Operations Final Exam Prep

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| By Millerman180

Millerman180

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Quizzes Created: 1 | Total Attempts: 939

Questions: 88 | Attempts: 939 | Updated: Mar 21, 2023

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Questions and Answers

1.

-------- forecasts are needed to plan work-force levels, allocate budgets among divisions and schedule jobs and resources.
- A.
  
  Long-range
- B.
  
  Intermediate-range
- C.
  
  Short-range
- D.
  
  Demand planning
Correct Answer
B. Intermediate-range

Explanation
Intermediate-range forecasts are needed to plan work-force levels, allocate budgets among divisions, and schedule jobs and resources. This type of forecast typically covers a time frame of 3 months to 2 years and helps organizations make decisions regarding staffing, budgeting, and resource allocation. It provides a balance between the long-term strategic forecasts and the short-term operational forecasts, allowing companies to make informed decisions in the medium term.

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2.

____ forecasts are needed to plan for facility expansion.
- A.
  
  Long-range
- B.
  
  Short-range
- C.
  
  Intermediate-range
- D.
  
  Demand planning
Correct Answer
A. Long-range

Explanation
Long-range forecasts are needed to plan for facility expansion because they provide a projection of demand and market conditions over an extended period, typically beyond one year. Facility expansion requires significant investment and long-term commitment, so it is crucial to have accurate and reliable forecasts to ensure that the expansion aligns with future demand. Short-range and intermediate-range forecasts may not provide a comprehensive view of future demand, making them less suitable for planning facility expansion. Demand planning, while important, focuses more on managing current demand rather than forecasting future demand for expansion purposes.

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3.

____ forecasts are needed for planning production schedules and to assign workers to jobs.
- A.
  
  Long-range
- B.
  
  Short-range
- C.
  
  Intermediate-range
- D.
  
  Demand planning
Correct Answer
B. Short-range

Explanation
Short-range forecasts are needed for planning production schedules and assigning workers to jobs because they provide a relatively detailed and accurate prediction of demand in the near future. These forecasts typically cover a time frame of up to one year and are crucial for making day-to-day operational decisions. By having short-range forecasts, companies can efficiently allocate resources, adjust production levels, and schedule workers accordingly to meet customer demand and optimize productivity.

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4.

Which of the following is not one of the five characteristics of a time series?
- A.
  
  Time bucket
- B.
  
  Trend
- C.
  
  Cyclical
- D.
  
  Random variation
Correct Answer
A. Time bucket
5.

Repeatable periods of ups and downs over short periods of time are called ____.
- A.
  
  Trends
- B.
  
  Seasonal patterns
- C.
  
  Cyclical patterns
- D.
  
  Irregular patterns
Correct Answer
B. Seasonal patterns

Explanation
Seasonal patterns refer to the repetitive fluctuations in data that occur within a specific time frame, such as a year or a season. These patterns are influenced by factors such as weather, holidays, and other recurring events. They can be observed in various industries, such as retail sales, tourism, and agriculture, where demand and supply tend to vary predictably throughout the year. Seasonal patterns allow businesses to anticipate and plan for fluctuations in their operations, such as adjusting inventory levels or staffing requirements accordingly.

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6.

Regular patterns in a data series that take place over long periods of time are called ____.
- A.
  
  Trends
- B.
  
  Seasonal Patterns
- C.
  
  Cyclical Patterns
- D.
  
  Irregular Patterns
Correct Answer
C. Cyclical Patterns

Explanation
Cyclical patterns refer to regular fluctuations in a data series that occur over long periods of time. These patterns are characterized by repetitive ups and downs, where the data values tend to follow a predictable cycle or wave-like pattern. Unlike seasonal patterns, which occur within shorter time frames and are influenced by factors like weather or holidays, cyclical patterns are driven by longer-term economic or business cycles. These cycles can be influenced by various factors such as interest rates, economic policies, or market trends. Therefore, cyclical patterns are the correct answer to describe regular patterns in a data series that occur over long periods of time.

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7.

The forecasting error measurement that is different in that the measurement scale factor is eliminated is
- A.
  
  MSE
- B.
  
  MAD
- C.
  
  RMSE
- D.
  
  MAPE
Correct Answer
D. MAPE

Explanation
MAPE stands for Mean Absolute Percentage Error. It is a forecasting error measurement that calculates the average percentage difference between the actual and forecasted values. Unlike other error measurements such as MSE, MAD, and RMSE, MAPE eliminates the measurement scale factor, making it a useful tool for comparing forecast accuracy across different datasets or variables. MAPE is often preferred when dealing with data that has varying scales or units.

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8.

Which of the following is not a statistical method?
- A.
  
  Delphi
- B.
  
  Exponential Smoothing
- C.
  
