Operations Management Exam 2
-
A company makes necklaces with attached letters. Department A makes up the chains and letters. Department B assembles the necklaces when orders are received. Departments A and B are, respectively:
-
Make-to-stock, make-to-stock
-
Make-to-stock, make-to-order
-
Make-to-order, make-to-stock
-
Make-to-order, make-to-order
-
This 'Operations Management Exam 2' assesses knowledge on production processes, types of operations, and strategic decision-making in manufacturing contexts. It evaluates understanding of operational strategies and their applications in real-world scenarios.
Quiz Preview
- 2.
What two numbers are contained in the daily report to the CEO of Walt Disney Parks & Resorts regarding the six Orlando parks?
-
Yesterday’s forecasted attendance and yesterday’s actual attendance
-
Yesterday’s actual attendance and today’s forecasted attendance
-
Yesterday’s forecasted attendance and today’s forecasted attendance
-
Yesterday’s actual attendance and last year’s actual attendance
-
Yesterday’s forecasted attendance and the year-to-date average daily forecast error
Correct Answer
A. Yesterday’s forecasted attendance and yesterday’s actual attendanceExplanation
The daily report to the CEO of Walt Disney Parks & Resorts regarding the six Orlando parks includes yesterday's forecasted attendance and yesterday's actual attendance. This information is important for the CEO to understand how well the parks are performing in terms of attendance and to evaluate the accuracy of the attendance forecasts. By comparing the forecasted attendance with the actual attendance, the CEO can assess the effectiveness of their forecasting methods and make informed decisions regarding park operations and future planning.Rate this question:
-
- 3.
When done correctly, mass customization
-
Increases pressure on supply chain performance
-
Helps eliminate the guesswork that comes with sales forecasting
-
Drives down inventories
-
Increases pressure on scheduling
-
All of the above
Correct Answer
A. All of the aboveExplanation
Mass customization refers to the process of producing customized products on a large scale. When done correctly, it increases pressure on supply chain performance because it requires efficient coordination and synchronization of various activities to meet individual customer demands. It also helps eliminate the guesswork that comes with sales forecasting as the products are tailored to specific customer needs. Additionally, mass customization drives down inventories as products are produced based on actual customer orders, reducing the need for excessive stock. Lastly, it increases pressure on scheduling as the production process needs to be flexible and responsive to accommodate customization requests.Rate this question:
-
- 4.
Given an actual demand of 61, a previous forecast of 58, and an of .3, what would the forecast for the next period be using simple exponential smoothing?
-
45.5
-
57.1
-
58.9
-
61.0
-
65.5
Correct Answer
A. 58.9Explanation
The forecast for the next period using simple exponential smoothing can be calculated by adding the weighted average of the previous forecast and the actual demand. In this case, the previous forecast was 58 and the actual demand was 61. The smoothing factor, also known as the weight, is given as 0.3. Therefore, the forecast for the next period can be calculated as follows: Next forecast = (Previous forecast * Weight) + (Actual demand * (1 - Weight)) Next forecast = (58 * 0.3) + (61 * (1 - 0.3)) Next forecast = 17.4 + 42.7 Next forecast = 60.1 Therefore, the forecast for the next period would be 60.1, which is closest to the given answer of 58.9.Rate this question:
-
- 5.
Time series data may exhibit which of the following behaviors?
-
Trend
-
Random variations
-
Seasonality
-
Cycles
-
They may exhibit all of the above.
Correct Answer
A. They may exhibit all of the above.Explanation
Time series data refers to a sequence of observations taken at regular intervals over time. These observations can show different patterns or behaviors. Trend refers to a long-term increase or decrease in the data. Random variations are unpredictable fluctuations that occur in the data. Seasonality refers to regular patterns that repeat at fixed intervals, such as daily, weekly, or yearly. Cycles refer to longer-term patterns that repeat over a longer period of time, such as economic cycles. Therefore, time series data can exhibit all of these behaviors simultaneously.Rate this question:
-
- 6.
Given the forecast errors of -1, 4, 8, and -3, what is the mean absolute deviation (MAD)? [Use formula: MAD = Σ | Actual – Forecast | / n ]
-
2
-
3
-
4
-
8
-
None of the above
Correct Answer
A. 4Explanation
The mean absolute deviation (MAD) is calculated by finding the absolute value of the difference between each actual value and its corresponding forecast value, summing these absolute differences, and then dividing by the number of values. In this case, the absolute differences between the actual values and the forecast values are 3, 1, 4, and 7. The sum of these absolute differences is 15. Dividing this sum by the number of values (4) gives a MAD of 3.75. Therefore, the correct answer is not available.Rate this question:
-
- 7.
