MGMT 425 Test 2
A disadvantage of the "few suppliers" strategy is a. Possible violations of the Sherman Antitrust Act. b. The risk of not being ready for technological change. c. The high cost of changing partners. d. The lack of cost savings for customers and suppliers. e. All of the above are disadvantages of the "few suppliers" strategy.
C
A hospital's layout most closely resembles which of the following? a. Project b. Work cell c. Job shop d. Product oriented e. None of the above.
C
A manager wants to build 3-sigma 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 12. b. -8 and 28. c. 16 and 4. d. 12 and 8. e. 4 and 16.
C
A rice mill in south Louisiana purchases the trucking firm that transports packed rice to distributors. This is an example of a. Keiretsu. b. Backward integration. c. Forward integration. d. Current transformation. e. Horizontal integration.
C
All of the following statements about ABC analysis are true except a. It states that there are the critical few and the trivial many inventory items. b. It categorizes on-hand inventory into three groups based on annual dollar volume. c. It states that all items require the same degree of control. d. Inventory may be categorized by measures other than dollar volume. e. It is an application of the Pareto principle.
C
Among the advantages of cycle counting is that it a. Does not need to be performed for less expensive items. b. Does not require the detailed records necessary when annual physical inventory is used. c. Allows more rapid identification of errors and consequent remedial action than is possible when annual physical inventory. d. Does not require highly trained people. e. Makes the annual physical inventory more acceptable to management.
C
An advantage of a joint venture over vertical integration is a. Flexibility. b. Globalization. c. Reduced risk. d. Compromised competitive advantages. e. Reduced costs.
C
Giving quantity discounts based on annual volume instead of single order size helps to control which supply-chain issue? a. Environmental risk b. Vendor-managed inventory c. The bullwhip effect d. Control risk e. Unethical supplier behavior
C
Goods made to order are typical of ____ and ____ approaches while goods made to forecast are typical of ___ and ____ approaches. a. Repetitive, process; mass customization, product b. Product, mass customization; repetitive, process c. Process, mass customization; repetitive, product d. Product, process; repetitive, mass customization e. Repetitive, product; mass customization, process
C
In the Office Relationship Chart, which rating reflects the highest importance for two departments' closeness to each other? a. I b. O c. A d. E e. X
C
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 100%. b. Either increase or decrease. c. Increase by about 41%. d. Increase, but more data is needed to say by how much. e. Increase by 200%.
C
Plots of sample ranges indicate that the most recent value is below the lower control limit. What course of action would you recommend? a. Lower than expected dispersion is a desirable condition; there is no reason to investigate. b. Since there is no obvious pattern in the measurements, variability is in control. c. Variation is not in control; investigate what created this condition. d. The process is out of control; reject the last units produced. e. One value outside the control limits is insufficient to warrant any action.
C
Which of the following is not a concern of the supply chain? a. Warehousing and inventory levels b. Suppliers c. Distributors and banks d. Maintenance scheduling e. Credit and cash transfers
D
A location decision for a traditional department store (Macy's) would tend to have a(n) a. Revenue focus. b. Education focus. c. Cost focus. d. Environmental focus. e. Labor focus.
A
A location decision for an appliance manufacturer would tend to have a(n) a. Cost focus. b. Education focus. c. Focus on finding very highly skilled technicians. d. Revenue focus. e. Environmental focus.
A
A process layout problem consists of 4 departments, each of which can be assigned to one of four rooms. The number of different solutions to this problem is (4!), although all of them may not have different material handling costs. a. 24 b. 1 c. 16 d. 4 e. Unknown
A
ABC analysis is based upon the principle that a. There are usually a few critical items, and many items which are less critical. b. As with grade distributions in many MBA courses, there should be more medium-level "B" items than either "A" or "C" items. c. More time should be spent on class "C" items because there are more of them. d. All items in inventory must be monitored very closely. e. An item is critical if its usage is high.
A
ASRS stands for a. Automated storage and retrieval system. b. Automated storage and recovery system. c. Automated scan and recognize system. d. Automated scan and retail system. e. None of the above.
