Preassessment

Question 1

An organization uses the Voice of the Customer to collect information about what customers want, what they like, and what they do not like.

Which two tools should be used once the VOC is complete?

Team problem-solving

Quality function deployment

Employee training

Fact-based management

Answer 1

Team problem-solving

Quality function deployment

Question 2

A paper manufacturing company dealing in paper products experiences quality issues due to poor performance and equipment malfunction.

Which of the following quality management tools must the paper manufacturer use to find out the reason for their poor quality of products?

Answer 2

Pareto charts

Question 3

A company makes rulers that are designed to be 20 cm in length with allowance ±0.1 cm.

If the actual length of a ruler is 20.2 cm, which factor will the company use to judge the quality of the length of the rulers?

Answer 3

Conformance

Question 4

Which aspect of quality is demonstrated by a vehicle that has a useful life of 165,000 miles?

Answer 4

Reliability

Question 5

Which quality management philosophy assigns cost to quality, defines quality by how well a product can be used for its intended purpose, and uses Pareto charts?

Answer 5

Juran Institute’s management theory

Question 6

Which quality management philosophy focuses on quality during the design of a product to eliminate product quality variations?

Answer 6

Taguchi methods

Question 7

Which quality management philosophy uses cause-and-effect fishbone diagrams for root-cause analysis, emphasizes a bottom-up approach to quality, and considers standardization and quality control to move together in improvement?

Answer 7

Ishikawa’s quality circle

Question 8

A company sells garage doors through a national retailer and contracts with local installers to complete the installations. The operations manager is responsible for completing the installations in a 14-day period after the sale. The company will be penalized financially if it fails to achieve these objectives. The operations manager’s daily responsibilities include contacting installers to expedite orders and ensure deadlines are met.

Which two tools should be used to measure installer performance?

Answer 8

Control charts to measure the time elapsed to completion

Run charts to chart output around the 14-day central tendency

Question 9

An employee at a company thinks the department could improve its performance metrics by inspecting 100% of all finished product.

Which quality management philosophy would address this employee’s opinion?

Answer 9

Deming: Cease dependence on inspection to achieve quality. Eliminate the need for inspection. Build quality into the product in the first place.

Question 10

The CEO of a service company wants to change the strategy of the company from volume sales to high-quality products.

Which philosophy should the CEO implement to emphasize quality over volume?

Answer 10

Deming 14 points

Question 11

Which method can a company use to relate customer needs and expectations to specific design characteristics?

Answer 11

Quality Function Deployment

Question 12

Which quality tool examines patterns, flow, and causes of variation of data points over time?

Answer 12

Statistical process control

Question 13

Six Sigma is adopted by a manufacturing company.

How can the company use Six Sigma to establish quality improvement?

Answer 13

There should be no more than 3.4 defects per million products from a manufacturing company statistically.

Question 14

Which two company practices reflect the guiding principles of Six Sigma?

Answer 14

1. A company tries to reduce variation in the quality of products it offers.
2. A company emphasizes the quality of suppliers because the quality of outputs are determined by the quality of inputs.

Question 15

Which Six Sigma methodology improves workplace efficiency and eliminates waste?

Answer 15

DMAIC

Question 16

A clothing retailer sends out evaluations to customers to rate quality as “outstanding,” “good,” “average,” and “bad.”

If the retailer wants to know the annual frequency of each evaluation category, which tool should the retailer use?

Answer 16

Histogram

Question 17

A vice president of a major retailer is trying to reduce the wait time for customers in the checkout line by appropriately opening checkout lines. To do this, the VP needs to know the relationship and degree of correlation between monthly customer visits and area population.

Which tool should be used in this situation?

Answer 17

Scatter Plot

Question 18

A company that produces motors uses the a “motor assembly check sheet”, why would the company use this check sheet?

Answer 18

To develop a Pareto chart identifying the root causes of engine defects

Question 19

A rental company has a fleet of 50 cars that can be rented daily if all vehicles have been washed and inspected and are free of mechanical and electrical defects. Due to maintenance requirements and late returns by customers, the rental company is, in general, able to prepare 45 cars per day for rental. On average, 30 cars are rented daily.

What is the efficiency rate for this company?

Answer 19

67%

Question 20

A quality improvement team is trying to illustrate to upper management how a process is varying over time as measurements are collected.

Which two statistical process control (SPC) tools should the team use?

Answer 20

Run Charts and Control Charts

Question 21

A manager is planning staffing needs for a seasonal ice cream stand. The manager expects to have the following number of customers per day each month:
January: 20
February: 23
March: 30
April: 60
May: 90
Jun: 120
July: 130
August: 150
September: 100
October: 80
November: 60
December: 30

Which capacity planning strategy should the manager use to achieve this customer demand?

