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Operations Management Test Questions - 3391 Verified Questions

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Operations Management Test Questions

Course Introduction

Operations Management is a course that explores the processes and strategies essential for producing goods and delivering services efficiently in organizations. Students will learn about key concepts such as process analysis, capacity planning, inventory management, quality control, supply chain management, and project scheduling. Emphasis is placed on decision-making tools and techniques that improve productivity, optimize resource utilization, and enhance overall organizational performance. Real-world case studies and practical applications equip students with the skills to address operational challenges and drive continuous improvement in various business environments.

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Chapter 1: Operations and Productivity

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Sample Questions

Q1) What is a knowledge society?

Answer: A knowledge society is one in which much of the labor force has migrated from manual work to work based on knowledge.

Q2) Measuring the impact of a capital acquisition on productivity is an example of multifactor productivity.

A)True

B)False

Answer: False

Q3) Which is <b>not</b> true regarding differences between goods and services?

A) Services are generally produced and consumed simultaneously; tangible goods are not.

B) Services tend to be more knowledge-based than goods.

C) Services tend to have a more inconsistent product definition than goods.

D) Goods tend to have higher customer interaction than services.

E) None of the above is true.

Answer: D

Q4) Marketing, Production, and __________ are the three functions that all organizations must perform to create goods and services.

Answer: finance/accounting

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Chapter 2: Operations Strategy in a Global Environment

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Sample Questions

Q1) NAFTA seeks to phase out all trade and tariff barriers between the United States and Asia.

A)True

B)False

Answer: False

Q2) Which of the following is <b>true</b>?

A) Corporate mission is shaped by functional strategies.

B) Corporate strategy is shaped by functional strategies.

C) Functional strategies are shaped by corporate strategy.

D) External conditions are shaped by corporate mission.

E) Functional area missions are merged to become the organizational mission.

Answer: C

Q3) Which of these organizations is likely to have the most important inventory decisions?

A) a marketing research firm

B) a lobbying agency

C) a management consulting firm

D) an aluminum manufacturer

E) a law firm

Answer: D

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Chapter 3: Project Management

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Sample Questions

Q1) Describe some of the challenges faced in the construction of the new 11-story building at Arnold Palmer Hospital in Orlando, Florida.

Answer: Prior to beginning actual construction, regulatory and funding issues added, as they do with most projects, substantial time to the overall project. Cities have zoning and parking issues, the EPA has drainage and waste issues, and regulatory authorities have their own requirements, as do issuers of bonds.

Q2) A contractor's project being analyzed by PERT has an estimated time for the critical path of 120 days. The sum of all activity variances is 81; the sum of variances along the critical path is 64. The probability that the project will take 130 or more days to complete is

A) 0.1057

B) 0.1335

C) 0.8512

D) 0.8943

E) 1.29

Answer: A

Q3) The network analysis method that allows activity times to vary is __________.

Answer: PERT or Program Evaluation and Review Technique

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Chapter 4: Forecasting

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Sample Questions

Q1) The larger the standard error of the estimate, the more accurate the forecasting model.

A)True

B)False

Q2) Seasonal indices adjust raw data for patterns that repeat at regular time intervals.

A)True

B)False

Q3) The following trend projection is used to predict quarterly demand: Y = 250 - 2.5t, where t = 1 in the first quarter. Seasonal (quarterly) indices are Quarter 1 = 1.5; Quarter 2 = 0.8; Quarter 3 = 1.1; and Quarter 4 = 0.6. What is the seasonally adjusted forecast for the next four quarters?

Q4) Which of the following techniques uses variables such as price and promotional expenditures, which are related to product demand, to predict demand?

A) associative models

B) exponential smoothing

C) weighted moving average

D) simple moving average

E) time series

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Chapter 5: Design of Goods and Services

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Sample Questions

Q1) Rapidly developing products and moving them to the market is part of time-based competition.

A)True

B)False

Q2) Which of the following typically shows the components, their description, and the quantity of each required to make one unit of a product?

A) an engineering drawing

B) an assembly drawing

C) a bill of material

D) an assembly chart

E) a route sheet

Q3) Boeing's use of epoxy composites and titanium graphite laminate represent the ethical and environmentally friendly concept of __________.

Q4) Virtual reality technology can improve designs less expensively than the use of physical models or prototypes.

A)True

B)False

Q5) Identify the steps involved in building the House of Quality.

