Operations Management Quiz 2

70 Questions
Operation Management Quizzes & Trivia
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Questions and Answers
  • 1. 
    1. 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. 

      A line process

    • B. 

      A batch process

    • C. 

      A project process

    • D. 

      A continuous process

  • 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:
    • A. 

      Make-to-stock, make-to-stock

    • B. 

      Make-to-stock, make-to-order

    • C. 

      Make-to-order, make-to-stock

    • D. 

      Make-to-order, make-to-order

  • 3. 
    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:
    • A. 

      Forecasting customer orders

    • B. 

      Planning capacity

    • C. 

      Use of overtime

    • D. 

      Delivery time

    • E. 

      A and B

  • 4. 
    • A. 

      Line in city

    • B. 

      Line in small town

    • C. 

      Batch in city

    • D. 

      Batch in small town

  • 5. 
    Identify the correct statement from the given choices.
    • A. 

      A batch process is characterized by jumbled flow while the line process is characterized by a regular sequential flow.

    • B. 

      The project form of operations is characterized by difficult planning and scheduling rules.

    • C. 

      Batch production is synonymous to mass production systems.

    • D. 

      All the above

    • E. 

      A & B

  • 6. 
    • A. 

      Dell is a practitioner of the mass customization process

    • B. 

      Dell builds its computers overseas in order to gain a low-cost advantage.

    • C. 

      Dell keeps very little inventory of finished goods.

    • D. 

      Dell utilizes a global supply chain, but assembles its computers in the U.S.

    • E. 

      Dell's research focuses on manufacturing issues, not computer part design

  • 7. 
    A product-focused process is commonly used to produce
    • A. 

      High-volume, high-variety products

    • B. 

      Low-volume, high-variety products

    • C. 

      High-volume, low-variety products

    • D. 

      Low-variety products at either high- or low-volume

    • E. 

      High-volume products of either high- or low-variety

  • 8. 
    Harley Davidson
    • A. 

      Utilizes job shops to make each of its modules

    • B. 

      Uses product focused manufacturing

    • C. 

      Uses a large number of modules to build a small number of different bikes

    • D. 

      Uses work cells to feed its assembly line

    • E. 

      All of the above are true.

  • 9. 
    When done correctly, mass customization
    • A. 

      Increases pressure on supply chain performance

    • B. 

      Helps eliminate the guesswork that comes with sales forecasting

    • C. 

      Drives down inventories

    • D. 

      Increases pressure on scheduling

    • E. 

      . all of the above

  • 10. 
    In mass service and service factory quadrants of the service process matrix, the operations manager could focus on all of the following except
    • A. 

      Automation

    • B. 

      Standardization

    • C. 

      Tight quality control

    • D. 

      Removing some services

    • E. 

      Customization

  • 11. 
    Which of the following statements regarding ethical and environmentally friendly processes is true?
    • A. 

      Operations managers can be environmentally sensitive, but they must avoid following a low cost strategy.

    • B. 

      Processes can be environmentally friendly or socially responsible, but not both.

    • C. 

      Operations managers can be environmentally sensitive and still follow a low cost strategy.

    • D. 

      Using energy-efficient lighting saves so little that it should not be labeled environmentally friendly.

    • E. 

      The only business strategy consistent with ethical and environmentally sensitive management is the differentiation strategy.

  • 12. 
    1. FedEx chose Memphis, Tennessee, as its U.S. hub because
    • A. 

      The city is in the center of the U.S., geographically

    • B. 

      The airport has relatively few hours of bad weather closures

    • C. 

      It needed a means to reach cities to which it did not have direct flights

    • D. 

      The firm believed that a hub system was superior to traditional city-to-city flight scheduling

    • E. 

      All of the above are true.

  • 13. 
    Which of the following statements regarding FedEx is true?
    • A. 

      . Its hub in Memphis, Tennessee, was selected because of its low cost.

    • B. 

      Memphis, Tennessee, is the only hub in the company's global flight network.

    • C. 

      FedEx believes the hub system helps reduce mishandling and delays due to better controls.

    • D. 

      FedEx uses a hub system in the U.S., but a city-to-city network in other countries

    • E. 

      Memphis is FedEx's only hub airport in the United States.

  • 14. 
    Which of the following is usually not one of the top considerations in choosing a country for a facility location?
    • A. 

      Availability of labor and labor productivity

    • B. 

      Exchange rates

    • C. 

      Attitude of governmental units

    • D. 

