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83 Cards in this Set
 Front
 Back
Lean production is a management philosophy and a pull system through the plant.

TRUE


In a forecasting model using simple moving average the shorter the time span used for calculating the moving average, the closer the average follows volatile trends.

TRUE


In the textbook the expression “quality at the source” means that we need to purchase the best quality a supplier or vendor can provide.

FALSE


To implement a Kanban pull system a firm would do which of the following?

Reduce lot sizes


Group technology is a philosophy wherein similar parts are grouped together and the processes required to make the parts are arranged as a work cell.

TRUE


In most cases, demand for products or services can be broken into several components. Which of the following is not considered a component of demand

Past demand


In the textbook Toyota’s Fujio Cho identified which of the following types of waste to be eliminated?

overproduction


In the textbook Toyota’s Fujio Cho identified which of the following types of waste to be eliminated?

product defaults


Subcontractor networks are not very important in Japanese manufacturing.

FALSE


Which of the following statements holds true for Kanban production control systems?

• In a paperless control system, containers can be used instead of cards


Group technology (GT) is credited with which of the following benefits?

Reducing waiting time between process operations


The term “freeze window” refers to the practice of building quality into the process and not identifying quality by inspection.

FALSE


In designing a lean production facility layout a designer should do which of the following

Design work flow balance


To implement a flow process in developing a lean system a firm might do which of the following?

Reduce setup/changeover time


Which of the following are related to lean production?

A philosophy of waste elimination


Lean production makes implementing green strategies in manufacturing processes more difficult.

FALSE


Value Stream mapping is a technique that aims to eliminate waste in a process.

TRUE


A kanban control system uses a signaling devise to regulate JIT flows.

TRUE


A company wants to forecast demand using a simple 3 period moving average. If the company uses four prior yearly sales values (i.e. year 2007=100, year 2008=120, year 2009=140, year 2010=210), which of the following is the simple moving average forecast for year 2011?

156.6


In designing a lean production facility layout a designer should do which of the following?

Design for work flow balance


A tracking signal (TS) can be calculated using the arithmetic sum of forecast deviations divided by the MAD.

TRUE


The weighted moving average forecasting model uses the weighting scheme to modify the effects of individual data points. This is its major advantage over the simple moving average model.

TRUE


In implementing a lean production system you should work with suppliers to do which of the following?

Making frequent deliveries


A principle of Value Stream mapping is to concentrate on speeding up valueadded operations

False


A company has calculated its running sum of forecast errors to be 500 and its mean absolute deviation is exactly 35. Which of the following is the company’s tracking signal?

about 14.3


A company has a MAD of 10. It wants to have a 99.7 percent control limits on its forecasting system. Its most recent signal value is 31. What can the company conclude from this information?

The forecasting model is operating acceptably


Which of the following is used to describe the degree of error?

Mean absolute deviation


Experience and trial and error are the simplest ways to choose weights for the weighted moving average forecasting model.

TRUE


In the textbook Toyota’s Fujio Cho identified which of the following types of waste to be eliminated?

Motion


In the simple exponential smoothing forecasting model you need at least 100 observations to set the weight.

FALSE


The value of the smoothing constant alpha in an exponential smoothing model is between 0 and 1.

TRUE


One of the many JIT techniques that have been successfully applied in service firms is the eliminating of unnecessary activities.

TRUE


Which of the following statements holds true for Kanban production control systems?

In a paperless control system, containers can be used instead of cards


Which of the following forecasting methodologies is considered a causal forecasting technique?

Linear Regression


Given a prior forecast demand value of 1100 a related actual demand value of 1000 and a smoothing constant alpha of 0.3 what is the exponential smoothing forecast value

1030


A company wants to forecast demand using the weighted moving average. If the company uses two prior yearly sales values (i.e year 2009=110 and year 2010= 130) and we want to weight year 2009 at 10% and year 2010 at 90% which of the following is the weighted moving average forecast for year 2011?

128


Random errors can be defined as those that cannot be explained by the forecast model being used.

TRUE


Which of the following forecasting methodologies is considered a qualitative forecasting technique?

Market Research


One of the many JIT techniques that have been successfully applied in service firms is the upgrading of quality.

