BUSI 411 exam 4 Liberty University complete answers

BUSI 411 exam 4 Liberty University complete answers

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Question 1 In a single-period inventory situation, the probabilities that demand will be 1, 2, 3, or 4 units are .3, .3, .2, and .2, respectively. If two units are stocked, what is the probability of selling both of them?

Question 2 The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $.80 per six-pack (each case of Stein beer contains four six-packs). Orders arrive three days from the time they are placed. Daily holding costs are equal to 5 percent of the cost of the beer. What is the economic order quantity for Stein beer?

Question 3 Which of the following is least likely to be included in order costs?

Question 4 A manufacturer is contemplating a switch from buying to producing a certain item. Setup cost would be the same as ordering cost. The production rate would be about double the usage rate. Compared to the EOQ, the maximum inventory would be approximately:

Question 5 A fill rate is the percentage of _____ filled by stock on hand.

Question 6 Which of the following contributes to the competitive advantage enjoyed by firms using lean production?

Question 7 The term that refers to the automatic detection of defects is:

Question 8 Which of the following is not characteristic of preventive maintenance in lean systems?

Question 9 Previously, management calculated the number of kanban cards allowed by using a value of 1.3 for X. Assuming nothing else (e.g., usage rates, container capacities, etc.), which of the following values for X would indicate management's belief that the system has become more efficient?

Question 10 A potential obstacle to conversion to a lean system is:

Question 11 The website and order fulfillment are essential features of:

Question 12 Which of the following is not a benefit of effective supply chain management?

Question 13 Which of the following would not usually be a main factor in selecting a vendor?

Question 14 _________ has/have helped firms to concentrate on their core business.

Question 15 Our organization can obtain visibility to potential trading partners on the Internet by using:

Question 16 Which of the following is the last step in the capacity/scheduling chain?

Question 17 Based on the cost information given in the following table, which set of job-machine pairs reflects the minimum-cost solution using the Assignment method?



Question 18 The operations manager of a body and paint shop has five cars to schedule for repair. He would like to minimize the throughput time to complete all work on these cars. Each car requires body work prior to painting. The estimates of the times required to do the body paint work on each are as follows:



What is the optimum sequence (first car to last)?

Question 19 Which of the following is critical to effective yield management?

Question 20 The scheduling sequencing rule which always results in the lowest average completion (flow) time is the:

Question 21 The inventory value of the supply chain exceeds the inventory value of the organization's work-inprocess inventory.

Question 22 Price is the primary determining factor in choosing a vendor since most products are essentially the same.

Question 23 A 30 percent reduction in product and service variety will not affect the efficiency of a supply chain.

Question 24 A schedule chart depicts the loading and idle times for a group of machines or departments.

Question 25 In a single work center, makespan improvement can be accomplished by selecting the optimal sequencing rule.

 

Question 1 The Operations Manager for Shadyside Savings & Loan orders cash from her home office for her very popular "BIG BUCKS" automated teller machine, which only dispenses $100 bills. She estimates that this machine dispenses an average of 12,500 bills per month, and that carrying a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armored car delivery costs, and that order lead time is six days. What is the economic order quantity?

Question 2 In the basic EOQ model, if D = 60 per month, S = $12, and H = $10 per unit per month, EOQ is:

Question 3 The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $.80 per six­pack (each case of Stein beer contains four six­packs). Orders arrive three days from the time they are placed. Daily holding costs are equal to 5 percent of the cost of the beer. If he were to order 16 cases of Stein beer at a time, what would be the daily total inventory costs, EXCLUDING the cost of the beer?

Question 4 In a two­bin inventory system, the amount contained in the second bin is equal to the:

Question 5 Which of the following is not true for the economic production quantity model?

Question 6 Which one of the following is not one of the building blocks that is the foundation of the lean philosophy?

Question 7 A system of lights used at each workstation to signal problems or slowdowns is:

Question 8 Having a vendor be responsible for managing the restocking of inventory is what is meant by the term:

Question 9 Breakdown programs often are prioritized such that some equipment gets a lot of attention and other equipment gets very little. This typically reflects the fact that breakdowns are consistent with:

Question 10 The goal of maintenance is to maintain the productive system in good working order while minimizing:

Question 11 It is especially the case for small businesses that closer interactions and increased agility make __________ relatively more attractive.

Question 12 Which of the following is not a goal of supply chain management?

Question 13 The website and order fulfillment are essential features of:

Question 14 The two types of decisions that are relevant to supply chain management are:

Question 15 Which of the following is a principle required for ethical behavior in purchasing? (I) loyalty to employer (II) justice to those you deal with (III) faith in your profession

Question 16 In theory of constraints scheduling, the synchronization of the sequence of operations is referred to as the:

Question 17 A work center can be a: (I) machine. (II) group of machines. (III) department. (IV) facility.

Question 18 The president of a consulting firm wants to minimize the total number of hours it will take to complete four projects for a new client. Accordingly, she has estimated the time it should take for each of her top consultants—Charlie, Betty, Johnny, and Rick—to complete any of the four projects, as follows: In how many different ways can she assign these consultants to these projects?

Question 19 Scheduled due dates are the result of:

Question 20 Which sequencing rule is designed specifically to minimize job tardiness?

Question 21 To provide satisfactory levels of customer service while keeping inventory costs within reasonable bounds, two fundamental decisions must be made about inventory: the timing and the size of orders.

Question 22 Returned goods are part of reverse logistics.

Question 23 Disintermediation refers to the phenomenon that the traditional retailer or service provider is reduced or eliminated in a supply chain.

Question 24 If optimal sequencing through three work centers is desired, Johnson's rule II is used rather than Johnson's rule.

Question 25 The assignment method is limited to a maximum of two jobs per resource

 

·         Question 1

3 out of 3 points

 
 
 
In a supermarket, a vendor's restocking the shelves every Monday morning is an example of:
 
 
 
 
 
 
 
·         Question 2                                                                                                  3 out of 3 points

 
 
 
Average demand for a particular item is 1,200 units per year. It costs $100 to place an order for this item, and it costs $24 to hold one unit of this item in inventory for one year. If the fixed-order-interval model is chosen in this instance, how often (on average) will this item be ordered?
 
 
 
 
 
 
 
·         Question 3                                                                                                  3 out of 3 points

 
 
 
In the basic EOQ model, if D = 60 per month, S = $12, and H = $10 per unit per month, EOQ is:
 
 
 
 
 
 
 
·         Question 4                                                                                                  3 out of 3 points

 
 
 
Which one of the following is implied by a lead time service level of 95 percent?
 
 
 
 
 
 
 
·         Question 5                                                                                                  3 out of 3 points

 
 
 
In the single-period model, if excess cost is double the shortage cost, the approximate stockout risk, assuming an optimum service level, is ___ percent.
 
 
 
 
 
 
 
·         Question 6                                                                                                  3 out of 3 points

 
 
 
Which of the following is not something commonly found in lean systems?

(I) Waste reduction
(II) Output match to a detailed forecast
(III) Visual controls
(IV) Quick changeovers
(V) Long production runs
 
 
 
 
 
 
 
·         Question 7                                                                                                  3 out of 3 points

 
 
 
A system of lights used at each workstation to signal problems or slowdowns is:
 
 
 
 
 
 
 
·         Question 8                                                                                                  3 out of 3 points

 
 
 
Which of the following is characteristic of the lean philosophy?
 
 
 
 
 
 
 
·         Question 9                                                                                                  3 out of 3 points

 
 
 
The kaizen philosophy applies to:
 
 
 
 
 
 
 
·         Question 10                                                                                       3 out of 3 points

 
 
 
With regard to suppliers, lean systems typically require:
 
 
 
 
 
 
 
·         Question 11                                                                                      3 out of 3 points

 
 
 
Which of these aspects of supply chain management are especially concerning to small business?

(I) customer reliability
(II) inventory management
(III) purchasing costs
(IV) risk management
(V) international trade
 
 
 
 
 
 
 
·         Question 12

3 out of 3 points

 
 
 
Small changes in consumer demand can result in large variations in orders placed because of the:
 
 
 
 
 
 
 
·         Question 13

3 out of 3 points

 
 
 
Which of the following is not a benefit of effective supply chain management?
 
 
 
 
 
 
 
·         Question 14

3 out of 3 points

 
 
 
Which of the following is not true of vendor analysis?
 
 
 
 
 
 
 
·         Question 15

3 out of 3 points

 
 
 
Vendor analysis has the greatest potential for savings for items which have:
 
 
 
 
 
 
 
·         Question 16

3 out of 3 points

 
 
 
There are four resources and four jobs to be done. The time required for each resource to do each job is as follows:
After the row reduction, what is the reduced time for assigning resource 4 to Job D?
 
 
 
 
 
 
 
·         Question 17

3 out of 3 points

 
 
 
The operations manager of a body and paint shop has five cars to schedule for repair. He would like to minimize the throughput time to complete all work on these cars. Each car requires body work prior to painting. The estimates of the times required to do the body paint work on each are as follows:
What is the idle time at the paint work center for the optimal schedule?
 
 
 
 
 
 
 
·         Question 18

3 out of 3 points

 
 
 
The operations manager of a body and paint shop has five cars to schedule for repair. He would like to minimize the throughput time to complete all work on these cars. Each car requires body work prior to painting. The estimates of the times required to do the body paint work on each are as follows:
Where in the optimum sequence should car A be scheduled?
 
 
 
 
 
 
 
·         Question 19

3 out of 3 points

 
 
 
The two different approaches to load work centers in job-shop scheduling are:
 
 
 
 
 
 
 
·         Question 20

3 out of 3 points

 
 
 
Which of the following is least likely to be a consideration when scheduling a high-volume system?
 
 
 
 
 
 
 
·         Question 21

3 out of 3 points

 
 
 
In the single-period model, the service level is the probability that demand will not exceed the stocking level in any period.
 
 
 
 
 
 
 
·         Question 22

3 out of 3 points

 
 
 
An advantage of decentralized purchasing is the attention given to local needs.
 
 
 
 
 
 
 
·         Question 23

3 out of 3 points

 
 
 
Using third-party logistics involves using your organization's logistics function to ship to customers that are not officially part of the supply chain.
 
 
 
 
 
 
 
·         Question 24

3 out of 3 points

 
 
 
A schedule chart depicts the loading and idle times for a group of machines or departments.
 
 
 
 
 
 
 
·         Question 25

3 out of 3 points

 
 
 
The output of the system cannot exceed the output of the bottleneck operation(s).
 
 
 
 

 

· Question 1

3 out of 3 points

 
 
 
The Operations Manager for Shadyside Savings & Loan orders cash from her home office for her very popular "BIG BUCKS" automated teller machine, which only dispenses $100 bills. She estimates that this machine dispenses an average of 12,500 bills per month, and that carrying a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armored car delivery costs, and that order lead time is six days. Assuming a 30-day month, if she were to order 6,000 bills at a time, what would be the average monthly total costs, EXCLUDING the value of the bills?
 
 
 
 
 
 
 
·         Question 2

3 out of 3 points

 
 
 
The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four days. What is the economic order quantity for resin?
 
 
 
 
 
 
 
·         Question 3

3 out of 3 points

 
 
 
Which of the following is least likely to be included in order costs?
 