      Zoning regulations

    • E. 

      Location of markets

  • 15. 
    Which of these factors would be considered when making a location decision at the region/community level?
    • A. 

      Government rules, attitudes, stability, incentives

    • B. 

      Cultural and economic issues

    • C. 

      Zoning restrictions

    • D. 

      Environmental impact issues

    • E. 

      Proximity to raw materials and customers

  • 16. 
    A firm is seeking a new factory location, and is considering several countries worldwide. In some of these countries, child labor is prevalent; in others, working conditions and worker safety are inferior to conditions in the U.S. An operations manager paying attention to __________will factor these issues into the location decision. 
    • A. 

      Ethical and social responsibility issues

    • B. 

      Critical success factors

    • C. 

      Factor rating systems

    • D. 

      Geographic information systems

    • E. 

      Regression models

  • 17. 
    Which of the following statements regarding "proximity" in the location decision is false?
    • A. 

      Service organizations find that proximity to market is the most critical primary location factor.

    • B. 

      Manufacturers want to be near customers when their product is bulky, heavy, or fragile.

    • C. 

      Perishability of raw materials is a good reason for manufacturers to locate near the supplier, not the customer.

    • D. 

      . Reduction in bulk is a good reason for a manufacturer to locate near the supplier

    • E. 

      Clustering among fast food chains occurs because they need to be near their labor supply.

  • 18. 
    Which of the following is the best example of the proximity rule that, for service firms, proximity to market is the most important location factor?
    • A. 

      Soft drinks are bottled in many local plants, where carbonated water is added to proprietary syrups that may have been shipped long distances

    • B. 

      Few people will travel out-of state for a haircut.

    • C. 

      Patients will travel very long distances to have their hernia surgeries performed at Shouldice Hospita

    • D. 

      Furniture makers choose to locate near the source of good hardwoods, even though it means locating near other furniture manufacturers

    • E. 

      Metal refiners (smelters) locate near mines to accomplish significant weight reduction near the metal's source

  • 19. 
    • A. 

      . Plant A, because it is cheaper than Plant B for all volumes under 10,000,000 units

    • B. 

      Plant B, because it is cheaper than Plant A for all volumes over 10,000,000 units

    • C. 

      Plant A, because it is cheaper than Plant B for all volumes

    • D. 

      Plant B, because it has the lower variable cost per unit

    • E. 

      Neither Plant A nor Plant B, because the crossover point is at 10 million units

  • 20. 
    Which of the following statements regarding Starbucks Coffee is false?
    • A. 

      The firm plans to open three new cafes per day around the world

    • B. 

      The firm uses GIS to evaluate most site decision

    • C. 

      The firm's cafes are exclusively in traditional settings: malls, tourist areas, and airports

    • D. 

      The firm places cafes into ever more innovative locations

    • E. 

      The firm put cafes in Japan, even though that country had no GIS data available

  • 21. 
    Which of the following is most likely to affect the location strategy of a manufacturing firm?
    • A. 

      Appearance/image of the area

    • B. 

      Utility costs

    • C. 

      Purchasing power of drawing area

    • D. 

      Competition in the area

    • E. 

      Parking availability

  • 22. 
    1.What two numbers are contained in the daily report to the CEO of Walt Disney Parks & Resorts regarding the six Orlando parks?
    • A. 

      Yesterday’s forecasted attendance and yesterday’s actual attendance

    • B. 

      Yesterday’s actual attendance and today’s forecasted attendance

    • C. 

      Yesterday’s forecasted attendance and today’s forecasted attendance

    • D. 

      Yesterday’s actual attendance and last year’s actual attendance

    • E. 

      Yesterday’s forecasted attendance and the year-to-date average daily forecast error

  • 23. 
    2. Forecasts
    • A. 

      Become more accurate with longer time horizons

    • B. 

      Are rarely perfect

    • C. 

      Are more accurate for individual items than for groups of items

    • D. 

      . all of the above

    • E. 

      None of the above

  • 24. 
    3. The three major types of forecasts used by business organizations are
    • A. 

      Strategic, tactical, and operational

    • B. 

      Economic, technological, and demand

    • C. 

      Exponential smoothing, Delphi, and regression

    • D. 

      Causal, time-series, and seasonal

    • E. 

      Departmental, organizational, and territorial

  • 25. 
    4. Which of the following is not a type of qualitative forecasting?
    • A. 

      Executive opinions

    • B. 

      Sales force composites

    • C. 