A large office which has a typing pool, a copying department and all the managers in a large suite of offices is an example of:
-
A line process
-
A batch process
-
A project process
-
A continuous process
Correct Answer
A. A batch processExplanation
A large office which has a typing pool, a copying department, and all the managers in a large suite of offices can be considered an example of a batch process. In a batch process, similar tasks or activities are grouped together and completed in batches or sets. In this scenario, the typing pool and copying department may handle multiple tasks together, such as typing and copying documents in batches, while the managers may handle their tasks in a separate batch. This approach allows for efficiency and streamlining of work by grouping similar activities together.Rate this question:
-
- 8.
The primary purpose of the mean absolute deviation (MAD) in forecasting is to
-
Estimate the trend line.
-
Eliminate forecast errors.
-
Measure forecast accuracy.
-
Seasonally adjust the forecast.
Correct Answer
A. Measure forecast accuracy.Explanation
The primary purpose of the mean absolute deviation (MAD) in forecasting is to measure forecast accuracy. MAD calculates the average absolute difference between the forecasted values and the actual values. It provides a quantitative measure of how well the forecasted values match the actual values. By measuring forecast accuracy, organizations can assess the reliability of their forecasting methods and make necessary adjustments to improve future predictions.Rate this question:
-
- 9.
Which of the following methods is closely related to the opinion / judgmental forecasting?
-
Regression analysis
-
Exponential Smoothing
-
Delphi technique
-
Least square method
Correct Answer
A. Delphi techniqueExplanation
The Delphi technique is closely related to opinion/judgmental forecasting because it involves gathering opinions and judgments from a panel of experts or stakeholders. In this method, the experts provide their individual forecasts, which are then compiled and analyzed to reach a consensus or a more accurate prediction. This technique is particularly useful when there is a lack of historical data or when the future is uncertain and subjective opinions are valuable.Rate this question:
-
- 10.
A product-focused process is commonly used to produce
-
High-volume, high-variety products
-
Low-volume, high-variety products
-
High-volume, low-variety products
-
Low-variety products at either high- or low-volume
-
High-volume products of either high- or low-variety
Correct Answer
A. High-volume, low-variety productsExplanation
A product-focused process is commonly used to produce high-volume, low-variety products. This means that the process is designed to efficiently produce a large quantity of the same product, while minimizing the variety of products being produced. This type of process is often used in industries such as automotive manufacturing, where a large number of identical products are produced in a standardized manner. By focusing on high volume and low variety, the process can optimize efficiency and reduce costs.Rate this question:
-
- 11.
Which of the following statements regarding ethical and environmentally friendly processes is true?
-
Operations managers can be environmentally sensitive, but they must avoid following a low cost strategy.
-
Processes can be environmentally friendly or socially responsible, but not both.
-
Operations managers can be environmentally sensitive and still follow a low cost strategy.
-
Using energy-efficient lighting saves so little that it should not be labeled environmentally friendly.
-
The only business strategy consistent with ethical and environmentally sensitive management is the differentiation strategy.
Correct Answer
A. Operations managers can be environmentally sensitive and still follow a low cost strategy.Explanation
This statement suggests that operations managers can prioritize environmental concerns while still striving to minimize costs. It implies that being environmentally sensitive does not necessarily mean sacrificing a low cost strategy. This aligns with the idea that organizations can adopt sustainable practices and still be financially efficient.Rate this question:
-
- 12.
Which of the following values of alpha would cause exponential smoothing to respond the most slowly to forecast errors?
-
0.10
-
0.20
-
0.40
-
0.80
Correct Answer
A. 0.10Explanation
A smaller value of alpha would cause exponential smoothing to respond more slowly to forecast errors. In exponential smoothing, alpha represents the weight given to the most recent observation in the smoothing process. A smaller alpha value means less weight is given to the most recent observation, resulting in a slower response to changes in the data. Therefore, an alpha value of 0.10 would cause exponential smoothing to respond the most slowly to forecast errors.Rate this question:
-
- 13.
The ______ is the input to material requirements planning which lists the assemblies, subassemblies, parts, and raw materials needed to produce one unit of finished product.
