Mini Case Week 18 Answers 5rOS

Mini-Case week 18
Mini-Case
Sparky Weyer, president and CEO of Minimotors, Inc., a growing manufacturer of small
(some of them downright tiny) electric motors used in a variety of power tools and appliances
told potential investors, "These are exciting times for our company. We've made a lot of
changes over the past two years that have really improved our operations and lowered our
costs. Now we are ready to expand into new markets. Minimotors is on its way to becoming a
global player."
Sparky was meeting with potential financial backers in an effort to obtain funding for some
expensive new machinery he wanted to purchase. "You may have heard about some of the
ways we've cut costs," Sparky continued. "We've developed a new arrangement with several
of our biggest suppliers. They've agreed to make more frequent deliveries tied directly to our
production schedules. This will help us reduce our inventory costs dramatically. We've also
greatly reduced the number of defective motors we produce by carefully keeping tabs on all of
our manufacturing processes. In fact, we have set a goal of reducing our defects to 3.4 parts
per million. The main purpose of my meeting with you today is because we want to install
some sophisticated new machinery and software that will allow us to quickly design and
produce motors to the exact specifications of our customers. The machinery is computer-
controlled and can produce custom-designed products at very little increase in cost compared
to our mass-produced motors. We feel this flexibility and quick response time will give us a
tremendous competitive advantage and help us attract new customers. Installing the new
equipment and training our workers to use it properly will be a complex project, but I'm
confident that once we get everything up and running we'll be able to strengthen our position
as the leading maker of high-quality electric motors."
1) One of Sparky's goals is to expand globally. He is most interested in doing business with
the nations of the EU. In order to do business with the European Union, Sparky's company
should
A) gain ISO 9001 certification.
B) make sure his production workers all belong to an international union.
C) put more emphasis on low cost rather than product quality.
D) buy at least 50 percent of its supplies from countries belonging to the European Union.
Answer: A
Explanation: ISO 9001 refers to quality management and assurance standards. These
standards provide a common denominator of business quality that is accepted around the
world. The EU is demanding that firms wanting to do business with it must be certified as
meeting the ISO 9001 standards.
2) The arrangements Minimotors has worked out with its suppliers to reduce the amount of
inventory the company holds at any one time show that it is committed to a(n)
A) priority inventory scheduling system.
B) first in, first out inventory processing system.
C) just-in-time inventory control system.
D) ABC inventory system.
Answer: C
Explanation: In a just-in-time inventory control system, suppliers deliver just enough
supplies just in time for their use in a production process. While this requires frequent
deliveries, it also allows the producer to greatly reduce the amount of parts and materials held
in inventory.
3) The equipment and software Sparky wants to purchase will allow the computers used to
design motors to be linked directly to the computer-aided equipment on the factory floor.
Sparky is proposing to set up a(n)
A) modular manufacturing system.
B) computer-integrated manufacturing system.
C) E-hub that relies on network software to control the production process.
D) first-in, first-out production system.
Answer: B
Explanation: Computer-integrated manufacturing unites CAD (computer-aided design) with
CAM (computer-aided manufacturing).
4) In order to schedule deliveries, Minimotors's suppliers need detailed information about

when parts are needed. Minimotors will purchase a computer application that will link its
operation to sales forecasts to make sure needed parts and supplies are available at the right
time to meet customer demands. This planning system is known as
A) materials requirement planning (MRP).
B) program evaluation and review technique (PERT).
C) minimum daily requirements scheduling (MDRS).
D) sales-based requirements forecasting (SBRF).
Answer: A
Explanation: MRP is a computer-based planning system that uses sales forecasts to make
sure needed parts and materials are available at the right time and place.
5) Sparky sees quality control in terms of detecting potential problems to prevent their
occurrence and thus save Minimotors money. The quality control process that is most closely
linked to Sparky's goal is known as
A) Six Sigma.
B) Quality function deployment.
C) ERP.
D) PERT analysis.
Answer: A
Explanation: Quality control concepts such as Six Sigma tend to focus on detecting potential
problems to prevent their occurrence.
6) Sparky knows that installing the new equipment and training workers to use it efficiently
will be a long and complex process consisting of many different tasks. Which of the following
methods would help him determine how long this project is likely to take?
A) TPSM (task priority scheduling method)
B) DA (dependency analysis)
C) TRSS (task and resource scheduling system)
D) PERT (program evaluation and review technique)
Answer: D
Explanation: PERT enables managers to estimate how long it will take to complete a project
by identifying the project's critical path, which is the sequence of tasks in a project that takes
the longest to complete.
7) While Minimotors has focused on improving production efficiencies, global customers are
inquiring about its environmental policies. In light of its strategy to serve customers in the
EU, Sparky has requested two of its lead engineers to investigate what it would take to meet
the environmental standards of its socially responsible customers. The engineers should
investigate ________ as best practices for managing a firm's impact on its environment.
A) the EPA's minimum pollution standards
B) ISO 14001
C) RG3 Regulations
D) WTO environmental policy
Answer: B
Explanation: ISO 14001 is a collection of best practices for managing an organization's
impact on the environment. Companies that are ISO 14001 certified show that they have an
environmental management system in place and are able to demonstrate that they maintain an
environmental policy; they have improvement targets; they conduct regular environmental
audits; and top management reviews the process.

Mini Case Week 18 Answers 5rOS

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Mini-Case week 18

4) In order to schedule deliveries, Minimotors's suppliers need detailed information about

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