************************* MIDTERM I *****************************

1. Operations Management is attracting increasing attention due to the recent trends in the industrial world. Which of the following statements correctly represents this recent change? a. The percentage of the world's output produced by the U.S. has been steadily increasing since 1960. b. Compared to the other industrial countries such as Italy and France, the U.S. has a higher rate of productivity growth since 1960. * c. Japan is gaining share of the U.S. market not only in smokestack industries, but also in high-tech industries. d. Compared to manufacturing industries, the service sectors of the U.S. economy has enjoyed much faster growth in productivity during recent decades. e. Third World Countries are more productive than the U.S.. 2. Productivity can be increased in a manufacturing environment by: a. increasing production efficiency by increasing the standard times for jobs. b. reducing production labor costs and material costs. c. increasing the number of goods produced while holding all production costs constant. * d. only (b) and (c) e. (a), (b), and (c) 3. Which one of the following statements about an FMS is true? a. Since an FMS does not require a large initial investment, it can be easily installed. b. An FMS cannot be used with NC or CNC equipment. c. An FMS is limited to machining operations, since assembly operations are not adaptable to this type of technology. * d. An FMS is flexible, due to in large measure its automatic tool interchange capability. 4. The objective of process layout analysis is to: a. maximize the quantity of items processed through the assembly line b. balance the line such that each station does equal amounts of work * c. determine a layout with flexibility in terms of production process d. a, b, and c are correct e. none of the above 5. An advantage of the cellular layout is that: a. specialists with common skills (e.g., welders) are near together so that they can learn from each other and help each other. b. it encourages operators to become more specialized and skillful in particular trade instead of learning just a little about several trades. c. larger pieces of equipment are usable, which permits economies of scale. * d. it cuts setup and flow times.

6. Which one of the following systems is most closely related to this quotation: "All bolts might be assigned to the same part family because they all require the same basic processing steps regardless of variations in size and shape." * a. b. c. d. Line processing. GT. Flexible automation. FMS

7. Which one of the following statements abut quality control is true? * a. Measurement by attributes is a simple yes or no decision. b. Complete inspection is used when inspection cost is high. c. Sampling inspection is used when the cost of passing a defective unit is high relative to cost of inspection. d. Measurement by variables is often used when the quality specifications are complex. 8. "Special cause" refers to quality deviations that are: a. relatively minor. * b. traceable to a specific reason. c. within the three-standard-deviation area encompassed by process control limits. d. all of the above. 9. Trend cannot be estimated by a. drawing a free-hand curve by inspection of plotted data points b. double exponential smoothing. c. least squares regression. * d. simple exponential smoothing 10. In exponential smoothing, what happens as the value of the smoothing constant increases? * a. the forecast responds more quickly to the forecast error at time t. b. the forecast includes a larger percentage of the forecast made for period t. c. the pattern of forecasts is more "smoothed." d. both (a) and (b) e. (a), (b), and (c) 11. One way of testing the accuracy of a forecast is to compare the forecasted and actual values over a few periods through use of: * a. the standard deviation b. time series analysis c. moving average d. all of the above 12. The focus of capacity planning is

a. b. c. d. e.

on item demand rather than aggregate demand. on fixed- rather than adjustable-capacity items. on output (goods and services) rather than on resource inputs. medium-term rather than short-term. all of the above.

13. Which one of the following statements about capacity expansion is true? a. The wait-and-see strategy involves large jumps in capacity compared to the expansionist strategy. b. The expansionist strategy involves frequent jumps in capacity compared to the wait-andsee strategy. c. The expansionist strategy is conservative and minimizes risk. * d. The wait-and-see strategy fits better with competitive priorities emphasizing flexibility, rather than the larger market share of the low-cost producers. USE THE FOLLOWING INFORMATION FOR THE NEXT TWO QUESTIONS. The following sample values represent weight in grams. Center lines for the R-chart and x barchart should be the average of the sample ranges and the average of the sample average, respectively. If necessary, Use a table appended at the end of this exam. Observations Number Sample _________________________________________ Number 1 2 3 4 5 1 2 3 4 5 10.1 9.7 10.1 9.9 10.4 10.6 9.8 9.5 10.3 10.7 9.2 9.8 10.5 10.1 10.9 9.9 9.9 10.0 10.4 9.9 10.9 10.5 10.1 10.1 10.3