 
 
 
 
 
 
·         Question 4

3 out of 3 points

 
 
 
A cycle count program will usually require that A items be counted:
 
 
 
 
 
 
 
·         Question 5

3 out of 3 points

 
 
 
The Operations Manager for Shadyside Savings & Loan orders cash from her home office for her very popular "BIG BUCKS" automated teller machine, which only dispenses $100 bills. She estimates that this machine dispenses an average of 12,500 bills per month, and that carrying a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armored car delivery costs, and that order lead time is six days. Assuming a 30-day month, what is the economic order quantity?
 
 
 
 
 
 
 
·         Question 6

3 out of 3 points

 
 
 
A lean-systems method of asking questions about a process is the __________ approach.
 
 
 
 
 
 
 
·         Question 7

3 out of 3 points

 
 
 
When lean is used in the context of services, which of the following is most often the focus?
 
 
 
 
 
 
 
·         Question 8

3 out of 3 points

 
 
 
Although lean systems tend to produce standardized product lines, to provide production variety without accompanying waste, lean producers often use __________ in __________.
 
 
 
 
 
 
 
·         Question 9

3 out of 3 points

 
 
 
Which of the following is not something commonly found in lean systems?
 

1.  (I) Waste reduction

2.    (II) Output match to a detailed forecast

3.     (III) Visual controls

4.       (IV) Quick changeovers

5.     (V) Long production runs
 
 
 
 
 
 
 
·         Question 10

3 out of 3 points

 
 
 
Managers considering an operations strategy reflecting the lean philosophy of operations should recognize that lean:
 
 
 
 
 
 
 
·         Question 11

3 out of 3 points

 
 
 
A factor that makes it desirable for business organizations to actively manage their supply chains is:
 
 
 
 
 
 
 
·         Question 12

3 out of 3 points

 
 
 
Which of the following is not an application of E-business?
 
 
 
 
 
 
 
·         Question 13

3 out of 3 points

 
 
 
Which of the following is a barrier to the integration of separate organizations in the supply chain?

(I) conflicting objectives of the companies in the chain
(II) different capacity levels of the companies in the chain
(III) reluctance of the organizations in the chain to allow other organizations access to their data
 
 
 
 
 
 
 
·         Question 14

3 out of 3 points

 
 
 
RFID chips:

(I) are used to track goods in distribution.
(II) are used to track job progress in production.
(III) are used to provide special instructions to operators.
(IV) can be used in inventory record keeping.
 
 
 
 
 
 
 
·         Question 15

3 out of 3 points

 
 
 
Which of the following is least likely to be a key consideration when a company chooses a supplier?
 
 
 
 
 
 
 
·         Question 16

3 out of 3 points

 
 
 
The priority rule which will sequence jobs in the order they are received is:
 
 
 
 
 
 
 
·         Question 17

3 out of 3 points

 
 
 
Which sequencing rule is designed specifically to minimize job tardiness?
 
 
 
 
 
 
 
·         Question 18

3 out of 3 points

 
 
 
Scheduled due dates are the result of:
 
 
 
 
 
 
 
·         Question 19

3 out of 3 points

 
 
 
The owner/operator of the local franchise of Handyman, Inc., has four jobs to do today, shown in the order they were received:
 

Job
 
Processing Time (hrs)
 
Due
(hrs from now)
W
 
 
4
 
 
 
4
 
X
 
 
3
 
 
 
5
 
Y
 
 
2
 
 
 
2
 
Z
 
 
1
 
 
 
1
 


If he uses the shortest processing time first priority rule to schedule these jobs, what will be the average job tardiness?
 
 
 
 
 
 
 
·         Question 20

3 out of 3 points

 
 
 
The following matrix shows relative costs for various job-machine combinations. Assume there must be one-to-one matching between jobs and machines. Which set of pairs constitutes the minimum-cost solution using the assignment method?
 

 
 
 
Machine
 
 
 
A
B
C
Job
1
 
$
6
 
 
0
 
 
0
 
 
2
 
 
0
 
 
3
 
 
4
 
 
3
 
 
0
 
 
1
 
 
2
 

 
 
 
 
 
 
 
·         Question 21

3 out of 3 points

 
 
 
Profit margins tend to be inversely related to inventory turns.
 
 
 
 
 
 
 
·         Question 22

3 out of 3 points

 
 
 
Using third-party logistics involves using your organization's logistics function to ship to customers that are not officially part of the supply chain.
 
 
 
 
 
 
 
·         Question 23

3 out of 3 points

 
 
 
Centralized or decentralized purchasing is directly related to the size of an organization.
 
 
 
 
 
 
 
·         Question 24

3 out of 3 points

 
 
 
The assignment model seeks an optimum matching of tasks and resources.
 
 
 
 
 
 
 
·         Question 25

3 out of 3 points

 
 
 
Priority rules are widely used to sequence jobs in high-volume systems.
 
 
 
 
 
 
 
 

1. One important use of inventories in manufacturing is to decouple operations through the use of work-inprocess inventories.

True False

2. The objective of inventory management is to minimize the cost of holding inventory.

True False

3. A retail store that carries twice as much inventory as its competitor will provide twice the customer service level.

True False

4. The overall objective of inventory management is to achieve satisfactory levels of customer service while keeping inventory costs reasonable.

True False

5. The two main concerns of inventory control relate to the costs and the level of customer service.

True False

6. To provide satisfactory levels of customer service while keeping inventory costs within reasonable bounds, two fundamental decisions must be made about inventory: the timing and the size of orders.

True False

7. In the EOQ formula, holding costs under 10 percent are expressed as percentages, above 10 percent are expressed as annual unit costs.

True False

8. DVD recorders would be an example of independent-demand items.

True False

9. Reorder point models are primarily used for dependent-demand items.

True False

10. An example of inventory holding cost is the cost of moving goods to temporary storage after receipt from a supplier.

True False

11. Decoupling operations applies to the railroad industry.

True False

12. Interest, insurance, and opportunity costs are all associated with holding costs.

True False

13. The A-B-C approach involves classifying inventory items by unit cost, with expensive items classified as A items and low-cost items classified as C items.

True False

14. An inventory buffer adds value and lowers cost in all supply chains.

True False

15. In the A-B-C approach, C items typically represent about 15 percent of the number of items, but 60 percent of the dollar usage.

True False

16. EOQ inventory models are basically concerned with the timing of orders.

True False

17. The average inventory level is inversely related to order size.

True False

18. The average inventory level and the number of orders per year are inversely related: As one increases, the other decreases.

True False

19. The EOQ should be regarded as an approximate quantity rather than an exact quantity. Thus, rounding the calculated value is acceptable.

True False

20. Carrying cost is a function of order size; the larger the order, the higher the inventory carrying cost.

True False

21. Understocking an inventory item is a sure sign of inadequate inventory control.

True False

22. Annual ordering cost is inversely related to order size.

True False

23. The total cost curve is relatively flat near the EOQ.

True False

24. Because price is not a factor in the EOQ formula, quantity discounts will not affect EOQ calculations.

True False

25. In the quantity discount model, if holding costs are given as a percentage of unit price, a graph of the total cost curves will have the same EOQ for each curve.

True False

26. In the quantity discount model, the optimum quantity will always be found on the lowest total cost curve.

True False

27. ROP models indicate to managers the time between orders.

True False

28. When to order can be calculated by the ROP and expressed as a quantity.

True False

29. The rate of demand is an important factor in determining the ROP.

True False

30. The inventory value of the supply chain exceeds the inventory value of the organization's work-in-process inventory.

True False

31. Safety stock is held because we anticipate future demand.

True False

32. Variability in demand and/or lead time can be compensated for by safety stock.

True False

33. Solving quality problems can lead to lower inventory levels.

True False

34. ROP models assume that demand during lead time is composed of a series of dependent daily demands.

True False

35. Profit margins tend to be inversely related to inventory turns.

True False

36. In the fixed-order-interval model, the order size is the same for each order.

True False

37. The fixed-order-interval model requires a continuous monitoring of inventory levels.

True False

38. Discrete stocking levels are used when an organization does not want visibility of inventory levels.

True False

39. The fixed-order-interval model requires a larger amount of safety stock than the ROP model for the same risk of a stockout.

True False

40. The single-period model can be very helpful in determining when to order.

True False

41. The single-period model can be very helpful in determining how much to order.

True False

42. Monitoring inventory turns over time can be used as a measure of performance.

True False

43. A single-period model would be used mainly by organizations going out of business.

True False

44. The basic EOQ model ignores the purchasing cost.

True False

45. When the item is offered for resale, shortage costs in the single-period model can include a charge for loss of customer goodwill.

True False

46. In the single-period model, the service level is the probability that demand will not exceed the stocking level in any period.

True False

47. A quantity discount will lower the reorder point.

True False

48. It is critical that the exact quantity calculated in the EOQ model be ordered.

True False

49. Safety stock eliminates all stockouts.

True False

50. The calculation of safety stock requires knowledge of demand and lead time variability.

True False

51. The two basic issues in inventory are how much to order and when to order.

True False

52. Cycle counting can be used in motorcycle inventory control.

True False

53. Using the EOQ model, the higher an item's carrying costs, the more frequently it will be ordered.

True False

54. A stock or store of goods is called a(n):

A. bundler.

B. servicer.

C. retailer.

D. supply chain.

E. inventory.

55. Which of the following is typically the largest of all inventory costs?

A. shortage cost

B. purchase cost

C. holding cost

D. ordering cost

E. pipeline cost

56. Even though it is often the case that no cash outflows result when demand exceeds capacity, __________ can nevertheless be experienced in those circumstances.

A. foreorder costs

B. service costs

C. shortage costs

D. holding costs

E. setup costs

57. If there are shipping cost economies that result from bundling orders for different items together, the __________ model becomes a relatively more attractive option.

A. multi-period

B. reorder-point

C. fixed-order-quantity

D. fixed-order-interval

E. multi-item

58. Average demand for a particular item is 1,200 units per year. It costs $100 to place an order for this item, and it costs $24 to hold one unit of this item in inventory for one year. If the fixed-order-interval model is chosen in this instance, how often (on average) will this item be ordered?

A. once a month

B. once every other month

C. twice a month

D. twice every three months

E. three times every two months

59. Weekly demand for a particular item averages 30 units, with a standard deviation of 4. This item is managed with a fixed-order-interval model. The order interval is three weeks, and this item has a certain lead time of one week. The desired service level is 97.5 percent. Assume that it is now time to place another order, and there are 43 units on hand. How many units should be ordered?

