question

What does WIP stand for?

answer

Work in process

question

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

answer

MRO Inventory

question

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

answer

transportation inventory

question

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

answer

52 weeks / 13 weeks = 4

question

What is an assumption of the basic EOQ model?

answer

Quantity discounts are not considered

question

What is an assumption of the basic EOQ model?

answer

Demand is known and constant

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

12 months / 0.5 months = 24 * $50 = $1,200

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 1,000 units. What will be the maximum inventory level that this product ever reaches?

answer

P = 1,000 units D = 30,000 / 300 = 100 S = $50 Q = √(2DS/(H(1- D/P))) = 577 Imax = Q(1-(D/P)) = 577(1-(100/1000)) = 519

question

The definition of quality that involves the product functioning as expected without failure is

answer

reliability

question

Quality has gained such prominence because organizations

answer

have gained an understanding of the high cost of poor quality

question

Not only does TQM encompass the entire organization, but it

answer

stresses quality is customer driven (TQM and JIT focus on customers)

question

Studying business practices of companies considered "best in class" is called

answer

benchmarking

question

Machine downtime due to failure in the process, scrap and rework are examples of

answer

internal failure costs

question

Warranty claims, customer complaints, and costs of litigation are examples of

answer

external failure costs

question

What quality control tool resembles a "fishbone"?

answer

Cause and effect diagrams

question

For control charts, which of the following situations means that the process is NOT in control?

answer

A measured observation is above the UCL

question

Suppose that a product has three parts, each of which must work in order for the product to function. The reliabilities of the parts are 0.898, 0.933 and 0.946 respectively. What is the reliability of the product?

answer

Rs = (R1)(R2)(R3) = (0.898)(0.933)(0.946) = 0.793

question

Suppose that a product has two parts, both of which must be working in order for the product to function. The reliability of the first part is 0.85, and the reliability of the second part is 0.82. In addition, the second part comes with a backup that is 50% reliable. What is the overall reliability of the product?

answer

0.82 + 0.5(1 - 0.82) = 0.91 (0.85)(0.91) = 0.7735

question

Common causes of variation are also known as

answer

random causes

question

Variation in the production process leads to

answer

quality defects

question

An x-bar chart is an example of what?

answer

Statistical process control

question

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

answer

Assignable

question

All processes will have what type of variation?

answer

Random/Common

question

What measures the central tendency of a set of data?

answer

Mean

question

The center line of a control chart represents what?

answer

Mean

question

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

answer

3

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

LCL = x double bar - A2(R bar) LCL = 14 - 0.73 (0.4) = 13.7084 **use table to find 0.73 and look at 4 NOT 10!

question

In the broad view of the organization everyone should have

answer

the same view of serving the customer

question

Kaizen is a Japanese term referring to

answer

continuous improvement

question

Three basic elements work together to complete a JIT system: just-in-time manufacturing, total equality management and

answer

respect for people

question

What business function is responsible for sales, generating customer demand and understanding customer wants and needs?

answer

Marketing

question

What business function is responsible for planning, coordinating, and controlling the resources needed to produce a company's products and services?

answer

Operations management

question

Operations management is responsible for increasing the organization's efficiency, which means the company will be able to

answer

eliminate activities that do not add value

question

Operations management is responsible for orchestrating all the resources needed to produce the final product. This includes all of the following except a) obtaining customer feedback b) arranging schedules c) managing inventory d) controlling quality e) designing work methods

answer

a) obtaining customer feedback

question

What are long-term decisions that set the direction for the entire organization called?

answer

Strategic

question

Which of the following is NOT primarily performed by the operation management function? a) job design and work measurement b) advertising strategy c) location analysis d) quality management e) facility layout

answer

b) advertising strategy

question

What movement started with the publication of the results of the Hawthorne studies?

answer

Human relations (The Hawthorne studies measured productivity of workers with changing environments)

question

What is the process of monitoring the external environment called?

answer

environmental scanning

question

Which of the following would NOT be considered a core competency that a company might have? a) highly trained workforce b) inefficient distribution system c) skills in attracting and raising capital d) use of information technology e) quality control techniques

answer

b) inefficient distribution system (Core competencies are internal strengths of the company)

question

What describes the process of obtaining goods or services from an outside provider?

answer

Outsourcing

question

Which is NOT considered one of the four broad categories of competitive priorities? a) technology b) cost c) quality d) flexibility e) time

answer

a) technology

question

When making competitive priority decisions, the firm

answer

must make trade-off decisions

question

What are the three primary types of technology?

answer

product technology, process technology, and information technology

question

The ease with which the product can be made is its

answer

manufacturability

question

What do all product designs begin with?

