question

Which of the following is not associated with descriptive statistics?

answer

d) proportion

question

What technique determines whether a batch of goods should be accepted or rejected?

answer

b) Acceptance sampling

question

What technique answers the question of whether the process is functioning properly or not?

answer

c) Statistical process control

question

Statistical process control tools are used most frequently because

answer

b) they are helpful in measuring and evaluating the quality of products

question

Common causes of variation are also known as __________________________.

answer

e) random

question

The range is an example of what?

answer

a) Traditional statistical tools

question

Variation in the production process leads to:

answer

a) quality defects

question

The standard deviation is an example of what?

answer

a) Traditional statistical tools

question

9. A process chart is a

answer

d) graph that show whether a sample falls within the common or normal range

question

. An x-bar chart is an example of what?

answer

e) Statistical process control

question

For the standard normal distribution, how much confidence is provided within 2 standard deviations above and below the mean?

answer

b) 95.44%

question

The A2 factor includes how many standard deviations of ranges?

answer

c) 3

question

A p-chart is an example of what?

answer

e) Statistical process control

question

P-charts are used to measure:

answer

c) proportion of items in a sample that is defective

question

A c-chart is an example of what?

answer

e) Statistical process control

question

An OC curve is an example of what?

answer

c) Acceptance sampling

question

Causes of variation that can be identified and eliminated are called what?

answer

b) Assignable

question

All processes will have what type of variation?

answer

a) Random

question

What measures the central tendency of a set of data?

answer

d) Mean

question

What measures the difference between the largest and smallest observations in a set of data?

answer

a) Range

question

What measures symmetry of a distribution?

answer

b) Skewness

question

Which of the following would imply that data observations are closely clustered around the mean?

answer

a) Small range and small standard deviation

question

What is a distribution called when the same numbers of observations are below the mean as are above the mean?

answer

e) Symmetric

question

What are the four most common control charts?

answer

a) x-bar, R, p, c

question

On a control chart, what separates common from assignable causes of variation?

answer

b) Control limits

question

The center line of a control chart represents what?

answer

c) Mean

question

What is the first step that should be taken if an observation falls below the lower control limit on a control chart?

answer

d) Search for assignable causes

question

Upper and lower control limits are usually set at ± how many standard deviations from the mean?

answer

d) 3.0

question

Assuming that data exhibit a normal distribution, control limits set at ± 3 standard deviations from the mean capture how much common variation?

answer

d) 99.74%

question

What is the probability of a Type I error for a control chart with limits set at ± 3 standard deviations from the mean?

answer

b) 0.26%

question

What is the term for the probability that a value falling outside the control limits is still due to normal variation?

answer

a) Type I error

question

The different characteristics that can be measured by control charts can be divided into what two groups?

answer

b) Variables and attributes

question

What is a control chart that monitors changes in the mean value of a process?

answer

a) x-bar chart

question

What is a control chart that monitors changes in the dispersion or variability of a process?

answer

b) R-chart

question

What is a control chart that monitors the proportion of defects in a sample?

answer

c) p-chart

question

For which of the following would a control chart for attributes not be appropriate?

answer

e) Length of metal rods

question

What are the two types of control charts for attributes?

answer

a) p and c

question

. What are the two types of control charts for variables?

answer

c) x-bar and R

question

Consider a p-chart measuring the percentage of defective light bulbs. If the LCL is .04 and a sample has 1% defects, what is the implication?

answer

b) The process is out of control even though the variation is "good."

question

For a p-chart or c-chart, what is the implication of a negative value for the LCL?

answer

e) The LCL can effectively be rounded up to 0.

question

What are preset ranges of acceptable quality characteristics?

answer

b) Product specifications.

question

Product tolerances are often called

answer

e) Product specifications

question

What process width is typically used when computing the process capability index Cp?

answer

e) 6?

question

. Setting up control charts to monitor whether a process is in control

answer

c) does not guarantee process capability

question

What is the formula for the process capability index Cp?

answer

d) specification width / process width

question

What process capability index (Cp) value implies that the process "exceeds minimal capability?"

answer

d) > 1

question

A process capability index (Cp) value of 1 means that what percent of products produced will fall within the specification limits?