Q6) What is quality function deployment (QFD)?

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Chapter 6: Managing Quality

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Sample

Questions

Q1) Enlarging employee jobs so that the added responsibility and authority is moved to the lowest level possible in the organization is called __________.

Q2) The definition of quality adopted by The American Society for Quality is a customer-oriented definition.

A)True

B)False

Q3) Kaizen is similar to TQM in that both are focused on continuous improvement.

A)True

B)False

Q4) Pareto charts are a graphical way of identifying the few critical items from the many less important ones.

A)True

B)False

Q5) 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

E) none of the above

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Chapter 7: Statistical Process Control

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Sample Questions

Q1) An operating characteristic (OC) curve describes

A) how many defects per unit are permitted before rejection occurs

B) the sample size necessary to distinguish between good and bad lots

C) the most appropriate sampling plan for a given incoming product quality level

D) how well an acceptance sampling plan discriminates between good and bad lots

E) none of the above

Q2) A bank's manager has videotaped 20 different teller transactions to observe the number of mistakes being made. Ten transactions had no mistakes, five had one mistake and five had two mistakes. Compute proper control limits at the 90% confidence level.

Q3) The normal application of a p-chart is in

A) process sampling by variables

B) acceptance sampling by variables

C) process sampling by attributes

D) acceptance sampling by attributes

E) none of the above

Q4) What do the terms producer's risk and consumer's risk mean?

Q5) What is the purpose of the Operating Characteristics curve?

Q6) The __________ are calculated to show how much allowance should be made for natural variation.

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Chapter 8: Process Strategy

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Sample Questions

Q1) Which of the following products is likely to be assembled on a repetitive process line?

A) automobiles

B) personal computers

C) dishwashers

D) television sets

E) all of the above

Q2) A product is currently made in a process-focused shop, where fixed costs are $8,000 per year and variable cost is $40 per unit. The firm currently sells 200 units of the product at $200 per unit. A manager is considering a repetitive focus to lower costs (and lower prices, thus raising demand). The costs of this proposed shop are fixed costs = $24,000 per year and variable costs = $10 per unit. If a price of $80 will allow 400 units to be sold, what profit (or loss) can this proposed new process expect?

Do you anticipate that the manager will want to change the process? Explain.

Q3) Describe some major challenges to implementing a successful build-to-order system?

Q4) A(n) __________ uses an automated work cell controlled by electronic signals from a common centralized computer facility.

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Chapter9: Capacity and Constraint Management

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Sample Questions

Q1) A firm is about to undertake the manufacture of a product, and is weighing three capacity alternatives: small job shop, large job shop, and repetitive manufacturing. The small job shop has fixed costs of $3,000 per month, and variable costs of $10 per unit. The larger job shop has fixed costs of $12,000 per month and variable costs of $3 per unit. The repetitive manufacturing plant has fixed costs of $30,000 and variable costs of $1 per unit. Demand for the product is expected to be 1,000 units per month with "moderate" market acceptance, but 2,000 under "strong" market acceptance. The probability of moderate acceptance is estimated to be 60 percent; strong acceptance has a probability of 40 percent. The product will sell for $25 per unit regardless of the capacity decision. Which capacity choice should the firm make?

Q2) __________ analysis finds the point at which costs equals revenues.

Q3) Which of the following is <b>False</b> regarding capacity expansion?

A) "Average" capacity sometimes leads demand, sometimes lags it.

B) If "lagging" capacity is chosen, excess demand can be met with overtime or subcontracting.

C) Total cost comparisons are a rather direct method of comparing capacity alternatives.

D) Capacity may only be added in large chunks.

E) All of the above are true.

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Chapter 10: Location Strategies

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Sample Questions

Q1) Industrial location analysis typically attempts to

A) minimize costs

B) maximize sales

C) focus more on human resources

D) avoid countries with strict environmental regulations

E) ignore exchange rates and currency risks

Q2) The center-of-gravity method is used primarily to determine what type of locations?

A) service locations

B) manufacturing locations

C) distribution center locations

D) supplier locations

E) call center locations

Q3) Which of the following workers is the most productive?

A) $50 wages, 10 parts produced

B) $10 wages, 1 part produced

C) $30 wages, 5 parts produced

D) $100 wages, 21 parts produced

E) $500 wages, 100 parts produced

Q4) __________ costs are readily identifiable and can be measured with precision.

