business multiple choice questions

Question 1

1. Raw materials have value added by the operations. Mining, growing, refining, cleaning, packing and shipping add value.

True

False

2.5 points

Question 2

1. Quality standards for components and subassemblies do not have to be clearly set by the materials manager for the producer.

True

False

2.5 points

Question 3

1. Vertical integration is achieved by buying companies able to provide components that are otherwise purchased from suppliers.

True

False

2.5 points

Question 4

1. DOI (days of inventory) is a measure that is equivalent to dividing total stock on-hand by the average demand per day.

True

False

2.5 points

Question 5

1. In the business environment of the United States, personal relationships are not considered to be a reasonable basis for enterprise decisions. They exist nevertheless in less blatant forms than in other cultures.

True

False

2.5 points

Question 6

1. Wal-Mart uses cross-docking to transfer goods from incoming trucks at the receiving dock to outgoing trucks at the shipping docks.

True

False

2.5 points

Question 7

1. _____ are needed to evaluate and balance the disadvantages of having large amounts of stock on-hand (SOH) against the benefits of large order quantities placed long in advance of delivery so that substantial quantity discounts can be obtained.

		Life-cycle models
		Trade-off models
		Order size models
		all of the above

2.5 points

Question 8

1. The cost of materials is often less crucial than _____

		on-time delivery.
		project completion date.
		carrying costs.
		TQM.

2.5 points

Question 9

1. Which function is part of the responsibilities of the materials control department?

		inspecting incoming materials
		expediting flows
		arranging for and regulating shipments
		international accounts payable department
		all of the above

2.5 points

Question 10

1. _____ has become a global system.

		Freshness dating
		EDI use
		Out-sourcing
		Invoicing

2.5 points

Question 11

1. Failing to achieve high turnover rates can be caused by

		carrying excessive inventories.
		overestimating demand.
		prices being too high for customers.
		smart competitive moves.
		all of the above

2.5 points

Question 12

1. It is neither ethical nor legal for vendors to use bribes to influence purchasing decisions in _____

		Japan.
		Argentina.
		the U.S.A.
		Egypt.

2.5 points

Question 13

1. The receiving facility is often called the _____, and another location for shipping is called a _____.

		shipping dock; receiving dock
		receiving dock; shipping dock
		cross-docking block; dock-crossing block
		receiving distribution center; shipping floor

2.5 points

Question 14

1. Cross-docking is the transfer of goods from _____

		incoming trucks at receiving docks to outgoing trucks at shipping docks.
		incoming trucks at receiving floors to forklift trucks on the shipping floors.
		incoming trucks at shipping docks to outgoing trucks at receiving docks.
		outgoing trucks at shipping docks to incoming trucks at receiving docks.

2.5 points

Question 15

1. Bidding models show that as the number of bidders competing _____, the size of the winning bid decreases.

		decreases
		changes
		increases
		is unknown

2.5 points

Question 16

1. _____ occurs when purchased components are further transformed by the company's production process.

		Acquisition
		Raw Material
		Value Adding
		Extraction

2.5 points

Question 17

1. Components (C) and sub-assemblies (SA) are purchased materials that have _____ value added than the raw materials of which they are made.

		less
		greater
		same
		none of the above

2.5 points

Question 18

1. _____ means following up on orders and doing whatever can be done to move materials faster.

		Last-in first-out
		First-in first-out
		Expediting
		WIP

2.5 points

Question 19

1. The importance of the buying function depends upon the extent to which the company requires

		suppliers.
		outside suppliers.
		raw materials suppliers.
		all of the above

2.5 points

Question 20

1. Bullwhip effect refers to

		shortages
		overstock
		both a. and b.
		safety stock

2.5 points

Question 21

1. In a double sampling plan the two acceptance numbers are: c1 = 8 and c2 = 12. The number of defectives found in the first sample is 9. Therefore, a second sample is taken. What is the maximum number of defectives allowed in the second sample for the lot to be accepted?

		0
		1
		2
		3
		4

5 points

Question 22

1. Twenty samples of n = 200 were taken by an operator at a workstation in a production process. The number of defective items in each sample was recorded as given in the following table. Management wants to develop a p-chart. The desired confidence level is 80.0 percent. What is the upper control limit?

Sample	Number of Defectives	Sample	Number of Defectives
1	12	11	16
2	18	12	15
3	10	13	13
4	15	14	16
5	16	15	18
6	19	16	17
7	17	17	18
8	12	18	20
9	11	19	21
10	14	20	22

		close to 0.08
		close to 0.019
		close to 1.28
		close 0.105
		close to 0.8

5 points

Question 23

1. Cans of soup are supposed to weigh exactly 16 oz. Inspectors want to develop process control charts. They take eight samples of five boxes and weigh them. They obtain the following data. What is the upper control limit for the x-bar chart?