  Moving agerage
- D.
  
  Linear Regression
Correct Answer
A. DelpHi

Explanation
Delphi is not a statistical method because it is a qualitative forecasting technique that relies on expert opinions and consensus rather than data analysis. It involves a group of experts providing their individual judgments and then reaching a collective decision through a series of iterations. In contrast, the other options (Exponential Smoothing, Moving Average, and Linear Regression) are all statistical methods commonly used for analyzing and forecasting quantitative data.

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9.

A moving average model works best when ____ in the time series.
- A.
  
  Only irregular variation is present
- B.
  
  Only a trend is present
- C.
  
  There is no trend, seasonal, or cyclical pattern
- D.
  
  Trend, seasonal, and cyclical patterns all exist
Correct Answer
C. There is no trend, seasonal, or cyclical pattern

Explanation
A moving average model works best when there is no trend, seasonal, or cyclical pattern in the time series. This is because a moving average model is used to smooth out random fluctuations or irregular variations in the data. If there are other patterns present such as a trend, seasonal variations, or cyclical patterns, a different model may be more appropriate to capture and analyze those patterns effectively.

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10.

For single exponential smoothing
- A.
  
  Large values of alpha place more emphasis on recent data
- B.
  
  Small values of alpha place more emphasis on recent data
- C.
  
  Very volatile time series with substantial random variability should use a large value for alpha
- D.
  
  Very stable time series with little random variability should use small values for alpha
Correct Answer
A. Large values of alpHa place more empHasis on recent data

Explanation
Large values of alpha in single exponential smoothing place more emphasis on recent data. This means that the forecasted values will be more influenced by the most recent observations in the time series. This is useful in situations where there is a lot of volatility and random variability in the data, as it allows the model to quickly adapt to any sudden changes or fluctuations. On the other hand, small values of alpha would place less emphasis on recent data and give more weight to historical observations, making it more suitable for stable time series with little random variability.

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11.

Which is not true regarding simple exponential smoothing?
- A.
  
  Small values of alpha place more emphasis on past data
- B.
  
  Larger values of alpha have the advantage of quickly adjusting the forecast
- C.
  
  If alpha equals zero, the forecast will never change
- D.
  
  If alpha equals one, the forecast will never change
Correct Answer
D. If alpHa equals one, the forecast will never change

Explanation
If alpha equals one, the forecast will never change. This is because with simple exponential smoothing, the forecast for a future period is calculated by taking a weighted average of the actual value from the previous period and the forecast for the previous period. When alpha equals one, it means that all the weight is given to the actual value from the previous period and none to the forecast. As a result, the forecast will always be equal to the actual value from the previous period, leading to no change in the forecast.

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12.

If single exponential smoothing is used and the time series has a negative trend, the forecast
- A.
  
  Lag
- B.
  
  Overshoot
- C.
  
  Be on target
- D.
  
  Have a MAD equal to zero
Correct Answer
B. Overshoot

Explanation
If single exponential smoothing is used and the time series has a negative trend, the forecast will overshoot. This means that the forecasted values will be higher than the actual values, resulting in an overestimation of the trend. This occurs because single exponential smoothing relies heavily on the most recent observations, and a negative trend implies that the recent observations are lower than the previous ones. As a result, the forecast will not accurately capture the decreasing trend, leading to an overshooting of the actual values.

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13.

Regression analysis
- A.
  
  Is limited to one dependent and one independent variable
- B.
  
  Is best with non-linear relationships
- C.
  
  Maximizes the sum of the squared deviations between the actual time series value and the estimated values of the dependent variable
- D.
  
  Can be used with time as the independent variable
Correct Answer
D. Can be used with time as the independent variable

Explanation
Regression analysis can be used with time as the independent variable. This means that time can be used to predict or explain changes in the dependent variable. The regression model will estimate the relationship between time and the dependent variable, allowing for the analysis of how the dependent variable changes over time. This is particularly useful in studying trends, patterns, or forecasting future values based on the time variable.

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14.

An R-square of 0.80 means
- A.
  
  80% of the variability in the independent variable is explained by the dependent variable
- B.
  
  80% of the variability in the dependent variable is explained by the independent variable
- C.
  
  80% of the variability in the dependent variable is not explained by the independent variable
- D.
  
  Multiple regression was used
Correct Answer
B. 80% of the variability in the dependent variable is explained by the independent variable

Explanation
An R-square value of 0.80 indicates that 80% of the variability in the dependent variable can be explained by the independent variable. This means that the independent variable has a strong influence on the dependent variable and is able to account for a significant portion of its variability. The higher the R-square value, the better the independent variable can predict and explain the variability in the dependent variable.

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15.

