Exam #3 Review

Question 1

In the context of data patterns in a time series, _____ are characterized by repeatable periods of ups and downs over short periods of time.
a. random variations
b. seasonal patterns
c. cyclical patterns
d. irregular variations

Answer 1

b. seasonal patterns

Pizza delivery peaks on weekends

Question 2

In the context of data patterns in a time series, _____ are regular patterns in a data series that take place over long periods of time.
a. random variations
b. seasonal patterns
c. cyclical patterns
d. irregular variations

Answer 2

c. cyclical patterns

Question 3

In the context of data patterns in a time series, _____ are unexplained deviation of a time series from a predictable pattern.
a. random variations
b. seasonal patterns
c. cyclical patterns
d. irregular variations

Answer 3

a. random variations

Question 4

In the context of data patterns in a time series, _____ are one‐time variations that are explainable.
a. random variations
b. seasonal patterns
c. cyclical patterns
d. irregular variations

Answer 4

d. irregular variations

After the 9/11 terrorist attacks, forecasts that predicted financial trends and airline passenger volumes were discarded due to the effects of this one‐time event

Question 5

Marvin Windows conducted a regression analysis. They predicted that the sales are related to time by a linear function y = 240 + 340t. Using simple linear regression, calculate the forecast for sales in year 6.
a. 580
b. 2,280
c. 2,550
d. 1,350

Answer 5

b. 2,280

y = 240 + 340t
= 240 + 340 (6)
= 2,280

Question 6

Alex, a manager at Symbic Inc., plotted the company’s total energy costs of 1 billion dollars over the past 10 years on a chart. The chart suggested that the energy costs appear to be increasing in a fairly predictable linear fashion and that the energy costs are related to time by a linear function y = 3 + 5t, where y represents the estimate of the energy cost in year t. Given the equation, which of the following is the value of the intercept of the straight line that best fits the time series?
a. 1
b. 3
c. 5
d. 10

Answer 6

b. 3

y = 3 + 5t
Intercept value is b0, or 3
Coefficient of independent variable is b1, or 5

Question 7

_____ occurs when the average unit cost of a good or service begins to decrease as the capacity and/or volume of throughput increases.
a. Economies of scale
b. Diseconomies of scale
c. Demand flags
d. Nonphysical constraints

Answer 7

a. Economies of scale

Question 8

_____ occurs when the average unit cost of a good or service begins to increase as the capacity and/or volume of throughput increases.
a. Economies of scale
b. Diseconomies of scale
c. Demand flags
d. Nonphysical constraints

Answer 8

b. Diseconomies of scale

Question 9

Greyon Spinning mills Inc. owns 600 spinning machines. Out of these, only 500 are used in a given year. Given this information, the utilization of spinning machines are Greyon Spinning Mills Inc. is _____.
a. 0.75
b. 0.83
c. 0.90
d. 1.2

Answer 9

b. 0.83

Utilization = Resources Used / Resources Available
500 / 600

Question 10

At Rues and West Bros., a spare parts manufacturing company, the most important competitive priority is quality. Only a few key spare parts are produced using similar process designs. In this scenario, Rues and West Bros. _____.
a. is a focused factory
b. has no throughput
c. is an unfocused factory
d. uses a mass customizable strategy

Answer 10

a. is a focused factory

Question 11

Suppose that the time for the first unit is 250 minutes, and we start an 80% learning curve. How much time will the 6th unit take?
a. 220.45
b. 180.89
c. 140.42
d. 120.18

Answer 11

c. 140.42

y = a * x^b
a = time to produce first unit
x = unit you are interested in
b = Log P / Log 2
Log P is learning curve rate
Log (0.80) / Log 2 = - 0.32
y = 250 * 6^ (- 0.32)
= 140.42

Question 12

In one method of calculating utilization, _____ is divided by Resources Available.
a. Resources Used
b. Service Rate
c. Number of Servers
d. Resource Capacity

Answer 12

a. Resources Used

Question 13

Besides resources used divided by resources available, what is another way to calculate resource utilization?

Answer 13

Demand Rate / (Service Rate * # of Servers)

Question 14

_____ time is the average time it takes to complete one cycle of a process.
a. Flow
b. Mean
c. Standard
d. Elemental

Answer 14

a. Flow

Question 15

Analytical queuing models assume a Poisson probability distribution for _____.
a. arrivals
b. demands
c. service times
d. departures

Answer 15

a. arrivals

Question 16

Analytical queuing models assume an exponential probability distribution for _____.
a. arrivals
b. demands
c. service times
d. departures

Answer 16

c. service times

Question 17

If:
Workstation A = 8 min/part
Workstation B = 9 min/part
Workstation C = 10 min/part
Workstation D = 10 min/part

Where is the bottleneck workstation?
a. B & D
b. C
c. D
d. C & D

Answer 17

d. C & D

Question 18

If:
Workstation A = 8 min/part
Workstation B = 9 min/part
Workstation C = 10 min/part
Workstation D = 10 min/part

This system works a 45 hour week, how many parts per week can this production cell produce?
a. 250
b. 240
c. 270
d. 300

Answer 18

c. 270

60min / 10min
= 6 parts/hour

6 * 45
= 270

Question 19

An airline has one employee work the counter. A customer arrives every 3 minutes, and it takes an average of 2 minutes to process the transaction. What is the probability that the system is empty?
a. 0%
b. 33%
c. 66%
d. 100%

