standards

Productivity can be improved by a. increasing inputs while holding outputs steady b. decreasing outputs while holding inputs steady c. increasing inputs and outputs in the same proportion d. decreasing inputs while holding outputs steady e. none of the above

d. decreasing inputs while holding outputs steady

A carpet manufacturer has delivered carpet directly to the end consumer rather than to the carpet dealer. The carpet manufacturer is practicing a. postponement b. cross-docking c. channel assembly d. drop shipping e. float reduction

d. drop shipping

Ambient conditions, spatial layout and functionality, and signs, symbols, and artifacts are all a. indicators of imbalance on an assembly line b. indicators that cross-docking has been successful c. elements of customization in a warehouse layout d. elements of servicescapes e. elements of successful office layouts

d. elements of servicescapes

Utilization in process-oriented facilities is frequently low because a. the postponement strategy for improving service productivity is being used b. scheduling in process-oriented facilities is not very complex c. with high fixed costs, utilization is not very important d. excess capacity for peak demands is desirable e. low raw material inventories cause machines to be idled

d. excess capacity for peak demands is desirable

What is sometimes referred to as rated capacity? a. efficiency b. utilization c. effective capacity d. expected output e. design capacity

d. expected output

Which time series model uses past forecasts and past demand data to generate a new forecast? a. naive b. moving average c. weighted moving average d. exponential smoothing e. regression analysis

d. exponential smoothing

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. can only be successful with two-dimensional processes

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

Net present value will be greater a. as a fixed set of cash receipts occurs later rather than earlier b. as the total of the cash receipts, made in same time periods, is smaller c. for one end-of-year receipt of $1200 than for twelve monthly receipts of $100 each d. for a 4% discount rate than for a 6% discount rate e. All of the above are true.

d. for a 4% discount rate than for a 6% discount rate

Costs, quality, and human resource decisions interact strongly with the _______ decision. a. layout design b. process and capacity design c. supply chain management d. goods and service design e. All of the above are correct.

d. goods and service design

Boeing's new 787 Dreamliner a. is assembled in Washington, D.C. b. uses engines from Japan c. has its fuselage sections built in Australia d. has increased efficiency from new engine technology e. results from a partnership of about a dozen companies

d. has increased efficiency from new engine technology

Advances in technology a. have impacted the manufacturing sector only b. have had only limited impact on services c. have failed to change the level of customer interaction with an organization d. have had dramatic impact on customer interaction with services and with products e. have dramatically changed health care, but have not changed retailing

d. have had dramatic impact on customer interaction with services and with products

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. raw material inventories are low relative to the value of the product

d. high fixed costs, low variable costs

The EOQ model with quantity discounts attempts to determine a. what is the lowest amount of inventory necessary to satisfy a certain service level b. what is the lowest purchasing price c. whether to use fixed-quantity or fixed-period order policy d. how many units should be ordered e. what is the shortest lead time

d. how many units should be ordered

An operating characteristic (OC) curve describes a. how many defects per unit are permitted before rejection occurs b. the sample size necessary to distinguish between good and bad lots c. the most appropriate sampling plan for a given incoming product quality level d. how well an acceptance sampling plan discriminates between good and bad lots e. none of the above

d. how well an acceptance sampling plan discriminates between good and bad lots

In mass service and professional service, the operations manager should focus on a. automation b. equipment maintenance c. sophisticated scheduling d. human resources e. all of the above

d. human resources

In the make-or-buy decision, one of the reasons for buying is a. to assure adequate supply b. to obtain desired quality c. to remove supplier collusion d. inadequate capacity e. to maintain organizational talents

d. inadequate capacity

Acceptance sampling is usually used to control a. the number of units output from one stage of a process which are then sent to the next stage b. the number of units delivered to the customer c. the quality of work-in-process inventory d. incoming lots of purchased products e. all of the above

d. incoming lots of purchased products

Kanban is associated with all of the following except a. small lot sizes b. signals, such as cards, lights, or flags c. moving inventory only as needed d. increased material handling e. reductions in inventory

d. increased material handling

For an x-bar chart where the standard deviation is known, the Upper Control Limit a. is 3∙σ below the mean of sample means for a 3σ control chart b. is 3∙σ above the mean of sample means for a 3σ control chart c. is 3∙σ/√n below the mean of sample means for a 3σ control chart d. is 3∙σ/√n above the mean of sample means for a 3σ control chart e. cannot be calculated unless the average range is known

d. is 3∙σ/√n above the mean of sample means for a 3σ control chart

Tupperware's use of forecasting a. involves only a few statistical tools b. concentrates on the low-level dealer, and is not aggregated at the company level c. relies on the fact that all of its products are in the maturity phase of the life cycle d. is a major source of its competitive edge over its rivals e. takes inputs from sales, marketing, and finance, but not from production

d. is a major source of its competitive edge over its rivals

The concept of customizing in a warehouse layout a. is possible, but causes serious loss of oversight of the quality function b. cannot be considered seriously in today's high efficiency factories c. is theoretically sound, but several years away in practice d. is a new trend in value-added activities in warehouses e. none of the above

d. is a new trend in value-added activities in warehouses

In MRP record calculations, the appearance of a negative value for the gross requirements of an end item in a specific time bucket a. signals the need to purchase that end item in that period b. implies that value was scheduled by the MPS c. signals the need for a negative planned order receipt in that period d. is impossible e. All of the above are true.