A
Ambient conditions, spatial layout and functionality, and signs, symbols, and artifacts are all a. Elements of servicescapes. b. Elements of customization in a warehouse layout. c. Indicators that cross-docking has been successful. d. Indicators of imbalance on an assembly line. e. Elements of successful office layouts.
A
Arnold Palmer Hospital uses which focus? a. Process b. Repetitive c. Mass customization d. Product e. Both A and D.
A
Because problems with fixed-position layouts are so difficult to solve well onsite, operations managers a. Often complete as much of the project as possible off-site. b. Virtually never employ this layout strategy. c. Increase the size of the site. d. Utilize this approach only for construction projects such as bridges and office towers. e. Utilize this layout only for defense contractors.
A
Which layout type assumes an adequate volume for high equipment utilization? a. Retail layout b. Product-oriented layout c. Fixed-position layout d. Process-oriented layout e. Warehouse layout
B
"Operators simply load new programs, as necessary, to produce different products" describes a. Flexible manufacturing systems. b. CAD. c. Vision systems. d. Process control. e. Automated guided vehicles.
A
Computer-integrated manufacturing (CIM) includes manufacturing systems that have a. Computer-aided design, a flexible manufacturing system, inventory control, warehousing and shipping integrated. b. Automated guided vehicles, robots, and process control. c. Robots, automated guided vehicles, and transfer equipment. d. Transaction processing, management information systems, and decision support systems integrated. e. All of the above.
A
Deloitte & Touche solved the empty desk problem by a. Implementing a "hoteling" program. b. Creating open offices. c. No longer allowing employees to work from home. d. Assigning permanent desks. e. None of the above.
A
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. Total costs are equal for two alternative locations. b. Fixed costs equal variable costs for one location. c. Total costs are equal for all alternative locations. d. Fixed costs are equal for two alternative locations. e. Variable costs are equal for two alternative locations.
A
The main issue in designing process layouts concerns the relative positioning of a. Departments. b. Safety devices. c. Raw materials. d. Supervisors to their employees. e. Entrance, loading docks, etc.
A
The major problem addressed by the process-oriented 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.
A
The primary purpose of the basic economic order quantity model is a. To minimize the sum of setup cost and holding cost. b. To minimize the sum of carrying cost and holding cost. c. To calculate the reorder point, so that replenishments take place at the proper time. d. To calculate the optimum safety stock. e. To maximize the customer service level.
A
Toyota's policy of having two suppliers per component after its experience with fire and earthquakes is similar to Hard Rock Cafe's franchising in societies that have significant cultural or environmental barriers because a. Both companies are coping with environmental supply-chain risks. b. Both companies are coping with control supply-chain risks. c. Both companies are coping with process supply-chain risks. d. Both companies are addressing outsourcing. e. None of the above accurately reflect the main similarity.
A
What is the primary reason why retailers tend to locate high-draw items around the periphery of the store? a. This arrangement will help to maximize customer exposure to other items in the store. b. There will be less congestion of customers than there would be in the middle. c. This arrangement allows customers to travel through the store as quickly as possible. d. It is easier to put large advertisement signs on the outside walls right next to the items. e. More shelf space for those popular items is available around the periphery.
A
Which of the following characteristics best describes repetitive focus? a. Its output is a standardized product produced from modules. b. Its costs are often known only after a job is done. c. It uses sophisticated scheduling to accommodate custom orders. d. It is widely used for the manufacture of steel. e. Operators are broadly skilled.
A
Which of the following statements is true regarding the leverage of supply-chain savings? a. Supply chain savings exert more leverage as the firm has a lower net profit margin. b. Supply chain leverage depends only upon the percent of sales spent in the supply chain. c. Supply chain savings exert more leverage as the firm's purchases are a smaller percent of sales. d. Supply chain leverage is about the same for all industries. e. None of the above is true.
A
Which of the following technologies would enable a cashier to scan the entire contents of a shopping cart in seconds? a. RFID b. CAD/CAM c. AGV d. FMS e. ASRS
A
Which of the following transformations generally has the highest equipment utilization? a. Product-focused process b. Repetitive process c. Specialized process d. Process-focused process e. Modular process
A
Which one of the following statements about purchasing is true? a. Purchasing has an impact on the quality of the goods and services sold. b. Purchasing provides a major opportunity for price increases. c. The cost of purchases as a percent of sales is often small. d. Purchasing is always more efficient than making an item. e. Competitive bidding is a major factor in long-term cost reductions.
