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Operations Management Exam 4

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Question;Question 1Consider a packaged milk products supply chain. A lumber company provides wood to a papermill, who supplies cardboard to a container manufacturer, who supplies containers to the milkproducts manufacturer. The lumber company is:Answera tier one supplier.a tier two supplier.a tier three supplier.a tier four supplier.not in the supplychain.Question 2Which term refers to inaccurate or distorted demand information created in the supply chain?AnswerBattle axeeffectCobra effectBullwhipeffectLasso effectWhirlpooleffectQuestion 3Which of the following is not one of the four major causes of the bullwhip effect?AnswerDemand forecast updatingOrder batchingPrice fluctuationsThe business cycleRationing and shortagegamingQuestion 4When do rationing and shortage gaming occur?AnswerSupply exceeds demand.Demand exceeds supply.Government contracts are awarded.Transportation workers go on strike.Marginal revenue exceeds marginalcost.Question 5Online retailing, or B2C, has shifted:Answerthe cost of doing business.the power from the suppliers to theconsumers.the way the internet works.internal corporate power to the ITdepartment.corporate funding levels to the ITdepartment.Question 6What refers to owning or controlling sources of raw materials and components?AnswerBackward integrationHorizontal integrationEncapsulatingintegrationForward integrationSubsuming integrationQuestion 7According to several studies, what are the three most important criteria for selecting suppliers?AnswerPrice, quality, fast deliveryQuality, fast delivery, on-timedeliveryPrice, flexibility, on-time deliveryQuality, flexibility, fast deliveryPrice, quality, on-time deliveryQuestion 8Early supplier involvement refers to the involvement of critical suppliers for what?AnswerStrategic planningAssembly line designSpeedy deliveryplanningSelection of newsuppliersNew product designQuestion 9What is the process whereby shipments are transferred directly from inbound trailers to outboundtrailers?AnswercrossdockingdirectdockingnodockingsimuldockingtransferdockingQuestion 10Benetton is well known for the practice of assembling all white sweaters and waiting to dye themmuch closer to the time of sale. This is an example of what?AnswerStupidityPostponementFractionalizationPartitioningGenericnessQuestion 11Supply chain velocity refers toAnswerhow fast the transportation vendor ishow fast the company pays the supply chain vendorshow fast the purchasing department responds to a requestthe speed at which a product moves through a pipeline from the manufacturer to thecustomerthe speed at which the warehouse is able to crossdock a shipmentQuestion 12Which of the following is not a typical result of the bullwhip effect?AnswerAbsenteeismLost revenuesIneffective transportation usePoor customer service levelsMisused manufacturingcapacityQuestion 13Which of the following is not a remedy for the bullwhip effect?AnswerAllocate units based on pastdemandPrice stabilizationFill orders based on a setpercentageEliminate order batchingInformation sharingQuestion 14Which of the following is NOT a positive attribute of Multiple Suppliers?Answerprovides a greater flexibility of volumeeliminates a supplier's dependence on the purchaserprobability of assured supply is betterdeliveries can be schedule more easilyallows for testing of new suppliers without jeopardizing the flow ofmaterialsQuestion 15Companies want a supply chain that makes it possible to:Answermanage all suppliers' development costs.manage and adapt to all of the businessdynamics.manage distribution display.manage distribution outlet retail prices.manage customer demands.Question 16Will's omelet factory produces 2,500 omelets a day. They've determined that their daily fixedcosts are $4,000 with a variable cost of fifteen cents per omelet. What should Will charge foreach omelet to make a 10% profit, rounded to the next whole dollar?Answer5.004.003.002.001.00Question 17Logo, Inc., can transport its own goods for a $140,000 annual cost and $25 per unit. A logisticssupplier offers a contract for a $100,000 annual cost at $30 per unit. What is the indifferencepoint?Answer8000700060005000Question 18Simuelson Industries can produce its own motors for a $60,000 fixed monthly cost and a $50variable cost per unit. Alternatively, Simuelson Industries can purchase the motors from anoutside supplier for $50,000 per month and $58 per unit. What option should be chosen ifmonthly demand is 1200 units?Answerin-houseproductionoutsourcingQuestion 19Yannis Corporation is trying to decide whether to produce its own subassemblies or outsourcethem. In-house production costs would include an annual fixed cost of $250,000, materials costsper unit of $7, and labor costs per unit of $5. Teshtown, Inc. has agreed to provide thesubassemblies for an annual cost of $400,000 and a unit cost of $8 per subassembly. Over whatranges of demand is outsourcing best option?AnswerLess than 37500Greater than or equal to37500Can not be determinedQuestion 20Big Oil Refinery is losing money every month. They cannot shut down the refinery. Whatquantity (in gallons) of product