d. is impossible

Divulging information to some bidders on a project to give them an unfair advantage a. is the same thing as altering a status report b. is bribery c. is permitted by NAFTA d. is known as bid rigging e. is acceptable for private corporations but not for government agencies

d. is known as bid rigging

All of the following statements about ABC analysis are true except a. inventory may be categorized by measures other than dollar volume b. it categorizes on-hand inventory into three groups based on annual dollar volume c. it is an application of the Pareto principle d. it states that all items require the same degree of control e. it states that there are the critical few and the trivial many inventory items

d. it states that all items require the same degree of control

Natural variations a. are variations that are to be identified and eliminated b. are variations that can be traced to a specific cause c. are the same as assignable variations d. lead to occasional false findings that processes are out of control e. play no role in statistical process control

d. lead to occasional false findings that processes are out of control

In a product-oriented layout, the process of deciding how to assign tasks to workstations is referred to as a. station balancing b. process balancing c. task allocation d. line balancing e. work allocation

d. line balancing

Which of the following is not an opportunity for effective management in the supply chain? a. accurate "pull" data b. vendor managed inventory c. postponement d. local optimization e. channel assembly

d. local optimization

A document calls for the production of 50 small garden tractors in week 1; 50 small garden tractors and 100 riding mowers in week 2; 100 riding mowers and 200 garden utility carts in week 3; and 100 riding mowers in week 4. This document is most likely a(n) a. net requirements document b. resource requirements profile c. aggregate plan d. master production schedule e. Wagner-Whitin finite capacity document

d. master production schedule

A network has been crashed to the point where all activities are critical. Additional crashing a. is unnecessary b. is impossible c. is prohibitively expensive d. may require crashing multiple tasks simultaneously e. can be done, but all critical tasks must be reduced in duration

d. may require crashing multiple tasks simultaneously

The most common tactic followed in process-layout planning is to arrange departments or work centers so they a. minimize the cost of skilled labor b. maximize the machine utilization c. allocate the available space equally to all the departments d. minimize the costs of material handling e. none of the above

d. minimize the costs of material handling

The major problem addressed by the process-oriented layout strategy is a. the movement of material to the limited storage areas around the site b. requiring frequent contact close to one another c. the provision of low-cost storage with low-cost material handling d. minimizing difficulties caused by material flow varying with each product e. balancing product flow from one work station to the next

d. minimizing difficulties caused by material flow varying with each product

Which of the international operations strategies uses the existing domestic model globally? a. international strategy b. global strategy c. transnational strategy d. multidomestic strategy e. none of the above

d. multidomestic strategy

The causes of variation in statistical process control are a. cycles, trends, seasonality, and random variations b. producer's causes and consumer's causes c. mean and range d. natural causes and assignable causes e. Type I and Type II

d. natural causes and assignable causes

A fabrication company wants to increase capacity by adding a new machine. The firm is considering proposals from vendor A and vendor B. The fixed costs for machine A are $90,000 and for machine B, $75,000. The variable cost for A is $15.00 per unit and for B, $18.00. The revenue generated by the units processed on these machines is $21 per unit. If the estimated output is 5000 units, which machine should be purchased? a. machine A b. machine B c. either machine A or machine B d. no purchase because neither machine yields a profit at that volume e. purchase both machines since they are both profitable

d. no purchase because neither machine yields a profit at that volume

A shop wants to increase capacity by adding a new machine. The firm is considering proposals from vendor A and vendor B. The fixed costs for machine A are $90,000 and for machine B, $75,000. The variable cost for A is $15.00 per unit and for B, $18.00. The revenue generated by the units processed on these machines is $22 per unit. If the estimated output is 9,000 units, which machine should be purchased? a. machine A b. machine B c. either machine A or machine B d. no purchase because neither machine yields a profit at that volume e. purchase both machines since they are both profitable

d. no purchase because neither machine yields a profit at that volume

Because the fixed-position layout problem is so difficult to solve on-site, operations managers a. virtually never employ this layout strategy b. utilize this approach only for construction projects such as bridges and office towers c. increase the size of the site d. often complete as much of the project as possible off-site e. utilize this layout only for defense contractors

d. often complete as much of the project as possible off-site

NAFTA seeks to a. substitute cheap labor in Mexico for expensive labor in the United States b. curb illegal immigration from Mexico to the United States c. phase out all trade and tariff barriers between the United States and Mexico d. phase out all trade and tariff barriers between the United States, Canada, and Mexico e. All of the above are NAFTA goals.

d. phase out all trade and tariff barriers between the United States, Canada, and Mexico

Hewlett-Packard withholds customization of its laser printers as long as possible. This is an example of a. vendor managed inventory b. standardization c. backward integration d. postponement e. timely customization

d. postponement

An operations task performed at Hard Rock Café is a. borrowing funds to build a new restaurant b. advertising changes in the restaurant menu c. calculating restaurant profit and loss d. preparing employee schedules e. all of the above

d. preparing employee schedules

Which of these layouts is most suitable for processing sugar from sugar beets or sugar cane? a. process-oriented layout b. fixed-position layout c. focused factory d. product-oriented layout e. work cell layout

d. product-oriented layout

In time series, which of the following cannot be predicted? a. large increases in demand b. technological trends c. seasonal fluctuations d. random fluctuations e. large decreases in demand

d. random fluctuations

Which of the following is a common heuristic for assembly line balancing? a. debits near the windows, credits near the door b. manufacturers locate near materials, retailers locate near customers c. earliest due date first d. ranked positional weight e. none of the above

d. ranked positional weight

The tracking signal is the a. standard error of the estimate b. running sum of forecast errors (RSFE) c. mean absolute deviation (MAD) d. ratio RSFE/MAD e. mean absolute percentage error (MAPE)

d. ratio RSFE/MAD

Which of the following is not a goal of JIT partnerships? a. removal of unnecessary activities b. removal of in-plant inventory c. removal of in-transit inventory d. removal of engineering changes e. All of the above are goals of JIT partnerships.

