Operation Management

Which of the following best describes the strategic importance of short-term scheduling? A) Effective scheduling, through lower costs, faster delivery, and more dependable schedules, can provide a competitive advantage. B) Effective scheduling is a tactical tool for increasing demand to meet production. C) Forward scheduling looks to future demand levels in order to increase customer satisfaction. D) Aggregate planning is a tactical action, but short-term scheduling is strategic because of its immense impact on costs.E) Short-term scheduling matches capacity to demand during the short term, three to eighteen months into the future. 2.

The three components that can lead to competitive advantage through effective scheduling are: A) aggregate planning, intermediate scheduling, and medium-term planning. B) forward scheduling, real-time scheduling, and backward scheduling. C) the item master file, the routing file, and the work-center master file. D) lower costs, faster delivery, and more dependable schedules. E) Gantt charts, Johnson’s rule and the Pareto principle. 3.A firm uses graphical techniques in its aggregate planning efforts.

Over the next twelve months (its intermediate period) it estimates the sum of demands to be 105,000 units. The firm has 250 production days per year. In January, which has 22 production days, demand is estimated to be 11,000 units. A graph of demand versus level production will show that: A) the January requirement is below level production of 420 units. B) level production is approximately 1000 units per day. C) level production of 420 units per day is below the January requirement.D) level production is approximately 420 units per month.

E) the firm must hire workers between December and January. 4. Which of the following statements regarding finite capacity scheduling (FCS) is false? A) Finite capacity scheduling allows delivery needs to be balanced against efficiency. B) Finite capacity scheduling overcomes the disadvantages of systems based exclusively on rules. C) Finite capacity scheduling allows virtually instantaneous change by operators. D) Finite capacity scheduling software formalizes the same data needed in any manual system. E) None; all of the above are true.

. The number of kanbans is: A) one. B) the ratio of the reorder point to container size. C) the same as EOQ. D) one full day’s production. E) none of the above. 6.

Which of the following techniques is not a technique for dealing with a bottleneck? A) Schedule throughput to match capacity of the bottleneck. B) Increase capacity of the constraint. C) Have cross-trained employees available to keep the constraint at full operation. D) Develop alternate routings. E) All are tools for dealing with bottlenecks. 7. A master production schedule (MPS) calls for 110 units of Product M.

There are currently 30 of Product M on hand. Each M requires 4 of Component N. There are 20 units of N on hand. The net requirements for N are: A) 150. B) 170. C) 300. D) 320.

E) 440. 8. Dependence on an external source of supply is found in which of the following aggregate planning strategies? A) Varying production rates through overtime or idle time B) Subcontracting C) Using part-time workers D) Back ordering during high demand periods E) Hiring and laying off 9. Five jobs are waiting to be processed. Their processing times and due dates are given below.Using the shortest processing time dispatching rule, in which order should the jobs be processed? |Job |Processing Time (days) |Job due date (days) | |A |4 |7 | |B |7 |4 | |C |8 |11 | |D |3 |5 | |E |5 |8 |A) A, B, C, D, E B) C, E, A, D, B C) B, D, A, E, C D) D, A, E, B, C E) C, E, A, D, B 10. Enterprise resource planning (ERP): A) seldom requires software upgrade or enhancement.

B) does not integrate well with functional areas other than operations. C) is inexpensive to implement. D) automates and integrates the majority of business processes. E) all of the above. 11. Which of the following aggregate planning strategies is a “capacity option”? A) Influencing demand by changing price B) Counterseasonal product mixing C) Influencing demand by extending lead timesD) Changing inventory levels E) Influencing demand by back ordering 12. The probability that a product will function properly for a specified time under stated conditions is: A) functionality.

B) maintenance. C) durability. D) reliability. E) fitness for use. 13. What lot-sizing technique is generally preferred when inventory holding costs are extremely high? A) Lot-for-lot. B) EOQ.

C) Part-period balancing. D) The Wagner-Whitin algorithm. E) All of the above are appropriate for the situation. 14. MRP II is accurately described as: A) MRP software designed for services.B) MRP with a new set of computer programs that execute on microcomputers. C) MRP augmented by other resource variables.