If actual demand for a product is highly influenced by only random variation, the quantitative technique to use for forecasting demand is
- A.
  
  Regression
- B.
  
  Moving average
- C.
  
  Mean Absolute Percentage Error (MAPE)
- D.
  
  Delphi
Correct Answer
B. Moving average

Explanation
Moving average is the appropriate quantitative technique to use for forecasting demand when the actual demand for a product is highly influenced by only random variation. This technique calculates the average of a certain number of past data points to smooth out any random fluctuations and identify the underlying trend. By using moving average, the impact of random variation on the forecasted demand can be minimized, resulting in a more accurate prediction.

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16.

Exponential smoothing...
- A.
  
  Works best for long-term forecasting
- B.
  
  Yields a mathematically optimal solution
- C.
  
  Assigns weights to past data that decay exponentially as the data gets older
- D.
  
  Cannot be adapted to handle trend
Correct Answer
C. Assigns weights to past data that decay exponentially as the data gets older

Explanation
Exponential smoothing is a forecasting technique that assigns weights to past data based on an exponential decay function. This means that as the data gets older, the weights assigned to it decrease exponentially. By doing so, the technique gives more importance to recent data while gradually reducing the impact of older data. This allows for a smoother and more accurate prediction of future values. It does not necessarily work best for long-term forecasting, yield a mathematically optimal solution, or handle trend.

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17.

Which of the following does not fit with the Delphi method?
- A.
  
  Group of experts
- B.
  
  Brought together as a group
- C.
  
  Process iterates until a consensus is reached
- D.
  
  Qualitative as well as numerical outputs
Correct Answer
B. Brought together as a group

Explanation
The Delphi method involves a group of experts, who are brought together to participate in a structured communication process. The process iterates until a consensus is reached, which means that the group works collaboratively to reach an agreement or shared understanding. The method also allows for both qualitative and numerical outputs, meaning that it can capture a range of perspectives and data. Therefore, the statement "Brought together as a group" does not fit with the Delphi method as it contradicts the collaborative nature of the process.

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18.

All of the following are important in choosing a forecasting method except
- A.
  
  Smoothing constant (alpha)
- B.
  
  Time span for which forecast is made
- C.
  
  Data requirements
- D.
  
  Quantitative skills needed
Correct Answer
A. Smoothing constant (alpHa)

Explanation
The smoothing constant (alpha) is not important in choosing a forecasting method because it is a parameter specific to exponential smoothing techniques. The choice of alpha determines the weight given to recent observations in the forecast calculation. However, when choosing a forecasting method, factors such as the time span for which the forecast is made, data requirements, and quantitative skills needed are more important considerations. These factors determine the suitability and accuracy of the forecasting method for the specific situation.

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19.

All of the following are important concepts in forecasting except
- A.
  
  Determining the planning horizon length.
- B.
  
  Determining the time bucket size (i.e., year, quarter, month, week, day, etc.).
- C.
  
  Using a smoothing constant of 0.1 in Delphi methods of forecasting
- D.
  
  . Identifying cyclical patterns.
Correct Answer
C. Using a smoothing constant of 0.1 in DelpHi methods of forecasting

Explanation
The question asks for an important concept in forecasting that is not included in the given options. The correct answer is "Using a smoothing constant of 0.1 in Delphi methods of forecasting." This answer is correct because determining the planning horizon length, determining the time bucket size, and identifying cyclical patterns are all important concepts in forecasting. However, using a smoothing constant of 0.1 in Delphi methods of forecasting is not a concept that is typically associated with forecasting.

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20.

Which of the following is NOT one of the ten principles of forecasting published by a group of international experts?
- A.
  
  Use quantitative rather than qualitative methods.
- B.
  
  Never ask experts to justify their forecasts in writing.
- C.
  
  Use multiple measures of forecast accuracy
- D.
  
  Combine forecasts from approaches that differ
Correct Answer
B. Never ask experts to justify their forecasts in writing.

Explanation
The given correct answer, "Never ask experts to justify their forecasts in writing," is not one of the ten principles of forecasting published by a group of international experts. The other options, such as using quantitative methods, using multiple measures of forecast accuracy, and combining forecasts from different approaches, are all principles that are recommended for effective forecasting. Asking experts to justify their forecasts in writing is not mentioned as a principle in the given context.

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21.

The purpose of aggregate planning is to
- A.
  
  Minimize the work force size
- B.
  
  Maximize the production rate
- C.
  
  Minimize the cost of meeting demand
- D.
  
  Optimize the inventory level
Correct Answer
C. Minimize the cost of meeting demand

Explanation
Aggregate planning is a strategic process that aims to balance the supply and demand of a company's products or services over a specified period. By minimizing the cost of meeting demand, a company can effectively allocate its resources and reduce unnecessary expenses. This can be achieved by optimizing production schedules, managing inventory levels, and minimizing overtime or subcontracting costs. Ultimately, the goal is to find the most cost-effective way to meet customer demand while maintaining operational efficiency.

