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110 Cards in this Set

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Chapter 5:
When a process fails to satisfy a customer:
a.it is quite often the customer’s fault.
b.it is considered a defect
c.it is time to reengineer the process.
d.it is usually half the customer’s fault and half the company’s fault.
Answer: b
Reference: Costs of Quality
Difficulty: Easy
Keywords: process defect
Chapter 5:
Consumers consider five aspects when defining quality. Which one of the following is least likely to be one of these aspects?
a.Value
b.Fitness for use
c.Psychological impressions
d.Individual development
Answer: d
Reference: Costs of Quality
Difficulty: Moderate
Keywords: quality dimensions
Chapter 5:
Which of the following would be considered a prevention cost of quality?
a.Inspecting incoming raw materials
b.Training workers to perform their jobs
c.Issuing a recall of defective product before another customer is injured
d.Performing a 24 hour burn-in on every item produced to make sure it works before it is shipped
Answer: b
Reference: Costs of Quality
Difficulty: Easy
Keywords: prevention cost
Chapter 5:
Which of the following would be considered an appraisal cost of quality?
a.Training workers to perform their jobs
b.Purchasing better tools for workers to perform their jobs
c.Repairing an item under the warranty
d.Running a functional test on each item before it is boxed for shipment
Answer: d
Reference: Costs of Quality
Difficulty: Easy
Keywords: appraisal cost
Chapter 5:
5. Improving quality seems to be a strategic weapon in gaining market share. However, improving quality entails allocation of resources and effort. As greater effort is expended to stop defects before they occur, which one of the following costs increases?
a.Prevention costs
b.Appraisal costs
c.Internal failure costs
d.External failure costs
Answer: a
Reference: Costs of Quality
Difficulty: Easy
Keywords: prevention cost
Chapter 5:
Which one of the following is a consequence of internal failures?
a.Increased customer service
b.Increased inventory costs
c.Increased productivity
d.Decreased lead time
Answer: b
Reference: Costs of Quality
Difficulty: Moderate
Keywords: internal failure
Chapter 5:
Increasing the quality level by better products and processes may:
a.allow a company to raise the price of the product.
b.move a company closer to a competitive priority of price.
c.reduce prevention costs.
d.ensure that the trade-off between prevention costs and other costs of poor quality is worthwhile.
Answer: a
Reference: Costs of Quality
Difficulty: Moderate
Keywords: quality level, price
Chapter 5:
Which one of the following statements is TRUE?
a.Fitness for use is how well a product or service serves its intended market at a price customers are willing to pay.
b.The quality of service is generally easier to measure than is the quality of manufactured products.
c.High conformance to quality in manufacturing has no effect on profit margins.
d.Rework tends to increase lead time and inventory levels maintained in a manufacturing company
Answer: d
Reference: Costs of Quality
Difficulty: Hard
Keywords: rework, rework cost, lead time
Chapter 5:
Which one of the following is considered to be an appraisal cost?
a.Cost of quality audits
b.Cost of supplier programs
c.Cost of rework
d.Cost of process design
Answer: a
Reference: Costs of Quality
Difficulty: Moderate
Keywords: appraisal cost, audit costs
Chapter 5:
Which one of the following statements is TRUE?
a.Appraisal costs decrease as quality level decreases.
b.Appraisal costs increase as the variation of output increases.
c.Appraisal costs increase as the variation of output decreases.
d.Appraisal costs increase as quality level increases.
Answer: b
Reference: Costs of Quality
Difficulty: Moderate
Keywords: appraisal cost, quality costs
Chapter 5:
A cost that is incurred if some aspect of a service must be performed again is called a(n):
a.yield loss.
b.prevention cost.
c.appraisal cost.
d.rework cost.
Answer: d
Reference: Costs of Quality
Difficulty: Moderate
Keywords: rework cost
Chapter 5:
When errors have been made while producing a product such that the item must be discarded, the resultant cost is called a(n):
a.warranty.
b.scrap cost.
c.rework cost.
d.external failure cost
Answer: b
Reference: Costs of Quality
Difficulty: Moderate
Keywords: yield loss, scrap cost
Chapter 5:
Which one of the following is part of prevention costs?
a.The costs of quality audits
b.The costs resulting from scrap
c.The costs of improving process design and product design
d.The costs of lawsuits from injury from use of the product
Answer: c
Reference: Costs of Quality
Difficulty: Hard
Keywords: prevention cost
Chapter 5:
“Quality at the source” implies:
a.less expensive raw materials.
b.lower scrap.
c.higher rework costs.
d.more final-test inspectors.
Answer: b
Reference: Total Quality Management
Difficulty: Hard
Keywords: quality at the source, TQM
Chapter 5:
Which one of the following statements is a key feature of both TQM and Six Sigma?
a.Quality is primarily the responsibility of all employees in the organization.
b.Quality is primarily the responsibility of the quality control department.
c.Quality is primarily the responsibility of the production department.
d.Quality is primarily the responsibility of top management.