A. 120

B. 93

C. 136

D. 46

E. 84

60. Which of the following is not one of the assumptions of the basic EOQ model?

A. Annual demand requirements are known and constant.

B. Lead time does not vary.

C. Each order is received in a single delivery.

D. Quantity discounts are available.

E. Ordering and holding costs have been estimated reasonably accurately.

61. Which of the following interactions with vendors would potentially lead to inventory reductions?

A. reduced lead times

B. increased safety stock

C. less frequent purchases

D. larger batch quantities

E. longer order intervals

62. A nonlinear cost related to order size is the cost of:

A. interest.

B. insurance.

C. taxes.

D. receiving.

E. space.

63. In a two-bin inventory system, the amount contained in the second bin is equal to the:

A. ROP.

B. EOQ.

C. amount in the first bin.

D. optimum stocking level.

E. safety stock.

64. When carrying costs are stated as a percentage of unit price, the minimum points on the total cost curves:

A. line up.

B. equal zero.

C. do not line up.

D. cannot be calculated.

E. depend on the percentage assigned.

65. Dairy items, fresh fruit, and newspapers are items that:

A. do not require safety stocks.

B. cannot be ordered in large quantities.

C. are subject to deterioration and spoilage.

D. require that prices be lowered every two days.

E. have minimal holding costs.

66. Which of the following is least likely to be included in order costs?

A. processing vendor invoices for payment

B. processing purchase order

C. inspecting incoming goods for quantity

D. taking an inventory to determine how much is needed

E. temporary storage of delivered goods

67. In an A-B-C system, the typical percentage of the number of items in inventory for A items is about:

A. 10.

B. 30.

C. 50.

D. 70.

E. 90.

68. In the A-B-C classification system, items which account for 15 percent of the total dollar volume for a majority of the inventory items would be classified as:

A. A items.

B. B items.

C. C items.

D. A items plus B items.

E. B items plus C items.

69. In the A-B-C classification system, items which account for 60 percent of the total dollar volume for few inventory items would be classified as:

A. A items.

B. B items.

C. C items.

D. A items plus B items.

E. B items plus C items.

70. The purpose of cycle counting is to:

A. count all the items in inventory.

B. count bicycles and motorcycles in inventory.

C. reduce discrepancies between inventory records and actual quantities.

D. reduce theft.

E. count 10 percent of the items each month.

71. The EOQ model is most relevant for which one of the following?

A. ordering items with dependent demand

B. determination of safety stock

C. ordering perishable items

D. determining fixed-interval order quantities

E. determining fixed order quantities

72. Which is not a true assumption in the EOQ model?

A. Production rate is constant.

B. Lead time does not vary.

C. No more than three items are involved.

D. Usage rate is constant.

E. No quantity discounts.

73. In a supermarket, a vendor's restocking the shelves every Monday morning is an example of:

A. safety stock replenishment.

B. economic order quantities.

C. reorder points.

D. fixed order intervals.

E. blanket ordering.

74. A cycle count program will usually require that A items be counted:

A. daily.

B. once a week.

C. monthly.

D. quarterly.

E. more often than annually.

75. A risk avoider would want ______ safety stock.

A. less

B. more

C. the same

D. zero

E. 50 percent

76. In the basic EOQ model, if annual demand doubles, the effect on the EOQ is:

A. It doubles.

B. It is four times its previous amount.

C. It is half its previous amount.

D. It is about 70 percent of its previous amount.

E. It increases by about 40 percent.

77. In the basic EOQ model, if lead time increases from five to 10 days, the EOQ will:

A. double.

B. increase, but not double.

C. decrease by a factor of 2.

D. remain the same.

E. increase, but more information is needed to calculate exactly how much.

78. In the basic EOQ model, an annual demand of 40 units, an ordering cost of $5, and a holding cost of $1 per unit per year will result in an EOQ of:

A. 20.

B. square root of 200.

C. 200.

D. 400.

E. 600.

79. In the basic EOQ model, if D = 60 per month, S = $12, and H = $10 per unit per month, EOQ is:

A. 10.

B. 12.

C. 24.

D. 72.

E. 144.

80. In the basic EOQ model, if annual demand is 50, carrying cost is $2, and ordering cost is $15, EOQ is approximately:

A. 11.

B. 20.

C. 24.

D. 28.

E. 375.

81. Which of the following is not true for the economic production quantity model?

A. Usage rate is constant.

B. Production rate exceeds usage rate.

C. Run size exceeds maximum inventory.

D. There are no ordering or setup costs.

E. Average inventory is one-half maximum inventory.

82. Given the same demand, setup/ordering costs, and carrying costs, the EPQ calculated using incremental replenishment will be ____________ if instantaneous replenishment was assumed.

A. greater than the EOQ

B. equal to the EOQ

C. smaller than the EOQ

D. greater than or equal to the EOQ

E. smaller than or equal to the EOQ

83. The introduction of quantity discounts will cause the optimum order quantity to be:

A. smaller.

B. unchanged.

C. greater.

D. smaller or unchanged.

E. unchanged or greater.

84. A fill rate is the percentage of _____ filled by stock on hand.

A. shipments

B. demand

C. inventory

D. safety stock

E. lead time

85. In the quantity discount model, with carrying cost stated as a percentage of unit purchase price, in order for the EOQ of the lowest curve to be optimum, it must:

A. have the lowest total cost.

B. be in a feasible range.

C. be to the left of the price break quantity for that price.

D. have the largest quantity compared to other EOQs.

E. have smaller ordering costs than the others.

86. Which one of the following is not generally a determinant of the reorder point?

A. rate of demand

B. length of lead time

C. lead time variability

D. stockout risk

E. purchase cost

87. If no variations in demand or lead time exist, the ROP will equal:

A. the EOQ.

B. expected usage during lead time.

C. safety stock.

D. the service level.

E. the EOQ plus safety stock.

88. If average demand for an inventory item is 200 units per day, lead time is three days, and safety stock is 100 units, the reorder point is:

A. 100 units.

B. 200 units.

C. 300 units.

D. 600 units.

E. 700 units.

89. Which one of the following is implied by a lead time service level of 95 percent?

A. Approximately 95 percent of demand during lead time will be satisfied.

B. Approximately 95 percent of inventory will be used during lead time.

C. The probability is .95 that demand during lead time will exactly equal the amount on hand at the beginning of lead time.

D. The probability is .95 that demand during lead time will not exceed the amount on hand at the beginning of lead time.

E. The probability is .95 that the order will arrive after the on-hand inventory is exhausted.

90. Which one of the following is implied by an annual service level of 95 percent?

A. Approximately 95 percent of demand during lead time will be satisfied.

B. The probability is .95 that demand will exceed supply during lead time.

C. The probability is .95 that demand will equal supply during lead time.

D. The probability is .95 that demand will not exceed supply during lead time.

E. Approximately 95 percent of all demand will actually be satisfied directly from on-hand inventory.

91. Daily usage is exactly 60 gallons per day. Lead time is normally distributed with a mean of 10 days and a standard deviation of 2 days. What is the standard deviation of demand during lead time?

A. 60 times 2

B. 60 times the square root of 2

C. 60 times the square root of 10

D. 60 times 10

E. 10 times the square root of 2

92. Lead time is exactly 20 days long. Daily demand is normally distributed with a mean of 10 gallons per day and a standard deviation of 2 gallons. What is the standard deviation of demand during lead time?

A. 20 times 2

B. 20 times 10

C. 2 times the square root of 20

D. 2 times the square root of 10

E. 400 times the square root of 10

93. All of the following are possible reasons for using the fixed-order-interval model except:

A. supplier policy encourages use.

B. grouping orders can save in shipping costs.

C. the required safety stock is lower than with an EOQ/ROP model.

D. it is suited to periodic checks of inventory levels rather than continuous monitoring.

E. continuous monitoring is not practical.

94. Which of these products would be most apt to involve the use of a single-period model?

A. gold coins

B. hammers

C. fresh fish

D. calculators

E. frozen corn

95. In a single-period model, if shortage and excess costs are equal, then the optimum service level is:

A. 0.

B. .33.

C. .50.

D. .67.

E. .75.

96. In a single-period model, if shortage cost is four times excess cost, then the optimum service level is ___ percent.

A. 100

B. 80

C. 60

D. 40

E. 20

97. In the single-period model, if excess cost is double the shortage cost, the approximate stockout risk, assuming an optimum service level, is ___ percent.

A. 100

B. 67

C. 50

D. 33

E. 5

98. In a single-period inventory situation, the probabilities that demand will be 1, 2, 3, or 4 units are .3, .3, .2, and .2, respectively. If two units are stocked, what is the probability of selling both of them?

A. .5

B. .6

C. .7

D. .8

E. .9

99. The management of supply chain inventories focuses on:

A. internal inventories.

B. external inventories.

C. both internal and external inventories.

D. safety stock elimination.

E. optimizing reorder points.

100.An operations strategy for inventory management should work toward:

A. increasing lot sizes.

B. decreasing lot sizes.

C. increasing safety stocks.

D. decreasing service levels.

E. increasing order quantities.

101.Cycle stock inventory is intended to deal with:

A. excess costs.

B. shortage costs.

C. stockouts.

D. expected demand.

E. quantity discounts.

102.An operations strategy which recognizes high carrying costs and reduces ordering costs will result in:

A. unchanged order quantities.

B. slightly decreased order quantities.

C. greatly decreased order quantities.

D. slightly increased order quantities.

E. greatly increased order quantities.

103.The need for safety stocks can be reduced by an operations strategy which:

A. increases lead time.

B. increases lead time variability.

C. increases lot sizes.

D. decreases ordering costs.

E. decreases lead time variability.

104.If average demand for an item is 20 units per day, safety stock is 50 units, and lead time is four days, the ROP will be:

A. 20.

B. 50.

C. 70.

D. 80.

E. 130.

105.With an A-B-C system, an item that had a high demand but a low annual dollar volume would probably be classified as:

A. A.

B. B.

C. C.

106.The fixed-order-interval model would be most likely to be used for this situation:

A. A company has switched from mass production to lean production.

B. Production is done in batches.

C. Spare parts are ordered when a new machine is purchased.

D. Grouping orders can save shipping costs.

E. Demand is highly variable

107.Which item would be least likely to be ordered under a fixed-order-interval system?

A. textbooks at a college bookstore

B. auto parts at an assembly plant

C. cards at a gift shop

D. canned peas at a supermarket

108.Which one of these would not be a factor in determining the reorder point?

A. the EOQ

B. the lead time

C. the variability of demand

D. the demand or usage rate

E. all are factors

109.A manufacturer is contemplating a switch from buying to producing a certain item. Setup cost would be the same as ordering cost. The production rate would be about double the usage rate. Compared to the EOQ, the economic production quantity would be approximately:

A. the same.

B. 20 percent larger.

C. 40 percent larger.

D. 20 percent smaller.

E. 40 percent smaller.

110.A manufacturer is contemplating a switch from buying to producing a certain item. Setup cost would be the same as ordering cost. The production rate would be about double the usage rate. Compared to the EOQ, the maximum inventory would be approximately:

A. 70 percent higher.

B. 30 percent higher.

C. the same.

D. 30 percent lower.

E. 70 percent lower.

111.The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $.80 per six-pack (each case of Stein beer contains four six-packs). Orders arrive three days from the time they are placed. Daily holding costs are equal to 5 percent of the cost of the beer. At what point should he reorder Stein beer?

A. 0 cases remaining

B. 4 cases remaining

C. 12 cases remaining

D. 16 cases remaining

E. 20 cases remaining

112.The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $.80 per six-pack (each case of Stein beer contains four six-packs). Orders arrive three days from the time they are placed. Daily holding costs are equal to 5 percent of the cost of the beer. If he were to order 16 cases of Stein beer at a time, what would be the length of an order cycle?

A. .25 days

B. 3 days

C. 1 day

D. 4 days

E. 20 days

113.The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $.80 per six-pack (each case of Stein beer contains four six-packs). Orders arrive three days from the time they are placed. Daily holding costs are equal to 5 percent of the cost of the beer. If he were to order 16 cases of Stein beer at a time, what would be the average inventory level?

A. 4 cases

B. 12 cases

C. 8 cases

D. 20 cases

E. 16 cases

114.The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $.80 per six-pack (each case of Stein beer contains four six-packs). Orders arrive three days from the time they are placed. Daily holding costs are equal to 5 percent of the cost of the beer. If he were to order 16 cases of Stein beer at a time, what would be the daily total inventory costs, EXCLUDING the cost of the beer?

A. $2.00

B. $4.00

C. $1.28

D. $3.28

E. $2.56

115.The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $.80 per six-pack (each case of Stein beer contains four six-packs). Orders arrive three days from the time they are placed. Daily holding costs are equal to 5 percent of the cost of the beer. What is the economic order quantity for Stein beer?

