Mqm 227 Test 3

Front 1

Industrial location analysis typically attempts to

Back 1

reduce costs

Front 2

A location decision for an appliance manufacturer would tend to have a(an)

Back 2

cost focus

Front 3

A location decision for a traditional department store (Macy's) would tend to have a(n)

Back 3

revenue focus

Front 4

In location planning, environmental regulations, cost and availability of utilities, and taxes are

Back 4

regional community factors

Front 5

usually not one of the top considerations in choosing a country for a facility location

Back 5

zoning regulations

Front 6

When making a location decision at the country level, which of these would be considered

Back 6

location of markets

Front 7

Which of these factors would be considered when making a location decision at the
region/community level?

Back 7

proximity to raw material and customers

Front 8

When making a location decision at the region/community level, which of these would be
considered?

Back 8

cost and availability of utilities

Front 9

Which of these factors would be considered when making a location decision at the site level?

Back 9

zoning regulations

Front 10

Tangible costs include which of the following?

Back 10

taxes

Front 11

Intangible costs include which of the following?

Back 11

a. quality of prospective employees
b. quality of education
c. availability of public transportation

Front 12

Community attitudes, zoning restrictions, and quality of labor force are likely to be considered in
which of the following location decision methods?

Back 12

factor rating method

Front 13

Which of the following methods best considers intangible costs related to a location decision?

Back 13

factor rating analysis

Front 14

Evaluating location alternatives by comparing their composite (weighted-average) scores involves

Back 14

factor rating analysis

Front 15

An approach to location analysis that includes both qualitative and quantitative considerations is

Back 15

Factor rating

Front 16

The crossover chart for location break-even analysis shows where

Back 16

total costs are equal for alternative locations

Front 17

The center of gravity method does not take into consideration

Back 17

value of the goods shipped

Front 18

The center-of-gravity method is used primarily to determine what type of locations

Back 18

distribution center locations

Front 19

A regional bookstore chain is about to build a distribution center that is centrally located for its eight retail outlets. It will most likely employ which of the following tools of analysis?

Back 19

center of gravity model

Front 20

Production and/or shipping costs are always considered in which of the following location decision
methods?

Back 20

transportation model

Front 21

The transportation method, when applied to location analysis

Back 21

minimizes total production and transportation costs

Front 22

Which of the following are not among the eight components of revenue and volume for the service
firm?

Back 22

shipment cost of finished goods

Front 23

Which of the following are among the eight components of revenue and volume for the service
firm?

Back 23

a. uniqueness of the firm's and the competitor's locations
b. quality of the competition
c. quality of management
d. purchasing power of the customer-drawing area

Front 24

Traffic counts and purchasing power analysis of drawing area are techniques associated with

Back 24

a retail or professional service location decision

Front 25

LaQuinta Motor Inns has a competitive edge over its rivals because it

Back 25

uses regression analysis to determine which variables most influence profitability

Front 26

Traffic counts and demographic analysis of drawing areas are associated with

Back 26

service location decisions

Front 27

Which one of the following factors does not affect the volume and revenue for a service firm?

Back 27

environmental regulations

Front 28

Location analysis techniques typically employed by service organizations include

Back 28

a. factor rating method
b. center of gravity method
c. purchasing power analysis of area
d. traffic counts

Front 29

Which of the following is most likely to affect the location decision of a service firm rather than a
manufacturing firm?

Back 29

parking and access

Front 30

Which of the following is a location analysis technique typically employed by a service
organization?

Back 30

purchasing power analysis

Front 31

A jewelry store is more likely than a jewelry manufacturer to consider __________ in making a
location decision.

Back 31

parking and access

Front 32

Location analysis techniques typically employed by manufacturing organizations include

Back 32

transportation method

Front 33

Which of these assumptions is not associated with strategies for goods-producing location
decisions?

Back 33

high customer contact issues are critical

Front 34

Which of the following is most likely to affect the location strategy of a manufacturing firm?

Back 34

utility cost

Front 35

Geographic Information Systems can assist the location decision by

Back 35

combining geography with demographic analysis

Front 36

layout strategy that deals with low-volume, high-variety production is

Back 36

Process Oriented layout

Front 37

A good layout requires determining

Back 37

a. material handling requirements
b. capacity and space requirements
c. environment and aesthetics
d. cost of moving between various work areas

Front 38

The fixed-position layout would be most appropriate in which of the following cases?

Back 38

gourmet restaurant

Front 39

For which of the following operations would a fixed-position layout be most appropriate?

