Set 1:
1. Operations managers aspire that all of their decisions are
redundant.
minor in nature.
informed.
quantitative.
None of the above
2. Transformation includes all of the following, except
assembling.
teaching.
staffing.
farming.
consulting.
3. When a vendor restocks the shelves in a supermarket every Monday morning, this is an example of
safety stock replenishment.
economic order quantities.
reorder points.
fixed order interval.
blanket ordering.
4. The basic EOQ model's assumptions include all of the following, except
annual demand requirements are known and constant.
lead time does not vary.
each order is received in a single delivery.
quantity discounts are available.
All of the above are necessary assumptions.
5. Which of the following costs related to order size is nonlinear?
Interest
Insurance
Taxes
Receiving
Space
6. Dependent demand is most closely described as
demand generated by suppliers.
estimates of demand using regression analysis of independent variables.
derived demand.
demands placed on suppliers by their customers.
net material requirements.
7. Which of the following was an enabling factor in the development and application of MRP along with the recognition of the difference between independent and dependent demand?
Computers
Development of the EOQ model
Inventory control systems
Blanket purchase orders
The Internet
8. When an MRP system is continuously updated to account for changes, the process is called
regenerative system.
batch-type system.
Plossl-Wright system.
net-change system.
gross-change system.
9. Which of the following is MRP's output?
Gross requirements
Net requirements
A schedule of requirements for all parts and end items
Inventory reorder points
Economic order quantities and reorder points
10. The MRP approach that is used for components or subassemblies to compensate for variations in lead times is called
pegging.
safety stock.
increased order sizes.
safety time.
low-level coding.
11. A lead time service level of 90 percent implies which of the following?
Approximately 10 percent of demand during lead time will be satisfied.
Approximately 10 percent of inventory will be used during lead time.
The probability is 90 percent that demand during lead time will exactly equal the amount on-hand at the beginning of lead time.
The probability is 90 percent that demand during lead time will not exceed the amount on-hand at the beginning of lead time.
None of the above
12. Which of the following compares known and expected capacity requirements with projected capacity availability?
Planned releases
Load reports
Lot sizing
Work loading
Time fencing
13. Bunny Helpers, Inc. has just received an order for 100 Deluxe Easter Baskets, which must be ready for delivery at the start of Week 6. An MRP planner has prepared the following table showing product structure, lead times (orders are lot-for-lot), and quantities on hand:
Deluxe Easter Basket BOM Lead Time On-Hand
Deluxe Easter Basket 1 week 10
Dark Chocolate Truffles (2 per) 2 weeks 30
Carved Chocolate Eggs (4 per) 1 week 50
Each Deluxe Basket contains two dark chocolate truffles and four carved chocolate eggs; additionally, one box of Alka-Seltzer is included for those who overindulge.
Given the following information, how many dark chocolate eggs should be ordered? (Points : 5)
310
450
500
550
600
14. Given a product mix, scheduling difficulties, quality factors, and so on, the maximum expected output is
utilization.
design capacity.
efficiency.
effective capacity.
available capacity.
15. Given the following information, determine utilization.
Effective capacity = 20 units per day
Design capacity = 60 units per day
Actual output = 15 units per day (Points : 5)
1/4
1/3
1/2
3/4
None of these
16. In an assignment method problem, it takes Abe 3 hours to build a birdhouse and 4 hours for a doghouse, while Betty takes 4 hours for a birdhouse and 3 hours for a doghouse. What is the reduced cost (in hours) of assigning Abe to build the doghouse?
0 hours
1 hour
2 hours
3 hours
4 hours
17. Based on the cost information given in the table below, which set of job-machine pairs reflects the minimum cost solution using the assignment method?
Machine
A B C
Job 1 $0 0 0
2 3 6 4
3 2 4 0
1-B, 2-A, 3-C
1-A, 2-B, 3-C
1-C, 2-A, 3-B
1-B, 2-C, 3-A
1-C, 2-B, 3-A
1. A company has found that introducing one additional worker enables a process improvement that reduces processing time for each unit so that output is increased by 25% with less material. Under the old process, five workers could produce 60 units per hour. Labor costs are $12/hour, and material input was previously $16/unit. For the new process, material is now $10/unit. Overhead is charged at 1.6 times direct labor cost. Finished units sell for $31 each. What increase in productivity is associated with the process improvement?
2. For a stock item, you are given the following information:
Order quantity = 300, = 20 units, desired lead-time service level = .86
(A) Find the expected number of units short per cycle.
(B) Find the annual service level. (Points : 30)
2. For the product tree below, how many Cs are needed if 17 Ps are needed and on-hand inventory consists of 10 As, 15 Bs, 20 Cs, 12 Ms, and 5 Ns? Show your work.
4. Given the tree below, develop a material requirements plan for end-item P and its components. Assume that all lead times are one week and that lot-for-lot ordering is used, except for Item F, which is ordered in multiples of 400 units.
One hundred units of P should be available at the start of Week 4 and at the start of Week 8. Beginning inventories are: 20 P, 100 A, and 200 F.
