MGSC 395 – Exam 2 – Practice Conceptual Questions

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Which of the following is NOT characteristic of a kanban​ system?

A. It controls the movement of containers from​ source/storage to the production process.
B. Each container contains equal numbers of​ non-defective parts.
C. At least one card is associated with a container of process input material.
D. It serves as a push mechanism.

It serves as a push mechanism.

In lean​ systems, part commonality serves to increase _______.


Lean systems can be an integral part of a corporate strategy based on speed as they improve which of the​ following?

A. inventory turnover
B. labor productivity
C. cycle times
D. All of the above.

All of the above.

Line flows are recommended in designing lean system layouts because they eliminate waste by reducing _______.

the frequency of setups.

One of the LEAST effective supplier strategies for lean systems is _______.

a​ short-term, competitive relationship between the company and the supplier.

What is a major reason why a traditional labor contract may cripple a​ company’s ability implement​ lean?

it reduces the​ company’s ability to reassign workers to other tasks as the need arises

Value stream maps typically include data related to each process including:

A. cycle time.
B. changeover time.
C. uptime.
D. All of the above.

All of the above.

The service department of Monroe Brothers Automotive would like to achieve uniform workstation loads. An effective system for this firm would be ________.

a reservation system.

Manufacturing an item before it is needed is an example of what form of​ waste?


Lean Farms operated every process with a lean philosophy. For example once Cletus returned with an empty​ wheelbarrow, Jake knew it was time to get busy shoveling manure in order to fill it back up. This is an example of _____________.

a container system.

The method that groups products with similar characteristics into families and sets aside groups of machines for their production is called _______________.

group technology.

The ability to automatically detect the occurrence of an​ abnormality, thereby helping achieve quality at the​ source, is _____________.


Which of these terms is NOT one of the Five​ Ss?

A. Shine
B. Store
C. Sustain
D. Sort


Which diagram is NOT a part of value stream​ mapping?

Transitional phase diagram

Which of these issues is a problem associated with the conversion to a lean production​ system?

Workers can feel pushed and stressed since the safety net of inventory has been removed.

Which of the following best characterizes JIT​ systems?

Pull method of materials flow

Benefits of having a flexible workforce include all of the following​ EXCEPT:

decreased worker morale.

Lean systems coupled with statistical process control​ (SPC) requires a high degree of regimentation which in turn can lead to __________.

worker stress.

The organizational structure that simplifies the lines of authority and is particularly effective for large projects is _________.

pure project.

Which of the following was NOT a network planning method developed in the​ 1950s?

the network project analysis technique​ (NPAT)

There are four major phases in a project life cycle. Which of the following is NOT​ included?


Crash time is defined as __________.

the shortest possible time to complete an activity.

On which of the following topics should effective project tracking systems collect​ information?

open​ issues, risks, and schedule status

Which is the best statement regarding work breakdown​ structure?

Each activity in the WBS must have an​ "owner" who is responsible for doing the work.

In the​ "facilitator" role, the project manager must ______________.

resolve conflicts between departments to ensure that the project has appropriate resources.

The project duration in a network can be determined by the largest value of which variable associated with the critical​ path?

Earliest finish time

A functional organizational structure requires that the project be _________.

led by a project manager who can negotiate assistance from personnel in other functional areas.

In an environment where the planned activities have been accomplished​ previously, there are several ways of getting time estimates. Which of the following is the least​ useful?

Random number generator

Suppose that the normal time for activity C is 10 weeks with a normal cost of​ $6,000. We can crash it to only 4 weeks at a total cost of​ $12,000.
The total activity cost if we crash it to 7 weeks will be ____________.


The methods of project management offer several benefits to project managers. Which of the following is NOT among​ them?

A. forces project teams to identify and organize the data required
B. helps managers analyze the time and cost implications of resource​ trade-offs
C. highlights the activities that may be delayed without affecting project completion dates
D. All of the above are benefits to project managers.

All of the above are benefits to project managers.

Projects have a life cycle that consists of all of the following major phases except​:


Which of these activities is not a major component of the initial phase of planning and managing​ projects?

Analyzing​ time/cost tradeoffs

Resource allocation involves _____________.

the assignment of resources to the most important activities.

Judgment methods may be the only practical way to make a forecast when _________.

there is no historical data due to a new product introduction.

The value of the sample correlation​ coefficient, r, can range from ____ to _______.

-1 to 1

A demand management option for a company is to even out the load on resources by producing​ ___________ products, or services that have similar resource requirements but different demand cycles.

complementary products

A repeatable pattern of increases or decreases in​ demand, depending on periods of time of within one year or​ less, is a​ time-series pattern called ________.


Which statement about the forecasting process is​ best?

Bias is the worst kind of forecast error.

Companies that use a​ two-tier forecasting system first cluster​ (or "roll​ up") several similar services or products in a process called __________.


Which statement is NOT true of seasonal​ methods?