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22.

The words "product family", "budget allocation" and "long-term" fit best with which level of the generic framework for resource planning?
- A.
  
  Agreggate planning - Level 1
- B.
  
  Disaggregation - Level 2
- C.
  
  Execution - Level 3
- D.
  
  Capacity requirements planning
Correct Answer
A. Agreggate planning - Level 1

Explanation
The words "product family", "budget allocation", and "long-term" suggest a high-level planning process that involves making strategic decisions about allocating resources, such as budget and capacity, for a group of related products. This aligns with the concept of aggregate planning, which focuses on long-term resource allocation and balancing supply and demand at a high level. Therefore, the correct answer is Aggregate planning - Level 1.

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23.

If forecast demand exceeds the total factory or supply capacity, managers might simply decide not to meet forecast demand. This decision would most likely be made at which planning level?
- A.
  
  Aggregate planning - Level 1
- B.
  
  Disaggregation - Level 2
- C.
  
  Execution - Level 3
- D.
  
  Capacity requirements planning
Correct Answer
A. Aggregate planning - Level 1

Explanation
If forecast demand exceeds the total factory or supply capacity, managers might simply decide not to meet forecast demand. This decision would most likely be made at the aggregate planning level. Aggregate planning involves making high-level decisions about the overall production and capacity levels of the organization. In this situation, the decision not to meet forecast demand would involve adjusting the production and capacity levels to align with the available resources. This decision would be made at a higher planning level rather than at the execution or capacity requirements planning levels, which focus more on the detailed implementation and scheduling of production.

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24.

Assigning people to tasks, setting priorities for jobs and scheduling equipment fits best with which level of the generic framework for resource planning?
- A.
  
  Aggregate planning - Level 1
- B.
  
  Disaggregation - Level 2
- C.
  
  Execution - Level 3
- D.
  
  Capacity requirements planning
Correct Answer
C. Execution - Level 3

Explanation
Execution - Level 3 fits best with assigning people to tasks, setting priorities for jobs, and scheduling equipment because execution is the level where the actual implementation and carrying out of plans occur. At this level, specific tasks and activities are assigned to individuals, priorities are determined for different jobs, and resources such as equipment are scheduled to ensure efficient and effective execution of the plans. This level focuses on the day-to-day operations and activities required to achieve the goals set at the higher levels of planning.

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25.

Setting order sizes and schedules for individual subassemblies and resources by week or day fits best with which level of the generic framework for resource planning?
- A.
  
  Aggregate planning - Level 1
- B.
  
  Disaggregation - Level 2
- C.
  
  Execution - Level 3
- D.
  
  Capacity requirements planning
Correct Answer
B. Disaggregation - Level 2

Explanation
Disaggregation, which is the process of breaking down the aggregate plan into more detailed plans, is the level at which setting order sizes and schedules for individual subassemblies and resources by week or day fits best. This level involves translating the aggregate plan into specific actions and decisions to meet the demand. Capacity requirements planning, on the other hand, focuses on determining the capacity needed to execute the disaggregated plans.

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26.

Which of the following is not an aggregate planning decision option?
- A.
  
  Building a new plant
- B.
  
  Promotion and advertising
- C.
  
  Subcontraction
- D.
  
  Layoffs
Correct Answer
A. Building a new plant

Explanation
Building a new plant is not an aggregate planning decision option because it is a long-term strategic decision that involves significant investment and cannot be easily adjusted in response to short-term fluctuations in demand. Aggregate planning decisions typically focus on managing production levels, inventory, workforce, and subcontracting to meet fluctuating demand while minimizing costs and maximizing efficiency. Promotion and advertising, subcontracting, and layoffs are all examples of aggregate planning decision options that can be adjusted in response to changes in demand.

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27.

Promotion of weekly discount airfares by an airline would be an example of ____.
- A.
  
  Demand Management
- B.
  
  Production rate changes
- C.
  
  Inventory changes
- D.
  
  Facility, equipment, and transportation changes
Correct Answer
A. Demand Management

Explanation
Promotion of weekly discount airfares by an airline would be an example of demand management. Demand management refers to the strategies and actions taken by a company to influence and control the demand for its products or services. By offering weekly discount airfares, the airline is actively managing the demand for its flights, aiming to attract more customers and increase ticket sales. This is a proactive approach to meet customer demand and optimize revenue.

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28.

Which aggregare planning strategy generally would result in the least amount of inventory?
- A.
  
  Level production
- B.
  
  Chase Demand
- C.
  
