Final Exam

Question 1

Higher inventory holding costs

Answer 1

retailer will place smaller orders more frequently

Question 2

Higher ordering costs

Answer 2

retailer will place larger orders more frequently

Question 3

determining the order quantity and frequency of orders

Answer 3

is not straight forward even in simple scenarios

Question 4

supply chain

Answer 4

common stages include: suppliers, manufacturers, distributors, warehouses, retailers

Question 5

the demand facing a supply change stage

Answer 5

accumulation of orders from customers

Question 6

Bullwhip effect

Answer 6

an unanticipated change in retail demand that results in increased fluctuations in demand and demand moves from retailer to supplier

Question 7

fluctuations in demand

Answer 7

result in an increased cost associated with meeting the demand due to having to build capacity to meet the highest level of demand.

Question 8

capacity of the system

Answer 8

the slowest workstation dictates the flow out of the system

Question 9

bottleneck

Answer 9

anything that limits throughput

Question 10

bottleneck resource

Answer 10

the resource limiting throughput

Question 11

the capacity of a bottleneck resource

Answer 11

less than or equal to the demand placed upon it in the market

Question 12

the capacity of a non-bottleneck resource

Answer 12

greater than the demand placed upon it by the market

Question 13

a system with excess capacity

Answer 13

the market will limit throughput and is the bottleneck

Question 14

Capacity Utilization Ratio (CUR) of a resource

Answer 14

an indication of whether the resource is a bottleneck resource or a non-bottleneck resource

Question 15

Inventory accumulates in-front-of a resource

Answer 15

whenever the flow feeding the resource is greater than the flow out of the resource

Question 16

the amount of inventory between two measures

Answer 16

depends upon the differential in the flow rates between the feeding and receiving resource

Question 17

in the absence of any inventory control system

Answer 17

there will always be inventory in-front-of a bottleneck resource

Question 18

local optimization everywhere

Answer 18

does not guarantee optimal performance of the system

Question 19

to prevent the accumulation of work-in-process inventory in a system

Answer 19

the flow into the system must equal the flow out of the system

Question 20

in a low inventory environment

Answer 20

non-bottleneck resources will experience idle time

Question 21

Both a just-in-time (JIT) system and drum-buffer-rope (DBR) system

Answer 21

prevent the accumulation of inventory in a system by making sure the flow into the system is equal to the flow out

Question 22

a JIC system

Answer 22

a push system that will result in the build-up of work-in-process inventory unless the slowest resource is at the start of the the process

Question 23

a JIT system

Answer 23

is a pull system where a work station does not pass items to a subsequent work station until the subsequent work station is ready to process the item

Question 24

Little’s Law

Answer 24

manufacturing lead times are proportional to the amount of work-in-process in the system

Question 25

reducing work-in-process inventory

Answer 25

will result in improved quality for 3 reasons: the bottleneck effect is less stressed, non-bottleneck resources have idle time which can be spent on ensuring quality, and systematic errors are identified before substantial amounts of rework accumulate

Question 26

in low inventory environments

Answer 26

there is less need for extensive tracking and scheduling

Question 27

`controlling inventory

Answer 27

is key to a successful operation

Question 28

2 batch sizes where a distinction can be made

Answer 28

process batch size and transfer batch size

Question 29

reducing transfer batch sizes

Answer 29

results in less work-in-process inventory and faster manufacturing lead times

Question 30

Transfer batch sizes

Answer 30

should be set as small as possible

Question 31

a key factor in setting process batch sizes

Answer 31

the set-up time required on the bottleneck resource

Question 32

In systems with complex flow structures

Answer 32

inventory can be controlled using a drum buffer-rope system

Question 33

as inventory accumulates in a system

Answer 33

manufacturing lead times increase and become less predictable

Question 34

observing system data over time

Answer 34

provides valuable information concerning the operation and evolution of a process

Question 35

static pictures of data

Answer 35

often results in the loss of crucial information

Question 36

priority rules

Answer 36

impact system performance in predictable ways

Question 37

in high inventory environments

Answer 37

priority rules are less likely to be followed

Question 38

The buffer

Answer 38

should be set large enough to ensure that the bottleneck resource always has something to work on

Question 39

controlling inventory data

Answer 39

results in faster and more predictable manufacturing lead times

Question 40

controlling the release of items into the system

Answer 40

results in accurate available to promise dates, improved quality, and the ability to better prioritize items

Question 41

variability

Answer 41

has a profound effect on system performance

Question 42

when variability exists

Answer 42

predicting system performance using averages will result in overly optimistic prediction of actual system performance

Question 43

a resource is starved

Answer 43

when it is not able to take advantage of available capacity because a preceding resource has not provided anything for it to work on

Question 44

starving of a bottleneck resource

Answer 44

can be prevented by: buffering the bottleneck with work-in-process inventory, reducing the variability that is causing the starving, or breaking the dependency of the bottleneck on the resources causing the starving

Question 45

When inventory accumulates in a system as a result of variability

Answer 45

the inventory moves through the system in waves

Question 46

Variability alone

Answer 46

can cause oscillations in the performance of a part of a process

Question 47

Blocking of a resource

Answer 47

results in idle time at that resource

Question 48

the source of the idle time

Answer 48

is the subsequent resource's inability to process items fast enough

Question 49

blocking and starving of a bottleneck resource

Answer 49

should be prevented

Question 50

variation in the output produced by a system

Answer 50

can be attributed to common causes of variation or assignable causes of variation

Question 51

When common causes of variation have a large impact on the output produced by workers

Answer 51

comparing worker performance has a detrimental effect on worker morale

Question 52

comparing the performance of two different systems

Answer 52

makes no sense

Question 53

process improvement efforts

Answer 53

should begin by removing all assignable causes of variation

Question 54

plotting system measurements over time

Answer 54

helps identify the presence of assignable causes

Question 55

once all assignable causes of variation are removed and only common causes are impacting system performance

Answer 55

control charts can be set up

Question 56

control charts

Answer 56

establish process capacity and can be used to monitor system performance and determine whether a process improvement effort has its desired effect

Question 57

a process improvement effort

Answer 57

should be undertaken if the current process is not capable of "consistently" meeting customer expectations

Question 58

product mix problems

Answer 58

involve allocating scarce resources among competing alternatives

Question 59

the optimal solution to a product mix problem

Answer 59

depends on the stated objective/goal and the constraints

Question 60

constraints

Answer 60

can be binding or non-binding

Question 61

if relaxed, non-binding constraints

Answer 61

do NOT result in an improvement in the objective function value

Question 62

if a non-binding constraint is associated with a resource

Answer 62

the slack value is positive meaning there will be leftover units if the optimal solution is implemented

Question 63

if relaxed, a binding constraint

Answer 63

will result in an improvement in the objective function value

Question 64

the shadow price of the constraint

Answer 64

the amount of the improvement in a relaxed binding constraint

Question 65

changes int he objective function coefficient

Answer 65

may or may not result in a change in the solution to the constrained optimization problem