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Q:
(p. 98) Capacity planning that involves hiring, layoffs, some new tooling, minor equipment purchases, and subcontracting is considered as which one of the following planning horizons?
A. Intermediate range
B. Long range
C. Short range
D. Current
E. Upcoming
Q:
(p. 101) The ability to rapidly and inexpensively switch production from one product to another enables what are sometimes referred to as:
A. Economies of scale
B. Economies of size
C. Economies of shape
D. Economies of scope
E. Economies of shipping
Q:
(p. 108) Because services cannot be stored for later use, service managers consider time as one of their supplies or resources.
Q:
(p. 102) In practice achieving a perfectly balanced plant is usually both impossible and undesirable.
Q:
(p. 102) In practice, achieving a perfectly balanced plant is usually desirable but impossible.
Q:
(p. 105) In decision tree analysis the time value of money is ignored because you are only concerned with cash costs.
Q:
(p. 103) When a firm's design capacity is less than the capacity required to meet its demand, it is said to have a negative capacity cushion.
Q:
(p. 103) The capacity cushion is the ratio of capacity used to the best capacity level.
Q:
(p. 103) The larger the capacity cushion the better.
Q:
(p. 103) The smaller the capacity cushion the better.
Q:
(p. 110) Low rates of capacity utilization in service organizations are never appropriate.
Q:
(p. 105) In a decision tree, the only time probabilities are applied to a decision node is when the decision is being made by someone else such as you customer or your competitor.
Q:
(p. 105-108) The probability of each occurrence at a decision tree chance node is the reciprocal of the number of possibilities at the chance node.
Q:
(p. 105) In solving a decision tree problem, calculations start at the ends of the "branches" of the tree and work backwards to the base of the tree.
Q:
(p. 105-108) A decision tree problem does not need probabilities or payoffs to generate a solution.
Q:
(p. 103) A capacity cushion is the amount of capacity less than expected demand.
Q:
(p. 102) Sharing capacity is a common source of external capacity.
Q:
(p. 102) Outsourcing is a common source of external capacity.
Q:
(p. 102) The frequency of adding to productive capacity should balance the costs of upgrading too frequently and the costs of upgrading too infrequently.
Q:
(p. 101) Economies of scope exist when multiple products can be produced at a lower cost in combination than they can separately.
Q:
(p. 101) Capacity flexibility means having the ability to rapidly increase or decrease production levels, or to shift production capacity quickly from one product or service to another.
Q:
(p. 101) The ultimate in plant flexibility is a one-hour-changeover time plant.
Q:
(p. 98) Making adjustments to eliminate the variance between planned and actual output is tied into intermediate range capacity planning.
Q:
(p. 100) A production facility develops virtuosity and works best when it focused on a widely varied set of production objectives.
Q:
(p. 100) A production facility works best when it focuses on a fairly limited set of production objectives.
Q:
(p. 100) The problem of keeping demand sufficiently high to keep a large factory busy is a sales issue and not a diseconomy of scale.
Q:
(p. 99) A piece of equipment with twice the capacity of another piece typically costs twice as much to purchase and to operate.
Q:
(p. 99) The basic notion of economies of scale is that as a plant gets larger and volume increases, the average cost per unit of output drops.
Q:
(p. 98) Capacity planning is generally viewed in three time durations: Immediate, Intermediate and Indeterminate.
Q:
(p. 98) Overtime and personnel transfers are solutions to capacity problems in the intermediate term.
Q:
(p. 98) Long-range capacity planning requires top management participation.
Q:
(p. 100) At some point, the size of a growing plant can become too large and diseconomies of scale become a capacity planning problem.
Q:
(p. 99) Best operating level is the volume of output at which average unit cost is minimized.
Q:
(p. 99) Best operating level is usually a multiple of the level of capacity for which a process was designed.
Q:
(p. 99) The objective of strategic capacity planning is to determine the overall capacity level of capital intensive resources (including facilities, equipment, and overall labor force size) that best supports the company's long-range competitive strategy.
Q:
(p. 99) The objective of strategic capacity planning is to determine the overall capacity level of capital intensive resources (including facilities, equipment, and overall labor force size) that best supports the company's short-range competitive strategy.
Q:
(p. 99) The objective of strategic capacity planning is to provide an approach for determining the overall capacity level of labor-intensive resources.
Q:
(p. 99) The capacity utilization rate is found by dividing best operating level by capacity used.
Q:
(p. 99) Capacity can be defined as the amount of available resource inputs relative to requirements for output over a particular period of time.
Q:
(p. 98) When evaluating capacity, managers need to consider both resource inputs and product outputs.
Q:
(p. 98) Capacity can be defined as the ability to hold, receive, store, or accommodate.
Q:
(p. 70) Which of the following is the portion of observations you would expect to see lying within a plus or minus 3 MAD range?