A
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. 70 b. 110 c. 16 d. 600 e. 183
B
An assembly line is an example of a a. Product-focused process. b. Repetitive process. c. Line process. d. Specialized process. e. Process-focused process.
B
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. Fourteen is the safety stock, and 100 is the reorder point. b. Fourteen is the reorder point, and 100 is the order quantity. c. One hundred is the reorder point, and 14 is the order quantity. d. The number 100 is a function of demand during lead time. e. None of the above is true.
B
Cross-docking is a. Using docks for either incoming or outbound shipments. b. Seldomly placing an item in storage, it is sent straight from incoming to outbound. c. Using a single dock to unload and then load the same truck. d. All of the above. e. None of the above.
B
Cycle counting a. Provides a measure of inventory turnover. b. Provides a measure of inventory accuracy. c. Assumes that the most frequently used items must be counted more frequently. d. Is a process by which inventory records are verified once a year. e. Assumes that all inventory records must be verified with the same frequency.
B
Industrial location analysis typically attempts to a. Avoid countries with strict environment regulations. b. Minimize costs. c. Focus more on human resources. d. Ignore exchange rates and currency risks. e. Maximize sales.
B
Most inventory models attempt to minimize a. The number of items ordered. b. Total inventory based costs. c. The likelihood of a stockout. d. The number of orders placed. e. The safety stock.
B
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. Only worthwhile if you are in the 50% tax bracket and still have a low profit margin. e. Worth from 35% in the technical instrument industry to 70% in the food products industry.
B
One of the similarities between process focus and mass-customization is a. The standard cost. b. The variety of outputs. c. The volume of outputs. d. The process layout. e. All of the above are similarities.
B
Red Top Cab Company receives multiple complaints per day about driver behavior. Over 9 days the owner recorded the number of calls to be 3, 0, 8, 9, 6, 7, 4, 9. 8. What is the upper control limit for the c-chart? a. 24.00 b. 13.35 c. 8.45 d. 9.03 e. 0.00
B
Takt time is a. The units required divided by workers required. b. The total work time available divided by units required by the consumer. c. The same thing as cycle time in a process layout. d. A fictional time increment similar to a therblig. e. An important consideration in balancing an assembly line.
B
The Institute for Supply Management a. Prohibits backward integration into developing economies. b. Publishes the principles and standards for ethical supply management conduct. c. Is an agency of the United Nations charged with promoting ethical conduct globally. d. Establishes laws and regulations for supply management. e. All of the above are true.
B
The concept of customizing in a warehouse layout a. Is possible, but causes serious loss of oversight of the quality function. b. Is a new trend in value-added activities in warehouses. c. Cannot be considered seriously in today's high efficiency factories. d. Is theoretically sound, but several years away in practice. e. None of the above.
B
The number of defects after a hotel room cleaning (sheets not straight, smears on mirror, missed debris on carpet, etc) should be measured using a(n) a. R-chart. b. C-chart. c. X-bar chart. d. P-chart. e. Either x-bar or R chart.
B
The number of late insurance claim payouts per 100 should be measured with a(n) a. C-chart. b. P-chart. c. R-chart. d. X-bar chart. e. Either a p or c chart.
B
The purpose of an x-bar chart is to determine whether there has been a a. Change in the dispersion of the process output. b. Change in the central tendency of the process output. c. Change in the AOQ. d. Change in the number of defects in a sample. e. Change in the percent defective in a sample.
B
The upper and lower limits for diving ring diameters made by John's Swimming are 40 and 39 cm. John took 11 samples with the following average diameters (39, 39.1, 39.2, 39.3, 39.4, 39.5, 39.6, 39.7, 39.8, 39.9, 40). Is the process in control? a. No, the range is not in control. b. No, there is a distinguishable pattern to the samples. c. Yes, no diameters exceeded the control limits. d. No, some diameters exceeded the control limits. e. There is not enough information to make a decision.
