# BUSI 411 Exam 2 Liberty University complete answers

BUSI 411 Exam 2 Liberty University complete answers

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· Question 1

3 out of 3 points

Which of the following is a key question in capacity planning?

·         Question 2

3 out of 3 points

Utilization is defined as the ratio of:

·         Question 3

3 out of 3 points

Given the following information, what would utilization be?

Effective capacity = 20 units per day
Design capacity = 60 units per day
Actual output = 15 units per day

·         Question 4

3 out of 3 points

An alternative will have fixed costs of \$10,000 per month, variable costs of \$50 per unit, and revenue of \$70 per unit. The break-even point volume is:

·         Question 5

3 out of 3 points

A Virginia county is considering whether to pay \$50,000 per year to lease a prisoner transfer facility in a prime location near Washington, D.C. They estimate it will cost \$50 per prisoner to process the paperwork at this new location. The county is paid a \$75 commission for each new prisoner they process. How many prisoners would they have to process annually to break even at this new location?

·         Question 6

3 out of 3 points

A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be \$.50 per load per meter moved. An analyst has prepared the following distances and flow matrices:

Distances (meters)
From/To
I
II
III
I
-
10
20
II

-
10
III

-

From/To
X
Y
Z
X
-
60
90
Y
40
-
160
Z
110
140
-

What is the distance (in meters) from area III to area I in this new facility?

·         Question 7

3 out of 3 points

QRS Corp. is designing a product layout for a new product. They plan to use this production line 10 hours a day in order to meet forecasted demand of 900 units per day. The following table describes the tasks necessary to produce this product:

Time(secs)
Immediate
Predecessor
a
34
none
b
20
a
c
10
b
d
16
b
e
10
c
f
24
d,e
g
38
f

For output to equal forecasted demand, what will be the efficiency of the production line that uses the least number of workstations?

·         Question 8

3 out of 3 points

What is it about job shops that make them appropriate for products in the introductory phase of their life cycle?

·         Question 9

3 out of 3 points

An operations strategy for process selection should recognize that:

·         Question 10

3 out of 3 points

Computer-aided manufacturing refers to the use of computers in:

·         Question 11

3 out of 3 points

Which of the following most closely describes job enlargement?

·         Question 12

3 out of 3 points

A methods and measurements analyst for Digital Devices needs to develop a time standard for the task of assembling a computer mouse. In a preliminary study, she observed one of her workers perform this task six times with the following results:

Observation
1
2
3
4
5
6
Time(Seconds)
46
38
40
34
42
40

What is the normal time for this task if the employee worked at a 20 percent faster pace than average?

·         Question 13

3 out of 3 points

The symbols for operation, storage, transportation, inspection, and delay would usually be found on which type of chart?

·         Question 14

3 out of 3 points

A methods and measurements analyst for Timepiece, Inc., needs to develop a time standard for the task of attaching a watch to a wristband. In a preliminary study, he observed one of his workers perform this task five times, with the following results:

Observation
1
2
3
4
5
Time(Seconds)
27
19
20
21
13

How many observations should be made if he wants to be 95.44 percent confident that the maximum error in the observed time is one second? Assume that the standard deviation of the task time is five seconds.

·         Question 15

3 out of 3 points

A methods and measurement analyst wants to develop a time standard for a certain task. In a preliminary study, he observed one worker perform the task six times with an average observed time of 20 seconds and a standard deviation of two seconds.

What is the normal time for this task if the employee worked at a 20 percent faster pace than average?

·         Question 16

3 out of 3 points

A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows:

Location
FC (annual)
VC (per unit)
Atlanta
\$
80,000

\$
20

Phoenix
\$
140,000

\$
16

What would the total annual costs be for the Phoenix location with an annual output of 10,000 units?

·         Question 17

3 out of 3 points

Nearness to raw materials would be most important to a:

·         Question 18

3 out of 3 points

Location choice I has monthly fixed costs of \$100,000 and per-unit variable costs of \$10. What would its total cost be at a monthly volume of 250 units?

·         Question 19

3 out of 3 points

A hardware distributor has regional warehouses at the locations shown below. The company wants to locate a new central distribution center to serve this warehouse network.

Location
(x, y)
A
2, 3
B
3, 7
C
5, 5
D
7, 3
E
8, 7

If weekly shipments to each warehouse will be approximately equal, what is the optimal location for the distribution center?

·         Question 20

3 out of 3 points

The center of gravity method is used to _______ travel time or shipping costs.

·         Question 21

3 out of 3 points

Capacity planning requires an analysis of needs: what kind, how much, and when.

·         Question 22

3 out of 3 points

The goal of line balancing is to assign tasks to workstations in such a way that the workstations have approximately equal time requirements.

·         Question 23

3 out of 3 points

Predetermined time standards use historical data from a company's own files.

·         Question 24

3 out of 3 points

Web-based, retail businesses should be located near the customer to reduce their long distance phone charges.

·         Question 25

3 out of 3 points

The fact that most types of firms are located in every section of the country suggests that in many cases, location decisions are not overly important; one location typically is as good as another.

·         Question 1

3 out of 3 points

The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for \$50,000. He figures it will cost an additional \$100 per cord to purchase and split wood with this machine, while he can sell each cord of split wood for \$125. If, for this machine, design capacity is 50 cords per day, effective capacity is 40 cords per day, and actual output is expected to be 32 cords per day, what would be its efficiency?

·         Question 2

3 out of 3 points

A Virginia county is considering whether to pay \$50,000 per year to lease a prisoner transfer facility in a prime location near Washington, D.C. They estimate it will cost \$50 per prisoner to process the paperwork at this new location. The county is paid a \$75 commission for each new prisoner they process. How many prisoners would they have to process annually to break even at this new location?

·         Question 3

3 out of 3 points

Improving cash flow would be a reasonable thing to focus on when trying to overcome a _________ constraint.

·         Question 4

3 out of 3 points

Which of the following is not a criterion for developing capacity alternatives?

·         Question 5

·         3 out of 3 points

The ratio of actual output to design capacity is:

·         Question 6

3 out of 3 points

Computer-integrated manufacturing integrates ______________ with manufacturing.

·         Question 7

3 out of 3 points

A company is designing a product layout for a new product. It plans to use this production line eight hours a day in order to meet projected demand of 480 units per day. The tasks necessary to produce this product are:

If the company wants the output rate to be equal to demand, what is the desired cycle time (in seconds)?

·         Question 8

3 out of 3 points

The maker of the world-famous Chocolate Chip Cookies needs to design a product layout for a new product, Mint Chocolate Chip. The company plans to use this new production line eight hours a day in order to meet projected demand of 1,440 cases per day. The following table describes the tasks involved in the production of a Mint Chocolate Chip Cookie.

Without considering projected demands, what is the minimum possible cycle time for this production line?

·         Question 9

3 out of 3 points

Process choice is _________ driven.

·         Question 10

3 out of 3 points

A company is designing a product layout for a new product. It plans to use this production line eight hours a day in order to meet projected demand of 480 units per day. The tasks necessary to produce this product are:

If the company wants the output rate to be equal to demand, what is the minimum number of workstations needed?

·         Question 11

3 out of 3 points

What is the effect of an increase in the desired confidence level on the number of observations necessary in a time study?

·         Question 12

3 out of 3 points

Asking a group of employees at a particular level to take on more responsibility is a form of ___________ loading, also known as job __________.

·         Question 13

3 out of 3 points

A methods and measurements analyst needs to develop a time standard for a certain task. In a preliminary study, he observed one of his workers perform this task five times, with the following results:

What is the standard time for this task if the employee worked at a 25 percent faster pace than average and an allowance of 20 percent of job time is used?

·         Question 14

3 out of 3 points

·         Question 15

3 out of 3 points

A methods and measurements analyst for Timepiece, Inc., needs to develop a time standard for the task of attaching a watch to a wristband. In a preliminary study, he observed one of his workers perform this task five times, with the following results:

What is the standard time for this task if the employee worked at a 20 percent faster pace than average, and an allowance of 20s percent of job time is used?

·         Question 16

3 out of 3 points

In regards to supply chain management and the location decision, a primary challenge is to address _______________ distribution.

·         Question 17

3 out of 3 points

The Skulls, a student social organization, has two different locations under consideration for constructing a new chapter house. The Skulls' president, a POM student, estimates that due to differing land costs, utility rates, etc., both fixed and variable costs would be different for each of the proposed sites, as follows:

What would be total annual costs for either location at the point of indifference?

·         Question 18

3 out of 3 points

A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows:

What would be the total annual costs at the point of indifference?

·         Question 19

3 out of 3 points

The method for evaluating location alternatives that uses their total cost curves is:

·         Question 20

3 out of 3 points

Which of the following is not a location option that management can consider in location planning?

·         Question 21

3 out of 3 points

An example of an external factor that influences effective capacity is government safety regulations.

·         Question 22

3 out of 3 points

Information technology refers to competitive data.

·         Question 23

3 out of 3 points

Work sampling can be used to estimate the proportion of time a machine is idle.

·         Question 24

3 out of 3 points

Web-based, retail businesses should be located near the customer to reduce their long distance phone charges.

·         Question 25

3 out of 3 points

Location decisions are basically one-time decisions usually made by new organizations.

Question 1 The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for \$50,000. He figures it will cost an additional \$100 per cord to purchase and split wood with this machine, while he can sell each cord of split wood for \$125. If, for this machine, design capacity is 50 cords per day, effective capacity is 40 cords per day, and actual output is anticipated to be 35 cords per day, what would be its utilization?

Question 2 Students at a major university must go through several registration steps. Officials have observed that it is typically the case that the waiting line at the fee-payment station is the longest. This would seem to suggest that the fee-payment station is the ___________ in the student registration process.

Question 3 The method of financial analysis which results in an equivalent interest rate is:

Question 4 Which of these factors would not be subtracted from design capacity when calculating effective capacity?

Question 5 Everything else being equal, a firm considering outsourcing can be reasonably certain that:

Question 6 A company needs to rebalance a product layout for producing new plastic license plates. They plan to use the assembly line six hours in order to meet projected demand of 2,160 license plates each day. The following table describes the tasks involved in the production of this product:

For output to equal projected demand, what will be the idle time at the second workstation of the assembly line that uses the minimum number of workstations?

Question 7 The maximum allowable cycle time is computed as:

Question 8 Although they do not guarantee optimal solutions, ______________ are useful in finding reasonable solutions when the number of possible options is overwhelming.

Question 9 Cellular layout is a term associated with:

Question 10 A production line is to be designed for a job with three tasks. The task times are .3 minutes, 1.4 minutes, and .7 minutes. The minimum cycle time in minutes is:

Question 11 The chart used to review the overall sequence of an operation by focusing on the movements of either the operator or materials is called a:

Question 12 Which sample proportion will require the largest number of work sampling observations?

Question 13 The owner of Touchdown Sports Bar wants to develop a time standard for the task of mixing a specialty cocktail. In a preliminary study, he observed one of his bartenders perform this task seven times with an average of 90 seconds and a standard deviation of five seconds. How many observations should be made if he wants to be 95.44 percent confident that the maximum error in the observed time is one second?

Question 14 A methods and measurements analyst needs to develop a time standard for a certain task. In a preliminary study, he observed one of his workers perform this task five times, with the following results:

What is the standard time for this task if the employee worked at a 25 percent faster pace than average and an allowance of 20 percent of job time is used?

Question 15 Determining the number of cycles to observe is an element of:

Question 16 Among the disadvantages of having global operations is/are:

Question 17 A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows:

At what annual output would the company be indifferent between the two locations?

Question 18 A location analysis has been narrowed down to three locations. The critical factors, their weights, and the ratings for each location are shown below:

What is the composite score for location B?

Question 19 In general, managing global operations is made easier by __________ and __________.

Question 20 Location choice I has monthly fixed costs of \$100,000 and per-unit variable costs of \$10. What would its total cost be at a monthly volume of 250 units?

Question 21 The term capacity refers to the maximum quantity an operating unit can process over a given period of time.

Question 22 The percentage of idle time in an assembly line is called cycle time.

Question 23 It would be acceptable to use a group incentive plan for an assembly line operation.

Question 24 Location decisions are basically one-time decisions usually made by new organizations.

Question 25 Retail businesses generally prefer locations that are not near other retailers, as this reduces their competition.

Question 1 Sensitivity analysis is required because:

Question 2 The operations manager for a well­drilling company must recommend whether to build a new facility, expand his existing one, or do nothing. He estimates that long­run profits (in \$000) will vary with the amount of precipitation (rainfall) as follows: If he uses the maximax criterion, which alternative will he decide to select?

Question 3 The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for \$50,000. He figures it will cost an additional \$100 per cord to purchase and split wood with this machine, while he can sell each cord of split wood for \$125. What would the potential profit be if he were to split 4,000 cords of wood with this machine?