-
Bill of material
-
Master production schedule
-
Inventory records
-
Assembly time chart
-
Net requirements chart
Correct Answer
A. Bill of materialExplanation
The bill of material is the input to material requirements planning which lists the assemblies, subassemblies, parts, and raw materials needed to produce one unit of finished product. It provides a comprehensive breakdown of all the components required for the production process, allowing for accurate planning and scheduling of materials.Rate this question:
-
- 14.
Forecasts
-
Become more accurate with longer time horizons
-
Are rarely perfect
-
Are more accurate for individual items than for groups of items
-
All of the above
-
None of the above
Correct Answer
A. Are rarely perfectExplanation
Forecasts are rarely perfect because they are based on assumptions and predictions about future events, which are inherently uncertain. No matter how much data and analysis is used, there will always be some degree of error or deviation from the actual outcome. Therefore, it is important to understand that forecasts are not guaranteed to be completely accurate and should be interpreted with caution.Rate this question:
-
- 15.
The three major types of forecasts used by business organizations are
-
Strategic, tactical, and operational
-
Economic, technological, and demand
-
Exponential smoothing, Delphi, and regression
-
Causal, time-series, and seasonal
-
Departmental, organizational, and territorial
Correct Answer
A. Economic, technological, and demandExplanation
The correct answer is economic, technological, and demand. Business organizations use these types of forecasts to make informed decisions about their operations. Economic forecasts help them understand the overall economic conditions and trends that may impact their business. Technological forecasts help them anticipate advancements in technology that may affect their industry. Demand forecasts help them predict customer demand for their products or services. By considering all three types of forecasts, organizations can develop strategies and plans to adapt and thrive in a changing business environment.Rate this question:
-
- 16.
An inventory decision rule states "when the inventory level goes down to 14 gearboxes, 100 gearboxes will be ordered." Which of the following statements is true?
-
One hundred is the reorder point, and 14 is the order quantity.
-
Fourteen is the reorder point, and 100 is the order quantity.
-
The number 100 is a function of demand during lead time.
-
Fourteen is the safety stock, and 100 is the reorder point.
-
None of the above is true.
Correct Answer
A. Fourteen is the reorder point, and 100 is the order quantity.Explanation
The statement "Fourteen is the reorder point, and 100 is the order quantity" is true because the inventory decision rule states that when the inventory level goes down to 14 gearboxes, 100 gearboxes will be ordered. The reorder point is the inventory level at which a new order should be placed, and in this case, it is 14. The order quantity is the number of items that should be ordered, and in this case, it is 100.Rate this question:
-
- 17.
Which of the following techniques uses variables such as price and promotional expenditures, which are related to product demand, to predict demand?
-
Associative models
-
Exponential smoothing
-
Weighted moving average
-
Time series
-
All of the above
Correct Answer
A. Associative modelsExplanation
Associative models use variables such as price and promotional expenditures, which are related to product demand, to predict demand. These models analyze the relationship between these variables and demand patterns to make accurate predictions. Unlike other techniques such as exponential smoothing and weighted moving average, associative models specifically focus on the relationship between demand and other relevant factors, making them suitable for predicting demand based on these variables. Therefore, the correct answer is associative models.Rate this question:
-
- 18.
What is the approximate forecast for May using a four-month moving average? Nov 39 Dec 36 Jan 40 Feb 42 Mar 48 Apr 46
-
38
-
42
-
43
-
44
-
47
Correct Answer
A. 44Explanation
The four-month moving average is calculated by taking the average of the sales data for the previous four months. In this case, the average of the sales data for Feb, Mar, Apr, and May would be 42+48+46+44 = 180, and dividing it by 4 would give us 45. Therefore, the approximate forecast for May using a four-month moving average would be 45.Rate this question:
-
- 19.
If demand is not uniform and constant, then stockout risks can be controlled by
-
Increasing the EOQ
-
Placing an extra order
-
Raising the selling price to reduce demand
-
Adding safety stock
-
Reducing the reorder point
Correct Answer
A. Adding safety stockExplanation
Adding safety stock is a strategy to control stockout risks when demand is not uniform and constant. Safety stock is extra inventory that is held to protect against unexpected fluctuations in demand or lead time. By adding safety stock, a company can ensure that they have enough inventory on hand to meet customer demand even during periods of high demand or longer lead times. This helps to reduce the risk of stockouts and maintain customer satisfaction.Rate this question:
-
- 20.