14. For the R-chart, what is the value of UCLR? a) less than or equal to 0.90 b) greater than 0.90, but less than or equal to 0.99 c) greater than 0.99, but less than or equal to 1.99 * d) greater than 1.99 15. For the x bar-chart, what is the value of LCLx? a) less than or equal to 9.00 * b) greater than 9.00, but less than or equal to 9.99 c) greater than 9.99, but less than or equal to 10.99

d) greater than 10.99 16. What is the MAD for the following data? Period -----1 2 3 4 a. b. c. d e. Forecast Actual -------- -----100 75 125 100 100 125 125 125

22.5 -6.25 +6.25 18.75 none of the above

17. If a demand of 600 units is expected for the next year and the seasonal index for the next quarter is 1.2, then the forecast for the next quarter in the next year is: (Suppose that there is no trend component in the past data.) a. 125 b. 150 * c. 180 d. 205 e. 720 18. Determine a forecast for August using a single exponential smoothing model with alpha = 0.2. Assume today is August 1st, and the forecast for July was 50. Jan 46 Feb 39 Mar 42 Apr 48 * a. b. c. d. e. 36.9 50.6 49.4 52.3 46.4 May 50 June 47 July 53 Aug

USE THE FOLLOWING INFORMATION FOR THE NEXT TWO QUESTIONS.

The actual demand data is as follows. Time Actual Demand ---------------------------1st quarter 1987 20 2nd quarter 1987 16 3rd quarter 1987 21 4th quarter 1987 18 Time series analyst, Mr. Taylor, had found that the data implies only seasonality. 19. What is the seasonal factor (or, seasonal index) for the 4th quarter? a. 0.68 b. 0.84 * c. 0.96 d. 1.11 e. 1.24 20. If the expected demand in 1988 is 80, what will be a forecast value for the 4th quarter 1988? a. 18.4 * b. 19.2 c. 20.1 d. 20.7 e. 21.5 21.The number of patients in a medical clinic varies over weeks. The following data shows the number of patients in the clinic for the past three weeks. Week ---1 2 3 Number of Patients -----------------401 380 411

How many patients can be expected in week 4 when single exponential smoothing technique with alpha of 0.1 is used? a. 390.21 b. 400.11 c. 410.09 d. 415.23 e. 426.45

22. The Southeast Mfg. Co. is producing two types of products, A and B. Demand forecasts for the next year and other production-related information are provided in the following table. Product A --------Demand forecast (units/yr) 4000 Batch size (units/batch) 80 Standard processing time (hrs/unit) Standard setup time (hrs/batch) Product B --------12000 150 2.5 2.5 18 24

Both products A and B are produced at the same operation called MASAC. The company works 250 days every year and operates 1 shifts, each of which covers 8 hours. how many MASAC machines does the company need in the next year to fully cover the demand of both products(round up)? a. less than 17 b. 17 c. 18 d. 19 * e. greater than 19

23. Which quality costs are in the category of costs of non-conformance which are needed to correct quality problems, such as errors and customer complaints? * a. internal and external failure costs b. prevention and appraisal costs c. internal failure costs and prevention costs d. external failure costs and appraisal costs e. internal failure costs and appraisal costs 24. Scrap and rework are examples of * a. internal failure costs b. external failure costs c. costs of dissatisfaction d. prevention costs e. societal costs 25. To become ISO 9000 certified, organizations must a. document quality procedures b. have an onsite assessment

c. have an ongoing series of audits of their products or service d. all of the above

26. A foundry produces circular utility access hatches (manhole covers). If 120 covers are produced in a 10-hour shift, the productivity of the line is a. 1.2 covers/hr b. 2 covers/hr * c. 12 covers/hr d. 1200 covers/hr e. none of the above 27. Susan has a part-time cottage industry producing seasonal plywood yard ornaments for resale at local craft fairs and bazaars. She currently works 8 hours per day to produce 16 ornaments. She thinks that by redesigning the ornaments and switching from use of a wood glue to a hot-glue gun she can increase her total production to 20 ornaments per day. If she redesigns the ornaments, what will be a percentage increase in her productivity? a. 10% * b. 25% c. 30% d. 40% e. 50%

