Mgmt 301 Exam 1

Front 1

What is the Operation Management pyramid from top down?

Back 1

Strategy> Tactics> Implementation

Front 2

Strategy

Back 2

long term planning (3-5 years); Set goals

Front 3

tactics

Back 3

Medium-term Planning (1 year); what you do to reach your goals

Front 4

Implementation

Back 4

Short-term; daily/weekly planning; operation

Front 5

What are some characteristics of goods?

Back 5

they are tangible, solid(physical), and inventoriable (save item for future use)

Front 6

What are characteristics of services?

Back 6

they are intangible

Front 7

When it comes to the site of production and consumption for goods vs. services what is the difference?

Back 7

For services, the site of production and consumption are the same thing whereas with goods the site of production and consumption are different places.

Front 8

Goods have low levels of what?

Back 8

customer contact and labor content

Front 9

Goods have high levels of what?

Back 9

capital investment and uniformity of inputs and outouts

Front 10

Services have high levels of what?

Back 10

customer contact and labor content

Front 11

Services have low levels of what?

Back 11

capital investment and uniformity of inputs and outputs

Front 12

What is an example of a mixed product?

Back 12

resutrants

Front 13

What are some characteristics of a standardized process?

Back 13

it produces high volume, have lower cost per unit, shorter lead time

Front 14

What are some characteristics of a customized process?

Back 14

it produces low volume, has a high cost per unit and has a longer lead time

Front 15

What is in between standardized and customized process?

Back 15

modular/ mass customization

Front 16

What is an example of a make-to-stock process and what happens?

Back 16

Frozen pizza; Raw Materials> Finished Goods

Front 17

What is an example of a make-to-assemble process and what happens?

Back 17

PaPa John's; Raw Materials> Work-In-Process

Front 18

What is an example of Made-to-order process and what happens?

Back 18

Fine Resturaunt; Raw Material> for you only

Front 19

What are the 4 phases of a product life cycle?

Back 19

1) Introduction

2) Growth

3) Maturity

4) Decline

Front 20

During which stage does "competitive shake-out" happens?

Back 20

Towards the end of the growth phase and the beginning of the maturity phase

Front 21

Throughout a product's life cycle what happens to the number of firms?

Back 21

there becomes fewer and fewer

Front 22

Throughout a product's life cycle, what happens to the process?

Back 22

it goes from customized to standardized

Front 23

Throughout a product's life cycle what happens to the volume that is produced?

Back 23

it goes from low volume to high volume

Front 24

Throughout a product's life cycle what happens to the product's price?

Back 24

It starts out high and slowly drops

Front 25

What happens in a production system?

Back 25

Inputs (resources)> Transformation (create/produce)> Outputs (Goods and SERvices)

Front 26

What is added throughout a production system?

Back 26

value

Front 27

Productivity

Back 27

Outputs/inputs

Front 28

Partial Measure of productivity

Back 28

= a particular output/ a particular input

Front 29

What are some examples of a partial measure of productivity?

Back 29

miles per gallon, words per minute, # per#

Front 30

Multi-factor Measure of productivity

Back 30

= a particular output/ a set of inputs

Front 31

Total measure of productivity

Back 31

= total outputs/ total inputs

Front 32

What is an example of total measure of productivity?

Back 32

GDP

Front 33

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

Back 33

E

Front 34

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

Back 34

E

Front 35

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

Back 35

B

Front 36

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

Back 36

E

Front 37

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%

Back 37

B

Front 38

What is the difference between quantitate and qualitative approaches for forecasting?

Back 38

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.

Front 39

What are three types of Qualitative forecasting approaches?