Given the time series equation of Yt = 40,000 + 150 t, what is the estimated demand for June if t = 1 in April?
-
40450
-
40600
-
42400
-
42250
-
None of the above
Correct Answer
A. 40450Explanation
The given time series equation is Yt = 40,000 + 150t, where t represents the time period. In this equation, Yt represents the estimated demand at time period t.
Given that t = 1 in April, we can substitute this value into the equation to find the estimated demand for April.
Y1 = 40,000 + 150(1) = 40,000 + 150 = 40,150
Therefore, the estimated demand for June would be the value of Yt when t = 3 (since June is two time periods after April).
Y3 = 40,000 + 150(3) = 40,000 + 450 = 40,450
Since none of the answer choices match the calculated value of 40,450, the correct answer is None of the above.Rate this question:
-
- 21.
John’s House of Pancakes uses a weighted moving average method to forecast pancake sales. It assigns a weight of 5 to the previous month’s demand, 3 to demand two months ago, and 1 to demand three months ago. If sales amounted to 1000 pancakes in May, 2200 pancakes in June, and 3000 pancakes in July, what should be the forecast for August?
-
2400
-
2511
-
2067
-
3767
-
1622
Correct Answer
A. 2511Explanation
The weighted moving average method assigns different weights to previous demand data based on their recency. In this case, the weight assigned to the previous month's demand is 5, the weight for demand two months ago is 3, and the weight for demand three months ago is 1. To calculate the forecast for August, we multiply the demand in May by 5, the demand in June by 3, and the demand in July by 1. Then, we sum these values and divide by the sum of the weights (5 + 3 + 1 = 9). Using this formula, the forecast for August is (1000 * 5 + 2200 * 3 + 3000 * 1) / 9 = 2511. Therefore, the correct answer is 2511.Rate this question:
-
- 22.
In a simple linear regression model, Y = α + β X, which one is the predictor variable?
-
Y
-
X
-
α
-
β
Correct Answer
A. YExplanation
In a simple linear regression model, the predictor variable is represented by the variable X. In this equation, Y is the dependent variable, which means it is the variable being predicted or explained by the predictor variable X. The value of Y is determined by the values of X, α (the intercept), and β (the coefficient of X). Therefore, X is the predictor variable in this equation.Rate this question:
-
- 23.
Which of the following statements about time series forecasting is true?
-
It is based on the assumption that future demand will be the same as past demand.
-
It makes extensive use of the data collected in the qualitative approach.
-
The analysis of past demand helps predict future demand.
-
Because it accounts for trends, cycles, and seasonal patterns, it is more powerful than causal forecasting.
-
All of the above are true.
Correct Answer
A. The analysis of past demand helps predict future demand.Explanation
Time series forecasting is a method that involves analyzing past demand patterns to predict future demand. By examining historical data and identifying trends, cycles, and seasonal patterns, it becomes possible to make accurate forecasts about future demand. This approach does not rely on qualitative data or assume that future demand will be the same as past demand. Additionally, while time series forecasting is powerful in capturing trends and patterns, it is not necessarily more powerful than causal forecasting, which considers the relationship between variables. Therefore, the correct statement in this case is that the analysis of past demand helps predict future demand.Rate this question:
-
- 24.
A six-month moving average forecast is better than a three-month moving average forecast if demand
-
Is rather stable
-
Has been changing due to recent promotional efforts
-
Follows a downward trend
-
Follows a seasonal pattern that repeats itself twice a year
-
Follows an upward trend
Correct Answer
A. Is rather stableExplanation
A six-month moving average forecast is better than a three-month moving average forecast if demand is rather stable because a longer time period allows for a smoother average that is less influenced by short-term fluctuations. This provides a more accurate representation of the overall trend and helps to reduce the impact of random variations in the data.Rate this question:
-
- 25.
Given an actual demand of 103, a previous forecast value of 99, and an alpha of .4, the exponential smoothing forecast for the next period would be
-
94.6
-
97.4
-
100.6
-
101.6
-
103.0
Correct Answer
A. 100.6Explanation
The exponential smoothing forecast is calculated by taking a weighted average of the actual demand and the previous forecast value. The weight given to the actual demand is determined by the alpha value. In this case, with an alpha of .4, the weight given to the actual demand is 40%, while the weight given to the previous forecast value is 60%. Therefore, the forecast for the next period is calculated as follows: (0.4 * 103) + (0.6 * 99) = 41.2 + 59.4 = 100.6.Rate this question:
-
- 26.