B
Up to three standard deviations above or below the centerline is the amount of variation that statistical process control allows for a. Assignable variation. b. Natural variation. c. Type I errors. d. About 95.5% variation. e. All types of variation.
B
Visibility throughout the supply chain is a requirement among supply-chain members for a. Compatible organizational cultures. b. Mutual trust. c. Local organization. d. Mutual agreement on goals. e. The bullwhip effect.
B
Which of the following is an aspect of environmental risk in supply-chain management? a. Secure financial transactions b. Political issues c. Management metrics d. Raw material availability e. All of the above are environmental risks.
B
Which of the following is false regarding repetitive processes? a. They are the classic assembly lines. b. They allow easy switching from one product to the other. c. They include the assembly of basically all automobiles. d. They have more structure and less flexibility than a job shop layout. e. They use modules.
B
Which of the following is not an advantage of work cells? a. Heightened sense of employee participation b. Decreased use of equipment and machinery c. Reduced raw material and finished goods inventory d. Reduced direct labor cost e. Reduced investment in machinery and equipment
B
Which of the following phrases best describes process focus? a. High fixed costs, low variable costs b. Low volume, high variety c. Finished goods are usually made to a forecast and stored d. Raw material inventories are low relative to the value of the product e. Operators are modestly skilled
B
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. Customizing b. Cross-docking c. Phantom-docking d. ASRS e. Random stocking
B
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. The larger annual demand, the less attractive a discount schedule will be. c. If carrying costs are expressed as a percentage of value, EOQ is larger at each lower price in the discount schedule. d. In inventory management, item cost becomes relevant to inventory decisions only when a quantity discount is available. e. The smaller the ordering cost, the less attractive a discount schedule will be.
B
Which of the following statements regarding the center-of-gravity method is false? a. The weights used are the quantity of goods moved to or from each location. b. It is designed to minimize the maximum possible travel distance to any location. c. The optimal x- and y-coordinates are calculated separately. d. The origin of the coordinates system and the scale used are arbitrary, just as long as the relative distances are correctly represented. e. The optimal solution is unconstrained, so it could suggest a location in the middle of a body of water.
B
Which of the statements below best describes office layout? a. Deals with low-volume, high-variety production b. Groups workers, their equipment, and spaces/offices to provide for movement of information c. Allocates shelf space and responds to customer behavior d. Addresses the layout requirements of large, bulky projects such as ships and buildings e. Seeks the best personnel and machine utilization in repetitive or continuous production
B
Which one of the following is not a supply-chain strategy? a. Negotiation with many suppliers b. Short-term relationships with few suppliers c. Keiretsu d. Vertical integration e. Virtual companies
B
Which one of the following products is most likely made in a job shop environment? a. Canned vegetables b. Paper forms c. Television sets d. Rolls of newsprint e. Cigarettes
B
Which type of layout is specifically designed to encourage employees to interact? a. Retail b. Open office c. Repetitive/continuous d. Job shop e. Warehouse
B
Statistical process control charts a. Indicate to the process operator the average outgoing quality of each lot. b. Indicate to the operator the true quality of material leaving the process. c. Display upper and lower limits for process variables or attributes, and signal when a process is no longer in control. d. Display the measurements on every item being produced. e. None of the above.
C
Tangible costs include which of the following? a. Zoning regulations b. Availability of public transportation c. Taxes d. Quality and attitude of prospective employees e. Climatic conditions
C
The EOQ model with quantity discounts attempts to determine a. What is the shortest lead time. b. Whether to use fixed-quantity or fixed-period order policy. c. How many units should be ordered. d. What is the lowest purchasing price. e. What is the lowest amount of inventory necessary to satisfy a certain service level.
C
The fixed-position layout would be most appropriate in which of the following settings? a. A doctor's office b. A fast-food restaurant c. A cruise ship assembly facility d. A casual dining restaurant e. None of the above.
C
The major problem addressed by the warehouse layout strategy is a. Minimizing difficulties caused by material flow varying with each product. b. Balancing product flow from one work station to the next. c. Addressing trade-offs between space and material handling. d. Requiring frequent contact close to one another. e. None of the above.
C
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. Minimize the costs of material handling. d. Allocate the available space equally to all the departments. e. None of the above.