d. removal of engineering changes

Which one of the following is a characteristic of a JIT partnership? a. large number of suppliers b. maximal product specifications imposed on supplier c. active pursuit of vertical integration d. removal of incoming inspection e. frequent deliveries in large lot quantities

d. removal of incoming inspection

Throughput measures the time a. that it takes to process one unit at a station b. between the arrival of raw materials and the shipping of finished products c. to produce one whole product through an empty system (i.e., with no waiting) d. required to move orders through the production process, from receipt to delivery e. none of the above

d. required to move orders through the production process, from receipt to delivery

All of the following are advantages of enterprise resource planning (ERP) except it a. creates commonality of databases b. increases communications and collaboration worldwide c. helps integrate multiple sites and business units d. requires major changes in the company and its processes to implement e. can provide a strategic advantage over competitors

d. requires major changes in the company and its processes to implement

Increasing the number of periods in a moving average will accomplish greater smoothing, but at the expense of a. manager understanding b. accuracy c. stability d. responsiveness to changes e. All of the above are diminished when the number of periods increases.

d. responsiveness to changes

Which of the following is not one of the four main types of inventory? a. raw material inventory b. work-in-process inventory c. maintenance/repair/operating supply inventory d. safety stock inventory e. All of these are main types of inventory.

d. safety stock inventory

The proper quantity of safety stock is typically determined by a. minimizing an expected stockout cost b. carrying sufficient safety stock so as to eliminate all stockouts c. meeting 95% of all demands d. setting the level of safety stock so that a given stockout risk is not exceeded e. minimizing total costs

d. setting the level of safety stock so that a given stockout risk is not exceeded

Which one of the following is not a supply chain strategy? a. negotiation with many suppliers b. vertical integration c. keiretsu d. short-term relationships with few suppliers e. virtual companies

d. short-term relationships with few suppliers

A disadvantage of the fixed-period inventory system is that a. it involves higher ordering costs than the fixed quantity inventory system b. additional inventory records are required c. the average inventory level is decreased d. since there is no count of inventory during the review period, a stockout is possible e. orders usually are for larger quantities

d. since there is no count of inventory during the review period, a stockout is possible

Walter Shewhart is listed among the important people of operations management because of his contributions to a. assembly line production b. measuring the productivity in the service sector c. just-in-time inventory methods d. statistical quality control e. all of the above

d. statistical quality control

When developing the operations strategy for a new manufacturing organization, one of the most important considerations is that it a. requires minimal capital investment b. utilizes as much automation as possible c. utilizes an equal balance of labor and automation d. supports the overall competitive strategy of the company e. none of the above

d. supports the overall competitive strategy of the company

The number of units projected to be available at the end of each time period refers to a. net requirements b. scheduled receipts c. the projected usage of the item d. the amount projected to be on hand e. the amount necessary to cover a shortage

d. the amount projected to be on hand

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

A disadvantage of the "few suppliers" strategy is a. the risk of not being ready for technological change b. the lack of cost savings for customers and suppliers c. possible violations of the Sherman Antitrust Act d. the high cost of changing partners e. All of the above are disadvantages of the "few suppliers" strategy.

d. the high cost of changing partners

One factor impacting the fixed-position layout strategy is a. minimizing difficulties caused by material flow varying with each product b. requiring frequent contact close to one another c. the provision of low-cost storage with low-cost material handling d. the movement of material to the limited storage areas around the site e. balancing product flow from one work station to the next

d. the movement of material to the limited storage areas around the site

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 material 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

A run test is used a. to examine variability in acceptance sampling plans b. in acceptance sampling to establish control c. to examine points in a control chart to check for natural variability d. to examine points in a control chart to check for nonrandom variability e. none of the above

d. to examine points in a control chart to check for nonrandom variability

Which of the following would not generally be a motive for a firm to hold inventories? a. to decouple or separate parts of the production process b. to provide a stock of goods that will provide a selection for customers c. to take advantage of quantity discounts d. to minimize holding costs e. All of the above are functions of inventory.

d. to minimize holding costs

The primary purpose of the basic economic order quantity model shown below is Q* = √(2∙D∙S)/H a. to calculate the reorder point, so that replenishments take place at the proper time b. to minimize the sum of carrying cost and holding cost c. to maximize the customer service level d. to minimize the sum of setup cost and holding cost e. to calculate the optimum safety stock

d. to minimize the sum of setup cost and holding cost

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

Harley Davidson a. utilizes job shops to make each of its modules b. uses product focused manufacturing c. uses a large number of modules to build a small number of different bikes d. uses work cells to feed its assembly line e. All of the above are true.

d. uses work cells to feed its assembly line

"A special arrangement of machinery and equipment to focus on production of a single product or group of related products" describes what layout type? a. fixed-position layout b. intermittent production c. focused factory d. work cell e. warehouse layout

d. work cell

Which of the following is usually not one of the top considerations in choosing a country for a facility location? a. availability of labor and labor productivity b. exchange rates c. attitude of governmental units d. zoning regulations e. location of markets

d. zoning regulations

The statistical definition of Six Sigma allows for 3.4 defects per million. This is achieved by a Cpk index of a. 0 b. 1 c. 1.33 d. 1.67 e. 2

e. 2

An item's holding cost is 60 cents per week. Each setup costs $120. Lead time is 2 weeks. EPP is a. .005 b. 60 c. 72 d. 100 e. 200

e. 200

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

e. 99%

Which of the following best describes "experience differentiation"? a. immerses consumers in the delivery of a service b. uses people's five senses to enhance the service c. complements physical elements with visual and sound elements d. consumers may become active participants in the product or service e. All are elements of experience differentiation.

e. All are elements of experience differentiation.