Question 4 One local hospital has just enough space and funds currently available to start either a cancer or heart research lab. If administration decides on the cancer lab, there is a 20 percent chance of getting \$100,000 in outside funding from the American Cancer Society next year, and an 80 percent chance of getting nothing. If the cancer research lab is funded the first year, no additional outside funding will be available the second year. However, if it is not funded the first year, then management estimates the chances are 50 percent it will get \$100,000 the following year, and 50 percent that it will get nothing again. If, however, the hospital's management decides to go with the heart lab, then there is a 50 percent chance of getting \$50,000 in outside funding from the American Heart Association the first year and a 50 percent change of getting nothing. If the heart lab is funded the first year, management estimates a 40 percent chance of getting another \$50,000 and a 60 percent chance of getting nothing additional the second year. If it is not funded the first year, then management estimates a 60 percent chance for getting \$50,000 and a 40 percent chance for getting nothing in the following year. For both the cancer and heart research labs, no further possible funding is anticipated beyond the first two years. What is the expected value for the decision alternative to select the cancer lab?

Question 5 Consider the following decision scenario: *PV for profits (\$000) If P(high) is .60, the choice for maximum expected value would be:

Question 6 Daily capacity of a product layout is determined by:

Question 7 The type of processing system which is used for highly standardized products is:

Question 8 Product profiling links key product or service requirements to:

Question 9 A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be \$.50 per load meter moved. An analyst has prepared the following flow and distance matrices: What is the layout that will minimize the total distance loads will be moved each week?

Question 10 In which type of processing system would gasoline be produced from crude oil?

Question 11 Suppose the first unit of output required 900 labor hours, and the second unit required only 810. At this rate, how many more units must be produced before labor requirements are less than 700 hours?

Question 12 A manager wants to analyze the learning curve associated with producing one of his company's products. Accordingly, he has gathered the following data: What is the learning curve percentage?

Question 13 The owner of Kat Motel wants to develop a time standard for the task of cleaning a cat cage. In a preliminary study, she observed one of her workers perform this task six times, with the following results: How many observations should be made if she wants to be 95.44 percent confident that the maximum error in the observed time is two seconds? Assume that the standard deviation of the task time is six seconds.

Question 14 A manager wants to analyze the learning curve associated with producing one of his company's products. Accordingly, he has gathered the following data: Approximately how long will it take to produce the fifth through tenth units?

Question 15 Determining the number of cycles to observe is an element of:

Question 16 Which of the following is least important as a consideration for a firm at the beginning of a supply chain?

Question 17 Suppose a decision maker is confronted with the following transportation model scenario: What is the total cost of the optimal solution?

Question 18 For service firms such as banks and supermarkets, location decisions are critical elements of __________ strategy.

Question 19 Which of the following is the last step in the procedure for making location decisions?

Question 20 The Skulls, a student social organization, has two different locations under consideration for constructing a new chapter house. The Skulls' president, a POM student, estimates that due to differing land costs, utility rates, etc., both fixed and variable costs would be different for each of the proposed sites, as follows: What would be the total annual costs for the Alpha Ave. location with 20 persons living there?

Question 21 The break­even quantity can be determined by dividing the fixed costs by the difference between the revenue per unit and the variable cost per unit.

Question 22 A cafeteria line would be an example of a process­focused layout.

Question 23 Ergonomics is an important part of job design to consider when we automate the system.

Question 24 For service organizations, the dominant factors in location analysis usually are marketrelated.

Question 25 A strategy that emphasizes convenience for the customers would probably select a single very large facility.

36. If the minimum expected regret is computed, it indicates to a decision-maker the expected:
A. value of perfect information
B. payoff under certainty
C. monetary value
D. payoff under risk
E. none of the above

37. The term sensitivity analysis is most closely associated with:
A. maximax
B. maximin
C. decision-making under risk
D. minimax regret
E. Laplace criterion

38. A manager has developed the following payoff table that indicates the profits associated with a set of alternatives under two possible states of nature.

(A) If the manager uses maximin as the decision criterion, which of the alternatives would be indicated?
(B) If the manager uses minimax regret as the criterion, which alternative would be indicated?
(C) Determine the expected value of perfect information if P(S2) = .40.
(D) Determine the range of P(S2) for which each alternative would be optimal.

39. A manager's staff has compiled the information below which pertains to four capacity alternatives under four states of nature. Values in the matrix are present value in thousands of dollars.

(A) Assuming a maximax strategy, which alternative would be chosen?
(B) If maximin were used, which alternative would be chosen?
(C) If states of nature are equally likely and an expected value criterion of maximization is used, which alternative would be chosen?

40. A manager has learned that annual profits from four alternatives being considered for solving a capacity problem are projected to be \$15,000 for A, \$30,000 for B, \$45,000 for C, and \$60,000 for D if state of nature 1 occurs; and \$60,000 for A, \$80,000 for B, \$90,000 for C, and \$35,000 for D if state of nature 2 occurs.
(A) Assuming maximax is used, what alternative would be chosen?
(B) Assuming maximin is used, what alternative would be chosen?
(C) If P(State of Nature 1) is .40, what alternative has the highest expected monetary value?
(D) Determine the range of P(S2) for which each alternative would be optimal.

41. A manager is quite concerned about the recent deterioration of a section of the roof on a building that houses her firm's computer operations. According to her assistant there are three options which merit consideration: A, B, and C. Moreover, there are three possible future conditions that must be included in the analysis: I, which has a probability of occurrence of .5; II, which has a probability of .3; and III, which has a probability of .2.
If condition I materializes, A will cost \$12,000, B will cost \$20,000, and C will cost \$16,000. If condition II materializes, the costs will be \$15,000 for A, \$18,000 for B, and \$14,000 for C. If condition III materializes, the costs will be \$10,000 for A, \$15,000 for B, and \$19,000 for C.
(A) Draw a decision tree for this problem.
(B) Using expected monetary value, which alternative should be chosen?

*PV for profits (\$000)

42. The maximax strategy would be:
B. lease
C. rent
D. high
E. low

43. The maximin strategy would be:
B. lease
C. rent
D. high
E. low

44. The minimax regret strategy would be:
B. lease
C. rent
D. high
E. low

45. If P(high) is .60, the choice for maximum expected value would be:
B. lease
C. rent
D. high
E. low

*PV for profits (\$000)

46. The maximax strategy would be:
A. small
B. Medium
C. med.-large
D. large
E. ex-large

47. The maximin strategy would be:
A. small
B. Medium
C. med.-large
D. large
E. ex-large

48. The minimax regret strategy would be:
A. small
B. Medium
C. med.-large
D. large
E. ex-large

49. If yes and no are equally likely, which alternative has the largest expected monetary value?
A. small
B. Medium
C. med.-large
D. large
E. ex-large

*PV for profits (\$000)

50. The maximax strategy would be:
A. A
B. B
C. C
D. D
E. E

51. The maximin strategy would be:
A. A
B. B
C. C
D. D
E. E

52. The minimax regret strategy would be:
A. A
B. B
C. C
D. D
E. E

53. With equally likely states of nature, the alternative that has the largest expected monetary value is:
A. A
B. B
C. C
D. D
E. E

The new owner of a beauty shop is trying to decide whether to hire one, two, or three beauticians. She estimates that profits next year (in thousands of dollars) will vary with demand for her services and has estimated demand in three categories low, medium and high

54. If she uses the maximax criterion, how many beauticians will she decide to hire?
A. one
B. two
C. three
D. either one or two
E. either two or three

55. If she uses the Laplace criterion, how many beauticians will she decide to hire?
A. one
B. two
C. three
D. either one or two
E. either two or three

56. If she uses the minimax regret criterion, how many beauticians will she decide to hire?
A. one
B. two
C. three
D. either one or two
E. either two or three

57. If she feels the chances of low, medium, and high demand are 50%, 20%, and 30% respectively, what are the expected annual profits for the number of beauticians she will decide to hire?
A. \$54,000
B. \$55,000
C. \$70,000
D. \$80,000
E. \$135,000

58. If she feels the chances of low, medium, and high demand are 50%, 20%, and 30% respectively, what is her expected value of perfect information?
A. \$54,000
B. \$55,000
C. \$70,000
D. \$80,000
E. \$135,000

The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in \$000) will vary depending upon whether passenger demand is low, moderate, or high, as follows:

59. If he uses the maximin criterion, which size bus will he decide to purchase?
A. small
B. Medium
C. large
D. either small or Medium
E. either medium or large

60. If he uses the Laplace criterion, which size bus will he decide to purchase?
A. small
B. Medium
C. large
D. either small or Medium
E. either medium or large

61. If he uses the minimax regret criterion, which size bus will he decide to purchase?
A. small
B. Medium
C. large
D. either small or Medium
E. either medium or large

62. If he feels the chances of low, moderate, and high demand are 30%, 30%, and 40% respectively, what is the expected annual profit for the bus that he will decide to purchase?
A. \$15,000
B. \$61,000
C. \$69,000
D. \$72,000
E. \$87,000

63. If he feels the chances of low, moderate, and high demand are 30%, 30%, and 40% respectively, what is his expected value of perfect information?
A. \$15,000
B. \$61,000
C. \$69,000
D. \$72,000
E. \$87,000

The operations manager for a well-drilling company must recommend whether to build a new facility, expand his existing one, or do nothing. He estimates that long-run profits (in \$000) will vary with the amount of precipitation (rainfall) as follows:

64. If he uses the maximax criterion, which alternative will he decide to select?
A. do nothing
B. expand
C. build new
D. either do nothing or expand
E. either expand or build new

65. If he uses the Laplace criterion, which alternative will he decide to select?
A. do nothing
B. expand
C. build new
D. either do nothing or expand
E. either expand or build new

66. If he uses the minimax regret criterion, which alternative will he decide to select?
A. do nothing
B. expand
C. build new
D. either do nothing or expand
E. either expand or build new

67. If he feels the chances of low, normal, and high precipitation are 30%, 20%, and 50% respectively, what are expected long-run profits for the alternative he will select?
A. \$140,000
B. \$170,000
C. \$285,000
D. \$305,000
E. \$475,000

68. If he feels the chances of low, normal, and high precipitation are 30%, 20%, and 50% respectively, what is his expected value of perfect information?
A. \$140,000
B. \$170,000
C. \$285,000
D. \$305,000
E. \$475,000

The local operations manager for the Internal Revenue Service must decide whether to hire one, two, or three temporary tax examiners for the upcoming tax season. She estimates that net revenues (in thousands of dollars) will vary with how well taxpayers comply with the new tax code just passed by Congress, as follows:

69. If she uses the maximin criterion, how many new examiners will she decide to hire?
A. one
B. two
C. three
D. either one or two
E. either two or three

70. If she uses the Laplace criterion, how many new examiners will she decide to hire?
A. one
B. two
C. three
D. either one or two
E. either two or three

71. If she uses the minimax regret criterion, how many new examiners will she decide to hire?
A. one
B. two
C. three
D. either one or two
E. either two or three

72. If she feels the chances of low, medium, and high compliance are 20%, 30%, and 50% respectively, what are the expected net revenues for the number of assistants she will decide to hire?
A. \$26,000
B. \$46,000
C. \$48,000
D. \$50,000
E. \$76,000

73. If she feels the chances of low, medium, and high compliance are 20%, 30%, and 50% respectively, what is her expected value of perfect information?
A. \$16,000
B. \$26,000
C. \$46,000
D. \$48,000
E. \$50,000

The construction manager for Acme Construction, Inc. must decide whether to build single-family homes, apartments, or condominiums. He estimates annual profits (in \$000) will vary with the population trend as follows:

74. If he uses the maximin criterion, which kind of dwellings will he decide to build?
A. single family
B. apartments
C. condominiums
D. either single family or apartments
E. either apartments or condos

75. If he uses the Laplace criterion, which kind of dwellings will he decide to build?
A. single family
B. apartments
C. condos
D. either single family or apartments
E. either apartments or condos

76. If he uses the minimax regret criterion, which kind of dwellings will he decide to build?
A. single family
B. apartments
C. condos
D. either single family or apartments
E. either apartments or condos

77. If he feels the chances of declining, stable, and growing population trends are 40%, 50%, and 10%, respectively, which kind of houses will he decide to build?
A. single family
B. apartments
C. condos
D. either single family or apartments
E. either apartments or condos

78. If he feels the chances of declining, stable, and growing population trends are 40%, 50%, and 10%, respectively, what is his expected value of perfect information?
A. \$187,000
B. \$132,000
C. \$123,000
D. \$65,000
E. \$55,000

The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. She estimates that monthly profits will vary with demand for her cookies as follows:

79. If she uses the maximax criterion, what size outlet will she decide to lease?
A. small
B. Medium
C. large
D. either small or Medium
E. either medium or large

80. If she uses the maximin criterion, what size outlet will she decide to lease?
A. small
B. Medium
C. large
D. either small or Medium
E. either medium or large

81. If she uses the Laplace criterion, what size outlet will she decide to lease?
A. small
B. Medium
C. large
D. either small or Medium
E. either medium or large

