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131 Cards in this Set
- Front
- Back
What is the Operation Management pyramid from top down? |
Strategy> Tactics> Implementation |
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Strategy |
long term planning (3-5 years); Set goals |
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tactics |
Medium-term Planning (1 year); what you do to reach your goals |
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Implementation |
Short-term; daily/weekly planning; operation |
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What are some characteristics of goods? |
they are tangible, solid(physical), and inventoriable (save item for future use) |
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What are characteristics of services? |
they are intangible |
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When it comes to the site of production and consumption for goods vs. services what is the difference? |
For services, the site of production and consumption are the same thing whereas with goods the site of production and consumption are different places. |
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Goods have low levels of what? |
customer contact and labor content |
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Goods have high levels of what? |
capital investment and uniformity of inputs and outouts |
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Services have high levels of what? |
customer contact and labor content |
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Services have low levels of what? |
capital investment and uniformity of inputs and outputs |
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What is an example of a mixed product? |
resutrants |
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What are some characteristics of a standardized process? |
it produces high volume, have lower cost per unit, shorter lead time |
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What are some characteristics of a customized process? |
it produces low volume, has a high cost per unit and has a longer lead time |
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What is in between standardized and customized process? |
modular/ mass customization |
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What is an example of a make-to-stock process and what happens? |
Frozen pizza; Raw Materials> Finished Goods |
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What is an example of a make-to-assemble process and what happens? |
PaPa John's; Raw Materials> Work-In-Process |
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What is an example of Made-to-order process and what happens? |
Fine Resturaunt; Raw Material> for you only |
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What are the 4 phases of a product life cycle? |
1) Introduction 2) Growth 3) Maturity 4) Decline |
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During which stage does "competitive shake-out" happens? |
Towards the end of the growth phase and the beginning of the maturity phase |
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Throughout a product's life cycle what happens to the number of firms? |
there becomes fewer and fewer |
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Throughout a product's life cycle, what happens to the process? |
it goes from customized to standardized |
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Throughout a product's life cycle what happens to the volume that is produced? |
it goes from low volume to high volume |
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Throughout a product's life cycle what happens to the product's price? |
It starts out high and slowly drops |
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What happens in a production system? |
Inputs (resources)> Transformation (create/produce)> Outputs (Goods and SERvices) |
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What is added throughout a production system? |
value |
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Productivity |
Outputs/inputs |
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Partial Measure of productivity |
= a particular output/ a particular input |
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What are some examples of a partial measure of productivity? |
miles per gallon, words per minute, # per# |
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Multi-factor Measure of productivity |
= a particular output/ a set of inputs |
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Total measure of productivity |
= total outputs/ total inputs |
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What is an example of total measure of productivity? |
GDP |
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Systems which produce highly customized products typically: A) Produce i n relatively high volumes B) Have relatively low costs per unit produced C) Have invested a great deal of money in automation D) Can produce the product relatively quickly E) Use relatively high skilled workers |
E |
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Which is the correct hierarchy of management decisions (highest first? A) Operating, Tactical, Strategic B) Operating, Strategic, tactical C) Tactical, Strategic, Operating D) Strategic, Operating, Tactical E) Strategic, Tactical, Operatin |
E |
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Which of the following is (are) NOT an advantage of product standardization? I. Standardized products offer the opportunity for high-volume production, and lower per-unit production costs II. Standardized products have more customer appeal, due to the wide range of options available to the customer. III. Standardized products usually do not require highly skilled labor to produce A) I only B) II only C) III only D) I and III only E) II and III only |
B |
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In an assembly operation at a furniture factory, six employees assembled an average of 450 standard dining chairs during a five day work week. Which of the following best describes the labor productivity of this operation? A) 450 chairs B) 90 chairs/day C) 75 chairs/day D) 20 chairs/worker-day E) 15 chairs/worker-day |
E |
