Opp Mgt Final

Which of the following would NOT generally be a motive for a firm to hold inventories?
A. to decouple various parts of the production processB. to provide a selection of goods for anticipated customer demand and to separate the firm fromfluctuations in that demandC. to take advantage of quantity discountsD. to minimize holding costsE. to hedge against inflation

Which of the following statements about ABC analysis is FALSE?
A. ABC analysis is based on the presumption that controlling the few most important itemsproduces the vast majority of inventory savings.B. In ABC analysis, "A" items should have tighter physical inventory control than "B" or "C"items have.C. In ABC analysis, forecasting methods for "C" items may be less sophisticated than for "A"items.D. ABC analysis is based on the presumption that all items must be tightly controlled to produceimportant cost savings.E. Criteria other than annual dollar volume, such as high holding cost or delivery problems, candetermine item classification in ABC analysis

ABC analysis is based upon the principle that:
A. all items in inventory must be monitored very closely.B. there are usually a few critical items, and many items that are less critical.C. an item is critical if its usage is high.D. more time should be spent on class "C" items because there are many more of them.E. as with grade distributions in many MBA courses, there should be more medium-level "B"items than either "A" or "C" items.

ABC analysis divides on-hand inventory into three classes, generally based upon which of thefollowing?
A. item qualityB. unit priceC. the number of units on hand
D. annual demandE. annual dollar volume

Which of the following is an element of inventory holding costs?
A. housing costsB. material handling costsC. investment costsD. pilferage, scrap, and obsolescenceE. All of these are elements of inventory holding costs

The two most basic inventory questions answered by the typical inventory model are:
A. timing of orders and cost of orders.B. order quantity and cost of orders.C. timing of orders and order quantity.D. order quantity and service level.E. ordering cost and carrying cost

Which of the following is NOT an assumption of the economic order quantity model shown below?
A. Demand is known, constant, and independent.B. Lead time is known and consistent.C. Quantity discounts are not possible.D. Production and use can occur simultaneously.E. The only variable costs are setup cost and holding (or carrying) cost.

What is the primary purpose of the basic economic order quantity model shown below?
A. to calculate the reorder point, so that replenishments take place at the proper timeB. to minimize the sum of carrying cost and holding costC. to maximize the customer service levelD. to minimize the sum of setup cost and holding costE. to calculate the optimum safety stock

A certain type of computer costs $50 per unit, and the annual holding cost is 20% of the value ofthe item. Annual demand is 10,000 units, and the order cost is $200 per order. What is theapproximate economic order quantity?
A. 400,000B. 632C. 110D. 985E. 346

In the basic EOQ model, if the cost of placing an order doubles and all other values remainconstant, the EOQ will:
A. increase by about 41%.B. increase by 100%.
C. increase by 200%.D. increase, but more data is needed to say by how much.E. either increase or decrease

In the basic EOQ model, if D = 6000 per year, S = $100, and holding cost = $10 per unit permonth, what is the economic order quantity?
A. 24B. 100C. 141D. 346E. 600

A product whose EOQ is 40 units experiences an increase in ordering cost from $10 per order to$90 per order. The revised EOQ is:
A. three times as large.B. one-third as large.C. nine times as large.D. one-ninth as large.E. cannot be determined

A product whose EOQ is 400 units experiences a 50% increase in demand. The new EOQ is:
A. unchanged.B. increased by less than 50%.C. increased by 50%.D. increased by more than 50%.E. cannot be determined

In the basic EOQ model, if lead time increases from five to 10 days, the EOQ will:
A. doubleB. increase, but not doubleC. decrease by a factor of twoD. remain the sameE. none of the above

A product has a demand of 10,000 units per year. Ordering cost is $50 per order, and holding costis $25 per unit per year. The cost-minimizing solution for this product is to order:
A. all 10,000 units at one time.B. 500 units per order.C. every 20 days.D. 50 times per year.E. none of these

A manufacturer replenishes their packaging materials according to the economic order quantitymodel. They use 25,000 cases of packaging materials per year and order 500 cases at a time. Theircost to carry a case in inventory for a year is $12. How much does it cost them to place an orderwith their supplier? A. $12B. $60C. $720D. $5E. $2

An inventory decision rule states, "When the inventory level goes down to 14 gearboxes, 100gearboxes will be ordered." Which of the following statements is TRUE?
A. One hundred is the reorder point, and 14 is the order quantity.B. Fourteen is the reorder point, and 100 is the order quantity.C. The number 100 is a function of demand during lead time.D. Fourteen is the safety stock, and 100 is the reorder point.E. None of these is true

A specific product has a fixed daily demand of 20 units, with a standard deviation of lead time of3 days. What safety stock (approximately) provides a 95% service level (z = 1.65)?
A. 99B. 50C. 133D. 126E. 165