Back 39

1) Expert Opinion Panels

2) Consumer Surveys

3) Delphi Groups

Front 40

Delphi Groups

Back 40

secret group; people in group don't know who's in it (anonymous) ask question again after report until ideas narrow down

Front 41

What are the advantages of delphi groups

Back 41

people are more likely to share real opinion when anonymous and should be better than expert opinion

Front 42

What are two types of quantitative approaches

Back 42

1) Associative Models

2) Time Series Analysis

Front 43

Associative Models

Back 43

regression analysis-> see relationship between data (positive, negative, no correlation)

Front 44

Time Series Analysis

Back 44

Find Trend based on past

Front 45

What are 3 types of time series analysis?

Back 45

1) Moving Average

2) Exponential Smoothing

3) Seasonal Relatives

Front 46

Time Series Decomposition

Back 46

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

Front 47

What happens when the n in moving averages is small?

Back 47

it will be more responsive to the forecasting

Front 48

what happens when the n in the moving average is large

Back 48

the smoother (flatter) the forecasting is

Front 49

What is the smallest n and what is it called?

Back 49

1; niave forecasting movdel

Front 50

What n should one use if their business involves a lot of randomness?

Back 50

a large n

Front 51

What n should one use if their business is highly correlated?

Back 51

a small n

Front 52

What is the formula for the simple exponential smoothing time series technique?

Back 52

New Forecast= Old Forecast+ Fraction (alpha) X (actual demand- old forecast)

Front 53

Forecasting error

Back 53

Actual demand- old forecast

Front 54

What is alpha between?

Back 54

0 and 1

Front 55

What happens when alpha is large?

Back 55

forecasting is very responsive

Front 56

What happens when alpha is small?

Back 56

the smoother the forecasting is

Front 57

What alpha should one use if their business is random?

Back 57

small alpha

Front 58

What alpha should one us if their business is highly correlated day to day?

Back 58

large alpha

Front 59

What is a disadvantage of mean error?

Back 59

cancellation issue (with negative and positive numbers)

Front 60

What does a negative number mean in mean error

Back 60

you are overestimating

Front 61

What does a positive number mean in mean error

Back 61

you are underestimating

Front 62

What is a disadvantage of mean squared error?

Back 62

it exaggerates forecasting error

Front 63

Tracking signal

Back 63

sum of error/ MAD

Front 64

Seasonal Indices

Back 64

set of numbers you can extract from the time series data

Front 65

How do you find seasonal Indices?

Back 65

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).

Front 66

How do you forecast data with seasonal indices?

Back 66

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.

Front 67

How do ou analyze data with seasonal indices?

Back 67

take you actual results form each season and divide them by their seasonal indices previously found.

Front 68

Design Capacity

Back 68

the maximum possible rate of output that can be achieved; theoretical/ ideal; may or may not be able to achieve

Front 69

Is it possible to go over design capacity?

Back 69

yes

Front 70

Effective Capcity

Back 70

the rate of output the firm is capable of achieving, given preventative maintenance, set-up time, etc; what you can actually use

Front 71

Efficiency

Back 71

output/ effective capacity

Front 72

Utilization

Back 72

output/design capacity

Front 73

What do you generally use efficiency for? Utilization for?

Back 73

Efficiency is used in operation management whereas utilization is similar to a financial performance indicator

Front 74

Conservative strategy

Back 74

lagging demand; below design capacity

Front 75

Advantages of conservative strategy

Back 75

high utilization, high ROA, other financial measures

Front 76

Disadvantages of conservative strategy

Back 76

allow competitors to enter your market, poor customer service

Front 77

Leading Demand Strategy

Back 77

above design capacity

Front 78

Advantages of leading demand strategy

Back 78

prevent competitors from entering you market; high customer service

Front 79

disadvantages of leading demand strategy

Back 79

lower utilization and lower ROA

Front 80

When the strategy line is below the design capacity ling what does that mean?

Back 80

There is a shortage; loss in sales; unmet demand

Front 81

When he strategy line is above the design capacity ling what does that mean?

Back 81

ther is a surplus; idle capacity; AKA capacity cushion

Front 82

What is an example of a leading demand strategy?

Back 82

emergency room, they have more rooms then then need generally.

Front 83

What happens are the break even point?