D) an enhancement of MRP that plans for all levels of the supply chain. E) a new generation of MRP software that extends MRP to planning and scheduling functions. 15. Ten high-technology batteries are tested for 200 hours each. One failed at 20 hours; all others completed the test. FR(%) is ________ and MTBF is ________. A) 10%; 1/1820 B) 90%; 1/1820 C) 10%; 1820 hours D) 10%; 1980 hours E) Cannot calculate from information provided 16.

The typical time horizon for aggregate planning is:A) less than a month. B) up to 3 months. C) 3 to 18 months. D) over one year. E) over 5 years. 17. Which of the following aggregate planning strategies might direct your client to a competitor? A) Using part-time workers B) Subcontracting C) Changing inventory level D) Varying production rates through overtime or idle time E) Varying work force size by hiring or layoffs 18.

Which of the following statements regarding MRP in services is true? A) MRP is for manufacturing only, and is not applicable to services. B) MRP can be used in services, but only those that offer very limited customization.C) MRP does not work in services because there is no dependent demand. D) Services such as restaurant meals illustrate dependent demand, and require product structure trees, bills-of-material, and scheduling. E) None of the above is true. 19. Which of the following is an aid used to monitor jobs in process? A) A Gantt load chart B) The assignment method C) A Gantt schedule chart D) Johnson’s rule E) None of the above 20.

Which of the following is specifically characterized by a focus on continuous improvement, respect for people, and standard work practices?A) Just-in-time (JIT) B) Toyota Production System (TPS) C) Lean operations D) Material requirements planning (MRP) E) Kanban 21. Which of the following costs tend to be ignored in determining the optimal maintenance policy? A) Expected breakdown costs B) Preventive maintenance costs C) The costs associated with various levels of commitment to maintenance D) Cost of low morale E) all of the above 22. Which of these aggregate planning strategies adjusts capacity to match demand? A) Back ordering. B) Using part-time workers. C) Counterseasonal product mixing. D) Changing price.E) None of the above is a capacity option.

23. Which of these is among the demand options of aggregate planning? A) Subcontracting. B) Back-ordering during high-demand periods. C) Changing inventory levels. D) Varying workforce size. E) All of the above are demand options. 24.

Which of these is not a characteristic that makes yield management attractive? A) Demand can be segmented B) Service can be sold in advance of consumption C) Capacity is easily changed D) Variable costs are low and fixed costs are high E) Demand fluctuates 25. Which one of the following statements about maintenance is true?A) The optimal degree of preventive maintenance is associated with zero breakdowns. B) Breakdown maintenance is proactive. C) Preventive maintenance is reactive. D) Preventive maintenance is limited to keeping machinery and equipment running. E) Human resources are a major component of effective maintenance management. Question 1 throughput time a) cost/price, quality, delivery speed, delivery reliability, and flexibility b) because the customer is involved c) rate at which flow units are output from the process d) time it takes a flow unit to get through the process nswer : d Question 2 essential functions of operations management: marketing, finance/accounting, operations a) variance; is a measure of how values are spread about the mean, often we talk about standard deviation, which is the square root of the varience b) events that slow down the output of an activity (by reducing the available time it can execute) equipment breakdowns, setups, worker unavailabitlity etc.

