ISCOM 305 Week 5 Final Exam Operations Management

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ISCOM 305 Final Exam

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Circle the correct answers.  Questions are multiple choice or True False type questions.  There are 35 questions in total.  The first 30 questions are worth 2.5 points each.  Work out the last 5 questions, they are worth 5 points each

1.                   Operations management is concerned only with the day-to-day operations of the firm’s productive system.     True / False

2.                   An advantage of mass production is its ability to adapt quickly to changes in demand.   True / False

3.                   Japanese firms used the concept of ___________ to convert from mass production to lean production.

a.                   division of labor

b.                  scientific management

c.                   just-in-time

d.                  interchangeable parts

4.                   All of the following are responsibilities of operations managers except

a.                   acquiring financial resources

b.                  managing inventories

c.                   planning production

d.                  scheduling production

5.                   Before Six Sigma quality levels in the United States were generally measured in terms of percentages or parts per hundred.   True / False

6.                   The probability that a product will operate properly within an expected time frame is known as performance.     True / False

7.                   Achieving quality of conformance depends on all of the following factors except

1. the design of the production process
2. the performance level of equipment, machinery and materials
3. the training and supervision of employees
4. the price charged for the product

8.                   Length, temperature, and weight are examples of attribute characteristics.     True / False

9.                   It is possible for samples to have very narrow ranges while at the same time having a sample average beyond the control limits.    True / False

10.               A process is generally considered to be in control when

a.       there are no sample points outside the control limits

b.      most points are near the center line, without many being close to the control limits

c.       sample points are randomly distributed equally above and below the center line

d.      all of the above are true

11.               A control chart that reflects the amount of dispersion, or spread, present in each sample is known as a(n)

a.       p-chart

b.      c-chart

c.       R-chart

d.      -chart

12.               A project team is typically cross-functional in its make up.     True / False

13.               A Gantt chart provides a visual display of the project schedule, including scheduled start times, finish times, and slack times.        True / False

14.               The critical path for a project is the shortest path through the project’s network.     True / False

15.               Increased uncertainty and variability in a supply chain typically results in

1. faster deliveries
2. more accurate order fulfillment
3. larger inventories
4. lower costs

16.               One of a company’s main objectives in managing its supply chain is to make the flow of incoming materials and parts independent of production and downstream distribution.  True / False

17.               Qualitative forecasting methods rely on judgment, opinion, past experiences, or best guesses to make forecasts.    True / False

18.               Continuous replenishment systems rely heavily on accurate long-term forecasts.    True / False

19.               Quantitative forecasting methods are the most common type of forecasting method for long-term strategic planning.         True / False

20.               A forecast is never completely accurate.    True / False

21.               A seasonal pattern is

1. an up-and-down repetitive movement in demand occurring periodically
2. an up-and-down repetitive movement in demand occurring over a long time span
3. a movement in demand that is not predicable
4. a gradual, long-term up-or-down movement of demand

22.                The sum of the weights in a weighted moving average forecast

1. must equal the number of periods being averaged
2. must equal 1.00
3. must be less than 1.00
4. must be greater than 1.00

23.               Large amounts of inventory may be purchased to take advantage of price discounts, but not as a hedge against future price increases.    True / False

24.               The three basic costs associated with inventory are holding costs, ordering costs, and shortage costs.     True / False

25.               As order size increases both carrying costs and ordering costs increase.     True / False

26.               In the ABC inventory system Class A items would require less monitoring and control than Class C items.     True / False

27.               The function of the economic order quantity (EOQ) model is to determine the optimal order size that minimizes total inventory costs.    True / False

28.               A stockout occurs when supply exceeds demand during the lead time.    True / False

29.               The three types of inventory costs identified by our authors include all of the following except,

1. carrying
2. ordering
3. shortage
4. handling

30.               The service level is the probability that the amount of inventory on hand during the lead time is sufficient to meet expected demand.     True / False

31.                A restaurant currently uses 62,500 boxes of napkins each year at a constant daily rate.  If the cost to order napkins is $200.00 per order and the annual carrying cost for one box of napkins is $1.00, then the optimal order quantity (EOQ) for napkins would be

a.       62,500 boxes

b.      10,000 boxes

c.       5,000 boxes

d.      2,500 boxes

32.               A company that produces specialized video equipment had cost of goods sold last year of $127,000,000.  The average value of inventory for raw materials, work-in-process, and finished goods are shown in the table below:

Raw Materials	$6,189,000
Work-In-Process	$2,541,000
Finished Goods	$3,710,000

If the company operates 50 weeks per year then the weeks of supply in inventory would be

1. 4.898
2. 0.098
3. 10.209
4. 35.75

33.               A forecasting model has produced the following forecasts:

Period	Demand	Forecast	Error
January	120	110
February	110	115
March	115	120
April	125	115
May	130	125

The mean absolute deviation (MAD) for the end of May is

1. 7.0
2. 7.5
3. 10.0
4. 3.0

34.               The weighted moving average forecast for the fifth period with weights of 0.15 for period 1, 0.20 for period 2, 0.25 for period 3, and 0.40 for period 4, using the demand data shown below would be 

Period	Demand
1	3500
2	3800
3	3500
4	4000

1. 3760
2. 3700
3. 3650
4. 3325

35.               Given the following demand data for the past five months, the four period moving average forecast for June would be

Period	Demand
January	120
February	90
March	100
April	75
May	110

a.       96.25

b.      99.00

c.       110.00

d.      93.75