Operations Management Final Exam

Which of the following is a core philosophy of Six Sigma? a) Achieving cycle time reduction b) Increasing non-value-added activities c) Avoiding errors per million opportunities as a standard d) Increasing variation in cash flow

A. Achieving cycle time reduction

Which of the following statements is true of kaizen? a. Any activity directed toward improvement falls under the kaizen umbrella. b. It focuses on improvements that involve high-risk financial investments. c. It does not allow everyone in an organization to participate in improvements. d. The concept of one-time improvement leads to the kaizen concept.

A. Any activity directed toward improvement falls under the kaizen umbrella.

_____ references producing large quantities of items before transferring them. a) Batching b) Offshoring c) Sampling d) Outsourcing

A. Batching

Manufactured parts and purchased parts are examples of _____. a. components b. parent items c. end items d. subassemblies

A. Components

In General Electric's Six Sigma problem-solving approach, the improve phase involves: a. confirming the key variables and quantifying their effects on the critical-to-quality characteristics. b. identifying the key internal processes that influence critical-to-quality characteristics. c. identifying customers and their priorities. d. determining how to measure a process and how it is performing.

A. Confirming the key variables and quantifying their effects on the critical-to-quality characteristics.

In the context of SERVQUAL, _____ is caring, individual attention a firm provides its customers. a. empathy b. reliability c. competence d. assurance

A. Empathy

Which of the following service organizations is likely to use a three-level resource planning similar to manufacturing firms? a. A fast-food restaurant b. A banking branch c. A credit card authorization company d. A telemarketer

A. Fast-food restaurant

Which of the following is true of lean thinking? a) It helps to drive a culture of waste elimination. b) It solely focuses on total quality control c) Systems can function with inconsistent processing. d) Systems function even if raw materials are bad.

A. It helps to drive a culture of waste elimination.

In the context of sequencing, the shortest processing time (SPT) rule tends to: a) Minimize work-in-process inventory b) Maximize the number of jobs in the system c) Maximize average flow time d) Minimize resource utilization

A. Minimize work-in-process inventory

An ultimate stretch goal of all organizations that adopt a Six Sigma philosophy is to have all critical processes at a level of: a. near-zero defects. b. zero implementation costs. c. not more than six rejects for every 100 units. d. not more than 3.4 faults for every 10,000 units.

A. Near-zero defects

In determining whether a process is in statistical control, the _____ is always analyzed first. a. R-chart b. p-chart c. x̅-chart d. c-chart

A. R-chart

In the context of operations management, _____ refers to determining the order in which jobs or tasks are processed. a. sequencing b. scheduling c. statistical forecasting d. demand planning

A. Sequencing

_____ is a methodology for monitoring the quality of manufacturing and service-delivery processes to help identify and eliminate unwanted causes of variation. a. Statistical process control b. Harmonic analysis c. Sequential process control d. Fourier analysis

A. Statistical process control

Which of the following lot sizing rules is best applied when the inventory-carrying costs are low? a. The fixed-order quantity rule b. The lot-for-lot rule c. The periodic-order quantity rule d. The gross requirements rule

A. The fixed-order quantity rule

In the context of designing control charts, which of the following is true of small sample sizes? a. They are desirable to keep the cost associated with sampling low. b. They allow smaller changes in process characteristics to be detected with higher probability than larger sample sizes. c. They provide more statistical accuracy in estimating the true state of control than larger sample sizes. d. They can accurately detect process shifts of two standard deviations or less.

A. They are desirable to keep the cost associated with sampling low.

Which of the following is true of long setup times? a. They waste manufacturing resources. b. They allow high flexibility and product variety. c. They enable a manufacturer to move toward single-piece flow. d. They compel a manufacturer to have frequent changeovers.

A. They waste manufacturing resources.

In the context of control charts, a process is out of control when the control chart: a. has a point outside the control limits. b. shows no shift in the average value of the process. c. shows most points close to or on the center line. d. has an equal number of points above and below the center line.

A. has a point outside the control limits.

In the airline industry, short setup and turnaround time translates into: a. higher asset utilization. b. idle time. c. fewer service encounters. d. overproduction.

A. higher asset utilization.

Overadjusting a process that is in control will: a. increase the variation in the output. b. decrease the proportion of nonconformances in a sample. c. increase the statistical control of the process. d. decrease the cost of repair or service recovery.