82. If she uses the minimax regret criterion, what size outlet will she decide to lease?
A. small
B. Medium
C. large
D. either small or Medium
E. either medium or large

83. If she feels there is a 30% chance that demand will be high, what are the expected monthly profits for the outlet she will decide to lease?
A. \$1,600
B. \$1,100
C. \$1,000
D. \$900
E. \$500

84. If she feels there is a 30% chance that demand will be high, what is her expected payoff under certainty?
A. \$1,600
B. \$1,100
C. \$1,000
D. \$900
E. \$500

85. If she feels there is a 30% chance that demand will be high, what is her expected value of perfect information?
A. \$1,600
B. \$1,100
C. \$1,000
D. \$900
E. \$500

86. For what range of probability that demand will be high, will she decide to lease the small facility?
A. 0 - .25
B. 0 - .33
C. .25 - .5
D. .33 - 1
E. .5 - 1

87. For what range of probability that demand will be high, will she decide to lease the medium facility?
A. 0 - .25
B. 0 - .33
C. .25 - .5
D. .33 - 1
E. .5 - 1

88. For what range of probability that demand will be high, will she decide to lease the large facility?
A. 0 - .25
B. 0 - .33
C. .25 - .5
D. .33 - 1
E. .5 - 1

The advertising manager for Roadside Restaurants, Inc. needs to decide whether to spend this month's budget for advertising on print media, television, or a mixture of the two. She estimates that the cost per thousand "hits" (readers or viewers) will vary depending upon the success of the new cable television network she plans to use, as follows:

89. If she uses the maximax criterion, which advertising strategy will she use?
A. print
B. mixed
C. television
D. either print or mixed
E. either mixed or television

90. If she uses the maximin criterion, which advertising strategy will she use?
A. print
B. mixed
C. television
D. either print or mixed
E. either mixed or television

91. If she uses the Laplace criterion, which advertising strategy will she use?
A. print
B. mixed
C. television
D. either print or mixed
E. either mixed or television

92. If she uses the minimax regret criterion, which advertising strategy will she use?
A. print
B. mixed
C. television
D. either print or mixed
E. either mixed or television

93. If she feels that there is a 60% chance that the new cable network will be successful, what is her expected cost (per thousand "hits") for the strategy she will select?
A. \$3.40
B. \$4.60
C. \$8.00
D. \$9.00
E. \$10.00

94. If she feels that there is a 60% chance that the new cable network will be successful, what is her expected cost (per thousand "hits") under certainty?
A. \$3.40
B. \$4.60
C. \$8.00
D. \$9.00
E. \$10.00

95. If she feels that there is a 60% chance that the new cable network will be successful, what is her expected value (per thousand "hits") of perfect information?
A. \$3.40
B. \$4.60
C. \$8.00
D. \$9.00
E. \$10.00

96. For what range of probability that the new cable network will be successful will she select the print media strategy?
A. 0 - .4
B. 0 - .55
C. .4 - .7
D. .55 - 1
E. .7 - 1

97. For what range of probability that the new cable network will be successful will she select the mixed media strategy?
A. 0 - .4
B. 0 - .55
C. .4 - .7
D. .55 - 1
E. .7 - 1

98. For what range of probability that the new cable network will be successful will she select the television media strategy?
A. 0 - .4
B. 0 - .55
C. .4 - .7
D. .55 - 1
E. .7 - 1

The head of operations for a movie studio wants to determine which of two new scripts they should select for their next major production. (Due to budgeting constraints, only one new picture can be undertaken at this time.) She feels that script #1 has a 70 percent chance of earning about \$10,000,000 over the long run, but a 30 percent chance of losing \$2,000,000. If this movie is successful, then a sequel could also be produced, with an 80 percent chance of earning \$5,000,000, but a 20 percent chance of losing \$1,000,000. On the other hand, she feels that script #2 has a 60 percent chance of earning \$12,000,000, but a 40 percent chance of losing \$3,000,000. If successful, its sequel would have a 50 percent chance of earning \$8,000,000, but a 50 percent chance of losing \$4,000,000. Of course, in either case, if the original movie were a "flop," then no sequel would be produced.

99. What would be the total payoff if script #1 were a success, but its sequel were not?
A. \$15,000,000
B. \$10,000,000
C. \$9,000,000
D. \$5,000,000
E. \$-1,000,000

100. What is the probability that script #1 will be a success, but its sequel will not?
A. .8
B. .7
C. .56
D. .2
E. .14

101. What is the expected value of selecting script #1?
A. \$15,000,000
B. \$9,060,000
C. \$8,400,000
D. \$7,200,000
E. \$6,000,000

102. What is the expected value of selecting script #2?
A. \$15,000,000
B. \$9,060,000
C. \$8,400,000
D. \$7,200,000
E. \$6,000,000

103. What is the expected value for the optimum decision alternative?
A. \$15,000,000
B. \$9,060,000
C. \$8,400,000
D. \$7,200,000
E. \$6,000,000

One local hospital has just enough space and funds presently available to start either a cancer or heart research lab. If administration decides on the cancer lab, there is a 20 percent chance of getting \$100,000 in outside funding from the American Cancer Society next year, and an 80 percent chance of getting nothing. If the cancer research lab is funded the first year, no additional outside funding will be available the second year. However, if it is not funded the first year, then management estimates the chances are 50 percent it will get \$100,000 the following year, and 50 percent that it will get nothing again. If, however, Merciless's management decides to go with the heart lab, then there's a 50 percent chance of getting \$50,000 in outside funding from the American Heart Association the first year and a 50 percent change of getting nothing. If the heart lab is funded the first year, management estimates a 40 percent chance of getting another \$50,000 and a 60 percent chance of getting nothing additional the second year. If it is not funded the first year, then management estimates a 60 percent chance for getting \$50,000 and a 40 percent chance for getting nothing in the following year. For both the cancer and heart research labs, no further possible funding is anticipated beyond the first two years.

104. What would be the total payoff if the heart lab were funded in both the first and second years?
A. \$100,000
B. \$60,000
C. \$50,000
D. \$40,000
E. \$20,000

105. What is the probability that the heart lab will be funded in both the first and second years?
A. .4
B. .3
C. .2
D. .1
E. 0

106. What is the expected value for the decision alternative to select the cancer lab?
A. \$100,000
B. \$60,000
C. \$50,000
D. \$40,000
E. \$20,000

107. What is the expected value for the decision alternative to select the heart lab?
A. \$100,000
B. \$60,000
C. \$50,000
D. \$40,000
E. \$20,000

108. What is the expected value for the optimum decision alternative?
A. \$100,000
B. \$60,000
C. \$50,000
D. \$40,000
E. \$20,000

Two professors at a nearby university want to co-author a new textbook in either economics or statistics. They feel that if they write an economics book, they have a 50 percent chance of placing it with a major publisher, and it should ultimately sell about 40,000 copies. If they can't get a major publisher to take it, then they feel they have an 80 percent chance of placing it with a smaller publisher, with ultimate sales of 30,000 copies. On the other hand, if they write a statistics book, they feel they have a 40 percent chance of placing it with a major publisher, and it should result in ultimate sales of about 50,000 copies. If they can't get a major publisher to take it, they feel they have a 50 percent chance of placing it with a smaller publisher, with ultimate sales of 35,000 copies.

109. What is the probability that the economics book would wind up being placed with a smaller publisher?
A. .8
B. .5
C. .4
D. .2
E. .1

110. What is the probability that the statistics book would wind up being placed with a smaller publisher?
A. .6
B. .5
C. .4
D. .3
E. 0

111. What is the expected value for the decision alternative to write the economics book?
A. 50,000 copies
B. 40,000 copies
C. 32,000 copies
D. 30,500 copies
E. 10,500 copies

112. What is the expected value for the decision alternative to write the statistics book?
A. 50,000 copies
B. 40,000 copies
C. 32,000 copies
D. 30,500 copies
E. 10,500 copies

113. What is the expected value for the optimum decision alternative?
A. 50,000 copies
B. 40,000 copies
C. 32,000 copies
D. 30,500 copies
E. 10,500 copies

114. When a decision-making scenario involves two or more departments, if the individual departments pursue what is optimal for them, sometimes the overall organization suffers. This is an example of _____________.
A. subminimization
B. suboptimization
C. rational boundaries
D. decision making under risk
E. decision making under uncertainty

115. Which of the following is not a stage in the decision making process?
A. select the best alternative
B. develop suitable alternatives
C. analyze and compare alternatives
D. monitor the competition
E. specify objectives

116. Option A has a payoff of \$10,000 in environment 1 and \$20,000 in environment 2. Option B has a payoff of \$5,000 in environment 1 and \$27,500 in environment 2. Once the probability of environment 1 exceeds ______, option A becomes the better choice.
A. .40
B. .45
C. .50
D. .57
E. .60

117. Option A has a payoff of \$10,000 in environment 1 and \$20,000 in environment 2. Option B has a payoff of \$12,500 in environment 1 and \$17,500 in environment 2. Once the probability of environment 2 exceeds ______, option A becomes the better choice.
A. .33
B. .67
C. .45
D. .50
E. .55

118. Which of the following would make decision trees an especially attractive decision making tool?
A. The need to think through a possible sequence of decisions
B. The need to maximize the expected value of perfect information
C. The need to minimize expected regret
D. The need to avoid suboptimization
E. The need to minimize costs

1. Decision trees, with their predetermined analysis of a situation, are really not useful in making health care decisions since every person is unique.
True    False

2. Bounded rationality refers to the limits imposed on decision-making because of costs, human abilities, time, technology, and/or availability of information.
True    False

3. In reaching a decision, the alternative with the lowest cost should be ranked #1.
True    False

4. The expected monetary value approach is most appropriate when the decision-maker is risk-neutral.
True    False

5. The value of perfect information is inversely related to losses predicted.
True    False

6. Expected monetary value gives the long-run average payoff if a large number of identical decisions could be made.
True    False

7. Among decision environments, risk implies that certain parameters have probabilistic outcomes.
True    False

8. Among decision environments, uncertainty implies that states of nature have wide ranging probabilities associated with them.
True    False

9. In decision theory, states of nature refer to possible future conditions.
True    False

10. The maximin approach involves choosing the alternative with the highest payoff.
True    False

11. The maximin approach involves choosing the alternative that has the "best worst" payoff.
True    False

12. The Laplace criterion treats states of nature as being equally likely.
True    False

13. The maximax approach is a pessimistic strategy.
True    False

14. A weakness of the maximin approach is that it loses some information.
True    False

15. The expected value approach applies to decision-making under uncertainty.
True    False

16. The expected value approach is used for decision-making under risk.
True    False

17. The EVPI indicates an upper limit on the amount a decision-maker should be willing to spend to obtain additional information.
True    False

18. Graphical sensitivity analysis is limited to cases with no more than two alternatives.
True    False

19. Graphical sensitivity analysis is used for decision-making under risk.
True    False

20. An advantage of decision trees compared to payoff tables is that they permit us to analyze situations involving sequential decisions.
True    False

21. The term sub-optimization is best described as the:
A. result of individual departments making the best decisions for their own areas
B. limitations on decision-making caused by costs and time
C. result of failure to adhere to the steps in the decision process
D. result of ignoring symptoms of the problem
E. none of the above

22. Which phrase best describes the term bounded rationality?
A. thinking a problem through clearly before acting
B. taking care not to exhaust limited resources
C. the result of departmentalized decision making
D. limits imposed on decision making by costs, time, and technology
E. the use of extremely structured steps in the decision making process

23. Testing how a problem solution reacts to changes in one or more of the model parameters is called:
A. simulation
B. sensitivity analysis
C. priority recognition
D. analysis of variance
E. decision analysis

24. Sensitivity analysis is required because _______.
A. payoffs and probabilities are estimates
B. most decision will affect employees
C. expected payoffs are sensitive to the time value of money
D. it's the second step in the decision model
E. with the passage of time, small decisions get bigger

25. A tabular presentation that shows the outcome for each decision alternative under the various possible states of nature is called a/an:
A. payoff table
B. feasible region
C. Laplace table
D. decision tree
E. payback period matrix

26. Which of the following characterizes decision-making under uncertainty?
A. Decision-makers must rely on probabilities in assessing outcomes.
B. The likelihood of possible future events is unknown.
C. Relevant parameters have known values.
D. Certain parameters have probabilistic outcomes.
E. none of the above

27. Which of the following is not an approach for decision-making under uncertainty?
A. decision trees
B. maximin
C. maximax
D. minimax regret
E. Laplace

28. Determining the worst payoff for each alternative and choosing the alternative with the "best worst" is the approach called:
A. minimin
B. maximin
C. maximax
D. minimax regret
E. Laplace

29. Determining the average payoff for each alternative and choosing the alternative with the highest average is the approach called:
A. minimin
B. maximin
C. maximax
D. minimax regret
E. Laplace

30. The maximin approach to decision-making refers to:
A. minimizing the maximum return
B. maximizing the minimum return
C. maximizing the minimum expected value
D. choosing the alternative with the highest payoff
E. choosing the alternative with the minimum payoff

31. Which one of these is not used in decision-making under risk?
A. EVPI
B. EMV
C. decision trees
D. minimax regret
E. All are used for risk situations.