A product whose EOQ is 400 experiences a 50% increase in demand. The new EOQ is
-
Unchanged
-
Increased by less than 50%
-
Increased by 50%
-
Increased by more than 50%
-
Cannot be determined
Correct Answer
A. Increased by less than 50%Explanation
When the demand for a product increases by 50%, the EOQ (Economic Order Quantity) does not increase by the same percentage. The EOQ is calculated based on factors such as holding costs, ordering costs, and demand rate. Since the demand rate is only one of the factors, a 50% increase in demand will result in a less than 50% increase in the EOQ. Therefore, the correct answer is "increased by less than 50%".Rate this question:
-
- 27.
For a certain item, the cost-minimizing order quantity obtained with the basic EOQ model was 200 units and the total annual inventory (carrying and setup) cost was $600. The inventory carrying cost per unit per year for this item is
-
$1.50
-
$2.00
-
$3.00
-
$150.00
Correct Answer
A. $3.00Explanation
The EOQ model is used to determine the optimal order quantity that minimizes both carrying and setup costs. In this case, the cost-minimizing order quantity is 200 units and the total annual inventory cost is $600. To find the carrying cost per unit per year, we divide the total annual inventory cost by the order quantity. Therefore, the carrying cost per unit per year for this item is $600/200 = $3.00.Rate this question:
-
- 28.
The fixed-period inventory model requires more safety stock than the fixed-quantity models because
-
A stockout can occur during the review period as well as during the lead time
-
This model is used for products that have largestandard deviations of demand
-
This model is used for products that require very high service levels
-
Replenishment is not instantaneous
-
Setup costs and holding costs are large
Correct Answer
A. A stockout can occur during the review period as well as during the lead timeExplanation
The fixed-period inventory model requires more safety stock than the fixed-quantity models because a stockout can occur during the review period as well as during the lead time. In the fixed-period model, inventory is only reviewed and replenished at specific intervals, such as weekly or monthly. This means that if a stockout occurs during the review period, there is no immediate replenishment, leading to potential stockouts and lost sales. Therefore, more safety stock is needed to account for this possibility and ensure sufficient inventory levels during both the review period and the lead time.Rate this question:
-
- 29.
Among the advantages of cycle counting is that it
-
Makes the annual physical inventory more acceptable to management
-
Does not require the detailed records necessary when annual physical inventory is used
-
Does not require highly trained people
-
Allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventory
-
Does not need to be performed for less expensive items
Correct Answer
A. Allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventoryExplanation
Cycle counting allows for more rapid identification of errors and consequent remedial action compared to annual physical inventory. This is because cycle counting involves counting a small portion of inventory on a regular basis throughout the year, allowing errors to be identified and corrected more quickly. In contrast, annual physical inventory involves counting the entire inventory once a year, which can be time-consuming and delays the identification and remediation of errors.Rate this question:
-
- 30.
A certain type of computer costs $1,000, and the annual holding cost is 25%. Annual demand is 10,000 units, and the order cost is $150 per order. What is the approximate economic order quantity?
-
16
-
70
-
110
-
183
-
600
Correct Answer
A. 110Explanation
The economic order quantity (EOQ) is a formula used to determine the optimal order quantity that minimizes the total cost of inventory. It is calculated by taking the square root of (2 times the annual demand multiplied by the order cost divided by the holding cost). In this case, the annual demand is 10,000 units, the order cost is $150, and the holding cost is 25% of the cost of the computer, which is $250. Plugging these values into the formula, we get the approximate EOQ of 110 units.Rate this question:
-
- 31.
Which of the following statements regarding Amazon.com is false?
-
The company was opened by Jeff Bezos in 1995.
-
The company was founded as, and still is, a "virtual retailer" with no inventory.
-
The company is now a world-class leader in warehouse management and automation.
-
The company uses both United Parcel Service and the U.S. Postal Service as shippers.
-
Amazon obtains its competitive advantage through inventory management.
