Management Midterm
Just-in-time inventory is a zero inventory system (T/F)
False
Reducing lot size is of little help in reducing inventory costs (T/F)
False
When using statistical process control, a process is said to be in control if none of the sample points fall outside the control limits (T/F)
False (?)
The type of goods for which a responsive supply chain is appropriate is
Fashion goods such as clothing
A responsive supply chain is preferred when
Flexible purchasing, production, and distribution systems are in place
One source of disruption caused by the internal supply chain is
Forecast error
Ways to minimize the Bullwhip Effect include all of the following except
Reducing the amount of sales data shared with members of the supply chain in order to protect the firm's sensitive financial information
A sampling plan with the following parameters has been proposed n=1700, n=60, c=4, AQL=.3, LTPD=0.09, d=number of defects found in the sample What is the correct conclusion about the sample?
Reject the lot if d>4
A quick oil change service franchise operation would most likely compete on which of the following dimensions of quality A. performance B. responsiveness C. reliability D. durability E. aesthetics
Responsiveness
The financial and market share objectives of a firm in a responsive supply chain are likely to be realized if the firm has a
Short lead time for new product development and delivery
Causes of the Bullwhip Effect include all of the following except
Stable pricing
The type of goods for which an efficient supply chain is appropriate is
Standardized products
The two internal elements of SWOT analysis are
Strengths and weaknesses
Which of the following is true for supply chain management
Supply chain management concepts can be applied to both manufacturing and service organizations
The basic purpose of supply chain management is to
Synchronize the operations of all suppliers with those of purchasing, production, distribution, and customers
In a sampling plan, if n, the sample size, is held constant while c, the acceptance number is decreased then
The consumers risk decreases
In a sampling plan specified by n and c, the value of a indicates
The risk of rejecting a good lot
Which of the following statements regarding supplier selection is true
The supplier should be selected on the basis of quality, price, and delivery
MotoX and Co uses x-bar and r charts to track the thickness of their brake pads in millimeters. Below are the observation for 5 test days where samples of size n=3 were taken each day. What are the UCL, LCL, and X double bar. Carry your calculations to 3 decimal places. Test Day Obs 1 Obs 2 Obs 3 1 10 10 13 2 19 20 21 3 24 18 18 4 22 14 12 5 16 14 15
UCL= 11.84 LCL= 0 Xbar= 16.4
Total Quality Management
A commitment to quality that goes beyond internal company issues to suppliers and customers
In an assembly line where the cycle time is 10 minutes and the sum of the tasks is 25 minutes, what would be the daily production rate in units for an 8-hour day A. 48 B. 19.2 C. 1.33 D. 32 E. 64
A. 48 (1 unit/10 min)x(60 min/1 hour)x(8 hours/1 day)= 48 units per day
Which of the following skills is/are NOT fundamental to operations management A. advertising tactics B. quantitative analysis C. understanding of international business D. knowledge of information systems E. a and d
A. advertising tactics
Which of the following statements about vertical integration is true A. as a firm performs more processes itself, from acquiring materials to final delivery to customers, the more vertically integrated it is B. by owning its own distribution channels, a company exhibits backward integration C. as a firm performs fewer processes itself, from acquiring materials to final delivery to customers, the more vertically integrated it is D. by owning its own distribution channels, a company exhibits outsourcing E. a key advantage of integration is the ability of the firm to easily merge organizations with little risk
A. as a firm performs more processes itself, from acquiring materials to final delivery to customers, the more vertically integrated it is
Which of the following statements concerning process management is true A. capital intensity depends on the mix of equipment and human skills in a production process: the greater the relevant cost of equipment to human labor, the greater the capital intensity B. high resource flexibility is required hen high volumes are to be produced at low costs C. with a customized-services process, the workforce and customer rarely interact D. high customer involvement usually means more capital intensity and less resource flexibility E. a project process is utilized when multiple units of a standard product are to be made
A. capital intensity depends on the mix of equipment and human skills in a production process: the greater the relevant cost of equipment to human labor, the greater the capital intensity
Which of the following is NOT an advantage of on-site expansion, compared to building a new facility in a foreign country A. direct access to new markets B. reduced construction time and costs C. higher level of managerial control of operations D. reduced transportation costs E. a and d
A. direct access to new markets
Which of the following is not a trend in operations management A. increased presence of the manufacturing sector B. increased global competition in both manufacturing and services C. development of supply chain partners D. pressure to address social issues such as the environment and workplace diversity E. increased presence of the service economy
A. increased presence of the manufacturing sector
Products built in anticipation of demand and sold from inventory are classified as A. make-to-stock B. make-to-order C. assemble-to-order D. mass customized E. flexible ordering
A. make-to-stock
Firms that produce high volumes of relatively few standardized products, for which reasonable accurate forecasts are available, are most likely to use a
A. make-to-stock strategy
A job shop process requires A. organizing the resources around the process B. a line flow strategy C. perfectly predictable customer demands D. the same sequence of steps for each job E. high equipment utilization
A. organizing the resources around the process
Costs associated with inspection, testing, and data gathering to determine the actual quality of products throughout all phases of the production process is what type of quality cost?