A quasi-custom product a. gets its apparent customization from the combinations available from a small number of modules b. is often the output of repetitive focus facilities c. is a valid description of a fast food sandwich d. is only possible when the focus strategy of service productivity improvement is in use e. All but d are true.

e. All but d are true.

Just-in-time systems make demands on layouts, including a. distance reduction b. increased flexibility c. reduced space and inventory d. cross-trained, flexible employees e. All of the above are JIT influences on layout.

e. All of the above are JIT influences on layout.

In the quest for competitive advantage, which of the following is a JIT requirement? a. small number of job classifications b. reduced number of vendors c. reduced space for inventory d. quality by suppliers e. All of the above are JIT requirements.

e. All of the above are JIT requirements.

Which of these is not one of the PIMS characteristics of high return on investment organizations? a. high product quality b. high capacity utilization c. low investment intensity d. low direct cost per unit e. All of the above are PIMS characteristics.

e. All of the above are PIMS characteristics.

Which of the following are elements of inventory holding costs? a. housing costs b. material handling costs c. investment costs d. pilferage, scrap, and obsolescence e. All of the above are elements of inventory holding cost.

e. All of the above are elements of inventory holding cost.

Examples of response to the global environment include a. Boeing's worldwide sales and production b. Benneton's flexibility in design, production, and distribution c. A Chinese manufacturer, Haier, opening plants in the United States d. Ford's partnerships with Volvo and Mazda e. All of the above are examples.

e. All of the above are examples.

A lot that is accepted by acceptance sampling a. has more defects than existed before the sampling b. has had all its defects removed by 100% inspection c. will have the same defect percentage as the LTPD d. has no defects present e. All of the above are false.

e. All of the above are false.

Which of the following is a function of inventory? a. to decouple or separate parts of the production process b. to decouple the firm from fluctuations in demand and provide a stock of goods that will provide a selection for customers c. to take advantage of quantity discounts d. to hedge against inflation e. All of the above are functions of inventory.

e. All of the above are functions of inventory.

Enterprise resource planning (ERP) a. has been made possible because of advances in hardware and software b. uses client/server networks c. creates commonality of databases d. uses business application-programming interfaces (BAPI) to access their database e. All of the above are true of ERP.

e. All of the above are true of ERP.

Outsourcing a. transfers traditional internal activities to outside vendors b. utilizes the efficiency which comes with specialization c. lets the outsourcing firm focus on its critical success factors d. None of the above are true of outsourcing. e. All of the above are true of outsourcing.

e. All of the above are true of outsourcing.

Acceptance sampling a. may involve inspectors taking random samples (or batches) of finished products and measuring them against predetermined standards b. may involve inspectors taking random samples (or batches) of incoming raw materials and measuring them against predetermined standards c. is more economical than 100% inspection d. may be either of a variable or attribute type, although attribute inspection is more common in the business environment e. All of the above are true.

e. All of the above are true.

An organization's process strategy a. will have long-run impact on efficiency and flexibility of production b. is the same as its transformation strategy c. must meet various constraints, including cost d. is concerned with how resources are transformed into goods and services e. All of the above are true.

e. All of the above are true.

Capacity planning in closed-loop MRP a. utilizes feedback about workload from each work center b. may make use of resource requirements profiles (load reports) c. may smooth work center loads with such tactics as overlapping and lot splitting d. does not add capacity, but rather seeks effective use of existing capacity e. All of the above are true.

e. All of the above are true.

Ethical issues that may arise in projects large and small include a. bid rigging b. expense account padding c. compromised safety or health standards d. bribery e. All of the above are true.

e. All of the above are true.

FedEx chose Memphis, Tennessee, as its U.S. hub because a. the city is in the center of the U.S., geographically b. the airport has relatively few hours of bad weather closures c. it needed a means to reach cities to which it did not have direct flights d. the firm believed that a hub system was superior to traditional city-to-city flight scheduling e. All of the above are true.

e. All of the above are true.

In supply chain management, ethical issues a. are particularly important because of the enormous opportunities for abuse b. may be guided by company rules and codes of conduct c. become more complex the more global is the supply chain d. may be guided by the principles and standards of the Institute for Supply Management e. All of the above are true.

e. All of the above are true.

Natural variations a. affect almost every production process b. are the many sources of variation that occur when a process is under control c. when grouped, form a pattern, or distribution d. are tolerated, within limits, when a process is under control e. All of the above are true.

e. All of the above are true.

Value Stream Mapping a. is a variation on time function mapping b. examines the supply chain to determine where value is added c. extends time function mapping back to the supplier d. starts with the customer and works backwards e. All of the above are true.

e. All of the above are true.

Which of the following is false regarding the links between JIT and quality? a. Inventory hides bad quality; JIT immediately exposes it. b. JIT reduces the number of potential sources of error by shrinking queues and lead times. c. As quality improves, fewer inventory buffers are needed; in turn, JIT performs better. d. If consistent quality exists, JIT allows firms to reduce all costs associated with inventory. e. All of the above are true.

e. All of the above are true.

Which of the following is true regarding the steps to reducing setup times? a. The first step involves performing as much setup preparation as possible while the process/machine is operating. b. The cycle of steps is repeated until setup time is reduced to under a minute. c. Standardize tooling and standardize training are included in the same step. d. Improved material handling and move material closer are done before operator training. e. All of the above are true.

e. All of the above are true.

Which of the following regarding enterprise resource planning (ERP) is true? a. It involves an ongoing process for implementation. b. It can incorporate improved, reengineered "best processes." c. It has a software database that is off-the-shelf coding. d. ERP systems usually include MRP, financial and human resource information. e. All of the above are true.

e. All of the above are true.