A. 8 cases

B. 11 cases

C. 14 cases

D. 20 cases

E. 32 cases

116.Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and carrying costs are 4 cents per pound per day. Lead time for each order is three days, and the pepperoni itself costs $3.00 per pound. At what point should she reorder pepperoni?

A. 20 pounds remaining

B. 40 pounds remaining

C. 60 pounds remaining

D. 80 pounds remaining

E. 100 pounds remaining

117.Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and carrying costs are 4 cents per pound per day. Lead time for each order is three days, and the pepperoni itself costs $3.00 per pound. If she were to order 80 pounds of pepperoni at a time, what would be the length of an order cycle?

A. 0 days

B. 0.25 days

C. 3 days

D. 4 days

E. 5 days

118.Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and carrying costs are 4 cents per pound per day. Lead time for each order is three days, and the pepperoni itself costs $3.00 per pound. If she were to order 80 pounds of pepperoni at a time, what would be the average inventory level?

A. 20 pounds

B. 40 pounds

C. 60 pounds

D. 80 pounds

E. 100 pounds

119.Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and carrying costs are 4 cents per pound per day. Lead time for each order is three days, and the pepperoni itself costs $3.00 per pound. If she were to order 80 pounds of pepperoni at a time, what would be the total daily costs, including the cost of the pepperoni?

A. $60.00

B. $63.20

C. $64.00

D. $64.10

E. $65.00

120.Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and carrying costs are 4 cents per pound per day. Lead time for each order is three days, and the pepperoni itself costs $3.00 per pound. What is the economic order quantity for pepperoni?

A. 20 pounds

B. 40 pounds

C. 60 pounds

D. 80 pounds

E. 100 pounds

121.The Operations Manager for Shadyside Savings & Loan orders cash from her home office for her very popular "BIG BUCKS" automated teller machine, which only dispenses $100 bills. She estimates that this machine dispenses an average of 12,500 bills per month, and that carrying a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armored car delivery costs, and that order lead time is six days. Assuming a 30-day month, at what point should bills be reordered?

A. 0 bills remaining

B. 417 bills remaining

C. 2,500 bills remaining

D. 10,000 bills remaining

E. 12,500 bills remaining

122.The Operations Manager for Shadyside Savings & Loan orders cash from her home office for her very popular "BIG BUCKS" automated teller machine, which only dispenses $100 bills. She estimates that this machine dispenses an average of 12,500 bills per month, and that carrying a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armored car delivery costs, and that order lead time is six days. Assuming a 30-day month, if she were to order 6,000 bills at a time, what would be the length of an order cycle?

A. .48 days

B. 2.08 days

C. 6 days

D. 8.4 days

E. 14.4 days

123.The Operations Manager for Shadyside Savings & Loan orders cash from her home office for her very popular "BIG BUCKS" automated teller machine, which only dispenses $100 bills. She estimates that this machine dispenses an average of 12,500 bills per month, and that carrying a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armored car delivery costs, and that order lead time is six days. If she were to order 6,000 bills at a time, what would be the dollar value of the average inventory level?

A. $3,000

B. $6,000

C. $12,500

D. $300,000

E. $600,000

124.The Operations Manager for Shadyside Savings & Loan orders cash from her home office for her very popular "BIG BUCKS" automated teller machine, which only dispenses $100 bills. She estimates that this machine dispenses an average of 12,500 bills per month, and that carrying a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armored car delivery costs, and that order lead time is six days. If she were to order 6,000 bills at a time, what would be the average monthly total costs, EXCLUDING the value of the bills?

A. $625

B. $1,250

C. $2,500

D. $3,125

E. $37,500

125.The Operations Manager for Shadyside Savings & Loan orders cash from her home office for her very popular "BIG BUCKS" automated teller machine, which only dispenses $100 bills. She estimates that this machine dispenses an average of 12,500 bills per month, and that carrying a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armored car delivery costs, and that order lead time is six days. What is the economic order quantity?

A. 600 bills

B. 3,000 bills

C. 949 bills

D. 6,215 bills

E. 12,500 bills

126.The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four days. At what point should resin be reordered?

A. 0 kilograms remaining

B. 50 kilograms remaining

C. 200 kilograms remaining

D. 400 kilograms remaining

E. 500 kilograms remaining

127.The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four days. If order size was 1,000 kilograms of resin, what would be the length of an order cycle?

A. .05 days

B. 4 days

C. 16 days

D. 20 days

E. 50 days

128.The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four days. If the order size was 1,000 kilograms of resin, what would be the average inventory level?

A. 50 kilograms

B. 200 kilograms

C. 500 kilograms

D. 800 kilograms

E. 1,000 kilograms

129.The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four days. If the order size was 1,000 kilograms of resin, what would be the daily total inventory costs, EXCLUDING the cost of the resin?

A. $5

B. $10

C. $20

D. $25

E. $40

130.The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four days. What is the economic order quantity for resin?

A. 50 kilograms

B. 100 kilograms

C. 250 kilograms

D. 500 kilograms

E. 1,000 kilograms

 

1. Flow-shop scheduling is used in high-volume systems.

True False

2. Line balancing is a major factor in the design and scheduling of low-volume systems because of batch processing.

True False

3. Scheduling in intermediate-volume systems has three basic issues: run size, timing, and sequence.

True False

4. When operations are often bottlenecked, additional planned idle time will improve the throughput in those areas.

True False

5. When orders exceed our capacity, priority rules are used to select which orders will be accepted.

True False

6. The term loading, as used in scheduling, refers to choosing the order in which jobs will be processed in low-volume systems.

True False

7. Loading is the determination of which work centers should perform which jobs.

True False

8. A Gantt chart is a basic scheduling tool that works best for high-volume systems.

True False

9. A Gantt chart is a basic scheduling tool that is most useful in low-volume systems.

True False

10. A schedule chart depicts the loading and idle times for a group of machines or departments.

True False

11. The output of the system cannot exceed the output of the bottleneck operation(s).

True False

12. The elimination of idle time on both bottleneck and non-bottleneck operations must be accomplished to optimize output.

True False

13. As long as the bottleneck operations are used effectively, idle time in non-bottleneck operations will not affect the overall productivity of the system.

True False

14. The quantity sent to a bottleneck operation could be split into two or more process batches to better utilize a bottleneck resource rather than process the entire batch.

True False

15. Splitting a large lot after one operation beyond a bottleneck operation would reduce the overall waiting time of the bottleneck operation.

True False

16. Input/output (I/O) control refers to monitoring the productivity changes since productivity is determined by the ratio of output to input.

True False

17. Infinite loading and finite loading are two major approaches used to load work centers.

True False

18. A schedule chart can be used to monitor job progress.

True False

19. The assignment model seeks an optimum matching of tasks and resources.

True False

20. Sequencing is concerned with the order in which jobs are done, while loading is concerned with assigning jobs to work centers or workstations.

True False

21. Priority rules are widely used to sequence jobs in high-volume systems.

True False

22. The assignment method is limited to a maximum of two jobs per resource.

True False

23. Priority rules generally assume that job setup cost is independent of processing sequence of jobs.

True False

24. In a single work center, makespan improvement can be accomplished by selecting the optimal sequencing rule.

True False

25. Priority rules are used in low-volume systems to identify an optimal processing sequence.

True False

26. The SPT priority rule always results in the lowest average completion time.

True False

27. Bottlenecks may shift with the passage of time, so that different operations become bottleneck operations at different times.

True False

28. If optimal sequencing through three work centers is desired, Johnson's rule II is used rather than Johnson's rule.

True False

29. In the decision-making hierarchy, scheduling decisions are the final step in the transformation process before actual output occurs.

True False

30. Makespan is the total time needed to complete a group of jobs.

True False

31. The theory of constraints has a goal of maximizing flow through the entire system.

True False

32. Similar to that in manufacturing, the service scheduling hierarchy begins with __________ and ends with _________.

A. aggregate planning; detailed daily scheduling

B. aggregate planning; master scheduling

C. master scheduling; detailed material planning

D. aggregate planning; detailed material planning

E. quarterly planning; monthly planning

33. Which of the following is present in the manufacturing scheduling hierarchy but is absent in the service scheduling hierarchy?

A. aggregate planning

B. materials planning

C. master scheduling

D. detailed, short-term scheduling

E. detailed, short-term planning

34. In theory of constraints scheduling, the __________ refers to the schedule and the __________ refers to inventory used to ensure that the bottleneck is never idle.

A. rope; drum

B. drum; rope

C. drum; buffer

D. buffer; drum

E. buffer; rope

35. In theory of constraints scheduling, the synchronization of the sequence of operations is referred to as the:

A. buffer.

B. bottleneck.

C. constraint.

D. rope.

E. drum.

36. To facilitate utilization of bottleneck operations, in theory of constraints scheduling ________ can be split into __________ to reduce waiting times.

A. bottleneck lots; nonbottleneck lots

B. transfer batches; process lots

C. sized lots; constrained lots

D. process batches; transfer batches

E. buffer lots; transfer lots

37. Ensuring that the constraining resource is used to its maximum is an example of constraint:

A. elevation.

B. subordination.

C. identification.

D. elimination.

E. exploitation.

38. Scheduling pertains to:

A. hiring workers.

B. process selection.

C. buying machinery.

D. timing the use of specific resources.

E. determining the lowest cost.

39. Which of the following is the last step in the capacity/scheduling chain?

A. product planning

B. process planning

C. capacity planning

D. aggregate planning

E. scheduling

40. Which of the following is not an example of a high-volume system?

A. aircraft manufacturing

B. magazine printing

C. petroleum refining

D. waste treatment

E. commercial donut baking

41. Which of the following is not usually a characteristic of successful high-volume systems?

A. smooth workflow through the system

B. customized output

C. rapid repair of breakdowns

D. minimal quality problems

E. reliable supply schedules

42. Primary considerations in scheduling high-volume systems involve:

(I) coordinating the flow of inputs.

(II) overcoming the disruptions to planned outputs.

(III) assigning workers to work centers.

A. I and III

B. I and II

C. II and III

D. I, II, and III

E. II only

43. Organizations with fixed, perishable capacity can benefit from:

A. yield management.

B. price increases.

C. constraints.

D. suboptimization.

E. waiting lines.

44. A work center can be a:

(I) machine.

(II) group of machines.

(III) department.

(IV) facility.

A. I, II, and III only

B. II and IV only

C. II and III only

D. I and III only

E. I, II, III, and IV

45. The EDD priority rule usually does well with regard to:

A. cost.

B. lateness.

C. overtime.

D. waste.

E. makespan.

46. Which of the following is not an assumption of priority rules?

A. The set of jobs is known: no new jobs arrive after processing begins.

B. Setup time is independent of processing sequence.

C. Finite loading is assumed.

D. Processing times are deterministic.

E. No machine breakdowns are assumed.

47. The two different approaches to load work centers in job-shop scheduling are:

A. load charts and schedule charts.

B. Gantt charts and assignment method.

C. infinite loading and finite loading.

D. linear programming and makespan.

E. infinite charting and finite charting.

48. The priority rule which will sequence jobs in the order they are received is:

A. EDD.

B. LIFO.

C. SPT.

D. CR.

E. FCFS.

49. A scheduling technique used to achieve an optimum, one-to-one matching of tasks and resources is:

A. the assignment method.

B. Johnson's rule.

C. the optimum production technology method.

D. the appointment method.

E. the reservation method.

50. In a task assignment situation, in how many different ways can five jobs be assigned to five machines?

A. 1

B. 5

C. 25

D. 120

E. 3,125

51. In an assignment method problem, if it takes Abe 3 hours to build a birdhouse and 4 hours for a doghouse, while Betty takes 4 hours for a birdhouse and 3 hours for a doghouse, what is the reduced cost (in hours) of assigning Abe to build the doghouse?

