MGT 71 Final Exam

what is a synonym for flow rate?

capacity

what are the 2 components for the “production cycle”

production time + setup time (repeats)

define “a batch size”

number of flow units made in one “production cycle”

what is the relationship between batch size and inventory

as batch size increases and decreases so does inventory

does reducing inventory reduce flow time

yes

what do we use to measure the financial impact of improvement in our process along with the operational measures?

ROIC

what are some examples of “fixed costs”

The capacity of a process with a setup time is increasing in a batch size.

True or False?

True because as batch size increases so does capacity.

(this is similar to the previous relationship in this flashcard set)

in a production process with many steps, what is the optimal batch size relationship between the steps?

the same batch size for all steps.

why? : In a process with multiple sub-processes, it is desirable to set the batch size such that the capacities of all sub-processes are the same to minimize the inventory and idle time of sub-processes.

You have a production process with two sub-processes (steps). The first step has a setup time while the second step does not have it. We learned that the batch size changes the capacity of the first step. Then, which batch size should we choose for the first step to minimize the idle time and inventory of the overall process?

A) A batch size that makes the capacity of the first step the same as the second step.

B) A batch size that results in a sufficiently higher capacity than the capacity of the second process.

C) A batch size that would minimize the impact of setup time in the first process.

D) A batch size that would maximize the capacity of the first step

E) A batch size that would maximize the inventory of the first step

A

formal definition of a “batch”

a collection of flow units

What do we call a collection of flow units in a process, where a process stops production after making such a number of units and then, it has a setup-time that does not produce any products before starting another set of production?

a batch

In a batch production process, increasing the batch size as much as possible is always desirable as it increases the process capacity. True or False?

False

As we increase the batch size, the process capacity increases. However, inventory in the process also increases, which is not desirable for a process management.

If the setup of a process occurs at the bottleneck step (and the process is capacity-constrained), it is better to increase the batch size, as this results in:

A) a larger process capacity and an unchanged flow rate.

B) a smaller process capacity and a lower flow rate.

C) a larger process capacity and a lower flow rate.

D) a larger process capacity and a higher flow rate.

E) a smaller process capacity and higher flow rate.

D

Cutting wages and reducing setup times are effective strategies that can be used to improve ROIC.

True

The basic formula for ROIC is

A) process capacity ÷ batch size

B) average invested capital per year.

C) return ÷ invested capital.

D) batch size ÷ inventory.

E) productivity ÷ labor costs.

C

The main idea behind the ROIC is to

A) minimize the costs associated with a process.

B) translate a high-level financial metric into its key operational ingredients.

C) calculate the process capacity for a process.

D) estimate the desired output for a process.

E) determine the optimal flow rate for a process.

B

Reducing the time workers spend waiting for a machine is not effective strategies for improving ROIC.

True or False?

False

Companies and industries use identical strategies with respect to how they achieve a specific ROIC.

True or False?

False

A fishbone diagram graphically represents potential categories of quality issues such that one can systematically brainstorm potential causes of quality problems within each category. 

True or False?

True

The process can be within the control limit but outside the specification limit, and vice versa.

True or False

True

Natural variation is also referred to as _____ variation.

A) common cause

B) input

C) single cause

D) multiple cause

E) none of the above

A

If the probability of a process outcome being less than the LSL is 0.15 and the probability of a process outcome being more than the USL is 0.12, the defect probability is

A) .03

B) .15

C) .12

D) .10

E) .27

E) .27

just add them

Whether or not the outcome variables lead to a defective unit depends on

A) a set of specifications.

B) input variables.

C) None of these answers are correct.

D) moderator variables.

E) environmental variables.

A

what is statistical process control

understanding quality problems and reducing their frequency. this is often done by redesigning the process to fix the root causes.

within the framework of quality, what is an “input” variable?

the variable under control of management. in the case of cucumber farming these can include:

irrigation settings, fertilizer usage, light exposure, pesticides

within the framework of quality, what is an “environmental” variable?

variables that are not under control but still impacts the outcome of the process. these can include:

weather, dust, equipment variations

within the framework of quality, what is an “output” variable?

a variable that measures the process quality output. this can be the end curve of the cucumber or something like the degree of lean on a boat.

within the framework of quality, what is an “specification” variable?

a set of acceptable values for the outcome variable such as the acceptable degree of curve on the boat or cucumber.

within the “Capability Index (Cp)” what are the 2 variables that are part of determining the likelihood of a process to be defective?

formal definition of the “process capability index” or what it measures

the allowable tolerance relative to the variation of the process