32. The term opportunity loss or regret is most closely associated with:
A. minimax regret
B. maximax
C. maximin
D. expected monetary value
E. Laplace

33. The expected monetary value criterion (EMV) is the decision-making approach used with the decision environment of:
A. certainty
B. risk
C. uncertainty
D. all of the above
E. none of the above

34. A decision tree is:
A. an algebraic representation of alternatives
B. a behavioral representation of alternatives
C. a matrix representation of alternatives
D. a schematic representation of alternatives
E. limited to a maximum of 12 branches

35. The difference between expected payoff under certainty and expected payoff under risk is the expected:
A. monetary value
B. value of perfect information
C. net present value
D. rate of return
E. profit

1. Continuous processing is the best way to produce customized output.

2. As a general rule, continuous processing systems produce products for inventory rather than for customer order.

3. A Job-Shop processing system generally requires less skilled workers than a continuous processing system.

4. Avoiding bottlenecks is the primary goal of product design.

5. In general, Job-Shop systems have a lower unit cost than continuous systems do because continuous systems use costly specialized equipment.

6. A robot consists of three parts: a power supply, a controller, and a mechanical arm.

7. Continuous production has been a significant factor underpinning the U.S. standard of living over the last century.

8. Right-sized equipment tends to be larger than equipment used in traditional process layout.

9. Intermittent processing can take the form of batch processing or a job shop.

10. The term computer aided manufacturing (CAM) refers primarily to the use of robotics in a manufacturing process.

11. Flexible manufacturing systems (FMS) bring the benefits of automation to continuous processes.

12. Repetitive processing systems usually produce goods specifically for customer orders rather than for inventory.

13. Morale problems can be a reason for redesign of a facility layout.

14. There are three basic process types – Input, Processing and Output.

15. A cafeteria line would be an example of a process focused layout.

16. A possible disadvantage of a product layout is an inflexible system.

17. Product layouts involve high utilization of labor and equipment.

18. A manufacturing cell allows the production of a wide-range of very different products.

19. Product layouts can more easily adapt to variations in product requirements than process layouts can.

20. Process layouts feature departments or other functional groupings of personnel or equipment.

21. Information technology refers to competitive data.

22. A process layout is more susceptible to shutdowns caused by equipment breakdowns than a product layout.

23. Accounting, purchasing, and inventory control are fairly routine with process layouts.

24. A disadvantage of a product layout can be high in-process inventory costs.

25. In cellular manufacturing, machines and equipment are grouped by type (e.g., all grinders are grouped into a cell).

26. Among the benefits claimed for cellular manufacturing are less material handling and reduced setup time.

27. Group technology is closely connected to cellular manufacturing.

28. The percentage of idle time in an assembly line is called cycle time.

Chapter 06 - Process Selection and Facilities Layout

29. Mismatches between operational capabilities and market demand can have a negative impact on an organization.

30. Service layouts must be visually pleasing as well as functional.

31. "Balance delay" is another name for the percentage of idle time in a product layout.

32. "Balance delay" is another name for the percentage of idle time in a process layout.

33. For a production line, daily capacity can be determined by dividing the daily operating time by the line's cycle time.

34. The minimum number of workstations for a production line is determined by the desired output rate.

35. The goal of line balancing is to assign tasks to workstations in such a way that the workstations have approximately equal time requirements.

36. An idle percentage of zero means a line is perfectly balanced.

37. None of the approaches to line balancing, manual or computerized, guarantee optimal solutions.

38. Heuristic approaches to line balancing are the only approach that will guarantee an optimal solution.

39. The main issue in the design of process layouts concerns the relative positioning of the departments involved.

40. An advantage of a U-shaped production line is that it facilitates teamwork and flexibility in work assignments.

41. The goal in line balancing is to obtain a reasonable allocation of work to each station.

42. Cycle time is the maximum time allowed for each workstation to complete its work on each unit.

43. The design of service layouts, e.g., warehouse and supermarket layouts, focuses on cost minimization and product flow.

44. Process layouts allow greater flexibility in processing than product layouts.

45. Process layouts tend to have low in-process inventories.

46. Flexibility can be used as a competitive strategy.

47. Poor layouts are found in both manufacturing and service organizations.

48. Numerically controlled (N/C) machine and some robots are applications of programmable automation.

49. Which of the following is not a process commonly considered in making products or delivering services?

A. continuous

B. batch

C. repetitive

D. job shop

E. subcontracting

50. The type of processing system which is used for highly standardized products is:

A. continuous

B. intermittent

C. project

D. batch

E. unit

51. Cellular layout is a term associated with:

A. wireless telecommunication

B. part families

C. functional (or process) layouts

D. assembly lines

E. job shops

52. The substitution of machinery that has sensing and control devices for human labor is best described by the term:

A. automation

B. feedback control

C. computer-aided manufacturing

D. computer-integrated manufacturing

E. flexible manufacturing system

53. Computer-aided manufacturing (CAM) refers to the use of computers in:

A. product design

B. decision making

C. data analysis

D. quality control

E. process control

54. A group of machines including supervisory computer control, automatic material handling, and possibly robots is called:

A. computer aided design

B. a manufacturing cell

C. computer-aided manufacturing

D. computer-integrated manufacturing

E. a flexible manufacturing system

55. In which type of operations are you likely to see, at most, only minor variations in the product or service being produced using the same process and the same equipment?

A. a project

B. a job shop

C. repetitive production

D. batch processing

E. continuous production

56. The process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements is called:

A. fair employment practices

B. idle time analysis

C. line balancing

D. cycle time optimization

E. none of the above

57. An operations strategy for process selection should recognize that:

A. process selection seldom requires technical expertise

B. engineering "white elephants" are uncommon

C. there is little need to manage technology

D. flexibility is not always the best choice

E. most technical skills can be contracted out to consultants

58. Layout planning is required because of:

(I) Efficient operations

(II) Accidents or safety hazards

(III) New products or services

(IV) Morale problems

A. I and II

B. II and IV

C. I and III

D. II, III, and IV

E. I, II, III, and IV

59. The advantages of automation include:

(I) Reduced output variability

(II) Reduced variable costs

(III) Machines don't strike or file grievances.

(IV) Machines are always less expensive than human labor.

A. I and IV

B. II and III

C. I, II, and III

D. I and III

E. II and IV

60. The benefits of flexible manufacturing systems (FMS) include:

A. reduced labor costs

B. higher flexibility than automation

C. quick changeover from part to part

D. significantly lower unit costs

E. all of the above

61. Which type of processing system tends to produce the most product variety?

A. Assembly

B. Job-Shop

C. Batch

D. Continuous

E. Project

62. In which type of processing system would gasoline be produced from crude oil?

A. Job Shop

B. Batch

C. Assembly

D. Continuous

E. Project

63. Which of the following is not a characteristic of layout decisions in system design?

A. substantial investment of both money and effort

B. long-term commitment

C. significant impact on short-term efficiency

D. usually well-received by operative personnel

E. all of the above

64. An example of automated services is

A. on-line banking

C. haircuts

D. massage parlors

E. all are examples of automated services

65. Which one of the following is not common to product layouts?

A. a high rate of output

B. specialization of labor

C. low unit costs

D. ability to adjust to changes in demand

E. all are common

66. Which one of the following is not considered an important factor in service layout design?

A. cost minimization and product flow

B. frequency of orders

C. customer attitude and image

D. all are important

E. none are important

67. The type of layout which features departments or other functional groupings in which similar activities are performed is:

A. process

B. product

C. fixed-position

D. mass

E. unit

68. Which of the following is not true about process layouts when they are compared to product layouts?

A. higher in-process inventories

B. lower span of supervision

C. lower rates of output

D. more involved cost accounting

E. lower unit costs

69. The type of layout in which workers, materials, and equipment are moved to the product as needed is:

A. process

B. product

C. fixed-position

D. batch

E. mass

70. The grouping of equipment by the operations needed to perform similar work for part families is:

A. product layout

B. cellular manufacturing layout

C. functional layout

D. fixed-position layout

E. process layout

71. Which term is most closely associated with cellular manufacturing?

A. part families

B. assembly line

C. robotics

E. CAM

72. Laser technology used in surgical procedures is an example of technological advances in:

A. Product

B. Service

C. Process

D. Information

E. Reverse Engineering

73. Product profiling links key product or service requirements to:

A. Market conditions

B. Order sizes

C. Pricing strategies

D. Schedule changes

E. Process capabilities

74. Layout design has many objectives, one of which is _______.

A. reduce bottlenecks

B. move materials and workers simultaneously

C. use workers and space efficiently

D. hold material handling costs to 27% or less

E. install computer terminals every 500 feet

75. Which phrase most closely describes flexible manufacturing systems?

B. a more fully automated version of cellular manufacturing

C. manufacturing resource planning

D. a process layout with a manufacturing overlay

E. an approach that allows workers to begin work at a time of their choosing

76. A service organization (for example, a hospital) is likely to use a ________ layout because of variability in customer processing requirements.

A. project

B. process

C. flow

D. assembly

E. non-repetitive

77. In a product layout, the task of deciding how to assign work to specific stations is referred to as:

A. process balancing

C. line balancing

D. work allocation

E. station balancing

78. The minimum possible cycle time in a product layout is determined by the:

E. none of the above

79. A production line is to be designed for a job with three tasks. The task times are 0.4 minutes, 1.2 minutes, and 0.5 minutes. The maximum cycle time in minutes is:

A. 0.3

B. 0.7

C. 1.4

D. 2.1

E. 0.8

80. A production line is to be designed for a job with three tasks. The task times are 0.3 minutes, 1.4 minutes, and 0.7 minutes. The minimum cycle time in minutes, is:

A. 0.3

B. 0.7

C. 1.4

D. 2.4

E. 0.8

81. Daily capacity of a product layout is determined by:

A. cycle time divided by operating time

B. operating time divided by cycle time

C. operating time divided by total task time

D. total task time divided by cycle time

E. cycle time divided by total task time

82. The maximum allowable cycle time is computed as:

A. daily operating time divided by the desired output

B. desired output divided by the daily operating time

C. daily operating time divided by the product of the desired output and the sum of job times

D. the product of desired output and the sum of job times divided by daily operating time

E. 1.00 minus station time

83. If a line is balanced with 80 percent efficiency, the "balance delay" would be:

A. 20 percent

B. 80 percent

C. 100 percent

D. unknown, since balance delay isn't related to efficiency

E. depends on the next operation

84. The main issue in the design of process layouts for service operations concerns the relative positioning of:

A. workstations

B. processing components

C. departments

E. manufacturing cells

85. Which of the following is not an information requirement for the design of a process layout?

A. a list of departments or work centers

B. a projection of work flows between the work centers

C. the distance between locations

D. the cost per unit of distance to move loads

E. a list of product cycle times for every product manufactured

86. Which of the following is not an approach that companies use to achieve a smooth flow of production?

A. line balancing heuristics

B. parallel workstations

C. dynamic line balancing (Cross train workers)

D. mixed model line

E. Companies use all of these.

87. A common goal in designing process layouts is:

A. minimizing the number of workers

B. minimizing idle time

C. minimizing transportation costs

D. maximizing work-station productive time

E. maximizing transportation distances

88. In the use of closeness ratings for process layouts, the code "U" means the closeness between two departments is:

A. (U)nknown

B. (U)nusually important

C. of (U)sual importance

D. (U)nimportant

E. (U)ndesirable

89. Which closeness rating reflects the undesirability of having two departments located near each other?

A. A

B. E

C. I

D. U

E. X

90. Which closeness rating reflects the highest importance for two departments being close to each other?

A. A

B. E

C. I

D. U

E. X

91. Which closeness rating reflects indifference on the nearness or lack of nearness of two departments?

A. A

B. E

C. I

D. U

E. X

92. Heuristic rules are used primarily in which of these types of layouts?

(I) Product

(II) Process

(III) Fixed-position

A. I

B. II

C. I and III

D. I and II

E. II and III

93. Heuristic rules are usually applied when:

A. an optimum is necessary

B. a computer program isn't available

C. a problem has a small number of alternatives

D. a problem has a large number of alternatives

E. other approaches have failed

94. An advantage of a U-shaped production line is that it:

A. is more compact.

B. permits better communication among employees.

C. facilitates teamwork among workers.

D. increases flexibility of work assignments.

E. all of the above

95. Which of these items would be most likely to be made with a fixed position layout?

A. a Boeing 777 jet aircraft

B. applesauce

C. a computer chip

D. toothpaste

E. all of these

96. A product focused, single piece flow, pull production system would be called a:

A. cellular layout

B. job shop

C. assembly line

D. non-repetitive process

E. continuous flow

97. Which one of these is a tool used to tell a machine the details of the operations to be performed?

A. CNC

B. CIM

D. CAM

E. automation

98. Which of the following is a primary concern for process selection?

A. variety in products/services

B. flexibility of equipment

C. volume of output

D. all of the above

E. none of the above

99. Management wants to design an assembly line that will turn out 800 videotapes per day.There will be eight working hours in each day. The industrial engineering staff has assembled the information below:

(A) Determine the maximum and minimum cycle times.