Appraisal costs
A CPA and her partner are moving into a new 4-room suite. The four rooms will be for (A) the CPA's office, (B) the partner's office, (C) a reception area, and (D), a file room. After looking at the distance matrix and load matrix, determine which layout has the lowest cost
B) 1=B, 2=D, 3=C, 4=A
An assembly line consists of 6 tasks and the desired production rate for an 9-hour work day is 180 units. What should the cycle time be (in minutes) A. 4.0 B. 2.67 C. 3.2 D. 1.6 E. not enough information
B. 2.67 (8 hours/180 units)x(60 minutes/1 hour)= 2.67 minutes per unit
A firm can effectively use its operations function to yield competitive advantage via all of the following EXCEPT A. customization of the product B. maximization of equipment utilization, even if it means increasing inventory levels C. speed of delivery D. constant innovation of new products E. maintain a variety of product options
B. Maximization of equipment utilization, even if it means increasing inventory levels
Which of the following statements best characterizes on-time delivery 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 system
B. a company that always delivers at the promised time
An operation that has a low variety of products and a high volume of production for the few products made, such as a steel mill, would benefit from which type of layout A. a process layout B. a product layout C. a warehouse layout D. a retail store layout E. a cellular manufacturing layout
B. a product layout
Operations management can be viewed in several different ways. Which of the below best characterizes operations management A. the corporate function in which the best way to finance corporate assets, such as plant and equipment is determined B. a system where inputs (raw materials, components, people) pass through one or more operations and are transformed into outputs (products or services) C. a set of decisions relating to budgeting the annual resources between different functional areas D. the set of decisions related to product pricing and marketing E. the selection of information technology and systems development to support the business functions
B. a system where inputs (raw materials, components, people) pass through one or more operations and are transformed into outputs (products or services)
Which of the following statements about process choice is best A. a batch process typically has a standard sequence of operations through the facility B. continuous processes are very capital intensive C. automobiles are an example of a product created using a continuous process D. items made in a job shop require a higher level of quality than those items made from a continuous process E. custom cakes made in a bakery are an example of a product created using a batch process
B. continuous processes are very capital intentsive
An approach to location analysis that includes with quantitative and qualitative 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 statements concerning flow diagrams is NOT true A. flow diagrams can take many forms B. flow diagrams are useful in business process reengineering, but not in continuous improvement C. it is helpful on flow diagrams to label each step with process measurements such as cost, capacity, or elapsed time D. flow diagrams trace the flow of information, customers, equipment, employees, or materials through a process E. a line of visibility is used to separate different functional areas in the process
B. flow diagrams are useful in business process reengineering, but not in continuous improvement
Which of the following is NOT a service or manufacturing strategy A. make-to-stock B. make-to-assemble C. make-to-order D. assemble-to-order E. mass customization
B. make-to-assemble
Which of the following is NOT an element of JIT A. flexible resources B. push production C. small lot sizes D. quick set-ups E. pull production
B. push production
Which of the following is not a major difference between goods and services A. services are intangible- you cannot hold it or see it directly B. services are always consistent due to the heterogeneity factor C. services are produced and consumed simultaneously D. services often involve high customer interaction E. many services are knowledge based
B. services are always consistent due to the heterogeneity factor
Which of the following statements about process management is best A. the traditional relationship between capital intensity and resource flexibility is that if one is high, so is the other B. when customization must be high, equipment should be general purpose, and employees need to perform a broader range of duties C. creating a more capital intensive process tends to reduce the fixed cost and raise the variable unit cost D. economies of scope mean that a process should be devoted to a single product or service to achieve high volumes E. economies of scale mean that a process should be devoted to a variety of products or services to achieve customization
B. when customization must be high, equipment should be general purpose, and employees need to perform a broader range of duties
Studying a company that is considered a world leader in distribution logistics in order to improve your company's distribution process is an example of