      Consumer surveys

    • D. 

      The Delphi method

    • E. 

      Moving average

  • 26. 
    5. 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. 

      Time series

    • E. 

      All of the above

  • 27. 
    6. Which of the following statements about time series forecasting is true?
    • A. 

      It is based on the assumption that future demand will be the same as past demand.

    • B. 

      . It makes extensive use of the data collected in the qualitative approach.

    • C. 

      The analysis of past demand helps predict future demand.

    • D. 

      Because it accounts for trends, cycles, and seasonal patterns, it is more powerful than causal forecasting.

    • E. 

      All of the above are true.

  • 28. 
    Time series data may exhibit which of the following behaviors?
    • A. 

      Trend

    • B. 

      Random variations

    • C. 

      Seasonality

    • D. 

      Cycles

    • E. 

      They may exhibit all of the above

  • 29. 
    What is the approximate forecast for May using a four-month moving average?  
    Nov. Dec. Jan. Feb. Mar. April
    39 36 40 42 48 46
    • A. 

      38

    • B. 

      42

    • C. 

      43

    • D. 

      44

    • E. 

      47

  • 30. 
    . 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?
    • A. 

      2400

    • B. 

      2511

    • C. 

      2067

    • D. 

      3767

    • E. 

      1622

  • 31. 
    A six-month moving average forecast is better than a three-month moving average forecast if demand
    • A. 

      Is rather stable

    • B. 

      Has been changing due to recent promotional efforts

    • C. 

      Follows a downward trend

    • D. 

      Follows a seasonal pattern that repeats itself twice a year

    • E. 

      Follows an upward trend

  • 32. 
    Increasing the number of periods in a moving average will accomplish greater smoothing, but at the expense of
    • A. 

      Manager understanding

    • B. 

      Accuracy

    • C. 

      Stability

    • D. 

      Responsiveness to changes

    • E. 

      All of the above are diminished when the number of periods increases.

  • 33. 
    Which of the following statements comparing the weighted moving average technique and exponential smoothing is true?
    • A. 

      Exponential smoothing is more easily used in combination with the Delphi method.

    • B. 

      More emphasis can be placed on recent values using the moving average

    • C. 

      Exponential smoothing is considerably more difficult to implement on a computer

    • D. 

      Exponential smoothing typically requires less record keeping of past data

    • E. 

      Exponential smoothing allows one to develop forecasts for multiple periods, whereas weighted moving averages does not.

  • 34. 
    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
    • A. 

      94.6

    • B. 

      97.4

    • C. 

      100.6

    • D. 

      101.6

    • E. 

      103.0

  • 35. 
    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?
    • A. 

      45.5

    • B. 

      57.1

    • C. 

      58.9

    • D. 

      61.0

    • E. 

      65.5

  • 36. 
    Which of the following values of alpha would cause exponential smoothing to respond the most slowly to forecast errors?
    • A. 

      0.10

    • B. 

      0.20

    • C. 

      0.40

    • D. 

      0.80

    • E. 

      Cannot be determined

  • 37. 
    The primary purpose of the mean absolute deviation (MAD) in forecasting is to
    • A. 

      Estimate the trend line

    • B. 

      Eliminate forecast errors

    • C. 

      Measure forecast accuracy

    • D. 

      Seasonally adjust the forecast

    • E. 

      All of the above

  • 38. 
    Which of the following statements regarding Amazon.com is false?
    • A. 

      The company was opened by Jeff Bezos in 1995.

    • B. 

      B. The company was founded as, and still is, a "virtual retailer" with no inventory.

    • C. 

      The company is now a world-class leader in warehouse management and automation.

    • D. 

      The company uses both United Parcel Service and the U.S. Postal Service as shippers.

    • E. 

      Amazon obtains its competitive advantage through inventory management.

  • 39. 
    Which of the following is a function of inventory?
    • A. 

      To decouple or separate parts of the production process

    • B. 

      To decouple the firm from fluctuations in demand and provide a stock of goods that will provide a selection for customers

    • C. 

      To take advantage of quantity discounts

    • D. 

      To hedge against inflation

    • E. 

      All of the above are functions of inventory.

  • 40. 
    Which of the following would not generally be a motive for a firm to hold inventories?
    • A. 

      To decouple or separate parts of the production process

    • B. 

      To provide a stock of goods that will provide a selection for customers

    • C. 

      To take advantage of quantity discounts

    • D. 

      To minimize holding costs

    • E. 

      All of the above are functions of inventory.

