Tabular Presentation on Operational Plan - DOC

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  Exam I

  BA 301

 Fall 2002

S.K. Norman


Exam I                                                                          Fall 2002

Select the best answer. 2 Points each.

1. Which of the following is not an element of the management process?
   a. staffing
   b. planning
   c. controlling
   d. leading
   e. pricing

2. Which of the following does NOT characterize the difference between goods and
   a. tangible/intangible
   b. can be inventoried/can not be inventoried
   c. invoicing/accounting
   d. low customer interaction/high customer interaction
   e. easy to measure quality/difficult to measure quality

3. The impact of strategies on the general direction and basic character of a company is
   a. long range
   b. medium range
   c. short range
   d. temporal
   e. minimal

4. Which of the following is NOT an aspect of the responsiveness competitive strategy?
   a. flexible
   b. consistent
   c. reliable
   d. quick
   e. lowest cost

5. A continuous process is commonly used to produce
   a. high-volume, high-variety products
   b. low-volume, high-variety products
   c. high-volume, low-variety products
   d. low-variety products at either high- or low-volume
   e. high-volume products of either high- or low-variety

6. Which of the following uses a job shop process strategy?
   a. McDonald’s
   b. Bank of America
   c. King Sooper’s bread line
   d. General Motors vehicles
   e. Weyerhauser Paper Company

Exam I                                                                                     Fall 2002

7. The likelihood that a decision maker will ever receive a payoff precisely equal to the
   expected value when making any one decision is
   a. high (near 100%)
   b. 50/50 (near 50%)
   c. low (near 0%)
   d. dependent upon the number of alternatives
   e. dependent upon the number of states of nature

8. Forecasts are usually classified by time horizon into three categories
   a. finance/accounting, marketing, and operations
   b. strategic, tactical, and operational
   c. short-range, medium-range, and long-range
   d. exponential smoothing, regression, and time series
   e. departmental, organizational, and industrial

9. Forecasting is a prediction based on:
   a. a model
   b. industry average
   c. manager’s expertise
   d. both a & c
   e. a, b, & c

10. Total Quality Management emphasizes
    a. ISO 14000 certification
    b. the responsibility of the Quality Control staff to identify and solve all quality-related
    c. a commitment to quality that goes beyond internal company issues to suppliers and
    d. a system where strong managers are the only decision makers
    e. a process where mostly statisticians get involved

11. Which of these is NOT an element of TQM?
    a. JIT
    b. benchmarking
    c. management empowerment
    d. continuous improvement
    e. employee training

12. According to the Wallace Company video, In Search of Quality, change almost always
    happens because of what?
    a. crisis
    b. strong competition
    c. sales growth
    d. decrease in costs
    e. government regulation

Exam I                                                                              Fall 2002

13. Pareto charts are used to
    a. identify inspection points in a process
    b. organize errors, problems or defects
    c. outline production schedules
    d. show an assembly sequence
    e. provide guidelines for quality training

14. The primary purpose of the mean absolute deviation (MAD) in forecasting is to
    a. estimate the trend line
    b. eliminate forecast errors
    c. measure forecast accuracy
    d. seasonally adjust the forecast
    e. calculate the expected value

15. A tabular presentation that shows the outcome for each decision alternative under the
    various possible states of nature is called a(n)
    a. payoff table
    b. isoquant table
    c. payback period matrix
    d. feasible region
    e. decision tree

16. Which of the following products is likely to be assembled on a repetitive-process
    a. paper
    b. beer
    c. surgery
    d. television sets
    e. motor oil

17. Which of the following is an example of competing on the basis of differentiation?
    a. A firm manufactures its product with less raw material waste than its competitors.
    b. A firm's products are introduced into the market faster than its competitors'.
    c. A firm's distribution network routinely delivers its product on time
    d. A firm offers more reliable products than its competitors.
    e. A firm advertises more than its competitors

18. Which of these companies is most apt to have quality standards that are relatively
    a. Chrysler
    b. Dell Computer
    c. Harvard University
    d. Sanyo Electronics
    e. Whirlpool

Exam I                                                                                   Fall 2002

19. Which of the following would not be an operations function in a fast-food restaurant?
    a. making hamburgers and fries
    b. maintaining equipment
    c. designing the layout of the facility
    d. advertising and promotion
    e. purchasing ingredients

20. Which of the following is NOT a typical service attribute?
    a. intangible product
    b. often easy to automate
    c. customer interaction is high
    d. simultaneous production and consumption
    e. difficult to resell

21. Forecasts used for new product planning, capital expenditures, facility location or expansion,
    and R&D typically utilize a
    a. long-range time horizon
    b. medium-range time horizon
    c. short-range time horizon
    d. naive method, because there is no data history
    e. conservative approach

22. The process of identifying other organizations that are best at some facet of your operations
    and then modeling your organization after them is known as
    a. continuous improvement
    b. employee empowerment
    c. benchmarking
    d. copycatting
    e. industrial espionage

23. The four parts of the PDCA wheel are:
    a. process, decision, control, analysis
    b. plan, do, check, act
    c. perform, declare, count, ask
    d. production, divide, customize, amount
    e. plan, decide, control, analysis