Answer: a
Reference: Total Quality Management, Six Sigma
Difficulty: Moderate
Keywords: TQM, total quality management, Six Sigma
Chapter 5:
A firm’s internal program in employee involvement includes which of the following considerations?
a.Defining who is the customer
b.Supplier management
c.Product availability
d.Psychological impressions
Answer: a
Reference: Total Quality Management
Difficulty: Easy
Keywords: TQM, total quality management, defining the customer
Chapter 5:
Which one of the following statements about total quality management (TQM) is TRUE?
a.Total quality management reduces the external failure costs but not the internal failure costs.
b.Total quality management reduces the internal failure costs but not the external failure costs.
c.Total quality management means inspectors are responsible for finding out who makes the defects.
d.In total quality management, workers have the authority to stop a production line if they see quality problems.
Answer: d
Reference: Total Quality Management
Difficulty: Moderate
Keywords: TQM, total quality management, authority to stop line
Chapter 5:
As an operations manager, which definition of quality do you have the most control over?
a.Conformance to specifications
b.Support
c.Psychological impressions
d.Value
Answer: a
Reference: Total Quality Management
Difficulty: Moderate
Keywords: quality conformance
Chapter 5:
The implementation of a total quality management program or a Six Sigma program will most likely result in:
a.an increase in product lead times.
b.a decrease in employee involvement.
c.an increase in communication between workers.
d.an increase in work-in-process inventory.
Answer: c
Reference: Total Quality Management, Six Sigma
Difficulty: Moderate
Keywords: TQM, total quality management, Six Sigma
Chapter 5:
One of the main challenges in developing the proper culture for TQM is to:
a.define customer for each employee.
b.suspend reward systems based on quantity.
c.institute an equitable employee recognition program.
d.get buy-in from the customer.
Answer: a
Reference: Total Quality Management
Difficulty: Easy
Keywords: TQM culture, total quality management, defining the customer
Chapter 5:
A firm that has embraced the notion of quality at the source is more likely to have:
a.an inspector at each workstation working alongside each employee.
b.inspectors at each of their suppliers performing 100% inspection on shipments bound for them.
c.multiple inspectors at the end of the line to make sure no defects are passed along to the customer.
d.no inspectors
Answer: d
Reference: Total Quality Management
Difficulty: Moderate
Keywords: TQM, quality at the source, inspectors
Chapter 5:
Continuous improvement is a philosophy that:
a.uses problem-solving techniques within work teams.
b.ensures there are plenty of quality inspectors to find areas for improvement.
c.waits until a big problem occurs, then systematically solves it.
d.encourages the hiring of statistical process control specialists to reduce the need for current employees to learn statistical methods.
Answer: a
Reference: Total Quality Management
Difficulty: Moderate
Keywords: continuous improvement, TQM
Chapter 5:
What is one reason that Six Sigma is more difficult to apply to service processes?
a.There is no manual that suggests how Six Sigma can be applied to services.
b.The work product is more difficult to see.
c.There is no way to measure process capability of a service product.
d.The National Six Sigma Society cautions against using it for services.
Answer: b
Reference: Six Sigma
Difficulty: Moderate
Keywords: Six Sigma, service processes
Chapter 5:
23. Which step of the Six Sigma DMAIC procedure uses flowcharts and process charts to identify gaps between the characteristics of a process’s output important to the customer and the process’s capabilities?
a.Define
b.Measure
c.Analyze
d.Improve
e.Control
Answer: a
Reference: Six Sigma
Difficulty: Moderate
Keywords: Six Sigma, improvement model, DMAIC
Chapter 5:
During which step of the Six Sigma DMAIC procedure are current processes modified or redesigned to meet new performance objectives?
a.Define
b.Measure
c.Analyze
d.Improve
e.Control
Answer: d
Reference: Six Sigma
Difficulty: Easy
Keywords: Six Sigma, improvement model, DMAIC
Chapter 5:
Which step of the Six Sigma DMAIC procedure involves identifying data sources and preparing a data collection plan?
a.Define
b.Measure
c.Analyze
d.Improve
e.Control
Answer: b
Reference: Six Sigma
Difficulty: Easy
Keywords: Six Sigma, improvement model, DMAIC
Chapter 5:
Six sigma teacher can attain different level titles, based on their experience and level of achievement. What is the highest level a Six Sigma teacher can reach?
a.Black Belt
b.Green Belt
c.Master Black Belt
d.Master Green Belt
Answer: c
Reference: Six Sigma
Difficulty: Easy
Keywords: Six Sigma, Black Belt, Green Belt
Chapter 5:
Which of the following would be a “common” cause of variation?
a.Random sources
b.A machine in need of repair
c.An untrained worker
d.A defective raw material
Answer: a
Reference: Statistical Process Control
Difficulty: Easy
Keywords: common and random causes of variation
Chapter 5:
Which one of the following statements is TRUE?
a.No two products are exactly alike because the processes that produce them contain many sources of variation, even if the process is a machine.
b.With due diligence, variation in a process can be completely eliminated.
c.SPC and TQM are two competing techniques for quality control.
d.Common causes of variation are those factors that can be identified as commonly occurring at a particular process.
Answer: a
Reference: Statistical Process Control
Difficulty: Moderate
Keywords: common causes of variation
Chapter 5:
In Statistical Process Control,___ are used to detect defects and determine if the process has deviated from design specifications.
a.Flowcharts
b.Cause-and-Effect Diagrams
c.Process Capability Charts
d.Control Charts
Answer: d
Reference: Statistical Process Control
Difficulty: Easy
Keywords: Statistical Process Control, SPC
Chapter 5:
Which of the following can be used to eliminate “common” causes of variation?
a.Statistical process control
b.Acceptance sampling
c.Traditional statistical techniques
d.They cannot be eliminated.
