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Q:
The Standard & Poor's Indexes are price-weighted indexes.
Q:
The Standard & Poor's Midcap Index is composed of 500 middle-sized firms.
Q:
A change in a high-priced stock's value has a greater impact on the Dow Jones Industrial Average than a change in a low-priced stock.
Q:
The Dow Jones Industrial Average is a value-weighted index.
Q:
The divisor in the Dow Jones Industrial Average equals 30.
Q:
The Dow Jones Composite index combines the Dow Jones Industrial, Transportation, and Utility averages into an index of 65 stocks.
Q:
The base period for the Standard & Poor's Stock Indexes is 1957-58.
Q:
The Dow Jones Industrial Average is not adjusted for stock splits.
Q:
The S&P Indexes are often used by professionals because they are weighted by total market value of the companies in the index.
Q:
The Value Line Average reflects changes in stock prices, rather than value of shares outstanding.
Q:
The Value Line Average contains stocks from several exchanges or markets.
Q:
Which of the following statements about acceptance sampling is true?
A) Acceptance sampling draws a sample from a population of items, tests the sample, accepts the entire population if the sample is good enough, and rejects it if the sample is poor enough.
B) The sampling plan contains information about the sample size to be drawn and the critical acceptance or rejection numbers for that sample size.
C) The steeper an operating characteristic curve, the better its ability to discriminate between good and bad lots.
D) All of the above are true.
E) All of the above are false.
Q:
Acceptance sampling:
A) may involve inspectors taking random samples (or batches) of finished products and measuring them against predetermined standards.
B) may involve inspectors taking random samples (or batches) of incoming raw materials and measuring them against predetermined standards.
C) is more economical than 100% inspection.
D) may be either of a variable or attribute type, although attribute inspection is more common in the business environment.
E) All of the above are true.
Q:
An acceptance sampling plan's ability to discriminate between low quality lots and high quality lots is described by:
A) a Gantt chart.
B) the Central Limit Theorem.
C) a process control chart.
D) an operating characteristic curve.
E) a range chart.
Q:
Acceptance sampling's primary purpose is to:
A) estimate process quality.
B) identify processes that are out of control.
C) detect and eliminate defectives.
D) decide if a lot meets predetermined standards.
E) determine whether defective items found in sampling should be replaced.
Q:
Acceptance sampling:
A) is the application of statistical techniques to the control of processes.
B) was developed by Walter Shewhart of Bell Laboratories.
C) is used to determine whether to accept or reject a lot of material based on the evaluation of a sample.
D) separates the natural and assignable causes of variation.
E) is another name for 100% inspection.
Q:
Consumer's risk is the probability of:
A) accepting a good lot.
B) rejecting a good lot.
C) rejecting a bad lot.
D) accepting a bad lot.
E) none of the above
Q:
The steeper an OC curve, the better it discriminates between good and bad lots.
Q:
The acceptable quality level (AQL) is the average level of quality we are willing to accept.
Q:
An acceptance sampling plan must define "good lots" and "bad lots" and specify the risk level associated with each one.
Q:
The probability of rejecting a good lot is known as consumer's risk.
Q:
In acceptance sampling, a manager can reach the wrong conclusion if the sample is not representative of the population it was drawn from.
Q:
A run test is used:
A) to examine variability in acceptance sampling plans.
B) in acceptance sampling to establish control.
C) to examine points in a control chart to check for natural variability.
D) to examine points in a control chart to check for nonrandom variability.
E) to test the validity of the Central Limit Theorem.
Q:
A nationwide parcel delivery service keeps track of the number of late deliveries (more than 30 minutes past the time promised to clients) per day. They plan on using a control chart to plot their results. Which type of control chart(s) would you recommend?
A) both x-bar chart and R-chart
B) p-chart
C) c-chart
D) x-bar chart
E) both p-chart and c-chart
Q:
A manufacturer uses statistical process control to control the quality of the firm's products. Samples of 50 of Product A are taken, and a defective/acceptable decision is made on each unit sampled. For Product B, the number of flaws per unit is counted. What type(s) of control charts should be used?
A) p-charts for both A and B
B) p-chart for A, c-chart for B
C) c-charts for both A and B
D) p-chart for A, mean and range charts for B
E) c-chart for A, mean and range charts for B
Q:
The local newspaper receives several complaints per day about typographic errors. Over a seven-day period, the publisher has received calls from readers reporting the following total daily number of errors: 4, 3, 2, 6, 7, 3, and 9. Based on these data alone, what type of control chart(s) should the publisher use?