Which of the following statements regarding Bechtel is true? a. Its competitive advantage is project management. b. Bechtel was the construction contractor for the Hoover Dam. c. While helping to rebuild Iraq, Bechtel's crews had to travel under armed escort. d. Bechtel's procurement program is global in nature. e. All of the above are true.

e. All of the above are true.

Which of the following statements regarding the Dreamliner 787 is true? a. Boeing has found partners in over a dozen countries. b. The new aircraft incorporates a wide range of aerospace technologies. c. The new aircraft uses engines from not one, but two manufacturers. d. Boeing will add only 20 to 30 percent of the aircraft's value. e. All of the above are true.

e. All of the above are true.

Which of the following statements regarding the gross material requirements plan is true? a. It shows total demand for an item. b. It shows when an item must be ordered from a supplier or when production must be started. c. It combines a master production schedule with the time-phased schedule. d. It requires several inputs, including an accurate bill of material. e. All of the above are true.

e. All of the above are true.

Which of the following statements regarding the reorder point is true? a. The reorder point is that quantity that triggers an action to restock an item. b. There is a reorder point even if lead time and demand during lead time are constant. c. The reorder point is larger than d x L if safety stock is present. d. The fixed-period model has no reorder point. e. All of the above are true.

e. All of the above are true.

Which of the following represent reasons for globalizing operations? a. to gain improvements in the supply chain b. to improve operations c. to expand a product's life cycle d. to attract and retain global talent e. All of the above are valid.

e. All of the above are valid.

Which of the following influences layout design? a. inventory requirements b. capacity needs c. personnel levels d. technology decisions e. All of the above influence layout decisions.

e. All of the above influence layout decisions.

Which of the following is not a concern of suppliers as they prepare to enter into JIT partnerships? a. Suppliers feel that they would be less at risk if they contracted with more than one customer. b. Suppliers are concerned that customers will present frequent engineering changes with inadequate lead time to deal with them. c. Suppliers feel that their processes are suited for larger lot sizes than the customer wants. d. Suppliers are concerned that frequent delivery of small quantities is economically prohibitive. e. All of the above represent JIT supplier concerns.

e. All of the above represent JIT supplier concerns.

Which of the following statements about the basic EOQ model is true? a. If the ordering cost were to double, the EOQ would rise. b. If annual demand were to double, the EOQ would increase. c. If the carrying cost were to increase, the EOQ would fall. d. If annual demand were to double, the number of orders per year would increase. e. All of the above statements are true.

e. All of the above statements are true.

The 5S's a. have the "flavor" of a housekeeping list b. are a checklist for lean operations c. have become a list of seven items in American practice d. can be used to assist with necessary changes in organizational culture e. All of these are true.

e. All of these are true.

Of the four approaches to capacity expansion, the approach that "straddles" demand a. uses incremental expansion b. uses one-step expansion c. at some times leads demand, and at other times lags d. works best when demand is not growing but is stable e. Choices a and c are both correct.

e. Choices a and c are both correct.

Which of the following statements regarding "proximity" in the location decision is false? a. Service organizations find that proximity to market is the most critical primary location factor. b. Manufacturers want to be near customers when their product is bulky, heavy, or fragile. c. Perishability of raw materials is a good reason for manufacturers to locate near the supplier, not the customer. d. Reduction in bulk is a good reason for a manufacturer to locate near the supplier. e. Clustering among fast food chains occurs because they need to be near their labor supply.

e. Clustering among fast food chains occurs because they need to be near their labor supply.

Which of the following statements best compares modular bills and phantom bills? a. Both pertain to assemblies that are not inventoried. b. There is no difference between the two. c. Both pertain to assemblies that are inventoried. d. Modular bills are used for assemblies that are not inventoried, unlike phantom bills. e. Modular bills represent subassemblies that actually exist and are inventoried, while phantom bills represent subassemblies that exist only temporarily and are not inventoried.

e. Modular bills represent subassemblies that actually exist and are inventoried, while phantom bills represent subassemblies that exist only temporarily and are not inventoried.

Which of the following is true regarding opportunities to improve service processes? a. Automation can do little to improve service processes, because services are so personal. b. Layout is of little consequence, since services seldom use an assembly line. c. If a work force is strongly committed, it need not be cross-trained and flexible. d. All of the above are true. e. None of the above is true.

e. None of the above is true.

Which of the following is not true when explaining why productivity tends to be lower in the service sector than in the manufacturing sector? a. Services are typically labor-intensive. b. Services are often difficult to evaluate for quality. c. Services are often an intellectual task performed by professionals. d. Services are difficult to automate. e. Service operations are typically capital intensive.

e. Service operations are typically capital intensive.

Which of the following is true regarding the two smoothing constants of the Forecast Including Trend (FIT) model? a. One constant is positive, while the other is negative. b. They are called MAD and RSFE. c. Alpha is always smaller than beta. d. One constant smoothes the regression intercept, whereas the other smoothes the regression slope. e. Their values are determined independently.

e. Their values are determined independently.

Time series data may exhibit which of the following behaviors? a. trend b. random variations c. seasonality d. cycles e. They may exhibit all of the above

e. They may exhibit all of the above

Plots of sample ranges indicate that the most recent value is below the lower control limit. What course of action would you recommend? a. Since there is no obvious pattern in the measurements, variability is in control. b. One value outside the control limits is insufficient to warrant any action. c. Lower than expected dispersion is a desirable condition; there is no reason to investigate. d. The process is out of control; reject the last units produced. e. Variation is not in control; investigate what created this condition.

e. Variation is not in control; investigate what created this condition.