Answer: d
Reference: Statistical Process Control
Difficulty: Easy
Keywords: Statistical Process Control, SPC
Chapter 5:
When should complete inspection be used?
a.When inspection tests are destructive
b.When inspection tasks are monotonous
c.When the cost of product failure is high relative to the inspection costs
d.When quality is a competitive priority
Answer: c
Reference: Statistical Process Control
Difficulty: Moderate
Keywords: complete inspection
Chapter 5:
In SPC, the distribution of sample means:
a.can be approximated by the normal distribution.
b.will have greater variability than the process distribution.
c.will always have a mean greater than the process distribution because of the sample size.
d.cannot be used for control charts because the variability is understated.
Answer: a
Reference: Statistical Process Control
Difficulty: Moderate
Keywords: SPC, distribution, sample mean
Chapter 5:
Regarding control charts, a type I error refers to concluding that the process is:
a.in control when it is not in control.
b.incapable when it is capable.
c.out of control when it is in control.
d.capable when it is not capable.
Answer: c
Reference: Statistical Process Control
Difficulty: Moderate
Keywords: type I errors, SPC, process control
Chapter 5:
An example of a type I error would be:
a.throwing away a perfectly good banana.
b.counting a student’s multiple choice response correct when it is actually incorrect.
c.releasing a guilty defendant.
d.counting a student’s multiple choice response correct when it is actually correct.
Answer: a
Reference: Statistical Process Control
Difficulty: Moderate
Keywords: type I and type II errors, process control
Chapter 5:
An example of a type II error would be:
a.counting a student’s True/False response incorrect when it is actually correct.
b.convicting an innocent defendant.
c.eating food that you were unaware was spoiled.
d.counting a student’s True/False response incorrect when it is actually incorrect.
Answer: c
Reference: Statistical Process Control
Difficulty: Moderate
Keywords: type I and type II errors, process control
Chapter 5:
Regarding control charts, changing from two-sigma limits to three-sigma limits:
a.increases the probability of concluding nothing has changed, when in fact it has.
b.increases the probability of searching for a cause when none exists.
c.decreases the probability that the process average will change.
d.decreases the probability that defects will be generated by the process.
Answer: a
Reference: Statistical Process Control
Difficulty: Moderate
Keywords: SPC, sigma limits
Chapter 5:
The UCL and LCL for an 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, 24, and 16. What should you do?
a.Nothing; the process is in control.
b.Explore the assignable causes because the second, fourth, and fifth samples are above the mean.
c.Explore the assignable causes because there is a run.
d.Explore the assignable causes because there is a trend.
Answer: a
Reference: Statistical Process Control Methods
Difficulty: Moderate
Keywords: SPC, process control, assignable causes
Chapter 5:
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, 0.45, 0.48, 0.45, and 0.42. What should you do?
a.Nothing; the process is behaving as expected.
b.Explore the assignable causes because three observations are above the central line.
c.Explore assignable causes because there is a run.
d.Increase the sample size to get a better measure.
Answer: c
Reference: Statistical Process Control Methods
Difficulty: Moderate
Keywords: p-chart, SPC, process control, assignable causes
Chapter 5:
A company is interested in monitoring the variability in the weight of the fertilizer bags it produces. An appropriate control chart would be:
a.an chart.
b.a p-chart.
c.a c-chart.
d.an R-chart.
Answer: d
Reference: Statistical Process Control Methods
Difficulty: Moderate
Keywords: SPC, process control, variability
Chapter 5:
A company is interested in monitoring the average time it takes to serve its customers. An appropriate control chart would be:
a.an chart.
b.a p-chart.
c.a c-chart.
d.an R-chart.
Answer: a
Reference: Statistical Process Control Methods
Difficulty: Moderate
Keywords: SPC, control chart, mean, central tendency, center line
Chapter 5:
A company is interested in monitoring the number of scratches on Plexiglass panels. The appropriate control chart to use would be:
a.an chart.
b.a p-chart.
c.a c-chart.
d.an R-chart.
Answer: c
Reference: Statistical Process Control Methods
Difficulty: Hard
Keywords: process control, SPC, defects
Chapter 5:
Five samples of size 4 were taken from a process. A range chart was developed that had LCLR = 0 and UCLR = 2.50. Similarly, an average chart was developed with the average range from the five samples, with and . The ranges for each of the five samples were 1.75, 2.42, 2.75, 2.04, and 2.80, respectively. The values of the sample average for each sample were 19.5, 22.3, 17.4, 20.1, and 18.9, respectively. What can you tell management from this analysis?
a.The process variability is out of control, and we cannot make a statement about the process average.
b.The process variability is out of control, but the process average is in control.
c.The process variability and the process average are out of control.
d.We cannot tell if the process variability or the process average is out of control.
