Operational Management Exam 2

It is usually a good idea to keep capacity planning separate from product and service design so that the issues in each area don't become intertwined.

Effective capacity is always less than design capacity.

Design capacity is the maximum output rate or service rate an operation is designed for.

Increasing the capacity of a bottleneck operation by 10% will always increase the capacity of the system by 10%.

Increasing quality will cause an increase in productivity, and hence, and increase in capacity.

Increasing the capacity of operations that follow a bottleneck operation will improve productivity because it will help those operation to overcome the bottleneck effect.

If capacity increases require a long time, a following strategy may be the best option.

Efficiency can be defined as the ratio of actual output to effective capacity.

Utilization can be defined as the ratio of design capacity to actual output.

A capacity cushion is the difference between capacity and expected demand.

The term economies of scale is used to describe the phenomenon whereby increases in the output rate result in a decrease in unit costs.

Concepts such as cash flow and present value are important financial measures for analyzing capacity alternatives.

The breakeven point occurs at an output where total cost and total profit are equal.

The point at which a decision maker is indifferent between two alternatives means both alternatives are optimal.

Capacity planners must keep a narrow focus in order to stay on track.

Which one of these is not a determinant of effective capacity, or are they all determinants?

Which one of these does not enhance developing capacity alternatives?

Which one of these is the primary input in capacity planning?

Which one of these is not necessarily an important factor in planning service capacity?

Which one of these is not a reason for diseconomies of scale?

The two basic questions in inventory management are how much to order and when to order.

Using the EOQ model, if an item's holding cost increases, its order quantity will decrease.

Use of the fixed-interval model requires having a perpetual inventory system.

With the A-B-C approach, items which have high unit costs are classified as A items.

When using EOQ ordering, the order quantity must be computed in every order cycle.

Inventory might be held to take advantage of order cycles.

The economic order quantity cannot be used when holding costs are a percentage of purchase cost.

Companies that can successfully use the A-B-C approach can avoid using EOQ models.

The objective of inventory management is to minimize holding costs.

Holding and ordering costs are inversely related to each other.

A two-bin system is essentially a simple reorder point system.

In the basic EOQ model, annual ordering cost and annual ordering cost are equal for the optimal order quantity.

Increasing the order quantity so that it is slightly above the EOQ would not increase the total cost by very much.

A fixed-interval ordering system would be used for items that have independent demand.

A store that sells daily newspapers could use the single-period model for reordering.

Other things beings equal, an increase in lead time for inventory orders will result in an increase in the:

If average demand for an item is 21 units per day, safety stock is 4 units, and lead time is 2 days, the ROP will be:

In an A-B-C system, B items typically represent about this percentage of items:

Which model does not take into account the amount of inventory on hand?

Which product is usually bought on an ROP basis?

Which product is usually bought on a fixed interval basis?

In the two-bin system, the quantity in the second bin is equal to the:

Using the basic EOQ model, if the ordering cost doubles, the order quantity will be

If a decrease in unit price causes the average demand rate to increase, which one of these would not increase?

Setup costs are analogous to which one of these costs?

Linear programming is a procedure for constrained optimization.

Linear programming requires an environment of certainty.

Linear programming will generate a solution to a problem if a solution exists.

The solution to a linear programming problem might not lie on the border of the feasible solution space.

Except for the objective function, all other functions in linear programming are straight lines.

Except for the objective function, all other functions in linear programming are straight lines.

Graphical solutions are limited to problems that have two constraints.

A linear programming problem can have more than one optimal solution.

The solution to a graphical problem can be determined by sliding the objective function and by enumeration.

As the objective function is moved away from the origin, its value decreases

A shadow price indicates how much decision variable's value can change without affecting the optimal value of the objective function.

The range of optimality indicates how much decision variable's value can change without affecting the optimal value of the objective function.

An optimal solution to an LP problem can always be found at a corner point of the feasible solution space if a problem has a solution.

A redundant constraint is one that forms a unique border of the feasible solution space.

Slack relates to a › constraint

If a constraint has a slack equal to zero, it is referred to as a binding constraint.

Which one is not an assumption of linear programming models?

In a two-variable problem, a solution occurs at

In a typical maximization problem, at least one constraint is this type:

Which objective function is parallel to the constraint 4x + 2y ‹ 10?

The range of feasibility relates to:

The range of optimality relates to:

Which one of these could have a non-zero surplus?

Which type of change does not fall into the category of sensitivity analysis?

If a change is within the range of feasibility, which of these will change?

If a change is within the range of optimality for a variable that is in solution, which of these will not change?

The goal in process selection is to match processing capability with expected demand.

Two benefits of cellular manufacturing are low cost and flexibility.

Process layouts are common in non-manufacturing environments.

Departments are typical in product layouts.

Intermittent processing systems generally tend to have special purpose equipment.

For repetitive processing, machines of the same type are grouped into departments.

A service process matrix is a tool that can be useful for organizations contemplating strategic changes in service operations.

Service systems do not lend themselves to automation. That is why you do not encounter automated services.

The degree of customer contact and the degree of customization are two key factors in service layout design

Product layouts usually require less-skilled workers than process layouts.

Process layouts tend to have lower equipment utilization than product layouts.

The term balance delay refers to the percentage of idle time for a line.

The minimum cycle time of a line is equal to the time of the shortest task.

Cycle time is the time allowed at each work station to complete a set of tasks.

A DVD player would most likely be repaired in this type of layout:

Which system has the least flexibility?

Which type of operation would be most closely associated with division of labor?

The type of layout that would be used to build a submarine is:

Which processing system would be the least likely choice for producing a pair of shoes?

Which two types of processing systems would most likely be used to produce iPods?

Product or service profiling links key product or service requirements to

Which one does not relate to designing process layouts?

In a Muther closeness grid, which symbol is used for a location if closeness isn't important?

In a Muther closeness grid, which symbol reflects the greatest important for closeness?

Which one of the following involves a group of machines that involve supervisory computer control and automatic material handling?

Group technology is often related to which one of the following?

Inventory: a stock or store of goods

Independent demand – finished goods, items that are ready to be sold

Dependent demand – components of finished products

Periodic System - Physical count of items made at periodic intervals

Perpetual Inventory System System that keeps track of removals from inventory continuously, thus monitoring current levels of each item

Two-Bin System - Two containers of inventory; reorder when the first is empty

Universal Bar Code - Bar code printed on a label that has information about the item to which it is attached

Lead time: time interval between ordering and receiving the order

Holding (carrying) costs: cost to carry an item in inventory for a length of time, usually a year

Ordering costs: costs of ordering and receiving inventory

Shortage costs: costs when demand exceeds supply