1. Lag
2. Lead
3. Adjustment
4. Match

Answer 21

Match

Question 22

The original capacity in each process for a computer manufacturer’s operations is as follows:
Parts inventory: 500 units available per day
Assembly: 300 units assembled per day
Delivery: 450 units processed per day

After the computer manufacturer upgrades the assembly system, it can assemble 550 units per day.

According to this information, what is the throughput for this computer manufacturer?

Answer 22

450 units/day

Question 23

At a software development company, programming Team A can write an average of 1600 lines of new code a day and programming Team B can correct an average of 1100 tested lines of code a day. An automated quality assurance (QA) testing suite can check an average of 2100 new lines of code a day, while the QA Team can test an average of 900 new lines of code daily. Each new line of code must be checked by both the automated test suite and a member of the QA team.

Which step should Acme take to optimize the number of corrected lines of code per day?

Answer 23

Add resources to the QA Team to increase the number of lines of code that can be tested each day.

Question 24

An automobile manufacturer has just built its first assembly factory in the United States based on increased demand from customers in the United States. The manufacturer intends to serve the entire U.S. market with this factory. Many of the suppliers for the U.S. factory are near the manufacturer’s other plants in India. The new U.S. factory enables the manufacturer to use many more robots to assist in the assembly of automobiles.

Which two location factors were important influences in building this new factory?

Answer 24

Labor productivity & Close to customers

Question 25

An auto service center that specializes in oil changes has two service bays that serve, on average, a total of 24 cars per eight-hour business day. On average, each bay can finish one oil change in 30 minutes.

What is the design capacity?

Answer 25

32 oil changes

Question 26

An appliance manufacturer has two factories located around the world, each with its own capacity:
* F1 can make 8 appliances per day.
* F2 can make 10 per day.

The factories can deliver to two different distribution centers. Every day each distribution center must receive 9 appliances each.

The cost to deliver appliances from each factory to each distribution center is listed in the table below:

DC1    DC2

F1 $4 $3

F2 $8 $3

Using the factory production constraints and the delivery costs in the above matrix, what is the lowest cost to deliver all 18 appliances to the distribution centers?

Answer 26

F1 = 8 x $4 = $32

F2 = 1 x $8 = $ 8

========== $40

F2 = 9 x $3 = $27

============ $67

Question 27

An oil refinery receives crude oil on a regular basis, which must be refined into five different octane-rated gasoline formulas and diesel. Demand for these fuels is easy to predict. The cost to refine the oil decreases rapidly depending on the size of the refinery that refines the oil.

Based on this information, which process strategy should the oil refinery use in its refining process?

Answer 27

Continuous Flow

Question 28

A company wants to compare shipping costs if it uses different routes to deliver products.

Which evaluation method should the company use?

Answer 28

Transportation Method

Question 29

A company makes garage door tracks for residential and commercial customers. The production manager prefers to run all the footage for residential requirements first each day and then change over for the commercial size after the residential orders are completed. The tooling is changed back to the residential size before the end of business each day.

Which process strategy is this company using?

Answer 29

Batch processing with some product variety on moderately flexible equipment

Question 30

A hospital administrator needs to determine how many beds to make available for exam rooms, operating rooms, and in-patient care. The hospital board announces they will be getting more patient referrals from specialists at a newly opened clinic.

What should the adminstrator use to forecast how many beds to make available, given the increased number of patients?

Answer 30

Weighted moving average using patient referral data

Question 31

A fairly new business, after facing early losses, now aims to develop a forecast plan to reduce inefficiencies.

What immediate next step must the company take?

Answer 31

Developing and testing its model

Question 32

A company has developed a new product that links a smartphone app to a doorbell and home security monitoring system. There is nothing else like it on the market and no prior sales history from which to develop a forecast. A sales manager is trying to determine the best price point for introduction, while also trying to estimate what first-year sales volumes might be.

What are two possible means for determining the price point and first-year sales forecast?

Answer 32

Panel of experts & Test market

Question 33

What is the time horizon for medium-range forecasting?

Answer 33

6- 18 months

Question 34

Which strategy should be used when inventory carrying costs are high and costs of changing capacity are low?

Answer 34

Chase Strategy

Question 35

A large retail chain is developing an aggregate plan for its “holiday tree” product line. It does not specify Douglas fir, pine, spruce tree, or artificial tree variations, just overall quantity of trees to be offered throughout the holiday season.

What is the appropriate time fence for the aggregate plan?

Answer 35

6 - 18 months before the holiday season starts

Question 36

A bicycle company receives an order to deliver 200 bicycles by the end of the month.

Which planning process will help this company to decide the required quantity of bicycle tires to meet the order?

Answer 36

MRP

Question 37

A car company is planning the allocation of employees for production of its vehicles.

Which planning type is being used?

Answer 37

MRP II because it extends to the manufacturing process

Question 38

A computer company needs to order 50 computer screens from a vendor so they can assemble 100 computers by the end of the month.

What does the computer company need to know to ensure the parts arrive when they are needed?