A. increase the variation in the output.

Staff scheduling problems are prevalent in service organizations because: a) of high variability in customer demand b) complexities arise when Web-based tools are used c) managers remain unavailable for daily updates d) determining the order of task processing is difficult

A. of high variability in customer demand

In an automobile factory, a component requires 0.75 hours of labor per unit in Work Center A and 1 hour of setup time. The planned order release (order size) for a week is 200 units. What is the capacity requirement for a week at Work Center A? a. 101 b. 151 c. 201 d. 251

B. 151

_____ are costs expended on ascertaining quality levels through measurement and analysis of data to detect and correct problems. a. Prevention costs b. Appraisal costs c. Internal failure costs d. External failure costs

B. Appraisal Costs

____________ references scheduling for individual subassemblies by week and day. a) Aggregate planning b) Disaggregation c) Execution d) Demand forecasting

B. Disaggregation

Which of the following is true of a level production strategy? a) Labor schedules are dynamic b) Equipment schedules are stable c) There are no capacity restrictions d) The production rate keeps changing

B. Equipment schedules are stable

_____ is a tool that shows the number of observations of a particular value. a) flowchart b) histogram c) cause-and-effect diagram d) scatter diagram

B. Histogram

In General Electric's Six Sigma problem-solving approach, the define phase involves: a) determining the most likely causes of defects b) identifying customers and their priorities. c) determining how to measure a process d) identifying means to remove the causes of defects.

B. Identifying customers and their priorities.

Which of the following is true of a process that is in control? a. A process is in control when special causes are present. b. It does not need any changes or adjustments. c. Overadjusting a process that is in control decreases the variation in the output. d. It does not have any nonconformance due to the lack of common cause variation.

B. It does not need any changes or adjustments.

Which of the following statements is true of the poka-yoke concept? a) Many applications of poka-yoke are expensive to implement b) It uses automatic devices to avoid simple human error. c) Many applications of poka-yoke are complex. d) It focuses on the mistakes pointed out by customers

B. It uses automatic devices to avoid simple human error.

_____ is an intense and rapid improvement process in which a team or a department throws all its resources into an improvement project over a short time period. a. A Six Sigma project b. A kaizen event c. The DMAIC approach d. The poka-yoke technique

B. Kaizen Event

In the context of aggregate planning options, which of the following costs are an implication of subcontracting? a. Labor cost and productivity changes b. Overhead costs c. Idle time or lost opportunity costs d. Separation costs

B. Overhead costs

A _____ is a quality control (QC) tool that helps separate the vital few causes from the trivial many and provides direction for selecting projects for improvement. a. control chart b. Pareto diagram c. scatter diagram d. cause-and-effect diagram

B. Pareto Diagram

In terms of SERVQUAL, _____ is a firm's ability to provide what was promised. a) responsiveness b) reliability c) competence d) assurance

B. Reliability

Which of the following is a framework for evaluating the quality of both goods and services and identifying where to focus design and improvement efforts? a. Six Sigma b. The GAP model c. Zero Defects d. A kaizen event

B. The GAP Model

Which of the following lot sizing rules is best applied when setup or order costs are low? a. The fixed-order quantity rule b. The lot-for-lot rule c. The periodic-order quantity rule d. The gross requirements rule

B. The lot-for-lot rule

In the context of control charts, the _____ is used to control the total number of nonconformances per unit when the size of the sampling unit or number of opportunities for errors is constant. a. R-chart b. c-chart c. -chart d. s-chart

B. c-chart

External failure costs can be defined as costs: a. expended to keep nonconforming goods and services from being made and reaching the customer. b. incurred after poor-quality goods or services reach the customer. c. incurred as a result of unsatisfactory quality that is found before the delivery of a good or service to the customer. d. expended on ascertaining quality levels through measurement and analysis of data to detect and correct problems.

B. incurred after poor-quality goods or services reach the customer.

Efficient manufacturing plants use the 5S principles to: a) minimize the use of the single-piece flow strategy b) share information with suppliers and customers c) create a clean and well-organized work environment d) reduce worker ownership of production equipment

C. Create a clean and well-organized work environment

Service firms frequently take their aggregate plans and disaggregate them down to the: a. master schedule level . b. material resource planning level. c. execution level. d. resource planning level.

