Production and Operations Management Final
Exam
Course Introduction
Production and Operations Management explores the strategic and tactical aspects of producing goods and delivering services efficiently. The course covers topics such as process design, capacity planning, facility layout, inventory management, quality control, supply chain logistics, and project management. Emphasizing both manufacturing and service sectors, it introduces tools and techniques for optimizing operations, reducing costs, improving quality, and responding to market demand. Through case studies and real-world applications, students develop analytical and decision-making skills vital for managing production systems and contributing to organizational competitiveness.
Recommended Textbook Decision Sciences and Operations Management Coursemate 4th Edition by David
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Page 2
A. Collier
Chapter 1: Goods, Services, and Operations Management
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Q1) A product that typically lasts at least three years is called a durable good.
A)True
B)False Answer: True
Q2) Value creation processes focus on primary goods and services.
A)True
B)False Answer: True
Q3) Employees who work in financial and accounting functions of organizations need little knowledge of operations management.
A)True
B)False
Answer: False
Q4) Support processes would typically include all of the following except
A)inventory management
B)customer help desk operations
C)research and development
D)manufacturing and assembly
Answer: D
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Chapter 2: Value Chains
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Q1) A company has two alternatives for meeting a customer requirement for 9,000 units of a specialty molding. If done in-house, fixed cost would be $350,000 with variable cost at $30 per unit. Alternative two is to outsource for a total cost of $80 per unit. Determine the breakeven quantity and determine if they should make the item in-house or outsource it.
Answer: VC<sub>1</sub> = $30
VC<sub>2</sub> = $80
FC = $350,000
Breakeven point = Q* = $350,000/$80 - $30) = 7,000 units. Since the anticipated volume is 9,000 units and is greater than the breakeven quantity, the firm should produce the part in-house and not outsource.
Q2) A value chain can be considered a "cradle-to-grave" model of the operations function.
A)True
B)False
Answer: True
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Chapter 3: Measuring Performance in Operations
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Q1) Explain the difference between design flexibility and volume flexibility.
Answer: Design flexibility is the ability to develop a wide range of customized goods or services to meet different or changing customer needs. Volume flexibility is the ability to respond quickly to changes in the volume and type of demand. This might mean rapid changeover from one product to another as the demand for certain goods increases or decreases, or the ability to produce a wide range of volumes as demand fluctuates.
Q2) Of the four models of organizational performance, which two focus on the "big picture" of organizational performance rather than on operational-level framework?
A)Malcolm Baldrige National Quality Award Framework and the Value Chain model
B)Balanced Scorecard and the Service-Profit Chain
C)Malcolm Baldrige National Quality Award Framework and the Balanced Scorecard
D)Value Chain model and Service-Profit Chain
Answer: C
Q3) Quality measures the degree to which the output of a process conforms to management's expectations and requirements.
A)True
B)False
Answer: False
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Chapter 4: Operations Strategy
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Q1) With regard to the three types of customer attributes in evaluating the quality of goods and services, those associated with the features of a new laptop computer such as processor speed and hard disk capacity would best be classified as
A)search attributes
B)experience attributes
C)credence attributes
D)reflect attributes
Q2) Requirements that are expected in a good or service are called
A)Order Qualifiers
B)Order Satisfiers
C)Order Exciters
D)Order Winners
Q3) Quality improvement initiatives generally increase market share in the long term and also increase profitability in the short term.
A)True
B)False
Q4) What do we mean by core competencies?
Q5) Explain the difference between an order qualifier and an order winner. Provide some examples.
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Chapter 5: Technology and Operations Management
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Q1) Information technology has been equally important to business-to-business, business-to-customer, and customer-to-customer interactions.
A)True
B)False
Q2) Infinite scalability is most related to
A)high variable cost
B)high fixed cost
C)high scalability
D)low scalability
Q3) Customer Relationship Management CRM) systems use segmentation data to help focus marketing initiatives and provide data for tracing sales trends and advertising effectiveness.
A)True
B)False
Q4) Without the internet, there would be little application of technology in services.
A)True
B)False
Q5) Discuss the role of technology on productivity.
Q6) Describe the three stages of the technology development and adoption process.
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Chapter 6: Goods and Service Design
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Q1) A quality characteristic has a specification in cm.) of 0.400 \(\times\) 0.03. If the value of the quality characteristic exceeds 0.400 by the tolerance of 0.030 on either side, the product will require a $180.00 repair. What is the appropriate Taguchi loss function?
Q2) Redundancy is the use of backup components in a design.