If a layout problem is solved by use of "heuristics," this means that a. there was no other way to solve the problem b. no computer software was available c. the problem has only a few alternatives to evaluate d. no optimum solution exists e. a "satisfactory" solution is acceptable

e. a "satisfactory" solution is acceptable

A project organization a. is effective for companies with multiple large projects b. is appropriate only in construction firms c. often fails when the project cuts across organizational lines d. is formed to ensure that programs (projects) get proper management and attention e. a and d are both true

e. a and d are both true

A strategy is a(n) a. set of opportunities in the marketplace b. broad statement of purpose c. simulation used to test various product line options d. plan for cost reduction e. action plan to achieve the mission

e. action plan to achieve the mission

A good layout requires determining a. material handling requirements b. capacity and space requirements c. environment and aesthetics d. cost of moving between various work areas e. all of the above

e. all of the above

Flexibility can be achieved with a. movable equipment b. inexpensive equipment c. sophisticated electronic equipment d. modular equipment e. all of the above

e. all of the above

Franz Colruyt has achieved low-cost leadership through a. Spartan headquarters b. absence of voice mail c. low-cost facilities d. no background music e. all of the above

e. all of the above

Location analysis techniques typically employed by service organizations include a. factor rating method b. center-of-gravity method c. purchasing power analysis of area d. traffic counts e. all of the above

e. all of the above

Many services maintain records of sales noting a. the day of the week b. unusual events c. weather d. holidays e. all of the above

e. all of the above

Multinational organizations can shop from country to country and cut costs through a. lower wage scales b. lower indirect labor costs c. less stringent regulations d. lower taxes and tariffs e. all of the above

e. all of the above

Operations managers will need to consider ethical and social responsibility issues when location decisions involve a. child labor issues b. sweatshop conditions c. allegiance to the firm's current location d. corruption e. all of the above

e. all of the above

Process redesign a. is the fundamental rethinking of business processes b. can focus on any process c. tries to bring about dramatic improvements in performance d. focuses on activities that cross functional lines e. all of the above

e. all of the above

The "bullwhip" effect a. occurs as orders are relayed from retailers to wholesalers b. results in increasing fluctuations at each step of the sequence c. increases the costs associated with inventory in the supply chain d. occurs because of distortions in information in the supply chain e. all of the above

e. all of the above

The aggregate plan gets input or feedback from which of the following areas? a. engineering b. finance, marketing, and human resources c. the master production schedule d. procurement, production, and general management e. all of the above

e. all of the above

Which of the following are typical of process control systems? a. They have sensors. b. The digitized data are analyzed by computer, which generates feedback. c. Their sensors take measurements on a periodic basis. d. The sensors' measurements are digitized. e. all of the above

e. all of the above

Which of the following devices represents an opportunity for technology to improve security of container shipments? a. devices that identify truck and container location b. devices that sense motion c. devices that measure radiation or temperature d. devices that can communicate the breaking of a container lock or seal e. all of the above

e. all of the above

Which of the following is among the eight components of revenue and volume for a service firm? a. uniqueness of the firm's and the competitor's locations b. quality of the competition c. quality of management d. purchasing power of the customer-drawing area e. all of the above

e. all of the above

Which of the following products is likely to be assembled on a repetitive process line? a. automobiles b. personal computers c. dishwashers d. television sets e. all of the above

e. all of the above

Assignable causes a. are not as important as natural causes b. are within the limits of a control chart c. depend on the inspector assigned to the job d. are also referred to as "chance" causes e. are causes of variation that can be identified and removed

e. are causes of variation that can be identified and removed

Which of the following worker characteristics would likely be least important for U.S. firms looking to open up call centers in different countries? a. willing to accept low wages b. have a high level of education c. speak English d. possess an in-depth knowledge of American popular culture e. are young

e. are young

The statistical process chart used to control the number of defects per unit of output is the a. x -chart b. R-chart c. p-chart d. AOQ chart e. c-chart

e. c-chart

If the standard deviation of demand is six per week, demand is 50 per week, and the desired service level is 95%, approximately what is the statistical safety stock? a. 8 units b. 10 units c. 16 units d. 64 units e. cannot be determined without lead time data

e. cannot be determined without lead time data

Which of the following changes does not result in strategy changes? a. change in the company's financial situation b. a company's adoption of new technology c. change in the product life cycle d. change in the competitive environment e. change in job scheduling technique

e. change in job scheduling technique

Which of the following is an opportunity for effective management in the supply chain? a. random "pull" data b. multistage control of replenishment c. the bullwhip effect d. customer managed inventory e. channel assembly

e. channel assembly

The ability of an organization to produce goods or services that have some uniqueness in their characteristics is a. mass production b. time-based competition c. competing on productivity d. competing on flexibility e. competing on differentiation

e. competing on differentiation

The bill of material contains information necessary to a. place an order to replenish the item b. calculate quantities on hand and on order c. convert net requirements into higher level gross requirements d. convert gross requirements into net requirements e. convert (explode) net requirements at one level into gross requirements at the next level

e. convert (explode) net requirements at one level into gross requirements at the next level