Back 39

refining of crude oil

Front 40

Because the fixed-position layout problem is so difficult to solve on-site, operations managers

Back 40

often complete as much of the project as possible off-site

Front 41

One factor impacting the fixed-position layout strategy is

Back 41

the movement of material to the limited storage areas around the site

Front 42

One of the major advantages of process-oriented layouts is

Back 42

flexibility in equipment and labor assignment

Front 43

The main issue in designing process-oriented layout concerns the relative positioning of _____ to minimize
cost of material handling.

Back 43

departments

Front 44

A process layout would be most appropriate in which of the following cases?

Back 44

gourmet restaurant

Front 45

The major problem addressed by the process-oriented layout strategy is

Back 45

minimizing difficulties caused by material flow varying with each product

Front 46

The most common tactic followed in process-layout planning is to arrange departments or work centers so
they

Back 46

minimize the costs of material handling

Front 47

A process-oriented layout is best suited for

Back 47

low-volume, high-variety production

Front 48

Which of the following is true for process layouts, but false for product layouts?

Back 48

flexibility in equipment and labor assignments

Front 49

A big advantage of a process-oriented layout is

Back 49

its flexibility for variety

Front 50

The typical goal used when developing a process-oriented layout strategy is to

Back 50

minimize the material handling costs

Front 51

Which of the following is true of a focused factory?

Back 51

They may be focused in ways other than by product line or layout.

Front 52

In the use of relationship charts for office layouts, the code "U" means the closeness between two
departments is

Back 52

(U)nimportant

Front 53

Which rating reflects the highest importance for two departments' closeness to each other?

Back 53

A

Front 54

According to the text book, an office layout

Back 54

groups workers, their equipment, and spaces/offices to provide for movement of information

Front 55

Which of the following constitutes a major trend influencing office layouts?

Back 55

virtual companies

Front 56

Which of the following does not support the retail layout objective of maximizing customer exposure to
products?

Back 56

maximize exposure to expensive items

Front 57

Balancing low-cost storage with low-cost material handling is important in a(n)

Back 57

warehouse layout

Front 58

Which of the following is strongly associated with "cross-docking"?

Back 58

processing items as soon as they are received into a distribution center

Front 59

The major problem addressed by the warehouse layout strategy is

Back 59

addressing trade-offs between space and material handling

Front 60

Which one of the following is not common to product-oriented layouts?

Back 60

ability to adjust to changes in demand

Front 61

Which of the following layouts generally has the best machine utilization?

Back 61

product-oriented layout

Front 62

Which type of layout is used to achieve a smooth and rapid flow of large volumes of output?

Back 62

product-oriented

Front 63

A product layout would be most appropriate in which of the following cases?

Back 63

a fast food restaurant

Front 64

The assumption of stability of demand is important for justifying which of the following layout types?

Back 64

product-oriented layout

Front 65

An adequate volume for high equipment utilization is an assumption for which of the following layout
types?

Back 65

product-oriented layout

Front 66

A product-oriented layout would be most appropriate for which one of the following businesses?

Back 66

steel-making

Front 67

The assumptions necessary for a successful product layout include all of the following except

Back 67

volatile product demand

Front 68

Which of these layouts is most suitable for processing sugar from sugar beets or sugar cane?

Back 68

product-oriented layout

Front 69

Which of the following is true regarding fabrication lines?

Back 69

Balancing their assembly line is more technological than worker oriented.

Front 70

In product-oriented layout, line balancing is usually undertaken to

Back 70

minimizing the imbalance in the work loads among workstations

Front 71

The disadvantages of product-oriented layout include

Back 71

a. there is a lack of flexibility in handling a variety of products or production rates
b. high volume is required because of the large investment needed to set up the process
c. work stoppage at any one point ties up the whole operation

Front 72

The main advantage of a product-oriented layout is typically

Back 72

low variable cost per unit

Front 73

In a product layout the process of deciding how to assign tasks to work stations is referred to as

Back 73

line balancing

Front 74

In assembly line balancing, the minimum number of workstations is

Back 74

the ratio of the sum of all task times to cycle time

Front 75

In assembly line balancing, cycle time (the ratio of production time to demand), is the

Back 75

maximum time that a product is available at each work station

Front 76

A production line is to be designed to make 500 El-More dolls per day. Each doll requires 11 activities
totaling 16 minutes of work. The factory operates 750 minutes per day. The desired cycle time for this
assembly line is

Back 76

one and one-half minutes

Front 77

A production line is to be designed for a job with 4 tasks. The task times are 2.4 minutes, 1.4 minutes, 0.9
minutes, and 1.7 minutes. The maximum cycle time is ______ and the minimum cycle time is ______ minutes.

Back 77

6.4; 2.4

Front 78

Cycle time is computed as

Back 78

daily operating time divided by the desired output

Front 79

Daily capacity of a product layout is determined by

Back 79

operating time divided by cycle time

Front 80

Four hundred and eighty minutes of production time are available per day. The demand for the product is
120 units per day. What is the cycle time?