A. 0 hours

B. 1 hour

C. 2 hours

D. 3 hours

E. 4 hours

52. The following matrix shows relative costs for various job-machine combinations. Which set of pairs constitutes the minimum-cost solution using the assignment method?

A. 1-B, 2-C, 3-A

B. 1-B, 2-A, 3-C

C. 1-A, 2-C, 3-B

D. 1-A, 2-B, 3-C

E. 1-C, 2-A, 3-B

53. Based on the cost information given in the following table, which set of job-machine pairs reflects the minimum-cost solution using the Assignment method?

A. 1-B, 2-A, 3-C

B. 1-A, 2-B, 3-C

C. 1-C, 2-A, 3-B

D. 1-B, 2-C, 3-A

E. 1-C, 2-B, 3-A

54. Effective scheduling cannot:

A. yield cost savings and improved productivity.

B. reduce the need for expansion of facilities.

C. improve customer service.

D. eliminate the need to train employees.

E. improve patient care in medical settings.

55. The priority rule where jobs are processed according to the smallest ratio of due date to processing time is:

A. CR.

B. EEDD.

C. FCFS.

D. S/O.

E. SPT.

56. Scheduled due dates are the result of:

A. promises to customers.

B. MRP processing.

C. managerial decisions.

D. all of the choices.

E. our competitor's promises.

57. Which of the following is not a measure for judging the effectiveness of a schedule sequence?

A. average number of jobs at the work center

B. total number of jobs at the work center

C. average completion (flow) time

D. average job tardiness

E. total number of work centers per job

58. The purpose of cyclical scheduling is to:

A. eliminate weekends and holidays.

B. rotate schedules.

C. add flexible hours.

D. incorporate overtime.

E. observe work patterns.

59. Average completion (flow) time for a schedule sequence at a work center is:

A. the sum of processing time divided by the number of jobs.

B. the sum of jobs' flow times divided by the number of jobs.

C. overall flow time divided by total processing time.

D. total processing time plus total late time divided by number of jobs.

E. the sum of flow time plus total late time divided by number of jobs.

60. The scheduling sequencing rule which always results in the lowest average completion (flow) time is the:

A. first come, first served (FCFS) rule.

B. shortest processing time first (SPT) rule.

C. earliest due date first (EDD) rule.

D. least slack per operation first (S/O) rule.

E. run until slack happens (RUSH) rule.

61. Which sequencing rule is designed specifically to minimize job tardiness?

A. S/O

B. EDD

C. FCFS

D. SPT

E. LPT

62. A scheduling rule used for sequencing jobs through two work centers is:

A. critical ratio rule.

B. Johnson's rule.

C. slack per operation rule.

D. shortest processing time rule.

E. Pareto rule.

63. For the jobs listed below, which processing sequence would result using Johnson's rule?

A. c-a-d-b

B. b-d-a-c

C. a-b-c-d

D. d-c-b-a

E. c-a-b-d

64. What is the optimum job sequence for the jobs listed below using Johnson's rule?

A. e-g-f-d

B. d-g-f-e

C. d-f-g-e

D. e-d-f-g

E. f-e-d-g

65. A major difference between manufacturing and service systems in terms of scheduling is:

A. variability in arrival and service rates.

B. processing cost per unit.

C. the number of units to be processed.

D. length of processing time.

E. output rate.

66. Scheduling in service systems often takes the form of:

(I) appointment systems.

(II) reservation systems.

(III) makespan systems.

A. I only

B. II only

C. I and II only

D. III only

E. I, II, and III

67. Scheduling in service systems may involve scheduling:

(I) the workforce.

(II) the equipment.

(III) customers.

A. II only

B. I and II only

C. II and III only

D. I and III only

E. I, II, and III

68. One disadvantage of appointment systems is:

A. Capacity can be adjusted by varying hours.

B. The customer's desired time may be already taken.

C. People generally accept it as fair.

D. It can reduce customer waiting time.

E. Appointments do not have to be all the same length.

69. In an assignment model where there are fewer jobs than resources:

A. dummy jobs are needed to solve the problem.

B. dummy resources are needed to solve the problem.

C. the problem cannot be solved using an assignment model.

D. the problem will have multiple optimum solutions.

E. the simplex method must be used to solve the problem.

70. The following table contains information about five jobs waiting to be processed at work center number three.

The sequence that would result using the SPT rule is:

A. e-b-c-d-a.

B. c-a-b-e-d.

C. a-d-c-e-b.

D. d-e-b-a-c.

E. e-d-b-a-c.

71. The following table contains information about five jobs waiting to be processed at work center number three. Using the EDD rule, the sequence of jobs would be:

A. d-e-b-a-c.

B. a-d-c-b-e.

C. e-d-b-a-c.

D. a-d-c-e-d.

E. e-b-c-d-a.

72. There are four resources and four jobs to be done. The time required for each resource to do each job is as follows: After the row reduction, what is the reduced time for assigning resource 4 to Job D?

A. 0 hours

B. 2 hours

C. 3 hours

D. 6 hours

E. 9 hours

73. There are four resources and four jobs to be done. The time required for each resource to do each job is as follows: After the row and column reductions, what is the reduced time for assigning resource 4 to job D?

A. 0 hours

B. 2 hours

C. 3 hours

D. 6 hours

E. 9 hours

74. There are four resources and four jobs to be done. The time required for each resource to do each job is as follows: After the row and column reductions, what is the minimum number of lines needed to cover all of the zeroes?

A. 0 lines

B. 1 line

C. 2 lines

D. 3 lines

E. 4 lines

75. There are four resources and four jobs to be done. The time required for each resource to do each job is as follows: What is the optimal assignment of resources to jobs?

A. 1 to A; 2 to C; 3 to B; 4 to D

B. 1 to B; 2 to D; 3 to C; 4 to A

C. 1 to C; 2 to B; 3 to A; 4 to D

D. 1 to D; 2 to B; 3 to C; 4 to A

E. 1 to A; 2 to C; 3 to D; 4 to B

76. There are four resources and four jobs to be done. The time required for each resource to do each job is as follows: For the optimal schedule, what is the total number of hours required to complete these jobs?

A. 23 hours

B. 22 hours

C. 21 hours

D. 20 hours

E. 19 hours

77. The president of a consulting firm wants to minimize the total number of hours it will take to complete four projects for a new client. Accordingly, she has estimated the time it should take for each of her top consultants—Charlie, Betty, Johnny, and Rick—to complete any of the four projects, as follows: In how many different ways can she assign these consultants to these projects?

A. 4

B. 8

C. 16

D. 24

E. 256

78. The president of a consulting firm wants to minimize the total number of hours it will take to complete four projects for a new client. Accordingly, she has estimated the time it should take for each of her top consultants—Charlie, Betty, Johnny, and Rick—to complete any of the four projects, as follows: After the row and column reductions, what is the reduced time for assigning Rick to project D?

A. 0 hours

B. 8 hours

C. 10 hours

D. 9 hours

E. 22 hours

79. The president of a consulting firm wants to minimize the total number of hours it will take to complete four projects for a new client. Accordingly, she has estimated the time it should take for each of her top consultants—Charlie, Betty, Johnny, and Rick—to complete any of the four projects, as follows: What is the optimal assignment of consultants to projects?

A. Charlie to A; Betty to B; Johnny to C; Rick to D

B. Charlie to D; Betty to C; Johnny to B; Rick to A

C. Charlie to C; Betty to A; Johnny to D; Rick to B

D. Charlie to D; Betty to B; Johnny to C; Rick to A

E. Charlie to D; Betty to A; Johnny to C; Rick to B

80. The president of a consulting firm wants to minimize the total number of hours it will take to complete four projects for a new client. Accordingly, she has estimated the time it should take for each of her top consultants—Charlie, Betty, Johnny, and Rick—to complete any of the four projects, as follows: For the optimal schedule, what is the total number of hours it will take these consultants to complete these projects?

A. 53 hours

B. 46 hours

C. 50 hours

D. 61 hours

E. 54 hours

81. The owner/operator of the local franchise of Handyman, Inc., has four jobs to do today, shown in the order they were received: If he uses the first come, first served priority rule to schedule these jobs, what will be the average completion time?

A. 7.5 hours

B. 5 hours

C. 3 hours

D. 2.5 hours

E. 2 hours

82. The owner/operator of the local franchise of Handyman, Inc., has four jobs to do today, shown in the order they were received: If he uses the earliest due date first priority rule to schedule these jobs, what will be the average job tardiness?

A. 0 hours

B. 1.5 hours

C. 1.75 hours

D. 2 hours

E. 2.25 hours

83. The owner/operator of the local franchise of Handyman, Inc., has four jobs to do today, shown in the order they were received: If he uses the shortest processing time first priority rule to schedule these jobs, what will be the average completion time?

A. 7.5 hours

B. 5 hours

C. 3 hours

D. 2.5 hours

E. 2 hours

84. The owner/operator of the local franchise of Handyman, Inc., has four jobs to do today, shown in the order they were received: If he uses the shortest processing time first priority rule to schedule these jobs, what will be the average job tardiness?

A. 0 hours

B. 1.5 hours

C. 1.75 hours

D. 2 hours

E. 2.25 hours

85. The owner/operator of the local franchise of Handyman, Inc., has four jobs to do today, shown in the order they were received: If he uses the shortest processing time first priority rule to schedule these jobs, what will be the average number of jobs in his shop today?

A. 0

B. 1

C. 2

D. 3

E. 4

86. Eva, the owner of Eva's Second Time Around Wedding Dresses, currently has five dresses to be altered, shown in the order in which they arrived: If Eva uses the first come, first served priority rule to schedule these jobs, what will be the average completion time?

A. 3 hours

B. 5 hours

C. 7 hours

D. 7.2 hours

E. 8 hours

87. Eva, the owner of Eva's Second Time Around Wedding Dresses, currently has five dresses to be altered, shown in the order in which they arrived: If Eva uses the earliest due date first (EDD) priority rule to schedule these jobs, what will be the average job tardiness?

A. 2 hours

B. 2.2 hours

C. 2.33 hours

D. 2.4 hours

E. 3 hours

88. Eva, the owner of Eva's Second Time Around Wedding Dresses, currently has five dresses to be altered, shown in the order in which they arrived: If Eva uses the shortest processing time first (SPT) priority rule to schedule these jobs, what will be the average completion time?

A. 3 hours

B. 5 hours

C. 7 hours

D. 7.2 hours

E. 8 hours

89. Eva, the owner of Eva's Second Time Around Wedding Dresses, currently has five dresses to be altered, shown in the order in which they arrived: If Eva uses the shortest processing time first priority rule to schedule these jobs, what will be the average job tardiness?

A. 2 hours

B. 2.2 hours

C. 2.33 hours

D. 2.4 hours

E. 3 hours

90. Eva, the owner of Eva's Second Time Around Wedding Dresses, currently has five dresses to be altered, shown in the order in which they arrived: If Eva uses the shortest processing time first priority rule to schedule these jobs, what will be the average number of jobs in her shop today?