No matter what seasonal method is​ used, the amplitude of the seasonal component remains the same.

A forecast with a large cumulative sum of forecast errors​ (CFE) indicates _________.

consistent forecasting mistake—the forecast is always too high or too low.

_________ methods translate the opinions of​ managers, expert​ opinions, consumer​ surveys, and salesforce estimates into quantitative estimates.


____________ can also be used for forecasting the quick pace of technological change.

Executive opinion

Which of the following is NOT a principle of the forecasting​ process?

Whenever​ possible, forecast in detail at more disaggregated levels.

Combination forecasts produced by averaging independent forecasts based on different methods

has been suggested by research to produce more accurate forecasts than a single forecasting procedure.

Judgment methods are LEAST likely to be indicated in which of the following​ situations?

Short-term forecasts are made for a product with stable demand.

Which of the following is NOT considered a quantitative forecasting​ method?

Delphi analysis

The​ _________ of forecasting is a process of gaining consensus from a group of experts.

Delphi method

Which error measure lets a forecaster know that the forecast is consistently​ high?


​________ is the best error measure to use when making comparisons between time series for different SKUs.

Mean absolute percent error

​Generally, which of the following are to be avoided when managing​ demand?


Which of the following statements is​ false?

A. If the lead time to buy raw materials is​ long, the forecasts go farther out into the future.
B. In a​ make-to-order environment, the forecasts tend to be for groups of products.
C. In a​ make-to-stock environment, forecasts tend to be more detailed and can get down to specific individual products.
D. All of the above statements are true.

All of the above statements are true.

In step three of the forecasting process we try to achieve consensus of the forecast. One way to achieve that consensus in a formal way is to employ __________.

collaborative​ planning, forecasting, and replenishment​ (CPFR).

The least predictable pattern of​ time-series variation is called _________.


Data on the weekly sales of room air conditioning units were matched with the average temperature and calculations produced sample correlation​ coefficients, r, in the range of minus−0.75 and minus−0.83. Which of the following statements best expresses a conclusion that can be drawn from the values of​ r?

As the temperature​ increases, the number of room air conditioners sold decreases.

Which of the following statements regarding forecasting​ "units of​ measurement" is​ best?

Forecasted​ "product units" can be translated to dollars by multiplying them by the unit price.

Time-series analysis is most effective when used in​ ______-term forecasts.


Which of the following costs is NOT considered an inventory holding​ (or carrying)​ cost?

inventory transportation costs

Which of the following are NOT advantages of a periodic review​ system?

Lower safety stock

What is the primary lever to reduce cycle​ inventory?

reduce the lot sizes

Which of these statements is NOT required in order for the EOQ model to be a reasonable​ approach?

The​ setup/ordering cost must exceed the annual holding cost of one unit.

A visual version of the Q system _____________.

is the​ two-bin system.

A perpetual inventory system requires that _____________.

inventory records are always current.

An individual item or product that has an identifying code and is held in inventory somewhere along the supply chain is called a ____________.

stock-keeping unit.

A form of shrinkage called​ ________ occurs when inventory cannot be used or sold at full​ value, owing to model​ changes, engineering​ modifications, or unexpectedly low demand.


The Mickey and Mouse Cat Food Factory runs an aggressive marketing campaign and much to the​ delight, orders surge to twice their previous level. If their operations manager uses an EOQ​ policy, what is the impact on the order​ quantity?

The order quantity will be​ 40% higher.

A reorder point will fall if __________.

the lead time falls.

Which of the following inventory classifications is one of the four forms that represent how the inventory was​ created?

pipeline inventory

Which of the following is NOT considered a pressure to hold large​ inventories?

the cost of insurance

A P system has an advantage over the Q system _______________________.

because orders from multiple items from one supplier can be combined into a single purchase order.

Which of the following can put pressure on a company to carry small levels of​ inventory?

high cost of capital

Matching the demand rate with the production rate is a primary lever to reduce _________.

anticipation inventory.

In ABC​ analysis, class A items typically represent​ ____ of the SKUs but account for​ ____ of the dollar usage.

20%; 80%

The optimal order​ quantity, Q, for the newsboy problem is found by _______________.

choosing the order quantity Q with the highest expected payoff.

Which of the following is the first step of the​ two-step procedure used to find the best lot size given a quantity​ discount?

Beginning with the lowest​ price, calculate the EOQ for each price level until a feasible EOQ is found.

The demand for a custom part is​ 1,500 units per​ year, with a daily use rate of 6 units. The unit costs are​ $200.00, holding costs are​ $2.50, and ordering costs are​ $12.00.
Considering a production rate of 8 units per​ day, what is the economic production lot​ size?


The demand for a custom part is​ 1,500 units per​ year, with a daily use rate of 6 units. The unit costs are​ $200.00, holding costs are​ $2.50, and ordering costs are​ $12.00.
Considering a production rate of 8 units per​ day, what is the total annual variable​ cost, assuming an ELS of 240 units and 250 annual​ workdays?