Benchmarking
Based on the required cycle time from problem 13 above, what is the theoretical minimum number of workstations required A. 1 B. 2 C. 3 D. 4 E. 5
C. 3= average task times divided by cycle time = 2.0694 but must be rounded up to three (but be rounded up no matter how small the decimal place is)
Analysis of a process is most likely to be economically beneficial if the process is A. the first operation on the assembly line B. a very fast operation C. a bottleneck operation D. the last operation on an assembly line E. an operation that is rarely performed
C. a bottleneck operation
Among the characteristics of an intermittent production process if A. high and even machine utilization B. low work-in-process inventories C. ability to produce a variety of products D. quality leadership
C. ability to produce a variety of products
Which of the following are of special importance to the managing of global service operations A. demographic factors B. economic factors C. culture, ethics, and education level of the workforce D. capacity planning E. none of the above
C. culture, ethics, and educational level of workforce
Which of the following statements regarding operations management is true A. inputs to a production system include capital and materials, but now human resources B. operations management deals only with manufacturing organizations because service organizations do not have tangible outputs C. customer participation and information on performance are two special types of inputs to a production system D. typical inputs to a production system are processes and consumer goods E. outputs from a process are either a service or a product
C. customer participation and information on performance are two special types of inputs to a production system
Which of the following statements about customer involvement is best A. in service industries, customer contact is of minor importance B. a firm that produces standardized products often seeks customer specifications C. for services that directly involve the customer, the customer often dictates the time of the service D. when customer involvement is highly customized, a process is more likely to use a standardized-process rather than a customized-services process E. empowered employees are not necessary when there is high customer involvement
C. for services that directly involve the customer, the customer often dictates the time of the service
When production volumes are high, process decisions are more likely to favor A. more customer involvement B. less capital intensity C. less resource flexibility D. less vertical integration E. less automation
C. less resource flexibility
Optimizing capacity would be most appropriate for which stage in the product life cycle A. introduction B. growth C. maturity D. decline E. incubation
C. maturity
Which of the following is NOT an operations decision A. job scheduling B. facility layout design C. product price D. product quality E. inventory levels
C. product price
Which of the following statements on continuous improvement and reengineering is best A. only continuous improvement processes make use of cross-functional teams B. reengineering focuses on business processes while continuous improvement focuses on people processes C. reengineering starts with a "clean slate" whereas continuous improvement looks for ways to incrementally improve D. continuous improvement only focuses on critical or core processes E. continuous improvement programs and reengineering efforts are universally embraced by both managers and workers
C. reengineering starts with a "clean slate" whereas continuous improvement looks for ways to incrementally improve
Reduction of in-transit inventory can be encouraged through the use of A. low set-up costs B. low carrying costs C. supplier location near plants D. use of trains, not trucks E. low-cost, global suppliers
C. supplier location near plants
The center of gravity method does NOT take into consideration A. the location of markets or populations B. the volume of goods shipped to the markets or population size C. the value of the goods shipped or the income of the population D. the combination of volume and distance E. the center of gravity method considers all of the above
C. the value of the goods shipped or the income of the population
What is the purpose of a process-oriented /job shop layout A. to increase the volume of production B. to decrease flexibility C. to minimize material handling costs D. to keep the variety of products made to as few as possible E. a and d
C. to minimize material handling costs
Which of the following is NOT one of the eight competitive priorities A. cost B. high-performance design C. volume delivery D. development speed E. customization
C. volume delivery
Which of the following statements on acceptance sampling and process control methods is true A. complete inspection is preferred over sampling when destructive testing is required B. complete inspection is preferred over sampling for products that could be critical to human life C. control charts for attributes measurement are called x-bar charts D. control charts for variable data plot the proportion defective over time to detect when the process is out of control E. none of the above is true