Back 80

4 minutes

Front 81

A production line is to be designed for a product whose completion requires 21 minutes of work. The
factory works 400 minutes per day. Can an assembly line with five workstations make 100 units per day?

Back 81

no, it will fall short even with a perfectly balanced line

Front 82

Four hundred and eighty minutes of production time are available per day. The demand for the product is 60 units per day. What is the cycle time?

Back 82

8 minutes

Front 83

Four hundred and eighty minutes of production time are available per day. The demand for the product is 80
units per day. Each unit of the product requires 30 minutes of work. What is the theoretical minimum
number of workstations?

Back 83

5

Front 84

Which of the following is not a heuristic rule for assigning tasks to work stations in a product layout?

Back 84

median tasks first

Front 85

If a layout problem is solved by use of "heuristics," this means that

Back 85

a "satisfactory" solution is acceptable

Front 86

Which of the following is a common heuristic for assembly line balancing?

Back 86

ranked positional weight

Front 87

Which of the following is a function of inventory?

Back 87

a. to decouple or separate parts of the production process
b. to provide a stock of goods that will provide a selection for customers
c. to take advantage of quantity discounts
d. to hedge against inflation

Front 88

Which of the following would not generally be a motive for a firm to hold inventories?

Back 88

to minimize holding costs

Front 89

All of the following statements about ABC analysis are true except

Back 89

it states that all items require the same degree of control

Front 90

ABC analysis is based upon the principle that

Back 90

there are usually a few critical items, and many items which are less critical

Front 91

Which of the following statements about ABC analysis is false?

Back 91

ABC analysis is based on the presumption that all items must be tightly controlled to produce
important cost savings.

Front 92

ABC analysis divides on-hand inventory into three classes, generally based upon

Back 92

annual dollar volume

Front 93

Cycle counting

Back 93

provides a measure of inventory accuracy

Front 94

Among the advantages of cycle counting is that it

Back 94

allows more rapid identification of errors and consequent remedial action than is possible with annual
physical inventory

Front 95

The two most basic inventory questions answered by the typical inventory model are

Back 95

timing and quantity of orders

Front 96

A certain type of computer costs $1,000, and the annual holding cost is 25%. Annual demand is 10,000
units, and the order cost is $150 per order. What is the approximate economic order quantity?

Back 96

110

Front 97

Most inventory models attempt to minimize

Back 97

total inventory based costs

Front 98

In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, the
EOQ will

Back 98

increase by about 41%

Front 99

In the basic EOQ model, if D = 6,000 per year, S = $100, H = $5 per unit per month, the Economic Order
Quantity is approximately

Back 99

142

Front 100

Which of the following statements about the basic EOQ model is true?

Back 100

a. If the ordering cost were to double, the EOQ would rise.
b. If annual demand were to double, the EOQ would increase.
c. If the carrying cost were to increase, the EOQ would fall.

Front 101

Which of the following statements about the basic EOQ model is false?

Back 101

If annual demand were to double, the EOQ would also double.

Front 102

A product whose EOQ is 40 experiences a decrease in ordering cost from $90 per order to $10. The revised
EOQ is

Back 102

one-third as large

Front 103

A product whose EOQ is 400 experiences a 50% increase in demand. The new EOQ is

Back 103

increased by less than 50%

Front 104

For a certain item, the cost-minimizing order quantity obtained with the basic EOQ model was 200 units
and the total annual inventory cost was $600. The inventory carrying cost per unit per year for this item is

Back 104

$3.00

Front 105

A product has demand of 4,000 units per year. Ordering cost is $20 and holding cost is $4 per unit per year.
The EOQ model is appropriate. The cost-minimizing solution for this product will cost _____ per year in total
annual inventory costs.

Back 105

$800

Front 106

A product has demand of 4,000 units per year. Ordering cost is $20 and holding cost is $4 per unit per year.
The cost-minimizing solution for this product is to order

Back 106

200 units per order

Front 107

The EOQ model with quantity discounts attempts to determine

Back 107

how many units should be ordered

Front 108

An inventory decision rule states "when the inventory level goes down to 14 gearboxes, 100 gearboxes will
be ordered." Which of the following statements is true?

Back 108

14 is the reorder point, and 100 is the order quantity.

Front 109

Which of the following statements regarding the Production Order Quantity model is true?

Back 109

It relaxes the assumption that all the order quantity is received at one time.

Front 110

The Production Order Quantity model

Back 110

is appropriate when units are sold/used as they are produced

Front 111

When quantity discounts are allowed, the cost-minimizing order quantity

Back 111

minimizes the sum of holding, ordering, and product costs

Front 112

A specific product has expected demand during lead time of 100 units, with a standard deviation of 25 units. What safety stock (approximately) provides a 95% service level?

