Management Mid-Term Exam

If the average time between customer arrivals is eight minutes, what is the hourly arrival rate?

7.5 (60/8=7.5)

The simplest way to think about throughput is the quantity of work completed. Group starts True or False

False

Operations and supply chain processes can be conveniently categorized as planning, sourcing, making, and delivering only. True or False

False (Operations and supply chain processes can be conveniently categorized as planning, sourcing, making, delivering, and returning.)

"Time between completions" is the fundamental basis of a capacity calculation Group starts True or False

True

Equipment utilization is normally expressed as a percentage of design capacity. Group starts True or False

True

The "C's" in the equation for the general queue stand for "Coefficient of Variation." Group starts True or False

True

Burrito King (a new fast-food franchise opening up nationwide) has successfully automated burrito production for its drive-up fast-food establishments. The Burro-Master 9000 requires a constant 50 seconds to produce a batch of burritos. It has been estimated that customers will arrive at the drive-up window according to a Poisson distribution at an average of one every 70 seconds. To help determine the amount of space needed for the line at the drive-up window, answer the following questions. a. What is the average waiting line length (in cars)? b. What is the average number of cars in the system (both in line and at the window)? c. What is the expected average time in the system, in minutes?

a.

Consider the following financial data from the past year for Midwest Outdoor Equipment Corporation. Annual sales $24,324,000 Net income 2,975,000 Cost of goods sold 12,600,000 Total assets 10,550,000 Inventory 2,875,000 Receivables 3,445,000 a. Compute the profit margin. b. Compute the asset turnover ratio. c. Compute the return on assets ratio.

a. .122 b. 2.306 c. .281

Utilization is equal to which of the following? a. Arrival rate divided by service rate b. Service rate divided by arrival rate c. Arrival rate times service rate d. Service rate minus arrival rate

a. Arrival rate divided by service rate

As the degree of customer contact increases in a service operation, what generally happens to the efficiency of the operation? a. It decreases b. It increases c. It remains steady d. It may increase or decrease depending on the particular service industry e. No such conclusion can be reasonably drawn

a. It decreases

Various financial data for the past two years follow. LAST YEAR THIS YEAR Output: Sales $200,000 $220,000 Input: Labor 30,000 40,000 Raw materials 35,000 45,000 Energy 5,000 6,000 Capital 50,000 50,000 Other 2,000 3,000 a. Calculate the total productivity measure for this company for both years. b. Calculate the partial productivity measures for labor, capital, and raw materials for this company for both years.

a. Last year = 1.64 This year = 1.53 b. Last year: Labor- 6.67 Capital- 4.00 Raw Materials- 5.71 This year: Labor- 5.50 Capital- 4.40 Raw Materials- 4.89

Throughput is a ...? a. Rate b. Number c. Time d. Proportion

a. Rate

What type of chart compares the current project schedule with the original baseline schedule so that deviations from the original plan can be easily noticed? a. Tracking Gantt chart Correct b. Project task tree c. Project calendar d. Milestone chart e. Bar chart

a. Tracking Gantt chart

The following activities are part of a project to be scheduled using CPM: IMMEDIATE PREDECESSOR TIME (WEEKS) A — 6 B A 3 C A 7 D C 2 E B,D 4 F D 3 G E,F 7 a. What is the critical path? a. A-B-E-G b. A-C-D-F-G c. A-C-D-E-G b. How many weeks will it take to complete the project? c. How much slack does activity B have?

a. is c. A-C-D-E-G b. (6+7+2+4+7 = 26) c. The slack for B is 12-6 = 6 weeks (The slack of any activity is the difference between the late and early start times (which is also the difference between the late and early finish times). The slack for B is 12-6 = 6 weeks. The slack for any activity on the critical path is zero. In this example there is a shortcut you could have used. Because B is only on one path, A-B-E-G, the slack for B is the difference between the critical path length and the length of A-B-E-G. If A-B-E-G is the CP, then the slack for B is of course zero.)

