Making Waves MAN 3506 (Operations Management) Summer 2015 Exam 2

Question 1

Which term most closely relates to remanufacturing?

A. resorting

B. reselling

C. recycling

D. redesigning

Question 2

The research and development activity which starts after positive research results are available and attempts to turn these results into useful commercial applications is:

A. basic research

B. redesign

C. commercial research

D. development

E. applied research

Question 3

Which of the following is an issue that designers must take into account in product and service design?

A. range of operating conditions

B. standardization

C. legal, environmental, and ethical issues

D. all of these

E. reliability

Question 6

Incorporating design for disassembly (DFD) principles in product design helps firms with ___________ design issues.

A. Re-use

B. Legal

C. Reverse engineering

D. Social

E. Re-engineering

Question 7

The Kano model illustrates that "wow" features can become "expected" features over time.

True

False

Question 8

Ideas for new or improved designs can come from:

all of these

customers

competitors

research and development departments

production departments

Question 9

Service design generally differs from product design in which of the following ways?

A. Service design tends to focus on tangible factors.

B. There is a lesser requirement to be aware of competitors' offerings.

C. There is no difference.

D. There is less visibility to customers.

E. There is less latitude in detecting and correcting errors in design prior to delivery.

Question 10

The process of dismantling and examining a competitor's product to get design ideas would be regarded as

A. illegal

B. unethical

C. reverse engineering

D. benchmarking

Question 11

Utilization is defined as the ratio of:

A. design capacity to actual output

B. design capacity to effective capacity

C. actual output to effective capacity

D. effective capacity to actual output

E. actual output to design capacity

Question 12

Students at a major university must go through several registration steps. Officials have observed that it is typically the case that the waiting line at the fee-payment station is the longest. This would seem to suggest that the fee-payment station is the ___________ in the student registration process.

A. capacity cushion

B. restraint

C. diseconomy of scale

D. bottleneck

E. economy of scale

Question 13

Capacity decisions are usually one-time decisions; once they have been made, we know the limits of our operations.

True

False

Question 14

A basic question in capacity planning is:

A. when is it needed

B. all of these

C. how much is needed

D. none of these

E. what kind is needed

Question 15

Utilization is defined as the ratio of effective capacity to design capacity.

True

False

Question 16

An example of an external factor that influences effective capacity is government safety regulations.

True

False

Question 17

Efficiency is defined as the ratio of:

A. design capacity to effective capacity

B. actual output to effective capacity

C. effective capacity to actual output

D. design capacity to actual output

E. actual output to design capacity

Question 18

A capacity cushion is the difference between capacity and expected demand.

True

False

Question 19

Design capacity refers to the maximum output that can possibly be attained.

True

False

Question 20

Capacity increases are usually acquired in fairly large "chunks" rather than in smooth increments.

True

False

Question 21

The current trend toward global operations has made capacity decisions much easier since we have the whole world in which to consider operations.

True

False

Question 22

Laser technology used in surgical procedures is an example of technological advances in:

A. Service

B. Product

C. Information

D. Process

Question 23

Morale problems can be a reason for redesign of a facility layout.

True

False

Question 24

Which two types of processing systems would most likely be used to produce iPods?

A. job shop or continuous

B. batch or job shop

C. assembly or batch

D. continuous or assembly

Question 25

Which type of processing system tends to produce the most product variety?

A. Continuous

B. Job-Shop

C. Assembly

D. Batch

Question 26

The type of layout that would be used to build a submarine is:

A. process

B. aquatic

C. product

D. fixed-position

Question 27

Which of the following is a primary concern for process selection?

A. all of these

B. volume of output

C. flexibility of equipment

D. variety in products/services

Question 28

The design of service layouts, e.g., warehouse and supermarket layouts, focuses on cost minimization and product flow.

True

False

Question 29

Which type of operation would be most closely associated with division of labor?

A. continuous

B. job shop

C. batch

D. assembly

Question 30

Which of the following process types would be more likely to be used in the introductory phase of a product's life-cycle?

A. job shop

B. continuous

C. batch

D. intermittent

E. project

Question 31

The type of processing system which is used for highly standardized products is:

A. batch

B. intermittent

C. unit

D. project

E. continuous

Question 32

Interest, insurance, and opportunity costs are all associated with holding costs.

True

False

Question 33

Annual ordering cost is inversely related to order size.

True

False

Question 34

Safety stock is held because we anticipate future demand.

True

False

Question 35

Solving quality problems can lead to lower inventory levels.

True

False

Question 36

The larger the number of orders placed, the larger the average level of inventory.

True

False

Question 37

A quantity discount will lower the reorder point.

True

False

Question 38

In the A-B-C classification system, items which account for fifteen percent of the total dollar-volume for a majority of the inventory items would be classified as:

A. C items

B. A items

C. A items plus B items

D. B items

E. B items plus C items

Question 39

Which of the following is not true for Economic Production Quantity model?

A. Run size exceeds maximum inventory.

B. Average inventory is one-half maximum inventory.

C. Usage rate is constant.

D. There are no ordering or setup costs.

E. Production rate exceeds usage rate.

Question 40

The purpose of "cycle counting" is to:

A. reduce theft

B. count bicycles and motorcycles in inventory

C. count all the items in inventory

D. count 10% of the items each month

E. reduce discrepancies between inventory records and actual

Question 41

In the basic EOQ model, if lead time increases from five to 10 days, the EOQ will:

A. none of these

B. double

C. decrease by a factor of two

D. increase, but not double

E. remain the same

Question 42

The need for safety stocks can be reduced by an operations strategy which:

A. increases lot sizes

B. decreases lead time variability

C. decreases ordering costs

D. increases lead time

E. increases lead time variability

Question 43

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

A. the variability of demand

B. the EOQ

C. all are factors

D. the lead time

E. the demand or usage rate

Question 44

Which one of the following is implied by a "lead time" service level of 95 percent?

A. None of these.

B. The probability is 95 percent that demand during lead time will exactly equal the amount on hand at the beginning of lead time.

C. The probability is 95 percent that demand during lead time will not exceed the amount on hand at the beginning of lead time.

D. Approximately 95 percent of inventory will be used during lead time

E. Approximately 95 percent of demand during lead time will be satisfied.

Question 45

An operations strategy which recognizes high carrying costs and reduces ordering costs will result in:

A. slightly decreased order quantities

B. unchanged order quantities

C. slightly increased order quantities

D. greatly increased order quantities

E. greatly decreased order quantities

Question 46

PET STORE PROBLEM: A local retailer of pet food faces demand for one of its items at a constant rate of 30,000 bags per year. It costs them $10 to process an order and $1 per bag per year to carry the item in stock. The stock is received four working days after an order is placed. Assume 300 working days in a year and no backordering. What is the reorder point?

A. 600

B. 400

C. 500

D. 300

E. cannot be calculated with given information

Question 47

ACE HARWARE STORE PROBLEM: Ace Hardware has introduced the following quantity discounts for a special product:

Order Quantity Price per Unit

0-299 $60.00

300-499 $58.80

500 or more $57.00

The annual demand for this item is 936, its ordering cost is $45 per order, and its annual holding cost is 25 percent of the unit price. What is the optimal order quantity?

A. 75

B. 500

C. 499

D. 76

E. 77

F. 300