Sample	Mean	Range
1	15.2	1.8
2	14.6	0.7
3	16.5	0.5
4	18.1	0.4
5	13.2	0.2
6	16.0	0.4
7	15.9	0.5
8	14.8	0.9
		close to 15.79
		close to 15.93
		close to 15.54
		close to 15.82

5 points

Question 24

1. Cans of soup are supposed to weigh exactly 16 oz. Inspectors want to develop process control charts. They take eight samples of five boxes and weigh them. They obtain the following data. What is the upper control limit for the R chart?

Sample	Mean	Range
1	15.2	1.8
2	14.6	0.7
3	16.5	0.5
4	18.1	0.4
5	13.2	0.2
6	16.0	0.4
7	15.9	0.5
8	14.8	0.9
		close to 1.42
		close to 0.78
		close to 1.12
		close to 0.82

5 points

Question 25

1. Cans of soup are supposed to weigh exactly 16 oz. Inspectors want to develop process control charts. They take eight samples of five boxes and weigh them. They obtain the following data. Is the process in a state of control?

Sample	Mean	Range
1	15.2	1.8
2	14.6	0.7
3	16.5	0.5
4	18.1	0.4
5	13.2	0.2
6	16.0	0.4
7	15.9	0.5
8	14.8	0.9
		yes (in control)
		no (not in control)

5 points

Question 26

1. Eight samples of n = 50 were taken by an operator at a workstation in a production process. The number of defective items in each sample was recorded as follows. Is the process in a state of control? Assume z =3.

Sample	Number of Defectives
1	10
2	0
3	12
4	8
5	10
6	16
7	14
8	10
		yes (in control)
		no (out of control)

5 points

Question 27

1. Cholesterol Palace is a fast-food restaurant. Management was concerned with errors in filling orders at its drive-up window. It hired several undercover quality inspectors to randomly place 100 orders while the process seemed to be in control. The completed orders were then checked for accuracy. What is the average number of defects per order based on these data?

Defect	Frequency
Incomplete, shorter order	12
Unordered items dispensed	2
Wrong product dispensed	14
Wrong toppings	14
Wrong size drink	2
Drink lid not sealed	17
No drinking straw with soft drink order	0
No napkins	18
Far too many condiment packets	65
No salt with sandwich or fries order	10
Wrong change	3
Other	12

		close to 1.69
		close to 169
		close to 0.59
		close to 2.00

5 points

Question 28

1. Cholesterol Palace is a fast-food restaurant. Management was concerned with errors in filling orders at its drive-up window. It hired several undercover quality inspectors to randomly place 100 orders while the process seemed to be in control. The completed orders were then checked for accuracy. What is the lower control limit for a c-chart. Use z =3.

Defect	Frequency
Incomplete, shorter order	12
Unordered items dispensed	2
Wrong product dispensed	14
Wrong toppings	14
Wrong size drink	2
Drink lid not sealed	17
No drinking straw with soft drink order	0
No napkins	18
Far too many condiment packets	65
No salt with sandwich or fries order	10
Wrong change	3
Other	12
		close to -2.21
		close to 1.3
		close to 3.0
		zero (0)
		close to 1.69

5 points

Question 29

1. Cholesterol Palace is a fast-food restaurant. Management was concerned with errors in filling orders at its drive-up window. It hired several undercover quality inspectors to randomly place 100 orders while the process seemed to be in control. The completed orders were then checked for accuracy.

Defect	Frequency
Incomplete, shorter order	12
Unordered items dispensed	2
Wrong product dispensed	14
Wrong toppings	14
Wrong size drink	2
Drink lid not sealed	17
No drinking straw with soft drink order	0
No napkins	18
Far too many condiment packets	65
No salt with sandwich or fries order	10
Wrong change	3
Other	12

1. 
   A quality inspector just used the drive-up window and now checks her order. Her cheeseburger has mustard on it although she ordered it without ketchup or mustard. Three handfuls of ketchup and mustard packets (far too many) are in the sack, but no napkins. And hot coffee has spilled because the lid wasn't properly sealed. Is the drive-up process in control?

		yes (in control)
		no (not in control)

5 points

Question 30

1. In a single sampling plan the sample size n =5. The submitted lot has on an average 25% defective items. Three acceptance numbers ( c = 0, c =1, and c=2) are being negotiated between the manufacturer and the buyer. Which acceptance number is most desirable from the manufacturer's viewpoint. You may use the following OC curve to find the answer.

		c = 0
		c = 1
		c = 2

5 points

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