Operation and Mgmt quiz

1. Which of the following is INCORRECT regarding the process capability index Cpk

Productivity can be improved by Increasing inputs while holding outputs steady Decreasing outputs while holding inputs steady Increasing inputs and outputs in the same proportion Increasing outputs while holding inputs steady 2. Productivity can be improved by Increasing inputs while holding outputs steady Decreasing outputs while holding inputs steady Increasing inputs and outputs in the same proportion Increasing outputs while holding inputs steady

3. Which of the following statements is INCORRECT regarding critical paths?

		The path that takes the longest time to complete in a project is the critical path.
		Activities on the critical path must have zero slack time.
		Some non-critical activities may have zero slack time.
		For any project, the (expected) project completion time is equal to the (expected) time duration of the project’s critical path.

4. Suppose a project team has arrived at the following time estimates for an activity: a = 4 days, m = 6 days, and b = 8 days. What is the variance involved in this activity?

		0.111
		0.250
		0.444
		0.694

5. Suppose you are asked to determine the Lower Control Limit for a p-chart for quality control purposes. Samples are taken from the production line. The fraction defective is 0.008 and the standard deviation is 0.002 based on the samples. Set z = 3. Which of the following is the LCL of the p-chart?

		0.001
		0.002
		0.006
		0.013

6. The least squares method is to find out the intercept and the slope of a regression line that minimizes the sum of the squared differences between

		observed values of the independent variable and predicted values of the independent variable
		observed values of the independent variable and predicted values of the dependent variable
		observed values of the dependent variable and predicted values of the dependent variable
		None of the three is correct.

7. Which of the following statements is INCORRECT regarding corporate missions?

		They reflect a company's purpose.
		They indicate what a company intends to contribute to society.
		They are formulated after strategies are known.
		They define a company's reason for existence.

8. Given forecast errors of -2, 5, 10, and -3, what is the mean absolute deviation (MAD)?

		2.5
		3
		4
		5

9. Which of the following best describes the process focus strategy?

		Appropriate for high-volume, low-variety production
		Equipment or processes are arranged based on the progressive steps by which a product is made.
		Also known as flow shop
		Appropriate for low-volume, high-variety production

10. According to the definition of design quality,

		Quality is the degree of excellence at an acceptable price
		Quality depends on how well the product fits consumer preferences
		Even though quality cannot be defined, you know what it is
		Quality is the degree to which a specific product conforms to design specifications

11. Which of the following project structures utilizes people from different functional areas?

		Matrix project
		Integrated Task Force
		Functional project
		Pure project

12. Which of the following statements is INCORRECT regarding process variations?

		It is impossible to have zero variation in production processes.
		Assignable variations can be caused by workers not sufficiently trained.
		Common variation is unavoidable.
		A process under statistical control is a process with no common variation

13. Which of the following is NOT a characteristic that distinguishes services from goods?

		The production and consumption of goods can be separated from each other, while services are often produced and consumed at the same time.
		Both goods and services need to have quality standards established.
		Goods are tangible and transportable.
		Cost is the most important factor when determining the locations of service facilities.

14. Consider a project consisting of five activities. The immediate predecessors and the activity times are summarized as follows:

Activity	Immediate Predecessor	Activity time (in days)
A	None	3
B	A	2
C	A	1
D	B	3
E	C, D	4

 How long does it take to complete the project?

		9 days
		10 days
		11 days
		12 days

15. The output of a production system is 800 units per day and the total amount of labor required to produce the 800 units is 400 labor hours. What is the labor productivity in this case?

		2.0
		1.0
		0.5
		0.4

16. The crossover point is the production quantity at which

		the total variable cost of one process equals the total variable cost of another process
		the fixed cost of a process is equal to its total variable cost
		the total cost equals the total revenue for a process
		the total cost of one process equals the total cost of another process

17. Suppose the design specification range of the outer diameter of a component is. A worker takes a sample and determines the sample mean to be 1.01 inches with a standard deviation of 0.02 inches. What is the process capability index in this case? Set z = 3. Find the closest value.

		0.50
		0.83
		1.17
		1.50

18. Which of the following is NOT a qualitative forecasting method?

		Sales force composite
		Jury of execution opinion
		Delphi method
		Moving average method

19. Which of the following is NOT a type of Cost of Quality?

		External failure cost
		Internal failure cost
		Return cost
		Prevention cost

20. Which of the following statements is INCORRECT regarding CPM and PERT?

		There can be more than one critical path in both CPM and PERT networks.
		PERT takes uncertainty into account.
		Slack times of activities cannot be calculated in PERT.
		CPM assumes zero uncertainty in activity time.