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An Operation has a 20 percent scrap rate. As a result, 56 pieces per hour are produced. What is the potential increase in labor productivity that could be achieved by eliminating the scrap? A) 20% B) 25% C) 75% D) 80% E) 100% |
B |
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What is the difference between quantitate and qualitative approaches for forecasting? |
Qualitative focuses on short term, they are expensive, looks at new product. Quantitative approaches focus on long term, they are cheaper, and they need data from the past. |
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What are three types of Qualitative forecasting approaches? |
1) Expert Opinion Panels 2) Consumer Surveys 3) Delphi Groups |
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Delphi Groups |
secret group; people in group don't know who's in it (anonymous) ask question again after report until ideas narrow down |
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What are the advantages of delphi groups |
people are more likely to share real opinion when anonymous and should be better than expert opinion |
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What are two types of quantitative approaches |
1) Associative Models 2) Time Series Analysis |
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Associative Models |
regression analysis-> see relationship between data (positive, negative, no correlation) |
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Time Series Analysis |
Find Trend based on past |
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What are 3 types of time series analysis? |
1) Moving Average 2) Exponential Smoothing 3) Seasonal Relatives |
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Time Series Decomposition |
looks at time series data and see if there are any components: 1) Trend 2) Seasonality (pattern) in less then 1 year 3) Cyclic (pattern) over several years 4) Irregular/ exogenons 5) Randomness |
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What happens when the n in moving averages is small? |
it will be more responsive to the forecasting |
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what happens when the n in the moving average is large |
the smoother (flatter) the forecasting is |
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What is the smallest n and what is it called? |
1; niave forecasting movdel |
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What n should one use if their business involves a lot of randomness? |
a large n |
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What n should one use if their business is highly correlated? |
a small n |
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What is the formula for the simple exponential smoothing time series technique? |
New Forecast= Old Forecast+ Fraction (alpha) X (actual demand- old forecast) |
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Forecasting error |
Actual demand- old forecast |
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What is alpha between? |
0 and 1 |
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What happens when alpha is large? |
forecasting is very responsive |
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What happens when alpha is small? |
the smoother the forecasting is |
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What alpha should one use if their business is random? |
small alpha |
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What alpha should one us if their business is highly correlated day to day? |
large alpha |
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What is a disadvantage of mean error? |
cancellation issue (with negative and positive numbers) |
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What does a negative number mean in mean error |
you are overestimating |
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What does a positive number mean in mean error |
you are underestimating |
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What is a disadvantage of mean squared error? |
it exaggerates forecasting error |
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Tracking signal |
sum of error/ MAD |
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Seasonal Indices |
set of numbers you can extract from the time series data |
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How do you find seasonal Indices? |
1) calculate the average value of each season 2) Average the season averages 3) Divide each season average (from step 1) by the average of the averages (step 2). |
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How do you forecast data with seasonal indices? |
take the total estimate for the next year. Divide it by the number of seasons, this will be your seasonalized data point. Then multiply that data point by the seasonal indice you found previously. This will be your estimate for that season. |
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How do ou analyze data with seasonal indices? |
take you actual results form each season and divide them by their seasonal indices previously found. |
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Design Capacity |
the maximum possible rate of output that can be achieved; theoretical/ ideal; may or may not be able to achieve |
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Is it possible to go over design capacity? |
yes |
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Effective Capcity |
the rate of output the firm is capable of achieving, given preventative maintenance, set-up time, etc; what you can actually use |
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Efficiency |
output/ effective capacity |
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Utilization |
output/design capacity |
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What do you generally use efficiency for? Utilization for? |
Efficiency is used in operation management whereas utilization is similar to a financial performance indicator |
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Conservative strategy |
lagging demand; below design capacity |
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Advantages of conservative strategy |
high utilization, high ROA, other financial measures |
