The forecasting time horizon that would typically be easiest to predict for would be the |
short-range |

A forecast that projects a company’s sales is a(n) |
demand forecast |

Quantitative methods of forecasting include |
exponential smoothing |

The method that considers several variables that are related to the variable being predicted is |
multiple regression |

The forecasting model that is based upon salesperson’s estimates of expected sales is |
sales force composite |

Decomposing a time series refers to breaking down past data into the components of |
trends, cycles, seasonal and random variations |

With regard to a regression-based forecast, the standard error of the estimate gives a measure of |
the variability around the regression line |

When using exponential smoothing, the smoothing constant |
can be determined using MAD |

A tracking signal |
must be either 1, 0, or -1 for the first predicted value |

If demand is 106 during January, 120 in February, 134 in March, and 142 in April, what is the 3-month simple moving average for May? |
132 |

Given last period’s forecast of 65, and last period’s demand of 62, what is the simple exponential smoothing forecast with an alpha of 0.4 for the next period? |
63.8 |

A forecasting technique consistently produces a negative tracking signal. This means that |
the forecast technique consistently over predicts |

A regression model is used to forecast sales based on advertising dollars spent. The regression line is y=500+35x and the coefficient of determination is .90. Which is the best statement about this forecasting model? |
The correlation between sales and advertising is positive |

Linear regression is most similar to |
the trend projection method of forecasting |

Time series patterns that repeat themselves after a period of days or weeks are called |
seasonality |

Which of the following is NOT a time-series model? |
linear regression |

Listing products in descending order of their individual dollar contribution to the firm is called |
product-by-value analysis. |

A route sheet |
lists the operations necessary to produce the component. |

An assembly chart is a(n) |
schematic showing how the product is assembled. |

Self-checkout at a grocery store is an example of |
customer participation in service delivery |

Which of the following is characteristic of the maturity phase |
Competitors are well established |

When ordering a new zagflatz, customers must choose the style of three major components, each of which has about ten variations. This is an example of: |
modular design. |

Which of the following is NOT a concept of green manufacturing? |
Make products so that small variations in production do not adversely affect the product. |

Which of the following is an external product development strategy? |
joint venture |

Which of the following is an internal product development strategy? |
migration of existing products |

There is a 0.7 probability of experiencing an increase in demand and a 0.3 probability of a decrease. If a company redesigns an existing product, they will gain $400,000 if there is a demand increase and $100,000 if demand falls. If the company designs a new product, they will gain $300,000 if demand increases and $200,000 if demand falls. If the company does nothing, they will not increase revenue at all. Which statement below is best? |
The company should redesign the existing product. |

In the service industry, the crucial moment that exemplifies, enhances, or detracts from the customer’s expectations is called |
the moment of truth. |

An umbrella of software programs that may include CAD/CAM, DFMA, product routing, maintenance, and other product concerns is called |
product lifecycle management software |

When a customer places a request for a product or service with a producer |
a work order is created |

Product design may be accomplished more quickly through the use of cross-functional teams that work on various aspects of the design at the same time. This approach is known as |
concurrent engineering |

A house of quality would depict the strength of relationship between which two items? |
The customer’s desire for a durable wallet and the company’s choice of material for the walle |

Which type of control chart should be used when it is possible to have more than one mistake per item? |
c-chart |

One type of control chart for attributes is a |
p-chart. |

C-charts are based on the |
Poisson distribution. |

If a sample of parts is measured and the mean of the sample measurements is outside the control limits |
the process is out of control and the cause can be established. |

Process capability |
means that the natural variation of the process must be small enough to produce products that meet the standard. |

The object of a statistical process control (SPC) system is to |
provide a signal when assignable variations are present. |

The R-chart |
is used to indicate gains or losses in uniformity. |

In acceptance sampling, the producer’s risk is the risk of having a |
good lot rejected. |

Twenty samples of size 5 are taken from a stable process. The average means of the sample means is 42.5, and the average range of the samples is 1.5. What is the UCL for the X-bar chart? *<b>NOTE</b>* Table S6.1, Factors for Computing Control Chart Limits, is available in the Hint portion of this question. |
43.37 |

Twenty samples of size 5 are taken from a stable process. The average means of the sample means is 42.5, and the average range of the samples is 1.5. What is the UCL for the R-chart? *<b>NOTE</b>* Table S6.1, Factors for Computing Control Chart Limits, is available in the Hint portion of this question. |
3.17 |

Twenty samples of size 100 are taken. The total number of defective items is 75. What is the UCL of the 3-sigma (z=3) p-chart? |
0.094 |

A customer service hotline has received an average of 7 complaints a day for the last 25 days. What type of control chart should be used to monitor this hotline? |
c-chart |

For the last 30 days, the number of mistakes on the daily report has averaged 4.5. What would the UCL be if a 3-sigma c-chart was constructed? |
10.86 |

A bottling company runs a filling process that should fill bottles with 12 plus or minus 0.04 ounces. A capability study reveals that the process mean is 12 ounces and the standard deviation is 0.01 ounces. What is the capability of the bottling process? |
1.33 |

