OPMA 3306 Mid-term Exam

What are "measures of tendency?"

Mean, median and mode

What are "measures of dispersion?"

Range, standard deviation and variance

Which of the two numbers is larger: 10E7 or 1,000?

10E7

Which of the two numbers is smaller: 10E-3 or 0.001?

They are the same.

How much of a normal distribution is between values located at one standard deviation above and one standard deviation below the mean?

68%

Regarding linear regression, the differences between the values predicted by the regression equation and the actual values in the data set are called?

Residuals

In certain data sets, notably economic income, the distribution is said to be "skewed." In this kind of distribution, the best measure of central tendency is the:

Median

Generally speaking, the "skew" in the distribution is usually thought to be because of the presence of:

Outliers

What is the relationship of the variance to the standard deviation?

The standard deviation is the square root of the variance

Can you add, subtract, multiply and divide standard deviations?

No

True or False: In linear regression, R-square is the amount of systematic variance that your linear regression model accounts for:

True

You are performing a test of statistical inference. In this case, you have a p-value of 0.001. Your alpha level is 0.05. Although you have no way of knowing this, absolutely no difference of any kind exists between the groups you are testing. The null hypothesis is true. How would you describe this?

False positive

As you make the value of alpha smaller, you can avoid one kind of problem. However, another kind of problem will become more likely. Pick the right pair of problems, and in the right sequence (which gets better, which gets worse):

False positive; false negative

True or False. In the majority of cases, capacity is typically fluid and easily adjusted to meet demand as demand fluctuates:

False

True or False. In exponential smoothing, the term "alpha" is multiplied by an error term (deviation) calculated by the difference between the previous term's forecast and previous term's demand:

True

True or False. We said that, as "n" (the number of periods) of the simple moving average becomes larger, it starts to approximate the mean of the distribution:

True

True or False. Short term forecasts are those forecasts covering periods up to, and including, two years.

False. Short term is under 3 months.

Points within the supply chain where inventory is positioned to allow processes or entities in the supply chain to operate independently:

Decoupling points

True of False. In multiplicative seasonal variation, the seasonal amount is constant no matter what the trend or average amount is:

False. The seasonal amount is constant in the additive season variation.

True or False. According to the algorithm provided by the text (and regarding seasonality), the final step in analyzing seasonality is to "multiply trend component by seasonal component:"

True

True or False. A simple moving average can be expressed as a weighted moving average (WMA) in which all the weights are equal:

True

True or False. KPI refers to "King pin inclination," an important engineering concept:

False. Key performance indicator.

True or False. According to lecture, data points that lie outside of the confidence bands of the model are outliers:

True

True or False. In estimating a trend that has a seasonality component, the first step is to de-seasonalize the data:

True

True or False. When demand is not predictable, then excess capacity may be needed if servicing customers quickly is important:

True

Which of the following is not one of the common types of trend illustrated in the book: Sigmoid (S-curve), Linear, Asymptotic, Stepwise.

Stepwise

True or False. Regarding why we forecast demand, we said that capacity is typically fixed, but demand fluctuates and may be seasonal:

True

True or False. Bias errors occur when a consistent mistake is made:

True

These are associated with the concept of "safety stock" and are used to prevent stock outs from occurring:

Inventory Buffers

True or False. The weighted moving average is the most used of all forecasting techniques:

False. Exponential smoothing is.

True or False. In estimating a trend that has a seasonality component, the final step is to re-constitute seasonality to the predicted value you estimated:

True

True or False. Regarding the use of Solver, to estimate weights for an optimized weighted moving average, we set the objective function to maximize RMS:

False. Minimize RMS.

True or False. Strategic forecasts are used for decisions related to strategy and aggregated demand:

True

True or False. Regarding the use of Solver on a new problem, we said that the first step is to select "Reset All:"

True

Which of the following is not one of the four types of forecasting described in the book? Qualitative, Time Series, Causal, Iatrogenic.

Iatrogenic

True or False. Tactical forecasts are used for decisions related to strategy and aggregate demand.

False. Strategy.

True or False. The "Planning Time Index" is a KPI developed regarding traffic flow and is related to daily seasonality of traffic:

True

Which of the following is not one of the four types of forecasting described in the textbook? Qualitative, Time Series, Causal or Sigmoid.

Sigmoid. Simulation is the last one.

Which of these two numbers is smaller: 10E3 or 0.05?

0.05

After determining the significance of the model (using the ANOVA table), the next step is:

Evaluate R-square

True or False. The slope is significant at an alpha level of 0.05:

True

Which of these two numbers is smaller: 10E-03 or 0.05?

10E-03, or .001

What is SAAS?

Sum, average, average, square root

Inventory that involves a one-time purchase of an item, such as T-shirts for a one-time sporting event:

Single Period Model

True or False. When ordering inventory under uncertainty, maintaining an inventory that matches the average demand will result in stockouts 2.5% of the time or less:

False. 50% of the time.

True or False. Single period inventory problems, also known as perishable inventory or newsvendor problems, are common in the fashion industry:

True

The need for any one item is a direct result for some other item, usually an item of which it is a part:

Dependent demand

True or False. Generally, reducing inventories provides an economic benefit:

True

An inventory control model that specifies inventory is ordered at the end of a predetermined time period:

Fixed-Time Period Model

The demands for various items are unrelated to each other:

Independent demand

What is not a purpose of inventory?