24. An operations manager is NOT likely to be involved in
    a. conducting market surveys
    b. the design of products and services to satisfy customers’ wants and needs
    c. the quality of products and services to satisfy customers’ wants and needs
    d. work scheduling to meet the due dates promised to customers
    e. forecasting sales

Exam I                                                                                   Fall 2002

25. Which of the following is NOT a key way in which business organizations compete
    with one-another?
    a. production cost
    b. quality
    c. product duplication
    d. flexibility
    e. time to delivery

26. Data that consistently increase of decreases over a period of time represents which pattern of
    a. random
    b. trend
    c. seasonal
    d. cyclic
    e. MAD

27. Which of the following is not a type of qualitative forecasting?
    a. executive opinions
    b. sales force composites
    c. consumer surveys
    d. the Delphi method
    e. time series analysis

28. "Kaizen" is a Japanese term meaning
    a. a foolproof mechanism
    b. Just-in-Time (JIT)
    c. continuous improvement
    d. quality circle
    e. setting standards

29. Increasing the number of periods in a moving average will accomplish greater smoothing, but
    at the expense of
    a. manager understanding
    b. accuracy
    c. responsiveness to changes
    d. stability
    e. all of the above are diminished when the number of periods increases

30. Competitive product improvements and options are best introduced in the _____
    stage in the product life cycle
    a. introduction
    b. growth
    c. maturity
    d. decline
    e. incubation

Exam I                                                                                   Fall 2002

31. All of the following decisions fall within the scope of operations management except
    a. financial analysis
    b. design of products and processes
    c. location of facilities
    d. quality management
    e. facility management
PROBLEMS – points vary from problem to problem.
32. (5 pts) In the decision table below, determine the best decision using the optimistic approach:

                                    States of Nature
           Decision Alternatives    S1       S2      S3
                    D1           15000 3000        -500
                    D2            3500 12500       -250
                    D3            2700 1000 12400

    a.   D1
    b.   D2
    c.   D3
    d.   S1
    e.   S2

33. (5 pts) The forecast for the month of January was 80. Actual demand for January was 100.
    Determine the forecast for February using the exponential smoothing model with an alpha =
    a. 76
    b. 80
    c. 84
    d. 90
    e. 100

34. (5 pts) The following is the payoff profit table for two alternative plans:

                                 p = 0.75               p = 0.25
                                 Market Receptive       Market Unfavorable
                       Plan A $20,000                   $6,000
                       Plan B $25,000                   $3,000
    What is the expected value of Plan A?
    a. $13,000
    b. $16,500
    c. $20,250
    d. $21,250
    e. $25,000

Exam I                                                                                    Fall 2002

35. (5 pts) For the payoff table in the previous question, what is the EvoPI? That is, what is the
    maximum the company should be for additional information about the market?
    a.      $750
    b. $3,000
    c. $3,750
    d. $5,250
    e. $20,250

36. (5 pts) Below is a table that contains the forecast and actual demand for the last six weeks.
                              Week Forecast Actual
                                 1          800      900
                                 2          850     1000
                                 3          950     1050
                                 4          950      900
                                 5        1000       900
                                 6          975     1100

    Determine the MAD for these six weeks.
    a. 54
    b. 104
    c. 325
    d. 625
    e. 800

37. (4 pts) Using the table above, determine the 4-week moving average forecast for week 7.
    a. 888
    b. 969
    c. 975
    d. 1000
    e. 1078

38. (4 pts) The Carpet City Store has determined that the number of housing permits can be used
    to forecast demand for carpeting (in square yards). The regression equation is:
           Y = 5576 + 387.2X
    There are 25 new housing permits granted in 2003. Determine the sales forecast for
    a.     387 square yards
    b. 5576 square yards
    c. 15256 square yards
    d. 139787 square yards
    e. 781137 square yards

Exam I                                                                            Fall 2002

39. (5 pts) The sales force for ACME, Inc. has predicted a large increase in sales with a
    probability of 0.65 and a small increase in sales with a probability of 0.35. Due to
    this projected increase in sales, Acme Inc. is considering an expansion of the
    production line for widgets. The expanded line will be cheaper to operate due to
    improved technology. However, there will be a single fixed cost for expanding the
    line. The life of both the current and expanded production line is 3 year.

                                         Current line Expanded line
                 Operating cost / year   $12,000      $9,000
                 Fixed cost of expansion $0           $8,000

   The revenue for Widgets is predicted to be $54,000 if the increase in sales is small
   and $76,000 is the increase in sales is large. Determine the entry A4 in the payoff
   table below (Use a 3 year time frame):
                                      Small increase Large increase
                     Current line            A1             A2
                    Expanded line            A3             A4
   a. 33000
   b. 99000
   c. 126000
   d. 141000
   e. 193000

Exam I                                             Fall 2002

                             Formulas for Exam 1

EVoPI  EVwPI  MaxExpectedValue

Ft  Ft 1    At 1  Ft 1 

SeasonalIndex 

          ForecastErrors

       ForecastErrors 



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