Answer 38

Lead time

Question 39

A computer company receives an order for 100 computers from a customer inside of its lead time. The production planner agrees to support the order.

Which two outputs will the MRP system issue?

Answer 39

Planned order receipts

Expedite notice

Question 40

A furniture company receives an order for 100 dining tables with four legs each. The planner has determined that the projected number of legs on hand is 60 units. If there is no previously scheduled production for legs, what will be the planned production of legs?

Answer 40

340
(100 x 4 legs = 400 - 60 legs = 340)

Question 41

Which equipment can be used in a just-in-time (JIT) environment to reduce setup time?

Answer 41

General purpose machines

Question 42

What helps to reduce setup time in a JIT system?

Answer 42

Placing the needed tools and equipment in predetermined locations & Shortening the downtime of equipment

Question 43

A product company uses the JIT system to optimize its manufacturing processes.

Which characteristic of the JIT system allows the company to achieve an optimal manufacturing process.

Answer 43

Streamlining manufacturing processes by identifying manpower excesses.

Aligning raw-material orders from suppliers directly with production schedules.

Question 44

What can be used in a company with a just-in-time (JIT) environment to reduce inventory?

Answer 44

Pull system

Question 45

A car manufacturing company aims to eliminate waste from the system and identifies the most efficient way of doing things.

Which lean system is being used by the car manufacturer?

Answer 45

TPS

Question 46

A company that makes Halloween costumes used to make the costumes using an assembly line process, but the company recently converted to a just-in-time system.

What do these two production systems have in common?

Answer 46

High-volume production

Question 47

Many companies implementing a just-in-time (JIT) system have eliminated complex material-handling systems and rearranged the layout of the workplace to move the workers closer to the production floor. Why is the movement of materials simplified in a JIT system?

Answer 47

Parts are moved by hand

Question 48

What is a direct competitive advantage to keeping a workstation clean?

Answer 48

Lower injury rates

Question 49

Which competitive advantage would a company gain from having suppliers managing inventory within the company’s facilities?

Answer 49

A decrease in overhead costs

Question 50

Strategic planning is based on a firm’s strengths and weaknesses, as well as the threats and opportunities in the external environment.

Regarding strategic planning, what is JIT?

Answer 50

A strength

Question 51

Which competitive advantage would a company gain from choosing to partner with a single supplier to source similar parts?

Answer 51

An increase in total quality

Question 52

Which competitive advantage is gained by reducing setup times?

Answer 52

It increases the time for value-added activities.

Question 53

What type of supply chain structure focuses on getting products quickly to market?

Answer 53

Agile Supply Chain structure

Question 54

Products A and B for a manufacturing company are level scheduled. Daily requirements are 15 units for product A and 20 units for product B.

If three units of product A and four units of product B are produced in each cycle, how many daily cycles should be scheduled?

Answer 54

5

Question 55

A paper company is implementing JIT in its production of multiple kinds of papers.

Which technique should the company adopt to keep a smooth production process?

Answer 55

Level Schedule

Question 56

A manufacturing company makes three products: A, B, and C. Manufacturing products A and C only involve minimal setup changes, while manufacturing products B and A and manufacturing products C and B involve a great change in setup.

Which two sequences would be appropriate to use in level scheduling?

Answer 56

A-C-B or B-C-A

Question 57

A manufacturing company makes two products. Products A and B are level scheduled and have daily basis requirements of 10 units for Product A and 15 units for Product B.

If five cycles are scheduled on a daily basis, how many units of Product A and Product B will be produced in each cycle?

Answer 57

2 units for Product A; 3 units for Product B

Question 58

A company has a repetitive manufacturing situation where the master schedule does not vary from day to day and is level loaded.

Under these circumstances, which manufacturing system should be employed?

Answer 58

Just-in-time

Question 59

In order to optimize a just-in-time production system, what should companies strive to do?

Answer 59

Reduce setup times of machinery.

Question 60

A steel products manufacturer sources their blank sheet stock from a domestic steel service center. However, they are concerned about price shocks in the spot-buy market. Additionally, their annual volume is lower than most of the other customers that also source from the domestic supplier. The executive team is considering a smaller, offshore supplier that has offered a more lucrative pricing structure for their annual volumes.

Which two bottlenecks in the supply chain would the manufacturer face if they moved to the offshore supplier?

Answer 60

Ship transportation of goods &
Customs inspection on incoming imported goods

Question 61

A lawn mowing service contracts with homeowners and businesses to cut grass during the growing season. There are several elements that affect a lawn mowing service, such as rainy weather, employee turnover, fuel prices, and maintenance repairs that can compress the amount of resources available on any given day.

Which two factors could create bottlenecks?

Answer 61

Frequent rain and thundershowers

High employee turnover

Question 62

A road building crew is supplied with hot asphalt mix from a supplier that is located 30 miles from the worksite. As the road extends, the distance increases from the asphalt supplier. Currently, the bottleneck for the project has been the throughput rate of the paving equipment being used on the road.