C. Execution level

In the airline industry, _____ is the largest form of waste. a. overproduction b. extra inventory c. idle time d. space for scrap parts

C. Idle time

Which of the following is true of the net promoter score (NPS)? a. It is a metric used to measure employee loyalty. b. It is the difference in the percentage of promoters and passives. c. It is claimed to correlate strongly with market and revenue growth. d. It is evaluated using a six point scale that ranges from 0 to 5.

C. It is claimed to correlate strongly with market and revenue growth.

With aggregate planning, which of the following costs are an implication of allowing stockouts? a) Separation costs b) Inventory-carrying costs c) Lost sales and customer loyalty costs d) High labor costs and premiums

C. Lost sales and customer loyalty costs

A master production schedule (MPS) is usually determined by the known customer orders in: a. assemble-to-stock industries. b. assemble-to-order industries. c. make-to-order industries. d. make-to-stock industries.

C. Make-to-order industries

Which of the following is a prevention cost? a) Product-liability costs b) Scrap and rework costs c) Process-control costs d) Downgrading costs

C. Process-control costs

Identify a true statement about the GAP model. a) Defines quality based on idea of standardization. b) Minimizing gap 4 will result in low customer satisfaction c) Understand gaps to prevent losing customer loyalty. d) Focuses on outputs that are critical to customers.

C. Understand gaps to prevent losing customer loyalty

Which of the following is a difference between lean production and Six Sigma? a. Unlike lean production, Six Sigma can easily be used in nonmanufacturing environments. b. Unlike Six Sigma, lean production is focused on effectiveness by reducing errors and defects. c. Unlike lean production, Six Sigma is more concerned with less visible problems in processes. d. Unlike Six Sigma, lean production has the ability to make significant financial impacts on an organization.

C. Unlike lean production, Six Sigma is more concerned with less visible problems in processes.

According to Philip B. Crosby's Absolutes of Quality Management, the only performance standard is _____, which represents the philosophy of preventing faults in goods and services rather than finding them after the fact and fixing them. a. Six Sigma b. the GAP model c. Zero Defects d. a kaizen event

C. Zero defects

Gap 1 in the GAP model is the discrepancy between: a. the customer's expectations and perceptions. b. quality specifications documented in operating and training manuals and plans and their implementation. c. customer expectations and management perceptions of those expectations. d. actual manufacturing and service-delivery system performance and external communications to the customers.

C. customer expectations and management perceptions of those expectations.

Capacity Requirements

Capacity required = Setup time + (Processing time * Order size)

In a six sigma process, moving from a three- to a four-sigma level requires about a 10-fold improvement, and moving from a five- to a six-sigma level requires almost a _____. a. 20-fold improvement b. 40-fold improvement c. 50-fold improvement d. 70-fold improvement

D. 70-fold

_____ is the result of complex interactions of variations in materials, tools, machines, information, workers, and the environment. a. Special cause variation b. Assignable cause variation c. Exceptional cause variation d. Common cause variation

D. Common cause variation

In General Electric's Six Sigma problem-solving approach, the _____ phase involves determining ways to maintain the improvements. a. define b. measure c. analyze d. control

D. Control

Which of the following steps is performed at the time of aggregate planning? a. Specific capacity allocation b. Equipment scheduling c. Setting priorities for jobs d. Demand forecasting

D. Demand forecasting

_____ are crucial for good aggregate planning and capacity utilization. a. Chase resource strategies b. Chase demand strategies c. Level production strategies d. Demand management strategies

D. Demand management strategies

In the context of disaggregation in manufacturing, lot-for-lot (LFL) is an ordering schedule that covers the _____ for each week. a. scheduled receipts b. planned order releases c. projected on-hand inventory d. gross requirements

D. Gross requirements

Which of the following statements is true of Joseph M. Juran? a) He proposed a major cultural change in the organization. b) He never defined or described quality precisely. c) He stated that workers speak in the language of money. d) He said to get top management's attention money matters.

D. He said to get top management's attention money matters.

Which of the following is true of Six Sigma? a. It solely addresses the visible problems in processes. b. Six Sigma tools can only be used in nonmanufacturing environments. c. All Six Sigma tools are intuitive and can be applied by anybody in the workplace. d. It is focused on effectiveness by reducing errors and defects.