A. 2 jobs

B. 2.33 jobs

C. 2.4 jobs

D. 2.67 jobs

E. 3 jobs

91. The operations manager of a body and paint shop has five cars to schedule for repair. He would like to minimize the throughput time to complete all work on these cars. Each car requires body work prior to painting. The estimates of the times required to do the body paint work on each are as follows: Where in the optimum sequence should car E be scheduled?

A. first

B. second

C. third

D. fourth

E. fifth

92. The operations manager of a body and paint shop has five cars to schedule for repair. He would like to minimize the throughput time to complete all work on these cars. Each car requires body work prior to painting. The estimates of the times required to do the body paint work on each are as follows: Where in the optimum sequence should car A be scheduled?

A. first

B. second

C. third

D. fourth

E. fifth

93. The operations manager of a body and paint shop has five cars to schedule for repair. He would like to minimize the throughput time to complete all work on these cars. Each car requires body work prior to painting. The estimates of the times required to do the body paint work on each are as follows: What is the optimum sequence (first car to last)?

A. A; B; C; D; E

B. E; D; C; B; A

C. E; B; D; C; A

D. E; D; B; C; A

E. E; B; D; A; C

94. The operations manager of a body and paint shop has five cars to schedule for repair. He would like to minimize the throughput time to complete all work on these cars. Each car requires body work prior to painting. The estimates of the times required to do the body paint work on each are as follows: What is the throughput time for the optimal schedule?

A. 24 hours

B. 25 hours

C. 26 hours

D. 28 hours

E. 50 hours

95. The operations manager of a body and paint shop has five cars to schedule for repair. He would like to minimize the throughput time to complete all work on these cars. Each car requires body work prior to painting. The estimates of the times required to do the body paint work on each are as follows: What is the idle time at the paint work center for the optimal schedule?

A. 1 hour

B. 2 hours

C. 4 hours

D. 7 hours

E. 10 hours

96. Job X, which has a duration of four days, is due by the close of business on Friday, December 23. Without looking at the work already scheduled on X's required resource, the scheduler schedules X to be begun on the morning of Tuesday, December 20. This is an example of:

A. infinite scheduling.

B. finite scheduling.

C. forward scheduling.

D. backward scheduling.

E. prioritization.

97. Job X, which has a duration of four days, is due by the close of business on Friday, December 23. Without looking at the work already at X's required resource, the scheduler schedules X to be begun immediately and assumes that X will be done four days from now. This is an example of:

A. infinite scheduling.

B. finite scheduling.

C. forward scheduling.

D. backward scheduling.

E. prioritization.

98. Job X arrived at work center Q at noon. At 2 p.m. that same day X was begun. X left work center Q at 3:15 p.m. that same day. X's flow time, in minutes, was:

A. 195.

B. 120.

C. 75.

D. 60.

E. Cannot be determined.

99. Which of the following is critical to effective yield management?

A. one-price pricing

B. forecasting

C. capacity flexibility

D. constant demand

E. trained service personnel

100.Which of the following is least likely to be a consideration when scheduling a high-volume system?

A. equipment failures

B. material shortages

C. accidents

D. worker absences

E. demand variability

 

 

1. The goal of maintenance is to minimize cost.

True False

2. The goal of maintenance is to maintain the productive system in good working order while minimizing or eliminating the cost of preventive maintenance.

True False

3. Breakdown maintenance includes activities such as equipment inspection and adjustment.

True False

4. Degree of technology is a factor affecting the decision of how much preventive maintenance is desirable.

True False

5. Breakdown maintenance is best performed on a regularly scheduled basis.

True False

6. One basis for scheduling preventive maintenance is passage of time.

True False

7. Ideally, preventive maintenance will be performed before a breakdown or failure.

True False

8. In the broadest sense, preventive maintenance extends back to the installation stage of equipment and facilities.

True False

9. Pareto analysis (using the 80/20 rule) is one method of determining when preventive maintenance activities should be performed.

True False

10. In the area of maintenance, the Pareto phenomenon is reflected in the fact that, regardless of problem classification, all equipment will justify about the same expense.

True False

11. As a piece of equipment begins to break down more often, the manager is often faced with a trade-off in which __________ are weighed against the __________.

A. failure rates; maintenance probabilities

B. maintenance intervals; maintenance programs

C. operating costs; variable costs

D. replacement costs; continued maintenance costs

E. fixed costs; maintenance costs

12. Suppose that for a particular piece of machinery, the frequency distribution of monthly breakdowns is as follows: The cost of a breakdown is $2,000, and the cost of a preventive maintenance program is $2,000 per month. If the preventive maintenance program is adopted, the probability of a machine breakdown is negligible. How much better off per month would the firm be if it adopted preventive maintenance?

A. $100 worse off

B. $200 worse off

C. $100 better off

D. $200 better off

E. $2,000 better off

13. Suppose that for a particular piece of machinery, the frequency distribution of monthly breakdowns is as follows: The cost of a breakdown is $2,000, and the cost of a preventive maintenance program is $2,000 per month. If the preventive maintenance program is adopted, the probability of a machine breakdown is negligible. How much better off per month would the firm be if it adopted preventive maintenance?

A. $100 worse off

B. $200 worse off

C. $100 better off

D. $200 better off

E. $2,000 better off

14. Suppose that the average time before breakdown is normally distributed with a mean of 2.5 weeks and a standard deviation of .4 weeks. If breakdowns cost an average of $1,200 and preventive maintenance costs $800, what is the optimal maintenance interval?

A. Every .67 weeks

B. Every .33 weeks

C. Every 2.67 weeks

D. Every 3.25 weeks

E. Every 3.12 weeks

15. Maintenance activities are often organized into the following two groups:

A. breakdown maintenance and preventive maintenance

B. breakdown maintenance and predictive maintenance

C. preventive maintenance and predictive maintenance

D. equipment maintenance and breakdown maintenance

E. equipment maintenance and buildings maintenance

16. Breakdown maintenance is _____________; preventive maintenance is _________.

A. reactive; proactive

B. proactive; reactive

C. expensive; inexpensive

D. inexpensive; expensive

E. easy; hard

17. The goal of maintenance is to maintain the productive system in good working order while minimizing:

A. total preventive maintenance costs.

B. total breakdown maintenance costs.

C. total maintenance costs.

D. the difference between preventive and breakdown costs.

E. the ratio of breakdown to preventive maintenance costs.

18. ___________ is most closely associated with breakdown maintenance.

A. Equipment adjustment

B. Equipment cleaning

C. Equipment inspection

D. Repair of broken parts

E. Replacement of worn parts

19. Factors affecting the decision of how much preventive maintenance is desirable typically include all of the following except:

A. age of equipment.

B. type of product.

C. degree of technology.

D. type of production process.

E. how critical to the production process.

20. Cost of equipment breakdown does not include:

A. loss of output.

B. cost of idle workers.

C. damage to other equipment.

D. replacement costs.

E. potential safety hazard.

21. The optimum amount of preventive maintenance occurs when:

A. total breakdown costs are at a minimum.

B. total preventive maintenance costs are at a minimum.

C. each maintenance component cost is at a minimum.

D. total maintenance costs are at a maximum.

E. total maintenance costs are at a minimum.

22. The type of maintenance which is periodic in nature is:

A. breakdown maintenance.

B. predictive maintenance.

C. preventive maintenance.

D. corrective maintenance.

E. all of the choices.

23. Preventive maintenance is generally scheduled on the basis of:

A. planned inspections.

B. passage of time.

C. number of operating hours.

D. all of the choices.

E. none of the choices.

24. Ideally, preventive maintenance will be performed:

A. after a planned inspection.

B. after the passage of a specified period of time.

C. after a predetermined number of operating hours.

D. just prior to the start of the workday.

E. just prior to a breakdown or failure.

25. Attempting to determine when preventive maintenance activities should be performed is called:

A. breakdown maintenance.

B. forecastive maintenance.

C. preventive maintenance.

D. predictive maintenance.

E. corrective maintenance.

26. "Total productive maintenance" is best described as:

A. avoiding all breakdown maintenance.

B. doing a great deal of preventive maintenance to try to avoid breakdown maintenance.

C. a JIT approach that takes advantage of cross-training.

D. extending preventive maintenance back to design.

E. none of these.

27. In the broadest sense, equipment and facilities preventive maintenance extends back to the:

A. design and selection stage.

B. procurement stage.

C. installation stage.

D. pilot-testing stage.

E. implementation stage.

28. The major approaches used in plans to deal with breakdowns include all of the following except:

A. standby equipment.

B. inventories of spare parts.

C. operator repair of minor problems.

D. readily available repair personnel.

E. All are major approaches.

29. In the area of maintenance, the Pareto phenomenon is reflected in the fact that:

A. all equipment justifies about the same expense.

B. a majority of equipment will justify considerable expense.

C. a few pieces of equipment will justify little expense.

D. a few pieces of equipment will justify considerable expense.

E. no piece of equipment will justify major expense; it's better to replace.

30. Reactive maintenance is _____________ maintenance.

A. planned

B. after the event

C. proactive

D. predictive

E. preventive

31. The total maintenance curve (preventive maintenance cost plus breakdown and repair cost):

A. slopes up as the number of preventive maintenances increases.

B. slopes down as the number of preventive maintenances increases.

C. starts low, increases rapidly, and then drops back down as the number of preventive maintenances increases.

D. starts high, drops gradually, but then goes back up as the number of preventive maintenances increases.

E. remains relatively flat as the number of preventive maintenances increases.

32. The average time before breakdown of a machine is normally distributed and has a mean of nine weeks and a standard deviation of 1.5 weeks. If breakdown cost averages $1,500 and preventive maintenance costs $500, what is the optimal preventive maintenance interval?

A. 3.8 weeks

B. 8.4 weeks

C. 9.6 weeks

D. 6.9 weeks

E. 7.2 weeks

33. The average time before breakdown of a machine is normally distributed and has a mean of 18 weeks and a standard deviation of three weeks. If breakdown cost averages $2,000 and preventive maintenance costs $1,400, what is the optimal preventive maintenance interval?

A. 16.4 weeks

B. 14.6 weeks

C. 16.9 weeks

D. 19.6 weeks

E. 21.3 weeks

34. Which of the following is the primary consideration with regard to preventive maintenance?

A. what technology to use

B. how varied the maintenance will be

C. how often the maintenance will occur

D. which products it will be provided to

E. who will do it

35. Which of the following would not improve the performance of a breakdown program?

A. more trained personnel

B. short lead times for replacement parts

C. standby equipment

D. cross-training repair personnel

E. reducing inventories of spare parts

36. Breakdown programs often are prioritized such that some equipment gets a lot of attention and other equipment gets very little. This typically reflects the fact that breakdowns are consistent with:

A. Pareto phenomena.

B. production interruptions.

C. supply disturbances.

D. cross-trained workers.

E. lean operations.

 

1. A company's supply chain involves the flow of materials and information from suppliers, through production, to the end users.

True False

2. In supply chain organizations, functions must operate independently of each other.

True False

3. In purchasing, one's only ethical obligation is to one's suppliers.

True False

4. Using third-party logistics involves using your organization's logistics function to ship to customers that are not officially part of the supply chain.

True False

5. Every business organization is part of at least one supply chain.

True False

6. Frequent deliveries of small shipments can reduce inventory but also result in an increase in the transportation cost per unit.

True False

7. The materials in the supply chain flow toward the end of the chain, while the information and the dollars move toward the beginning of the chain.