What will happen to the bottleneck as the project nears completion?

Answer 62

It will change to become the transportation time of the asphalt trucks.

Question 63

A generator is used at an off-grid building site to run a chop saw, a concrete mixer, a battery charger, an angle grinder, and a polishing wheel. Because the amperage output of the generator is limited, only two items can run simultaneously. The battery charger is almost always plugged in to the generator to maintain the cordless tools the workers use. The chop saw is used to cut steel struts, and the angle grinder is used to cut cement board sheathing. The polishing wheel is used to smooth out imperfections in the concrete slab.

What is the bottleneck in this worksite?

Answer 63

The amperage output of the generator

Question 64

A road building crew is supplied with hot asphalt mix from a supplier that is located 30 miles from the worksite. As the road extends, the distance increases from the asphalt supplier. Currently, the bottleneck for the project has been the throughput rate of the paving equipment being used on the road.

What will happen to the bottleneck as the project nears completion?

1. It will be resolved
2. It will change to become the throughput rate of the mixing equipment
3. It will change to become the transportation time of the asphalt trucks
4. It will remain the same

Answer 64

It will change to become the transportation time of the asphalt trucks

Question 65

A critical care hospital ward has nurses for administering medicines, therapists for assisting patients with recovery, and aides for hygiene needs, dressings, and food service. Therapists are the most highly paid members of the staff at $30 per hour. Nurses are also paid well and earn $25 per hour. Aides are entry-level employees and earn up to $12 per hour. There are 28 patients served by seven nurses, four aides, and four therapists.

The chief of nursing operations (CNO) determines that when a patient activates the call light, the closest staff member should respond immediately. This tactic provides outstanding patient care. However, from the therapists’ perspective, it often seems like the aides are preoccupied elsewhere, leaving the therapists to answer more than their share of call lights. Answering the call lights prevents the therapists from providing therapeutic care for their patients. In fact, the therapists are having difficulty seeing all their patients during the week because they are responding to so many call lights.

Which action should the CNO take?

Answer 65

Hire more aides to respond to the call lights

Question 66

What would be considered a bottleneck for the process of going through airport security?

Answer 66

The throughput rate of the full-body scanner

Question 67

What are two steps in the theory of constraints?

Answer 67

Identifying the system constraint

Elevating the system constraint

Question 68

A company desires to increase the throughput of the products that it manufactures. The firm finds a bottleneck in the availability of its raw materials.

What is the firm accomplishing?

Answer 68

Identifying the system contraint

Question 69

A request for additional production personnel by a production manager to meet increased demand is approved with some delay on the part of the senior management of the company.

What would be the direct result of this delay in the supply chain?

Answer 69

This will affect the company’s ability to meet demand.

Question 70

A steel products manufacturer sources their blank sheet stock from a domestic steel service center. However, they are concerned about price shocks in the spot-buy market. Additionally, their annual volume is lower than most of the other customers that also source from the domestic supplier. The executive team is considering a smaller, offshore supplier that has offered a more lucrative pricing structure for their annual volumes.

Which two services can the domestic supplier offer that would reduce bottlenecks for the manufacturer compared to the offshore supplier?

Answer 70

Just-in-time delivery on a daily basis &
Batch sizes optimized for weekly production requirements

Question 71

Because of uncertain demand for residential windows and a desire to keep low inventory, a window manufacturer pays its supplier of aluminum extrusions an annual fee to have production priority for its products. The extrusion company can make other products if the window company does not call in the order.
Which supply chain integration strategy is the window manufacturer using?

Answer 71

Reserve capacity &
Backward vertical integration

Question 72

Movie studios traditionally sell rental copies of movies to video rental stores. Instead of paying a very high price for a few copies of movies, one video store makes a deal to pay a small amount for each copy. The movie studio is paid according to how many times the movie is rented instead of the large flat fee. Both the movie studio and rental store make more money this way.
Which supply chain integration strategy is the movie studio using?

Answer 72

Revenue sharing

Question 73

A mattress manufacturer holds many patents on their mattresses because they are specially constructed out of unique materials. This leads the manufacturer to open retail stores in high-traffic areas to increase visibility and brand recognition.

Which supply chain integration strategy is the mattress manufacturer using?

1. Revenue sharing
2. Outsourcing
3. Insourcing
4. Forward vertical integration

Answer 73

Forward vertical integration

Question 74

An electric company wants to increase service reliability by building new high-voltage wiring. Because service improves for other electric companies on the same grid, the company partners with other companies to plan routes and finance construction.
Which supply chain integration strategy is the electric company using?

1. Merge with competitors
2. Strategic alliance
3. Agile supply chain
4. Horizontal integration

Answer 74

Strategic alliance

Question 75

A folding chair manufacturer continues to make the same five chairs it has made for the past 15 years. It has worked to minimize inventory throughout the supply chain by sharing information with component suppliers and continuous improvement.
Which supply chain integration strategy is the chair manufacturer using?