To reduce setup (or production change) costs

True or False. Regarding single period inventory models, cost of reordering is an important consideration in calculating the optimal order:

False

True or False. When ordering inventory under uncertainty, maintaining an inventory that matches the average demand will result in stockouts typically 50% of the time:

True

True or False. Regarding single period inventory models, holding costs are an important consideration in calculating the optimal order:

False

What are costs of maintaining inventory?

Shortage, holding, carrying and ordering costs

True or False. Lost profits are calculated using the Cost of Overage:

False. Cost of Underage.

The stock of any item or resource used in an organization:

Inventory

A physical inventory taking technique in which inventory is counted on a frequent basis rather than once or twice a year:

Cycle Counting

An inventory control model where the amount requisitioned is fixed and the actual ordering is triggered by the inventory dropping to a specified level:

Fixed Order Quantity

True or False. Fixed order quantity inventory systems are time triggered models:

False

True or False. Fixed order quantity inventory systems are also called EOQ or Q-model inventory systems:

True

True or False. Single period inventory problems are known as newsvendor or newsperson problems:

True

The amount on-hand plus on-order minus backordered quantities:

Inventory Position

This is a basic type of process structures where similar equipment or functions are grouped together:

Workcenter

A mathematical expression that relates inventory, throughput, and flow time:

Little's Law

This is a basic type of process structures where equipment or processes are arranged according to the progressive steps by which the product is made:

Assembly Line

The time needed to respond to a customer order:

Lead time

True or False. Little's Law states that supply chain processes can be regarded as unrelated and thus treated and analyzed separately:

False

An often automated process that converts raw materials into a finished product in one contiguous process:

Continuous process

A process structure designed to make discrete parts. Parts are moved through a set of specially designed workstations at a controlled rate:

Assembly Line

The time between successive units coming off the end of an assembly line:

Workstation cycle time

According to Little's Law, which of the following can be used to estimate work-in-process inventory:

Throughput times flow time

The attempt to achieve high customer service with minimum levels of inventory investment:

Lean manufacturing

The place where inventory is positioned to allow processes or entities in the supply chain to operate independently:

Customer order decoupling point

An area where simple items that are similar in processing requirements are produced:

Manufacturing cell

True or False. If the sum of the task times required to produce a product is 45 minutes and the cycle time for the same product is 10 minutes, then the theoretical minimum number of workstations is 5 using the assembly line balancing procedure:

True

True or False. In assembly line balancing, the theoretical minimum number of workstations is found by a ratio of the sum of all task times divided by the cycle time:

True

True or False. In balancing an assembly line, workstation cycle time has to be less than the time between successive units coming off the end of the line:

False

True or False. Assume a fixed cost for a process of $120,000. The variable cost to produce each unit of product is $35, and the selling price for the finished product is $50. Which of the following is the number of units that has to be produced and sold to break-even:

8,000

Often referred to as a job shop, a process structure suited for low-volume production of a great variety of nonstandard products. Workcenters sometimes are referred to as departments and are focused on a particular type of operation:

Workcenter

A production environment where pre-assembled components, subassemblies, and modules are put together in response to a specific customer order:

Assemble-to-order

The number of days of inventory of an item. If an item were not replenished, this would be the number of days until the firm would run out of the item (on average). Also, the inverse of inventory turn expressed in days:

Days-of-supply

The cost of goods sold divided by the total average value of inventory:

Inventory turn

A production environment where the product is built directly from raw materials and components in response to a specific customer order:

Make-to-order

The time it takes a unit to flow through a process from beginning to end:

Flow time

The long-term average rate that items flow through a process:

Throughput

True or False. The first step in balancing an assembly line is to specify the precedence relationships among tasks to be performed on the line:

True

Shows the relationships between different production units and how they are used depending on product volume and the degree of product standardization:

Product process matrix

Here the firm works with the customer to design the product, which is then made from purchased materials, parts and components:

Engineer-to-order

The total average investment in raw material, work-in-process, and finished goods inventory. This is valued at the cost to the firm:

Total average value of inventory

True or False. For the purposes of assembly-line balancing, the required workstation cycle time is found by dividing production time per day by the required units of output per day.

True

The product, because of its sheer bulk or weight, remains fixed in a location. Equipment is moved to the product rather than vice versa:

Project layout

The problem of assigning all the tasks to a series of workstations so that each workstation has no more than can be done in the workstation cycle time and so that idle time across all workstations is minimized:

Assembly-line balancing

The order in which tasks must be performed in the assembly process:

Precedence relationship

True or False. Break-even analysis can only be used in production equipment decision making when dealing solely with fixed costs, no variable costs.

False

A production environment where the customer is served on-demand from finished goods inventory.

Make-to-stock

Procedures that prevent mistakes from becoming defects:

Poka-yokes

A characteristic that can be used to guide the design of service systems:

Services cannot be inventoried

True or False. A central problem in many service settings in the management of waiting time:

True

The expected number of customers that arrive each period:

Arrival rate