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Disadvantages of conservative strategy |
allow competitors to enter your market, poor customer service |
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Leading Demand Strategy |
above design capacity |
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Advantages of leading demand strategy |
prevent competitors from entering you market; high customer service |
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disadvantages of leading demand strategy |
lower utilization and lower ROA |
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When the strategy line is below the design capacity ling what does that mean? |
There is a shortage; loss in sales; unmet demand |
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When he strategy line is above the design capacity ling what does that mean? |
ther is a surplus; idle capacity; AKA capacity cushion |
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What is an example of a leading demand strategy? |
emergency room, they have more rooms then then need generally. |
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What happens are the break even point? |
total costs= total revenues |
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Break even Quantity |
= Fixed Costs/ Revenue- Variable Costs |
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What is the basic anatomy of the line theory? |
Source (arrival)> Queue (line)> Server System |
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What 4 questions do you ask about a line's source? |
1) Infinite population or finite population 2) Arrival size/ pattern (single or group) 3) Distribution of arrival (randomly, Poisson Distribution) 4) Degree of patience (Balking or reneging) |
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Infinite vs. Finite population |
infinit is uncountable wheres finite is usually single digit |
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Balking Impatients |
seeing long line and never joining the line or getting service |
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Reneging Impacience |
join line and leave after awhile, don't receive service |
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What 3 questions do you ask about a line's waiting issues? |
1) Length limited or unlimited 2) How many lines in the system 3) What is the logic behind the line (queue discipline |
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What does an unlimited length of a line mean? |
there is no limit t the number of people who can wait in the line |
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For queue discipline what is the most common system? |
First-Come First-Serve (FCFS) |
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What is a secondary system for a queue discipline? |
example would be reservations at a resturaunt, those with reservations are seated first, before the FCFS people. Another example is the disney fast passes |
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What is another name for a server? |
channel |
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What are the possible service system structures? |
1) multiple lines/ multiple servers 2) Single line/ Multiple servers |
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Which service system is most efficient? |
single line/ multiple server |
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Which service system helps with impatience? |
multiple lines/multiple servers |
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What does U/D/1 mean? |
U: uniform distribution of arrival D: Service Time (deterministic 1: number of lines
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What type of distribution is the distribution of service time? |
exponential distribution |
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what does lambda stand for? |
average customer arrival within a certain time |
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What does M/M/1 mean? |
M: Possion distribution (distribution of arrival) M: Exponential distribution (service time distribution) 1: number of lines |
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lambda/ Mue |
arrival rate/ average number of people who can be served within a certain time |
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What does Lambda/ mue find? |
the probability that an arriving customer will have to wait |
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What does 1-lambda/mue find? |
the proportion of time the server will be idle |
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What does Po(lambda/mue)^n find? |
the probability of exactly 1 (or however many n) people waiting |
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What does Lq= lambda^2/ Mue(Mue-lambda) find? |
the average length of a line |
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What does Ls= Lq+lambda/mue find? |
the average number of people in the whole system |
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What does Wq=Lq/lambda find? |
the average wait time in line |
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What does Ws= Wq+1/Mue find? |
the average total amount of time spent in the system |
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What is the difference between absolute and received time? |
absolute can be measures with a clock (actual time whereas received time can be measures by human beings, how long you feel to think the time is |
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what are 5 ways to shorten received time? |
1) distraction 2) without fear 3) fair 4) Valuable 5) broken |
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distraction |
example would be magazines in a waiting room, keep person occupied |
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Without fear |
example would be going to the doctor, or fear of not being able to be served |
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Fair |
everyone has to wait, not cuts |
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valuable |
wait for something of value to the person |
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Broken |
break up time, example would be wait in waiting room at doctor then move to another room to wait. |