1. Agile supply chain
2. Lean supply chain
3. Strategic alliance
4. Reverse logistics

Answer 75

Lean supply chain

Question 76

A cell phone manufacturer makes a new model every six months with the latest available technology. The demand for these high-end models is not easy to predict. The manufacturer needs to ensure it has the right components for the new phone model on time.
Which supply chain integration strategy should the manufacturer use to get new components quickly?

Answer 76

Agile supply chain

Question 77

A semiconductor manufacturer recently purchased a copper ore mine to ensure access to a copper supply for a long period of time.

Which supply chain integration strategy did this manufacturer use?

1. Backward vertical integration
2. Strategic partnership
3. Forward vertical integration
4. Agile supply chain

Answer 77

Backward vertical integration

Question 78

An aircraft manufacturer has many highly complex subassemblies such as seats, cockpit, engines, and landing gear. It works with other manufacturers to design and build these subassemblies while doing project management and final assembly themselves.
Which supply chain integration strategy is the aircraft manufacturer using?

Answer 78

Outsourcing

Question 79

What is a characteristic of an agile supply chain?

Answer 79

Suppliers help develop new products that can better meet individual customer needs.

Question 80

The owner of an electrical contracting company has determined there is a shortage of skilled technical workers in the local community.

Which action should the owner take to address this shortage in the long term?

Answer 80

Develop a relationship with local technical schools through equipment, training, scholarships, or internships to increase the number of enrollees for technical training

Question 81

When designing a braking system for a commercial elevator, a company has a choice between a product made in the United States, a product made in China, and a product made in Germany. Lead times are three weeks for the U.S. product, five weeks for the Chinese product, and four weeks for the German product. Product testing shows that the U.S. product costs $1.26 each and fails above 80 pounds per square inch, the Chinese product costs $0.89 each and fails above 70 pounds per square inch, and the German product costs $1.99 each and fails above 85 pounds per square inch. The engineering manager specifies performance characteristics that are higher than 80 pounds per square inch, so the supply chain manager procures the U.S. product. However, the supplier is out of stock until tomorrow and these products are needed as soon as possible.

What should the supply chain manager do to keep the operations in production?

Answer 81

Order the German products because the performance is acceptable

Question 82

An employee for a manufacturing company calls a supervisor to take time off to care for an ill parent until the employee can arrange for care for the parent. The company has a benefit policy that provides employees with up to five paid time off days for family emergencies. However, there are imminent production deadlines that must be met.

Which action should the supervisor take?

Answer 82

Allow the employee to take time off and fill in for the employee if necessary to meet deadlines

Question 83

During a routine maintenance event on a paint booth at a ceramic manufacturing company, an employee’s hand is severely injured when a piece of equipment drops off the hook suspending it above the paint booth. The first-response team lifts the equipment off the employee’s hand and rushes her to the emergency room. A representative from the Occupational Safety and Health Administration (OSHA) is on-site within hours to begin an investigation.

After several days of investigation, the root cause is determined to be an eye-bolt that had been fabricated in the company’s maintenance shop that attached the cable to the hook suspending the equipment. Everyone is extremely remorseful because the employee has lost the use of her hand, but no one is willing to accept the responsibility for creating the eye-bolt.

Which two courses of actions would be socially responsible for the company to take?

Answer 83

Beginning a company-wide series of training events on safety and employee wellness that is funded by an individual line item in the corporate budget &

Preparing disciplinary action for the entire maintenance department for not following generally accepted procedures for routine maintenance

Question 84

What would be considered a strength for a computer company performing a SWOT analysis?

Answer 84

The computer company has a stronger brand name in the market than other computer companies.

Question 85

A customer contacts a major retailer one month after purchasing a display model of a BBQ grill island that has been discontinued. The grill was sold “as-is.” During the installation, the customer somehow loosened a fitting that is part of a subassembly and is concealed inside the unit. The only way to access the fitting is to dismantle an external bulkhead after removing the stone veneer finish the customer has installed. This repair is a major headache, and the customer is not taking any responsibility for their incorrect actions.

What is the socially responsible solution for the major retailer?

Answer 85

Negotiate a cost-sharing agreement with the customer and schedule a visit with the customer to get the grill repaired

Question 86

The CEO of a large manufacturing company is aware of impending financial problems, but this has not been disclosed to the board of directors.

What can correctly be said of the CEO’s lack of disclosure?

Answer 86

It is an unethical decision.

Question 87

Which two statements reflect strengths discovered when conducting a SWOT analysis at a computer company?

Choose 2 answer

1. The price of a computer is more expensive than the price of other companies’ computers.
2. The company’s brand name and reputation are much better than those of its competitors. &
3. The quality of this company’s products is better than that of other companies’ products.
4. This company’s capital expenditures are more costly in comparison to its competitors.