(B) Determine the optimum cycle time.

(C) What is the minimum number of stations needed?

(D) Draw the precedence diagram.

(E) Assign tasks to stations in order of most following tasks first.

(A) Maximum cycle time is 2.3 minutes; minimum cycle time is .6 minutes.

D) Refer to the diagram above.

E) Refer to the diagram above

100. Given the information below, assign departments to locations in a 3 x 3 grid, with department F in the lower right hand corner.

101. Given the information below, assign the departments A through I to locations in a 3 x 3 rid, with department E fixed in the lower right-hand corner.

102. Determine the minimum number of workstations needed for this situation:

103. Given the following data:

Determine the percentage idle time.

(1.) Compute the station idle time and the total idle time per cycle:

104. Given the following process layout data for locating six departments in the six areas shown: What process layout(s) satisfy(ies) these closeness ratings? Any layout with I and VI at one end of the facility, III and IV at the other end, and II and V in the middle.

A company is designing a product layout for a new product. It plans to use this production line eight hours a day in order to meet projected demand of 480 units per day. The tasks necessary to produce this product:

105. Without regard to demand, what is the minimum possible cycle time (in seconds) for this situation?

A. 162

B. 72

C. 54

D. 12

E. 60

106. If the company desires that output rate equal demand, what is the desired cycle time (in seconds)?

A. 162

B. 72

C. 54

D. 12

E. 60

107. If the company desires that output rate equal demand, what is the minimum number of workstations needed?

A. 3

B. 4

C. 5

D. 6

E. 7

108. If the company desires that output rate equal demand, what would be the efficiency of this line with the minimum number of workstations?

A. 100%

B. 92.5%

C. 75%

D. 87.5%

E. 90%

109. If the company desires that output rate equal demand, what is the last task performed at the second workstation in the balance which uses the minimum number of workstations?

A. u

B. v

C. w

D. x

E. y

110. Without considering forecasted demand, what is the minimum possible cycle time for this production line?

A. 10 seconds

B. 20 seconds

C. 34 seconds

D. 38 seconds

E. 152 seconds

111. For output to equal forecasted demand, what should be the actual cycle time for this production?

A. 32 seconds

B. 38 seconds

C. 40 seconds

D. 76 seconds

E. 152 seconds

112. For output to equal forecasted demand, what is the minimum number of workstations needed?

A. 1

B. 3

C. 3.75

D. 4

E. 5

113. For output to equal forecasted demand, what will be the efficiency of the production line that uses the least number of workstations?

A. 81%

B. 90%

C. 95%

D. 85%

E. 100%

114. For output to equal forecasted demand, what will be the second task performed at the second workstation of the production line that uses the fewest number of stations?

A. a

B. b

C. c

D. d

E. e

115. Without considering projected demands, what is the minimum possible cycle time for this production line?

A. 54 seconds

B. 14 seconds

C. 12 seconds

D. 10 seconds

E. 4 seconds

116. For output to equal projected demand, what should be the actual cycle time for this production line?

A. 54 seconds

B. 27 seconds

C. 20 seconds

D. 18 seconds

E. 14 seconds

117. For output to equal projected demand, what is the minimum number of workstations needed?

A. 6

B. 4.5

C. 3

D. 2.7

E. 2

118. For output to equal projected demand, what will be the efficiency of the production line that uses the minimum number of workstations?

A. 90%

B. 95%

C. 97%

D. 99%

E. 100%

119. For output to equal projected demand, what will be the first task performed at the third workstation of the production line which uses the minimum number of stations?

A. u

B. v

C. w

D. x

E. y

120. Without regard to projected demand, what is the minimum possible cycle time for this assembly line?

A. 0 seconds

B. 3 seconds

C. 9 seconds

D. 10 seconds

E. 28 seconds

121. For output to equal projected demand, what should be the actual cycle time for this assembly line?

A. 0 seconds

B. 3 seconds

C. 9 seconds

D. 10 seconds

E. 28 seconds

122. For output to equal projected demand, what is the minimum number of workstations needed?

A. 2

B. 2.8

C. 3

D. 4

E. 5

123. For output to equal projected demand, what will be the efficiency of the assembly line that uses the minimum number of workstations?

A. 0.0%

B. 6.7%

C. 70.0%

D. 93.3%

E. 100%

124. For output to equal projected demand, what will be the idle time at the second workstation of the assembly line that uses the minimum number of workstations?

A. 0 seconds

B. 1 second

C. 2 seconds

D. 3 seconds

E. 5 seconds

125. What is the distance (in meters) from area III to area I in this new facility?

A. 0

B. 10

C. 20

D. 30

E. 40

126. What is the total flow (loads per week) between department Y and department Z?

A. 140

B. 160

C. 200

D. 250

E. 300

127. If departments X, Y, and Z were to be located in areas I, II, and III, respectively, what would be the total distance (in meters) loads would be moved each week?

A. 4,000

B. 4,500

C. 7,000

D. 8,000

E. 9,000.

128. What are total weekly costs for the least costly process layout?

A. \$2,800

B. \$3,150

C. \$3,500

D. \$4,000

E. \$4,500

129. How many least costly process layouts are there?

A. 1

B. 2

C. 3

D. 4

E. 5

130. What is the distance (in meters) from area 3 to area 1 of this new facility?

A. 0

B. 10

C. 20

D. 30

E. 40

131. What is the total flow (loads per week) between department Y and department Z?

A. 130

B. 150

C. 180

D. 230

E. 280

132. If the company were to locate departments X, Y, and Z in areas 1, 2, and 3, respectively, what would be the total distance (in meters) loads would be moved each week?

A. 3,100

B. 3,600

C. 6,200

D. 7,200

E. 8,200

133. What is the layout that will minimize the total distance loads will be moved each week?

A. X in 1; Y in 2; Z in 3

B. X in 1; Z in 2; Y in 3

C. Y in 1; X in 2; Z in 3

D. Z in 1; X in 2; Y in 3

E. Z in 1; Y in 2; X in 3

134. What are total weekly costs for an optimum layout?

A. \$3,100

B. \$3,600

C. \$6,200

D. \$7,200

E. \$8,200

135. What is the distance (in meters) from area IV to area II in this new facility?

A. 0

B. 5

C. 10

D. 15

E. 20

136. What is the total flow (patients per week) between department W and department L?

A. 70

B. 80

C. 88

D. 130

E. 148

137. How many different process layouts are possible for this new facility?

A. 4

B. 6

C. 16

D. 24

E. 120

138. If the consultant were to locate departments W, C, L, and E in areas I, II, III, and IV, respectively, what would be total weekly costs?

A. \$114

B. \$217

C. \$255

D. \$322

E. \$366

139. What are total weekly costs for the least costly process layout?

A. \$114

B. \$217

C. \$255

D. \$322

E. \$366

1. Ergonomics is the use of computers and robots in the workplace.
True    False

2. Specialization is one of the sources of disagreement between the efficiency and behavioral approaches to job design.
True    False

3. One disadvantage of specialization is worker dissatisfaction.
True    False

4. The quickest, most effective way to improve an employee's job satisfaction is increase his or her compensation.
True    False

5. Job enrichment involves giving a workers a greater share of the total task which is why they feel enriched.
True    False

6. Trust is a factor influencing productivity.
True    False

7. Many lower level jobs are monotonous and boring.
True    False

8. Job enrichment involves an increase in the level of responsibility for planning and coordinating tasks.
True    False

9. "Self-directed teams" are allowed to make changes in the work processes under their control.
True    False

10. "Self-directed teams" help other work groups make changes to their processes.
True    False

11. Motivation influences quality and productivity, but not the work environment.
True    False

12. One important factor that influences productivity is trust between workers and managers.
True    False

13. Ergonomics is an important part of job design to consider when we automate the system.
True    False

14. One of the potential benefits of "self-directed teams" is higher productivity and greater worker satisfaction.
True    False

15. One of the potential benefits of "self-directed teams" is higher quality.
True    False

16. One potential disadvantage of "self-directed teams" is higher training costs.
True    False

17. Job design relates to people therefore technology has little impact.
True    False

18. Methods analysis cannot be done for new jobs (ones that do not yet exist) since it requires observation of the process.
True    False

19. One therblig is the equivalent of one hour of sustained work by one average person.
True    False

20. A flow process chart is helpful for visualizing the portions of a work cycle during which the operator and equipment are busy or idle.
True    False

21. Predetermined time standards are usually based on observing one very efficient worker performing the task.
True    False

22. Therbligs are basic elemental motions.
True    False

23. We incorporate the average seriousness of accidents by measuring the number of lost-time accidents per million labor-hours worked.
True    False

24. Work measurement concentrates on how long the tasks take to accomplish.
True    False

25. Ergonomics is important for preventing common workplace injuries such as back injuries and repetitive-motion injuries.
True    False

26. The most widely used method of work measurement is work sampling.
True    False

27. For purposes of obtaining good time standards using a stopwatch time study, the analyst should try to avoid having the worker discover he or she is being observed.
True    False

28. One factor in determining how many cycles to time in a time study is the degree of variation that is present in the observed times.
True    False

29. The normal time in time study is obtained by multiplying the observed time by the performance rating.
True    False

30. Studies on worker efficiency and time of day suggest the greatest efficiency is at the end of the day when workers are ‘warmed up'.
True    False

31. The normal time for a job is multiplied by the performance rating to obtain the standard time for the job.
True    False

32. The design of work systems, because objective standards are used, avoids most ethical issues.
True    False

33. The standard time for a job can be obtained by multiplying the normal time by an appropriate allowance factor.
True    False

34. Predetermined time standards use historical data from a company's own files.
True    False

35. A performance rating of less than 1.0 means that the observed worker was judged to be working at a faster than normal rate - doing the job quicker than normal.
True    False

36. Predetermined time standards involve the use of published data regarding how long various activities are expected to take.
True    False

37. Work sampling can be used to estimate the proportion of time a machine is idle.
True    False

38. Work sampling involves the use of some method of randomizing the observations.
True    False

39. An advantage of work sampling, compared to a stopwatch time study, is that observations are spread out over a period of time in work sampling.
True    False

40. No stopwatch is required in a work sampling study.
True    False

41. Work sampling provides a detailed elemental breakdown of a task for purposes of establishing reliable time standards.
True    False

42. Measured day work refers to an output-based system.
True    False

43. It would be acceptable to use a group incentive plan for an assembly line operation.
True    False

44. Work sampling provides both quick and accurate estimates of activity times.
True    False

45. Methods analysis and motion study techniques do not directly consider behavioral aspects of jobs.
True    False

46. "Time-based systems" compensate employees according to the time the employee has worked and the amount of output they produce.
True    False

47. "Output-based systems" compensate employees according to the amount of output they produce, thereby tying pay directly to performance.
True    False

48. A pay system that rewards workers who undergo training that increases their skills is called a "knowledge-based pay system."
True    False

49. "Knowledge-based pay systems" pay higher wages or salaries to workers who have completed college than to those who just finished high school.
True    False

50. Increasing compensation is always a way to improve worker satisfaction.
True    False

51. A worker-machine chart can help identify non-productive parts of a process.
True    False

52. A worker-machine chart can be used to determine how many machines an operator can manage.
True    False

53. Micromotion studies should be limited to periodic activities where breakthrough improvements are possible.
True    False

54. The Occupational Safety and Health Act (OSHA) is a regulatory burden that has been proven to have little impact on the safety and welfare of workers.
True    False

55. Management compensation should be based primarily on organizational output.
True    False

56. Many management compensation systems are being revised to reflect increased emphasis on quality and customer service.
True    False

A. Specialization
B. Ergonomics
C. Job Rotation
D. Flow Process Charts
E. SIMO Charts

58. A major advantage of job specialization in business is increased _________.
A. motivation
C. opportunity for self-fulfillment
D. productivity
E. job enrichment

59. Which of the following is not generally considered an advantage of specialization?
A. high productivity
B. low wage costs
C. ease of training employees
D. low equipment costs

60. Process chart symbols don't include ________.
A. Delay
B. Inspection
C. Operation
D. Rejection
E. Storage

61. Which of the following most closely describes job enlargement?
B. increasing the level of responsibility associated with a job
C. transferring workers through a series of jobs to increase their scope of experience
D. increasing the amount of workspace assigned to a worker
E. assigning two jobs to the same worker

62. A behavioral approach to job design which increases responsibility for planning and coordinating tasks is job:
A. enlargement
B. rotation
C. enrichment
D. involvement
E. enhancement