  Mixed
- D.
  
  Lot-for-Lot (LFL)
Correct Answer
B. Chase Demand

Explanation
Chase Demand is an aggregate planning strategy that aims to match production with the actual demand, resulting in the least amount of inventory. This strategy involves adjusting production levels according to the fluctuating customer demand, which helps in minimizing the need for excess inventory. By closely aligning production with demand, the company can avoid overproduction and reduce the costs associated with carrying excess inventory. Therefore, Chase Demand strategy generally leads to the least amount of inventory compared to other strategies like Level production, Mixed, or Lot-for-Lot.

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29.

Which of the following is not correct regarding aggregate planning?
- A.
  
  Large number of alternatives
- B.
  
  Good solutions by trial-and-error method
- C.
  
  Seasonal fluctuations in demand can be handled
- D.
  
  Costs are sunk and irrelevant
Correct Answer
D. Costs are sunk and irrelevant

Explanation
Aggregate planning involves determining the best way to meet future demand by making decisions about production, inventory, and workforce levels. Costs are not considered sunk and irrelevant in aggregate planning because they play a crucial role in determining the feasibility and profitability of different alternatives. Considering costs helps in evaluating the financial implications of different aggregate planning strategies and selecting the most cost-effective option. Therefore, the statement "Costs are sunk and irrelevant" is not correct regarding aggregate planning.

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30.

A(n) ____ is a statement of how many finished items are to be produced and when they are to be produced
- A.
  
  Aggregate Plan
- B.
  
  Master Production Schedule
- C.
  
  Material Requirements Plan
- D.
  
  Capacity Requirements Plan
Correct Answer
B. Master Production Schedule

Explanation
A Master Production Schedule is a statement that outlines the quantity of finished items that need to be produced and the specific timing for their production. It serves as a detailed plan that helps coordinate production activities and ensure that the right amount of products is available at the right time to meet customer demand. The Master Production Schedule takes into account factors such as production capacity, inventory levels, and customer orders to create an efficient production plan.

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31.

The inputs required for material requirements planning are defined by the _____.
- A.
  
  Master Production Schedule
- B.
  
  MRP explosion
- C.
  
  Bill of material
- D.
  
  MRP Record
Correct Answer
D. MRP Record

Explanation
The inputs required for material requirements planning are defined by the MRP Record. The MRP Record contains information such as the inventory levels, lead times, and demand forecasts for each item in the bill of materials. This information is essential for the MRP system to calculate the quantity and timing of materials needed for production. The MRP Record serves as a central database that provides the necessary data for the MRP process to generate accurate production plans and schedules.

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32.

Which of the following is <u>not</u> a primary output from a time-phased MRP report?
- A.
  
  The capacity requirements plan
- B.
  
  Information on obtaining raw materials and purchased parts
- C.
  
  Detailed schedules for manufacturing the product and controlling manufacturing inventories
- D.
  
  Information that drives cash flow, budgets and financial needs
Correct Answer
A. The capacity requirements plan

Explanation
A time-phased MRP report provides information on the detailed schedules for manufacturing the product and controlling manufacturing inventories. It also provides information on obtaining raw materials and purchased parts, as well as information that drives cash flow, budgets, and financial needs. However, the capacity requirements plan is not a primary output from a time-phased MRP report.

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33.

An inventory item can be
- A.
  
  Only a parent
- B.
  
  Only a component
- C.
  
  Both a parent and a component
- D.
  
  Neither a parent or a component
Correct Answer
C. Both a parent and a component

Explanation
An inventory item can be both a parent and a component because in some cases, an item can be a standalone product (parent) and in other cases, it can be a part or component of a larger product (component). This means that an inventory item can have its own inventory management and can also be included as a part of another inventory item's management.

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34.

___ is/are the total demand for an item derived from all of its parents.
- A.
  
  An explosion
- B.
  
  Gross requirements
- C.
  
  Scheduled receipts
- D.
  
  Lot sizing
Correct Answer
B. Gross requirements

Explanation
Gross requirements refer to the total demand for an item derived from all of its parents. This means that the gross requirements take into account the demand for the item from all levels of the supply chain, including any higher-level assemblies or products that require the item as a component. It represents the total quantity needed to fulfill all the demands and is an important factor in determining the overall production and inventory planning for the item.

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35.

The Lot-for-Lot (LFL) Rule
- A.
  
  Minimizes purchase or setup costs
- B.
  
  Is best used for low inventory carrying costs and high purchase order costs
- C.
  
  Is best applied when inventory carrying costs are high and setup/order costs are low
- D.
  