Answer 87

The company’s brand name and reputation are much better than those of its competitors. &

The quality of this company’s products is better than that of other companies’ products.

Question 88

Which question is important for a computer company to consider when performing a SWOT analysis related to strengths?

Answer 88

Will the quality of its computers be lower compared to other companies’ computers?

Question 89

Which statement represents a threat for a company?

1. The reputation and brand name of competitors are not good as this company.
2. The competition is more intense in the current market.
3. Competitors have a narrower range of products than that of this company.
4. This company is user-friendly.

Answer 89

The reputation and brand name of competitors are not good as this company.

Question 90

In an expansion, a tire company opens a manufacturing unit in a remote area. Due to the absence of hospitals in the area, the company opens a tertiary healthcare center for its employees. Based on requests from area residents, the company decides to allow non-employees to visit the center as well.

This decision of the company addresses which of the following issues?

Answer 90

Social Responsibility

Question 91

Which two elements of a SWOT analysis reflect the external impact on productivity?

Answer 91

Opportunity
Threat

Question 92

. A retail store needs 400 tires to meet the annual demand. The unit purchase price from the supplier is constant at $5/unit. It costs the store $25 to place an order from the supplier and $2 to store one unit in the warehouse for a year.

Based on this information, what is the trade-off in inventory management of tires for this store?

Answer 92

Holding cost vs. ordering cost

Question 93

The lead time from a computer manufacturing company to a retail store is two days. The average daily demand of the computers in this retail store is 20 units.

Which inventory model should this retail store use to decide when to place an order?

Answer 93

Reorder point model

Question 94

An electronic manufacturer is developing a SWOT analysis in order to build a strategic plan to expand its business to China over the next three years.

Which statement is an opportunity based on the SWOT analysis?

Answer 94

The Chinese government has developed new policies to attract manufacturing companies to do business in China.

Question 95

A company’s strong product design team used its skills to add a special feature to the product. This feature will make their product unique and help them gain a competitive advantage.

Which of the following elements from SWOT analysis is the company working on?

Answer 95

Strengths

Question 96

A company analyst examines internal weaknesses and tries to determine possible areas of improvement.

Which is the key factor the analyst will consider in this process?

Answer 96

Reasons for low sales in quarter

Question 97

A retail store is planning to place a large order. Their suppliers will offer a lower price per unit for a large order.

Which model will help the store decide the optimal quantity to order?

1. Basic economic order quantity (EOQ)
2. Production order quantity model
3. Quantity discount model
4. Reorder point model

Answer 97

Quantity discount model

Question 98

Under what two conditions should a periodic review system be adopted?

Answer 98

When a company must manually track inventory levels
When a supplier will only deliver at a specific interval

Question 99

Which items are correct for periodic inventory systems for a retail store that uses a variety of inventory systems?

Answer 99

Items with relatively low values and low usages

Question 100

A brand new, small retailer adopts a periodic inventory system.

What information will the store use to decide the order point?

Answer 100

Expected demand until the next order window plus demand during the lead time

Question 101

Which type of distribution network design must a company adopt if its objective is to provide its product to its customers in the shortest possible time?

Answer 101

Retail storage with consumer pickup

Question 102

Once computers are assembled in the final assembly department at a computer company, they are stored in a warehouse.

What type of inventory is stored in the warehouse?

Answer 102

Finished goods inventories or merchandise

Question 103

Which formula helps determine the value of average stock levels?

Answer 103

​Minimum stock level 1/2 of re-order level

Question 104

If a retail store needs to keep an accurate inventory level at all times, which inventory system should be used?

1. Active maintenance systems
2. Perpetual inventory systems
3. Periodic inventory systems
4. Daily cycle count systems

Answer 104

Perpetual inventory systems

Question 105

Which method should be used in an inventory system to guard against the risk of stockouts?

Answer 105

High safety stock

Question 106

A company that produces motors uses the following check sheet:
Why would the company use this check sheet?

1. To create a control chart to measure the engine assembly process
2. To create a flow chart of the engine assembly process
3. To develop a suppliers, inputs, process, outputs, customers (SIPOC) diagram
4. To develop a Pareto chart identifying the root causes of engine defects

Answer 106

To develop a Pareto chart identifying the root causes of engine defects

Question 107

Which statement is true for periodic inventory systems?

Answer 107

Exact inventory balances cannot be kept without a physical count.

Question 108

A production company wants to avoid stockouts, so they increase the level of their safety stock. This enables them to cover demand over the lead time necessary for receiving their next order.

Which inventory system is the company using?

Answer 108

Periodic inventory system

Question 109

A tool manufacturing company excels by constantly maintaining highly-accurate inventory counts.

Which inventory system is the tool manufacturing company using?

Answer 109

Perpetual, because it allows prompt updating of inventory

Question 110

Which quality tool examines patterns, flow, and causes of variation of data points over time?