answer

d) 99.74%

question

According to the textbook, the way to reduce the ppm defective is to

answer

b) increase process capability

question

What is the relationship between Cp and Cpk?

answer

c) Cp ? Cpk

question

Which company is known for coining the term "six-sigma?"

answer

d) Motorola Corporation

question

Six-sigma quality implies how many average defects per million?

answer

a) 3.4

question

What are the two aspects to implementing the six-sigma concept?

answer

d) technical tools and people involvement

question

In six-sigma programs, individuals who have extensive training in the use of technical tools and are responsible for carrying out the implementation of Six Sigma are __________________.

answer

a) black belts

question

In six-sigma programs, individuals are given __________________ titles that reflect their skills in the six-sigma process.

answer

c) martial arts

question

The Six Sigma approach is organized around a _______ plan known as ________.

answer

d) five step DMAIC

question

. The person that comes from the top ranks of the organization and is responsible for providing direction and overseeing all aspects of a six-sigma implementation process is called a ________________________.

answer

e) champion

question

When should 100% inspection be used?

answer

) When the expected cost of a defective item exceeds the cost of inspecting a unit

question

What is a graph that shows the probability or chance of accepting a lot given various proportions of defects in the lot?

answer

c) OC curve

question

Single sampling plan is when

answer

b) a random sample is drawn from every lot.

question

According to the text, what percent of defects are consumers generally willing to accept?

answer

a) 1-2%

question

Which of the following is the least important point to perform inspection?

answer

c) Just after costly processing

question

What is the only service company to have won the Malcolm Baldrige National Quality Award twice?

answer

d) Ritz-Carlton

question

Suppose that you want to measure the percentage of candles that are cut longer than 9 inches. Which control chart would be appropriate?

answer

c) p-chart

question

What is the upper control limit for a c-chart if the total defects found over 20 samples equals 150?

answer

c) 15.72

question

Suppose that Matt wants to use a process control chart to monitor the number of different types of mistakes that he makes when giving motivational speeches to student groups. Which control chart would be most appropriate?

answer

d) c-chart

question

Suppose that you have calculated the control limits for a p-chart to be the following: LCL = 0.02 and UCL = 0.08. Today, you took 10 samples of 20 units each. The first nine samples each had one defect. The last sample had zero defects. What can you conclude?

answer

a) the process is out of control

question

Suppose that you want to monitor the variability in ounces of a process that fills beer cans. Which control chart would be appropriate?

answer

b) R-chart

question

What is the lower control limit for a c-chart if the average number of defects found over 320 samples is equal to 16?

answer

b) 4

question

Each day for two workweeks (10 days total), George weighs 4 bags from that day's production. If the average of the means is 14 oz. and the average range is 0.4 oz., what is the lower control limit for an x-bar chart for this process?

answer

a) 13.7084 oz.

question

If the upper control limit for a c-chart is 28 and the lower control limit is 4, what is the average number of defects per sample?

answer

a) 16

question

. Suppose that you want to monitor the average ounces of a process that fills beer cans. Which control chart would be appropriate?

answer

a) x-bar chart

question

What is the upper control limit for a c-chart if the total defects found over 200 samples equals 32?

answer

a) 1.36

question

Ritz-Carlton employees are empowered to spend up to how much money on the spot to correct any customer complaint?

answer

e) $2000

question

What program at Intel enforces the policy to make chips in the same way at all facilities?

answer

b) "copy-exactly"

question

What does WIP stand for?

answer

a) work-in-process

question

What are purchased items or extracted materials that will be transformed into components or products called?

answer

a) raw materials inventory

question

Hand tools, lubricants, and cleaning supplies are usually examples of what?

answer

d) MRO inventory

question

Finished goods in transit to the customer are called what?

answer

d) distribution inventory

question

Which inventory function specifically is designed to allow the company to maintain a level production strategy?

answer

a) anticipation inventory

question

Which inventory function provides a cushion against unexpected supply shortage?

answer

e) speculative inventory

question

Which inventory function helps firms garner quantity discounts?

answer

c) lot-size inventory

question

Which of the following inventory functions does not involve end products sold to customers?