28. If a firm produced 5000 units of product last month using $15000 of energy and $35000 of labor, then its multifactor productivity measure for energy and labor inputs would be a. 10.00 units per dollar spent b. 0.333 units per dollar spent c. 0.143 units per dollar spent * d. 0.100 units per dollar spent e. 0.020 units per dollar spent

*************************** MIDTERM II **************************

1. What inventory factor may be omitted from basic EOQ derivation because it is a constant? a. carrying cost b. holding cost * c. purchase (item) cost d. ordering cost e. none of the above 2. Which one of the following is implied by a service level of 95 percent which is needed for determining a reorder point? a. 95 percent of demand for any given customer will be satisfied. b. 95 percent of replenishment orders are received after a stockout occurs. c. 95 percent of replenishment orders are received when a stockout occurs. * d. 95 percent of replenishment orders are received before a stockout occurs. e. the risk of a stockout is virtually zero. 3. Which one of the following statements on inventory concepts is true? * a) Cycle inventory is created when ordering is done in batches and orders are placed less frequently. b) A high inventory turnover ratio represents an undesirable situation and suggests that tighter controls on inventory levels need to be exercised. c) High ordering and setup costs create pressures for small inventories. d) Anticipation inventory is created by overproducing during the season when demand is high. 4. Which one of the following statements on the economic order quantity (EOQ) is best? a) Three assumptions of the EOQ are: (1) the demand rate is constant, (2) there are three relevant costs (inventory holding, ordering, and hire/fire costs), and (3) decisions for each item can be made independently. b) The EOQ changes in direct proportion with the demand rate. If annual demand increases by 50 percent, so does the EOQ. c) The EOQ is quite sensitive to errors in demand forecasts, particularly in terms of total costs. * d) When the interest rate drops, the inventory holding cost decreases and the EOQ increases. 5. Which one of the following statements is true? a) The level of safety stock maintained is inversely proportional to the desired cycle-service level. b) The level of safety stock maintained is inversely proportional to the standard deviation of demand during lead time. c) When no safety stock is maintained, stockouts will occur during approximately 50 percent of the cycles.

d) The level of safety stock maintained is greater if mean absolute deviation (MAD) is used rather than standard deviation in estimating forecast errors. 6. An inventory system answers two important questions: when to order and how much to order. Which of the following statements correctly explains how a Q system (continuous review system) or P system (periodic review system) answers these questions? a) Under a Q system, a fixed quantity is ordered every P time periods. b) Under a Q system, an order is placed to replenish the inventory position up to the target level T when the inventory position reaches the reorder point R. c) Under a P system, a fixed quantity Q is ordered when the inventory position reaches the reorder point R. * d) Under a P system, an order is placed to replenish the inventory position up to the target level T every P time periods. 7. Which one of following conditions favors a level production planning strategy? a) The cost of changing the work force levels is low. * b) Products complementary to the existing product line can easily be produced with the given facilities. c) The shelf life of the goods being produced is limited. d) Inventory holding costs are high. 8. The production planning strategy to be used should be consistent with the environment. Which one of the following pairs of environment and strategy is consistent? a) skilled labor in short supply; variable work force levels. * b) low inventory holding cost; building anticipation inventory. c) ample labor supply; increase backlog for short-term demand surges. d) seasonal requirements and ample, unskilled labor supply; subcontracting. 9. Which one of the following statements is true concerning line balancing? a. The theoretical minimum number of stations must always be less than the actual number achieved in a final solution. * b. Increasing the output rate may increase the theoretical minimum number of stations. c. The longest work-element time method and the largest number of followers method will never result in the same line station configuration. d. Selecting the cycle time will have no effect on line efficiency. 10. Which of the following does the Aggregate Production Plan do? a. It plans and schedules the production of components. b. It calculates the load for most work centers. * c. It plans the production of families of products. d. It calculates loads for critical, bottleneck work centers.