c) as batch size becomes “larger” throughput time d) marketing: generates (detects) demand answer : d Question 3 observations about moving average ) over the long run, the average throughput rate of a process is always strictly less than its capacity this implies that utilization can never be 100% in the long run b) variance; is a measure of how values are spread about the mean, often we talk about standard deviation, which is the square root of the varience c) as batch size becomes “larger” throughput time increases, the firm is less responsive, to increase process capacity, better to focus on reducing set-up time rather than increase batch size d) responsiveness/stability of MA depends on n, the number of periods in the average MA lags data with significant trendsMA often effective for short term forecasting answer : d Question 4 measuring regression fit a) variance; is a measure of how values are spread about the mean, often we talk about standard deviation, which is the square root of the varience b) High R^2 value: R^2 the percentage of variability in Y that is explained by X R^2 is a unitless measure the closer that R^2 Low Syx value: Syx measures the c) responsiveness/stability of MA depends on n, the number of periods in the average MA lags data with significant trendsMA often effective for short term forecasting d) average throughput time increases with increases in utilization (barring other changes and does so sharply as utilization approaches 100% answer : b Question 5 quantitative forecasting a) number of flow units contained within the process measured in physical units or in dollars b) fraction of time that an activity is busy (not idle)= flow rate into activity/capactiy of activity c) time series models;gt; moving average, exponential smoothing, trend projections casual models;gt;linear regression ) labor: edu. ,diet, and sanitation capital: equipment, building management: tech, knowledge answer : c Question 6 measuring variability a) 1. define the process boundaries 2. list the steps 3. sequence the steps 4. complete the map using appropriate symbols to describe the actions, flows, and waiting b) variance; is a measure of how values are spread about the mean, often we talk about standard deviation, which is the square root of the varience c) Forecast error=Ai-Fi=Acutal-Forecast Mean absolute deviation (MAD)Graphically plot errors over time to detect bias or patterns d) measure of process improvement, represents output relative to input, total factor productivity $value of output/ cost of all inputs answer : b Question 7 queueing theory a) cost/price, quality, delivery speed, delivery reliability, and flexibility b) processing rate; throughput rate of an activity under ideal conditions (no detractors c) the science of waiting lines explains the effect of variability on a process d) increasing variability always degrades the performance of a system answer : cQuestion 8 variability propagation a) as batch size becomes “larger” throughput time increases, the firm is less responsive, to increase process capacity, better to focus on reducing set-up time rather than increase batch size b) forecasts are almost always wrong, the longer the forecast horizon, the less accurate the forecast will be, a good forecast is more than a single number forecasts should incorporate qualitative info aggregate forecasts are more accurate orecasts become worse the further up the supply chain c) variability early in a process routing increases flow time mroe than equivalent variability later in a process routing how variability is propagated depends on the relative utlizations of the different stages in the process d) events that slow down the output of an activity (by reducing the available time it can execute) equipment breakdowns, setups, worker unavailabitlity etc. answer : c Question 9 work-in-process inventory a) cost/price, quality, delivery speed, delivery reliability, and flexibility b) number of flow units contained within the process easured in physical units or in dollars c) 3 months to 2 years; sales and production planning, budgeting and cost projections, capacity planning d) labor: edu.