Back 112

41

Front 113

Demand for dishwasher water pumps is 8 per day. The standard deviation of demand is 3 per day, and the order lead time is four days. The service level is 95%. What should the reorder point be?

Back 113

more than 35

Front 114

The purpose of safety stock is to

Back 114

control the likelihood of a stockout due to the variability of demand during lead time

Front 115

The proper quantity of safety stock is typically determined by

Back 115

setting the level of safety stock so that a given stockout risk is not exceeded

Front 116

If demand is not uniform and constant, then stockout risks can be controlled by

Back 116

adding safety stock

Front 117

A disadvantage of the fixed-period inventory system is that

Back 117

since there is no count of inventory during the review period, a stockout is possible

Front 118

The typical time horizon for aggregate planning is

Back 118

3 to 18 months

Front 119

Aggregate planning is capacity planning for

Back 119

the intermediate range

Front 120

Which of the following is the term used for medium range capacity planning with a time horizon of three to
eighteen months?

Back 120

aggregate planning

Front 121

Planning tasks associated with job scheduling, machine loading, and dispatching typically fall under

Back 121

short-range plans

Front 122

The planning tasks associated with staffing, production, inventory, and sub-contracting levels typically fall
under

Back 122

intermediate-range plans

Front 123

Which of the following statements about aggregate planning is true?

Back 123

Aggregate planning uses the adjustable part of capacity to meet production requirements.

Front 124

Dependence on an external source of supply is found in which of the following aggregate planning
strategies?

Back 124

subcontracting

Front 125

An option for altering the availability of capacity is

Back 125

inventory levels

Front 126

Which of the following aggregate planning strategies might direct your client to a competitor?

Back 126

subcontracting

Front 127

Which of the following aggregate planning strategies is a "capacity option?"

Back 127

changing inventory levels

Front 128

Which of these aggregate planning strategies adjusts capacity to match demand?

Back 128

using part-time workers

Front 129

Which of the following aggregate planning strategies is most likely to lower employee morale?

Back 129

varying workforce size by hiring or layoffs

Front 130

Which of the following is not associated with manipulation of product or service demand?

Back 130

subcontracting

Front 131

Which of the following attempts to manipulate product or service demand?

Back 131

price cuts

Front 132

Which of the following aggregate planning strategies is a "demand option?"

Back 132

changing price

Front 133

In aggregate planning, which one of the following is not a basic option for altering demand?

Back 133

subcontracting

Front 134

Which of the following statements about aggregate planning is true?

Back 134

a. In spite of the research into mathematical models, aggregate production planners continue to use trial
and error methods when developing their plans.
b. In aggregate planning, backorders are a means of manipulating demand while part-time workers are a
way of manipulating product or service supply.
c. A chase strategy allows lower inventories when compared to level strategies.

Front 135

In level scheduling, what is kept uniform from month to month?

Back 135

production/workforce levels

Front 136

Which of the following is not consistent with a level strategy?

Back 136

a. varying the use of subcontracting
b. variable work force levels
c. little or no use of inventory to meet demand requirements
d. varying production levels and/or work force to meet demand requirements

Front 137

Which of the following is consistent with a chase strategy?

Back 137

a. vary production levels to meet demand requirements
b. vary work force to meet demand requirements
c. vary production levels and workforce to meet demand requirements
d. little or no use of inventory to meet demand requirements

Front 138

Which of the following is not an advantage of level scheduling?

Back 138

matching production exactly with sales

Front 139

Which of the following actions is consistent with use of level strategy?

Back 139

use of inventory to meet demand requirements

Front 140

"An optimal plan for minimizing the cost of allocating capacity to meet demand over several planning
periods" best describes

Back 140

the transportation method

Front 141

Which of the following aggregate planning models is based primarily upon a manager's past experience?

Back 141

the management coefficients model

Front 142

Which of the following aggregate planning methods does not work if hiring and layoffs are possible?

Back 142

the transportation method

Front 143

Which of the following uses regression to incorporate historical managerial performance into aggregate
planning?

Back 143

management coefficients model

Front 144

Yield management is most likely to be used in which one of the following industries?

Back 144

airlines

Front 145

"Yield management" is best described as

Back 145

capacity allocation to different classes of resources in order to maximize profits

Front 146

Which of the following is not an ingredient for controlling labor cost in services?

Back 146

contract overseas labor for lower wage scale

Front 147

Aggregate planning for service firms with high-volume tangible output is directed toward

Back 147

smoothing the production rate

Front 148

Yield management is most likely to be used in which one of the following industries?

Back 148

airlines

Front 149

"Yield management" is best described as

Back 149

capacity allocation to different classes of customers in order to maximize profits