A. 57.05 percent
B. 88.95 percent
C. 98.36 percent
D. 99.85 percent
E. 100 percent
Q:
(p. 71) You are hired as a consultant to advise a small firm on forecasting methodology. Based on your research you find the company has a MAD of 3. Its wants to have a 99.7 percent control limits on its forecasting system. It's most recent tracking signal value is 15. What should be your report to the company?
A. The forecasting model is operating acceptably
B. The forecasting model is out of control and needs to be corrected
C. The MAD value is incorrect
D. The upper control value is less than 20
E. The company is using an inappropriate forecasting methodology
Q:
(p. 71) A company has a MAD of 10. Its wants to have a 99.7 percent control limits on its forecasting system. It's most recent tracking signal value is 3.1. What can the company conclude from this information?
A. The forecasting model is operating acceptably
B. The forecasting model is out of control and needs to be corrected
C. The MAD value is incorrect
D. The upper control value is less than 20
E. It is using an inappropriate forecasting methodology
Q:
(p. 71) A company has calculated its running sum of forecast errors to be 500 and its mean absolute deviation is exactly 35. Which of the following is the company's tracking signal?
A. Cannot be calculated based on this information
B. About 14.3
C. More than 35
D. Exactly 35
E. About 0.07
Q:
(p. 71) If you were selecting from a variety of forecasting models based on MAD, which of the following MAD values from the same data would reflect the most accurate model?
A. 0.2
B. 0.8
C. 1.0
D. 10.0
E. 100.0
Q:
(p. 70) A company has actual unit demand for four consecutive years of 100, 105, 135, and 150. The respective forecasts were 120 for all four years. Which of the following is the resulting MAD value that can be computed from this data?
A. 2.5
B. 10
C. 20
D. 22.5
E. 30
Q:
(p. 70) A company has actual unit demand for three consecutive years of 124, 126, and 135. The respective forecasts for the same three years are 120, 120, and 130. Which of the following is the resulting MAD value that can be computed from this data?
A. 1
B. 3
C. 5
D. 15
E. 123
Q:
(p. 70) Which of the following are used to describe the degree of error?
A. Weighted moving average
B. Regression
C. Moving average
D. Forecast as a percent of actual
E. Mean absolute deviation
Q:
(p. 70) Which of the following is a possible source of bias error in forecasting?
A. Failing to include the right variables
B. Using the wrong forecasting method
C. Employing less sophisticated analysts than necessary
D. Using incorrect data
E. Using standard deviation rather than MAD
Q:
(p. 56) As a consultant you have been asked to generate a unit demand forecast for a product for year 2014 using exponential smoothing. The actual demand in year 2013 was 750. The forecast demand in year 2013 was 960. Using this data and a smoothing constant alpha of 0.3, which of the following is the resulting year 2014 forecast value?
A. 766
B. 813
C. 897
D. 1,023
E. 1,120
Q:
(p. 56) A company wants to generate a forecast for unit demand for year 2014 using exponential smoothing. The actual demand in year 2013 was 120. The forecast demand in year 2013 was 110. Using this data and a smoothing constant alpha of 0.1, which of the following is the resulting year 2014 forecast value?
A. 100
B. 110
C. 111
D. 114
E. 120
Q:
(p. 56) Given a prior forecast demand value of 1,100, a related actual demand value of 1,000, and a smoothing constant alpha of 0.3, what is the exponential smoothing forecast value?
A. 1,000
B. 1,030
C. 1,070
D. 1,130
E. 970
Q:
(p. 56) If a firm produced a product that was experiencing growth in demand, the smoothing constant alpha (reaction rate to differences) used in an exponential smoothing forecasting model would tend to be which of the following?
A. Close to zero
B. A very low percentage, less than 10%
C. The more rapid the growth, the higher the percentage
D. The more rapid the growth, the lower the percentage
E. 50 % or more
Q:
(p. 56) If a firm produced a standard item with relatively stable demand, the smoothing constant alpha (reaction rate to differences) used in an exponential smoothing forecasting model would tend to be in which of the following ranges?
A. 5 % to 10 %
B. 20 % to 50 %
C. 20 % to 80 %
D. 60 % to 120 %
E. 90 % to 100 %
Q:
(p. 56) Given a prior forecast demand value of 230, a related actual demand value of 250, and a smoothing constant alpha of 0.1, what is the exponential smoothing forecast value for the following period?
A. 230
B. 232
C. 238
D. 248
E. 250
Q:
(p. 56) The exponential smoothing method requires which of the following data to forecast the future?
A. The most recent forecast
B. Precise actual demand for the past several years
C. The value of the smoothing constant delta
D. Overall industry demand data
E. Tracking values
Q:
(p. 54) A company wants to forecast demand using the weighted moving average. If the company uses three prior yearly sales values (i.e., year 2011 = 160, year 2012 = 140 and year 2013 = 170), and we want to weight year 2011 at 30%, year 2012 at 30% and year 2013 at 40%, which of the following is the weighted moving average forecast for year 2014?