A) p-chart
B) c-chart
C) x-bar chart
D) R-chart
E) x-bar chart and R-chart
Q:
The c-chart signals whether there has been a:
A) gain or loss in uniformity.
B) change in the number of defects per unit.
C) change in the central tendency of the process output.
D) change in the percent defective in a sample.
E) change in the AOQ.
Q:
What is the statistical process chart used to control the number of defects per unit of output?
A) x-bar chart
B) R-chart
C) p-chart
D) AOQ chart
E) c-chart
Q:
The normal application of a p-chart is in:
A) process sampling by variables.
B) acceptance sampling by variables.
C) process sampling by attributes.
D) acceptance sampling by attributes.
E) process capability ratio computations.
Q:
Which of the following is true of a p-chart?
A) The lower control limit is found by subtracting a fraction from the average number of defects.
B) The lower control limit indicates the minimum acceptable number of defects.
C) The lower control limit equals D3 times p-bar.
D) The lower control limit may be at zero.
E) The lower control limit is the same as the lot tolerance percent defective.
Q:
According to the text, what is the most common choice of limits for control charts?
A) 1 standard deviation
B) 2 standard deviations
C) 3 standard deviations
D) 3 standard deviations for means and 2 standard deviations for ranges
E) 6 standard deviations
Q:
To set x-bar chart upper and lower control limits, one must know the process central line, which is the:
A) average of the sample means.
B) total number of defects in the population.
C) percent defects in the population.
D) size of the population.
E) average range.
Q:
Plots of sample ranges indicate that the most recent value is below the lower control limit. What course of action would you recommend?
A) Since there is no obvious pattern in the measurements, variability is in control.
B) One value outside the control limits is insufficient to warrant any action.
C) Lower than expected dispersion is a desirable condition; there is no reason to investigate.
D) The process is out of control; reject the last units produced.
E) Variation is not in control; investigate what created this condition.
Q:
Excess bags of basic commodities such as flour and sugar that are stored in a restaurant's kitchen represent which of the following wastes?
A) overproduction
B) queues
C) transportation
D) inventory
E) defective product
Q:
Because most services cannot be inventoried, there is little place for JIT to help service organizations achieve competitive advantage.
Q:
Which of the following is characteristic of lean operations?
A) inventory buffers between each workstation to minimize system downtime
B) easy, mindless jobs
C) specialty workers with no cross-training
D) low space requirements
E) no supplier partnerships
Q:
Lean operations are known for their:
A) employee development.
B) supplier education.
C) supplier partnerships.
D) challenging jobs.
E) All of the above are attributes of lean operations.
Q:
Which of the following is NOT an attribute of lean operations?
A) eliminating almost all inventory through just-in-time techniques
B) minimizing space requirements by reducing the distance a part travels
C) pushing responsibility to the highest level possible through centralized decision making
D) educating suppliers to accept responsibility for helping meet customer needs
E) building worker flexibility through cross-training and reducing job classifications
Q:
Which of the following is not characteristic of a TPS employee?
A) knowledgeable
B) strict job classifications
C) know more about their job than anyone else
D) empowered
E) All of the above characterize a TPS employee.
Q:
Which of the following is an illustration of employee empowerment?
A) UPS drivers are trained to perform several motions smoothly and efficiently.
B) Unionization of the work place brings better morale and therefore better quality.
C) "No one knows the job better than those who do it."
D) all of the above
E) none of the above
Q:
The Toyota Production System requires that activities have built-in, automatic tests to signal problems.
Q:
Employee empowerment is unnecessary in the Toyota Production System, because automation and powerful information systems reduce the need for employee creativity and decision making.
Q:
A bakery uses 5 kanban containers that each holds 3 cakes. Daily demand is 10 cakes and safety stock is 5 cakes. What is the lead time?
Q:
A bakery uses 6 kanban containers that each hold 4 cakes. If safety stock is 2 cakes and lead time is 11 days, determine daily demand.
Q:
Planning bills of material are bills of material for "kits" of inexpensive items such as washers, nuts, and bolts.
Q:
"Phantom bills" are bills of material for subassemblies that do not exist in reality.
Q:
Lead times, inventory availability, and purchase orders outstanding are among the five things operations managers must know for effective use of dependent inventory models.
Q:
What is MRP? Identify four benefits from its use.
Q:
Describe the role of record accuracy in Wheeled Coach's successful use of MRP.
Q:
________ is a dependent demand technique that uses a bill of material, inventory, expected receipts, and a master production schedule to determine material requirements.
Q:
Wheeled Coach uses ________ as the catalyst for low inventory, high quality, tight schedules, and accurate records.
Q:
Which of the following is NOT a key benefit of MRP?