TRUE


A company has actual unit demand for three consecutive years of 124, 126 and 135. The respective forecasts for the same three years are 120, 120, and 130. Which of the following is the resulting MAD value that can be computed from this data?

5


Lean production is an integrated set of activities to achieve highvolume production using minimal inventories of raw material, work in process and finished goods.

TRUE


A company wants to generate a forecast for unit demand for year 2011 using exponential smoothing. He actual demand for year 2010 was 120. The forecast demand for the year 2010 was 110. Using this data and a smoothing constant alpha of 0.1, which of the following is the resulting year 2011 forecast value?

111


Which of the following is the portion of observations you would expect to see lying within a plus or minus 3 MAD range?

98.334 percent


There are other related mathematical programming techniques that can be used instead of linear programming if the problem has a unique characteristic. If the problem prevents divisibility of products or resources we should use which of the following methodologies?

Integer programming


Apply linear programming to this problem. A firm wants to determine how many units of each of two products (products X and Y) they should produce in order to make the most money. The profit from making a unit of product X is $190 and the profit from making a unit of product Y is $112. The firm has a limited number of labor hours and machine hours to apply to these products. The total labor hours per week are 3,000. Product X takes 2 hours of labor per unit and product Y takes 6 hours of labor per unit. The total machine hours available are 750 per week. Product X takes 1 machine hour per unit and product Y takes 5 machine hours per unit. Which of the following is one of the constraints for this linear program?

1X+5Y=<750


Apply linear programming to this problem. A oneairplane airline wants to determine the best mix of passengers to serve each day. The airplane seats 25 people and flies 8 oneway segments per day. There are two types of passengers: first class (F) and coach (C). The cost to serve each first class passenger is $15 per segment and the cost to serve each coach passenger is $10 per segment. The marketing objectives of the airplane owner are to carry at least 13 first class passenger segments and 67 coach passenger segments each day. In addition, in order to break even, they must at least carry a minimum of 110 total passenger segments each day. Which of the following is one of the constraints for this linear program?

1F=>13


Finding the optimal routing for a product that must be processed sequentially through several machine centers, with each machine in a center having its own cost and output characteristics cannot be solved using linear programming.

False


In decision tree analysis the time value of money is ignored because you are only concerned with cash costs.

FALSE


In solving decision tree problems, calculations start at the ends of the "branches" of the tree and work backwards to the base "trunk" of the tree.

TRUE


The decision variables in linear programming model must be nonnegative. T/F

True


There are other related mathematical programming techniques that can be used instead of linear programming if the problem has a unique characteristic. If the problem has multiple objectives we should use with of the following methodologies?

Goal Programming


In decision tree analysis the time value of money is ignored because you are only concerned with cash costs. T/F

False


A company wants to determine how many units of each of two products, A and B, they should produce. The profit of product A is $50 and the profit on product B is $45. Applying linear programming to this problem, which of the following is the objective function if the firm wants to make as much money as possible?

Maximize Z=50A +45B


There are other related mathematical programming techniques that can be used instead of linear programming if the problem has a unique characteristic. If the problem is best solved in stages or time frames we should use which of the following methodologies?

Dynamic Programming


Linear programming is a model with an objective function to be maximized or minimized. T/F

TRUE


Apply linear programming to this problem. David and Harry operate a discount jewelry store. They want to determine the best mix of customers to serve each day. There are two types of customers for their store, retail (R) and wholesale (W). The cost to serve a retail customer is $70 and the cost to serve a wholesale customer is $89. The average profit from either kind of customer is the same. To meet headquarters' expectations, they must serve at least 8 retail customers and 12 wholesale customers daily. In addition, in order to cover their salaries, they must at least serve 30 customers each day. Which of the following is one of the constraints for this model.

1R + 1W => 30


At a decision point in a decision tree, which machine would you select when trying to maximize payoff when the anticipated benefit of selecting machine A is $45,000 with a probability of 90%; the expected benefit of selecting maching B is $80,000 with a probability of 50% and the expected benefit of selecting machine C is $60,000 with a probability of 75%.