C
The objective of layout strategy is to a. Maximize flexibility. b. Minimize material handling costs. c. Develop an efficient and effective system that meets competitive requirements. d. Minimize space used. e. Minimize cost.
C
The two most basic inventory questions answered by the typical inventory model are a. Quantity and cost of orders. b. Ordering cost and carrying cost. c. Timing and quantity of orders. d. Order quantity and service level. e. Timing and cost of orders.
C
The use of information technology to monitor and control a physical process is known as a. Computer-aided design. b. Numeric control. c. Process control. d. Information numeric control. e. None of the above.
C
The usual purpose of an R-chart is to signal whether there has been a a. Change in the percent defective in a sample. b. Change in the central tendency of the process output. c. Gain or loss in dispersion. d. Change in the number of defects in a sample. e. None of the above.
C
What describes a system that stores and displays information that can be linked to a geographic location? a. LIS b. GLOC c. GIS d. LOC e. AIS
C
When quantity discounts are allowed, the cost-minimizing order quantity a. Minimizes the unit purchase price. b. May be a quantity below that at which one qualifies for that price. c. Minimizes the sum of holding, ordering, and product costs. d. Is always an EOQ quantity. e. Minimizes the sum of holding and ordering costs.
C
Which layout's main objective is to equalize the task time for each station? a. Fixed position b. Work cell c. Product oriented d. Process oriented e. Job shop
C
Which of the following is not an advantage of a virtual company? a. Speed b. Specialized management expertise c. Total control over every aspect of the organization d. Flexibility e. Low capital investment
C
Which of the following is not an opportunity for effective management in the supply chain? a. Vendor-managed inventory b. Channel assembly c. Local optimization d. Accurate "pull" data e. Postponement
C
Which of the following is not one of the factors complicating the techniques for addressing the fixed-position layout? a. At different stages of a project, different materials are needed; therefore, different items become critical as the project develops. b. There is limited space at virtually all sites. c. Takt times at workstations are dynamic. d. The volume of materials is dynamic. e. All of the above are complicating factors.
C
Which of the following is not one of the four main types of inventory? a. Maintenance/repair/operating supply inventory b. Work-in-process inventory c. Safety stock inventory d. Raw material inventory e. All of these are main types of inventory.
C
Which of the following is true for process layouts, but false for product-oriented layouts? a. Often solved by assembly line balancing b. Low variety of products c. Flexibility in equipment and labor assignments d. Low in-process inventories e. High volume of output
C
Which of the following statements about ABC analysis is false? a. In ABC analysis, "C" Items have minimal records, periodic review, and simple controls. b. In ABC analysis, "A" Items are tightly controlled, have accurate records, and receive regular review by major decision makers. c. ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings. d. ABC analysis is based on the presumption that controlling the few most important items produces the vast majority of inventory savings. e. All of the above statements are true.
C
Which of the following statements regarding Amazon.com is false? a. Amazon obtains its competitive advantage through inventory management. b. The company uses both United Parcel Service and the U.S. Postal Service as shippers. c. The company was founded as, and still is, a "virtual retailer" with no inventory. d. The company is now a world-class leader in warehouse management and automation. e. The company was opened by Jeff Bezos in 1995.
C
Which of the following statements regarding ethical and environmentally friendly processes is true? a. Processes can be environmentally friendly or socially responsible, but not both. b. 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. d. Operations managers can be environmentally sensitive, but they must avoid following a low cost strategy. e. Using energy-efficient lighting saves so little that it should not be labeled environmentally friendly.
C
Which of these factors would be considered when making a location decision at the site level? a. Proximity to raw materials and customers b. Cost and availability of utilities c. Zoning regulations d. Government rules, attitudes, stability, incentives e. Cultural and economic issues
C
Which one of the following technologies is used only for material handling, not actual production or assembly? a. FMS b. CNC c. AGVs d. Robots e. CAD
C
A product-focused process is commonly used to produce a. Low-volume, high-variety products. b. Low-variety products at either high- or low-volume. c. High-volume, high-variety products. d. High-volume, low-variety products. e. High-volume products of either high- or low-variety.