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Chapter 11: Layout Strategies

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Sample Questions

Q1) Identify the seven fundamental layout strategies. Describe the use of each one very briefly.

Q2) What are the advantages and disadvantages of product layouts?

Q3) Which type of layout is specifically designed to encourage employees to interact?

A) warehouse

B) job shop

C) open office

D) retail

E) repetitive/continuous

Q4) A production line is to be designed to make 500 El-More dolls per day. Each doll requires 11 activities totaling 16 minutes of work. The factory operates 750 minutes per day. The required cycle time for this assembly line is

A) one-half minute

B) one and one-half minutes

C) two minutes

D) 5,500 minutes

E) cannot be determined from the information given

Q5) To develop a good facility layout, what must be determined?

Q6) __________ are fees manufacturers pay to get their products displayed.

Page 13

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Chapter 12: Human Resources, Job Design, and Work Measurement

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Sample Questions

Q1) A job characterized by __________ allows a worker to use his/her dexterity, physical strength, and skills to do his/her work.

A) feedback

B) skill variety

C) job identity

D) job significance

E) autonomy

Q2) Which of the following techniques may not provide reliable and accurate time standards?

A) historical experience

B) method time measurement (MTM)

C) time studies

D) work sampling

E) predetermined time standards

Q3) How many observations would be necessary for a time studies analyst to be 99% confident that the average time is within .1 minutes of the true value if the average time is 10.5 minutes and the standard deviation is 3 minutes?

Q4) A(n) __________ is a group of empowered individuals working together to reach a common goal.

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Chapter 13: Supply-Chain Management

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Sample Questions

Q1) The three classic types of negotiation strategies are

A) vendor evaluation, vendor development, and vendor selection

B) Theory X, Theory Y, and Theory Z

C) many suppliers, few suppliers, and keiretsu

D) cost-based price model, market-based price model, and competitive bidding

E) None of the above is correct.

Q2) What are the special requirements of supply-chain systems in global environments?

Q3) The Japanese concept of a company coalition of suppliers is

A) poka-yoke

B) kaizen

C) keiretsu

D) dim sum

E) illegal

Q4) Because the supply chain has become so electronic and automated, opportunities for unethical behavior have been greatly reduced.

A)True

B)False

Q5) What are the three negotiation strategies?

Briefly describe each of them.

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Chapter 14: Outsourcing as a Supply-Chain Strategy

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Sample Questions

Q1) Offshoring is the practice of moving a business process to a foreign country but retaining __________.

Q2) Some organizations use outsourcing to replace entire purchasing, information systems, marketing, finance, and operations departments.

A)True

B)False

Q3) The theory of competitive advantage states that you should allow another firm to perform work activities for your company if that company can do it more productively than you can.

A)True

B)False

Q4) What do you think would be a major risk for a government trying to promote its country as a low-cost producer, filled with ready and willing outsourcing providers?

Q5) Research indicates that of all the reasons given for outsourcing failure, the most common is that the decision was made without sufficient understanding of the options through analysis.

A)True

B)False

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Chapter 15: Inventory Management

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Sample Questions

Q1) ABC analysis is based on the presumption that carefully controlling all items is necessary to produce important inventory savings.

A)True

B)False

Q2) In the quantity discount model, the cost of acquiring goods (product cost) is not a factor in determining lot size.

A)True

B)False

Q3) What is MRO an acronym for?

What is the function of MRO inventories?

Q4) The assumptions of the production order quantity model are met in a situation where annual demand is 3650 units, setup cost is $50, holding cost is $12 per unit per year, the daily demand rate is 10 and the daily production rate is 100. The production order quantity for this problem is approximately

A) 139

B) 174

C) 184

D) 365

E) 548

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Chapter 16: Aggregate Planning

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Sample Questions

Q1) A small private university normally charges the same price -$200-per credit-hour for all courses and for all students. While the university is pretty near capacity in the fall and spring, it finds that its classrooms are only about 60 percent occupied during the summer session. A student of operations management (who has recently read this chapter) wonders if yield management might be useful to both the university and its students alike. This student, with help from some economics majors, estimates a demand curve for summer course enrollment. Points on this demand curve include 9000 credit-hours at the current rate of $200, 12,000 credit hours at $180, 15,000 credit-hours at $160, and 18,000 credit-hours at $140. Based on this demand curve, what price point would best serve the university, if its objective is the greatest revenue for the summer session?

