Exam 1 Study Guide: Sample Questions

Exam 1 Study Guide
Sample Questions
I. True/False (20 points)
The operations manager has primary responsibility for making operations system design decisions, such
as system capacity and location of facilities.
Service involves a much higher degree of customer contact than manufacturing.
Productivity is defined as the ratio of output to input.
Strategy includes both organizational and functional strategies.
Concurrent Engineering is another term for sequential development.
Standardization refers to the extent to which there is absence of variety in a product, service, or process.
Job enrichment involves giving a workers a greater share of the total task which is why they feel
enriched.
Design capacity refers to the maximum output that can possibly be attained.
Aggregate planning is used to establish general levels of employment, output, and inventories over an
intermediate-range of time.
The inventory records contain information on the status of each item by time period.
II. Multiple Choice (30 points)

Budgeting, analysis of investment proposals, and provision of funds are activities associated with the
_______ function.
A. operation
B. marketing
C. purchasing
D. finance
E. internal audit
Which of the following is not a characteristic of service operations?

A. intangible output
B. high customer contact
C. high labor content
D. easy measurement of productivity
E. low uniformity of output
Productivity is expressed as:

A. output plus input
B. output minus input
C. output times input
D. output divided by input
E. input divided by output
The fundamental purpose for the existence of any organization is described by its:
A. policies
B. procedures
C. corporate charter
D. mission statement
E. bylaws
The external elements of SWOT analysis are:

A. strengths and weaknesses
B. strengths and threats
C. opportunities and threats
D. weaknesses and opportunities
E. strengths and opportunities
Incorporating design for disassembly (DFD) principles in product design helps firms with ___________
design issues.
A. Legal
B. Social
C. Re-use
D. Reverse engineering
E. Re-engineering
The research and development activity which starts after positive research results are available and
attempts to turn these results into useful commercial applications is:
A. basic research
B. applied research
C. development
D. redesign
E. commercial research
The structural approach for integrating customer requirements into every aspect of product
development is known as:
A. total quality management
B. customer satisfaction
C. quality function deployment
D. customer integration
E. a product development team
Behavioral approaches to job design include:

A. Specialization
B. Ergonomics
C. Job Rotation
D. Flow Process Charts
E. SIMO Charts
Which of the following most closely describes job enlargement?

A. horizontal loading
B. increasing the level of responsibility associated with a job
C. transferring workers through a series of jobs to increase their scope of experience
D. increasing the amount of workspace assigned to a worker
E. assigning two jobs to the same worker
A job had an observed time of 10 minutes, a performance rating of .90, and an allowance factor of 20
percent of job time. Twenty-five cycles were timed. Standard time for the job in minutes is:
A. 10.0
B. 10.8
C. 12.5
D. 15.0
E. depends on the number of cycles observed
A basic question in capacity planning is:

A. what kind is needed
B. how much is needed
C. when is it needed
D. all of the above
E. none of the above
The ratio of actual output to design capacity is:

A. design capacity
B. effective capacity
C. actual capacity
D. efficiency
E. utilization
Capacity in excess of expected demand that is intended to offset uncertainty is a:

A. margin protect
B. line balance
C. capacity cushion
D. timing bubble
E. none of the above
Aggregate planning is capacity planning for:

A. the long range
B. the intermediate range
C. the short range
D. typically one to three months
E. typically one or more years
III. Problem Solving (30 points)

Question 1 (6 points)
The weekly output of a production process is shown below, together with data for labor and material
inputs. The standard inventory value of the output is $125 per unit. Overhead is charged weekly at the
rate of $1500 plus .5 times direct labor cost. Assume a 40-hour week and an hourly wage of $16.
Material cost is $10 per running foot. What is the average multi-factor productivity for this process?
An analyst has observed 28 work cycles, for which the average cycle time was five minutes and the
performance rating was 1.05. Allowances for the department are 25 percent of job time. What standard
time is appropriate for this job?
A system consists of three components A, B, and C. C is a backup for B and works when B is down. A and
B (or its backup) must work together for the entire system to work. Reliability of each component is
marked below.
1) Compute the system reliability. (5 points)

2) Now we have an omnipotent additional backup D with reliability only 0.1. Should we use it at all? If
using it, where should it be attached to obtain the highest system reliability? (Hint: Attaching to B is
equivalent to attaching to C) (3 points)
.8
A B
.9 .8
Given the following data for a make or buy decision:
(1) For what range of output would you prefer to buy?
(2) For what range of output would you prefer to make?
IV. Small Essay (20 points)

List at least 3 key issues for today’s business operations and explain how each of them affects today’s
business operations.

Given the projected demands for the next six months, prepare an aggregate plan that uses inventory,
regular time and overtime, and backorders. The plan must wind up with no units in ending inventory in
Period 6. Regular time capacity is 150 units per month. Overtime capacity is 20 units per month.
Overtime cost is $30 per unit, backorder cost is $20 per unit, inventory holding cost is $5 per unit,
regular time cost of $20 per unit, and beginning inventory is zero.
Keys
I. True/False
FALSE; TRUE; TRUE; TRUE; FALSE; TRUE; FALSE; TRUE; TRUE; TRUE
II. Multiple Choices
DDDDCCCCCABDECB
III. Problem Solving
1.
2.
3. (1) 0.864; (2) use it on A, the reliability will be 0.8736.
4. (1) 1-24,999; (2) 25,001 and above (be careful about the range)
IV. Small Essay

1. Example key issues: economic conditions, the internet, ecommerce, ebusiness, globalization,
outsourcing, quality problems, risk management. You can also list key issues that are not in the textbook
but you have to convince the reader that it is a critical issue.
2. The aggregate plan should look like this:
With costs as follows:
Total cost of this plan is $20,200.

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Exam 1 Study Guide

Service involves a much higher degree of customer contact than manufacturing.

Productivity is defined as the ratio of output to input.

Strategy includes both organizational and functional strategies.

Concurrent Engineering is another term for sequential development.

II. Multiple Choice (30 points)

Which of the following is not a characteristic of service operations?

Productivity is expressed as:

The external elements of SWOT analysis are:

Behavioral approaches to job design include:

Which of the following most closely describes job enlargement?

A basic question in capacity planning is:

The ratio of actual output to design capacity is:

Capacity in excess of expected demand that is intended to offset uncertainty is a:

Aggregate planning is capacity planning for:

III. Problem Solving (30 points)

1) Compute the system reliability. (5 points)

Given the following data for a make or buy decision:

(1) For what range of output would you prefer to buy?

(2) For what range of output would you prefer to make?

IV. Small Essay (20 points)

Question 6 (12 points)

II. Multiple Choices

III. Problem Solving

3. (1) 0.864; (2) use it on A, the reliability will be 0.8736.

IV. Small Essay

2. The aggregate plan should look like this:

With costs as follows:

Total cost of this plan is $20,200.

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