OPS MGMT Multiple Choice Questions Exam Set

Question 1

The reorder point in a continuous review system is ________.

Answer

		the sum of the safety stock level and the average demand during lead time
		the safety stock level
		the sum of the economic order quantity and average demand during lead time
		the sum of the safety stock level and the economic order quantity

Question 2

Which of the following is a characteristic of competitive clustering?

Answer

		an organization groups several outlets near each other
		several organizations are located closely together
		there is a risk of cannibalization of sales
		outlets are sometimes located near to market generators

Question 3

The Anderson Palmer Hospital would like to reduce the cost of its inventory by calculating the optimal order size for hypodermic needles. On average, the hospital uses 200 needles per month. The purchasing staff has calculated that the EOQ for needles is 160 needles. If they proceed to purchase in EOQ quantities, how many orders per year will be placed?

Answer

		About 15 orders per year
		About 18 orders per year
		About 20 orders per year
		About 30 orders per year

Question 4

A textbook retailer wants to locate a facility which is most convenient to their student customers. Five universities have been identified and located on a grid map as shown on the table below. Enrollment at each university is represented by the value inside each circle on the map. Using a cross-median method, the optimal location for the retailer is a ________

Answer

		single point
		line segment between two points
		rectangle formed by four points
		none of the above

Question 5

The Anderson Palmer Hospital would like to reduce the cost of its inventory by calculating the optimal order size for hypodermic needles. On average, the hospital uses 80 needles per month, the cost of placing an order is $14, and holding cost is estimated to be $1.20 per needle per year. Using the EOQ formula, the optimal order size is ______

Answer

		About 40 needles
		About 60 needles
		About 130 needles
		About 150 needles

Question 6

A textbook retailer wants to locate a facility which is most convenient to their student customers. Five universities have been identified and located on a grid map as shown on the table below. Enrollment at each university is represented by the value inside each circle on the map. Using a cross-median method, the optimal location for the retailer is on the map ________

Answer

		at coordinates x=1, y=3
		at coordinates x=2, y=2
		at coordinates x=3, y=2
		anywhere between (x=2, y=2) and (x=3, y=2)

Question 7

The local distributor for Macho Heavy Beer is reconsidering its inventory policy now that only kegs will be sold. The sales forecast for next year is 1,200 kegs. The cost to store a keg of Macho in a refrigerated warehouse is approximately $4 per year. Placing an order with the factory costs about $5. Recommend an EOQ for Macho Heavy Beer.

Answer

		About 45 kegs
		About 55 kegs
		About 65 kegs
		About 75 kegs

Question 8

Which of the following distance metrics would provide the most accurate travel time for auto travel in Broward County

Answer

		Euclidian metric
		Metropolitan metric
		Network arc
		Longitudinal arc

Question 9

In a single location, single service business, all of the following are typical success factors EXCEPT ________

Answer

		building a preferred position among local customers
		allowing for capacity expansion on site
		developing standardized processes with sophisticated control systems
		adding peripheral services

Question 10

Which of the following is true in relation to following EOQ graph?

Answer

		Curve J represents the annual ordering cost, and curve K represents the annual holding cost.
		Curve K represents the annual ordering cost, and curve J represents the annual holding cost.
		Curve J represents the total annual cost, and curve K represents the annual ordering cost.
		Curve L represents the annual ordering cost, and curve K represents the annual holding cost.

Question 11

All of the following are common conflicts between franchisers and franchisees EXCEPT ________.

Answer

		when franchisee facilities should be upgraded
		how far a franchiser should go in saturating a single market area with outlets
		which employees should be promoted to management
		how fees should be established and profits distributed

Question 12

A textbook retailer wants to locate a facility which is most convenient to their student customers. Five universities have been identified and located on a grid map as shown on the table below. Enrollment at each university is represented by the value inside each circle on the map. Using a cross-median method, the optimal location for the retailer is on the map ________

Answer

		at coordinates x=2, y=4
		at coordinates x=2, y=2
		anywhere between (x=2, y=2) and (x=2, y=3)
		anywhere between (x=2, y=2) and (x=2, y=4)

Question 13

A textbook retailer wants to locate a facility which is most convenient to their student customers. Five universities have been identified and located on a grid map as shown on the table below. Enrollment at each university is represented by the value inside each circle on the map. Using a cross-median method, the optimal location for the retailer is a ________

Answer

		single point
		line segment between two points
		rectangle formed by four points
		none of the above

Question 14

If a cereal manufacturer were to sell its globally-branded cereals that were developed in its home country, but customize the formula and supply chain for each country in which it operates, the manufacturer's international operations strategy would be best described as __________.

Answer

		multiplex
		global
		multidomestic
		transnational

Question 15

The local distributor for Macho Heavy Beer is reconsidering its inventory policy now that only kegs will be sold. The sales forecast for next year is 1200 kegs. The cost to store a keg of Macho in a refrigerated warehouse is approximately $4 per year. Placing an order with the factory costs about $6. If orders are placed in pallets of 50 kegs, the brewery is willing to give the local distributor a discount on the wholesale price of each keg. Macho beer must determine the exact discount amount before deciding whether or not to take the discount.

Answer

True

False