Q2) The aggregate planning process usually includes expediting and dispatching of individual products.

A)True

B)False

Q3) The strategies of aggregate planning are broadly divided into demand options and capacity options.

A)True

B)False

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Chapter 17: Material Requirements Planning MRP and ERP

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Sample Questions

Q1) In MRP record calculations, the appearance of a negative value for the gross requirements of an end item in a specific time bucket

A) signals the need to purchase that end item in that period

B) implies that value was scheduled by the MPS

C) signals the need for a negative planned order receipt in that period

D) is impossible

E) All of the above are true.

Q2) Closed-loop MRP systems allow production planners to move work between time periods to smooth the load or to at least bring it within capacity.

A)True

B)False

Q3) Finite capacity scheduling, unlike MRP, recognizes the capacity limitations of departments and machines when building schedules.

A)True

B)False

Q4) A working MRP system allows a firm to react to even minor changes in production requirements. Discuss both the advantages and disadvantages of having such ability.

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Chapter 18: Short-Term Scheduling

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Sample Questions

Q1) What makes short-term scheduling of strategic importance?

Q2) When a set of jobs must pass through two workstations whose sequence is fixed, __________ is the sequencing rule most commonly applied.

A) critical ratio

B) earliest due date

C) first come, first served

D) slack time remaining

E) Johnson's rule

Q3) One criterion for developing effective schedules is minimizing completion time.

A)True

B)False

Q4) What is input-output control?

Q5) There are 5 jobs (A, B, C, D,E) that need to be completed in a work center. The due dates are the 10 , 13 , 8 , 20 , and 15 respectively with process times of 7, 12, 7, 20, and respectively as well. If today is the 1 of the month calculate the critical ratio for each and use this value to sequence the jobs in the order they should be started.

Q6) __________ determines the order in which jobs should be done at each work center.

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Chapter 19: Just-In-Time and Lean Options

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Q1) __________ involves scheduling products so that each day's production meets the demand for that day.

Q2) Because most services cannot be inventoried, there is little place for JIT to help service organizations achieve competitive advantage.

A)True

B)False

Q3) Waste is anything that does not add value, such as storage or inspection of items; waste also includes any activity that does not add value from the consumer's perspective.

A)True

B)False

Q4) A scheduler may find that freezing the portion of the schedule closest to the due dates allows the production system to function and the schedule to be met.

A)True

B)False

Q5) Identify JIT scheduling tactics.

Q6) __________ gets suppliers to accept responsibility for satisfying end customer needs.

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Chapter 20: Maintenance and Reliability

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Sample Questions

Q1) Adding an additional part to a component or product ordinarily reduces reliability by introducing an additional source of failure.

A)True

B)False

Q2) Ten high-technology batteries are tested for 200 hours each. One failed at 20 hours; all others completed the test. FR(%) is __________ and MTBF is __________.

A) 10%; 1/1820

B) 90%; 1/1820

C) 10%; 1820 hours

D) 10%; 1980 hours

E) cannot calculate from information provided

Q3) What is the impact on system reliability of adding parts or components in parallel?

Q4) How do expert systems improve maintenance systems?

Q5) A simple electrical motor has three components: windings, armature, and housing. These three components have reliabilities of .9998, .9992, and .9999. There is no possibility of redundant parts. What is the reliability of the motor? Round your answer to four decimal places.

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Chapter 21: Decision-Making Tools

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Sample Questions

Q1) A toy manufacturer makes stuffed kittens and puppies which have relatively lifelike motions. There are three different mechanisms which can be installed in these "pets." These toys will sell for the same price regardless of the mechanism installed, but each mechanism has its own variable cost and setup cost. Profit, therefore, is dependent upon the choice of mechanism and upon the level of demand. The manufacturer has in hand a forecast of demand that suggests a 0.2 probability of light demand, a 0.45 probability of moderate demand, and a probability of 0.35 of heavy demand. Payoffs for each mechanism-demand combination appear in the table below.

\[\begin{array} { | l | c | c | c | }

\hline \text { Demand } & \text { Wind-up action } & \text { Pneumatic action } & \text { Electronic action } \\

\hline \text { Light } & \$ 250,000 & \$ 90,000 & - \$ 100,000 \\

\hline \text { Moderate } & 400,000 & 440,000 & 400,000 \\

\hline \text { Heavy } & 650,000 & 740,000 & 780,000 \\

\hline

\end{array}\]

Construct the appropriate decision tree to analyze this problem. Use standard symbols for the tree. Analyze the tree to select the optimal decision for the manufacturer.