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Given an actual demand of 59 in March, a March Forecast of 64, and an "alpha" of 0.3, what would the forecast for April be using exponential smoothing? A) 36.9 B) 57.7 C) 60.5 D) 62.5 E) 65.5 |
D |
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Simple exponential smoothie is being used to forecast demand. The previous forecast of 66 turned out to be four units less than actual demand. The nest forecast is 66.6, implying an "alpha" equal to: A) 0.01 B) .1 C) 0.15 D) 0.2 E) 0.6 |
C |
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Jim's Bicycle Comp. has provided you with the following data on their past sales of unicycles: OCt. 1995 40 Nov. 1995 42 Dec. 1995 44 Jan. 1996 31 Predict sales for Feb. 1996, using a 3 month moving average. A) -6 B) 39 C) 39.25 D) 42 E) 52.33 |
B |
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Which of the following "alphas" would make an exponential smoothing forecast the same as a naive forecast? A) 0.01 B) 0.05 C) 0.1 D) 0.5 E) 1 |
E |
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A production facility has a design cap. of 200 units a day and an effective cap of 190 units. Which of the following are potential "determinants" of its effective cap, accounting for the gap between 200 and 190? I. The need for periodic maintenance of the equipment in the facility. II. The actual output of the facility. III. Lunch breaks and coffee breaks taken during a typical day in the facility. A) I only B) I an II C) II only D) I and III E) All of them |
D |
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The Kitti Kreme donut production facility consists of 3 identical donut production limes, each of which operated at 80% efficiency last week. If this facility produced a total of 30,000 donuts last week, what is the apparent effective capacity of 1 of kitty Kreme's donut production lines? a) 8,000 B) 10,000 C) 12,500 D) 24,000 E) 37,500 |
C |
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Costs that continue to be incurred even if no units are produced by a facility are called A) fixed costs B) variable costs C) breakeven costs D) marginal costs E) relational costs |
A |
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The ratio of a facility's actual output to the max possible output that the same facility could theoretically attain under ideal conditions is called that facility's: A) design capacity B) Effective capacity C) Theoretical Capacity D) efficiency E) utlization |
E |
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Medic clinic is considering purchasing a new blood analysis machine for $60,000. Medic Clinic can charge $25.00 for each blood sample analyzed, while the actual cost of the blood analysis would only be $5.00. The new machine has a design capacity of 6,000 blood analyses a year and an effective capacity of 5,000 blood analyses a year. How many blood analyses would have to be performed in order for Medic Clinic to break even? A) 12,000 B) 5,000 C) 3,000 D) 2,400 E) 1,000 |
C |
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Medic clinic is considering purchasing a new blood analysis machine for $60,000. Medic Clinic can charge $25.00 for each blood sample analyzed, while the actual cost of the blood analysis would only be $5.00. The new machine has a design capacity of 6,000 blood analyses a year and an effective capacity of 5,000 blood analyses a year. Suppose Medic Clinic expects to perform 4,500 analyses next year, if it buys the new machine. What would be the utilization of this machine? A) 0% B) 75% C) 83% D) 90% E) 100% |
B |
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Medic clinic is considering purchasing a new blood analysis machine for $60,000. Medic Clinic can charge $25.00 for each blood sample analyzed, while the actual cost of the blood analysis would only be $5.00. The new machine has a design capacity of 6,000 blood analyses a year and an effective capacity of 5,000 blood analyses a year. How many blood analyses would Medic Clinic have to perform each year, in order for the use of the new machine to be 80% efficient? A) 1,000 B) 3,200 C) 4,000 D) 4,800 E) 5,000 |
C |
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All trucks traveling on I-75 south of Gainesville, Florida must stop at a weigh station. This station has one set of scales, which can weigh an average of 18 trucks an hour, exponentially distributed. Trucks arrive at the weigh station at an average of 15 an hour, Poisson distributed. What is the average delay a truck suffers at the I-75 weigh station? That is, what is the average total time the truck spends waiting and being weighed? (in minutes) A) .2778 B) .3333 C) 4.1667 D) 16.6667 E) 20 |
E |
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All trucks traveling on I-75 south of Gainesville, Florida must stop at a weigh station. This station has one set of scales, which can weigh an average of 18 trucks an hour, exponentially distributed. Trucks arrive at the weigh station at an average of 15 an hour, Poisson distributed. What is the probability that there are no trucks at the I-75 weigh station? A) 0 B) .1667 C) .2778 D) .3333 E) .833 |
B |
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All trucks traveling on I-75 south of Gainesville, Florida must stop at a weigh station. This station has one set of scales, which can weigh an average of 18 trucks an hour, exponentially distributed. Trucks arrive at the weigh station at an average of 15 an hour, Poisson distributed. On average, how many trucks are waiting in line at the I-75 weigh station? A) .0556 B) .1667 C) 1 D) 4.1667 E) 5 |
D |
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Suppose you are taking a 105 minutes flight from Gainesville, FL to Atlanta, GA. This flight does not occur at mealtime, but the cabin staff still provides you with a small drink and two packs of peanuts. You eat the peanuts and study the evacuation instructions and the airline magazine you found in the pocket of the seat in front of you. Which of the following best describes the psychological waiting principle both you and the airline are employing to shorten this 105 minute waiting period? I. In-process waits are shorter than pre-process waits II. Unfair wait are longer than fair waits III. Occupied wait are shorter than unoccupied waits. A) I only B) II only C) III only D) I and II E) all |
C |