,diet, and sanitation capital: equipment, building management: tech, knowledge answer : b Question 10 medium range forecast a) correlation coefficient denoted R values range from -1 to 1 measures degree of association when x gets larger y does also b) 3 months to 2 years; sales and production planning, budgeting and cost projections, capacity planning c) model that characterizes the relationship between a dependent variable and variables. ) executive judgment, grass roots, market research, panel consensus, Delphi method historical analogy answer : b Question 11 qualitiative methods a) companies are constantly looking for people that know how to increase work place productivity b) executive judgment, grass roots, market research, panel consensus, delphi method, historical analogy c) labor: edu. ,diet, and sanitation capital: equipment, building management: tech, knowledge d) fraction of time that an activity is busy (not idle) = flow rate into activity/capactiy of activity answer : bQuestion 12 naive forecast a) executive judgment, grass roots, market research, panel consensus, delphi method, historical analogy b) processing rate; throughput rate of an activity under ideal conditions (no detractors c) companies are constantly looking for people that know how to increase work place productivity d) purely naive forecast for the next period is equal to observation from current period answer : D Question 13 productivity a) variability induced by process design etup times incurred between switching product or customer types the activity desgin facilitates simultaneous processing b) average throughput time increases with increases in utilization (barring other changes and does so sharply as utilization approaches 100% c) measure of process improvement, represents output relative to input, total factor productivity $value of output/ cost of all inputs d) model that characterizes the relationship between a dependent variable and multiple independent variables answer : CQuestion 14 utilization a) the science of waiting lines explains the effect of variability on a process b) time series models;gt; moving average, exponential smoothing, trend projections casual models;gt;linear regression c) fraction of time that an activity is busy (not idle) = flow rate into activity/capactiy of activity model that characterizes the relationship between a dependent variable and multiple independent variables answer : C Question 15 actual capacity ) increasing variability always degrades the performance of a system b) processing rate; throughput rate of an activity under ideal conditions (nodetractors c) =design capacity-detractors max avg throughput rate of a process d) time it takes a flow unit to get through the process answer : C Question 16 Why is service productivity lower? A) because the customer is involved B) averaging over the long-run: WIP=throughput rate*throughput time (I=R*T) C) ;gt;2 years; new product planning, facility location D) 2. 5% answer : A Question 17 productivity variablesA) processing rate; throughput rate of an activity under ideal conditions (no detractors B) the science of waiting lines explains the effect of variability on a process C) time series models;gt; moving average, exponential smoothing, trend projections casual models;gt;linear regression D) labor: edu. ,diet, and sanitation capital: equipment, building management: tech, knowledge answer : D Question 18 detractors A) events that slow down the output of an activity (by reducing the available time it can execute) equipment breakdowns, setups, worker unavailabitlity etc.B) variability induced by process design setup times incurred between switching product or customer types the activity desgin facilitates simultaneous processing C) average throughput time increases with increases in utilization (barring other changes and does so sharply as utilization approaches 100% D) linear regression: facilitates alternative forecasting using explanatory factors develop linear trend projections can incorporate seasonality answer : AQuestion 19 Why do we need to know OM? A) purely naive forecast for the next period is equal to observation from current period B) model that characterizes the relationship between a dependent variable and multiple independent variables C) companies are constantly looking for people that know how to increase work place productivity D) executive judgment, grass roots, market research, panel consensus, delphi method, historical analogy answer : B Question 20 process mappingA) ES is a form of weighted moving average, weights decline exponentially with most recent data weighted most responsivness/stability of ES depends on alpha ES lags data with significant trends ES often is very effective for short term forecasting B) a process map clearly describes “how the process actually exists” by diagramming the flow of materials and or information ultimate goal: undesrtand and improve the process so that it generates the most possible value C) marketing: generates (detects) demand finance/accounting: tracks how well the organization is doing, pays bills, collects the money operations: creates the product and/or delivers the service D) as batch size becomes “larger” throughput time increases, the firm is less responsive, to increase process capacity, better to focus on reducing set-up time rather than increase batch size answer : B Question 21 causual forecasting modelA) variance; is a measure of how values are spread about the mean, often we talk about standard deviation, which is the square root of the varience B) linear regression: facilitates alternative forecasting using explanatory factors develop linear trend projections can incorporate seasonality C) variability induced by process design setup times incurred between switching product or customer types the activity desgin facilitates simultaneous processing D) measure of process improvement, represents output relative to input, total factor productivity $value of output/ cost of all inputs answer : B Question 22 queueing theory A) the science of waiting lines explains the effect of variability on a process B) purely naive forecast for the next period is equal to observation from current period C) activity that constrains the capacity of the entire process D) labor: edu. ,diet, and sanitation capital: equipment, building management: tech, knowledge answer : A Question 23 qualitiative methodsA) the science of waiting lines explains the effect of variability on a process B) executive judgment, grass roots, market research, panel consensus, delphi method, historical analogy C) time series models;gt; moving average, exponential smoothing, trend projections casual models;gt;linear regression D) companies are constantly looking for people that know how to increase work place productivity answer : B Question 24 moving average method A) used if data exhibits little or no trend B) rate at which flow units are output from the process C) time it takes a flow unit to get through the process D) because the customer is involved answer : A Question 25 batching A) variability induced by process design setup times incurred between switching product or customer types the activity desgin facilitates simultaneous processing B) High R^2 value:R^2 the percentage of variability in Y that is explained by X R^2 is a unitless measure the closer that R^2 Low Syx value:Syx measures the C) Forecast error=Ai-Fi=Acutal-Forecast Mean absolute deviation (MAD) Graphically plot errors over time to detect bias or patterns D) variance; is a measure of how values are spread about the mean, often we talk about standard deviation, which is the square root of the varience answer : A Question 26 throughput rate A) underlying basis of virtually all business decisions B) time it takes a flow unit to get through the process C) used if data exhibits little or no trend D) rate at which flow units are output from the process answer : D Question 27 bottleneckA) cost/price, quality, delivery speed, delivery reliability, and flexibility B) activity that constrains the capacity of the entire process C) averaging over the long-run: WIP=throughput rate*throughput time (I=R*T) D) rate at which flow units are output from the process answer : B Question 28 multiple linear regression A) processing rate; throughput rate of an activity under ideal conditions (no detractors B) number of flow units contained within the process measured in physical units or in dollars C) model that characterizes the relationship between a dependent variable and multiple independent variables D) fraction of time that an activity is busy (not idle) = flow rate into activity/capactiy of activity answer : C