Demand for dishwasher water pumps is 20 per day. The standard deviation of demand is 3 perday, and the order lead time is nine days. The service level is 95% (z = 1.65). What should thereorder point be?
A. about 49B. about 100C. less than 150D. more than 190E. about 160

The purpose of safety stock is to:
A. replace failed units with good ones.B. eliminate the possibility of a stockout.C. eliminate the likelihood of a stockout due to erroneous inventory tally.D. control the likelihood of a stockout due to variable demand and/or lead time.
E. protect the firm from a sudden decrease in demand

If daily demand is normally distributed with a mean of 20 and standard deviation of 3, and leadtime is constant at 16 days, a 98% service level (z = 2.05) will require how much (approximate)safety stock?
A. 8 unitsB. 10 unitsC. 15 unitsD. 25 unitsE. 40 units

In a safety stock problem where both demand and lead time are variable, demand averages 100units per day with a daily standard deviation of 10, and lead time averages 8 days with a standarddeviation of 2 days. How much safety stock is required for a 95% service level (z = 1.65)?
A. 517 unitsB. 333 unitsC. 154 unitsD. 512 unitsE. 1,517 units

In a safety stock problem where both demand and lead time are variable, demand averages 100units per day with a daily standard deviation of 10, and lead time averages 8 days with a standarddeviation of 2 days. What should the (approximate) reorder point be for a 95% service level (z =1.65)?
A. 330 unitsB. 587 unitsC. 417 unitsD. 1,133 unitsE. 1,531 units

Dairy items, fresh fruit and newspapers are items that:
A. do not require safety stocksB. cannot be ordered in large quantitiesC. are subject to deterioration and spoilageD. require that prices be lowered every two daysE. have minimal holding costs

In a single period model, if shortage and excess costs are equal, then the optimum service level is
:A. 0B. 0.33C. 0.50D. 0.67E. none of these

In a supermarket, a vendor's restocking the shelves every Monday morning is an example of:
A. safety stock replenishmentB. economic order quantitiesC. reorder pointsD. fixed order intervalE. blanket ordering

What is the effort to plan the coordination of demand forecasts with functional areas of the firmand its supply chain?
A. enterprise resource planningB. material requirements planningC. capacity planningD. sales and operations planningE. new product developmen

Disaggregation:
A. breaks the aggregate plan into greater detail.B. transforms the master production schedule into an aggregate plan.C. calculates the optimal price points for yield management.D. converts product schedules and labor assignments to a facility-wide plan.E. is an assumption required for the use of the transportation model in aggregate planning

the main purpose of aggregate operations planning is to specify the optimal combination of whichof the following?
A. Workforce levels and inventory on handB. Inventory on hand and financing costs for that inventoryC. The strategic plan and the products available for saleD. The workforce level and the degree of automationE. Operational costs and the cash flow to support operation

Which of the following best describes aggregate planning?
A. the link between intermediate term planning and short term operating decisionsB. a collection of objective planning toolsC. make or buy decisionsD. an attempt to respond to predicted demand within the constraints set by product, process andlocation decisionsE. manpower planning

In doing "aggregate planning" for a firm producing paint, the aggregate planners would mostlikely deal with:
A. just gallons of paint, without concern for the different colors and sizesB. gallons of paint, but be concerned with the different colors to be producedC. gallons, quarts, pints, and all the different sizes to be producedD. all the different sizes and all the different colors by sizeE. none of the above

Dependence on an external source of supply is found in which of the following aggregate planningstrategies?
A. varying production rates through overtime or idle timeB. subcontractingC. using part-time workersD. back ordering during high demand periodsE. hiring and laying off

Which of the following is a disadvantage of subcontracting for aggregate planning?
A. loss of quality controlB. lost salesC. high training costsD. overtime premiumsE. high inventory cost

Which of the following aggregate planning strategies is known to lower employee morale?
A. yield managementB. counterseasonal product and service mixingC. changing inventory levelsD. varying workforce size by hiring or layoffsE. back ordering during high demand periods

Which of the following aggregate planning strategies is a demand option?
A. changing priceB. subcontractingC. varying production levelsD. changing inventory levelsE. using part-time worker

Which of the following statements about aggregate planning is TRUE?
A. An advantage of the counterseasonal product and service mixing option is that it matchesseasonal fluctuations without hiring/training costs.
B. In aggregate planning, back orders are a means of manipulating supply while part-timeworkers are a way of manipulating product or service demand.C. A pure chase strategy allows lower inventories when compared to a pure level scheduling.D. A disadvantage of subcontracting is that it may require skills or equipment outside the firm'sareas of expertise.E. The option of varying workforce size by hiring or layoffs is used where the size of the laborpool is small