answer

d) MRO inventory

question

Which is the primary inventory function that is activated after coupons are distributed to customers?

answer

a) anticipation inventory

question

Which inventory function provides a hedge against inflation?

answer

e) speculative inventory

question

Which inventory function exists between the manufacturing plant and the distribution plant?

answer

d) transportation inventory

question

Which of the following allow you to calculate the average amount of inventory in transit?

answer

e) ATI - (365*t)/d

question

In inventory management, when discussing customer service we mean:

answer

c) whether the product is available when the customer wants it.

question

Percentage of orders shipped on schedule is a good measure of finished goods customer service if:

answer

b) all orders and customers have similar value.

question

Percentage of Line Items Shipped on Schedule recognizes that:

answer

a) not all orders are equal but fails to take into account the dollar value of orders.

question

What is the formula for inventory turnover?

answer

a) annual cost of goods sold / average inventory in dollars

question

Companies can achieve cost-efficient operations by using which of the following inventory approaches?

answer

b) inventory building to leverage reduced setup costs

question

If a company carries 13 weeks of supply, what is the inventory turnover?

answer

b) 4

question

The formula to calculate a week's of supply is?

answer

c) weeks of supply = average inventory on hand in dollars/average weekly usage in dollars

question

Which of the following is not affected by decisions about how much inventory to hold?

answer

c) depreciation

question

All of the following affect holding costs except:

answer

d) setup cost

question

If inventory records fail to accurately reflect the quantity of materials available, all except which of the following may occur?

answer

b) continuous operations

question

In the service industry it is considered good performance when a company has an inventory loss of only:

answer

a) 1%

question

A SKU is a ______________ at a _____________ geographic location.

answer

d) specific item, particular

question

In a periodic review inventory system, how many units are ordered?

answer

b) Target inventory level ? on hand balance

question

Which of the following is an assumption of the basic EOQ model?

answer

d) Quantity discounts are not considered.

question

Which of the following is an assumption of the basic EOQ model??

answer

a) Lead time is known and constant.

question

Which of the following is an assumption of the basic EOQ model????

answer

b) Demand is known and constant.

question

Which of the following is an assumption of the basic EOQ model???????

answer

c) Orders arrive at once (in one lot).

question

What costs are considered in the basic EOQ model?

answer

a) annual ordering costs + annual holding costs

question

If annual demand is 24,000 units, orders are placed every 0.5 months, and the cost to place an order is $50, what is the annual ordering cost?

answer

d) $1,200

question

If annual demand is 48,000 units, orders are placed in quantities of 2000 units at a time, and the cost to place an order is $80, what is the annual ordering cost?

answer

a) $1,920

question

For the basic EOQ model, what is the formula for the total annual cost?

answer

b) (D/Q)S + (Q/2)H

question

If the EOQ is ordered, which of the following is true?

answer

c) Annual ordering cost is equal to annual holding cost

question

What does EPQ stand for?

answer

c) economic production quantity

question

If the costs (S and H) and demands (D) are the same, which of the following is not true with regard to the EPQ model as compared to the EOQ model?

answer

e) Both models use the same formula to compute annual holding cost.

question

If the costs (S and H) and demands (D) are the same, which of the following is not true with regard to the EPQ model as compared to the EOQ model??

answer

c) The two models use different formulas to compute annual ordering cost.

question

. If the costs (S and H) and demands (D) are the same, which of the following is not true with regard to the EPQ model as compared to the EOQ model???

answer

a) The EPQ model produces a higher total annual cost.

question

If the costs (S and H) and demands (D) are the same, which of the following is not true with regard to the EPQ model as compared to the EOQ model????

answer

d) The inventory depletion rate is not the same for both models.

question

A (an) _________________ inventory record provides an up-to-date inventory balance by recording all inventory transactions as they happen.

answer

e) perpetual

question

In a two-bin system, what does the quantity in the second bin represent?

answer

c) demand during replenishment lead time

question

Which of the following statements is not true?

answer

b) Using perpetual inventory records results in different order quantities than using a two-bin system.

question

What costs are considered in the quantity discount model?

answer

b) annual purchasing costs + annual holding costs + annual ordering costs

question

How can the EPQ model be economically reconciled with just-in-time (JIT) production?