A manufacturing engineer is designing a process that must be able to produce a shaft with a diameter of 2.5 cm plus or minus 0.01 cm. If the process capability must be 1.5, what is the maximum process standard deviation? |
0.00222 |

Which is the best statement regarding an operating characteristic curve? |
As the AQL decreases, the producer’s risk also decreases. |

A box of 1000 parts is subjected to an acceptance sampling plan that examines only 50 parts. The actual fraction defective in the box is 0.02 and the sampling plan has a 0.53 probability of accepting a box of this quality. What is the average outgoing quality for this scenario? |
0.01 |

A fundamental weakness of associative forecasting methods is that we must first provide a forecast of the value of the independent variable, and then apply that value in the forecast of the dependent variable. |
TRUE |

Exponential smoothing is an example of an associative model. |
FALSE |

When the data are highly variable, the forecaster should choose a high value of alpha if exponential smoothing is to be used. |
TRUE |

No single forecast methodology is appropriate under all conditions. |
TRUE |

The alpha that generates the lowest mean absolute deviation (MAD) is the best choice. |
TRUE |

A weighted moving average is the only moving average technique that responds to trends. |
FALSE |

Unfortunately, regression analysis can only be used to develop a forecast based upon a single independent variable. |
FALSE |

The naïve approach to forecasting is a qualitative model. |
FALSE |

A cycle represents a longer period of time than a season. |
TRUE |

The larger the n in a moving average forecast, the more sensitive it is to real changes in the data |
FALSE |

If forecasting model A has a higher MSE than forecasting model B, then model A is more accurate than model B. |
FALSE |

The slope in a trend projection equation represents the value of the dependent variable when time is equivalent to zero. |
FALSE |

Due to a typo, Jim uses a linear trend equation with a value for b of 25 instead of the value 15 that should be used. The tracking signal computed on a series of forecasts made using this model will be positive. |
FALSE |

A robust design is a product design such that small variations in production or assembly do not adversely affect the product. |
TRUE |

During the maturity stage of the product life cycle, the product is still being "fine-tuned." |
FALSE |

Migration of existing products is an example of an external product development strategy. |
FALSE |

One factor influencing market opportunities is political/legal change. |
TRUE |

The house of quality is a graphical technique for defining the relationship between customer desires and product. |
TRUE |

Time-based competition involves rapidly developing products and moving them to market. |
TRUE |

Using less material is one example of green manufacturing. |
TRUE |

The cash flow graph is almost identical to the product life cycle graph. |
FALSE |

A product that has been developed with robust design principles is insensitive to variations in the production process. |
TRUE |

Waste minimization represents ethical behavior on the part of the manufacturer. |
TRUE |

Increasing the standardization of components tends to make products more difficult to manufacture because a standard component must fit many different uses. |
FALSE |

One way for a company to rapidly develop a new product is to buy a firm that has already developed one. |
TRUE |

Cause-and-effect diagrams are a schematic technique used to discover possible locations of quality problems. |
TRUE |

Company reputation is one reason quality is important. |
TRUE |

Employee empowerment means involving employees in every step of the production process. |
TRUE |

Inspection must be conducted at the point of customer contract. |
FALSE |

ISO 14000 provides an international standard for quality management. |
FALSE |

ISO 9000 is the only quality standard with international recognition. |
TRUE |

Kaizen is the Japanese word for the ongoing process of incremental improvement. |
TRUE |

One cost of quality is internal failure costs. |
TRUE |

TQM refers to a quality emphasis that encompasses the entire organization. |
TRUE |

A Green Belt in a Six Sigma program spends more time on his normal job duties than a Master Black Belt does. |
TRUE |

Joseph Juran is famous for his 14 points for implementing quality improvement. |
FALSE |

Benchmarking involves selecting a target at which to shoot and measuring your performance against it. |
TRUE |

Taguchi’s quality loss function says that a product is OK as long as its performance or measurement falls in between an upper tolerance limit and a lower tolerance limit. |
FALSE |

The personal component of services is more difficult to measure than the quality of the tangible component. |
TRUE |

The service operations manager must accept the fact that the customer’s perception of service quality depends in part on their before-service expectation. |
TRUE |

A process is said to be operating in statistical control when the only natural variation is present. |
TRUE |

When the process average is under control, the process dispersion is also under control. |
FALSE |

The central limit theorem states that regardless of the distribution of all parts (or services), the distribution of x-bars will tend to follow a normal curve as the number of samples increases. |
TRUE |

Control charts for variables classify items as defective or not defective. |
FALSE |

One popular measure of process capability is Cpk. |
TRUE |

Acceptance sampling is a form of testing that involves taking random samples of lots or batches of products and comparing them against predetermined standards. |
TRUE |

For a process exhibiting only natural variation, 95% of the sample averages will fall within three standard deviations of the sampling distribution. |
FALSE |

When the process fraction defective is low, the p-chart may have a negative lower control limit. |
FALSE |

Six sigma capability means that the process specifications are six standard deviations wide. |
FALSE |

If the producer’s risk increases, then the consumer’s risk decreases. |
TRUE |

The average outgoing quality limit (AOQL) tells the producer the maximum fraction defective possible for a sampling plan |
TRUE |

If a process is in control, then all of the output produced is acceptable for use. |
FALSE |

# POM2

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