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Aija > OM > Flashcards

OM Flashcards

1
Q

weak Efficient market hypothesis

A

prices don’t predict future prices

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2
Q

Semi-Strong Efficient market hypothesis

A

no publicly available information can predict future prices

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3
Q

Strong Efficient market hypothesis

A

no publicly available OR privately available information can predict future prices

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4
Q

3 flavors of Efficient Market Hypothesis

A

Weak, Semi-Strong, Strong

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5
Q

Local wage rates, presence of local unions, and attitudes of local workers would be major factors for location decisions for businesses that ________________________.

A

are labor intensive

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6
Q

It takes many pounds of milk to make one pound of cheese. Therefore, there are many cheese factories in dairy states because ________________________.

A

of transportation costs

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7
Q

Which of the following is a reason capacity and location decisions are usually made simultaneously?

A

the size of a new facility may affect its location

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8
Q

Spectrum Hair Salon is considering expanding its business, as it is experiencing a large growth. The question is whether it should expand with a bigger facility than needed, hoping that demand will catch up, or with a small facility, knowing that it will need to reconsider expanding in three years.

The management at Spectrum has estimated the following chances for demand:

The likelihood of demand being high is 0.70.
The likelihood of demand being low is 0.30.

Estimated profits for each alternative are as follows:

Large expansion has an estimated profitability of either $100,000 or $70,000, depending on whether demand turns out to be high or low.
Small expansion has a profitability of $50,000, assuming that demand is low.
Small expansion with an occurrence of high demand would require considering whether to expand further. If the business expands at this point, the profitability is expected to be $90,000. If it does not expand further, the profitability is expected to be $60,000.
Draw a decision tree and solve the problem. What should Spectrum do? Show details of your work.

A

Spectrum shoudl anticipate high demand and go for an initial large exapnsion because that is expected to have e profit of $100,000 and in the 0.3 off chance that there is low demand then ther will still be a $70,000 profit. If they were to go with a small expansion, they would woudl make either $90,000 or $60,000 based on if they further expand in a high demand situation (which is still lower than the high demand/large expansion) or if demand is low then have $50,000 (which is lower than any of the large expansion options regardless of demand).

Large expansion is optimal decision.

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9
Q

The following 3 questions are based on these data.

Joe’s Sports Supplies Corporation is considering where to locate its warehouse in order to service its four stores in four towns: A, B, C, and D. Two possible sites for the warehouse are being considered, one in Jasper and the other in Longboat. The following table shows the distances between the two locations being considered and the four store locations. Also shown are the loads between the warehouse and the four stores. Use the load–distance model to determine whether the warehouse should be located in Jasper or in Longboat.

Town Distance to Jasper Distance to Longboat Load
A 30 12 15
B 6 12 10
C 10.5 30 12
D 4.5 24 8

Calculate Jasper’s load-distance score.

A

672

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10
Q

Calculate Longboat’s load-distance score.

A

852

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11
Q

Warehouse should be located in __________.

A

Jasper

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12
Q

The following five questions are based on these data.

The Quick Copy center for document copying is deciding where to locate a new facility. The annual fixed and variable costs for each site it is considering have been estimated as follows:

Location Fixed Costs Variable Costs
A $85,000 $2/unit
B $49,000 $7/unit
C $35,000 $10/unit
D $65,000 $6/unit

Demand is expected to be 3000 units.

Calculate the cost of A.

A

91000

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13
Q

Calculate the cost of B.

A

70000

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14
Q

Calculate the cost of C.

A

65000

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15
Q

Calculate the cost of D.

A

83000

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16
Q

Which alternative is the best (least cost)?

A

C

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17
Q

A company with a pure continuous processing system is most likely to use which layout type?

A

product

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18
Q

A high-volume paper mill is an example of which layout type?

A

product

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19
Q

A hospital is an example of which layout type?

A

process

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20
Q

Bridge construction is an example of which layout type?

A

fixed position

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21
Q

Group technology creates groupings of products primarily based on what?

A

similar processing requirements

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22
Q

In the previous question, calculate and interpret the safety factor when the number of containers is rounded up (to the next whole number).

A

The safety factor is 200% (50 safety stock). This was solved by using the kanban continaer equation and subsequent safety stock equation. This means that by roudning up the number of containters form 2.5 to 3, that would factor in a 200% (50 pieces) extra safety in LT.

3= (50(0.5) +S)/25

S=50

50=x(50)(0/5)

x= 2.00 -> 200%

23
Q

Lauren’s Beauty Boutique has experienced the following weekly sales:

Week Sales
1 432
2 396
3 415
4 458
5 460

Forecast sales for week 6 using the naïve method.

A

460

24
Q

Forecast sales for week 6 using the simple average method. (One decimal place.)