e. It plans and schedules the finished goods build schedule. 11. Which one of the following actions are relevant for a level production planning strategy for a manufacturing firm? a. Hire workers to increase production output. * b. Build anticipatory inventory to meet the variability in demand. c. Decrease production output to match any decrease in demand requirements. d. Use promotional campaigns to boost demand. ANSWER QUESTIONS 12, 13, and 14 BASED UPON THE FOLLOWING INFORMATION. A firm operates 52 weeks per year. One of the items has the following characteristics: Demand = 140 units/week Standard deviation in weekly demand = 21 units Ordering cost = $20/order Holding cost = $1 per unit per year Service level = 85 percent Lead time = 6 weeks The company attempts to design a Q system (continuous review system) making Q equal to EOQ. 12. What will be the EOQ then? * a. less than 560 b. between 560 and 575 c. between 575 and 590 d. between 590 and 605 e. more than 605 13. What should safety stock be to satisfy 85% service level? a. less than 5 b. between 5 and 15 c. between 15 and 30 d. between 30 and 50 * e. more than 50 14. Assume that demand during lead time is normally distributed. For the Q system, what should be the reorder point? a. less than 870 * b. between 870 and 900 c. between 900 and 930 d. between 930 and 960

10

e. more than 960 15. A neighborhood sportwear store sells a pair of Nike sneakers for $40. Due to the recent fitness craze, these shoes are in high demand: 50 pairs of shoes are sold per week. The ordering cost is $20/order and annual holding cost is 20% of selling price. If the store operates 52 weeks in a year, what can you say about the current lot size of 235? * a) too large b) too small c) just right d) cannot tell from the information given 16. Molded Products, Inc. plans its aggregate production rate in machine cycles. (A machine cycle consists of filling a set of molds with plastic resin and heating the mold under pressure to turn out molded products.) Forecast demand for the next three months is for 5,000, 7,000, and 8,000 machine cycles. If there presently is 30,000 machine cycles' worth of molded products inventory on hand and 9,000 cycles per month is the planned production rate, what is the planned ending inventory? a. -1,000 b. 23,000 * c. 37,000 d. 41,000 e. can't tell without more information USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT TWO QUESTIONS. Archie Toys operating out of Wichita, Kansas experiences a seasonal demand pattern for their main line of dolls. Labor requirements over a typical 6 month period are as given below: Month Requirement 1 2 3 4 5 6 ---- ---- ---- ---- ---- ---6 7 12 13 8 5

Costs associated with operations are as follows: Wages $800 per worker per month Hiring cost $300 per worker Layoff cost $200 per worker The current work force level is 9 workers. 17. The total cost of the production plan (including the cost of regular wages, hiring and layoffs) using a chase strategy is: a. less than or equal to $42,000. b. greater than $42,000, but less than or equal to $43,000. c. greater than $43,000, but less than or equal to $44,000.

11

d. greater than $44,000.

18. The total cost of the production plan, using a level strategy where no overtime is allowed, is: a. less than or equal to $60,000. * b. greater than $60,000, but less than or equal to $65,000. c. greater than $65,000, but less than or equal to $70,000. d. greater than $70,000. USE THE FOLLOWING INFORMATION FOR THE NEXT FOUR QUESTIONS. The Pennsylvania Appliance company is installing an assembly line to produce vacuum cleaners, and you as an operations manager are responsible for balancing the line. The work elements to be performed are listed, along with their times and immediate predecessors. Work Element A B C D E F G H I J Time (sec) 60 40 30 20 40 60 70 50 20 60 Immediate Predecessor(s) A B B B C D F, G E H, I

19. The company is planning to operate two shifts per day, eight hours per shift. If the desired output rate of the line is 480 units per day, what is the cycle time? a. 60 seconds * b. 120 seconds c. 180 seconds d. 240 seconds 20. What is the theoretical minimum number of stations for the line? If you are using the longest work-element time rule, how many work stations do you need? a. TM = 3; Solution = 3 stations b. TM = 3; Solution = 4 stations * c. TM = 4; Solution = 4 stations d. TM = 4; Solution = 5 stations 21. What is the balance delay of the solution just found? a. more than 9% b. more than 7% and less than 9% * c. more than 5% and less than 7%

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d. less than 5% 22. At which station will Task C be performed? a. workstation 1 b. workstation 2 * c. workstation 3 d. workstation 4

USE THE FOLLOWING INFORMATION FOR THE NEXT THREE QUESTIONS. The Administration Department of a small college is now designing its layout for newly built office space. From statistical samplings over the last three months, the following From-To matrix was developed for daily trips between departments. (Hint: Assume that materials handling costs do not depend on the direction of flow.) From-To Matrix (trips/day) A B C D E F A B C D E F 10 20 60 55 65 40 70 30 90 10 55 80 60 40 -