Matching the production rate to the order rate by hiring and laying off employees as the order ratevaries is which of the following pure production planning strategies?
A. Stable workforce, variable work hoursB. ChaseC. LevelD. Meeting demandE. Minimizing inventory

Maintaining a stable workforce working at a constant output rate while shortages and surplusesare absorbed by fluctuating inventory levels, order backlogs, and allowing lost sales is which ofthe following production planning strategies?
A. Stable workforce, variable work hoursB. ChaseC. LevelD. Full employmentE. Skill maintenanc

Which choice best describes level scheduling?
A. Daily production is variable from period to period.B. Subcontracting, hiring, and layoffs manipulate supply.C. Price points are calculated to match demand to capacity.D. Inventory goes up or down to buffer the difference between demand and production.E. Overtime is used to handle seasonal demand fluctuations

Which of the following statements regarding aggregate planning is TRUE?
A. In a pure level strategy, production rates or workforce levels are adjusted to match demandrequirements over the planning horizon.B. A pure level strategy allows lower inventories when compared to pure chase and hybridstrategies.C. Mixed strategies in aggregate planning may utilize inventory, workforce, and production ratechanges over the planning horizon.D. Because service firms have no inventory, the chase strategy does not apply.E. A disadvantage of the option of changing inventory levels is that it forces abrupt productionchanges

Which of the following is consistent with a chase strategy?
A. vary production levels to meet demand requirementsB. vary workforce to meet demand requirementsC. vary production levels and workforce to meet demand requirementsD. little or no use of inventory to meet demand requirementsE. All of these are consistent with a chase strategy

Which of the following is NOT consistent with level scheduling?
A. varying the use of subcontractingB. finding alternative work for employees during low-demand periodsC. using built-up inventory to meet demand requirementsD. varying production levels and/or workforce to meet demand requirementsE. All of these are inconsistent with the pure level strategy

Aggregate planning for service firms that provide intangible output deals mainly with:
A. smoothing the production rate and finding the optimal size of the workforce.B. capital investment decisions.C. centralized purchasing.D. centralized production.E. planning for human resource requirements and managing demand

Which of the following is one of the main purposes of an MRP system?
A. Educate personnel in basic work rules.B. Determine the amount of materials needed to produce each end item.C. Stimulate the work force.D. Decrease labor requirements.E. Increase inventory accuracy.

Demand for a given item is said to be dependent if:
A. it originates from the external customer.B. there is a deep bill of material.C. the finished products are mostly services (rather than goods).D. it is a component of a clearly identifiable parent.E. the item has several children.

One of the main purposes of an MRP system is which of the following?
A. Track inventory levels.B. Create productive capacity.C. Decrease layers of management.D. Develop schedules specifying when each component should be ordered or produced.E. Upgrade manufacturing's professionalism

Effective use of MRP and other dependent demand models does NOT require which of thefollowing?
A. master production scheduleB. bill of materialsC. inventory availabilityD. lead timesE. cost of individual components

MRP systems seek to achieve which of the following?
A. Minimize lot sizes.B. Determine the number of dependent demand items needed.C. Relieve capacity bottlenecks.
D. Provide a yardstick for future improvements.E. Improve on JIT methods

The MRP input listing the assemblies, subassemblies, parts, and raw materials needed to produceone unit of finished product is the:
A. master production scheduleB. bill-of-materialsC. inventory-recordsD. assembly-time chartE. net-requirements char

is choosing how many to order or make.
A. Quantity determinationB. Package sizingC. Lot sizingD. GroupingE. Aggregation

For the lot-sizing technique known as lot-for-lot to be appropriate:
A. future demand should be known for several weeks.B. setup cost should be relatively small.C. annual volume should be rather low.D. item unit cost should be relatively small.E. the independent demand rate should be very stable

In MRP, system nervousness is caused by:
A. management's attempt to continually respond to minor changes in production requirements.B. the use of the lot-for-lot approach.C. management's marking part of the master production schedule as "not to be rescheduled."D. the use of phantom bills of material.E. management's attempt to evaluate alternative plans before making a decision

Forward scheduling is the scheduling of:
A. the end items or finished products.B. jobs as soon as the requirements are known.C. the start items or component parts.D. the final operation first beginning with the due date.E. jobs according to their profit contribution

What is the objective of scheduling?
A. maximize qualityB. maximize throughput timeC. minimize flow timeD. prioritize and allocate demand to available facilitiesE. maximize takt time

Which of the following is NOT an effectiveness criterion for scheduling?
A. minimizing customer waiting timeB. minimizing completion timeC. minimizing WIP inventoryD. maximizing utilizationE. maximizing flow time

The short-term scheduling activity called "loading":
A. assigns dates to specific jobs or operations steps.B. specifies the order in which jobs should be done at each center.C. assigns jobs to work centers.D. assigns workers to jobs.E. assigns workers to machines

Backward scheduling:
A. is more likely to be used in restaurants.B. schedules jobs as soon as the requirements are known.C. involves jobs that are performed to customer order.D. schedules the final operation first, beginning with the due date.
E. schedules jobs according to their profit contributions.