True False

8. Managing supply chain visibility involves making sure that potential supply chain partners are aware of your organization's needs.

True False

9. The goal of supply chain management is to synchronize supply and demand of all of the organizations that are part of the chain.

True False

10. The need for supply chain management increases as globalization increases.

True False

11. The design of the supply chain and establishing partnerships with vendors and distributors are examples of operational issues in a supply chain.

True False

12. Traffic management refers to truck movement within our parking areas.

True False

13. One of the major reasons for a company to adopt third-party logistics is to concentrate on one's core business.

True False

14. E-commerce refers to the use of electronic technology to facilitate business transactions.

True False

15. E-commerce involves business-to-business (B2B) interaction only.

True False

16. Disintermediation refers to the phenomenon that the traditional retailer or service provider is reduced or eliminated in a supply chain.

True False

17. Most people working for a business organization are somehow involved with the supply chain of that business.

True False

18. Strategic partnering is encouraged when two or more business organizations have complementary products or services that would benefit the others.

True False

19. Forming strategic partnerships is beneficial for two or more business organizations that have the same products or services.

True False

20. Inventory velocity refers to the average speed (in miles/hour) of material handling equipment in a warehouse.

True False

21. Global supply chains make purchasing easier because there are more options.

True False

22. Centralized or decentralized purchasing is directly related to the size of an organization.

True False

23. The optimization of the supply chain uses a mathematical model to determine the optimal number of business organizations to be included in the chain.

True False

24. Information technology is the key to success of global supply chains.

True False

25. Bullwhip effect refers to a phenomenon in which demand variations that exist at the customer end of the supply chain are magnified as orders are generated back through the supply chain.

True False

26. Starting with the final customer and moving backward through the supply chain, batch sizes and the level of safety stock tend to decrease.

True False

27. Scheduling and maintaining equipment are operational decisions.

True False

28. To avoid temporary storage in a warehouse, cross-docking can be used.

True False

29. Delayed differentiation is a means of increasing product variety without building the customized product from scratch or keeping large inventories of custom products.

True False

30. Returned goods are part of reverse logistics.

True False

31. A 30 percent reduction in product and service variety will not affect the efficiency of a supply chain.

True False

32. The service function of purchasing interfaces with many areas, including legal, accounting, and engineering functions.

True False

33. Gatekeeping manages the cost of shipping returned goods.

True False

34. Outsourcing logistics gives a company less flexibility because it forces them to focus more on core businesses.

True False

35. Vendor analysis examines the function of purchased parts and materials with a view toward improvement or cost reduction.

True False

36. Using third-party fulfillment means losing control of fulfillment.

True False

37. Price is the primary determining factor in choosing a vendor since most products are essentially the same.

True False

38. RFID eliminates the need for counting and bar-code scanning.

True False

39. The importance of purchasing relates only to the cost of parts and materials purchased, which is often 60 percent or more of the cost of finished goods.

True False

40. Important factors in purchasing include the cost of goods purchased, the quality of goods and services, and the timing of deliveries of goods or services.

True False

41. Vendor analysis is the process that evaluates the source of supply in terms of price, quality, reputation, and service.

True False

42. In e-commerce, the front-end design is significantly more important than the back-end design.

True False

43. One disadvantage to RFID is that it requires a clear "line of sight" to operate.

True False

44. Decentralized purchasing can usually offer quicker response than centralized purchasing.

True False

45. Some firms have structured their procurement function to include both centralized and decentralized purchasing.

True False

46. Creating an effective supply chain requires linking the marketing, distribution, and supplier channels.

True False

47. An advantage of decentralized purchasing is the attention given to local needs.

True False

48. Event management is the advanced planning required for major performances such as concerts or conferences.

True False

49. Strategies to address supply chain risks include:

(I) risk avoidance.

(II) risk reduction.

(III) risk projection.

(IV) risk sharing.

A. I, II, and IV only

B. II and III only

C. I and IV only

D. II and IV only

E. I, II, III, and IV

50. Which of the following, while desirable from some perspectives, might actually increase the risk of supply chain reductions?

(I) fewer supply chain partners

(II) a shorter supply chain

(III) greater supply chain visibility

A. I and II only

B. II and III only

C. I and III only

D. I only

E. I, II, and III

51. One of the biggest ethical risks in supply chain management is that the __________ supply chain member tends to be the one that suffers the blame and/or lost goodwill when something goes wrong.

A. most responsible

B. buying

C. most visible

D. supplying

E. most ethical

52. The more __________ a company's supply chain, the more difficult it is to ensure that the supply chain is managed ethically.

A. interconnected

B. global

C. visible

D. shortened

E. competitive

53. It is especially the case for small businesses that closer interactions and increased agility make __________ relatively more attractive.

A. domestic suppliers

B. centralized purchasing

C. global suppliers

D. decentralized purchasing

E. risk transfer

54. Which of these aspects of supply chain management are especially concerning to small business?

(I) customer reliability

(II) inventory management

(III) purchasing costs

(IV) risk management

(V) international trade

A. III, IV, and V only

B. I, II, and III only

C. I, III, and IV only

D. I and II only

E. II, IV, and V only

55. Which of the following is not a goal of supply chain management?

A. fewer suppliers and long-term relationships

B. small lot sizes

C. on-time deliveries

D. lowest possible transportation costs

E. delivery often to the place of use

56. Logistics includes all of these except:

A. the movement of materials within a production facility.

B. incoming shipments of goods or materials.

C. outgoing shipments of goods or materials.

D. customer selection.

E. returned goods processing.

57. Small changes in consumer demand can result in large variations in orders placed because of the:

A. supply chain.

B. safety stock requirement.

C. lead time effect.

D. bullwhip effect.

E. FCFS scheduling.

58. RFID chips:

(I) are used to track goods in distribution.

(II) are used to track job progress in production.

(III) are used to provide special instructions to operators.

(IV) can be used in inventory record keeping.

A. II and III only

B. I and II only

C. II, III, and IV

D. I, II, and IV

E. IV only

59. Which of the following is not a benefit of RFID?

A. increased productivity

B. elimination of paperwork

C. frequent deliveries of smaller shipments

D. reduction in clerical labor

E. increased accuracy

60. A factor that makes it desirable for business organizations to actively manage their supply chains is:

A. more potential vendors.

B. increasing globalization.

C. downsizing.

D. the Internet.

E. RFIDs.

61. Which of the following is not a benefit of effective supply chain management?

A. lower inventory costs

B. higher productivity

C. shorter lead times

D. greater customer loyalty

E. larger number of suppliers

62. Which of the following is not a measure of the reliability of the supply chain?

A. supply chain response time

B. on-time delivery

C. fill rate

D. lead time variability

E. improving e-fulfillment statistics

63. The automatic identification of material is part of/facilitated by:

A. holding costs.

B. RFID.

C. working capital reduction.

D. net present value calculations.

E. vendor analysis.

64. Which of the following is not an application of E-business?

A. Internet buying and selling

B. e-mail

C. order and shipment tracking

D. electronic data interchange (EDI)

E. universal product codes

65. Which of the following is an advantage of E-business?

(I) reduction of transaction costs

(II) shortened supply chain response time

(III) greater customer loyalty

A. I

B. II

C. I and II

D. II and III

E. I, II, and III

66. Which of the following is a barrier to the integration of separate organizations in the supply chain?

(I) conflicting objectives of the companies in the chain

(II) different capacity levels of the companies in the chain

(III) reluctance of the organizations in the chain to allow other organizations access to their data

A. I only

B. I and II

C. II and III

D. I and III

E. I, II, and III

67. _________ has/have helped firms to concentrate on their core business.

A. Supply chains

B. Scheduling

C. Outsourcing

D. ERP

E. Lean production

68. Outsourcing followed by __________ is not simple.

A. integration

B. unionization

C. backsourcing

D. computerization

E. just-in-time

69. The interface between the firm and its suppliers is:

A. purchasing.

B. production.

C. distribution.

D. engineering.

E. accounting.

70. The two types of decisions that are relevant to supply chain management are:

A. short- and long-term.

B. domestic and international.

C. location and layout.

D. in-sourcing and outsourcing.

E. tactical and operational.

71. One important objective of purchasing is to:

A. set quality standards for purchased items.

B. be knowledgeable about new products.

C. maintain numerous sources of supply.

D. obtain the lowest prices on all purchased items.

E. determine the processes that should be used.

72. The purchasing cycle begins with:

A. selecting a supplier.

B. placing an order.

C. evaluating potential vendors.

D. conducting a value analysis.

E. receiving a requisition.

73. Examination of the sources of supply for purchased parts or materials in order to improve performance is called:

A. vendor analysis.

B. value analysis.

C. negotiated purchasing.

D. reverse engineering.

E. disintegration.

74. Vendor analysis has the greatest potential for savings for items which have:

A. low cost per unit.

B. low annual cost-volume.

C. high cost per unit.

D. high annual usage.

E. high annual cost-volume.

75. Which of the following is not true of vendor analysis?

A. It involves an examination of the function of purchased parts or raw materials.

B. Its purpose is to reduce costs and/or improve performance of purchased goods or services.

C. It is usually performed only periodically.

D. Representatives from design and operations may work with purchasing.

E. If improvements are identified, purchasing implements those that purchasing agrees are justified.

76. Which of the following is not a performance driver?

A. quality

B. cost

C. stability

D. velocity

E. flexibility

77. Which of the following would not usually be a main factor in selecting a vendor?

A. location

B. price

C. quality

D. inventory turnover

E. vendor services

78. Which of the following is part of the purchasing cycle?

(I) Purchasing selects a supplier.

(II) Orders from vendors are received.

(III) Purchasing receives a requisition.

A. II and III

B. I, II, and III

C. I only

D. I and II

E. I and III

79. Which of the following is least likely to be a key consideration when a company chooses a supplier?

A. lead time and on-time delivery

B. reputation and financial stability

C. value analysis

D. quality and quality assurance

E. flexibility of design change

80. Which of the following is not a benefit of centralized purchasing?

A. potential for quantity discounts

B. better service from suppliers

C. quick response to local needs

D. potential for use of purchasing specialists

E. supplier research

81. The purchasing perspective of the supplier as a partner is characterized by:

A. an emphasis on low prices.

B. one or a few suppliers.

C. low flexibility.

D. 100 percent inspection for quality.

E. low volume.

82. Vendor analysis is the examination of the _________ of purchased materials.

A. function

B. source

C. quality

D. cycle

E. quantity

83. Last quarter, a retailer sold 8,000 T-shirts, 7,000 of which were sold directly from on-hand inventory. This retailer's ________ was 88 percent.

A. fill rate

B. inventory yield

C. profit margin

D. inventory turnover

E. working yield

84. Which of the following is a principle required for ethical behavior in purchasing?

(I) loyalty to employer

(II) justice to those you deal with

(III) faith in your profession

A. III only

B. I only

C. II only

D. I, II, and III

E. II and III only

85. The activity which begins with a request from within the organization is:

A. outsourcing search.

B. purchasing cycle.

C. supplier selection.

D. order receipt.

E. supply chain management.

86. Our organization can obtain visibility to potential trading partners on the Internet by using:

A. C2C.

B. B2C.

C. B2B.

D. C2B.

E. 2BC.

87. Real-time information about product movement on store shelves could benefit from the use of:

A. batch processing.

B. economic order quantities.

C. statistical process control.

D. radio frequency identification tags.

E. infrared remote scanners.

88. The website and order fulfillment are essential features of:

A. delayed differentiation.

B. e-commerce.

C. Internet service providers.

D. inventory balancing.

E. market segmentation.

89. A given inventory item has a per-year holding cost of $500. One method of shipping this item is three days faster than the other, but it is $2.50 more per unit. Using the slower method would be __________ more expensive overall than using the faster method.

