Operation management

QUESTION 4

1.  

Monthly demand forecast of STX-43 is 800 units, averaged over all 12 months of the year. The product is known to have a seasonal pattern and July monthly index is 1.25. What is the seasonal sales forecast for July?

Answer

		640 units
		799 units
		800 units
		1000 units
		Cannot be calculated with the information given

5 points   

QUESTION 5

1.  

The last four weekly values of sales were 85, 91, 99, and 94 units. The last four forecasts were 73, 82, 91, and 81 units. These forecasts illustrate:

Answer

		qualitative methods
		exponential smoothing
		slope
		trend projection
		None of the above

5 points   

QUESTION 6

1.  

Weekly sales of copy paper at ABC Suppliers are in the table below. Which forecasting method is more accurate to forecast week 8 sale?  Initial forecast for week 1 was 17 cases.

Week	Sales (cases)
1	18
2	23
3	31
4	32
5	18
6	16
7	24

Answer

		3-weeks moving average
		exponential smoothing-Alpha=0.1
		exponential smoothing-Alpha=0.9
		Weighted moving average.  Weights of 0.5 for the most recent period, then 0.3 and 0.2 for previous two periods
		Regression analysis

5 points   

QUESTION 7

1.  

A fast-food restaurant owner operates a dozen outlets in California. One menu item is the most popular among others, and its sales (X, in millions of dollars) is related to Profits (Y, in hundreds of thousands of dollars).  Forecasting equation obtained based on the historical data is

Y = 7.31 + 0.54 X

What is your forecast of profit for a store with sales of $40 million?

Answer

		$1,289,007
		$21,600,007
		$2,891,000
		$289,100,000
		None of the above are correct

5 points   

QUESTION 8

1.  

ABC Inc. started producing its new line of parts at the end of year 0. In year 1, it produced 45000 parts at a total cost of $660,000. In year 2, its production increased to 85,000 parts at a total cost of $1,140,000. If the Fixed cost and variable cost per unit are the same, what must be the variable cost per part (c) and the fixed cost (F)?

Answer

		F is less than $80,000, and c is greater than $7
		F is greater than $60,000, and c is less than $9
		F is greater than $100,000, and c is greater than $13
		F is greater than $110,000, and c is less than $16
		None of the above are correct

5 points   

5 points   

QUESTION 10

 

1. The ABC Company is screening three new product ideas. Only one idea must be selected. The following estimates have been made for the performance criteria that management feels are most important, along with the weight of each in decision making. What are the best and worst alternatives?

 

			Estimated Rating
	Performance criterion	Weight	A	B	C
1	Demand uncertainty	0.1	0.3	0.9	0.2
2	Similarity to present products	0.15	0.7	0.8	0.6
3	Expected return on investment	0.35	1	0.4	0.7
4	Compatibility with current process	0.25	0.4	0.7	0.6
5	Competitive advantage	0.15	0.4	0.6	0.5

Answer

		A is best, and B is worst
		B is best, and C is worst
		B is best, and A is worst
		C is best, and A is worst
		None of the above is correct

5 points   

QUESTION 11

1.  

ABC Inc. is evaluating alternative production methods using a decision tree. Production manager has developed estimates of payoffs based on high or low demand.  Probability of high demand is 40% and that of low demand 60%.  Which alternative will provide the best payoff?

 

Answer

		A
		B
		C
		D

5 points   

QUESTION 12

1.  

A company of six departments has the following closeness factors and current locations of departments. Assume rectilinear distance. Which pair of departments has the greatest weighted-distance score?

 

1	2	3
4	5	6

 

Department pair	Closeness factor
1,2	10
1,3	9
1,4	8
1,5	7
1,6	5
2,3	4
2,4	3
2,5	2
2,6	1
3,4	8
3,5	7
3,6	5
4,5	4
4,6	3
5,6	2

 

Answer

		1, 2
		3, 6
		3, 4
		5, 6
		2, 4

5 points   

QUESTION 13

1.  

1. A company of six departments has the following closeness factors and current locations of departments. There are two alternative configurations.  Assume rectilinear distance. Which configuration has the lowest weighted-distance score?

  

initial configuration
1	2	3
4	5	6

Alternative 1 5 2 3 4 1 6    Alternative 2 1 2 3 4 6 5

Department pair Closeness factor 1,2 10 1,3 9 1,4 8 1,5 7 1,6 5 2,3 4 2,4 3 2,5 2 2,6 1 3,4 8 3,5 7 3,6 5 4,5 4 4,6 3 5,6 2

Answer

		Current configuration
		Alternative 1
		Alternative 2
		Both the current and alternative 2

5 points   

QUESTION 14

1.  

A company is considering two options for the production of a part needed downstream in the manufacturing process. Particulars are as follows:

Specialized automation	Fixed Costs = $10,000 / month	Variable Cost / Unit = $2
General automation:	Fixed Costs = $4,000 / month	Variable Cost / Unit = $6

What is the monthly break-even quantity for choosing between the two automation approaches?

Answer

		1000
		1500
		2000
		2300
		2500

5 points   

QUESTION 15

1.  

You observed a worker assembling parts and recorded the data as following: 

Time (seconds)	Observations
16	18
18	25
20	29

What is the average time for this job element?

Answer

		16.1 seconds
		18.3 seconds
		18 seconds
		17.2 seconds

5 points   

QUESTION 16

1.  

You observed a worker assembling parts and recorded the data as following: 

Time (seconds)	Observations
16	18
18	25
20	29

What is the normal time for this job element if the rating factor is 75%?

Answer

		16.1 seconds
		15.4 seconds
		14.2 seconds
		13.7 seconds

5 points   

QUESTION 17

1.  

You observed a worker assembling parts and recorded the data as following:

Time (seconds)	Observations
16	18
18	25
20	29

What is the standard time for this job element if rating factor is 75% and the allowance for the process is 20%?

Answer

		14.6 seconds
		14.9 seconds
		15.6 seconds
		16.2 seconds

5 points   

QUESTION 18

1.  

A restaurant manager tracks complaints from the diner satisfaction cards that are turned in at each table. The data collected from the past week's diners appear in the following table.

Complaint	Frequency
Food taste	60
Food temperature	11
Order mistake	3
Slow service	18
Table/utensils dirty	47
Too expensive	5

 Using a classic Pareto analysis, how was the cumulative value for the second most important complaint calculated? 

Answer

		47/60+11+3+18+47+5
		3+5+11+18+47/60+11+3+18+47+5 + 60/60+11+3+18+47+5 60
		3+5+11+18+47-60/60+11+3+18+47+5
		47/60+11+3+18+47+5 + 60/60+11+3+18+47+5

5 points   

QUESTION 19

1.  

The UCL and LCL for an X_bar chart are 25 and 15 respectively. The central line is 20, and the process variability is considered to be in statistical control. The results of the next six sample means are 18, 23, 17, 21, 26, and 16. What should you do?

Answer

		Nothing; the process is in control.
		Explore the assignable causes because the second, fourth, and fifth samples are above the mean.
		Explore the assignable causes because there is a run.
		Explore the assignable causes because there is a trend
		Explore the assignable causes because the process is out of control

5 points   

QUESTION 20

1.  

The central line on a p-chart is 0.50 with a UCL of 0.65 and an LCL of 0.35. The results of the next six samples are 0.60, 0.37, 0.55, 0.48, 0.55, and 0.42. What should you do?

Answer

		Nothing; the process is behaving as expected.
		Explore the assignable causes because three observations are above the central line.
		Explore assignable causes because there is a run.
		Increase the sample size to get a better measure.
		Explore the assignable causes because the process is out of control