Complete inspection is preferred over sampling for products the could be critical to human life
A national fast food restaurant will most likely compete on which of the following dimensions of quality A. conformance B. features C. durability D. aesthetics
Conformance
Which of the following is true? A. quality is related to profitability on the market side B. ISA 9000 certification guarantees the quality of a company's products C. poor quality that results in scrap, rework, and equipment downtime is an internal failure cost D. a and c E. all of the above
D- a and c Quality is related to profitability on the market side Poor quality that results in scrap, rework, and equipment downtime is an internal failure cost
If a new hospital's emergency room area has 8 departments that must be assigned to 8 rooms, in how many ways can they be arranged? A. 255 B. 64 C. 256 D. 40,320 E. 5,040
D. 40,320
Which of the following is an example of competing on the basis of customization A. a firm manufactures its product with less raw material than its competitors B. a firm's products are introduced into the market faster than its competitors C. a firm's distribution network routinely delivers its product on time D. a firm offers more variations of its products than its competitors E. a firm advertises more than its competitors
D. a firm offers more variations of its products than its competitors
Breaking up process clusters into cells that make up a family of products with similar process flows describes A. a process layout B. a product layout C. a retail store D. a group technology layout E. a warehouse layout
D. a group technology layout
In an assembly line where each task is performed at one station, the production rate will be determined by A. sum of the task times B. average task time C. shortest task time D. longest task time E. none of the above
D. longest task time
Which of the following statements about vertical integration is true A. a high level of vertical integration is likely to be attractive when volumes are low B. make-or-buy decisions relate primarily to forward integration C. a company owning its own distribution channels is an example of backward integration D. opting for a higher level of vertical integration implies less outsourcing E. forward integration represents movement towards the sources of raw materials and parts
D. opting for a higher level of vertical integration implies less outsourcing
Operations management techniques that can be used to reduce the cost of goods include all of the following EXCEPT A. using technology to monitor real-time production, financial, and sales information B. redesigning the layout to improve the flow of materials, employees, and customers C. improving quality D. purchasing at quantity discounts, even if not all the materials are needed since excess inventory is an asset E. training employees so they develop new skills and be able to work a variety of tasks
D. purchasing at quantity discounts, even if not all the materials are needed since excess inventory is an asset
A manufacturer took the following steps to reduce inventory. Which one is NOT a JIT action? A. they used a pull system to move inventory B. they produced in even smaller lots C. they required deliveries directly to the point of use D. they picked the supplier that offered the lowest price based on quantity discounts E. they worked to reduce their in-transit inventory
D. they picked the supplier that offered the lowest price based on quantity discounts
Productivity can be improved by
Decreasing inputs while holding outputs steady
An efficient supply chain is preferred when
Demand is highly predictable
Low-volume and high variety production is best undertaken by A. process focused manufacturing B. product focused manufacturing C. job shop type operations D. a, b, and c E. a and c
E. a and c-process focused manufacturing and job shop type operations
In the quest for competitive advantage, which of the following is a JIT requirement A. reduced number of vendors B. reduced space for inventory C. quality by suppliers D. small number of job classifications E. all of the above
E. all of the above
In which of the following phases of a product should quality be considered A. design B. procurement C. production D. distribution E. all of the above
E. all of the above
The difference between process focus and product focus is in A. the degree of flexibility of the production system B. the extent of product customization C. the volume of production per product D. product variety E. all of the above
E. all of the above
Which of the following represent issues of culture and ethics in International Operations A. bribery B. employee punctuality C. employee theft D. protection of intellectual property rights E. all of the above
E. all of the above
Which of the following represent reasons for globalizing operations A. reduce costs B. improve the supply chain C. attract new markets D. attract and retain global talent E. all of the above
E. all of the above
Which of the following is NOT a goal of JIT partnerships A. elimination of unnecessary activities B. elimination of in-plant inventories C. elimination of in-transit inventories D. elimination of engineering changes E. all of the above are goals of JIT partnerships