  Masks the true nature of dependent demand
Correct Answer
C. Is best applied when inventory carrying costs are high and setup/order costs are low

Explanation
The Lot-for-Lot (LFL) rule is best applied when inventory carrying costs are high and setup/order costs are low. This is because the LFL rule aims to minimize purchase or setup costs. When inventory carrying costs are high, it is more cost-effective to order smaller quantities more frequently to avoid holding excess inventory. On the other hand, when setup/order costs are low, it is feasible to place frequent orders without incurring significant additional costs. Therefore, the LFL rule is most suitable in this scenario to optimize costs and minimize inventory levels.

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36.

Which lot sizing rule minimizes costs associated with ordering and setup?
- A.
  
  Lot-for-Lot (LFL)
- B.
  
  Fixed order quantity (FOQ)
- C.
  
  Periodic order quantity (POQ)
- D.
  
  All rules provide the same result
Correct Answer
C. Periodic order quantity (POQ)

Explanation
The periodic order quantity (POQ) lot sizing rule minimizes costs associated with ordering and setup. This rule calculates the optimal order quantity by considering the total holding and ordering costs over a specified period. It aims to strike a balance between the costs of holding inventory and the costs of placing orders and setting up production. By periodically reviewing and adjusting the order quantity, the POQ rule helps to optimize costs and minimize waste.

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37.

Which lot sizing rule is best when inventory carrying costs are high and setup/order costs are low?
- A.
  
  Lot for Lot (LFL)
- B.
  
  Fixed order quantity (FOQ)
- C.
  
  Periodic order quantity (POQ)
- D.
  
  All rules provide the same result
Correct Answer
A. Lot for Lot (LFL)

Explanation
When inventory carrying costs are high and setup/order costs are low, the most efficient lot sizing rule is Lot for Lot (LFL). This rule ensures that the order quantity is equal to the demand for each period, minimizing the inventory carrying costs by avoiding excess inventory. Since setup/order costs are low, it is not necessary to consolidate orders, making LFL the most cost-effective option in this scenario.

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38.

Which lot sizing rule might use the EOQ calculation?
- A.
  
  Lot-for-Lot (LFL)
- B.
  
  Fixed order quantity (FOQ)
- C.
  
  Periodic order quantity (POQ)
- D.
  
  All rules provide the same result
Correct Answer
C. Periodic order quantity (POQ)

Explanation
The EOQ (Economic Order Quantity) calculation is used to determine the optimal order quantity that minimizes total inventory costs. The periodic order quantity (POQ) lot sizing rule utilizes the EOQ calculation to determine the order quantity for a fixed time period, such as a week or month. This rule aims to balance the costs of ordering and holding inventory by placing orders at regular intervals rather than ordering a fixed quantity each time. Therefore, the POQ lot sizing rule is the one that might use the EOQ calculation.

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39.

Which is not true regarding periodic order quantity (POQ)?
- A.
  
  Might be selected judgmentally
- B.
  
  Using the EOQ, it might be determined an economic time interval
- C.
  
  Easy to implement
- D.
  
  Longer POQs reduce inventory levels and costs
Correct Answer
D. Longer POQs reduce inventory levels and costs

Explanation
Longer POQs do not reduce inventory levels and costs. In fact, longer POQs result in higher inventory levels and costs. This is because a longer POQ means ordering larger quantities less frequently, leading to higher inventory holding costs and potentially increased risk of obsolescence or spoilage. Therefore, the statement "Longer POQs reduce inventory levels and costs" is not true.

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40.

Which is the most comprehensive solution for a firm if a load report shows not enough capacity is available
- A.
  
  Find more capacity
- B.
  
  Change the master production schedule
- C.
  
  Change both the master production schedule and add capacity
- D.
  
  Rerun MRP
Correct Answer
C. Change both the master production schedule and add capacity

Explanation
If a load report shows that not enough capacity is available, the most comprehensive solution for a firm would be to change both the master production schedule and add capacity. Changing the master production schedule allows the firm to adjust the timing and sequencing of production to better utilize the available capacity. Adding capacity, on the other hand, involves increasing the resources or infrastructure to meet the demand. By combining these two actions, the firm can optimize its production process and ensure that enough capacity is available to meet the load requirements.

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41.

According to Chapter 13, a candy manufacturer makes use of all of the following concepts and methods of resource management EXCEPT
- A.
  
  Dividing the year into 13 periods of four weeks each
- B.
  
  All types of candy are converted into a poundage figure for purposes of aggregate planning
- C.
  
  The amount of inventory investment is a top priority and they must be kept low
- D.
  
  The policy of the firm is to allow the workforce to vary, that is, a chase strategy
Correct Answer
D. The policy of the firm is to allow the workforce to vary, that is, a chase strategy

Explanation
The correct answer is "The policy of the firm is to allow the workforce to vary, that is, a chase strategy." This means that the candy manufacturer does not use a chase strategy, which involves adjusting the workforce to match the production needs. Instead, they likely use a different strategy for managing their workforce, such as a level strategy where the workforce remains constant and production is adjusted through inventory levels.