Firms need​ one-time inventory decisions in all of the following cases EXCEPT ____________.

when holding costs are low and there is no seasonal demand.

The net effect of reducing setup cost is to reduce all the following EXCEPT ____________.

ordering cost.

Which term describes a customer order that cannot be filled immediately but will be filled as soon as​ possible?


The level strategy involves ____________.

keeping the workforce constant.

Which of the following statements does NOT apply to a production​ plan?

It provides a view of detailed workforce schedules.

If the ending inventory last period equals 200​ units, production in this period equals​ 1,000 units, and demand in this period equals​ 1,200 units, what is the ending inventory at the end of this​ period?


Backorder and stockouts typically do not include which of the following​ costs?

pilferage and obsolescence costs

The operations area input to the sales and operations plan includes ______________.

workforce capacities.

The Gantt chart takes two basic forms. Which form can be used to schedule the capacity of​ facilities?

the workstation chart

A​ for-profit service can expect to encounter which of the following sequences of​ plans?

Business​ plan; staffing​ plan; workforce schedule

Which of the following best defines flow​ time?

the amount of time a job spends in a service or manufacturing system

Aggressive alternatives for coping with demand requirements include ______________.

creative pricing.

​Ed’s of Edmond has decided to use a level​ strategy, keeping the number of employees​ constant, to keep employee goodwill.​ Ed’s will use all of the following EXCEPT ____________.


The time horizon for a sales and operations plan is typically ____________.

3-18 months.

In​ scheduling, the term​ ______________ refers to the process of completing a job sooner than it would otherwise have been done.


In which of the following ways is a sales and operations plan for a service provider quite different than for a manufacturing​ firm?

A. their plan does not contain an inventory section
B. their plan focuses on the demand and supply of human resources
C. forecasts are typically expressed in terms of employees required
D. All of the above.

All of the above.

In​ general, companies perform aggregation along three​ dimensions:

services or​ products, labor, and time.

What is an example of a policy constraint for a sales and operations​ plan?

Overtime cannot exceed 10 hours per week.

Which of the following statements best defines​ "utilized time"?

that portion of the​ workforce’s regular time that is paid for and productively used

Which work scheduling rule is commonly used at service facilities because it seems most​ "fair"?

first-come, first-served

The key inputs to an MRP include _________.

inventory record database.

An end item​ "A" is assembled from two​ "B" components and two​ "C" subassemblies. The​ "C" subassembly is composed of one of each component​ "B" and​ "D." If the gross requirement for​ "A" is 100​ units, what is the demand for component​ "B"?


An enterprise process is a company-wide process that cuts across:

A. business units and geographic regions.
B. functional areas.
C. suppliers and customers.
D. All of the above.

All of the above.

The concept of dependent demand is _______________.

that demand for an item is a function of the production plans for some other item the company produces.

Which of the following is NOT a benefit of an MRP​ system?

Forecasting of​ finished-goods demand

ERP revolves around a single comprehensive​ _________ that can be made available across the entire organization.


A component that has one or more parents and no components is most likely to be __________.

a purchased item.

Which of the following statements is true regarding master production​ scheduling?

A. Capacity limitations and bottlenecks may determine the timing and size of MPS quantities.
B. The sums of the quantities in the MPS must equal those in the sales and operations plan.
C. The production quantities should be allocated efficiently over time.
D. All of the above are true.

All of the above are true.

The Bill of Resources​ (BOR) can be used to determine which of the​ following?

A. when resources will be needed by a firm
B. how much of a resource a firm will need
C. what resources a firm will need
D. All of the above.

All of the above.

The goal of determining the timing and size of MPS quantities is to _____________________.

maintain a nonnegative projected​ on-hand inventory balance.

An MRP system provides which of the following​ advantages?

Automatic update of the dependent demand and replenishment schedules of components when parent schedules change.

In master production​ scheduling, what does projected​ on-hand inventory​ represent?

an estimate of the amount of inventory available each week after demand has been satisfied

Which of the following is an example of dependent demand for manufactured​ goods?

Hospital bed sheets

If gross requirements are​ 100, planned receipts are​ 120, and inventory on hand from the previous period is​ 50, then the projected​ on-hand inventory balance is ___.


Which of the following is NOT a feature of an ERP​ system?

Identifying the actions planners must take to stay on schedule

Service providers must plan their resources just as manufacturers do.​ However, unlike finished​ goods, services cannot be ________________.


In master production​ scheduling, what does​ available-to-promise (ATP) inventory​ represent?

the difference between the customer orders already booked and the quantity that operations is planning to produce

Studies show that companies reap the greatest rewards with ERP when they ____________.

keep their ERP implementations simple.

The service analogy to the bill of materials is the _______.

bill of resources.

Which statement about capacity requirements planning​ (CRP) is NOT​ true?

CRP systems adjust the order release time to prevent a workstation from exceeding its capacity.

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