The assignment method is:
A. a method to highlight overloads in a given work center.B. a computerized method of determining appropriate tasks for an operation.C. a form of linear programming for optimally assigning tasks or jobs to resources.D. the same thing as the Gantt schedule chart.E. a method for achieving a balance between forward and backward scheduling

Assume there are five jobs (i.e., A, B, C, D, and E) that need to be sequenced in a productionschedule. The remaining operating time necessary for completion of job
A is 4 days (i.e., job Awill take 4 more days to complete), B will take 7 days, C will take 8 days, D will take 2 days, andE will take 5 days. Which job should be scheduled first if you use the Shortest Processing Time(SPT) priority rule for job sequencing?A. AB. BC. CD. DE. E

Assume there are five jobs (i.e., A, B, C, D, and E) that need to be sequenced in a productionschedule. The remaining operating time necessary for completion of job
A is 3 days (i.e., job Awill take 3 more days to complete), B will take 9 days, C will take 6 days, D will take 5 days andE will take 8 days. In what order will these jobs be scheduled if using the SOT priority rule forjob sequencing?A. A-B-D-E-CB. A-D-C-E-BC. D-C-A-B-ED. B-E-C-D-AE. E-D-A-B-C

The assignment method is useful in solving scheduling problems that have which of the followingcharacteristics?
A. There are n jobs to be distributed to n machines or workers.B. Each job can only be done on one particular machine.C. Speed and efficiency are important.D. The objective is to minimize cost and lateness of delivery.E. The jobs have to go through more than one process

What is the priority rule that sequences jobs using the smallest ratio of due date from today toprocessing time?
A. critical ratioB. earliest due dateC. first come, first servedD. longest processing timeE. shortest processing time

Which of the following is an advantage of the FCFS dispatching rule when used in services?
A. FCFS maximizes utilization.B. FCFS minimizes the average number of jobs in the system.C. FCFS minimizes the average lateness of all jobs.D. FCFS maximizes the number of jobs completed on time.E. FCFS seems fair to customers

Which of the following is generally found in most Lean environments?
A. a push or pull system, depending upon the rate of demandB. a push system for high margin items and a pull system for low margin itemsC. a push system for purchased parts and a pull system for manufactured partsD. push systemsE. pull systems

Which of the following is NOT true about pull systems?
A. They are a standard tool of Lean.B. They use signals to request production and delivery from upstream supplying stations.C. They often use small lot sizes.D. They move material to the next downstream workstation as soon as it is finished beingprocessed.E. They are used both within the immediate production process and with suppliers

The 5Ss:
A. have the "flavor" of a housekeeping list.B. are a checklist for lean operations.C. have become a list of seven items in American practice.D. can be used to assist with necessary changes in organizational culture.E. All of these are tru

The list of 5Ss, although it looks like a housekeeping directive, supports lean production by:
A. identifying non-value items and removing them, in the "sort/segregate" category.B. reducing inventory, in the "standardize" category.C. increasing variability through standardized procedures, in the "standardize" category.D. eliminating wasted motion through ergonomic studies, in the "support" category.E. building good safety practices, in the "shine/sweep" category

Which one of the following is NOT a benefit of JIT implementation?
A. cost reductionB. variability increaseC. rapid throughput
D. quality improvementE. rework reduction

Which one of the following is a characteristic of a JIT partnership?
A. third-party logistics never usedB. maximal product specifications imposed on supplierC. active pursuit of vertical integrationD. removal of incoming inspectionE. frequent deliveries in large lot quantitie

With regard to suppliers, lean systems typically involve:
A. delivery of large lots on short noticeB. the highest quality at the lowest priceC. long-term relationshipsD. multiple suppliers to assure continuous availabilityE. dedicated staging areas for materia

Which one of the following statements is TRUE about the kanban system?
A. The quantities in the containers are usually large to reduce setup costs.B. It is associated with a push system.C. It is useful to smooth operations when numerous quality problems occur.D. The supplier workstation signals the customer workstation as soon as a batch is completed.E. The customer workstation signals to the supplier workstation when production is needed

Lean operations are known for their:
A. employee development.B. supplier education.C. supplier partnerships.D. challenging jobs.E. All of these are attributes of lean operations