Answer 19

b. 33%

P0 = 1 – (λ / μ)
λ = 60min / 3min = 20
μ = 60min / 2min = 30

1 – 20/30
= 0.33

Question 20

An airline has one employee work the counter. A customer arrives every 3 minutes, and it takes an average of 2 minutes to process the transaction. What is the probability that a customer must wait for service in the queue?
a. 0%
b. 33%
c. 66%
d. 100%

Answer 20

c. 66%

Pw = (λ / μ)
= 20 / 30
= 0.66

Question 21

In the context of ABC inventory analysis, which of the following statements is true of class A items?
a. They require close control by operations managers
b. They comprise less than 30 percent of the total dollar usage
c. They can be managed using automated computer systems
d. They account for more than 50 percent of inventory items

Answer 21

a. They require close control by operations managers

Question 22

In the context of ABC inventory analysis, which of the following statements is true of class C items?
a. They require close control by operations managers
b. They comprise less than 30 percent of the total dollar usage
c. They can be managed using automated computer systems
d. They account for more than 50 percent of inventory items

Answer 22

c. They can be managed using automated computer systems

Question 23

What are the differences between classes A, B, and C in ABC inventory analysis?

Answer 23

A items account for a large dollar value but a relatively small percentage of total items

B items items are between A and C

C items account for a small dollar value but a large percentage of total items

Question 24

CraftWare Inc., a furniture manufacturer, uses ABC analysis to define its inventory value. The inventory contains wood, cast iron, adhesive, and carbon fiber. If wood accounts for 50% of the items and 5% of the total dollar value; carbon fiber accounts for 10% of the items and 60% of the total dollar value; cast iron accounts for 25% of the items and 18% of the total dollar value; and adhesive accounts for 15% of the items and 17% of the total dollar value, _____ can be classified as a class C ite,.
a. wood
b. carbon fiber
c. cast iron
d. adhesive

Answer 24

a. wood

wood – volume = 50% value = 5% –> C
carbon fiber – volume = 10 % value = 60% –> A
cast iron – volume = 25% value = 18% –> B
adhesive – volume = 15% value = 17% –> B

Question 25

In the context of managing inventories in supply charts, _____ is the time between the placement of an order and its receipt.
a. the lead time
b. a time series
c. the changeover time
d. a time horizon

Answer 25

a. the lead time

Question 26

_____ is a set of observations measured at successive points in time or over successive periods of time.
a. Lead time
b. Time series
c. Changeover time
d. Time horizon

Answer 26

b. Time series

Question 27

Cynthia Baker, a manager of a large medical supply house that operates 50 weeks per year and six days per week, has decided to implement a fixed-period inventory system for all class A items. One such item has the following characteristics:
Demand: 10,000 units/year
Order cost: $50/order
Holding cost: $4/unit/year

If Cynthia wishes to minimize the total cost, what should the review period be?
a. 10 days
b. 5 days
c. 15 days
d. 20 days

Answer 27

c. 15 days

T = Q* / D
Q* = sqrt ( (2 * D * C0) / Ch )
Ch = holding cost

Q* = sqrt ( (2 * 10,000 * 50) / 4 )
= 500

T = 500 / 10,000
= 0.05 years

0.05 * (50 weeks * 6 days)
= 0.05 * 300
= 15 days

Question 28

Lumeris Inc., an automobile manufacturer, has an inflexible work schedule and requires its workers to work 9 hours a day and 6 days a week, Its laborers do not have adequate skills to perform their job efficiently. The inflexible work schedule and inadequate labor skills are examples of _____.
a. physical constraints
b. nonphysical constraints
c. bottleneck activities
d. work orders

Answer 28

b. nonphysical constraints

Question 29

What are physical constraints?

Nonphysical?

Answer 29

Physical: associated with the capacity of a resource such as a machine, employee, or workstation (results in bottlenecks)

Nonphysical: environmental or organizational, such as low product demand or an inefficient management policy or procedure, inflexible work rules, inadequate labor skills

Question 30

_____ inventory is an additional amount of inventory that is kept over and above the average amount required to meet demand.
a. Seasonal
b. Work-in-process
c. Finished-goods
d. Safety stock

Answer 30

d. Safety stock

Question 31

Using the data regarding the inventory management of a stock-keeping unit shown in the following table, it can be concluded that the optimal replenishment level with safety stock for a fixed-period system (FPS) under the model assumptions is:
Demand: 140 units/week
Order cost: $30/order
Inventory-holding cost: $0.40/unit/year
Lead time: 3 weeks
Economic time interval: 7 weeks
Standard deviation in weekly demand: 8
Acceptable service level: 95%
Z value to achieve the acceptable service level: 1.645
a. 1,442
b. 1,565
c. 1,752
d. 1,843

Answer 31

a. 1,442

M = μ + zσ
utl = ut (T + L)
= 140 (7 + 3)
= 1,400

σtl = σt sqrt (T + L)
= 8 sqrt(10)
z = 1.645

1,400 + 1.645 * 8 sqrt(10)
= 1,442

Question 32

What equation would be used to find optimal replenishment level (reorder point) without safety stock?

Answer 32

M = d (T + L)