Answer: a
Reference: Statistical Process Control Methods
Difficulty: Moderate
Keywords: SPC, process control, process variability, process average
Chapter 5:
Historically, the average diameter of the holes drilled has been 0.25 cm and the average range has been 0.1 cm. Determine the central line and upper and lower control limits for an and an R-chart, assuming samples of size 8 will be taken. Use Table 5.1. For the R-chart, what is the value of the UCLR?
a.Less than or equal to 0.1000
b.Greater than 0.1000 but less than or equal to 0.1510
c.Greater than 0.1510 but less than or equal to 0.2020
d.Greater than 0.2020
Answer: c
Reference: Statistical Process Control Methods
Difficulty: Moderate
Keywords: SPC, upper control limit, R-chart
Chapter 5:
Historically, the average diameter of the holes drilled has been 0.25 cm and the average range has been 0.1 cm. Determine the central line and upper and lower control limits for an and an R-chart, assuming samples of size 8 will be taken. Use Table 5.1. For the R-chart, what is the value of the LCLR?
a.Less than or equal to 0.010
b.Greater than 0.010 but less than or equal to 0.020
c.Greater than 0.020 but less than or equal to 0.030
d.Greater than 0.030
Answer: b
Reference: Statistical Process Control Methods
Difficulty: Moderate
Keywords: SPC, lower control limit, R-chart
Chapter 5:
Historically, the average diameter of the holes drilled has been 0.25 cm and the average range has been 0.1 cm. Determine the central line and upper and lower control limits for an and an R-chart, assuming samples of size 8 will be taken. Use Table 5.1. For the - chart, what is the value of the ?
a.Less than or equal to 0.10
b.Greater than 0.10 but less than or equal to 0.19
c.Greater than 0.19 but less than or equal to 0.29
d.Greater than 0.29
Answer: c
Reference: Statistical Process Control Methods
Difficulty: Moderate
Keywords: SPC, lower control limit, x-bar chart
Chapter 5:
Historically, the average time to service a customer complaint has been 3 days and the standard deviation has been 0.50 day. Management would like to specify the control limits for an chart with a sample size of 10- and 3- sigma limits. The LCL for the chart would be:
a.less than 2.40.
b.greater than 2.40 but less than or equal to 2.45.
c.greater than 2.45 but less than or equal to 2.50.
d.greater than 2.50.
Answer: d
Reference: Statistical Process Control Methods
Difficulty: Moderate
Keywords: SPC, lower control limit, x-bar chart
Chapter 5:
Historically, the average time to service a customer complaint has been 3 days and the standard deviation has been 0.50 day. Management would like to specify the control limits for an chart with a sample size of 10 and 3- sigma limits. The UCL for the chart would be:
a.less than or equal to 3.30.
b.greater than 3.30 but less than or equal to 3.40.
c.greater than 3.40 but less than or equal to 3.50.
d.greater than 3.50.
Answer: c
Reference: Statistical Process Control Methods
Difficulty: Moderate
Keywords: SPC, control limit, x-bar chart
Chapter 5:
The consultant suspiciously eyed the c-chart that Chickenverks used to monitor the number of broken eggs in each 100 egg carton. “You know you really should be using a p-chart,” the consultant commented with an air of superiority. “What’s the difference between a p-chart and a c-chart in this application?” the long time Chickenverks employee asked with an obvious edge to his voice. “Well,” the consultant replied, “the difference is:
a.the width of the three sigma limits for the c-chart is 100 times greater than those of the p-chart.”
b.the three-sigma p-chart will catch problems earlier than the three sigma c-chart.”
c.the three sigma c-chart will catch problems earlier than the three sigma p-chart.”
d.well, OK, you got me. The charts will look and behave the same for all practical purposes.”
Answer: c
Reference: Statistical Process Control Methods
Difficulty: Moderate
Keywords: SPC, control limit, x-bar chart
Chapter 5:
Historically, the average proportion of defective bars has been 0.015. Samples will be of 100 bars each. Construct a p-chart using . Suppose a sample had 0.07 defectives. What would you do?
a.Nothing; it is just random variation.
b.Look for assignable causes.
c.Change z to 2 and take another sample.
d.Change z to 4 and continue sampling.
Answer: b
Reference: Statistical Process Control Methods
Difficulty: Moderate
Keywords: SPC, control limit, p-chart, assignable causes
Chapter 5:
A hotel tracks the number of complaints per month. When the process is in control, there is an average of 35 complaints per month. Assume that a 2-sigma control limit is used. What is the lower control limit?
a.Less than or equal to 15
b.More than 15 but less than or equal to 20
c.More than 20 but less than or equal to 25
d.More than 25
Answer: c
Reference: Statistical Process Control Methods
Difficulty: Moderate
Keywords: SPC, control limit, attribute
Chapter 5:
hotel tracks the number of complaints per month. When the process is in control, there is an average of 35 complaints per month. Assume that a 2-sigma control limit is used. What is the upper control limit?
a.Less than or equal to 35
b.More than 35 but less than or equal to 45
c.More than 45 but less than or equal to 55
d.More than 55
Answer: c
Reference: Statistical Process Control Methods
Difficulty: Moderate
Keywords: SPC, control limit, attribute
Chapter 5:
A hotel tracks the number of complaints per month. When the process is in control, there is an average of 35 complaints per month. Assume that a 2-sigma control limit is used. The next four months have 33, 27, 29, and 43 complaints. What should management do?
a.Look for assignable causes because the process is in control.
b.Look for assignable causes because the process is out of control.
c.Look for common causes because the process is out of control.
d.Do nothing; the process is in control.