A) increased quality
B) better response to customer orders
C) faster response to market changes
D) improved utilization of facilities and labor
E) reduced inventory levels
Q:
Dependent demand and independent demand items differ in that:
A) for any product, all components are dependent-demand items.
B) the need for independent-demand items is forecast.
C) the need for dependent-demand items is calculated.
D) All of the above are true.
E) None of the above is true.
Q:
Demand for a given item is said to be dependent if:
A) it originates from the external customer.
B) there is a deep bill of material.
C) the finished products are mostly services (rather than goods).
D) there is a clearly identifiable parent.
E) the item has several children.
Q:
Which of the following is NOT one of the four key tasks that Wheeled Coach insists are necessary for successful MRP implementation?
A) The material plan must meet both schedule requirements and facility capabilities.
B) The plan must be executed as designed.
C) Inventory investment must be minimized.
D) Excellent record integrity must be maintained.
E) The process must adhere to stringent quality control standards.
Q:
The aggregate planning process usually includes dispatching of individual jobs.
Q:
Plans for new product development generally fall within the scope of aggregate planning.
Q:
A professional services firm is investigating revenue management as a means of taking advantage of unused capacity. Analysts for this firm estimate a demand curve for the firm's service, which is sold by the hour. Points on this demand curve include 9000 hours at the current rate of $60 per hour, 9500 hours at $55, 10,000 hours at $50, and 10,500 hours at $45. Based on this demand curve, what price point would be best for the firm, if its objective is maximum revenue?
Q:
A small private university normally charges the same price $200per credit-hour for all courses and for all students. While the university is pretty near capacity in the fall and spring, it finds that its classrooms are only about 60 percent occupied during the summer session. A student of operations management wonders if revenue management might be useful to both the university and its students alike. This student, with help from some economics majors, estimates a demand curve for summer course enrollment. Points on this demand curve include 9000 credit-hours at the current rate of $200, 12,000 credit hours at $180, 15,000 credit-hours at $160, and 18,000 credit-hours at $140. Based on this demand curve, what price point would best serve the university, if its objective is the greatest revenue for the summer session?
Q:
To make revenue management work, the company needs to manage what three issues?
Q:
Identify the five conditions that make revenue management of interest.
Q:
What is the primary management challenge when implementing revenue management?
Q:
________ involves capacity decisions that determine the allocation of resources to maximize revenue or yield.
Q:
A hotel room that goes unrented, a dental appointment that no patient booked, and an airline seat that went unsold, are all examples of ________ in services.
Q:
To use revenue management strategies, a business should have which combination of costs?
A) high variable and high fixed
B) low variable and high fixed
C) high variable and low fixed
D) low variable and low fixed
E) either A or B
Q:
Industries in which revenue management techniques are easiest to apply are those where:
A) use tends to be predictable, and pricing tends to be fixed.
B) use tends to be predictable, and pricing tends to be variable.
C) use tends to be uncertain, and pricing tends to be fixed.
D) use tends to be uncertain, and pricing tends to be variable.
E) All of the above, i.e., there is no difference.
Q:
Once revenue and total logistics costs are considered together, the optimal number of facilities in a distribution network may decrease compared to the optimal number of facilities based on total logistics costs only.
Q:
Designing distribution networks to meet customer expectations suggests three criteria: (1) rapid response, (2) cost, and (3) service.
Q:
As the number of facilities increases, total logistics costs tend to follow a curve that first rises, then declines.
Q:
What are several advantages of shipping by truck?
Q:
Supply chain managers outsource logistics to meet what three goals?
Q:
Why is channel assembly popular in the personal computer industry?
Q:
What is the trucking industry doing to improve efficiency?
Q:
________ is an approach that seeks efficiency of operations through the integration of all material acquisition, movement, and storage activities.
Q:
________ postpones final assembly of a product so the distribution channel can assemble it.
Q:
Warehouses sometimes perform certain other functions besides storing goods. Which of the following is NOT typically one of those functions?
A) purchasing
B) postponement
C) break-bulk activities
D) consolidation point
E) cross-docking
Q:
While freight rates are often based on very complicated pricing systems, in general, the primary freight price factor is based on which of the following attributes?
A) damage record
B) on-time delivery
C) door-to-door service
D) speed of shipment
E) consolidation capabilities
Q:
Cross-sourcing describes the practice of having two suppliers provide every component.
Q:
The new model of a tight, fast, low-inventory supply chain, operating across political and cultural boundaries, has reduced the overall level of supply chain risk.
Q:
Use of a diversified supply base represents one of the most common supply chain risk reduction tactics for several different supply chain risk categories.