Machine C


An agribusiness company mixes and sells chicken feed to farmers. The costs of the chicken feed ingredients vary throughout the chicken feeding season but the selling price of chicken feed is independent of the ingredients. On August 1, management needs to know how many units of each of three grains (Q, R, and S) should be included in their chicken feed in order to product the product most economically. The cost of each grain is, for a unit of Q, $30; for a unit of R $37; and for a unit of S $78. Applying linear programming to this problem, which of the following is the objective function?

Minimize Z=30 Q + 37 R +78 S


In solving decision tree problems, calculations start at the ends of the "branches" of the tree and work backwards to the base of the "trunk" of the tree.

True


Apply linear programming to this problem. A firm wants to determine how many units of each of two products (products D and E) they should product to make the most money. The profit in the manufacture of a unit of product D is $100 and the profit in the manufacture of a unit of product E is $87. The firm is limited by its total available labor hours and total available machine hours. The total labor hours per week are 4,000. Product D takes 5 hours per unit of labor and product E takes 7 hours per unit. The total machine hours are 5,000 per week. Product D takes 9 hours per unit of machine time and product E takes 3 hours per unit. Which of the following is one of the constraints for this linear program?

9D + 3E =< 5,000


Which of the following is an essential condition in a situation for linear programming to be useful?

Homogeneity


Linear programming solutions may include a sensitivity report. This report gives information on making changes in objective function coefficients. T/F

True


If annual demand is 35,000 units, the ordering cost is $50 per order and the holding cost is $0.65 per unit per year, which of the following is the optimal order quantity using the fixedorder quantity model?

2320


To take into consideration demand uncertainty in reorder point (R) calculations, what do we add to the product of the average daily demand and lead time in days when calculating the value of R?

The product of the standard deviation of demand variability and a "z" score relating to a specific service probability


Cycle counting is a physical inventorytaking technique in which inventory is counted on a frequent basis rather than once or twice a year. T/F

True


Which of the following methods requires generating several alternative aggregate plans?

cut and try


Firms keep supplies of inventory for which of the following reasons?

to meet variation in product demands


Safety stock can be computed when using the fixedorder quantity inventory model by multiplying a "z" value representing the number of standard deviations to achieve a service level or probability by the standard deviation of lead time. T/F

True


Using the cut and try method for aggregate operations planning we can determine the production requirement in units of product. If the beginning inventory is 500 units, the demand forecast is 1,000 and the necessary safety stock is 10% of the demand forecast, which of the following is the production requirement?

600


In conducting aggregate operations planning there are a number of required inputs. Which of the following are inputs considered external to the firm?

Raw material availability and competitor's behavior.


Aggregation in sales and operations planning is by groups of customers on the supply side and by product families on the demand side of the firm's supply chain.

False


Which of the following is usually included as an inventory holding cost?

Breakage


If it takes a supplier four days to deliver an order once it has been placed and the standard deviation of daily demand is 10, which of the following is the standard deviation of usage during lead time?

20


Costs incurred in hiring, training and laying off personnel are considered relevant aggregate operations planning costs.

True


Which of the following is not included as an inventory holding cost?

Annualized cost of materials


A company wants to determine its reorder point (R). Demand is variable and they want to build a safety stock into R. If the average daily demand is 12, the lead time is 5 days, the desired "z" value is 1.96, and the standard deviation of usage during lead time is 3, which of the following is the desired value of R?

About 66


If annual demand is 35,00o units, the ordering cost is $50 per order and the holding cost is $0.65 per unit per year, which of the following is the optimal order quantity using the fixedorder quantity model?

2320


A company wants to determine its reorder point (R). Demand is variable and they want to build a safety stock into R. The company wants to have a service probability coverage of 95%. If the average daily demand is 8, lead time is 3 days, and the standard deviation of usage during lead time is 2, which of the following is the desired value of R?

about 27.3


In a price break model of lot sizing, to find the lowestcost order quantity, it is necessary to calculate the economic order quantity for each possible price. T/F

True


In inventory models, high holding costs tend to favor high inventory levels. T/F

False


An advantage of the level strategy for aggregate operations planning is which of the following

There is a smooth flow throughout the production system


Which of the following is not a reason to carry inventory?

to keep the stock out of the hands of the competitors


Assuming no safety stock, what is the reorder point (R) given an average daily demand of 50 units, a lead time of 10 days and 625 units on hand?

500