A)True
B)False
Q3) A quality characteristic has a manufacturing specification in cm) of 0.200 \(\times\) 0.05. Historical data indicate that if the quality characteristic takes on values larger than 0.25 cm or smaller than 0.15 cm, the product fails and a cost of $75 is incurred. Based on this data, answer the questions below.
a. Determine the Taguchi Loss Function
b. Estimate the loss for a quality characteristic of 0.135 cm.
Q4) Product simplicity encourages the use of standard parts and components.
A)True
B)False
Q5) The servicescape refers to the place where a service is located.
A)True B)False
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Chapter 7: Process Selection, Design, and Analysis
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Q1) In designing processes, one often starts at the detail level and moves progressively toward the aggregate.
A)True
B)False
Q2) The service positioning matrix focuses on the service encounter level rather than the overall design of the service system.
A)True
B)False
Q3) Transferring material between two non-adjacent workstations, waiting for service and requiring multiple approvals are examples of
A)A value stream
B)A process map
C)Non-value-added activities
D)Little's Law
Q4) Once a firm decides on the most appropriate process, they can then determine the type of goods they need to create.
A)True
B)False
Q5) Define a value stream map. How does this differ from a regular process map?
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Chapter 8: Facility and Work Design
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Q1) Considering ergonomics, which of the following does not fit?
A)Improving productivity
B)Group technology
C)Designing equipment and instrumentation
D)Considering physical capability of people
Q2) Self-managed teams perform entire jobs, rather than specialized assembly-line work.
A)True
B)False
Q3) Flow-blocking and lack-of-work delays can be reduced by assigning an appropriate level of capacity at each workstation.
A)True
B)False
Q4) A Gallup study showed that workers who are allowed to personalize their workplaces were no more productive than those who are not allowed.
A)True
B)False
Q5) Explain assembly line balancing. Discuss the three types of information needed to balance an assembly line.
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Chapter 9: Supply Chain Design
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Q1) Which one of the following statements is false?
A)Boeing's new 787 Dreamliner airplane has encountered many startup and supply chain coordination problems.
B)At Dell, Inc. customer financing of purchases is a post-production service in their value chain.
C)At Dell, Inc. installation, warranty, and field repair services are normally done on a prepaid contract basis with customers.
D)Federal Express has over one million pickup and delivery sites and therefore, is a good example of multisite management.
Q2) Accurate forecasts are more critical to a pull system.
A)True
B)False
Q3) Explain the typical structure of a supply chain.
Q4) In designing an efficient supply chain, an organization would need high levels of inventory stored in many small distribution centers.
A)True
B)False
Q5) Summarize the Supply Chain Operations Reference SCOR) model.
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Chapter 10: Capacity Management
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Q1) Focused factories are often devoted to a specific technology or particular market segments or customers.
A)True
B)False
Q2) For a Marriott hotel call center the expected service rate was 3.0 minutes per telephone call per customer service representative (CSR). With 3 telephone CSRs on-duty during the 6:30 to 7:00 am time period, and assuming a 90% target CSR labor utilization rate, how many telephone calls can these 3 CSRs handle during this time period.
Q3) A physical constraint is associated with the capacity of a resource.
A)True
B)False
Q4) Economies of scale occur when the average unit cost of the good or service begins to increase as the capacity and/or volume of throughput increases.
A)True
B)False
Q5) The earliest revenue management systems focused solely on overbooking.
A)True
B)False
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Chapter 11: Forecasting and Demand Planning
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Q1) Using the data shown below, compute the mean square error, mean absolute deviation, and mean absolute percentage error for the forecasts shown.
\[\begin{array} { c c c }
\text { Month } & \text { Forecast Demand } & \text { Actual Demand } \\
\hline\text { April }& 170 & 180 \\
\text { May } & 225 & 200 \\
\text { Jure } & 210 & 200 \\
\text { July } & 260 & 240 \\
\text { August } & 200 & 230 \end{array}\]
Q2) Seasonal patterns can occur over the weeks during a month, over days during a week, or hours during a day.
A)True
B)False
Q3) Explain the difference between statistical forecasting and judgment forecasting.
Q4) Long range forecasts expressed in sales dollars are more meaningful to top managers than to managers at the operations level.
A)True
B)False
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Chapter 12: Managing Inventories
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Q1) When a customer is unwilling to wait for an item that is not in stock and purchases the item elsewhere, a backorder has occurred.
A)True
B)False
Q2) Define the EOQ model and explain its major assumptions.