Capacity is directly related to: (Choose all that apply) a. Output b. Machines c. Time d. Processes

all of them

Which of the following are required for a capacity calculation (choose all that apply) a. Time between process starts b. Time between process completions c. Total Time spent in the process d. Length of the time horizon in question

b, c, and d

Operations and supply chain management is concerned with the design and management of the entire system that has what function? a. Supplies goods and services to customers b. Creates and delivers a firm's products and services c. Employs people and produces a product d. Operates the distribution of goods e. Procures, sells, and transports goods

b. Creates and delivers a firm's products and services

According to Little's Law, which of the following ratios is used to find throughput rate? a. Cycle time/Process time. b. Inventory/Flow time. c. Throughput time/Process velocity. d. Value added time/Process velocity. e. Process velocity/Throughput time.

b. Inventory/Flow time.

"tp" stands for "average service" time and can be found by taking the inverse of which thing? a. Arrival Rate b. Service Rate c. Utilization d. Coefficient of Variation

b. Service Rate

What is defined as the likelihood of disruption that would impact the ability of a company to continuously supply products or services? a. Operations interruption likelihood factor b. Supply chain risk c. Process disruption probability d. Insurability factor e. Profitability risk

b. Supply chain risk

Triple bottom line is a phrase that captures which of the following? a. The concept that shareholders like economic, environmental and societal stewardship affecting shareholders and stake holders. b. The concept that firms should consider economic prosperity, environmental stewardship and social responsibility affecting shareholders and stake holders. c. The concept that sustainability, social awareness and profitability are three important measures for a firm affecting shareholders and stake holders. d. The concept that firms should consider economic prosperity, environmental stewardship and social responsibility affecting only shareholders.

b. The concept that firms should consider economic prosperity, environmental stewardship and social responsibility affecting shareholders and stake holders.

Regarding the measures of inventory managing efficiency, identify the most appropriate answer. (Select all that apply.) a. Total average value of inventory is equal to the selling price multiplied by finished goods inventory. b. Inventory turn is the annual cost of goods sold multiplied by average inventory. c. Days of supply is the inverse of inventory turns × 365. d. Inventory turn is the annual cost of goods sold divided by average inventory.

c. Days of supply is the inverse of inventory turns × 365. and d. Inventory turn is the annual cost of goods sold divided by average inventory.

Which of these in not an approach to capacity planning? a. Tracking b. Leading c. Forecasting d. Following

c. Forecasting

The second, simpler formula is only valid for which condition? a. The arrival and service rates are derived from a Normal distribution b. The arrival and service rates are derived from a Chi-Square distribution c. The arrival and service rates are derived from a Poisson distribution d. The arrival and service rates are derived from a Beta distribution

c. The arrival and service rates are derived from a Poisson distribution

All other things remaining the same, if the revenue or sales decreases, asset turnover ratio will _____. a. decrease and will decrease, but the amount of change will depend on the profit margin b. stay the same c. decrease d. will decrease, but the amount of change will depend on the profit margin e. increase

c. decrease

Throughput is generally equal to which thing? a. Time to completion b. The number of process steps c. Inventory buildup d. Arrival rate

d. Arrival rate

To get capacity from time between completions you do which mathematical operation? a. Multiply times the length of the day b. Divide by the length of the day c. Subtract the length of an hour d. Take the inverse

d. Take the inverse

You have just performed a CPM analysis and have found that more than one path through the project network has zero slack values. What can you conclude? a. The analysis is performed incorrectly. b. More than one path is optimal. c. The project will not be completed by the desired time. d. There are multiple critical paths. e. Only one path is optimal.

d. There are multiple critical paths.

A diagram that shows how a company's strategy is delivered by a set of supporting activities is called a(n) ____________. a. strategy process diagram b. strategy support map c. activity integration plan d. activity-system map e. corporate systems diagram

d. activity-system map

What is the name of the process in which one company studies the processes of another firm to identify best practices? a. Forecasting b. Business analytics c. Continuous improvement d. Outsourcing e. Benchmarking

e. Benchmarking

According to Little's Law, which of the following can be used to estimate work-in-process inventory? a. Process velocity/Flow time. b. Set up time/Throughput rate. c. Value added time/Process velocity. d. Process time/Cycle time. e. Throughput rate × Flow time.

e. Throughput rate × Flow time.