Answer: d
Reference: Statistical Process Control Methods
Difficulty: Moderate
Keywords: SPC, control limit, attribute
Chapter 5:
Process capability can be addressed when:
a.assignable causes are present.
b.a process is in statistical control.
c.a process is in statistical control but assignable causes are present.
d.the nominal value equals the tolerance regardless of assignable causes.
Answer: b
Reference: Process Capability
Difficulty: Moderate
Keywords: process capability, process control
Chapter 5:
Which of the following statements is TRUE?
a.A process can be out of statistical control but still exhibit process capability.
b.Process capability refers to the ability to meet a product’s design specifications.
c.A process in statistical control necessarily exhibits process capability.
d.Process capability can be determined for manufactured products only, not for services.
Answer: b
Reference: Process Capability
Difficulty: Moderate
Keywords: process capability, design specification
Chapter 5:
A metal-cutting operation has a target value of 20 and consistently averages 19.8 with a standard deviation of 0.5. The design engineers have established an upper specification limit of 22 and a lower specification limit of 18. Which statement concerning this process is TRUE?
a.The process capability ratio is 1.46.
b.The process capability index is 1.33.
c.The process is in control.
d.None of these is true.
Answer: d
Reference: Process Capability
Difficulty: Moderate
Keywords: process capability ratio, process capability index
Chapter 5:
A metal-cutting operation has a target value of 20 and consistently averages 19.8 with a standard deviation of 0.5. The design engineers have established an upper specification limit of 22 and a lower specification limit of 18. What is the process capability index?
a.1.20
b.1.33
c.1.46
d.1.66
Answer: a
Reference: Process Capability
Difficulty: Moderate
Keywords: process capability index
Chapter 5:
The upper and lower control limits for a component are 0.150 cm. and 0.120 cm., with a process target of .135 cm. The process standard deviation is 0.004 cm. and the process average is 0.138 cm. What is the process capability index?
a.1.00
b.1.25
c.1.50
d.1.75
Answer: a
Reference: Process Capability
Difficulty: Moderate
Keywords: process capability index
Chapter 5:
Service time is targeted for 15 minutes with an upper and lower specification of 16 and 14 min., respectively. The process standard deviation is 0.2 min. and the process average is 14.8 min. What is the process capability ratio?
a.1.33
b.1.50
c.1.66
d.2.00
Answer: c
Reference: Process Capability
Difficulty: Moderate
Keywords: process, capability ratio
Chapter 5:
A metal-cutting operation has a target value of 20 and consistently averages 19.8 with a standard deviation of 0.5. The design engineers have established an upper specification limit of 22 and a lower specification limit of 18. What is the process capability ratio?
a.1.20
b.1.33
c.1.46
d.1.66
Answer: b
Reference: Process Capability
Difficulty: Moderate
Keywords: process capability index
Chapter 5:
Which one of the following statements is TRUE?
a.The Malcolm Baldrige National Quality Award and ISO 9000:2000 are essentially the same things, except that ISO 9000:2000 is a quality award for European companies.
b.The Malcolm Baldrige National Quality Award is only for manufacturing companies.
c.To achieve ISO 9000:2000 standards, a company must have excellent quality.
d.ISO 9000:2000 is not an award for good quality.
Answer: d
Reference: International Quality Documentation Standards
Difficulty: Moderate
Keywords: ISO 9000:2000, award
Chapter 5:
The ISO 9000:2000 standard:
a.emphasizes corporate leadership as a means of determining who receives the award.
b.has the greatest number of points awarded for business results.
c.is awarded by the U.S. government each year.
d.addresses quality system documentation.
Answer: d
Reference: International Quality Documentation Standards
Difficulty: Moderate
Keywords: ISO 9000:2000, standards, documentation
Chapter 5:
The international standard that is applied to determine a company’s “environmental friendliness” is:
a.ISO 9000:2000.
b.ISO 14000:2004.
c.ISO 19000:2008.
d.ISO 24000:2009.
Answer: b
Reference: International Quality Documentation Standards
Difficulty: Moderate
Keywords: ISO 14000:2004, environment
Chapter 5:
The Malcolm Baldrige National Quality Award:
a.involves a rigorous review process that often helps the companies define what quality means to them, regardless of the outcome.
b.focuses on large manufacturing companies because of the impact they have on the economy.
c.is a set of standards governing the requirements for documentation of a quality program.
d.was devised by the International Organization for Standardization for companies doing business in Europe.
Answer: a
Reference: Malcolm Baldrige National Quality Award
Difficulty: Moderate
Keywords: MBNQA, Baldrige
Chapter 9:
Which one of the following is TRUE for supply chain management?
a.Supply chain applies to both manufacturing and service organizations.
b.Supply chain applies only to manufacturing because it deals with flow of materials.
c.Supply chain is about suppliers and does not include distributors or customers.
d.Supply chain includes any operation that deals with materials.