Q3) A local furniture store is examining its inventory policy and considering using an economic order quantity EOQ) approach for a popular table set that they have had difficulty keeping in stock. They have the following information about the table set:
Annual demand = 3,920 sets
Current order quantity = 80 sets
Carrying cost = $80.00/set/year
Order cost = $200
a. What is the current total annual cost TC)?
b. What is the EOQ?
c. What is the total annual cost at the EOQ?
Q4) Inventory holding costs can be accurately measured by accounting departments.
A)True
B)False
Q5) What are the four categories of inventory costs?
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Chapter 13: Resource Management
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Q1) A furniture company produces two types of wooden chairs: products A and B. They are interested in developing a rough-cut capacity plan to prevent overloading their assembly facility. Assembly time required for product A is 2 hours and for product B it is 3 hours. Total assembly time available is 100 hours/week. They have the following weekly production information available: \(\quad \)\(\quad \)\(\quad \)\(\quad \)\(\quad \)\(\quad \)\(\quad \)\(\quad \)\(\quad \)\(\text { Week }\)\(\begin{array}{|c|c|c|c|c|c|c|}
\hline \text { End Item } & 1 & 2 & 3 & 4 & 5 & 6 \\
\hline \mathrm{A} & 10 & 20 & 20 & 10 & 30 & 10 \\
\hline \mathrm{B} & 20 & 20 & 20 & 10 & 20 & 30 \\
\hline
\end{array}\)
a. What is the total hourly load on the assembly facility in week 4?
b. In how many weeks is the assembly facility overloaded?
Q2) End items in a master production schedule or final assembly schedule must be forecast.
A)True
B)False
Q3) Define resource management and list its key objectives.
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Chapter 14: Operations Scheduling and Sequencing
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Q1) If the highest priority is to minimize the average job lateness, then the jobs sequence should begin with those jobs requiring
A)The shortest processing time
B)The smallest critical ratio
C)The least remaining operations
D)The longest processing time
Q2) Staff scheduling needs all of the following except
A)Flow-time estimates
B)Accurate forecasting
C)Staffing levels required by time period
D)Determining available personnel
Q3) Johnson's sequencing rule is used to sequence
A) several jobs through several work centers
B) several jobs through one work center
C) two jobs through several work centers
D) several jobs through two work centers
Q4) The makespan is the sum of flow times of a given set of jobs.
A)True
B)False
Q5) Describe Johnson's sequencing rule for the two-resource sequencing problem.
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Chapter 15: Quality Management
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Q1) ISO 9000 is best used by firms with mature quality systems as a means of refining their quality practices.
A)True
B)False
Q2) Define Six Sigma and explain the key concepts used to implement a Six Sigma quality initiative.
Q3) Because of the amount of resources required, a Kaizen blitz is generally performed outside of normal working hours over several weeks or months.
A)True
B)False
Q4) W. Edward Deming believed that productivity would improve by setting numerical quotas.
A)True
B)False
Q5) Explain the four components of the cost of quality.
Q6) A Pareto diagram helps to understand the relationships between two variables and to verify possible cause and effect hypotheses.
A)True
B)False
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Chapter 16: Quality Control and Spc
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Q1) What is the purpose of a process-capability study and what is a process capability index?
Q2) Honda wants to monitor the number of blemishes scratches, blisters, etc.) on the fenders of its cars using a statistical process control chart. The most appropriate type of SPC chart is
A)x-bar.
B)R-bar chart.
C)C<sub>pk</sub> chart
D)c-chart
Q3) A system governed only by common causes is called a stable system.
A)True
B)False
Q4) In-process quality control is typically performed by the employees who run the processes.
A)True
B)False
Q5) In general, discuss how to interpret control charts.
Q6) Explain the issues associated with selecting the appropriate sample size and sampling frequency for control charts.
Q7) Define and give an example of the three components of any control system.
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Chapter 17: Lean Operating Systems
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Q1) Lean production is focused on efficiency by reducing waste and improving process flow, while Six Sigma is focused on effectiveness by reducing errors and defects.
A)True
B)False
Q2) Contrast batching with single-piece flow.
Q3) Which of the following is least related to a pull system?
A)Building inventory
B)Final assembly schedule
C)Real time information
D)Sales rate
Q4) Which of the following is least related to a push system?
A)Maximum customer responsiveness
B)Predefined schedule
C)Finished goods inventory
D)Based on forecast
Q5) A manufacturer of automobile engines is designing a new Kanban system for engine #321. The demand for #321 is 75/day and they are built in groups of 8. The total process and wait time is 3 days. The manager wants an alpha (\(\alpha\)) of 2 or 200%. How many Kanbans are required?