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42.

A company currently has no items in inventory. The demand for the next four months is 200, 400, 250 and 350 units. Assuming a level production rate of 250 units per month, determine the month in which a backorder will materialize.
- A.
  
  The month in which demand is 250
- B.
  
  The month in which demand is 400
- C.
  
  the month in which demand is 200
- D.
  
  The month in which demand is 350
Correct Answer
B. The month in which demand is 400

Explanation
The month in which a backorder will materialize is the month in which the demand exceeds the production rate. In this case, the production rate is 250 units per month. The demand for the next four months is 200, 400, 250, and 350 units. Since the demand in the second month is 400 units, which is greater than the production rate, a backorder will materialize in that month.

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43.

The recognized benchmark for Six Sigma implementation is General Electric (GE). GE's Six Sigma problem solving approach employs five phases. Which is not one of the phases?
- A.
  
  Define
- B.
  
  Measure
- C.
  
  Analyize
- D.
  
  Improvise
Correct Answer
D. Improvise

Explanation
The correct answer is "Improvise". The recognized benchmark for Six Sigma implementation is General Electric (GE), and their Six Sigma problem-solving approach consists of five phases: Define, Measure, Analyze, Improve, and Control. "Improvise" is not one of the phases in GE's approach.

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44.

A tool to help focus on the most significant problem is:
- A.
  
  Flowchart
- B.
  
  Pareto analysis
- C.
  
  Cause-and-effect diagram
- D.
  
  Scatter diagram
Correct Answer
B. Pareto analysis

Explanation
Pareto analysis is a tool used to prioritize problems or issues by identifying the most significant ones. It is based on the Pareto principle, also known as the 80/20 rule, which states that 80% of the effects come from 20% of the causes. By using Pareto analysis, one can focus on the vital few problems that have the most impact and allocate resources accordingly. This helps in efficient problem-solving and decision-making.

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45.

In the SERVQUAL instrument for measuring service quality, the concept of assurance is associated with
- A.
  
  The ability to convey trust and confidence
- B.
  
  Caring and individual attention
- C.
  
  Always providing consistent service
- D.
  
  Performing a service quickly and on time
Correct Answer
A. The ability to convey trust and confidence

Explanation
The concept of assurance in the SERVQUAL instrument refers to the ability of a service provider to convey trust and confidence to customers. This means that customers should feel secure and have faith in the service being provided. Assurance involves factors such as the competence and expertise of the service provider, their reliability, and their ability to effectively communicate and address customer concerns. By conveying trust and confidence, service providers can enhance customer satisfaction and loyalty.

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46.

Which of the following is not one of W. Edwards Deming's 14 points?
- A.
  
  Create a vision and demonstrate commitment
- B.
  
  Stop making decisions purely on the basis of cost
- C.
  
  Eliminate exhortation
- D.
  
  The only performance standard is Zero Defects
Correct Answer
D. The only performance standard is Zero Defects

Explanation
The correct answer is "The only performance standard is Zero Defects." This statement is not one of W. Edwards Deming's 14 points because Deming emphasized the importance of continuous improvement, teamwork, and long-term thinking rather than focusing solely on achieving zero defects. He believed that setting arbitrary performance standards can be counterproductive and hinder overall improvement. Deming's approach emphasized the need for a holistic view of quality and the importance of understanding and improving the entire system, rather than just focusing on individual metrics like zero defects.

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47.

Which of the following emphasizes defects per million opportunities as a key measure of quality?
- A.
  
  The 14 Points
- B.
  
  ISO 9000:2000
- C.
  
  The Gap model
- D.
  
  Six Sigma
Correct Answer
D. Six Sigma

Explanation
Six Sigma emphasizes defects per million opportunities as a key measure of quality. This methodology focuses on reducing variation and defects in a process to achieve near-perfect quality. By measuring defects per million opportunities, organizations can identify areas of improvement and strive for continuous improvement. Six Sigma aims to achieve a level of quality where there are only 3.4 defects per million opportunities, which demonstrates a high level of quality control and efficiency.

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48.

Machine down time and downgrading costs are examples of which type of quality cost?
- A.
  
  Prevention
- B.
  
  Appraisal
- C.
  
  Internal failure
- D.
  
  External failure
Correct Answer
C. Internal failure

Explanation
Machine down time and downgrading costs are examples of internal failure costs. Internal failure costs refer to the costs incurred when a defect or non-conformance is identified before the product or service is delivered to the customer. In this case, machine down time refers to the time when the machine is not functioning properly, leading to a decrease in productivity and potential delays in production. Downgrading costs refer to the costs incurred when a product or service does not meet the required quality standards and needs to be reworked or downgraded. Both of these examples highlight the costs associated with internal failures within the production process.