1. Quality function deployment
2. Cause-and-effect matrix
3. Students t-test
4. Statistical process control

Answer 110

Statistical process control

Question 111

A rental company has a fleet of 50 cars that can be rented daily if all vehicles have been washed and inspected and are free of mechanical and electrical defects. Due to maintenance requirements and late returns by customers, the rental company is, in general, able to prepare 45 cars per day for rental. On average, 30 cars are rented daily.

What is the efficiency rate for this company?

30%
40%
60%
67%

Answer 111

67% (actual / capacity) - 30 cars/45 cars

Question 112

A children’s clothing retailer is looking to build a store in a city that happens to be close to one of the company’s distribution centers. The retailer opens a retail store on this city’s busiest street, which also has other clothing retailers and a department store.

Which two factors were influential in opening this store at this location?
A children’s clothing retailer is looking to build a store in a city that happens to be close to one of the company’s distribution centers. The retailer opens a retail store on this city’s busiest street, which also has other clothing retailers and a department store.

Which two factors were influential in opening this store at this location?

Choose 2 answers

1. Proximity to customers
2. Taxes
3. Proximity to competitors (clustering)
4. Labor Productivity
5. Cost of labor

Answer 112

Proximity to customers &
Proximity to competitors (clustering)

Question 113

A restaurant manager inside a major entertainment venue needs to estimate the amount of soft drinks to order for the coming month. Cumulative convention attendance for each event is estimated at 20,000 people. The manager understands the historical pull-through and turnover rate metrics at the restaurant.

Which two tools should the manager use to estimate the total amount of soft drinks to purchase?

Answer 113

Weighted moving average using attendance estimates &
Simple regression using independent variables to estimate total soft drink use

Question 114

The sales department for a company is having their sales representatives meet with customers to develop a sales plan for the coming year. The sales plan details prior year sales, current year sales, and year-to-year sales growth. Each customer can estimate how many products they plan to buy from the sales representatives the following year. Each customer signs the sales plan, and the sales representatives forward it to their sales managers. The sales managers then tally up the estimated sales and forward the totals on to the vice president of sales. The vice president then announces what the predicted sales for the company will be for the coming year.

What was used to predict sales for the coming year?

1. Exponential smoothing
2. A panel of experts
3. Simple moving average
4. The buildup method

Answer 114

The buildup method

Question 115

5 Steps of Theory of Constraints - Step 1

1) Identify the system’s constraint(s)
2) Exploit what you have to best outcome
3) Subordinate everything else to the above decision(s)
4) Elevate the system’s constraint for urgency
5) Repeat

Answer 115

Identify the system’s constraint(s)

Question 116

81.B 5 Steps of Theory of Constraints - Step 2

1) Identify the system’s constraint(s)
2) Exploit what you have to best outcome
3) Subordinate everything else to the above decision(s)
4) Elevate the system’s constraint for urgency
5) Repeat

Answer 116

2) Exploit what you have to best outcome

Question 117

81.C 5 Steps of Theory of Constraints - Step 3

1) Identify the system’s constraint(s)
2) Exploit what you have to best outcome
3) Subordinate everything else to the above decision(s)
4) Elevate the system’s constraint for urgency
5) Repeat

Answer 117

3) Subordinate everything else to the above decision(s)

Question 118

81.D 5 Steps of Theory of Constraints - Step 4

1) Identify the system’s constraint(s)
2) Exploit what you have to best outcome
3) Subordinate everything else to the above decision(s)
4) Elevate the system’s constraint for urgency
5) Repeat

Answer 118

4) Elevate the system’s constraint for urgency

Question 119

81.F 5 Steps of Theory of Constraints - Step 5

1) Identify the system’s constraint(s)
2) Exploit what you have to best outcome
3) Subordinate everything else to the above decision(s)
4) Elevate the system’s constraint for urgency
5) Repeat

Answer 119

5) Repeat

Question 120

A company manufactures ceramic coffee cups. The company employs automated pottery making machines in creating the ceramic coffee cups.

Which one of the production steps is a bottleneck?

1. Coating the coffee cups with glaze
2. Preparing the clay in making the coffee cups
3. Polishing the coffee cups
4. Firing the coffee cups in a kiln

Answer 120

Firing the coffee cups in a kiln

Question 121

Imelda Company wants to minimize the total of their ordering costs and holding costs. However, they also understand that ordered items usually cost less per unit when purchased by the case rather than individually.

Which inventory management model should they use?

Production order quantity model

Quantity discount model

Reorder point model

Economic order quantity model

Answer 121

Quantity discount model

Question 122

A hardware store in a small town cannot afford to invest in an automated inventory system. This means they will not generally know the inventory levels of the many sizes of nuts and bolts that they carry. In order to determine those inventory levels, they take a physical count of their fasteners every two weeks.

Which inventory system is the hardware store using?