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Chapter 18: Project Management
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Q1) Slack in an activity is computed as
A)ES - LS
B)EF - LF
C)LS - ES
D)LS - EF
Q2) The county government has decided to redo the street you live on and plans to block the street off which causes you and your neighbor's considerable inconvenience. The project has three parallel paths defined as follows:( i) path A-B-C-H to install street lights and electrical wiring that takes 16 days, (ii) path A-D-E-H to install sidewalks with handicap capabilities that takes 22 days, and (iii) path A-F-G-H to repave the street including storm drains that takes 30 days. Which one of the following statements is true?
A)The expected duration of the project is 30 + 22 + 16 = 68 days.
B)Path A-B-C-H is the critical path.
C)Path A-D-E-H has the most slack time.
D)Path A-F-G-H is the critical path.
Q3) Describe how a project fits into each of the three common organizational structures.
Q4) Define critical path and explain how it is identified once a project schedule is calculated
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Chapter 19: Work Measurement, Learning Curves, and Standards
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Q1) Determine the sample size for the following time study given a standard deviation of three ounces and a 92% probability that the value of the sample mean is within two ounces?
Q2) All of following are true regarding learning curves except
A)Not used for a pricing strategy
B)Are affected by a ratio of manual to machine work
C)80% learning curves exhibit a step initial decline and then level off
D)Used in defense industries
Q3) Allowances include time for all of the following except A)Fatigue
B)Equipment breakdowns
C)Rest periods
D)Poor scheduling
Q4) For work sampling, p will never be known exactly since it is the population parameter that is being estimated.
A)True
B)False
Q5) The performance rating factor and allowances are based upon human judgment. A)True
B)False
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Chapter 20: Queuing Analysis
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Q1) Discuss the seven key assumptions for the multiple-server waiting line model.
Q2) ____ is the use of a criterion that allows new arrivals to displace members of the current queue and become the first to receive service.
A)Shortest Processing Time SPT)
B)A random queue discipline
C)Preemption
D)A reservation
Q3) The process of customers leaving one waiting line to join another in a multiple-server channel) configuration is called
A)jockeying
B)reneging
C)balking
D)preempting
Q4) When \(\lambda\) = \(\mu\), the operating characteristics are not defined, which means that these times and numbers of items grow infinitely large.
A)True
B)False
Q5) Contrast wait cost with server cost. Which is harder to estimate?
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Chapter 21: Modeling Using Linear Programming
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Q1) For linear programming to work for project crashing decisions, a dummy activity is needed at the beginning of the project, with a duration of zero 0) time.
A)True
B)False
Q2) Explain the steps necessary to solve a linear programming problem using Microsoft Excel's Solver.
Q3) Deciding on how much of each grade of gasoline to produce is an example of the linear programming model for blending applications.
A)True
B)False
Q4) If R<sub>m</sub> = increase in the total production level during Month 'm' compared to Month m-1 and D<sub>m</sub> = decrease in the total production level during Month 'm' compared to Month m-1, which of the following statements can be correct?
A)R<sub>m</sub> = D<sub>m</sub> = 0
B)Both R<sub>m</sub> and D<sub>m</sub> positive
C)Both R<sub>m</sub> and D<sub>m </sub>negative
D)One variable can be positive and the other negative
Q5) Differentiate between a feasible solution and an optimal solution.
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Chapter 22: Simulation
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Q1) The Excel function (RAND ) generates random numbers that provide a continuous range of values. Unlike those for two-digit numbers, these values are not limited to probability increments of 0.01.
A)True
B)False
Q2) In regard to a simulation model for inventory management, all of the following are correct except
A)Results in an optimal solution with a large simulation
B)Many days of simulation run are needed to obtain meaningful results
C)Lead-time can vary
D)Assumes that a specific reorder point and order quantity have been selected
Q3) Validation consists of all of the following except
A)Developing a model with high face validity
B)Validating model assumptions
C)Developing logical flow charts
D)Validating model output
Q4) Define simulation and give some operations management examples.
Q5) A simulator is a general purpose simulation model.
A)True
B)False
24
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Chapter 23: Work Measurement, Learning Curves, and Standards
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Q1) With some modification, the decision rules for one-time decisions without event probabilities can be applied to situations where the payoff is cost.
A)True
B)False
Q2) All of the following are characteristics of management decisions for which decision analysis techniques apply except
A)They must be important
B)They are probably unique
C)They are usually deterministic
D)They are complex
Q3) ____ represent a future outcome that can occur after a decision is made that are not under the control of the decision-maker.
A)Decision alternatives
B)Events
C)Payoffs
D)Probabilities
Q4) Discuss the five characteristics of management decisions when decision analysis techniques should be utilized.
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