should they make in an effort to break even? Their primaryproduct sale price is $1.50 per gallon. The production fixed cost is $36,000/day. The variablecost per gallon is $1.30.Answer36,00018,000180,00030,000Question 21Twenty samples of n = 200 were taken by an operator at a workstation in a production process.The number of defective items in each sample was recorded as given in the following table.Management wants to develop a p-chart. The desired confidence level is 80.0 percent. What isthe upper control limit?Sampl Number ofSampl Number ofeDefectiveseDefectives11211162181215310131341514165161518619161771717188121820911192110142022Answerclose to 0.08close to0.019close to 1.28close 0.105close to 0.8Question 22Cans of soup are supposed to weigh exactly 16 oz. Inspectors want to develop process controlcharts. They take eight samples of five boxes and weigh them. They obtain the following data.What is the upper control limit for the x-bar chart?SampleMeanRange115.21.8214.60.7316.50.5418.10.4513.20.2616.00.4715.90.58Answerclose to15.79close to15.93close to15.54close to15.8214.80.9Question 23Cans of soup are supposed to weigh exactly 16 oz. Inspectors want to develop process controlcharts. They take eight samples of five boxes and weigh them. They obtain the following data.What is the upper control limit for the R chart?SampleMeanRange115.21.8214.60.7316.50.5418.10.4513.20.2616.00.4715.90.5814.80.9Answerclose to1.42close to0.78close to1.12close to0.82Question 24Cans of soup are supposed to weigh exactly 16 oz. Inspectors want to develop process controlcharts. They take eight samples of five boxes and weigh them. They obtain the following data. Isthe process in a state of control?SampleMeanRange115.21.8214.60.7316.5418.1513.2616.0715.9814.8Answeryes (in control)0.50.40.20.40.50.9no (not incontrol)Question 25Eight samples of n = 50 were taken by an operator at a workstation in a production process. Thenumber of defective items in each sample was recorded as follows. Is the process in a state ofcontrol? Assume z =3.Sample Number of Defectives1102031248510616714810Answeryes (in control)no (out ofcontrol)Question 26Cholesterol Palace is a fast-food restaurant. Management was concerned with errors in fillingorders at its drive-up window. It hired several undercover quality inspectors to randomly place100 orders while the process seemed to be in control. The completed orders were then checkedfor accuracy. What is the average number of defects per order based on these data?DefectFrequencyIncomplete, shorter order12Unordered items dispensed2Wrong product dispensedWrong toppingsWrong size drinkDrink lid not sealedNo drinking straw with soft drink orderNo napkinsFar too many condiment packetsNo salt with sandwich or fries orderWrong changeOther14142170186510312Answerclose to1.69close to169close to0.59close to2.00Question 27Cholesterol Palace is a fast-food restaurant. Management was concerned with errors in fillingorders at its drive-up window. It hired several undercover quality inspectors to randomly place100 orders while the process seemed to be in control. The completed orders were then checkedfor accuracy. What is the lower control limit for a c-chart. Use z =3.DefectFrequencyIncomplete, shorter order12Unordered items dispensed2Wrong product dispensed14Wrong toppings14Wrong size drink2Drink lid not sealed17No drinking straw with soft drink order0No napkins18Far too many condiment packets65No salt with sandwich or fries order10Wrong change3Other12Answerclose to-2.21close to 1.3close to 3.0zero (0)close to1.69Question 28Cholesterol Palace is a fast-food restaurant. Management was concerned with errors in fillingorders at its drive-up window. It hired several undercover quality inspectors to randomly place100 orders while the process seemed to be in control. The completed orders were then checkedfor accuracy.DefectFrequencyIncomplete, shorter order12Unordered items dispensed2Wrong product dispensed14Wrong toppings14Wrong size drink2Drink lid not sealed17No drinking straw with soft drink order0No napkins18Far too many condiment packets65No salt with sandwich or fries order10Wrong change3Other12A quality inspector just used the drive-up window and now checks her order. Her cheeseburgerhas mustard on it although she ordered it without ketchup or mustard. Three handfuls of ketchupand mustard packets (far too many) are in the sack, but no napkins. And hot coffee has spilledbecause the lid wasn't properly sealed. Is the drive-up process in control?Answeryes (in control)no (not incontrol)Question 29In a single sampling plan the sample size n =5. The submitted lot has on an average 25%defective items. Three acceptance numbers (c = 0, c =1, and c=2) are being negotiated betweenthe manufacturer and the buyer. Which acceptance number is most desirable from themanufacturer's viewpoint. You may use the following OC curve to find the answer.Answerc=0c=1c=2Question 30In a double sampling plan the two acceptance numbers are: c1 = 8 and c2 = 12. The number ofdefectives found in the first sample is 9. Therefore, a second sample is taken. What is themaximum number of defectives allowed in the second sample for the lot to be accepted?

 

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