D. It is focused on effectiveness by reducing errors and defects.

Which of the following statements is true of International Organization for Standardization (ISO) 9000:2000? a. It is not adopted in the United States. b. It lacks written quality standards. c. It is the first version of the ISO family of standards. d. It prescribes documentation for all processes affecting quality.

D. It prescribes documentation for all processes affecting quality.

Which of the following is true of total productive maintenance (TPM)? a) It excludes maintenance and backup. b) It seeks to reduce worker ownership of production equipment. c) Minimize equipment effectiveness. d) It solely focuses on preventing failures of equipment.

D. It solely focuses on preventing failures of equipment

The purpose of _____ is to translate the aggregate plan into a separate plan for individual finished goods. a. a final assembly schedule b. forecasting c. execution d. a master production schedule

D. Master Production Schedule

_____ refers to the quick setup or changeover of tooling and fixtures in processes so that multiple products in smaller batches can be run on the same equipment. a. Methods-Time Measurement b. Total productive maintenance c. Value stream mapping d. Single Minute Exchange of Dies

D. Single Minute Exchange of Dies

In the context of root cause analysis, the approach that forces one to redefine a problem statement as a chain of causes and effects to identify the source of the symptoms is specifically called _____. a. kaizen b. poka-yoke c. the breakeven analysis d. the 5-Why Technique

D. The 5-Why Technique

Which of the following is true of aggregate plans? a. They are not driven by demand forecast. b. They are not associated with budget allocation. c. They focus on individual products. d. They focus on total capacity requirements.

D. They focus on total capacity requirements

In the context of the net promoter score (NPS), which of the following is a difference between promoters and detractors? a. Unlike promoters, detractors are less price sensitive. b. Unlike promoters, detractors are customers who are associated with scores of 7 or 8. c. Unlike promoters, detractors are satisfied customers who may switch to competitors. d. Unlike promoters, detractors defect at higher rates.

D. Unlike promoters, detractors defect at higher rates.

In the context of the seven major categories of waste classified by the Toyota Motor Company, not performing work correctly the first time leads to: a. overproduction. b. inventory waste. c. motion waste. d. production defects.

D. production defects.

In the context of control charts, a process is in control when: a. the control chart has a cyclical pattern. b. all points fall on the center line of the control chart. c. there is a shift in the average value of the process as determined from the control chart. d. the number of points above and below the center line of the control chart is about the same.

D. the number of points above and below the center line of the control chart is about the same.

Ending Inventory Formula

Ending Inventory = Beginning Inventory + Production - Demand

Tardiness is the difference between the completion time and the due date of a job. True or False?

False

In a chase demand strategy...

Inventories are reduced

Scheduling references the start and completion times to particular jobs, people, or equipment. True or False?

True

Which of the following statements is true of Dr. W. Edwards Deming's philosophy of quality management? a. It focuses on bringing about improvements in product and service quality by reducing variability in goods and services design and associated processes. b. It is embodied in what Dr. W. Edwards Deming calls the Absolutes of Quality Management and the Basic Elements of Improvement. c. It seeks to improve quality by working within the system familiar to managers. d. It advocates against a major cultural change in organizations.

a. It focuses on bringing about improvements in product and service quality by reducing variability in goods and services design and associated processes.

Which of the following is a key point of Philip B. Crosby's Absolutes of Quality Management philosophy? a. Quality is free. b. Quality means conformance to elegance. c. Requirements of quality need not be stated. d. A quality problem affects a firm.

a. Quality is free.

A television manufacturer wants to monitor the proportion of defective television sets that do not meet quality standards from a sample of 100 television sets. In the context of quality control charts, the manufacturer is most likely to use a(n) _____. a. p-chart b. R-chart c. -chart d. s-chart

a. p-chart

Gap 5 in the GAP model is the difference between: a. the customer's expectations and perceptions. b. quality specifications documented in operating and training manuals and plans and their implementation. c. customer expectations and management perceptions of those expectations. d. actual manufacturing and service-delivery system performance and external communications to the customers.

a. the customer's expectations and perceptions.

Aggregate Planning

is the development of a long-term output and resource plan in aggregate units of measure. Aggregate plans define output levels over a planning horizon of one to two years, usually in monthly or quarterly time buckets.

Disaggregation

is the process of translating aggregate plans into short-term operational plans that provide the basis for weekly and daily schedules and detailed resource requirements.