Correct Answer
A. The company was founded as, and still is, a "virtual retailer" with no inventory.Explanation
The statement that is false is "The company was founded as, and still is, a 'virtual retailer' with no inventory." This statement is false because Amazon started as an online bookstore but has since expanded its inventory to include a wide range of products. Amazon now sells physical goods and has a vast network of warehouses to store and ship these products. Therefore, the company does have inventory.Rate this question:
-
- 32.
Which of the following is used to obtain the best linear trend (or linear regression) line in a linear regression / correlation analysis?
-
Scatter diagram
-
Correlation of coefficient (r)
-
Least square method
-
Coefficient of determination ( r2 )
Correct Answer
A. Scatter diagramExplanation
A scatter diagram is used to obtain the best linear trend (or linear regression) line in a linear regression / correlation analysis. A scatter diagram is a graph that displays the relationship between two variables, with one variable plotted on the x-axis and the other variable plotted on the y-axis. By visually examining the scatter diagram, it is possible to identify the general pattern or trend in the data. The best linear trend line can then be drawn to represent this trend.Rate this question:
-
- 33.
A master production schedule specifies
-
The raw materials required to complete the product
-
What component is to be made, and when
-
What product is to be made, and when
-
The labor hours required for production
-
The financial resources required for production
Correct Answer
A. What product is to be made, and whenExplanation
A master production schedule specifies what product is to be made and when. This means that it outlines the specific products that need to be manufactured and the time frame in which they should be produced. It does not include information about raw materials, components, labor hours, or financial resources required for production.Rate this question:
-
- 34.
A document calls for the production of 50 small garden tractors in week 1; 50 small garden tractors and 100 riding mowers in week 2; 100 riding mowers and 200 garden utility carts in week 3; and 100 riding mowers in week 4. This document is most likely a(n)
-
Net requirements document
-
Resource requirements profile
-
Aggregate plan
-
Master production schedule
-
Wagner-Whitin finite capacity document
Correct Answer
A. Master production scheduleExplanation
The given document outlines the production requirements for different types of products over a period of four weeks. It specifies the quantity of each product that needs to be produced in each week. This type of document is known as a master production schedule, which serves as a detailed plan for production activities and helps in coordinating the production process. It provides the necessary information for scheduling and coordinating resources, materials, and labor to meet the production requirements.Rate this question:
-
- 35.
Each X requires 2 of component Y; each Y requires 4 of part Z. The lead time for assembly of X is 1 week. The lead time for the manufacture of Y is 1 week. The lead time for the procurement of Z is 6 weeks. The cumulative lead time for X is _____ weeks.
-
6
-
7
-
8
-
10
-
Cannot be determined
Correct Answer
A. 8Explanation
The cumulative lead time for X is 8 weeks. This is because it takes 1 week to assemble X, 1 week to manufacture Y (which is required for X), and 6 weeks to procure Z (which is required for Y). Therefore, the total time it takes to complete X is 1 + 1 + 6 = 8 weeks.Rate this question:
-
- 36.
An entrepreneur is planning to start a factory to produce specialized plastic containers. She has decided to choose either a line or batch process and has selected two possible sites, one in a small town and one in a big city. She has discovered the following facts: Small Town City Capital Not readily available Readily available Labor Unskilled available All types of labor Market Small Large Based on the information just presented, which of the following should be chosen?
-
Line in city
-
Line in small town
-
Batch in city
-
Batch in small town
Correct Answer
A. Line in cityExplanation
Based on the information given, the entrepreneur should choose a line process in the city. This is because the capital is readily available in the city, which is crucial for setting up a factory. Additionally, the city offers a larger market, which means there is a higher potential for sales and profits. Although the small town may have unskilled labor available, the availability of different types of labor in the city can provide more flexibility and options for the entrepreneur.Rate this question:
-
- 37.
Which of the following statements regarding Dell Computer is false?
-
Dell is a practitioner of the mass customization process.
-
Dell builds its computers overseas in order to gain a low-cost advantage.
-
Dell keeps very little inventory of finished goods.
-
Dell utilizes a global supply chain, but assembles its computers in the U.S.
-
Dell's research focuses on manufacturing issues, not computer part design.
Correct Answer
A. Dell builds its computers overseas in order to gain a low-cost advantage.Explanation
Dell builds its computers overseas in order to gain a low-cost advantage. This statement is false because Dell actually assembles its computers in the U.S., not overseas. Dell utilizes a global supply chain, but the assembly of its computers takes place in the U.S. This allows Dell to have better control over the manufacturing process and ensures high-quality standards. By keeping the assembly in the U.S., Dell can also respond quickly to customer demands and customization requests.Rate this question:
-
- 38.