Daily cycle count system

Periodic inventory system

Active maintenance system

Perpetual inventory system

Answer 122

Periodic inventory system

Question 123

A bank needs to know how much a customer has in their account at any particular time. This enables the bank to determine if the customer has available funds for a withdrawal from their account.

Which inventory system should the bank use?

Daily cycle count system

Periodic inventory system

Active maintenance system

Perpetual inventory system

Answer 123

Perpetual inventory system

Question 124

A computer company assembles computers to meet market demand.

Which inventory model should the company adopt to minimize the total setup cost and carrying cost?

Basic economic order quantity (EOQ) model

Production order quantity model

Quantity discount model

Reorder point model

Answer 124

Production order quantity model

Question 125

A company is experiencing rapid changes in the technology of one of its products.

Which characteristic of a SWOT analysis will be of greatest benefit to this company?

Identifying environmental threats so they can strive to change these threats into opportunities

Determining a plan to enter new markets with very high barriers to entry

Benchmarking with competitors that have been slow to implement technology improvements

Determining opportunities through the examination of previously under-served markets

Answer 125

Determining opportunities through the examination of previously under-served markets

Question 126

An employee for a manufacturing company is handing out literature from a local organized labor union in the company break room. The employees have been complaining about low wages and long hours. The operations manager would like to make socially responsible recommendations to the general manager to resolve these concerns.

Which two recommendations should the operations manager make?

The company should develop a pay-for-skills training program &

1. The company should develop a pay-for-skills training program.
2. The company should discipline the employee that handed out the union literature.
3. The company should confiscate the union literature and post an announcement about why unions are bad for workers.
4. The company should begin one-on-one meetings with employees to listen and develop solutions that address their complaints.

Answer 126

The company should develop a pay-for-skills training program &

The company should begin one-on-one meetings with employees to listen and develop solutions that address their complaints.

Question 127

A printing company prints a magazine dedicated to reporting on new scientific discoveries. The company has almost no paper inventory, but rather orders and then receives the paper a day before it prints an edition of the magazine.

Which inventory control system is the printing company using?

1. Value stream mapping
2. Just-in-time inventory
3. Honda production system
4. Vendor managed inventory

Answer 127

Just-in-time inventory

Question 128

A company is trying to solve a problem in their manufacturing facility. They use TOC to solve the problem. They just ensured the bottleneck is at 100% capacity utilization. Based on the Theory of Constraints, what is the firm accomplishing?

1. Elevate the system’s constraint
2. Subordinate everything else to the constraint (communicate the bottleneck)
3. Exploit the system’s constraint
4. Remove the system’s constraint

Answer 128

Exploit the system’s constraint

Question 129

Which component of a master production schedule acts as a boundary between periods in the planning horizon?

1. Planning boundaries
2. Time fences
3. Available-to-promise quantity
4. Time buckets

Answer 129

) Time fences

(divide that segment of the master schedule that can be revised from that section that is “not to be rescheduled.”)

Question 130

Tammy’s dishwasher started making weird noises. She was concerned that it may have technical issues so she called the manufacture to see if it was still under warranty. She had 1 month left on the warranty so the manufacturer picked up the dishwasher the next day to service it. Which process best represents this scenario?

Reverse logistics
Third Party Logistics (3PL)
Global logistics
Warranty Logistics

Answer 130

Reverse logistics

Question 131

Which quality expert created PDCA?

1. Juan
2. Crosby
3. Deming
4. Shewhart

Answer 131

Shewhart

Question 132

Delta Airlines has seen a decline in business because of the Coronavirus outbreak. Delta decides to reduce the number of employees working each shift by 40%. What strategy is Delta using?

Peak Demand
Chase Demand
reservation strategy
Adjustable capacity

Answer 132

Chase demand

Question 133

A computer company sells damaged products to another company, who refurbishes and sells the products. Which answer is the most appropriate reflection of this example?

1. Outsourcing
2. Strategic Alliance
3. Reverse logistics
4. 3PL

Answer 133

Reverse logistics

Question 134

New York can test 394 people for Coronavirus. However, due to a lack of testing kits they can only test 322 people. On average, 286 people are tested daily. what is the effective capacity, design capacity, capacity utilization and efficiency rate?

322 - 394 - 73% - 89%
394 - 322 - 72% - 88%
322 - 394 - 82% - 73%
322 - 394 - 89% - 73%
322 - 289 - 73% - 82%

capacity, design capacity, capacity utilization and efficiency rate

Answer 134

322 - 394 - 73% - 89%

Question 135

Which criteria or factors should be evaluated regardless of process types?

Maximizing flow time, WIP, machine idle time, employee idle time, and costs.

Providing goods when the customer wants them and minimizing flow time, WIP, machine idle time, employee idle time, and costs.

Providing goods when the customer wants them.

Answer 135

Providing goods when the customer wants them and minimizing flow time, WIP, machine idle time, employee idle time, and costs.