23. If other factors are all equal, which two offices should be located most closely? a. C and E b. C and F c. E and F * d. A and F On alternative block plan suggested for the Department looks as follows. C F A B E D 24.What is the total load-distance score of this plan using the simple Adjacent-Department Method? a. less than 800 b. more than 800 and less than 850

13

c. more than 850 and less than 900 d. more than 900

25.Which switch of two offices within the Department will improve the total load-distance score the most? a. B and C * b. C and D c. A and C d. A and D

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************************ FINAL EXAM ****************************

1. The direct inputs to the Master Production Schedule include all of the following EXCEPT: a. customer orders b. forecasts c. aggregate production plan * d. MRP 2. The available-to-promise quantity for any period t which has an MPS quantity, other than the first period, is equal to: the MPS quantity in period t, minus _____________. a. the projected on-hand inventory in period t b. the cumulative total of forecasts from period t up to period that has the next MPS quantity * c. the cumulative total of booked customer orders from period t up to the period that has the next MPS quantity d. the sum of the forecast and booked customer orders for period t 3. MRP can best be described as: a. a sophisticated mathematical model designed to solve independent demand inventory problems b. a simple model for computing EOQ when demand is uniform and leadtime is constant c. a distribution system for delivery of products to customer d. MRP is an acronym for Machine Repair Priorities * e. a system or set of techniques for determining the quantity and timing of components based on end-product production needs. 4. The basic concept involved in the use of kanban is: a. inventory must be stockpiled to avoid the possibility of stockouts and shortages * b. inventory is produced or delivered only when it is needed and in the quantities needed c. large production lot sizes are encouraged to make use of machine capacity and produce excessive quantities of goods d. a great many computerized reports and printouts are needed to keep track of inventory e. none of the above 5. Mixed-model sequencing is a means by which: a. large batch production is re-introduced b. lead times for individual products are extended * c. uniform production required by a level assembly schedule can be achieved d. only one model is produced each week e. all A's are produced first, then B's, then C's, etc. 6. Which of the following is generally INCREASED in a JIT? * a. delivery dependability and flexibility b. manufacturing lead-time c. work-in-process inventory d. setup time e. waste

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7.

A kanban system is an important mechanism for JIT management. Which one of the following statements regarding the operation of a kanban system is true? a. A typical kanban used in the JIT system includes various information such as item number, unit price, competitor's product name, and its price. b. A withdrawal kanban is issued when the production in the preceding process is to be authorized. c. An empty container can be exchanged for a full container at the storage location even though no withdrawal kanban has been issued. d. A production-ordering kanban and a container move as a pair during processing once production begins at the preceding process.

8. What is most likely to be on a "kanban card"? a. Name of a delivery person * b. Quantity per container c. Time or date delivery is required d. Specification of an item 9. Which one of the following statements about priority rules is true? a. local priority rules base a job's priority assignment on information from more than one work station. b. examples of local rules are S/RO and CR. c. local priority rules can be used to schedule only one work station. * d. examples of global rules are Johnson's rule and CR. 10. Which one will always provide an optimal job sequence? a. FCFS b. SPT * c. Johnson's Algorithm d. EDD e. CR 11. Which of the following is not a criterion used to evaluate scheduling rules? a. makespan b. flowtime c. past due * d. turnover ratio e. average WIP inventory

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12. The distinction between makespan and flowtime is that a. flowtime is the total time taken for a set of jobs while makespan is the actual production time (i.e. does not include waiting time.) b. flowtime is the total time taken for a single job while makespan refers to the actual production time for the single job. * c. makespan refers to the time taken to process a set of jobs while flowtime is the total time spent by a single job. d. flowtime and makespan are synonymous. e. none of the above.