Which of the following is not a type of qualitative forecasting?
-
Executive opinions
-
Sales force composites
-
Consumer surveys
-
The Delphi method
-
Moving average
Correct Answer
A. Moving averageExplanation
Moving average is not a type of qualitative forecasting because it is a quantitative forecasting method. Qualitative forecasting methods rely on subjective opinions, judgments, and experiences to make predictions, whereas quantitative methods use historical data and mathematical models. Executive opinions, sales force composites, consumer surveys, and the Delphi method are all examples of qualitative forecasting techniques that involve gathering opinions and input from individuals or groups. On the other hand, moving average is a quantitative method that calculates the average of a set of data points over a specific time period to identify trends and patterns.Rate this question:
-
- 39.
Regression analysis was applied between sales (in $1000, Y) and advertising (in $100, X), and the following regression function was obtained: Y = 20 + 2.1X. Based on this estimated regression line, if advertising is $10,000, then the estimate for sales (in dollars) is:
-
$21,020
-
$22,100
-
$230
-
$230,000
-
None of the above
Correct Answer
A. $21,020Explanation
The estimated regression line is given as Y = 20 + 2.1X, where Y represents sales and X represents advertising. To find the estimate for sales when advertising is $10,000, we substitute X = 10,000 into the regression line equation. Therefore, Y = 20 + 2.1(10,000) = 20 + 21,000 = $21,020.Rate this question:
-
- 40.
The two most basic inventory questions answered by the typical inventory model are
-
Timing and cost of orders
-
Quantity and cost of orders
-
Timing and quantity of orders
-
Order quantity and service level
-
Ordering cost and carrying cost
Correct Answer
A. Timing and quantity of ordersExplanation
The typical inventory model aims to answer two fundamental questions: when to place an order (timing) and how much to order (quantity). By determining the optimal timing and quantity of orders, a business can effectively manage its inventory levels and balance the costs associated with ordering and carrying inventory. Therefore, the correct answer is timing and quantity of orders.Rate this question:
-
- 41.
Each R requires 4 of component S; each S requires 3 of part T. The lead time for assembly of R is 1 week. The lead time for the manufacture of S is 2 weeks. The lead time for the procurement of T is 6 weeks. The cumulative lead time for R is ______ weeks.
-
6
-
9
-
12
-
18
-
28
Correct Answer
A. 9Explanation
The cumulative lead time for R can be calculated by adding up the lead times for each component. R requires 4 of component S, which has a lead time of 2 weeks. Therefore, it will take 4 x 2 = 8 weeks to procure all the required S components. Component S requires 3 of part T, which has a lead time of 6 weeks. Therefore, it will take 3 x 6 = 18 weeks to procure all the required T parts. Adding up the lead times for S and T, we get 8 + 18 = 26 weeks. Since R itself has a lead time of 1 week, the cumulative lead time for R is 26 + 1 = 27 weeks. Therefore, the correct answer is 27.Rate this question:
-
- 42.
Which of the following is a function of inventory?
-
To decouple or separate parts of the production process
-
Decouple the firm from fluctuations in demand and provide a stock of goods that will provide a selection for customers
-
To take advantage of quantity discounts
-
To hedge against inflation
-
All of the above are functions of inventory.
Correct Answer
A. All of the above are functions of inventory.Explanation
Inventory serves multiple functions in a business. It helps to decouple or separate different parts of the production process, ensuring that one stage can continue even if another is delayed. Additionally, inventory allows firms to decouple from fluctuations in demand by providing a stock of goods that can meet customer needs even during peak periods. It also enables businesses to take advantage of quantity discounts by purchasing larger quantities at lower prices. Lastly, inventory can act as a hedge against inflation, as goods purchased at lower prices can be sold at higher prices in the future. Therefore, all of the given options are valid functions of inventory.Rate this question:
-
- 43.
All of the following are advantages of enterprise resource planning (ERP) except it
-
Creates commonality of databases
-
Increases communications and collaboration worldwide
-
Helps integrate multiple sites and business units
-
Requires major changes in the company and its processes to implement
-
Can provide a strategic advantage over competitors
Correct Answer
A. Requires major changes in the company and its processes to implementExplanation
Enterprise resource planning (ERP) systems offer numerous advantages, including creating commonality of databases, increasing communications and collaboration worldwide, and helping integrate multiple sites and business units. Additionally, ERP systems can provide a strategic advantage over competitors by streamlining operations and improving efficiency. However, one disadvantage of implementing an ERP system is that it requires major changes in the company and its processes, which can be disruptive and time-consuming.Rate this question:
-
- 44.