  • 41. 
    Which of the following is not one of the four main types of inventory?
    • A. 

      Raw material inventory

    • B. 

      Work-in-process inventory

    • C. 

      Maintenance/repair/operating supply inventory

    • D. 

      Safety stock inventory

    • E. 

      All of these are main types of inventory.

  • 42. 
    Which of the following statements about ABC analysis is false?
    • A. 

      ABC analysis is based on the presumption that controlling the few most important items produces the vast majority of inventory savings.

    • B. 

      In ABC analysis, "A" Items are tightly controlled, have accurate records, and receive regular review by major decision makers.

    • C. 

      In ABC analysis, "C" Items have minimal records, periodic review, and simple controls.

    • D. 

      ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings.

    • E. 

      All of the above statements are true.

  • 43. 
    All of the following statements about ABC analysis are true except
    • A. 

      Inventory may be categorized by measures other than dollar volume

    • B. 

      It categorizes on-hand inventory into three groups based on annual dollar volume

    • C. 

      It is an application of the Pareto principle

    • D. 

      It states that all items require the same degree of control

    • E. 

      It states that there are the critical few and the trivial many inventory items

  • 44. 
    All of the following statements about ABC analysis are true except
    • A. 

      Inventory may be categorized by measures other than dollar volume

    • B. 

      It categorizes on-hand inventory into three groups based on annual dollar volume

    • C. 

      It is an application of the Pareto principle

    • D. 

      It states that all items require the same degree of control

    • E. 

      It states that there are the critical few and the trivial many inventory items

  • 45. 
    The two most basic inventory questions answered by the typical inventory model are
    • A. 

      Timing and cost of orders

    • B. 

      Quantity and cost of orders

    • C. 

      Timing and quantity of orders

    • D. 

      Order quantity and service level

    • E. 

      Ordering cost and carrying cost

  • 46. 
    Among the advantages of cycle counting is that it
    • A. 

      Makes the annual physical inventory more acceptable to management

    • B. 

      Does not require the detailed records necessary when annual physical inventory is used

    • C. 

      Does not require highly trained people

    • D. 

      Allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventory

    • E. 

      Does not need to be performed for less expensive items

  • 47. 
    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?
    • A. 

      16

    • B. 

      70

    • C. 

      110

    • D. 

      183

    • E. 

      600

  • 48. 
    In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, the EOQ will
    • A. 

      Increase by about 41%

    • B. 

      Increase by 100%

    • C. 

      Increase by 200%

    • D. 

      Increase, but more data is needed to say by how much

    • E. 

      Either increase or decrease

  • 49. 
    In thr basic EOQ model, if D=6,000 per year, S=$100, H=$5 per unit per month, the economic order quantity is approximately
    • A. 

      24

    • B. 

      100

    • C. 

      141

    • D. 

      490

    • E. 

      600

  • 50. 
    A product whose EOQ is 40 experiences a decrease in ordering cost from $90 per order to $10. The revised EOQ is
    • A. 

      Three times as large

    • B. 

      One-third as large

    • C. 

      Nine times as large

    • D. 

      One-ninth as large

    • E. 

      Cannot be determined

  • 51. 
    13. Aproduct whose EOQ is 400 experiences a 50% increase in demand. The new EOQ is  
    • A. 

      Unchanged

    • B. 

      Increased by less than 50%

    • C. 

      Increased by 50%

    • D. 

      Increased by more than 50%

    • E. 

      Cannot be determined

  • 52. 
    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
    • A. 

      $1.50

    • B. 

      $2.00

    • C. 

      $3.00

    • D. 

      $150.00

    • E. 

      Not enough data to determine

  • 53. 
    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?
    • A. 

      One hundred is the reorder point, and 14 is the order quantity

    • B. 

      Fourteen is the reorder point, and 100 is the order quantity.

    • C. 

      The number 100 is a function of demand during lead time.

    • D. 

      Fourteen is the safety stock, and 100 is the reorder point.

    • E. 

      None of the above is true.

  • 54. 
    Which of the following statements regarding the production order quantity model is true?
    • A. 

      It applies only to items produced in the firm's own production departments

    • B. 

      It relaxes the assumption that all the order quantity is received at one time.

    • C. 

      It relaxes the assumption that the demand rate is constant.

    • D. 

      It minimizes the total production costs

    • E. 

      It minimizes inventory.

  • 55. 
    If demand is not uniform and constant, then stockout risks can be controlled by
    • A. 