USE THE FOLLOWING MPS TABLE TO ANSWER THE NEXT THREE QUESTIONS. Using the information in the table below, prepare the MPS and calculate the available-topromise quantities. The order policy is to produce in lots of 150 units. 1 50 20 2 Week 3 4 50 30 5 60 30 6 7 60 10 8 60 - _______________________________________________

Quantity on hand: 60 Forecast Customer orders (booked) Projected on-hand inventory MPS quantity

_____________________________________________________________ 50 50 60 55 _____________________________________________________________ 95 120

_____________________________________________________________

_____________________________________________________________ _____________________________________________________________ Available-to-promise (ATP) inventory

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 13. In what week does the third MPS quantity occur? a. week 2 b. week 3 c. week 4 * d. week 5 e. week 6 14. What is the projected on-hand inventory in week 3? a. 0 b. 25 c. 55 d. 65 * e. 95 15. What is the ATP quantity in week 5? a. less than 50 * b. greater than 50, but less than or equal to 60 units c. greater than 60, but less than or equal to 65 units d. greater than 65, but less than or equal to 75 units e. greater than 75 units USE THE FOLLOWING INFORMATION FOR PROBLEMS 16, 17, 18, AND 19. A | ----------| | B(3) C(2) | ----------| | D(1) E(2) Part A: safety stock = 20, order quantity = 100, lead time = 1 week Week # Gross Requirements Scheduled Receipts 1 2 90 3 4 50 5 6 7 110 8 9

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On Hand = 100 Planned Receipts Planned Order Rel. Part B: safety stock = 10, order policy = LFL, lead time = 2 weeks Week # Gross Requirements Scheduled Receipts On Hand = 350 Planned Receipts Planned Order Rel. 1 2 100 3 4 5 6 7 8 9

16. How many units of (E) are required to make five units of (A)? Assume (C) is not stocked. a. 4 b. 5 c. 25 * d. 20 17. What would be the On Hand inventory balance in period 8 for part (A)? a. 100 b. 80 c. 20 * d. 50 e. cannot be determined with the information given 18. What would be the gross requirements in period 1 for part (B)? a. 0 b. 33 c. 100 * d. 300 e. cannot be determined with the information given 19. What would be the planned Order Release in period 4 for part (B)? a. 9 b. 105 c. 10 * d. 160 e. 300 A company produces three models of a product that can be made by the assembly team. The marketing department has forecast the next month's demand as follows: Model ----Expected Demand ---------------

19

A B C

528 396 264

The company will work 22 days during the next month. 20. What can be a mixed-model sequence? a. A-B-C-A-B-C b. A-A-B-B-C-C c. A-B-C-A-B-C-A-B * d. A-B-C-A-B-C-A-B-A e. A-B-C-A-B-C-A-B-C USE THE FOLLOWING INFORMATION FOR THE NEXT TWO QUESTIONS. A company uses a kanban system. The daily demand for part A is 3000 units. The average waiting time for a container of parts is 0.8 days. The processing time for a container of part A is 0.2 days, and a container holds 270 units. There are presently 20 kanban production cards for this item. 21. What is the implicit value of the policy variable alpha? a. less than or equal to 0.5 b. greater than 0.5, but less than or equal to 0.7 * c. greater than 0.7, but less than or equal to 0.9 d. greater than 0.9 22. What is the total inventory for part A? a. less than or equal to 500 units b. greater than 500, but less than or equal to 1500 units c. greater than 1500, but less than or equal to 2500 units * d. greater than 2500 23. Consider the following problem where 4 jobs must each be processed on two machines starting with machine A and then going to machine B. The following processing times are available (in hours). Job Machine A Machine B 1 3 4 2 3 2 3 3 1 4 6 5 5 6 4 What sequence would you use if you wanted to minimize the makespan of the jobs? a. 1-2-3-4-5 b. 3-2-4-1-5

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c. 3-1-2-5-4 d. 1-4-5-2-3 e. 5-2-3-1-4 USE THE FOLLOWING INFORMATION FOR THE NEXT TWO QUESTIONS. Operation Time Time at Remaining Machine A to Due Date Job (hrs) (days) 1 2 3 12 18 7 3 10 7 Shop Time Remaining, Including Remaining Machine A (days) Operations 5 8 10 2 5 2

24. The operations sequence, using the slack per remaining operation rule, is: * a. b. c. d. 3-1-2. 3-2-1. 1-2-3. 2-3-1.

25. The operations sequence, using the critical ratio rule, is: a. b. c. d. 3 - 1 - 2. 3 - 2 - 1. 1 - 3 - 2. 2 - 3 - 1.

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