Back 83

total costs= total revenues

Front 84

Break even Quantity

Back 84

= Fixed Costs/ Revenue- Variable Costs

Front 85

What is the basic anatomy of the line theory?

Back 85

Source (arrival)> Queue (line)> Server System

Front 86

What 4 questions do you ask about a line's source?

Back 86

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)

Front 87

Infinite vs. Finite population

Back 87

infinit is uncountable wheres finite is usually single digit

Front 88

Balking Impatients

Back 88

seeing long line and never joining the line or getting service

Front 89

Reneging Impacience

Back 89

join line and leave after awhile, don't receive service

Front 90

What 3 questions do you ask about a line's waiting issues?

Back 90

1) Length limited or unlimited

2) How many lines in the system

3) What is the logic behind the line (queue discipline

Front 91

What does an unlimited length of a line mean?

Back 91

there is no limit t the number of people who can wait in the line

Front 92

For queue discipline what is the most common system?

Back 92

First-Come First-Serve (FCFS)

Front 93

What is a secondary system for a queue discipline?

Back 93

example would be reservations at a resturaunt, those with reservations are seated first, before the FCFS people. Another example is the disney fast passes

Front 94

What is another name for a server?

Back 94

channel

Front 95

What are the possible service system structures?

Back 95

1) multiple lines/ multiple servers

2) Single line/ Multiple servers

Front 96

Which service system is most efficient?

Back 96

single line/ multiple server

Front 97

Which service system helps with impatience?

Back 97

multiple lines/multiple servers

Front 98

What does U/D/1 mean?

Back 98

U: uniform distribution of arrival

D: Service Time (deterministic

1: number of lines

Front 99

What type of distribution is the distribution of service time?

Back 99

exponential distribution

Front 100

what does lambda stand for?

Back 100

average customer arrival within a certain time

Front 101

What does M/M/1 mean?

Back 101

M: Possion distribution (distribution of arrival)

M: Exponential distribution (service time distribution)

1: number of lines

Front 102

lambda/ Mue

Back 102

arrival rate/ average number of people who can be served within a certain time

Front 103

What does Lambda/ mue find?

Back 103

the probability that an arriving customer will have to wait

Front 104

What does 1-lambda/mue find?

Back 104

the proportion of time the server will be idle

Front 105

What does Po(lambda/mue)^n find?

Back 105

the probability of exactly 1 (or however many n) people waiting

Front 106

What does Lq= lambda^2/ Mue(Mue-lambda) find?

Back 106

the average length of a line

Front 107

What does Ls= Lq+lambda/mue find?

Back 107

the average number of people in the whole system

Front 108

What does Wq=Lq/lambda find?

Back 108

the average wait time in line

Front 109

What does Ws= Wq+1/Mue find?

Back 109

the average total amount of time spent in the system

Front 110

What is the difference between absolute and received time?

Back 110

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

Front 111

what are 5 ways to shorten received time?

Back 111

1) distraction

2) without fear

3) fair

4) Valuable

5) broken

Front 112

distraction

Back 112

example would be magazines in a waiting room, keep person occupied

Front 113

Without fear

Back 113

example would be going to the doctor, or fear of not being able to be served

Front 114

Fair

Back 114

everyone has to wait, not cuts

Front 115

valuable

Back 115

wait for something of value to the person

Front 116

Broken

Back 116

break up time, example would be wait in waiting room at doctor then move to another room to wait.

Front 117

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

Back 117

D

Front 118

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

Back 118

C

Front 119

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

Back 119

B

Front 120

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

Back 120

E

Front 121

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

Back 121

D

Front 122

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

Back 122

C

Front 123

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

Back 123

A

Front 124

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

Back 124

E

Front 125

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

Back 125

C

Front 126

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%

Back 126

B

Front 127

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

Back 127

C

Front 128

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

Back 128

E

Front 129

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

Back 129

B

Front 130

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

Back 130

D

Front 131

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

Back 131

C