D
An employee produces 15 parts during a shift in which he made $90. The labor content of the product is a. $90. b. $0.167. c. $5. d. $6. e. None of the above.
D
Balancing low-cost storage with low-cost material handling is important in a(n) a. Repetitive and product-oriented layout. b. Office layout. c. Process-oriented layout. d. Warehouse layout. e. Fixed-position layout.
D
Flexible equipment with rapid changeovers is most closely associated with which approach? a. Process b. Repetitive c. Product d. Mass customization e. Both A and C.
D
Frito-Lay is to ____ focus as Harley Davidson is to _____ focus. a. Process, repetitive b. Process, product c. Repetitive, product d. Product, repetitive e. Product, mass customization
D
Instead of comparing the salaries of Detroit autoworkers to foreign automakers to determine if Union labor prices are the cause of Detroit's financial woes, which of the following should be used? a. Labor content per vehicle b. Labor productivity c. Total production. d. Both A and B. e. None of the above, salary is the best comparison.
D
Intangible costs include which of the following? a. Availability of public transportation b. Quality of education c. Quality of prospective employees d. All of the above. e. None of the above.
D
Japanese manufacturers often take a middle ground between purchasing from a few suppliers and vertical integration. This approach is a. Poka-yoke. b. Kanban. c. Kaizen. d. Keiretsu. e. Samurai.
D
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 bar, but not R-charts d. X bar and R-charts e. Both p- and c-charts
D
Keeping a product generic as long as possible before customizing is known as a. Vendor-managed inventory. b. Backward integration. c. Forward integration. d. Postponement. e. Keiretsu.
D
One of the major advantages of process-oriented layouts is a. Smooth and continuous flow of work. b. High equipment utilization. c. Large work-in-process inventories. d. Flexibility in equipment and labor assignment. e. None of the above.
D
One of the similarities between repetitive focus and mass customization is a. The standard cost. b. The high volume of outputs. c. The wide variety of outputs. d. Module inputs. e. The process layout.
D
Retail layouts thrive on the notion that a. Space used should be minimized. b. Average customer visit duration should be maximized. c. Handling costs should be minimized. d. Maximizing customer exposure rate maximizes sales and profit. e. Storage costs should be minimized.
D
The center-of-gravity method does not take into consideration the a. Combination of volume and distance. b. Volume of goods shipped to the markets. c. Location of markets. d. Value of the goods shipped. e. None of the above.
D
The p-chart tells us whether there has been a a. Change in the central tendency of the process output. b. Change in the number of defects in a sample. c. Gain or loss in dispersion. d. Change in the percent defective in a sample. e. None of the above.
D
Traffic counts and demographic analysis of drawing areas are associated with a. Manufacturing location decisions. b. The transportation method. c. The center-of-gravity method. d. Service location decisions. e. None of the above.
D
What type of negotiating strategy requires the supplier to open its books to the purchasers? a. Price-based model b. Competitive bidding c. Market-based price model d. Cost-based price model e. None of the above.
D
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. Labor cost c. Parts cost d. Pilferage, scrap, and obsolescence e. Material handling costs
D
Which of the following best describes vertical integration? a. To develop the ability to produce the specified good more efficiently than before b. To sell products to a supplier or a distributor c. To build long-term partnerships with a few suppliers d. To produce goods or services previously purchased e. To develop the ability to produce products which complement the original product
D
Which of the following is true regarding vision systems? a. They do not become bored. b. They are consistently accurate. c. They are modest in cost. d. All of the above are true. e. None of the above are true.
D
Which of the following workers is the most productive? a. $10 wages, 1 part produced b. $50 wages, 10 parts produced c. $30 wages, 5 parts produced d. $100 wages, 21 parts produced e. $500 wages, 100 parts produced
D
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 take advantage of quantity discounts c. To provide a stock of goods that will provide a selection for customers d. To minimize holding costs e. All of the above are functions of inventory.
D
"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. Job shop b. Warehouse layout c. Intermittent production d. Fixed-position layout e. Work cell
E
"Automatic placement and withdrawal of parts and products into and from designated places in a warehouse" describes a. CIM. b. AGV. c. CAD/CAM. d. FMS. e. ASRS.