Which of the following requires an information system that provides inbound product identification, its destination, and routing of the product to the designated outbound vehicle? a. phantom-docking b. random stocking c. ASRS d. customizing e. cross-docking

e. cross-docking

In JIT partnerships, suppliers have several concerns. Which of the following is not such a concern? a. desire for diversification b. poor customer scheduling c. small lot sizes d. producing high enough quality levels e. customers' infrequent engineering changes

e. customers' infrequent engineering changes

In mass service and service factory quadrants of the service process matrix, the operations manager could focus on all of the following except a. automation b. standardization c. tight quality control d. removing some services e. customization

e. customization

The ability of an organization to produce services that, by utilizing the consumer's five senses, have some uniqueness in their characteristics is a. mass production b. time-based competition c. differentiation d. flexible response e. experience differentiation

e. experience differentiation

A forecast based on the previous forecast plus a percentage of the forecast error is a(n) a. qualitative forecast b. naive forecast c. moving average forecast d. weighted moving average forecast e. exponentially smoothed forecast

e. exponentially smoothed forecast

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 break-even analysis c. center-of-gravity method d. simulation e. factor rating method

e. factor rating method

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

e. is the discounted value of a series of future cash receipts

One use of short-range forecasts is to determine a. production planning b. inventory budgets c. research and development plans d. facility location e. job assignments

e. job assignments

Which of the following is not one of the four approaches to capacity expansion? a. average capacity with incremental expansion b. lead demand with incremental expansion c. lag demand with incremental expansion d. lead demand with one-step expansion e. lag demand with one-step expansion

e. lag demand with one-step expansion

All of the following are "opportunities" for supply chain management except a. postponement b. drop shipment c. blanket orders d. channel assembly e. line balancing

e. line balancing

The main advantage of a product-oriented layout is typically a. low raw material cost b. employability of highly skilled labor c. high flexibility d. low capital cost e. low variable cost per unit

e. low variable cost per unit

Which of the following is not a concern of the supply chain? a. warehousing and inventory levels b. credit and cash transfers c. suppliers d. distributors and banks e. maintenance scheduling

e. maintenance scheduling

When quantity discounts are allowed, the cost-minimizing order quantity a. is always an EOQ quantity b. minimizes the sum of holding and ordering costs c. minimizes the unit purchase price d. may be a quantity below that at which one qualifies for that price e. minimizes the sum of holding, ordering, and product costs

e. minimizes the sum of holding, ordering, and product costs

The central problem in product-oriented layout planning is a. minimizing material handling within workstations b. minimizing labor movement between workstations c. equalizing the space allocated to the different workstations d. maximizing equipment utilization e. minimizing the imbalance in the work loads among workstations

e. minimizing the imbalance in the work loads among workstations

Which of the following is not a type of qualitative forecasting? a. executive opinions b. sales force composites c. consumer surveys d. the Delphi method e. moving average

e. moving average

The Beta distribution is used in project management to a. calculate slack on activities not on the critical path b. calculate the probability that a project will be completed within its budget c. calculate pessimistic and optimistic activity times d. determine which activity should be crashed e. none of the above

e. none of the above

The layout strategy that deals with low-volume, high-variety production is a. fixed-position layout b. retail layout c. warehouse layout d. office layout e. none of the above

e. none of the above

The mean and standard deviation for a process for which we have a substantial history are x = 120 and σ = 2. For the variable control chart, a sample size of 16 will be used. What is the mean of the sampling distribution? a. 1/8 (0.125) b. 0.5 c. 2 d. 40 e. none of the above

e. none of the above

Which of these factors would be considered when making a location decision at the region/community level? a. government rules, attitudes, stability, incentives b. cultural and economic issues c. zoning restrictions d. environmental impact issues e. proximity to raw materials and customers

e. proximity to raw materials and customers

Which of the following is generally found in most JIT environments? a. a push or pull system, depending upon the rate of demand b. a push system for high margin items and a pull system for low margin items c. a push system for purchased parts and a pull system for manufactured parts d. push systems e. pull systems

e. pull systems

Which of the following is an advantage of the postponement technique? a. reduction in automation b. early customization of the product c. better quality of the product d. reduction in training costs e. reduction in inventory investment

e. reduction in inventory investment

One disadvantage of process-oriented layouts arises from a. the use of special purpose equipment b. machine maintenance, which tends to seriously degrade the capacity of the entire system c. the use of specialized material handling equipment d. the need for stable demand e. the use of the general purpose machines and equipment

e. the use of the general purpose machines and equipment

Manufacturing cycle time is best defined as the a. length of the work shift, expressed in minutes per day b. time it takes a unit to move from one workstation to the next c. time between the start of one unit and the start of the next unit d. sum of all the task times to make one unit of a product e. time from raw materials receipt to finished product exit

e. time from raw materials receipt to finished product exit

In the make-or-buy decision, one of the reasons for making is a. to reduce inventory costs b. to obtain technical or management ability c. inadequate capacity d. reciprocity e. to assure adequate supply in terms of quantity

e. to assure adequate supply in terms of quantity

Break-even is the number of units at which a. total revenue equals price times quantity b. total revenue equals total variable cost c. total revenue equals total fixed cost d. total profit equals total cost e. total revenue equals total cost

e. total revenue equals total cost

Balancing low-cost storage with low-cost material handling is important in a(n) a. fixed-position layout b. process-oriented layout c. office layout d. repetitive and product-oriented layout e. warehouse layout

e. warehouse layout

True/False: A product will always be in the same stage of its product life cycle regardless of the country.

False

True/False: Manufacturing now constitutes the largest economic sector in postindustrial societies.

False

True/False: Manufacturing organizations have ten strategic OM decisions, while service organizations have only eight.

False

True/False: Measuring the impact of a capital acquisition on productivity is an example of multi-factor productivity.

False

True/False: Most services are tangible; this factor determines how the ten decisions of operations management are handled differently for goods than for services.

False

True/False: Operations strategies are implemented in the same way in all types of organizations.

False

True/False: Productivity is the total value of all inputs to the transformation process divided by the total value of the outputs produced.

False

True/False: Shewhart's contributions to operations management came during the Scientific Management Era.

False

True/False: The production process at Hard Rock Café is limited to meal preparation and serving customers.