answer

An idea

question

What is reverse engineering?

answer

Acquiring a competitor's product and studying its design features

question

What technique is based on computing the quantity of goods a company needs to sell to just cover its costs?

answer

Break-even analysis

question

What are costs that are proportional to the amount of units produced, like materials and labor called?

answer

Variable costs

question

What is the break-even volume given a fixed cost of $100,000, a variable cost per unit of $30, and a selling price of $35?

answer

QBE = FC / (SP - VC) = 100,000 / (35 - 30) = 20,000 units

question

What are two categories of quantitative models?

answer

Causal and time series

question

Which of the following is NOT considered to be one of the four basic patterns of time series data? a) horizontal b) trend c) vertical d) seasonal e) cycle

answer

c) vertical

question

Suppose that you are using the simple mean to make a forecast. This period's forecast was equal to 100 units and was based on 6 periods of demand. This period's actual demand was 86 units. What is your forecast for next period?

answer

600 + 86 = 686 / 7 = 98

question

What value of the correlation implies that there is a perfect positive linear relationship between the two variable of a linear regression model?

answer

1

question

Suppose that Sally's company uses exponential smoothing to make forecasts. Further suppose that last period's demand forecast was for 20,000 units and last period's actual demand was 21,000 units. Sally's company uses a smoothing constant equal to 40%. What should be the forecast for this period?

answer

(0.4)(21,000) + (1 - 0.4)(20,000) = 20,400

question

In linear regression, what are we trying to forecast?

answer

Dependent variable

question

What is a tracking signal used for?

answer

To identify forecast bias

question

Typically a manufacturer will have more direct contact with what type of supplier?

answer

Tier one supplier

question

Consider a packaged milk products supply chain. A lumber company provides wood to a paper mill, who supplies cardboard to a container manufacturer, who supplies containers to the milk products manufacturer. What is the lumber company?

answer

A tier three supplier

question

What term refers to inaccurate or distorted information created in the supply chain?

answer

Bullwhip effect

question

What is the time between order placement and the receipt of goods called?

answer

Lead time

question

What refers to owning or controlling sources of raw material and components?

answer

Backward integration

question

What term refers to processes or activities that are completed by suppliers?

answer

Outsource

question

The quantity that equates the cost of making a product to the cost of buying the product is generally called what?

answer

The indifference point

question

In-sourcing incurs an annual fixed cost of $500,000 and a variable cost of $60 per unit. Outsourcing incurs an annual fixed cost of $750,000 and a variable cost of $20 per unit. What is the indifference point between the two alternatives?

answer

500,000 + 60Q = 750,000 + 20Q 40Q = 250,000 Q = 6,250 units

question

Will's omelet factory produces 2,500 omelets a day. They have determined that their daily fixed costs are $4,000 with a variable cost of fifteen cents per omelet. a) What is the total cost to make a day's omelets? b) What should Will charge for each omelet to make a 10% profit?

answer

a) 4,000 + (2,500)(0.15) = $4,375 b) (4,375)(0.1) = 438 438 + 4,375 = 4,813 4,813 / 2,500 = about $2

question

Simuelson Industries can produce its own motors for a $60,000 fixed monthly cost and a $50 variable cost unit. Alternatively, Simuelson Industries can purchase the motors from an outside supplier for $50,000 per month and $58 per unit. a) What is the indifference point? b) What option should be chosen if monthly demand is 1,200 units?

answer

a) 60,000 + 50Q = 50,000 + 58Q 10,000 = 8Q Q = 1,250 units b) 60,000 + (50)(1,200) = 120,000 to make 50,000 + (58)(1,200) = 119,600 to buy 120,000 > 119,600, so you should purchase the motors at 1,200 units!

question

What structures the sequencing of activities in a project?

answer

Precedence relationships

question

The critical path is the sequential path of interrelated activities which has

answer

the longest time

question

If a delay in an activity will delay completion of the whole project, the activity

answer

is on the critical path

question

The sum of the activity times the critical path determines

answer

the minimum time to complete the project

question

What time estimates are used when we can make a reliable estimate?

answer

Deterministic (probabilistic is uncertain)

question

The process of calculating ES and EF

answer

requires only a forward pass through the network

question

Given this information about an activity: ES = 10, EF = 15, LS = 26 and LF = 31. What is the amount of slack associated with the activity?

answer

16

question

Which of the following waiting line systems best describes a bank with a single waiting line that feeds customers to multiple identical servers?

answer

multi-server, single-line, single-phase

question

Customers generally consider what priority rule to be the fairest?

answer

first-come, first-served

question

What is the formula for the average utilization of the system?

answer

lambda / mu

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