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49.

A tool to help determine how a process works and what it is supposed to do is a
- A.
  
  Run chart
- B.
  
  Cause-and-effect diagram
- C.
  
  Scatter diagram
- D.
  
  Flow chart
Correct Answer
D. Flow chart

Explanation
A flow chart is a visual representation of a process that helps to determine how it works and what it is supposed to do. It uses symbols and arrows to show the sequence of steps or actions involved in the process, making it easier to understand and analyze. By mapping out the flow of a process, a flow chart can identify potential bottlenecks, inefficiencies, or areas for improvement. Therefore, it is a useful tool for analyzing and improving processes.

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50.

Common cause variation is
- A.
  
  Controllable at the sources
- B.
  
  Called assignable cause
- C.
  
  Can be reduced by statistical process control methods
- D.
  
  Inherent (i.e., present) in every process
Correct Answer
D. Inherent (i.e., present) in every process

Explanation
Common cause variation refers to the natural variation that is inherent in every process. It is not caused by any specific assignable cause and cannot be controlled or reduced by statistical process control methods. Instead, it is a result of the complex interactions and randomness that are inherent in any process. Therefore, the correct answer is that common cause variation is present in every process.

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Operations Final Exam Prep

-------- forecasts are needed to plan work-force levels, allocate budgets among divisions and schedule jobs and resources.

____ forecasts are needed to plan for facility expansion.

____ forecasts are needed for planning production schedules and to assign workers to jobs.

Which of the following is not one of the five characteristics of a time series?

Repeatable periods of ups and downs over short periods of time are called ____.

Regular patterns in a data series that take place over long periods of time are called ____.

The forecasting error measurement that is different in that the measurement scale factor is eliminated is

Which of the following is not a statistical method?

A moving average model works best when ____ in the time series.

For single exponential smoothing

Which is not true regarding simple exponential smoothing?

If single exponential smoothing is used and the time series has a negative trend, the forecast

Regression analysis

An R-square of 0.80 means

If actual demand for a product is highly influenced by only random variation, the quantitative technique to use for forecasting demand is

Exponential smoothing...

Which of the following does not fit with the Delphi method?

All of the following are important in choosing a forecasting method except

All of the following are important concepts in forecasting except

Which of the following is NOT one of the ten principles of forecasting published by a group of international experts?

The purpose of aggregate planning is to

The words "product family", "budget allocation" and "long-term" fit best with which level of the generic framework for resource planning?

If forecast demand exceeds the total factory or supply capacity, managers might simply decide not to meet forecast demand. This decision would most likely be made at which planning level?

Assigning people to tasks, setting priorities for jobs and scheduling equipment fits best with which level of the generic framework for resource planning?

Setting order sizes and schedules for individual subassemblies and resources by week or day fits best with which level of the generic framework for resource planning?

Which of the following is not an aggregate planning decision option?

Promotion of weekly discount airfares by an airline would be an example of ____.

Which aggregare planning strategy generally would result in the least amount of inventory?

Which of the following is not correct regarding aggregate planning?

A(n) ____ is a statement of how many finished items are to be produced and when they are to be produced

The inputs required for material requirements planning are defined by the _____.

Which of the following is <u>not</u> a primary output from a time-phased MRP report?

An inventory item can be

___ is/are the total demand for an item derived from all of its parents.

The Lot-for-Lot (LFL) Rule

Which lot sizing rule minimizes costs associated with ordering and setup?

Which lot sizing rule is best when inventory carrying costs are high and setup/order costs are low?

Which lot sizing rule might use the EOQ calculation?

Which is not true regarding periodic order quantity (POQ)?

Which is the most comprehensive solution for a firm if a load report shows not enough capacity is available

According to Chapter 13, a candy manufacturer makes use of all of the following concepts and methods of resource management EXCEPT

A company currently has no items in inventory. The demand for the next four months is 200, 400, 250 and 350 units. Assuming a level production rate of 250 units per month, determine the month in which a backorder will materialize.

The recognized benchmark for Six Sigma implementation is General Electric (GE). GE's Six Sigma problem solving approach employs five phases. Which is not one of the phases?

A tool to help focus on the most significant problem is:

In the SERVQUAL instrument for measuring service quality, the concept of assurance is associated with

Which of the following is not one of W. Edwards Deming's 14 points?

Which of the following emphasizes defects per million opportunities as a key measure of quality?

Machine down time and downgrading costs are examples of which type of quality cost?

A tool to help determine how a process works and what it is supposed to do is a

Common cause variation is