A product whose EOQ is 40 experiences a decrease in ordering cost from $90 per order to $10. The revised EOQ is
-
Three times as large
-
One-third as large
-
Nine times as large
-
One-ninth as large
-
Cannot be determined
Correct Answer
A. One-third as largeExplanation
When the ordering cost decreases from $90 per order to $10, the EOQ (Economic Order Quantity) will increase. The EOQ is inversely proportional to the square root of the ordering cost. Therefore, when the ordering cost decreases by a factor of 9 (from $90 to $10), the EOQ will increase by a factor of the square root of 9, which is 3. Therefore, the revised EOQ will be one-third as large as the original EOQ.Rate this question:
-
- 45.
A company makes necklaces with attached letters. Department A makes up the chains and letters. Department B assembles the necklaces when orders are received. Department B would be primarily concerned with:
-
Forecasting customer orders
-
Planning capacity
-
Use of overtime
-
Delivery time
-
A and B
Correct Answer
A. Delivery timeExplanation
Department B would be primarily concerned with delivery time because they are responsible for assembling the necklaces when orders are received. Their main focus would be on ensuring that the completed necklaces are delivered to the customers within the specified time frame. This involves coordinating with Department A to ensure timely production of the chains and letters, managing the assembly process efficiently, and coordinating with the shipping department to ensure prompt delivery.Rate this question:
-
- 46.
Increasing the number of periods in a moving average will accomplish greater smoothing, but at the expense of
-
Manager understanding
-
Accuracy
-
Stability
-
Responsiveness to changes
-
All of the above are diminished when the number of periods increases.
Correct Answer
A. Responsiveness to changesExplanation
When the number of periods in a moving average is increased, it will result in greater smoothing of the data. However, this increased smoothing comes at the expense of responsiveness to changes. In other words, as more periods are included in the average, the moving average becomes slower to react to any recent changes or fluctuations in the data. Therefore, the responsiveness to changes is diminished when the number of periods increases.Rate this question:
-
- 47.
Which of the following would not generally be a motive for a firm to hold inventories?
-
To decouple or separate parts of the production process
-
To provide a stock of goods that will provide a selection for customers
-
To take advantage of quantity discounts
-
To minimize holding costs
-
All of the above are functions of inventory.
Correct Answer
A. To minimize holding costsExplanation
Holding inventory generally incurs costs such as storage, insurance, and obsolescence. Therefore, minimizing holding costs would not be a motive for a firm to hold inventories. Instead, firms typically hold inventories for reasons such as decoupling parts of the production process, providing a selection for customers, and taking advantage of quantity discounts.Rate this question:
-
- 48.
In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, the EOQ will
-
Increase by about 41%
-
Increase by 100%
-
Increase by 200%
-
Increase, but more data is needed to say by how much
-
Either increase or decrease
Correct Answer
A. Increase by 100%Explanation
If the cost of placing an order doubles in the basic EOQ model, the EOQ (Economic Order Quantity) will increase by 100%. This is because the EOQ is inversely proportional to the square root of the ordering cost. When the ordering cost doubles, the square root of the ordering cost also doubles, resulting in a doubling of the EOQ.Rate this question:
-
- 49.
Harley Davidson
-
Utilizes job shops to make each of its modules
-
Uses product focused manufacturing
-
Uses a large number of modules to build a small number of different bikes
-
Uses work cells to feed its assembly line
-
All of the above are true.
Correct Answer
A. Uses work cells to feed its assembly lineExplanation
The correct answer is "uses work cells to feed its assembly line." This means that Harley Davidson utilizes work cells, which are small production units, to supply components to its assembly line. Work cells are efficient in terms of time and cost as they allow for a smooth flow of materials and reduce the need for transportation between different production areas.Rate this question:
-
Quiz Review Timeline (Updated): Oct 18, 2024 +
Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.
-
Current Version
-
Oct 18, 2024Quiz Edited by
ProProfs Editorial Team -
Mar 23, 2013Quiz Created by
Ryanbecker24
Back to top