E. all of the above are goals of JIT partnerships
The "standards of global competition" include all of the following EXCEPT A. quality of the product and services B. variety of products and options to choose from C. customization to customer requirements D. timeliness of deliver E. all of the above are standards of global competition
E. all of the above are standards of global competition
In order to evaluate a job-shop or process layout, what information do you need A. the number of people employed B. the degree of interaction between each pair of departments C. the distance between each pair of departments D. all of the above E. b and c
E. b and c- the degree of interaction between each pair of departments and the distance between each pair of departments
A product-oriented layout is characterized by A. high product variety B. grouping of similar machines in work centers C. low and uneven machine utilization D. a high level of materials hanling E. equipment arrangement based on the sequence of operations
E. equipment arrangement based on the sequence of operations
Which of the following is NOT a trend in operations management A. increased global focus B. just-in-time shipments C. supply chain partners D. mass customization E. job specialization
E. job specialization
A facility layout must allow for trade-offs between space and material handling would be A. fixed position layout B. cellular manufacturing layout C. product-oriented layout D. process-oriented layout E. warehouse layout
E. warehouse layout
Which of the following is true A. corporate strategy is shaped by functional strategies B. corporate mission is shaped by corporate strategy C. functional strategies are shaped by corporate strategy D. external conditions are shaped by corporate missions E. corporate mission is shaped by functional strategies
Functional strategies are shaped by corporate strategy
Attribute inspection is appropriate for measuring
If a product is conforming or non-conforming
Which of the following statements correctly represents a benefit of centralized buying
Increased buying power can result in significant savings in purchasing costs
Precision Instrument uses a p-chart to monitor the quality of their microscope lenses. Each day they inspect a sample of 30 lenses (n=30). Below are the number of defective lenses found over the last 10 days. With the information compute the control limits of a p-chart with Z=3. Carry all values to four decimal places. Day #Defects Day #Defects 1 4 6 5 2 1 7 2 3 3 8 2 4 5 9 4 5 1 10 3
LCLp= 0.0 UCLp= 0.2644
MotoX and Co. uses control charts to track tension in the process of installing chains on their racing motorcycles. If for the last twenty days they take a sample each day of size n=4 and you are given that average Xbar = 98.4 and average R = 25.6, what would be the corresponding upper and lower control limits for the xbar chart?
LCLx= 3.987 UCLx= 5.853
One source of distribution caused by the external supply chain s
Late deliveries by vendors
Which of the following statements about the relationships between financial and supply chain performance measures is true
Longer delivery lead times require higher levels of working capital
A firm in a responsive supply chain should have
Low inventory investments consistent with fast delivery times
According to the quality literature, which of the following is NOT included in the cost of quality A. marketing costs B. appraisal costs C. prevention costs D. scrap costs E. all of the above are considered costs of quality
Marketing costs
Which of the following statements is true? A. no two products are exactly alike because the production process contains many sources of variation, even if the process is a machine B. with due diligence, variation in a process can be completely eliminate C. SPC and TQM are two competing techniques for quality control D. common causes of variation are those factors that can be completely eliminated using SPC E. none of the above are true
No two products are exactly alike because the production process contains many sources of variation, even if the process is a machine
Which of the following is NOT necessarily an essential element of a TQM program? A. benchmarking B. continuous improvement C. managing quality D. obtaining the Malcolm Bald Ridge National Quality Award E. defining quality as a strategic issue
Obtaining the Malcolm Bald Ridge National Quality Award
Which of the following tools Total Quality Management is used to organize and quantify problems? A. Pareto Analysis B. process charts C. cause and effect diagrams (fishbone diagrams) D. control charts E. none of the above
Pareto Analysis
A responsive supply chain is preferred when
Product variety is high
Which of the following statements is true regarding purchasing
Purchasing must satisfy the firm's short-term and long-term supply needs
Frequent deliveries of small quantities are a characteristic of JIT partnerships (T/F)
True
Hidden problems are generally uncovered during the process of reducing inventory (T/F)
True
In the just-in-time framework, waste is anything that does not add value (T/F)
True
Just-In-Time is a philosophy that works well with continuous improvement philosophies (T/F)
True