Answer: a
Reference: Supply Chain Design Across the Organization
Difficulty: Easy
Keywords: supply chain, service, manufacturing
Chapter 9:
Which of the following generates pressure to decrease inventories?
a.inventory shrinkage costs
b.backorders and stockouts
c.transportation costs
d.quantity discounts
Answer: a
Reference: Inventory and Supply Chains
Difficulty: Easy
Keywords: pressures for small/ large inventories
Chapter 9:
Which of the following DOES NOT generate pressure to increase inventories?
a.transportation costs
b.backorders and stockouts
c.inventory shrinkage costs
d.quantity discounts
Answer: a
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: pressures for small / large inventories
Chapter 9:
Inventories needed for the production of services and goods (inputs to a firm’s transformation processes) are called:
a.quarantined materials
b.work-in-process
c.raw materials
d.finished goods
Answer: c
Reference: Inventory and Supply Chains
Difficulty: Easy
Keywords: types of inventories
Chapter 9:
Items, such as components or assemblies, needed to manufacture a final product are called:
a.quarantined materials
b.work-in-process
c.raw materials
d.finished goods
Answer: b
Reference: Inventory and Supply Chains
Difficulty: Easy
Keywords: types of inventories
Chapter 9:
Items sold to a firm’s customers are called:
a.quarantined materials
b.work-in-process
c.raw materials
d.finished goods
Answer: d
Reference: Inventory and Supply Chains
Difficulty: Easy
Keywords: types of inventories
Chapter 9:
Shipments of Product A from a distribution center to a retailer are made in lots of 350. The retailer’s average demand for A is 75 units per week. Lead time from distributor to retailer is 3 weeks. The retailer pays for the shipments when they leave the distributor. The distributor has agreed to reduce the lead time to 2 weeks if the retailer will purchase quantities of 400 per shipment instead of 350.
With the change in purchased quantities, the average cycle inventory will:
a.Decrease by 75 units.
b.Increase by 50 units.
c.Decrease by 25 units.
d.Increase by 25 units.
Answer: d
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: types of inventories, cycle inventory, pipeline inventory
Shipments of Product A from a distribution center to a retailer are made in lots of 350. The retailer’s average demand for A is 75 units per week. Lead time from distributor to retailer is 3 weeks. The retailer pays for the shipments when they leave the distributor. The distributor has agreed to reduce the lead time to 2 weeks if the retailer will purchase quantities of 400 per shipment instead of 350.
With the change in lead times, the pipeline inventory will:
a.Decrease by 75 units.
b.Increase by 50 units.
c.Decrease by 25 units.
d.Increase by 25 units.
Answer: a
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: types of inventories, cycle inventory, pipeline inventory
Shipments of Product A from a distribution center to a retailer are made in lots of 350. The retailer’s average demand for A is 75 units per week. Lead time from distributor to retailer is 3 weeks. The retailer pays for the shipments when they leave the distributor. The distributor has agreed to reduce the lead time to 2 weeks if the retailer will purchase quantities of 400 per shipment instead of 350.
The net impact on the retailer will be:
a.No net change in average cycle and pipeline inventories.
b.A net average increase in cycle and pipeline inventories of 50 units.
c.A net average decrease in cycle and pipeline inventories of 75 units.
d.A net average decrease in cycle and pipeline inventories of 50 units.
Answer: d
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: types of inventories, cycle inventory, pipeline inventory
Chapter 9:
Which of the following is not a lever for reducing cycle inventories?
a.place purchased item orders at fixed intervals
b.reduce lot sizes for items moving in the supply chain
c.streamline methods for placing orders and making machine set ups
d.increase repeatability to eliminate the need for changeovers
Answer: a
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: inventory, types of inventories, inventory reduction, tactics
Chapter 9:
Which of the following does not increase repeatability?
a.parts standardization
b.customization
c.group technology
d.flexible automation
Answer: b
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: inventory, types of inventories, inventory reduction, tactics
Chapter 9:
One of the secondary levers for reducing pipeline inventory is to:
a.offer seasonal pricing plans.
b.increase capacity cushions.
c.accept only large orders.
d.select more responsive suppliers.
Answer: d
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: pipeline inventory, lever
Chapter 9:
Which one of the following statements on inventory placement of finished goods is best?
a.Forward placement might help reduce transportation cost.
b.Forward placement is consistent with a competitive priority that calls for customization.
c.Inventory pooling should be avoided when demand in various regions fluctuates month to month.
d.Backward placement is consistent with a competitive priority that calls for fast delivery times.
Answer: a
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: inventory, forward placement
Chapter 9:
Which location shift would qualify as forward placement?
a.From the manufacturer to a distribution center
b.From the retailer to the wholesaler
c.From the wholesaler to the manufacturer
d.From the retailer to the manufacturer
Answer: a
Reference: Inventory and Supply Chains
Difficulty: Moderate
Keywords: inventory, forward placement
Chapter 9:
Padco averages $15 million worth of inventory in all of its worldwide locations. They operate 51 weeks a year and each week average $3 million in sales (at cost). Their inventory turnover is:
a.1.13 turns.
b.5 turns.
c.10.2 turns.
d.17 turns.
Answer: c
Reference: Measures of Supply Chain Performance
Difficulty: Moderate
Keywords: inventory, turnover
Chapter 9:
Which one of the following statements about the relation between financial and supply-chain performance measures is TRUE?
a.Longer delivery times require higher levels of working capital.
b.Shorter new product development time decreases revenue.
c.Higher inventory turns call for higher working capital requirements.
d.Lower aggregate inventory value means higher current assets.
