Exam Prep

if the customer lead time is less than manufacturing lead time, make to stock (MTS) environment may be suitable

TRUE

In quality Function Deployment (QFD customer needs are translated into technical definitions of product and service requirements

TRUE

The critical path is the path that has the most number of activities

FALSE

two-bin system can be used to implement fixed quantity/variable interval inventory model

TRUE

effective supply chain management depends both on the flow of information as well as on the flow of goods

TRUE

A balanced scorecard helps focus manager attention on strategic issues and strategy implementation

TRUE

the bullwhip effect suggest that the demand variation of a particular item at the retailer is usually lower than the demand variation of the same item at the manufacturer

TRUE

In statistical process control, R-chart are used for observations that are discrete in nature

FALSE

companies should try to reduce inventory turns so that they can do business with less amount of inventory and improve operationally

FALSE ( higher number, the better the manager)

Utilization of a machine can never exceed its efficiency

FALSE

at which part of the product life cycle is operations most likely and willing to suffer financial losses from production and sale of goods or services

introduction and growth

which of the following could cause an item to be classified as an A item under ABC inventory classification

High volume usage of the item and high item purchase cost

the economic production quantity (EPQ) model assumes all of the following EXCEPT

instantaneous replenishment

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

EOQ

You have just been asked to oversee 100 people on a two-year project to implement a new student information system similar to a current production that will have twice the effectiveness and cost less to implement. You are uncertain about the time required to complete many of the activities. Which project management technique should you use

MRP

Quality planning and administration, quality training, and quality control procedures are examples of _______.
A. internal failure costs
B. external failure costs
C. appraisal costs
D. prevention costs
E. replacement costs

prevention cost

In the service-system design matrix, a face-to-face total customization service encounter is expected to have which of the following

low production efficiency

which of the following is NOT considered as a major process type

fabrication

the main focus of concurrent engineering is to

reduce the time required to complete all design functions

which of the following would be considered to be a nonrandom pattern on a control chart

14 points in a row, alternating up and down

in a pure demand chase strategy of aggregate planning, changes in demand levels are dealt with:

by hiring and laying off workers

ABC analysis is used, continuous monitoring and accurate record keeping will be most important for ___ items

A

in a fixed quantity inventory system, as the variability of demand of an item increases

the safety stock increases

according to Hau Lee's uncertainty framework which type of supply chain design is likely to be most suitable for an industry having high supply uncertainty and low demand uncertainty

Risk-hedging supply chain

the most important aspect of warehousing strategy is

risk-pooling and consolidation

each month the Blue Ridge manufacturing company uses 200 hours of labor and 400 units of electricity to make 800 machine parts. every 6 months the company has to pay $4500 for the lease of the facility. other expenses cost $1500 per month. the cost of labor is $15 per hour and the cost of electricity is $2 per unit. based on the given information, find the following.

The energy productivity (machine parts per unit of electricity) is

2

800 machine parts/ 400 units of electricity

each month the Blue Ridge manufacturing company uses 200 hours of labor and 400 units of electricity to make 800 machine parts. every 6 months the company has to pay $4500 for the lease of the facility. other expenses cost $1500 per month. the cost of labor is $15 per hour and the cost of electricity is $2 per unit. based on the given information, find the following.

the multi-factor productivity (machine parts per dollar spent) of the company is

0.1322

800 machine parts/[(200 labor hr $15/hr) + (400 units of electric $2/hr) + ($4500 lease/ 6 mos) + ($1500 misc costs)]

the following time estimates are for activity D in a project that is controlled through the use of CPM with three time estimates (optimistic, most likely, and pessimistic respectively)
Activity o m p1
D 8 12 22
which of the following is expected time needed to complete this activity

13

a local retailer is trying to develop an appropriate inventory policy for a commonly used item, cash register tape. presently they order 250 rolls at a time and were interested in knowing is ordering more or less might be advantageous. the demand for cash register tape is 100,000 per year. it costs them 25% of the acquisition cost or unit purchase price to keep one roll of tape in inventory for a year. the order cost is $2.00 and the acquisition cost is $1.00

what is the economic order quantity (EOQ)

about 1,265 rolls

a shop owner uses a reorder point approach to restocking a certain raw material. Lead time is six days. usage of the material lead time is normally distributed with a mean of 42 pounds (i.e. 7 pounds per day) and a standard deviation of 2 pounds per day. the shop owner indicates that the acceptable risk of a stock-out is to be held as 2.5%? use the appropriate Z-value from the tale provided at the end of the test as needed

when should the replenishment order be placed?

when inventory drops to 51.6

a purchasing agent has just received a pricing schedule from a vendor (shown below) Annual demand is 150 units, ordering cost is $9, and annual inventor carrying cost is $1.50 per unit

Quantity Unit price
1-39 $19
40-59 $18
60-89 $17
90+ $16

wha order quantity should the purchasing agent use in order to minimize total relevant costs

60

in an X-bar chart plotting length of machine part the upper control limit is 17.55 mm. from each batch of machine parts produced, samples of size 5 are collected (A2= 0.577, D4= 2.115, D3= 0). the average dispersion (average of ranges from each batch of sample) is 0.2 mm.
the center-line of X-bar chart is

17.43436

a machine is set up to make a component with target length of 10.50 cm with +/-0.2 cm tolerance. assume process mean is 10.56 cm and stnd dev is 0.06 cm
what is the process capability index (Cpk)

0.7777

the average daily demand of DVDs sold at a store is 50. the replenishment leas time is 8 days ad each time the store places a replenishment order it costs $150 (processing fee). The stnd dev of daily demand is 9 units. Annual unit inventory carrying cost is $4. se 365 days in a year for calculation, if needed. the probability of stock-out should be within 5%. unit purchase price of dvds is $3.50. Inventory is reviewed continuously and each time a fixed number od DVDS is ordered

use appropriate Z-value from the table provided at the end of the test as needed

how much safety stock should be kept?