A. $1.08

B. $1.16

C. $2.37

D. $2.73

E. $1.61

1. In lean operations, input resources arrive for processing just as the preceding batch is completed

 2. A functioning MRP system is required prior to adopting lean planning and control systems. 
FALSE

 3. In a lean environment, anything not essential to the product or process is viewed as waste. 
TRUE

 4. The ultimate goal of lean operations is a system characterized by the smooth, rapid flow of materials. 
TRUE

 5. Although inventories are maintained, the goal of lean operations is to minimize safety stock. 
FALSE

 6. Lean operations are unable to easily handle changes of output or product mix. 
FALSE

 7. In the lean philosophy, producing more than two order quantities represents waste. 
FALSE

 8. The four building blocks of lean operations are: product design, process design, personnel/organizational elements, and manufacturing planning and control. 
TRUE

 9. Fast and simple are two common threads that run through the four building blocks of lean operations. 
TRUE

 10. Value-stream mapping is a technique focused on finding new ways of adding value for critical stakeholders such as customers. 
FALSE

 11. If a firm's product mix is 60% of product A and 20% each of products B and C, an optimal mix-model production schedule would be successive sequences of AAABC. 
FALSE

 12. Quality and highly capable production systems are requirements for the successful implementation of lean operations. 
TRUE

 13. The small lot-sizing policy works well in a situation where both holding costs and setup costs are high. 
FALSE

 14. The use of small lot sizes in lean operations is in conflict with the EOQ approach since setup costs tend to be significantly higher than holding costs. 
FALSE

 15. A basic requirement for operating with low inventories in lean systems is that major system problems must already have been solved and new problems will be solved as they appear. 
TRUE

 16. A benefit of small lot sizes in lean systems is that each product is produced less frequently. 
FALSE

 17. In the lean philosophy, the larger the lot size, the easier it is to schedule. 
FALSE

 18. Setup time and its associated cost can often be reduced by the use of group technology. 
TRUE

 19. Lean systems often use layouts that are based on group technology product requirements. 
TRUE

 20. The goal of lean operations is to produce output using fewer resources than traditional planning systems. 
TRUE

 21. "Autonomation" indicates that the firm is attempting to reduce its dependence on automated equipment. 
FALSE

 22. "Preventive maintenance" is additional maintenance done immediately after a breakdown has occurred to help prevent any further breakdowns. 
FALSE

 23. In the lean approach, inventories are reduced gradually, instead of eliminating inventories as rapidly as possible. 
TRUE

 24. One problem with lean operations is that they can lead to much frustration and disappointment of people on the shop floor due to the need for continuously monitoring and expediting resource availability. 
TRUE

 25. A real advantage of the lean philosophy is the reduction of co-ordination effort required. 
FALSE

 26. The lean philosophy recognizes that some work-in-process inventories are a necessary investment to allow for smooth work-flow. 
FALSE

 27. Preventive maintenance will eliminate the need to carry supplies of spare parts. 
FALSE

 28. A fundamental tenet of the lean philosophy is that workers are paid based on seniority. 
FALSE

 29. In lean operations, a responsibility of the cross-trained worker is to check the quality of the work of others. 
TRUE

 30. In lean operations, when work is completed at one work center, it is important to immediately move the completed work to the next work center to minimize idle time. 
FALSE

 31. In a "pull system," a quantity of inventory in front of a workstation indicates problems at that workstation. 
TRUE

 32. Limited WIP lowers inventory carrying costs but reduces flexibility. 
FALSE

 33. Engineering changes can be very disruptive to smooth operations and should not be made in the six month period following introduction of a new product. 
FALSE

 34. Kanban is the Japanese term for autonomation. 
FALSE

 35. Increased setup times equal increased work in process inventories. 
TRUE

 36. Kanban focuses on specific part numbers; CONWIP does not. 
TRUE

 37. Lean systems typically require that suppliers be able to provide large lots at periodic intervals. 
FALSE

 38. Lean purchasing requires frequent contract bidding by multiple sources to ensure the buyer of competitive prices. 
FALSE

 39. One way of reducing the number of suppliers to the organization is to limit contacts to only one or two tiers of suppliers. 
FALSE

 40. One major difference between the use of kanban and MRP II in scheduling the products to be built is that kanban is primarily a manual system while MRP II uses computers. 
TRUE

 41. A benefit of the lean philosophy is the flexibility to respond quickly to changing customer requirements. 
TRUE

 42. A benefit of lean systems is that lead times are increased allowing more time for processing. 
FALSE

 43. A successful conversion to a lean system requires that every vendor use lean approaches prior to the organization's implementation. 
FALSE

 44. The single-minute exchange of die is a system for reducing defective product. 
FALSE

 45. In a balanced system cycle time is equal to Takt time. 
TRUE

 46. It is important to lower the water (inventory) completely to expose all the rocks (problems). 
FALSE

 47. Successful lean implementation requires much more than slogans and idealistic goals such as zero inventories and zero defects. 
TRUE

 48. Lean concepts include large lots to take advantage of the economies of scale. 
FALSE

 49. Value-stream mapping is concerned strictly with the flow of materials through a production system. 
FALSE

 50. For a company with a product mix of 40% of product A and 30% each of products B and C, which of the following mixed-model sequences most reflects the lean philosophy? 
A. AABBCCAABC
B. ABCABCABCA
C. AAAABBBCCC
D. BCABCABCAB
E. BBBAACCCAA

 51. The lean philosophy suggests that workers are ¼ 
A. Assets
B. Liabilities
C. Interchangeable
D. Replaceable
E. To be phased out

 52. The ultimate goal of lean operations is to have: 
A. no in-process inventories
B. cross-trained workers capable of handling every process
C. a smooth, rapid flow of materials through the system
D. no setup times
E. all of the above

 53. Which one of the following is not one of the building blocks that is the foundation of the lean philosophy? 
A. product design
B. process design
C. personnel/organizational elements
D. manufacturing planning and control
E. kanban

 54. Building up an inventory of standard parts or modules instead of immediately producing the finished end items is the essence of: 
A. delayed differentiation
B. kanban
C. autonomation
D. andon
E. matrix management

 55. Which of the following would you not expect to see in a lean environment? 
A. a flexible system
B. minimum inventory
C. little waste
D. reduced setup times
E. a significant number of daily schedule changes

 56. The comprehensive approach used in lean systems to deal with quality includes: 
A. designing quality into products and processes
B. insisting vendors provide high quality materials
C. making workers responsible for producing high quality
D. A, B and C
E. 100% inspection of raw materials, work-in-process and finished goods

 57. Which of the following is not a benefit of small lot sizes in lean systems? 
A. In-process inventory is considerably less.
B. Each product is produced less frequently.
C. Carrying costs are reduced.
D. There is less clutter in the workplace.
E. Inspection and rework costs are less.

 58. In the lean philosophy, the ideal lot size is: 
A. the economic order quantity
B. the economic run size
C. one unit
D. the capacity of the standard container
E. N=(DT(1+X))/C

 59. Which of the following does not contribute to reduced setup time and cost? 
A. standardized setup tools
B. standardized setup equipment
C. custom setup procedures for each product
D. use of multipurpose equipment or attachments
E. use of group technology

 60. A conveyance __________ signals parts movement. 
A. Request
B. Routing
C. Bar code
D. Kanban
E. Kazian

 61. The term that refers to the automatic detection of defects is: 
A. kaizen
B. kanban
C. autonomation
D. automation
E. 100% inspection

 62. A basic requirement for operating with the low inventories present in lean systems is: 
A. Inventory space must be increased.
B. Inventory investment must be increased.
C. Major problems must be identified.
D. Major problems must have been solved.
E. Inventories must be reduced rapidly.

 63. Which of the following is not characteristic of preventive maintenance in lean systems? 
A. maintaining equipment in good operating condition
B. replacing parts when they are worn but before they fail
C. workers maintaining their own equipment
D. eliminating supplies of spare parts to reduce capital investment
E. perceiving breakdowns as an opportunity for improvement

 64. The Five S's don't include ¼ 
A. Sort
B. Straighten
C. Sanitize
D. Sweep
E. Standardize

 65. The Kaizen philosophy applies to ¼ 
A. Employee development
B. Safety stock
C. Waste
D. Supply Chain Management
E. MRP III

 66. A kanban card is used to signal that: 
A. work is needed at the work center
B. work is ready to be moved to the next station
C. a worker has run out of parts needed for further processing
D. a machine has broken down and needs immediate attention
E. a machine is ready for preventive maintenance

 67. With regard to suppliers, lean systems typically require: 
A. delivery of large lots at regular intervals
B. buyer inspection of goods and materials
C. multiple sources from which to purchase
D. long-term relationships and commitments
E. the lowest price possible

 68. Which of the following is characteristic of the lean philosophy? 
A. Inventories are an asset.
B. Lot sizes are optimized by formula.
C. Vendors are co-workers, essentially other departments of our organization.
D. Queues are a necessary investment.
E. all of the above

 69. The activities controlled in the same way by kanban and MRP II is the determination of: 
A. rates of output
B. products to be built
C. materials required
D. capacity required
E. feedback information

 70. Process design supporting lean doesn't include ¼ 
A. Production flexibility.
B. Duplicate facilities.
C. Setup time reduction.
D. Minimal inventory storage.
E. Small lot sizes

 71. Which of the following questions is not answered by value stream mapping? 
A. Where does waste occur?
B. Which processes or sub-processes exhibit the most variability?
C. Where are the best opportunities to extract more value from customers?
D. Where are process bottlenecks?
E. Where do errors occur?

 72. A successful conversion to a lean system requires that the conversion: 
A. be done as quickly as possible
B. begin at the start of the process and work forward
C. convert vendors to lean as one of the last steps
D. reduce setup times as one of the last steps
E. all of the above

 73. A potential obstacle to conversion to a lean system is: 
A. lack of management commitment
B. lack of worker cooperation
C. supplier resistance
D. all of the above
E. insufficient space to store the increased inventories

 74. A system of lights used at each workstation to signal problems or slowdowns is: 
A. command and control center
B. automation
C. andon
D. pull system
E. kanban

 75. Which of the following contributes to the competitive advantage enjoyed by firms using lean production? 
A. Backup employees to cover for absenteeism
B. 100% inspection to remove defects
C. Dedicated equipment to reduce unit costs
D. Safety stocks to prevent stock-outs
E. Greater flexibility to cope with change

 76. An operations strategy reflecting the lean philosophy of production should recognize that lean: 
A. is most suited for non-repetitive manufacturing
B. cannot be implemented sequentially
C. requires a wholesale commitment from the outset
D. may provide a competitive advantage
E. all of the above

 77. With regard to suppliers, lean systems typically involve: 
A. delivery of large lots on short notice
B. the highest quality at the lowest price
C. long-term relationships
D. multiple suppliers to assure continuous availability
E. dedicated staging areas for material

 78. A common objective of both MRP and the lean philosophy is to: 
A. smooth production
B. minimize inventory
C. obtain high quality
D. reduce overhead
E. eliminate inventory

 79. The ultimate objective in a lean system is: 
A. low to moderate levels of inventory
B. high quality, zero defects
C. minimal waste (less than 6%)
D. balanced and rapid flow
E. all of the above

 
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