Answer: a
Reference: Measures of Supply Chain Performance
Difficulty: Moderate
Keywords: financial measures, supply chain, working capital
Chapter 9:
Henderson Corporation is a supplier of alloy ball bearings to auto manufacturers in Detroit. Because of the specialized manufacturing process employed, considerable work-in-process and raw material inventories are created. The average inventory levels are $1,152,000 and $2,725,000, respectively. In addition, finished goods inventory is $3,225,000, and sales (at cost) for the current year are expected to be about $24 million. The inventory turnover that Henderson Corporation is currently expecting is:
a.less than 2.0.
b.greater than 2.0 but less than 2.5.
c.greater than 2.5 but less than 3.0.
d.greater than 3.0.
Answer: d
Reference: Measures of Supply Chain Performance
Difficulty: Moderate
Keywords: inventory, turnover
Chapter 9:
In addition, the cost of goods sold last year (50 weeks) was $15 million. What was the inventory turnover?
a.Less than or equal to two
b.Greater than two but less than three
c.Greater than three but less than four
d.Greater than four
Answer: c
Reference: Measures of Supply Chain Performance
Difficulty: Moderate
Keywords: inventory, turnover
Chapter 9:
The average inventory at Hamilton Industries, comprising raw materials, work-in-process, and finished goods, was found to be $17.2 million last year. If the cost of goods sold per week averaged $1.32 million, what was the inventory turnover experienced by Hamilton Industries? Assume the company had 50 working weeks per year.
a.Less than or equal to 3.50
b.Greater than 3.50 but less than 3.75
c.Greater than 3.75 but less than 4.00
d.Greater than 4.00
Answer: c
Reference: Measures of Supply Chain Performance
Difficulty: Moderate
Keywords: inventory, turnover
Chapter 9:
A firm may choose to use members of the distribution channel as if they were assembly stations in the factory. Such an approach is known as:
a.backward integration.
b.postponement.
c.channel assembly.
d.deferred delay.
Answer: c
Reference: Mass Customization
Difficulty: Easy
Keywords: channel assembly
Chapter 9:
A somewhat successful computer manufacturer makes a generic computer in five exciting colors. Once orders are received, the computer guts are encased in the customer’s choice of colored case at the factory. This approach to production is known as:
a.channel assembly.
b.postponement.
c.strategic sourcing.
d.strategic production.
Answer: b
Reference: Mass Customization
Difficulty: Moderate
Keywords: postponement, delayed differentiation
Chapter 9:
The supply chain management department of a major manufacturer pondered a particularly weighty make or buy decision for weeks, ultimately deciding to make, rather than buy. This decision resulted in increased:
a.outsourcing.
b.offshoring.
c.postponement.
d.backward integration.
Answer: d
Reference: Outsourcing Processes
Difficulty: Easy
Keywords: make-or-buy decisions, integration
Chapter 9:
Which of the following is not a benefit of outsourcing?
a.comparative labor costs
b.lower logistics costs
c.reduction of transaction costs through use of the Internet
d.technology transfer to another country or company
Answer: d
Reference: Outsourcing processes
Difficulty: Moderate
Keywords: outsourcing, make-or-buy decisions
Chapter 9:
A U.S. company faced with spiraling costs in their customer care center recreated that service in Luxembourg at a fraction of the cost. This is an example of:
a.offshoring.
b.forward integration.
c.backward integration.
d.postponement.
Answer: a
Reference: Outsourcing Processes
Difficulty: Easy
Keywords: offshoring, outsourcing
Chapter 9:
An efficient supply chain should be preferred when:
a.product variety is high.
b.competitive priority is customization.
c.demand is highly predictable.
d.demand is unpredictable.
Answer: c
Reference: Strategic Implications
Difficulty: Moderate
Keywords: efficient supply chain
Chapter 9:
An efficient supply chain typically has:
a.a high capacity cushion.
b.high inventory turns.
c.supply chain partners that emphasize fast delivery time.
d.supply chain partners that emphasize volume flexibility.
Answer: b
Reference: Strategic Implications
Difficulty: Moderate
Keywords: efficient supply chain
Chapter 9:
A responsive supply chain typically has:
a.a low capacity cushion.
b.high inventory turns.
c.supply chain partners that emphasize low prices.
d.supply chain partners that emphasize volume flexibility.
Answer: d
Reference: Strategic Implications
Difficulty: Moderate
Keywords: responsive supply chain
Chapter 9:
Responsive supply chains should be preferred when:
a.product variety is low.
b.demand is predictable.
c.contribution margins are low.
d.product variety is high.
Answer: d
Reference: Strategic Implications
Difficulty: Moderate
Keywords: responsive supply chain
Chapter 9:
The type of goods for which a responsive supply chain is appropriate are:
a.fashion goods.
b.products with a long shelf life.
c.expensive products.
d.those with infrequent design changes.
Answer: a
Reference: Strategic Implications
Difficulty: Hard
Keywords: responsive supply chain
Chapter 9:
It is desirable for a firm in a responsive supply chain to have:
a.low-capacity cushions.
b.delivery by railroad.
c.high-capacity utilization consistent with high-volume delivery.
d.inventory investments as needed to enable fast delivery times.