A

432.2

25
Q

Forecast sales for week 6 using the 3-period moving average method. (One decimal place.)

A

444.33

26
Q

Forecast sales for week 6 using the weighted moving average method with three periods and weights 0.1 (oldest period), 0.3 and 0.6 (most recent period). (One decimal place.)

A

454.9

27
Q

The next six questions are based on these data:

The manager of a small health clinic would like to use exponential smoothing to forecast demand for laboratory services in the facility. She has decided to use α = 0.7.

Week Demand (lab requirements)
1 330
2 350
3 320
4 370
5 368
6 343

Calculate the forecast in Week 2. (Hint 1: assume the actual in Week 1 was also the forecast.) (Hint 2: perform all your calculations in Excel and never manipulate any number by rounding it; only change the number of decimal places the numbers are displayed with.)

A

330

28
Q

Calculate the forecast in Week 3.

A

344

29
Q

Calculate the forecast in Week 4. (One decimal place.)

A

327.2

30
Q

Calculate the forecast in Week 5. (One decimal place.)

A

357.2

31
Q

Calculate the forecast in Week 6. (One decimal place.)

A

364.7

32
Q

Calculate the MAD of forecasts in weeks 2-6. (One decimal place.)

A

5.6

33
Q

The next eight questions are based on these data:

Small Wonder, an amusement park, experiences seasonal attendance. It has collected two years of quarterly attendance data and made a forecast of annual attendance for the coming year. Compute the seasonal indexes for the four quarters and generate quarterly forecasts for the coming year, assuming annual attendance for the coming year to be 1525.

Park Attendance (in thousands)

Quarter Year 1 Year 2
Fall 352 391
Winter 156 212
Spring 489 518
Summer 314 352

Calculate the seasonal index for Fall. (Three decimal places.) (Hint 1: this is the average seasonal index across all years.) (Hint 2: perform all your calculations in Excel and never manipulate any number by rounding it; only change the number of decimal places the numbers are displayed with. )

A

1.068

34
Q

Calculate the seasonal index for Winter. (Three decimal places.)

A

0.526

35
Q

Calculate the seasonal index for Spring. (Three decimal places.)

A

1.449

36
Q

Calculate the seasonal index for Summer. (Three decimal places.)

A

0.957

37
Q

Forecast the demand for next year’s Fall. (Two decimal places.)

A

407.13

38
Q

Forecast the demand for next year’s Winter. (Two decimal places.)

A

200.47

39
Q

Forecast the demand for next year’s Spring. (Two decimal places.)

A

552.55

40
Q

Forecast the demand for next year’s Summer. (Two decimal places.)

A

364.84

41
Q

According to JIT, __________ is carried to cover up a wide variety of problems, such as poor quality, demand uncertainty, and slow delivery.

A

Inventory

42
Q

Beliefs that help define the JIT philosophy include all of the following except

A

Push production

43
Q

In JIT the workforce is viewed as

A

a long-term asset

44
Q

JIT applies to

A

both the manufacturing and service organizations

45
Q

Small lot production

A

Reduces setup

46
Q

The Crunchy Potato Chip Company is renowned for its chips but is worried about their filling & packaging at present. Product design specifications define the weight of an acceptable box to be 850±13grams. The standard deviation of the packet-filling process is known from history to be 6 grams per box. The most recent full week’s production showed an average weight of 845 grams per box. Calculate the process capability index (Cp), and enter it after rounding to the nearest hundredth (two digits after the decimal).

A

0.72

47
Q

Assuming the process center line aligns perfectly with the midpoint of the specification limits, a process capability index (Cp) value of 0.5 means that what percent of products produced will conform with the specifications?

A

86.64%

48
Q

Each day for two workweeks (10 days total), George weighs 4 bags from that day’s production. If the average of the means is 14 oz. and the average range is 0.4 oz., what is the lower control limit for an x-bar chart for this process? (Hint: The process standard deviation is not known from history.)

A

13.7084 oz

49
Q

If the upper control limit for a c-chart is 28 and the lower control limit is 4, what is the average number of defects per sample?

A

16

50
Q

A process chart is a

A

graph that show whether a sample falls within the common or normal range

51
Q

According to the text, what percent of defects are consumers generally willing to accept?

A

1-2%

52
Q

Assuming that data exhibit a normal distribution, control limits set at ± 3 standard deviations from the mean capture how much common variation?

A

99.74%

53
Q

Under what circumstance does Cpk equal Cp?

A

The process is perfectly centered, i.e., the process average equals the midpoint of the specification limits.

54
Q

Define acceptance sampling.

A

a technique that determines whether a batch of goods should be accepted or rejected

Aija (5 decks)

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