A. 170
B. 168
C. 158
D. 152
E. 146
Q:
What is the role of judgment in simulation?
Q:
(p. 54) A company wants to forecast demand using the weighted moving average. If the company uses two prior yearly sales values (i.e., year 2012 = 110 and year 2013 = 130), and we want to weight year 2012 at 10% and year 2013 at 90%, which of the following is the weighted moving average forecast for year 2014?
A. 120
B. 128
C. 133
D. 138
E. 142
Q:
As described in the text, validation of a simulation involves insuring that the simulation yields "correct" results when compared to the results of the actual real-world system. If this is so, why run simulations at all, why not just use the results of the actual situation which we obviously already know?
Q:
(p. 53) A company wants to forecast demand using the simple moving average. If the company uses three prior yearly sales values (i.e., year 2011 = 130, year 2012 = 110, and year 2013 =160), which of the following is the simple moving average forecast for year 2014?
A. 100.5
B. 122.5
C. 133.3
D. 135.6
E. 139.3
Q:
What is the most common approach to determining the appropriate run length of a simulation?
Q:
(p. 53) A company wants to forecast demand using the simple moving average. If the company uses four prior yearly sales values (i.e., year 2010 = 100, year 2011 = 120, year 2012 = 140, and year 2013 = 210), which of the following is the simple moving average forecast for year 2014?
A. 100.5
B. 140.0
C. 142.5
D. 145.5
E. 155.0
Q:
What are two ways that time is incremented in simulation models?
Q:
(p. 53) Which of the following considerations is not a factor in deciding which forecasting model a firm should choose?
A. Time horizon to forecast
B. Product
C. Accuracy required
D. Data availability
E. Analyst availability
Q:
(p. 52) Which of the following forecasting methods can be used for short-term forecasting?
A. Simple exponential smoothing
B. Delphi technique
C. Market research
D. Hoskins-Hamilton smoothing
E. Serial regression
Q:
What two kinds of probability distributions can be used in a simulation?
Q:
In constructing a simulation model you decide that a particular property of the real system should be allowed to vary throughout the simulation. What is that property called?
Q:
(p. 52) In general, which forecasting time frame is best to detect general trends?
A. Short-term forecasts
B. Quick-time forecasts
C. Long range forecasts
D. Medium term forecasts
E. Rapid change forecasts
Q:
(p. 52) In general, which forecasting time frame best identifies seasonal effects?
A. Short-term forecasts
B. Quick-time forecasts
C. Long range forecasts
D. Medium term forecasts
E. Rapid change forecasts
Q:
What are the major phases of a simulation study?
Q:
(p. 52) In general, which forecasting time frame compensates most effectively for random variation and short term changes?
A. Short-term forecasts
B. Quick-time forecasts
C. Long range forecasts
D. Medium term forecasts
E. Rapid change forecasts
Q:
Which of the following are not viewed as advantages of simulation in operations management decision making?
A. Simulations are easy to run and easy to explain to upper management
B. Time can be compressed
C. Simulations do not disrupt ongoing activities of the real system
D. Simulations can be used to analyze transient conditions
E. Developing a simulation model can lead to better understanding of the real system
Q:
(p. 52) In business forecasting, what is usually considered a long-term time period?
A. Three months or longer
B. Six months or longer
C. One year or longer
D. Two years or longer
E. Ten years or longer
Q:
Which of the following are viewed as advantages of simulation in operations management decision making?
A. A simulation can be used in training courses as though it were a game
B. A significant amount of computer time can be utilized running simulations
C. The technique of simulation requires innovation as it lacks a standardized approach
D. Simulation may be equally precise but less accurate than a mathematical analysis
E. Simulations are inexpensive and easy to set up and run
Q:
(p. 52) In business forecasting, what is usually considered a medium-term time period?
A. Six weeks to one year
B. Three months to two years
C. One to five years
D. One to six months
E. Six months to six years
Q:
A desirable feature of simulation software is which of the following?
A. Have micro capability, such as the ability to zoom in on minute details
B. Output standard statistics such as cycle times, utilizations and wait times
C. Limiting the variety of data reported to help focus the analysis of alternatives
D. The ability to manipulate the frequency distribution pattern to achieve desired results
E. The ability to exactly mimic the actual situation being simulated
Q:
(p. 52) In business forecasting, what is usually considered a short-term time period?
A. Four weeks or less
B. More than three months
C. Six months or more
D. Less than three months
E. One year
Q:
Which of the following is not one of the desirable features of simulation software listed in the textbook?
A. Being capable of being used interactively
B. Being a complete and accurate model of reality
C. Having building blocks with built-in commands
D. Allow modules to be built and then connected
E. Allow users to write and incorporate their own routines