False

True/False: "How much inventory of this item should we have?" is within the critical decision area of managing quality.

False

True/False: A knowledge society is one that has migrated from work based on knowledge to one based on manual work.

False

True/False: An organization's strategy is its purpose or rationale for an organization's existence.

False

True/False: Customer interaction is often high for manufacturing processes, but low for services.

False

True/False: Henry Ford is known as the Father of Scientific Management.

False

True/False: In order to have a career in operations management, one must have a degree in statistics or quantitative methods.

False

True/False: Low-cost leadership is the ability to distinguish the offerings of the organization in any way that the customer perceives as adding value.

False

True/False: All organizations, including service firms such as banks and hospitals, have a production function.

True

True/False: An example of a "hidden" production function is money transfers at banks.

True

True/False: An organization's ability to generate unique advantages over competitors is central to a successful strategy implementation.

True

True/False: Between 1980 and 2005, the amount of money (bank deposits, government and corporate debt securities, and equity securities) invested in global capital markets more than tripled.

True

True/False: Boeing's development of the 787 Dreamliner is an example of a company obtaining a competitive advantage via product differentiation/innovation.

True

The Dulac Box plant produces 500 cypress packing boxes in two 10-hour shifts. What is the productivity of the plant? a. 25 boxes/hr b. 50 boxes/hr c. 5000 boxes/hr d. none of the above e. not enough data to determine productivity

a. 25 boxes/hr

Which of the following statements is true? a. Almost all services and almost all goods are a mixture of a service and a tangible product. b. A pure good has no tangible product component. c. A pure service has only a tangible product component. d. There is no such thing as a pure good. e. None of the above is a true statement.

a. Almost all services and almost all goods are a mixture of a service and a tangible product.

Which of the following statements is true? a. The person most responsible for initiating use of interchangeable parts in manufacturing was Eli Whitney. b. The origins of management by exception are generally credited to Frederick W. Taylor. c. The person most responsible for initiating use of interchangeable parts in manufacturing was Walter Shewhart. d. The origins of the scientific management movement are generally credited to Henry Ford. e. The person most responsible for initiating use of interchangeable parts in manufacturing was Henry Ford.

a. The person most responsible for initiating use of interchangeable parts in manufacturing was Eli Whitney.

Which of the following would not be an operations function in a fast-food restaurant? a. advertising and promotion b. designing the layout of the facility c. maintaining equipment d. making hamburgers and fries e. purchasing ingredients

a. advertising and promotion

Productivity measurement is complicated by a. the competition's output b. the fact that precise units of measure are often unavailable c. stable quality d. the workforce size e. the type of equipment used

b. the fact that precise units of measure are often unavailable

A foundry produces circular utility access hatches (manhole covers). If 120 covers are produced in a 10-hour shift, the productivity of the line is a. 1.2 covers/hr b. 2 covers/hr c. 12 covers/hr d. 1200 covers/hr e. none of the above

c. 12 covers/hr

Productivity tends to be more difficult to improve in the service sector because the work is a. often difficult to automate b. typically labor-intensive c. frequently processed individually d. often an intellectual task performed by professionals e. all of the above

e. all of the above

Reasons to study Operations Management include learning about a. why people organize themselves for productive enterprise b. how goods and services are produced c. what operations managers do d. a costly part of the enterprise e. all of the above

e. all of the above

The Ten Critical Decisions of Operations Management include a. Layout strategy b. Maintenance c. Process and capacity design d. Managing quality e. all of the above

e. all of the above

The field of operations management is shaped by advances in which of the following fields? a. chemistry and physics b. industrial engineering and management science c. biology and anatomy d. information technology e. all of the above

e. all of the above

True/False: The relative importance of each of the ten operations decisions depends on the ratio of goods and services in an organization.

True

True/False: To attract and retain global talent, and to expand a product's life cycle, are both reasons to globalize.

True

True/False: NAFTA seeks to phase out all trade and tariff barriers between the United States and Asia.

False

Which of the following is not among the ethical and social challenges facing operations managers? a. honoring community commitments b. maintaining a clean environment c. efficiently developing and producing safe quality products d. increasing executive pay e. providing a safe workplace

d. increasing executive pay

Reasons to study Operations Management include a. studying why people organize themselves for free enterprise b. knowing how goods and services are consumed c. understanding what human resource managers do d. learning about a costly part of the enterprise e. all of the above

d. learning about a costly part of the enterprise

The total of all outputs produced by the transformation process divided by the total of the inputs is a. utilization b. greater in manufacturing than in services c. defined only for manufacturing firms d. multifactor productivity e. none of the above

d. multifactor productivity

True/False: Decisions that involve what is to be made and what is to be purchased fall under the heading of supply chain management.

True

Which of the following services is least likely to be unique, i.e., customized to a particular individual's needs? a. dental care b. hairdressing c. legal services d. elementary education e. computer consulting

d. elementary education

The marketing function's main concern is with a. producing goods or providing services b. procuring materials, supplies, and equipment c. building and maintaining a positive image d. generating the demand for the organization's products or services e. securing monetary resources

d. generating the demand for the organization's products or services

Which of the following are the primary functions of all organizations? a. operations, marketing, and human resources b. marketing, human resources, and finance/accounting c. sales, quality control, and operations d. marketing, operations, and finance/accounting e. research and development, finance/accounting, and purchasing

d. marketing, operations, and finance/accounting

Eli Whitney, in the _____, provided the foundations for ______ in operations management. a. 1920s; statistical sampling b. United Kingdom; mass production c. U.S. Army; logistics d. nineteenth century; interchangeable parts e. none of the above

d. nineteenth century; interchangeable parts