Answer: d
Reference: Strategic Implications
Difficulty: Moderate
Keywords: responsive supply chain
Chapter 9:
The objective of a firm in a responsive supply chain is likely to be realized if it has a:
a.standardized product.
b.short lead time.
c.low-capacity cushion.
d.line-flow process.
Answer: b
Reference: Strategic Implications
Difficulty: Moderate
Keywords: responsive supply chain
Chapter 10:
Which of the following is NOT a component of the supply chain?
a.Order fulfillment
b.Materials
c.Customer relationship
d.Competitors
Answer: d
Reference: Supply Chain Integration Across The Organization
Difficulty: Easy
Keywords: supply chain, component
Chapter 10:
The bullwhip effect is characterized by:
a.ordering patterns that experience increasing variance as you proceed downstream in the chain.
b.ordering patterns that experience increasing variance as you proceed upstream in the chain.
c.purchasing patterns that experience increasing variance downstream in the chain.
d.purchasing patterns that experience decreasing variance as you proceed upstream in the chain.
Answer: b
Reference: Supply Chain Dynamics
Difficulty: Moderate
Keywords: bullwhip effect, variation
Chapter 10:
Which of the following changes would decrease the likelihood of the bullwhip effect?
a.Changing the mix of items in an order
b.Sending partial shipments of an order
c.Instituting a policy of no discounts or promotions
d.Sending late deliveries of an order
Answer: c
Reference: Supply Chain Dynamics
Difficulty: Moderate
Keywords: bullwhip effect, variation
Chapter 10:
Which of the following changes would increase the likelihood of a supply chain experiencing the bullwhip effect?
a.Engineering changes to the design of a product
b.Instituting a more accurate materials management information system
c.Closely coordinating promotions with the internal marketing department and suppliers
d.Using a more reliable delivery company
Answer: a
Reference: Supply Chain Dynamics
Difficulty: Easy
Keywords: bullwhip effect, variation
Chapter 10:
Which of the following is NOT an internal cause of supply chain disruptions?
a.Engineering changes
b.Batching of orders
c.Service or product promotions
d.Underfilled shipments
Answer: d
Reference: Supply Chain Dynamics
Difficulty: Easy
Keywords: internal cause, supply chain disruptions
Chapter 10:
Which of the following is NOT an external cause of supply chain disruptions?
a.Late deliveries
b.New service or product introductions
c.Customer service or product mix changes
d.Underfilled shipments
Answer: b
Reference: Supply Chain Dynamics
Difficulty: Easy
Keywords: external cause, supply chain disruptions
Chapter 10:
One source of disruption caused by the internal supply chain is:
a.forecast error.
b.underfilled shipments.
c.volume changes.
d.late deliveries.
Answer: a
Reference: Supply Chain Dynamics
Difficulty: moderate
Keywords: internal supply chain, disruption
Chapter 10:
One source of disruption caused by the external supply chain is:
a.product or sales promotions.
b.new product or service introduction.
c.late deliveries.
d.engineering changes.
Answer: c
Reference: Supply Chain Dynamics
Difficulty: Moderate
Keywords: external supply chain, disruption
Chapter 10:
Possible causes of disruption due to internal supply chain problems are:
a.late deliveries.
b.machine breakdowns or inexperienced workers.
c.product and service mix changes.
d.underfilled shipments.
Answer: b
Reference: Supply Chain Dynamics
Difficulty: Moderate
Keywords: disruption, internal supply chain
Chapter 10:
Which of the following is NOT a stage in the New Service / Product Development Process?
a.development
b.design
c.maintenance
d.analysis
Answer: c
Reference: New Service or Product Development Process
Difficulty: Easy
Keywords: stage, New Service / Product Development Process
Chapter 10:
The stage of new product or service development that links the creation of new services or products to the corporate strategy of the firm is called:
a.design.
b.analysis.
c.development.
d.full launch.
Answer: a
Reference: New Service or Product Development
Difficulty: Moderate
Keywords: stage, development, new, corporate strategy
Chapter 10:
The product development team ensures compatibility of the proposed product with corporate strategy and regulatory standards in the:
a.design stage.
b.analysis stage.
c.development stage.
d.full launch stage.
Answer: b
Reference: New Service or Product Development
Difficulty: Moderate
Chapter 10:
The stage of new service or product development at which personnel are trained and some pilot runs can be conducted to look for possible problems in production is called:
a.design.
b.analysis.
c.development.
d.full launch.
Answer: c
Reference: New Service or Product Development
Difficulty: Moderate
Keywords: development, stage, new, service, product
Chapter 10:
A new product development team that is composed of product and process engineers, marketers, quality specialists, and buyers that work together to make sure the new product can actually be built is engaging in:
a.concurrent engineering.
b.joint application development.
c.reverse logistics.
d.core process design.
Answer: a
Reference: New Service or Product Development
Difficulty: Easy
Keywords: development, stage, new, service, product
Chapter 10:
Which one of the following statements is TRUE about purchasing?
a.Purchasing’s primary role is to satisfy the firm’s long-term supply needs.
b.Purchasing’s primary role should be placing and tracking orders.
c.Purchasing’s primary role is to negotiate lower prices.
d.Purchasing’s primary role is to negotiate prices and delivery dates.
Answer: a
Reference: Supplier Relationship Process
Difficulty: Moderate
Keywords: purchasing, supply