21. The following table summarizes the demand of a product in the past 3 weeks:

Week	Demand
1	300
2	350
3	400

 The company decides to use the 3-week simple moving average method to make the forecast for the demand in week 4. What is the forecast for week 4? Find the closest value.

		350
		358
		361
		370

22. An activity in a PERT network has these time estimates: optimistic = 4, most likely = 6, and pessimistic = 8. Its expected completion time is

		5.00
		6.00
		5.83
		17.00

23. In the analysis of Costs of Quality, the cost incurred by employee training is classified as:

		Appraisal cost
		Prevention cost
		Internal failure cost
		External failure cost

24. Process A has a fixed cost of $1,000 and a per-unit variable cost of $5. Process B has a fixed cost of $2,000 and a per-unit variable cost of $4. What is the crossover point between the two processes? Find the closest value.

		250
		500
		750
		1,000

25. Which of the following combines the flexibility of a process focus with the efficiency of a product focus?

		Mass customization
		Standardization
		Repetitive
		Mass production

26. Suppose a company sold an average of 2,000 units a year in the past five years. On average, 800 units were sold in the spring, 250 units in the summer, 350 units in the fall, and 600 units in the winter. Then what is the seasonal index for winter?

		1.2
		1.6
		0.5
		0.7

27. Contract requirements state that a project must be completed within 160 working days, or it will incur penalties for late completion. Analysis of the project network reveals an estimated project completion time of 145 working days with a project variance of 225. What is the z value for the target completion time of 160 working days? Find the closest value.

		2.33
		1.75
		1.00
		0.53

28. Suppose the inputs of a process are materials, labor, and energy. Then which of the following is a multi-factor measure of productivity in this case?

		Output / Materials
		Output / (Labor + Materials)
		Output / (Labor + Energy + Materials)
		Output / Energy

29. Suppose the Earliest Start time of an activity is 5. The Earliest Finish time and the Latest Finish time of the activity are 8 and 10, respectively. Which of the following statements is INCORRECT ?

		The activity time is 3.
		The slack time is 2.
		The Latest Start of the activity is 6.
		The activity is not on the critical path.

30. A company hires you to develop a linear regression model that includes one independent variable X. Based on the company's past sales data, you estimate the intercept value of the model (a) to be 100 and the slope (b) to be 50. Given x = 8, what is the forecast based on this linear regression model?

		500
		600
		8000
		Not enough information available

31. Which of the following statements is INCORRECT regarding efficiency and effectiveness?

		Productivity is a measure of efficiency.
		Effectiveness means doing the right things to create the most value for the company.
		A process can be effective without being efficient.
		A process cannot be effective without being efficient.

32. Which of the following is NOT an assumption of Cost of Quality?

		It is cheaper to prevent than to correct.
		Failures are caused.
		Employees are adequately trained.
		Performance can be measured.

33. A company wants to estimate the annual demand for year 2015 using exponential smoothing. The actual demand in year 2014 was 200. The forecast for year 2014 was 170. Set α=0.2. What is the forecast for year 2015?

		173
		167
		176
		197

34. The following table represents a project that needs be scheduled using PERT.  

Activity	Immediate Predecessor	Times (Days)
		a	m	b
A	None	2	3	4
B	A	1	2	3
C	A, B	2	3	4
D	C	3	4	5

What is the expected completion time of the project?

		9.5 days
		10 days
		11 days
		12 days

35. A manufacturer decides to develop a  chart to monitor the performance of a process. 10 samples are taken with 5 units in each sample. Suppose the average of the 10 sample means is 55 and the average of the 10 sample ranges is 8. Then what is the Lower Control Limit of this  chart? Find the closest value. (A2 = 0.577 for sample size 5)

		44.23
		45.38
		50.38
		53.00

36. The process capability ratio of a process is 1.33. Then which of the following statements is INCORRECT ?

		The process satisfies 3-sigma requirements.
		The process satisfies 6-sigma requirements.
		The process is capable.
		The target value of the process is equal to the process mean

37. Suppose the Earliest Start time of an activity is 7 and the Latest Start time of the activity is 10. Which of the following statements is INCORRECT ?

		The Latest Finish of the activity is 12.
		The slack time of the activity is 3.
		The activity is not on the critical path.
		The activity is not critical.