42

the average daily demand of DVDs sold at a store is 50. the replenishment leas time is 8 days ad each time the store places a replenishment order it costs $150 (processing fee). The stnd dev of daily demand is 9 units. Annual unit inventory carrying cost is $4. se 365 days in a year for calculation, if needed. the probability of stock-out should be within 5%. unit purchase price of dvds is $3.50. Inventory is reviewed continuously and each time a fixed number od DVDS is ordered

use appropriate Z-value from the table provided at the end of the test as needed

the store will place order when the inventory falls below a caertian level (reorder point or ROP). suppose safety stock of 17 DVDs is needed to maintain 75% service level. what will be the corresponding (for 75% service level) reorder point?

417

the average daily demand of DVDs sold at a store is 50. the replenishment leas time is 8 days ad each time the store places a replenishment order it costs $150 (processing fee). The stnd dev of daily demand is 9 units. Annual unit inventory carrying cost is $4. se 365 days in a year for calculation, if needed. the probability of stock-out should be within 5%. unit purchase price of dvds is $3.50. Inventory is reviewed continuously and each time a fixed number od DVDS is ordered

use appropriate Z-value from the table provided at the end of the test as needed

how many DVDs should be ordered each time?

1170

the average daily demand of DVDs sold at a store is 50. the replenishment leas time is 8 days ad each time the store places a replenishment order it costs $150 (processing fee). The stnd dev of daily demand is 9 units. Annual unit inventory carrying cost is $4. se 365 days in a year for calculation, if needed. the probability of stock-out should be within 5%. unit purchase price of dvds is $3.50. Inventory is reviewed continuously and each time a fixed number od DVDS is ordered

use appropriate Z-value from the table provided at the end of the test as needed

Suppose the DVD supplier is offering quantity discount on the unit purchase price
Order quantity unit purchase price
1-1499 $3.50
1500-2000 $3.00
if the store likes to take advantage of the deal, how many dvds should it order each time DVDs are replenished?

1500

An aggregate planning for a factory for next 4 months is developed using pure level strategy. Partial info of the plan is provided below

month jan feb mar april
forecast 2000 3000 2750 2250
planned prod 2500 2500 2500 2500
beg inv 250 750 500
end inv 750 250 250
avg inv 500 375

inv. carry cost 3000 2250
payroll

if each employee can finish 50 units per month and monthly payroll cost for each employee is $2500, and unit annual inv caryying cost is $6.
what is the payroll cost for the month of january

$125,000

An aggregate planning for a factory for next 4 months is developed using pure level strategy. Partial info of the plan is provided below

month jan feb mar april
forecast 2000 3000 2750 2250
planned prod 2500 2500 2500 2500
beg inv 250 750 500
end inv 750 250 250
avg inv 500 375

inv. carry cost 3000 2250
payroll

if each employee can finish 50 units per month and monthly payroll cost for each employee is $2500, and unit annual inv caryying cost is $6.

how uch is the inv carrying cost for Feb ONLY

3000

An aggregate planning for a factory for next 4 months is developed using pure level strategy. Partial info of the plan is provided below

month jan feb mar april
forecast 2000 3000 2750 2250
planned prod 2500 2500 2500 2500
beg inv 250 750 500
end inv 750 250 250
avg inv 500 375

inv. carry cost 3000 2250
payroll

if each employee can finish 50 units per month and monthly payroll cost for each employee is $2500, and unit annual inv caryying cost is $6.

what is the ending inventory in March

none of the above

the process flow chart of a bakery is provided below. suppose bread making operations are run for 2 shifts and packing operations are run for 3 shifts every day. the duration of each shift is 8 hours.

Raw material
Bread making cycle time: 1 hr/ 100 loves Bread making cycle time: 1 hr/ 100 loves
WIP
pack cycle time: 3/4 hr/ 100 loaves
Finished goods

based on the information given above

what is the max number of loaves that can be shipped out from the bakery every day? assume unsold loaves from the previous days are discarded.

3200

the process flow chart of a bakery is provided below. suppose bread making operations are run for 2 shifts and packing operations are run for 3 shifts every day. the duration of each shift is 8 hours.

Raw material
Bread making cycle time: 1 hr/ 100 loves Bread making cycle time: 1 hr/ 100 loves
WIP
pack cycle time: 3/4 hr/ 100 loaves
Finished goods

based on the information given above

bread making operations are carried out in two paralled lines. One of the lines is having maintenance and its effective capacity is reduced by 50% what is the max order size of loaves can this bakery handle on a DAILY basis while maintenance work is going on

2400