63. Which of the following concerns is not one that job designers focus on?
A. what will be done in a job
B. who will do the job
C. how the job will be done
D. when should the job be completed
E. where the job will be done

64. Which of the following is not a potential benefit of the use of self-directed teams?
A. higher quality
B. higher productivity
C. greater worker satisfaction
D. greater satisfaction for middle managers
E. lower turnover

65. A SIMO chart includes:
A. Delay
B. Storage
C. Transportation
D. Left/Right hand movements
E. Inspection

66. Determining the number of cycles to observe is an element of ________.
A. Stop watch time study
B. Standard elemental times
C. Predetermined time standards
D. Work sampling
E. MTM tables

67. The chart used to review the overall sequence of an operation by focusing on either the movements of the operator or materials is called a _________.
A. SIMO-chart
B. Gantt chart
C. Worker-materials chart
D. Flow process chart
E. Multi-activity chart

68. The methods analysis chart which describes the overall sequence of operations, transportation, storage, delays, and inspection is a:
A. flow process chart
B. worker-machine chart
C. gang process chart
D. simultaneous-motion (SIMO) chart
E. time/efficiency chart

69. The symbols for operation, storage, transportation, inspection, and delay would usually be found on which type of chart?
A. Flow process
B. Gantt
C. Simultaneous motion
D. Worker-machine
E. Delay analysis

70. The chart used to focus on busy and idle portions of a work cycle is a:
A. Worker-machine chart
B. Gantt chart
C. SIMO-chart
D. Idle chart
E. Flow process chart

71. The methods analysis chart which describes the portions of a work cycle during which an operator and equipment are busy or idle is a:
A. flow process chart
B. worker-machine chart
C. gang process chart
D. simultaneous-motion (SIMO) chart
E. time/efficiency chart

72. In methods analysis, a "therblig" is a:
A. charting method of analysis
B. job enrichment technique
D. basic elemental motion
E. fraction (.0006) of a minute

73. The methods analysis chart which describes the movements of both hands at the same time is a:
A. flow process chart
B. worker-machine chart
C. gang process chart
D. simultaneous-motion (SIMO) chart
E. time/efficiency chart

74. One form of long term team that is increasingly being used, especially in lean production settings, is:
A. Quality circle
B. Product Design
C. Self-directed
D. Self-improvement
E. Mandatory

75. In a stopwatch time study, the number of cycles that must be timed is a function of:
A. the variability of observed times
B. the desired accuracy for the estimated job time
C. the desired confidence for the estimated job time
D. all of the above
E. none of the above

76. What is the effect of an increase in the desired confidence level on the number of observations necessary in a time study?
A. increases
B. decreases
C. unaffected
D. may increase or decrease, depending on the sample standard deviation
E. impossible to say without additional information

77. In a stopwatch time study, the average time it takes a given worker to perform a task a certain number of times is the:
A. observed time
B. normal time
C. standard time
D. allowance time
E. performance rating time

78. Which is not a requirement for an effective team?
A. talent and skills to meet goals.
B. one or more members representing supervision.
C. a system of reinforcement and celebration.
D. clearly stated and commonly held vision and goals.
E. effective and skilled interpersonal relations.

79. A job had an observed cycle time of four minutes, a performance rating of 80 percent, and an allowance factor that was 20 percent of job time. Normal time for the job in minutes is:
A. 3.20
B. 3.84
C. 4.00
D. 4.80
E. 5.00

80. When performing a time study, the analyst converts the observed time into the time an "average" worker would require working at an acceptable pace by using which of the following?
A. allowance factors
B. MTM
C. methods analysis
D. performance rating
E. analysis of therbligs

81. In stopwatch time study, adjusting the normal time by an allowance factor for normal delays and interruptions results in the:
A. observed time
B. normal time
C. standard time
D. allowance time
E. performance rating time

82. A job had an observed time of 10 minutes, a performance rating of .90, and an allowance factor of 20 percent of job time. Twenty-five cycles were timed. Standard time for the job in minutes is:
A. 10.0
B. 10.8
C. 12.5
D. 15.0
E. depends on the number of cycles observed

83. A job has a normal time of 12 minutes, a performance rating of .80, and an allowance factor of 20 percent of job time. The standard time for this job in minutes is:
A. 11.52
B. 12
C. 14.4
D. 15
E. depends on the number of cycles observed

84. Standard times derived from a firm's historical data are known as:
A. predetermined times
B. MTM
C. work sampling times
D. judgmental times
E. standard elemental times

85. Allowance percentages normally would not include:
A. noise levels
B. monotony
C. personal phone calls
D. weight lifted
E. rest room allowances

86. A technique for estimating the proportion of time a worker spends on various activities is:
A. stopwatch time study
B. standard elemental (historical) times
C. simultaneous motion study
D. predetermined (published) time standards
E. work sampling

87. The technique which can be used to estimate the percentage of time a worker or piece of equipment is idle is known as:
A. MTM
B. work sampling
C. methods analysis
D. micro motion study
E. none of these

88. Which sample proportion will require the largest number of work sampling observations?
A. .05
B. .25
C. .50
D. .75
E. .95

89. What will be the effect on sample size in work sampling of increasing the permissible maximum error?
A. increase the number of observations needed
B. decrease the number of observations needed
C. no effect on sample size
D. sometimes increase and sometimes decrease the sample size, depending on the analyst
E. impossible to say without additional information

90. In work sampling, observations should be taken:
A. at the same time each day
B. within a short period of time
C. at randomly determined times
D. once every hour
E. once every day

91. Which of the following is not an advantage of work sampling compared to stopwatch time study?
A. There is little or no disruption of work.
B. It is less susceptible to short-term fluctuations.
C. Workers are less resentful.
D. It is less costly and less time-consuming.
E. It is better suited for short, repetitive tasks.

92. Which of the following is not characteristic of time-based compensation plans?
A. stable labor costs
B. easier to administer than output-based plans
C. stable pay for workers
D. simpler wage computations than output-based plans
E. lower cost per unit than output-based plans

93. Which of the following statements should not characterize an operations strategy toward the design of work systems?
A. Manufacturing technology is the heart of a business.
B. Workers can make or break a business.
C. Workers can be a valuable source of insights.
D. A spirit of cooperation can contribute to success.
E. Workers can be proud and respected.

94. The design of work systems involves:
A. work measurement
B. job design
C. compensation
D. all of the above
E. use of outside human resource consultants

95. Methods analysis and motion study techniques develop which aspect of jobs?
A. behavioral aspects
B. efficiency aspects
C. pay levels
D. all of the above
E. none of the above

96. A disadvantage of teams is:
A. higher quality
B. higher productivity
C. greater worker satisfaction
D. team member conflict
E. lower turnover

A Methods and Measurements Analyst needs to develop a time standard for a certain task. In a preliminary study, he observed one of his workers perform this task five times, with the following results:

104. What is the observed time (OT) for this task?
A. 80 seconds
B. 84 seconds
C. 160 seconds
D. 240 seconds
E. 400 seconds

105. What is the normal time (NT) for this task if the employee worked at a twenty-five percent faster pace than average?
A. 80 seconds
B. 96 seconds
C. 100 seconds
D. 120 seconds
E. 125 seconds

106. What is the standard time (ST) for this task if the employee worked at a twenty-five percent faster pace than is average and an allowance of twenty percent of the workday is used?
A. 80 seconds
B. 96 seconds
C. 100 seconds
D. 120 seconds
E. 125 seconds

107. What is the standard time (ST) for this task if the employee worked at a twenty-five percent faster pace than is average and an allowance of twenty percent of job time is used?
A. 80 seconds
B. 96 seconds
C. 100 seconds
D. 120 seconds
E. 125 seconds

108. How many observations should be made if the analyst wants to be 99.74 percent confident that the maximum error in the observed time is two seconds? Assume that the standard deviation of each task time is 4 seconds.
A. 5
B. 6
C. 25
D. 36
E. 49

The owner of Kat Motel wants to develop a time standard for the task of cleaning a cat cage. In a preliminary study, she observed one of her workers perform this task six times, with the following results:

109. What is the observed time (OT) for this task?
A. 81 seconds
B. 90 seconds
C. 99 seconds
D. 108 seconds
E. 540 seconds

110. What is the normal time (NT) for this task if the employee worked at a fifty-percent faster pace than is average?
A. 45 seconds
B. 60 seconds
C. 90 seconds
D. 135 seconds
E. 180 seconds

111. What is the standard time (ST) for this task if the employee worked at a fifty-percent faster pace than is average, and an allowance of twenty percent of job time is used?
A. 90 seconds
B. 99 seconds
C. 100 seconds
D. 162 seconds
E. 150 seconds

112. What is the standard time (ST) for this task if the employee worked at a fifty-percent faster pace than is average, and an allowance of ten percent of the workday is used?
A. 90 seconds
B. 99 seconds
C. 100 seconds
D. 168.8 seconds
E. 150 seconds

113. How many observations should be made if she wants to be 95.44 percent confident that the maximum error in the observed time is two seconds? Assume that the standard deviation of the task time is 6 seconds.
A. 5
B. 6
C. 30
D. 36
E. 49

A Methods and Measurements Analyst for Timepiece, Inc. needs to develop a time standard for the task of attaching a watch to a wristband. In a preliminary study, he observed one of his workers perform this task five times, with the following results:

114. What is the observed time (OT) for this task?
A. 20 seconds
B. 27 seconds
C. 46 seconds
D. 66 seconds
E. 100 seconds

115. What is the normal time (NT) for this task if the employee worked at a twenty- percent faster pace than is average?
A. 16.7 seconds
B. 20 seconds
C. 24 seconds
D. 25 seconds
E. 100 seconds

116. What is the standard time (ST) for this task if the employee worked at a twenty- percent faster pace than is average, and an allowance of twenty percent of the workday is used?
A. 20 seconds
B. 24 seconds
C. 25 seconds
D. 28.8 seconds
E. 30 seconds

117. What is the standard time (ST) for this task if the employee worked at a twenty-percent faster pace than is average, and an allowance of twenty percent of job time is used?
A. 4.5 seconds
B. 5 seconds
C. 20 seconds
D. 28.8 seconds
E. 100 seconds

118. How many observations should be made if he wants to be 95.44 percent confident that the maximum error in the observed time is one second? Assume that the standard deviation of the task time is 5 seconds.
A. 5
B. 10
C. 25
D. 100
E. 121

A Methods and Measurement Analyst wants to develop a time standard for a certain task. In a preliminary study, he observed one worker perform the task six times with an average observed time of 20 seconds and a standard deviation of 2 seconds.

119. What is the normal time (NT) for this task if the employee worked at a twenty percent faster pace than is average?
A. 4 seconds
B. 16.7 seconds
C. 20 seconds
D. 24 seconds
E. 100 seconds

120. What is the standard time (ST) for this task if the employee worked at a twenty percent faster pace than is average, and an allowance of twenty-five percent of the workday is used?
A. 20 seconds
B. 25 seconds
C. 26.7 seconds
D. 30 seconds
E. 32 seconds

121. What is the standard time (ST) for this task if the employee worked at a twenty percent faster pace than is average, and an allowance of twenty-five percent of job time is used?
A. 20 seconds
B. 25 seconds
C. 26.7 seconds
D. 30 seconds
E. 32 seconds

122. How many observations should be made if he wants to be 95.44 percent confident that the maximum error in the observed time is one second?
A. 3
B. 4
C. 13.3
D. 16
E. 25

The owner of Touchdown Sports Bar wants to develop a time standard for the task of mixing a specialty cocktail. In a preliminary study, he observed one of his bartenders perform this task seven times with an average of 90 seconds and a standard deviation of 5 seconds.