answer

c) Decrease ordering cost (S).

question

_____________________ is the probability that demand during lead time will not exceed on-hand inventory.

answer

d) Order-cycle service level

question

he formula for calculating safety stock when an estimate of demand during lead time and its standard deviation are known is?

answer

d) SS = z*?dl

question

Which of the following is used in determining the order quantity in the periodic review system?

answer

c) target inventory level

question

. Under a periodic review system, enough inventory must be carried to protect against stockout for the ___________.

answer

c) replenishment lead time plus the review period

question

What are the two major decisions to be made when using the periodic review system?

answer

a) the time between orders and the target inventory level

question

What are two logical ways in which to base the time between orders in a periodic review system?

answer

d) convenience or EOQ calculations

question

What does TBO stand for?

answer

e) time between orders

question

In a periodic review system, if you are basing your time between orders on the EOQ, what should be its length in weeks?

answer

b) EOQ / average weekly demand

question

Consider a periodic review inventory system with a lead time of two weeks and a review period of seven weeks. If the standard deviation of weekly demand is 200 and the desired cycle-service level is 86%, what should the safety stock equal?

answer

d) 648

question

Consider a periodic review system with a lead time of two weeks and a review period of seven weeks. If the average demand per week is 1000 units and 300 units of safety stock are held, what should the target inventory level be?

answer

d) 9300

question

Consider a periodic review system. The target inventory level is 1000 units. It is time to review the item, and the on-hand inventory level is 200 units. How many units should be ordered?

answer

a) 800

question

What implies that about 20% of the inventory items will account for about 80% of the inventory value?

answer

e) Pareto's law

question

The ranking in ABC inventory analysis is based on what?

answer

a) annual dollar usage

question

ABC inventory assumes that a company's inventory is ____ equal and _______________ the same level of _________.

answer

c) not, does not need, control

question

Which of the following statements is true?

answer

c) Periodic counting generally counts every item in stock, whereas annually cycle counting generally does not daily.

question

Suppose that a plant manager uses economic batch sizes for production of a product. Suppose further that the setup cost is $50 per batch, the holding cost per unit per year is $10, the annual demand is 30,000 units, the firm operates (and experiences demand) 300 days per year, and the production rate per day is 1000 units. What will be the maximum inventory level that this product ever reaches? a) 577

answer

c) 519

question

Mary's Flower Boutique needs to ship finished goods from its manufacturing facility to its distribution warehouse. Annual demand for the Flower Boutique is 2000 flowers. Flower Boutique can ship the flowers via regular parcel service (3 days transit time), premium parcel service (1 day transit time), or via public carrier (5 days transit time). What is the average annual transportation inventory for each alternative?

answer

a) 19.7, 6.6, 32.9

question

What is the optimal order quantity?

answer

e) 812

question

A computer company has annual demand of 20,000. They want to determine EOQ for circuit boards which have an annual holding cost (H) of $10/unit, and an ordering cost (S) of $75. The purchasing lead time is 5 days. What is the TC and reorder point ( R) ?

answer

b) 400 units, $5,477

question

What is the formula for calculating the maximum inventory level?

answer

b) Imax = Q(1-d/p)

question

How can both the JIT and EOQ inventory theories effectively be reconciled?

answer

c) by considering the setup cost as a variable instead of a parameter

question

Which of the following sets of order quantities is guaranteed to contain the optimal solution?

answer

e) {2500, 5000, 8000}

question

What is the formula for calculating the average transportation inventory (ATI)?

answer

e) ATI = tD / 365

question

. When is the basic EOQ model a special case of the EPQ model?

answer

c) The production rate per day approaches infinity.

question

Consider the basic EOQ model. If annual demand doubles, what happens to the total annual setup and holding cost?

answer

b) It increases by 41.42%.

question

Which of the following is not an identified reason why manufacturing firms do not use optimal EOQ order quantities?

answer

d) what the sales price is

question

. Which of the following is not one of the six ways to use inventory?

answer

b) JIT inventory

question

The inventory objective of customer service is measured by any of the following except _______________.

answer

a) weeks of supply

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