Scheduled receipts are 800 F at the start of Week 1.
5. Can both small and large organizations implement centralized purchasing, or is that a function of organization size? Explain your answer.
6. How many cords of wood would the owner of Dry Firewood have to split with a new machine to make a profit of $30,000 if this hydraulic wood splitter sells for $50,000? It will cost an additional $100 per cord to purchase and split wood with this machine. He can sell each cord of split wood for $125. Show your work.
7. Evaluate the following statement: "Lean concepts include large lots to take advantage of the economies of scale." Explain your reasoning.
8. When developing an MPS, time buckets are used. What are they? Elaborate on their varieties and the reasons for them.
1. Operations managers aspire that all of their decisions are
redundant.
minor in nature.
informed.
quantitative.
None of the above
2. In the control process, measurements taken at various points in the transformation process are called
plans.
directions.
controls.
feedback.
budgets.
3. When manufacturing work is subcontracted or performed in other countries, it is
downsized.
outsourced.
internationalization.
vertical integration.
entrepreneurial.
4. The basic EOQ model's assumptions include all of the following, except
annual demand requirements are known and constant.
lead time does not vary.
each order is received in a single delivery.
quantity discounts are available.
All of the above are necessary assumptions.
5. The amount contained in the second bin in a two-bin inventory system is equal to the
ROP.
EOQ.
amount in the first bin.
optimum stocking level.
safety stock.
6. All of the following statements are true about ERP implementation, except
it needs cross-functional teams.
it takes just a few weeks to install.
it requires intensive training.
it requires high funding for both initial cost and maintenance.
it needs frequent upgrades after installation.
7. The time periods employed in master schedule's planning horizons are called
pegging.
lead times.
stacked lead times.
time buckets.
firm, fixed, and frozen.
8. When an MRP system is periodically updated to account for all changes that have occurred within a given time interval, the process is called
pegging.
planned order release.
net change.
regenerative.
exception report.
9. Which of the following is MRP's output?
Gross requirements
Net requirements
A schedule of requirements for all parts and end items
Inventory reorder points
Economic order quantities and reorder points
10. The lot-sizing method that does not attempt to balance ordering (or setup) and holding costs is called
economic order quantity.
economic run size.
lot-for-lot.
part period.
All of the above
11. Choosing how many to order or make is known as
quantity determination.
package sizing.
lot sizing.
grouping.
aggregation.
12. The dynamic store of information on the status of each item by time period (e.g., scheduled receipts, lead time, lot size), which is an input to the MRP, is the
master production schedule.
bill of materials.
inventory records.
assembly time chart.
net requirements chart.
13. What will be the quantity of the first planned receipt if net requirements for component J are as follows: 60 units in Week 2, 40 units in Week 3, and 60 units in Week 5? A fixed-period, two-period lot-sizing method is used.
60 units
120 units
180 units
Cannot be determined
None of the above
14. Which of the following is a basic question in capacity planning?
What kind is needed?
How much is needed?
When is it needed?
All of the above
None of the above
15. When developing capacity alternatives, all but which of the following is advisable?
Design structured, rigid systems.
Take a big-picture approach to capacity changes.
Prepare to deal with capacity in chunks.
Attempt to smooth out capacity requirements.
Identify the optimal operating level.
16. Scheduling pertains to
hiring workers.
process selection.
buying machinery.
timing the use of specific resources.
determining the lowest cost.
17. Based on the cost information given in the table below, which set of job-machine pairs reflects the minimum cost solution using the assignment method?
Machine
A B C
Job 1 $0 0 0
2 3 6 4
3 2 4 0
1-B, 2-A, 3-C
1-A, 2-B, 3-C
1-C, 2-A, 3-B
1-B, 2-C, 3-A
1-C, 2-B, 3-A
Below is shown the weekly output of a fabrication process and data for labor and material inputs. Note the following:
- Standard selling price is $125 per unit.
- Overhead is charged weekly at the rate of $1,500 plus .5 times direct labor cost.
- Hourly wage is $16 in a 40-hour week.
- Material cost is $10 per foot.
Week Output # Workers Material (ft)
1 392 5 2790
2 408 6 2790
What is the average multifactor productivity?
2. If instantaneous replenishment is assumed when given the same demand, setup/ordering costs, and carrying costs, then the EOQ calculated using incremental replenishment will be _____.
Illustrate using a numeric example.
3. For the product tree below, how many Cs will be needed if 17 Ps are needed and no on-hand inventory exists for any items? Show your work.
4. Develop a material requirements plan that will lead to 400 units of Product P being available at the start of Week 7 when given the following information:
5. In supplier partnerships, state the key characteristic of the products or services of business organizations forming strategic partnerships, and explain why.
6. How many rosebushes would the owner of a rose nursery have to produce and sell in order to make a profit of $6,000 if she spends $6,000 to acquire the licensing rights to grow a new variety of rosebush? She could sell the new rosebushes for $6 each. The per-unit variable cost would be $3. Show your work.
7. Compare and contrast kanban and CONWIP.
8. MPS planners use what is referred to as time fences? What are they, and why are they used?