      Increasing the EOQ

    • B. 

      Placing an extra order

    • C. 

      Raising the selling price to reduce demand

    • D. 

      Adding safety stock

    • E. 

      Reducing the reorder point

  • 56. 
    The fixed-period inventory model requires more safety stock than the fixed-quantity models because
    • A. 

      A stockout can occur during the review period as well as during the lead time

    • B. 

      This model is used for products that have large standard deviations of demand

    • C. 

      This model is used for products that require very high service levels

    • D. 

      Replenishment is not instantaneous

    • E. 

      Setup costs and holding costs are large

  • 57. 
    Which of the following statements regarding Wheeled Coach is false?
    • A. 

      Wheeled Coach has found competitive advantage through MRP

    • B. 

      Wheeled Coach builds ambulances in a repetitive process.

    • C. 

      Wheeled Coach’s MRP system allowed the company to meet tight schedules, but caused inventory to rise.

    • D. 

      Wheeled Coach’s MRP system maintains excellent record integrity.

    • E. 

      Low inventory and high quality are two positive outcomes of Wheeled Coach’s use of MRP.

  • 58. 
    Dependent demand and independent demand items differ in that
    • A. 

      For any product, all components are dependent- demand items

    • B. 

      The need for independent-demand items is forecast

    • C. 

      The need for dependent-demand items is calculated

    • D. 

      A and C

    • E. 

      All of the above are true.

  • 59. 
    A master production schedule specifies 
    • A. 

      The raw materials required to complete the project

    • B. 

      What component is to be made, and when

    • C. 

      What product is to be made, and when

    • D. 

      The labor hours required for production

    • E. 

      The financial resources required for production

  • 60. 
    4. A 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)document calls for the production of 50 small  
    • A. 

      Net requirements document

    • B. 

      Resource requirements profile

    • C. 

      Aggregate plan

    • D. 

      Master production schedule

    • E. 

      Wagner-Whitin finite capacity document

  • 61. 
    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.
    • A. 

      Bill of material

    • B. 

      Master production schedule

    • C. 

      Inventory records

    • D. 

      Assembly time chart

    • E. 

      Net requirements chart

  • 62. 
    The bill of material contains information necessary to
    • A. 

      Place an order to replenish the item

    • B. 

      Calculate quantities on hand and on order

    • C. 

      Convert net requirements into higher level gross requirements

    • D. 

      Convert gross requirements into net requirements

    • E. 

      Convert (explode) net requirements at one level into gross requirements at the next level

  • 63. 
    The minimum record accuracy required for successful MRP is approximately
    • A. 

      Lower than 90%

    • B. 

      90%

    • C. 

      95%

    • D. 

      97%

    • E. 

      99%

  • 64. 
    Given the following bill of material If the demand for product A is 50 units, what will be the gross requirement for component E?
    • A. 

      4

    • B. 

      100

    • C. 

      200

    • D. 

      250

    • E. 

      300

  • 65. 
    Given the following bill of material If the demand for product A is 50 units, what will be the gross requirement for component E?
    • A. 

      50

    • B. 

      100

    • C. 

      150

    • D. 

      200

    • E. 

      300

  • 66. 
    Refer to the previous bill of material. If the demand for product A is 30 units, and there are 10 units of B on hand and none of C, how many units of part D will be needed?
    • A. 

      3

    • B. 

      40

    • C. 

      70

    • D. 

      90

    • E. 

      110

  • 67. 
    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.
    • A. 

      6

    • B. 

      7

    • C. 

      8

    • D. 

      10

    • E. 

      CANNOT BE DETERMINED

  • 68. 
    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.
    • A. 

      6

    • B. 

      9

    • C. 

      12

    • D. 

      18

    • E. 

      28

  • 69. 
    Which of the following best describes a gross material requirements plan?
    • A. 

      A schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started

    • B. 

      An intermediate range plan for the scheduling of families of products

    • C. 

      A chart illustrating whether capacity has been exceeded

    • D. 

      A table that corrects scheduled quantities for inventory on hand

    • E. 

      A schedule showing which products are to be manufactured and in what quantities

  • 70. 
    All of the following are advantages of enterprise resource planning (ERP) except it
    • A. 

      Creates commonality of databases

    • B. 

      Increases communications and collaboration worldwide

    • C. 

      Helps integrate multiple sites and business units

    • D. 

      Requires major changes in the company and its processes to implement

    • E. 

      Can provide a strategic advantage over competitors