E
A good layout requires determining a. Environment and aesthetics. b. Material handling requirements. c. Cost of moving between various work areas. d. Capacity and space requirements. e. All of the above.
E
A job shop is an example of a(n) a. Repetitive process. b. Specialized process. c. Line process. d. Continuous process. e. Intermittent process.
E
Among the following choices, an operations manager might best evaluate political risk of a country by looking at which type of country ranking? a. Based on magnitude of government social programs b. Based on average duration between presidential/prime minister elections c. Based on competitiveness d. Based on cost of doing business e. Based on corruption
E
An organization's process strategy a. Is concerned with how resources are transformed into goods and services. b. Is the same as its transformation strategy. c. Will have long-run impact on efficient and flexibility of production. d. Must meet various constraints, including cost. e. All of the above are true.
E
An x-bar control chart was examined and no data points fell outside of the limits. Can this process be considered in control? a. No, there could be a pattern to the points. b. No, the R-chart must be checked. c. Yes. d. No, the number of samples must be known. e. Both A and B.
E
Ethical and environmentally friendly processes include which of the following? a. Reduction of waste by-products b. Emission controls c. Efficient use of resources d. Recycling e. All of the above.
E
For which of the following operations would a fixed-position layout be most appropriate? a. Running an insurance agency b. Assembling automobiles c. Producing TV sets d. Refining of crude oil e. Constructing a highway tunnel or bridge
E
High fixed costs and low variable costs are typical of which approach? a. Product b. Process c. Mass customization d. Repetitive e. Both A and C.
E
If the actual order quantity is the economic order quantity in a problem that meets the assumptions of the economic order quantity model, the average amount of inventory on hand a. Is affected by the amount of product cost. b. Is zero. c. Is smaller than the holding cost per unit. d. Goes down if the holding cost per unit goes down. e. Is one-half of the economic order quantity.
E
In supply-chain management, ethical issues a. May be guided by the principles and standards of the Institute for Supply Management. b. May be guided by company rules and codes of conduct. c. Are particularly important because of the enormous opportunities for abuse. d. Become more complex the more global is the supply chain. e. All of the above are true.
E
Outsourcing a. Utilizes the efficiency which comes with specialization. b. Transfers traditional internal activities to outside vendors. c. Lets the outsourcing firm focus on its key success factors. d. None of the above are true of outsourcing. e. All of the above are true of outsourcing.
E
Process A has fixed costs of $1,000 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. $5,000. b. 200 units. c. $2,500. d. $9,500. e. 50 units.
E
Process redesign a. Can focus on any process. b. Is the fundamental rethinking of business processes. c. Focuses on activities that cross functional lines. d. Tries to bring about dramatic improvements in performance. e. All of the above.
E
Slotting fees a. Are not a part of Wal-Mart's business practices. b. Can amount to as much as $25,000. c. Can reduce the ability of small businesses to introduce new products. d. Are changed by retailers to stock a product. e. All of the above.
E
Swift movement through the facility is typical of goods in which approach? a. Product b. Repetitive c. Mass customization d. Process e. Both A and C.
E
Ten samples of a process measuring the number of returns per 100 receipts were taken for a local retail store. The number of returns were 10, 9, 11, 7, 3, 12, 8, 4, 6, 11. Find the standard deviation of the sampling distribution. (Hint: Use p-bar formula.) a. There is not enough information. b. 0.0863 c. 8.1 d. 0.081 e. 0.0273
E
The "bullwhip" effect a. Results in increasing fluctuations at each step of the sequence. b. Occurs as order are relayed from retailers to wholesalers. 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
The Central Limit Theorem a. States that the average of assignable variations is zero. b. States that the average range can be used as a proxy for the standard deviation. c. Is the theoretical foundation of the c-chart. d. Controls the steepness of an operating characteristic curve. e. Allows managers to use the normal distribution as the basis for building some control charts.
E
The layout strategy that deals with low-volume, high-variety production is a. Retail layout. b. Warehouse layout. c. Fixed-position layout. d. Office layout. e. None of the above.
E
The main goal of retail layout is a. Minimizing space required. b. Minimizing material handling cost. c. Minimizing storage costs. d. Maximizing high-margin sales e. Maximizing profitability per square foot of floor space.