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Chapter 22: Linear Programming

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Q1) The Queen City Nursery manufactures bags of potting soil from compost and topsoil. Each cubic foot of compost costs 12 cents and contains 4 pounds of sand, 3 pounds of clay, and 5 pounds of humus. Each cubic foot of topsoil costs 20 cents and contains 3 pounds of sand, 6 pounds of clay, and 12 pounds of humus. Each bag of potting soil must contain at least 12 pounds of sand, 12 pounds of clay, and 10 pounds of humus. Explain how this problem meets the conditions of a linear programming problem. Plot the constraints and identify the feasible region. Graphically or with corner points find the best combination of compost and topsoil that meets the stated conditions at the lowest cost per bag. Identify the lowest cost possible.

Q2) Suppose that an iso-profit line is given to be X+Y=15. What would be the profit made from producing 20X and 10Y?

A) 15

B) 30

C) 0

D) 20X and 10Y is not a feasible solution.

E) Unable to determine

Q3) What is the feasible region in a linear programming problem?

Q4) What is sensitivity analysis?

Q5) Explain how to use the iso-profit line in a graphical maximization problem.

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Chapter 23: Transportation Models

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Q1) A feasible solution in transportation models is one in which all of the supply and demand constraints are satisfied.

A)True

B)False

Q2) One difference between the stepping-stone method compared to the Northwest-corner and intuitive method is that

A) the stepping-stone method never finds a feasible solution

B) the stepping-stone method ignores costs

C) the stepping-stone method ALWAYS finds a lower-cost solution

D) the stepping-stone method guarantees an optimal solution

E) All of the above or None of the above.

Q3) A transportation problem requires exactly as many origins as destinations.

A)True

B)False

Q4) A transportation problem with 8 sources and 6 destinations will have an optimal solution that uses at most 13 of the 48 possible routes.

A)True

B)False

Q5) When does degeneracy occur in a transportation model?

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Chapter 24: Waiting-Line Models

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Q1) The potential restaurant customer who says to her husband, "The line looks too long; let's eat somewhere else," is an illustration of which element of queue discipline?

A) first-in, first-out

B) balk

C) renege

D) random departure

E) none of the above

Q2) A crew of mechanics at the Highway Department garage repair vehicles that break down at an average of = 8 vehicles per day (approximately Poisson in nature). The mechanic crew can service an average of = 10 vehicles per day with a repair time distribution that approximates an exponential distribution.

a. What is the probability that the system is empty?

b. What is the probability that there is precisely one vehicle in the system?

c. What is the probability that there is more than one vehicle in the system?

d. What is the probability of 5 or more vehicles in the system?

Q3) What is queue discipline?

State three rules for queue discipline. Which of these rules appears most frequently in the four main models?

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Chapter 25: Learning Curves

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Q1) The first unit of a product took 832 hours to build, and the learning curve is 75%. How long will it take to make the 10th unit? (Use at least three decimals in the exponent if you use the logarithmic approach.)

A) less than 250 hours

B) from 251 to 275 hours

C) from 276 to 300 hours

D) from 301 to 325 hours

E) 325 or more hours

Q2) The earliest industrial application of learning curves came from a report by

Q3) The first unit took 10 hours and the fourth unit 8.1 hours. What is the improvement rate?

A) 99%

B) 95%

C) 90%

D) 15%

E) none of the above

Q4) Using the arithmetic concept determine how long it will take to make the 64 unit of a product if it took 1 hour to complete the first product with a 50% learning rate.

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Chapter 26: Simulation

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Sample Questions

Q1) Which of the following is <b>not </b>an application of simulation in the area of operations?

A) personnel scheduling

B) truck dispatching

C) plant (or facility) layout

D) inventory management using EOQ principles

E) inventory planning and control

Q2) Which of the following is a necessity for common EOQ methodology but not simulations

A) constant lead time

B) variable demand

C) variable holding costs

D) A and B

E) A, B and C

Q3) Explain what is meant by "simulation is not limited to using the standard probability distributions."

Q4) Simulation can use any probability distribution that the user defines.

A)True

B)False

Q5) Identify five applications of simulation.

28

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