123. What is the normal time (NT) for this task if the bartender worked at a twenty percent faster pace than is average?
A. 75 seconds
B. 90 seconds
C. 108 seconds
D. 110 seconds
E. 112.5 seconds

124. What is the standard time (ST) for this task if the bartender worked at a twenty percent faster pace than is average, and an allowance of twenty percent of the workday is used?
A. 112.5 seconds
B. 120 seconds
C. 135 seconds
D. 144 seconds
E. 150 seconds

125. What is the standard time (ST) for this task if the bartender worked at a twenty percent faster pace than is average, and an allowance of ten percent of job time is used?
A. 135 seconds
B. 123.8 seconds
C. 118.8 seconds
D. 120 seconds
E. 112.5 seconds

126. How many observations should be made if he wants to be 95.44 percent confident that the maximum error in the observed time is one second?
A. 64
B. 86
C. 100
D. 144
E. 169

A Methods and Measurements Analyst for Digital Devices needs to develop a time standard for the task of assembling a computer mouse. In a preliminary study, she observed one of her workers perform this task six times with the following results:

127. What is the observed time (OT) for this task?
A. 34 seconds
B. 40 seconds
C. 46 seconds
D. 48 seconds
E. 240 seconds

128. What is the normal time (NT) for this task if the employee worked at a 20% faster pace than is average?
A. 8 seconds
B. 32 seconds
C. 40 seconds
D. 48 seconds
E. 200 seconds

129. What is the standard time (ST) for this task if the employee worked at a 20% faster pace than is average and an allowance of 25% of the workday is used?
A. 40 seconds
B. 50 seconds
C. 53.3 seconds
D. 60 seconds
E. 64 seconds

130. What is the standard time (ST) for this task if the employee worked at a 20% faster pace than is average and an allowance of 25% of job time is used?
A. 40 seconds
B. 50 seconds
C. 53.3 seconds
D. 60 seconds
E. 64 seconds

131. How many observations should be made if she wants to be 0.8664 confident that the maximum error in the observed time is 0.5 second? Assume that the standard deviation of the task time is 4 seconds.
A. 10
B. 12
C. 120
D. 144
E. 169

The manager of Lawn and Garden Services would like to estimate the proportion of her employees' time spent performing various gardening or lawn care activities. She has made 400 random observations of a typical worker, with the following results:

132. What is the most likely true proportion of time spent mowing?
A. 0
B. .1
C. .2
D. .5
E. 1

133. What is the probability that the true proportion of time spent mowing is exactly equal to the sample proportion?
A. 0
B. .1
C. .2
D. .5
E. 1

134. How confident can the manager be that the true proportion of time spent mowing is between .45 and .55?
A. 90 percent
B. 95 percent
C. 95.5 percent
D. 99 percent
E. 99.7 percent

135. Between what limits can the manager be 68.26 percent confident the true proportion of time spent mowing is?
A. 0 and .683
B. .475 and .525
C. .45 and .55
D. .425 and .575
E. .4 and .6

136. If the manager wants to be 95.44 percent confident that the true proportion of time spent mowing is within .02 (plus or minus) of the sample proportion, what should be her sample size?
A. 400
B. 1,000
C. 1,600
D. 2,000
E. 2,500

1. If the elapsed time for the task is short and the activity is somewhat routine, a modest amount of improvement occurs during the first few repetitions.
True    False

2. When the task is fairly complex and has a longer duration, it will take a larger number of repetitions before improvement is observed.
True    False

3. Negotiated purchasing results in lower unit costs for smaller quantities.
True    False

4. Learning curves generally apply to situations in which there is a high degree of human involvement and tasks are fairly repetitive.
True    False

5. Learning curves are mostly relevant for complex, new activities that have not been done often.
True    False

6. According to learning curve theory, every doubling of total output will produce a constant percentage decrease in time per unit.
True    False

7. The decrease in time between the second and fourth units will be equal to the decrease in time between the first and second units.
True    False

8. According to learning curve theory, for certain kinds of tasks the cost per unit decreases as the number of repetitions increases.
True    False

9. According to learning curve theory, the time reduction per unit decreases (improves) as the number of units increase.
True    False

10. A learning percentage of 95% indicates greater learning than a percentage of 90%.
True    False

11. A learning curve for an overqualified worker is higher than an average worker.
True    False

12. An 80 percent learning curve means that with each doubling of repetitions there will be a 20 percent decrease in time per unit.
True    False

13. For an 80% learning curve, if the first unit requires 10 hours, the second unit will require 8 hours and the third 6.4 hours.
True    False

14. If an 80% curve is appropriate for a task and the first unit takes ten hours, the average time for the first two units would be eight hours.
True    False

15. If we have never made the first unit but only think we know how much the labor time will be, we cannot draw a learning curve.
True    False

16. The learning curve principal would apply to the number of students in a class - a class twice as large will learn 80% faster.
True    False

17. The learning curve principle would apply to a baseball pitcher learning to throw a curve ball.
True    False

18. The learning curve is a basic tool for mass production type activities because it can deal with large volumes of output.
True    False

19. Learning curves are used primarily for mass production applications.
True    False

20. A learning rate of 98% implies an exceptionally rapid rate of improvement.
True    False

21. A learning rate of 77% will produce relatively minor decreases in completion times of the first few repetitions.
True    False

22. One use of learning curves is for negotiated purchasing anticipating lower costs at the vendor with increasing volumes.
True    False

23. A learning rate of 97% will produce minor decreases in completion times of the first few repetitions.
True    False

24. The fact that human activities typically improve when they are done on a repetitive basis is described by a/an:
A. normal distribution curve
B. learning curve
C. binomial distribution curve
D. exponential curve
E. fatigue factor allowance

25. To which worker would learning curves be most applicable?
A. bus driver
B. printing press operator
C. assembly-line worker
D. auto service mechanic
E. baker or cook

26. Once production is underway and the learning curve effect is occurring, successive changes made to the production process will cause the time per unit to:
A. continue following the original learning curve without any impact
B. cause a scallop effect
C. increase the unit time and result in a higher percentage learning curve
D. decrease the unit time and result in a higher percentage learning curve
E. decrease the unit time and result in a lower percentage learning curve

27. On a log-log graph, learning curves appear as:
A. upward-curving lines
B. downward-curving lines
C. straight lines
D. lines which increase at a decreasing rate
E. lines which decrease at a decreasing rate

28. Increasing volumes result in ___________ the learning curve.
A. moving up
B. moving down
C. moving off
D. moving away from
E. stabilization of

29. It took exactly 10 hours to perform the first kidney transplant on a 100 percent learning curve. The second kidney transplant will take how many hours to perform?
A. 8.0 hours
B. 10.0 hours
C. 12.0 hours
D. A 100 percent learning curve cannot exist.
E. 5 hours

30. A job is expected to have a 70 percent learning curve. The first unit has been completed in 20 hours. Accordingly, the second unit can be expected to take approximately how many hours?
A. 6
B. 9.8
C. 14
D. 20
E. 34

31. A job with a 70 percent learning curve required 20 hours for the initial unit. The fourth unit should require approximately how many hours?
A. 6
B. 9.8
C. 14
D. 20
E. 34

32. How long would a job with a 70 percent learning curve and a time of 20 hours for the first unit require (approximately, in hours) for the third unit?
A. 14.1
B. 11.5
C. 10.0
D. 7.8
E. 4.3

33. A job is expected to have a learning curve of 90 percent. The third unit required 16 hours. The twelfth unit should take approximately how many hours?
A. 2.67
B. 4.83
C. 7.94
D. 10.31
E. 12.95

34. A job has an 80 percent learning curve. The second unit required 12 hours to complete. Approximately how many hours will be devoted to the first five units (including those already completed)?
A. 26
B. 36
C. 46
D. 56
E. 66

35. A manager is trying to estimate the appropriate learning curve for a certain job. The manager notes that the first four units had a total time of 30 minutes. Which learning curve would yield approximately this result if the first unit took 10 minutes?
A. .70
B. .75
C. .80
D. .85
E. .90

36. In which of the following managerial activities would learning curves probably be the least useful?
B. manpower planning
C. location analysis
D. budgeting
E. pricing new products

37. Which of the following is not a major caution or criticism of learning curves?
A. Learning rates may differ between organizations.
B. Projections should be regarded as approximations.
C. The base time must be carefully determined.
D. The curve may eventually tip upwards.
E. Carryover effects may alter the learning rate.

38. A job has a 70% learning curve. If the first unit took 10 hours to complete, the third unit should take roughly how many hours?
A. 7
B. 5.5
C. 5
D. 3.5
E. 4.9

39. A job has an 80% learning curve. If the first unit took 40 hours to complete, the fourth unit should take roughly how many hours?
A. 20
B. 25
C. 31
D. 35
E. 40

40. Which one of the following would learning curves probably affect the least?
A. pricing new products
C. layout analysis
D. scheduling
E. capacity planning

41. A job has an 80% learning curve. If the first unit took 50 hours to complete, the third unit should take roughly how many hours?
A. 40
B. 36
C. 35
D. 32
E. 10

42. Unit times for a job exhibit a learning effect. If the 2nd unit took 30 hours, and the 4th unit took 21 hours, roughly how many hours would you estimate the 3rd unit took?
A. 29
B. 27
C. 25
D. 24
E. 21

43. A manager is trying to estimate the learning rate for a new job. The first unit took 16 hours and the fourth unit required about 13 hours. The learning rate is:
A. 70%
B. 75%
C. 80%
D. 85%
E. 90%

44. A job will have a learning rate of 75 percent. If the 3rd unit requires 10 hours, the 12th unit should require about this many hours:
A. 5.6
B. 6.5
C. 7.4
D. 8.3
E. 9.2

45. Assembly of a model airplane has a learning curve of 80 percent. The estimated time to assemble a second identical model airplane is 40 hours. Determine approximately how much time will be required for:
(A) the eighth unit
(B) the first ten units

46. Developing work assignments in a job shop in a certain firm has a learning curve of 80 percent. If the second set of assignments takes 12 minutes, determine the length of time required for the following:
(A) the fifth set
(B) sets 3, 4, and 5 together

47. An order we just received has a 90 percent learning curve associated with it. The second unit of the total 25-unit order had a unit time of 36 minutes. What will the total time be for the entire order (all 25 units)?

48. Sally suspects strongly that there is a learning curve associated with solving problems assigned for operations management. She notes that it took her approximately 33 minutes to solve the first problem and 17 minutes to solve the fifth problem.
(A) Estimate Sally's learning percentage.
(B) Using your answer from Part A, estimate how long it will take Sally to finish the three remaining problems.

49. Ron has noted that the first accounting problem he did in a set of similar problems took him one hour, and the ninth problem took 24 minutes.
(A) Estimate Ron's learning curve.
(B) About how long did it take Ron to do his set of 10 problems?

50. It takes a worker with a 90 percent learning curve 72.9 minutes to complete the fourth unit of a seven-unit job. Estimate the amount of time the worker spent on the first two units.

51. The 3rd unit of a ten-unit job required 7.3 hours to complete. The 4th unit has been worked on for two hours, but it is not yet finished. Estimate the remaining amount of time that will be needed to finish this ten-unit job if the work has an 80% learning curve.

A company is preparing a bid on a government contract for 40 units of a certain product. The operations manager estimates the assembly time required for the first two units to be 10.4 hours and 8.8 hours respectively.

52. What is the appropriate learning curve?
A. 70 percent
B. 75 percent
C. 80 percent
D. 85 percent
E. 90 percent

53. What is the expected time required to produce the 40th unit?
A. 3.2 hours
B. 4.4 hours
C. 5.9 hours
D. 3.7 hours
E. 2.2 hours

54. What is the average time per unit for the first 30 units?
A. 4.7 hours
B. 5.9 hours
C. 5.6 hours
D. 4.5 hours
E. 3.6 hours

55. If a contract for 30 units is canceled after the first 20 units, approximately how much of the expected total direct labor will have been expended to that point?
A. 73%
B. 55%
C. 61%
D. 50%
E. It is impossible to say without additional information.

56. Approximately how long will it take to produce the 15th unit?
A. 4.3 hours
B. 5.5 hours
C. 4.7 hours
D. 6.9 hours
E. 3.4 hours

57. Which unit, if any, will require approximately one-half the time of the first unit?
A. 18th unit
B. 19th unit
C. 20th unit
D. 21st unit
E. 22nd unit

58. Approximately how long will it take to produce the 25th through the 30th units?
A. 23 hours
B. 49 hours
C. 29 hours
D. 38 hours
E. It is impossible to say without additional information.