E
Three types of processes are a. Goods, services, and hybrids. b. Manual, automated, and service. c. Input, transformation, and output. d. Modular, continuous, and technological. e. Process focus, repetitive focus, and product focus.
E
Vertical integration appears particularly advantageous when the organization has a. A very specialized product. b. Purchases that are a relatively small percent of sales. c. A very common, undifferentiated product. d. Little experience operating an acquired vendor. e. A large market share.
E
When done correctly, mass customization a. Increases pressure on scheduling. b. Helps eliminate the guesswork that comes with sales forecasting. c. Drives down inventories. d. Increases pressure on supply-chain performance. e. All of the above.
E
Which of the following industries is most likely to have low equipment utilization? a. Chemical processing b. Auto manufacturing c. Television manufacturing d. Commercial baking e. Restaurants
E
Which of the following is a function of inventory? a. To decouple or separate parts of the production process b. To take advantage of quantity discounts c. To hedge against inflation d. To decouple the firm from fluctuations in demand and provide a stock of goods that will provide a selection for customers e. All of the above are functions of inventory.
E
Which of the following is an element of inventory holding costs? a. Pilferage, scrap, and obsolescence b. Material handling costs c. Housing costs d. Investment costs e. All of the above are elements of inventory holding cost.
E
Which of the following is not a retail layout practice? a. High-margin and impulse items in prominent locations b. End-aisle locations are used to maximize product exposure c. Distribute power items throughout store d. High-draw items along periphery e. All of the above are retail layout practices.
E
Which of the following is not an assumption of the economic order quantity model? a. The only variable costs are setup cost and holding (or carrying) cost. b. Quantity discounts are not possible. c. Lead time is known and constant. d. Demand is known, constant, and independent. e. Production and use can occur simultaneously.
E
Which of the following is not one of McDonald's "seven major innovations"? a. "Made by You" kitchen system b. Breakfast menus c. Play areas d. Drive-through windows e. The Happy Meal
E
Which of the following is the best example of the proximity rule that, for service films, proximity to market is the most important location factor? a. Furniture makers choose to locate near the source of good hardwoods, even though it means locating near other furniture manufacturers. b. Patients will travel very long distances to have their hernia surgeries performed at Shouldice Hospital. c. Soft drinks are bottled in many local plants, where carbonated water is added to proprietary syrups that may have been shipped long distances. d. Metal refiners (smelters) locate near mines to accomplish significant weight reduction near the metal's source. e. Few people will travel out-of-state for a haircut.
E
Which of the following is true regarding opportunities to improve service processes? a. If a work force is strongly committed, it need not be cross-trained and flexible. b. Layout is of little consequence, since services seldom use an assembly line. c. Automation can do little to improve service processes, because services are so personal. d. All of the above are true. e. None of the above are true.
E
Which of the following is typical of process control systems? a. The output may take numerous forms including warning lights or statistical process control charts. b. The data are analyzed by computer, which generates feedback. c. The sensors' measurements are digitized. d. Their sensors take measurements on a periodic basis. e. All of the above.
E
Which of the following methods best considers intangible costs related to a location decision? a. The assignment method b. The transportation method c. Locational break-even analysis d. Crossover methods e. Factor-rating analysis
E
Which of the following products is likely to be assembled on a repetitive process line? a. Television sets b. Dishwashers c. Personal computers d. Automobiles e. All of the above.
E
Which of the following statements about the basic EOQ model is true? a. If annual demand were to double, the EOQ would increase. b. If annual demand were to double, the number of orders per year would increase. c. If the carrying cost were to increase, the EOQ would fall. d. If the ordering cost were to double, the EOQ would rise. e. All of the above statements are true.
E
Which of the following statements regarding the reorder point is true? a. The reorder point is larger than d x L if safety stock is present. b. The fixed-period model has no reorder point. c. There is a reorder point even if lead time and demand during lead time are constant. d. The reorder point is that quantity that triggers an action to restock an item. e. All of the above are true.
E
Why is Northern Mexico used as a cluster for electronics films? a. Natural resources of land and climate b. High per capita GDP c. Venture capitalists located nearby d. High traffic flows e. NAFTA
E