A manager wants to analyze the learning curve associated with producing one of his company's products. Accordingly, he has gathered the following data:

59. What is the learning curve percentage?
A. 40%.
B. 50%.
C. 75%.
D. 80%.
E. 90%.

60. How long did it take to produce the first unit?
A. 5 hours
B. 6 hours
C. 6.25 hours
D. 6.33 hours
E. 6.5 hours

61. Approximately how long did it take to produce the first four units?
A. 15 hours
B. 16 hours
C. 18 hours
D. 20 hours
E. 21 hours

62. Approximately how long will it take to produce the tenth unit?
A. 1 hour
B. 2 hours
C. 3 hours
D. 4 hours
E. 5 hours

63. Approximately how long will it take to produce the fifth through tenth units?
A. 15 hours
B. 16 hours
C. 18 hours
D. 20 hours
E. 21 hours

64. In which of the following scenarios would an 80% learning curve be especially relevant?
A. the pursuit of an innovation strategy to stay ahead of competitors
B. the pursuit of a flexibility-based strategy to increase customer satisfaction
C. the pursuit of a customization-based strategy to command premium prices
D. the pursuit of a time-based strategy to gain market share
E. the pursuit of a quality-based strategy to gain customer loyalty

65. To which of the following challenges are learning curves important considerations?
A. capacity planning
B. product designs
C. process layouts
D. output-based compensation
E. demand forecasting

66. Which of the following is an example of a carryover effect?
A. capacity that was used on older products but that can be used on new products
B. previous experience that is relevant to the current scenario
C. existing products that are still in the maturity phase of their life cycle
D. forecasting errors from previous product lines
E. old supplier contracts that must still be honored

67. When are learning curves most relevant to managerial decision making in mass production settings?
A. late in product life-cycles
B. in the maturity phase
C. in the decline phase
D. before processes are stabilized
E. never

68. Suppose the first unit required 800 hours and the second unit required only 680. Which of the following times for the fourth unit would be consistent with a true learning curve scenario?
A. 492
B. 587
C. 578
D. 603
E. 583

1. Location decisions are basically one-time decisions usually made by new organizations.
True    False

2. The fact that most types of firms are located in every section of the country suggests that in many cases, location decisions are not overly important; one location typically is as good as another.
True    False

3. You can't make a mistake by locating where labor costs are low.
True    False

4. Advanced communications has aided globalization.
True    False

5. The first step in developing location alternatives is identifying important factors.
True    False

6. An example of a regional factor in location planning is the location of our markets (either existing or potential).
True    False

7. A strategy that emphasizes convenience for the customers would probably select a single very large facility.
True    False

8. For service organizations, the dominant factors in location analysis usually are market-related.
True    False

9. Global Positioning Systems (GPS) use the Center of Gravity method to establish starting grid co-ordinates.
True    False

10. Labor laws are an important site-related factor.
True    False

11. Web-based, retail businesses should be located near the customer to reduce their long distance phone charges.
True    False

12. For service and retail stores, a prime factor in location analysis is customer access.
True    False

13. Retail businesses generally prefer locations that are not near other retailers, as this reduces their competition.
True    False

14. Technology has made communication with global operations as easy as local communication.
True    False

15. Factor rating is limited to quantitative information concerning location decisions.
True    False

16. As a result of the factor rating analysis, a manager may sometimes reject all of the alternatives under consideration when the composite scores are below the minimum threshold value.
True    False

17. The lower cost of foreign labor is often offset by lower levels of productivity.
True    False

18. The center of gravity method is a location planning technique that determines a composite score from weighted factor evaluation.
True    False

19. The center of gravity method is useful in location planning for the location of a distribution center.
True    False

20. The center of gravity method of location planning is accurate only when the quantities to be shipped to each location are equal.
True    False

21. Location decisions are closely tied to an organization's strategies.
True    False

22. A "micro-factory" is a small, automated facility with a narrow product focus located near major markets.
True    False

23. One of the reasons for the importance of location decisions is its strategic importance to the supply chains.
True    False

24. Nearness to raw materials would be most important to a ¼
A. grocery store
B. tax preparation service
C. manufacturing company
D. post office
E. hospital

25. A one-hour photo processing machine in a Wal-Mart store is an example of a _________.
A. micro-factory
B. downsize strategy
C. diversified strategy
D. lean production system
E. falling price strategy

26. Which statement best characterizes a typical search for location alternatives?
A. identify the best location choice
B. minimize cost consequences
C. maximize associated profits
D. locate near markets
E. identify acceptable locations

27. Which of the following is not a location option that management can consider in location planning?
A. expand an existing facility
C. relocate from one location to another
D. do nothing
E. All are possible options.

28. Which of the following is the last step in the procedure for making location decisions?
A. determine the evaluation criteria
B. identify important factors
C. develop location alternatives
D. evaluate alternatives and make a selection
E. request input regarding alternatives

29. When a location evaluation includes both quantitative and qualitative inputs, a technique that can be used is ___________.
A. Linear programming
B. Consumer surveys
C. Factor rating
D. Transportation models
E. Center of gravity methods

30. The center of gravity method is used to _______ travel time, distance and costs.
A. Normalize
B. Eliminate
C. Average
D. Minimize
E. Document

31. In location planning, the location of raw materials, the location of markets, and labor factors are:
A. regional factors
B. community factors
C. site-related factors
D. national factors
E. minor considerations

32. Software systems known as GIS help in location analysis. The initials GIS stand for _______.
A. Graphic Interface Systems
B. Global Integrated Software
D. Geo Intensive Software
E. Geographical Information System

33. Facilities, personnel and operations that are located around the world are called:
A. non-domestic
B. diversified operations
C. globalization
D. worldwide presence
E. virtual organization

34. Some communities offer financial and other incentives to ______ new businesses.
A. Tax
B. Attract
C. Marginalize
D. Incorporate
E. Zone

35. Location options don't usually include:
A. expansion
B. a contract
D. moving
E. doing nothing

36. Cultural differences, Customer preferences, Labor and Resources are factors relating to:
A. Regional choices
B. Site selection
C. Zoning
D. Product design
E. Foreign locations

37. The method for evaluating location alternatives which uses their total cost curves is:
A. cost-volume analysis
B. transportation model analysis
C. factor rating analysis
D. linear regression analysis
E. MODI analysis

38. The method for evaluating location alternatives which minimizes shipping costs between multiple sending and receiving locations is:
A. cost-volume analysis
B. transportation model analysis
C. factor rating analysis
D. linear regression analysis
E. MODI analysis

39. The method for evaluating location alternatives which uses their composite (weighted-average) scores is:
A. cost-volume analysis
B. transportation model analysis
C. factor rating analysis
D. linear regression analysis
E. MODI analysis

40. An approach to location analysis that can include both qualitative and quantitative considerations is:
A. location cost-volume
B. factor rating
C. transportation model
D. expected value (net present value)
E. financial analysis

41. A location analysis has been narrowed down to two locations, Akron and Boston. The main factors in the decision will be the supply of raw materials, which has a weight of .50, transportation cost, which has a weight of .40, and labor cost, which has a weight of .10. The scores for raw materials, transportation, and labor are for Akron 60, 80, and 70, respectively; for Boston 70, 50, and 90, respectively. Given this information and a minimum acceptable composite score of 75, we can say that the manager should:
A. be indifferent between these locations
B. choose Akron
C. choose Boston
D. reject both locations
E. build a plant in both cities

42. A manager must decide between two location alternatives, Boston and Chicago. Boston would have annual fixed costs of \$70,000, transportation costs of \$60 per unit, and labor and material costs of \$200 per unit. Chicago would have annual fixed costs of \$90,000, transportation costs of \$40 per unit, and labor and material costs of \$170 per unit. Revenue will be \$300 per unit.
(A) Which alternative would yield the higher profit for an annual demand of 3,000 units?
(B) Would the two locations yield the same profit at a certain volume? If so, at what volume would that be?

43. A firm is trying to decide between two location alternatives, Albany and Baltimore. Albany would result in annual fixed costs of \$60,000, labor costs of \$7 per unit, material costs of \$10 per unit, transportation costs of \$15 per unit, and revenue per unit of \$50. Baltimore would have annual fixed costs of \$80,000, labor costs of \$6 per unit, material costs of \$9 per unit, transportation costs of \$14 per unit, and revenue per unit of \$48.
(A) At an annual volume of 9,000, which would yield the higher profit?
(B) At what annual volume would management be indifferent between the two alternatives in terms of annual profits?

44. Given the information below on scores of three location alternatives, which alternative would you recommend? Why?

45. Determine the center of gravity location for the destinations and shipping quantities shown below:

46. Determine the optimum location for a distribution center to serve the following locations. Shipments to each location will be approximately equal.

The Skulls, a student social organization, has two different locations under consideration for constructing a new chapter house. Skull's president, a POM student, estimates that due to differing land costs, utility rates, etc., both fixed and variable costs would be different for each of the proposed sites, as follows:

47. What would be total annual costs for the Alpha Ave. location with twenty persons living there?
A. \$5,400
B. \$4,000
C. \$5,000
D. \$7,000
E. \$9,000

48. What would be total annual costs for either location at the point of indifference?
A. \$13,000
B. \$13,350
C. \$9,000
D. \$17,000
E. \$19,200

49. If it is estimated that thirty persons will be living in this new chapter house, which location should the Skulls select?
A. Alpha Ave.
B. Beta Blvd.
C. either Alpha Ave. or Beta Blvd.
D. reject both Alpha Ave. nor Beta Blvd.
E. become a virtual organization

50. If it is estimated that thirty persons will be living in this new chapter house, what would be the Skull's annual cost savings by selecting the less costly location, rather than the more costly?
A. \$0
B. \$1,500
C. \$200
D. \$150
E. \$350

51. What are total costs for site A for a quantity of 5,000 units per year?

52. What are total costs for site B for a quantity of 5,000 units per year?

53. What are total costs for site C for a quantity of 5,000 units per year?

54. For what quantity would you be indifferent between selecting site A or site B?

55. For what quantity would you be indifferent between selecting site B or site C?

56. For what range of output would you prefer site A?

57. For what range of output would you prefer site B?

58. For what range of output would you prefer site C?

59. Which site would you prefer for a quantity of 20,000 units per year?

60. For the preferred site for 20,000 units per year, what would be your total costs?

61. For the preferred site for 20,000 units per year, what would be your cost savings compared to each of the other two sites?

A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows:

62. At what annual output would the company be indifferent between the two locations?
A. 60,000 units
B. 15,000 units
C. 10,000 units
D. 20,000 units
E. 4,000 units

63. What would the total annual costs be for the Phoenix location with an annual output of 10,000 units?
A. \$280,000
B. \$140,000
C. \$220,000
D. \$300,000
E. \$156,000

64. What would be the total annual costs at the point of indifference?
A. \$300,000
B. \$240,000
C. \$380,000
D. \$220,000
E. \$760,000

65. If annual demand is estimated to be 20,000 units, which location should the company select?
A. Atlanta
B. Phoenix
C. either Atlanta or Phoenix
D. reject both Atlanta and Phoenix
E. build at both locations

66. If the annual demand will be 20,000 units, what would be the cost advantage of the better location?
A. \$20,000
B. \$460,000
C. \$480,000
D. \$80,000
E. \$60,000

A location analysis has been narrowed down to three locations. The critical factors, their weights, and the ratings for each location are shown below:

67. What is the composite score for location A?
A. 76
B. 75
C. 78
D. 74
E. 76.33

68. What is the composite score for location B?
A. 76
B. 75
C. 78
D. 74
E. 76.33

69. What is the composite score for location C?
A. 76
B. 75
C. 78
D. 74
E. 76.33

70. If the selection criteria is to be the greatest composite score, management should choose:
A. location A
B. location B
C. location C
D. either B or C
E. to reject all locations

71. If the decisions rule is to select the location with the greatest composite score exceeding 80, management should choose:
A. location A
B. location B
C. location C
D. either B or C
E. to reject all locations

A clothing manufacturer produces clothing in five locations in the U. S. In a move to vertical integration, the company is planning a new fabric production plant that will supply fabric to all five clothing plants. The clothing plants have been located on a coordinate system as follows:

72. If the amount of fabric shipped to each plant is equal, what is the optimal location for the fabric plant?
A. 5, 5
B. 6, 4
C. 4, 6
D. 6, 2
E. 5, 4

73. Shipments of fabric to each plant vary per week as follows: plant A, 200 units; plant B, 400 units; plant C, 300 units; plant D, 300 units; and plant E, 200 units. What is the optimal location for the fabric plant?
A. 6.2, 3.0
B. 6.0, 4.0
C. 6.5, 5.3
D. 5.6, 4.4
E. 5.0, 3.0

A hardware distributor has regional warehouses at the locations shown below. The company wants to locate a new central distribution center to serve this warehouse network.

74. If weekly shipments to each warehouse will be approximately equal, what is the optimal location for the distribution center?
A. 5, 5
B. 5, 4
C. 4, 5
D. 5, 6
E. 6, 5

75. Weekly shipments to each warehouse will be: WH1, 100; WH2, 150; WH3, 120; WH4, 150; and WH5, 120. What is the optimal location of the distribution center?
A. 5.1, 4.2
B. 5.2, 4.0
C. 5.1, 5.1
D. 4.2, 5.1
E. 4.9, 5.2

76. Which of the following circumstances would be least likely to lead to a need for a new location?
A. Shifting of markets.
B. Depletion of basic inputs.
C. Growth in demand that is leading to greater utilization of existing capacity.
D. The need to expand into new markets.
E. The opportunity to take advantage of globalization trends.

77. Which of the following is least important as a consideration for a firm at the beginning of a supply chain?
C. Proximity to customers

78. Location choice I has monthly fixed costs of \$100,000 and per-unit variable costs of \$10. What would its total cost be at a monthly volume of 250 units?
A. \$105,200
B. \$102,500
C. \$100,250
D. \$100,520
E. \$105,500

79. Location choice I has monthly fixed costs of \$100,000 and per-unit variable costs of \$10. What would its total cost be at a monthly volume of 550 units?
A. \$105,200
B. \$102,500
C. \$100,250
D. \$100,520
E. \$105,500

80. Location choice I has monthly fixed costs of \$100,000 and per-unit variable costs of \$10. Location choice J has monthly fixed costs of \$150,000 and per-unit variable costs of \$9. At what volume would these locations have equal total costs?
A. 30,000 units
B. 25,000 units
C. 40,000 units
D. 50,000 units
E. 60,000 units