# Exam a

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```					     UNIVERSITY OF MASSACHUSSETTS. COLLEGE OF MANAGEMENT
OPERATIONS MANAGEMENT
FINAL EXAM (5/15/02)
INSTRUCTOR : PEDRO SANCHEZ

STUDENT’S LAST AND FIRST NAME:

From each question, Circle the letter you consider the right answer in both, the matrix and
scanned sheet.

1.    The purpose of the transportation approach for locational analysis is to minimize
a. total costs
b. total shipping costs
c. total variable costs
d. total fixed costs
e. the number of shipments

2.    The initial solution to a transportation problem can be generated in any manner, so long as
a. it minimizes cost
b. it ignores cost
c. all supply and demand are satisfied
d. degeneracy does not exist
e. all cells are filled

3.    Which of the following statements about the northwest corner rule is false?
a. One must exhaust the supply for each row before moving down to the next row.
b. One must exhaust the demand requirements of each column before moving to the next column.
c. When moving to a new row or column, one must select the cell with the lowest cost.
d. One must check that all supply and demand constraints are met.
e. All of the above are false.

4.    In transportation model analysis the stepping-stone method is used to
a. obtain an initial optimum solution
b. obtain an initial feasible solution
c. evaluate empty cells for potential solution improvements
d. evaluate empty cells for possible degeneracy
e. balance supply and demand

5.    A transportation problem has a feasible solution when
a. all of the improvement indexes are positive
b. the number of filled cells is one less than the number of rows plus the number of columns
c. all the squares are used
d. the solution yields the lowest possible cost
e. all demand and supply constraints are satisfied
6.    When the number of shipments in a feasible solution is less than the number of rows plus the
number of columns minus one
a. the solution is optimal
b. there is degeneracy, and an artificial allocation must be created
c. a dummy source must be created
d. a dummy destination must be created
e. the closed path has a triangular shape

7.    The total cost of the optimal solution to a transportation problem
a. is calculated by multiplying the total supply (including any dummy values) by the average cost
of the cells
b. cannot be calculated from the information given
c. can be calculated from the original non-optimal cost, by adding the savings made at each
improvement
d. is found by multiplying the amounts in each cell by the cost for that cell for each row and then
subtract the products of the amounts in each cell times the cost of each cell for the columns
e. can be calculated based only on the entries in the filled cells of the solution

8.    The stepping-stone method
a. is an alternative to using the northwest corner rule
b. often involves tracing closed paths with a triangular shape
c. is used to evaluate the cost effectiveness of shipping goods via transportation routes not
currently in the solution
d. is used to identify the relevant costs in a transportation problem
e. helps determine whether a solution is feasible or not

9.    In a minimization problem, a negative improvement index in a cell indicates that the
a. solution is optimal
b. total cost will increase if units are reallocated to that cell
c. total cost will decrease if units are reallocated to that cell
d. current iteration is worse than the previous one
e. problem has no feasible solution

10.   In a minimization problem, a positive improvement index in a cell indicates that
a. the solution is optimal
b. the total cost will increase if units are reallocated to that cell
c. the total cost will decrease if units are reallocated to that cell
d. there is degeneracy
e. the problem has no feasible solution

11.   An improvement index indicates
a. whether a method other than the stepping stone should be used
b. whether a method other that the northwest corner rule should be used
c. whether the transportation cost in the upper left-hand corner of a cell is optimal
d. how much total cost would increase or decrease if the largest possible quantity were reallocated
to that cell
e. how much total cost would increase or decrease if a single unit was reallocated to that cell

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12.   Which of the following would not generally be a motive for a firm to hold inventories? To
a. take advantage of quantity discounts
b. minimize holding costs
c. reduce stockout risks
d. decouple production from distribution
e. meet anticipated demand

13.   Which of the following statements about ABC analysis is false?
a. ABC analysis is based on the presumption that controlling the few most important items
produces the vast majority of inventory savings.
b. In ABC analysis, "A" Items are tightly controlled, have accurate records, and receive regular
review by major decision makers.
c. ABC analysis is based on the presumption that all items must be tightly controlled to produce
important cost savings.
d. In ABC analysis, "C" Items have minimal records, periodic review, and simple controls
e. None of the above statements are true.

14.   ABC analysis divides on-hand inventory into three classes, generally based upon
a. unit price
b. the number of units on hand
c. annual demand
d. annual dollar volume
e. item quality

15.   Among the advantages of cycle counting is that it
a. makes the annual physical inventory more acceptable to management
b. allows more rapid identification of errors and consequent remedial action than is possible with
annual physical inventory
c. does not require the detailed inventory records necessary when annual physical inventory is
used
d. does not require highly trained people
e. does not need to be performed for less expensive items

16.   The two most basic inventory questions answered by the typical inventory model are
a. timing and cost of orders
b. quantity and cost of orders
c. timing and quantity of orders
d. order quantity and service level
e. ordering cost and carrying cost

17.   Which of the following statements about the basic EOQ model is true?
a. If the ordering cost were to double, the EOQ would rise.
b. If annual demand were to double, the EOQ would increase.
c. If the carrying cost were to increase, the EOQ would fall.
d. If annual demand were to double, the number of orders per year would decrease.
e. All of the above statements are true.

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18.     An inventory decision rule states that "when the inventory level goes down to 14 gearboxes, 100
gearboxes will be ordered." Which of the following statements is true?
a. 100 is the reorder point, and 14 is the order quantity.
b. The number 100 is a function of demand during lead time.
c. 14 is the safety stock, and 100 is the reorder point.
d. 14 is the reorder point, and 100 is the order quantity.
e. None of the above.

19.    The Production Order Quantity model
a. relaxes the assumption of known and constant demand
b. uses Ordering Cost, not Setup Cost, in its formula
c. assumes instantaneous delivery
d. results in larger average inventory than an equivalent EOQ model
e. is appropriate when units are sold/used as they are produced

20. Which of the following statements regarding the Production Order Quantity model is true?
a. It applies only to items produced in the firm's own production departments.
b. It relaxes the assumption that the demand rate is constant.
c. It minimizes the total production costs.
d. It relaxes the assumption that all the order quantity is received at one time.
e. It minimizes inventory.

21. Which of the following statements about quantity discounts is false?
a. The cost-minimizing solution may, or may not, be where annual holding costs equal annual
ordering costs.
b. In inventory management, item cost becomes relevant to inventory decisions only when a
quantity discount is available.
c. The larger annual demand, the less attractive a discount schedule will be.
d. The smaller the ordering cost, the less attractive a discount schedule will be.
e. If carrying costs are expressed as a percentage of value, EOQ is larger at each lower price in
the discount schedule.

22.     The layout strategy that deals with low-volume, high-variety production is
a. fixed-position layout
b. retail/service layout
c. warehouse layout
d. all of the above
e. none of the above

23.     A good layout requires determining
a. capacity and space requirements
b. material handling requirements
c. environment and aesthetics
d. flows of information
e. all of the above

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24.   For which of the following operations would a fixed-position layout be most appropriate?
a. assembly of an automobile
b. production of cameras and TV sets
c. construction of a ship
d. refining of crude oil
e. grocery store

25.   The type of layout which features departments or other functional groupings in which similar
activities are performed is
a. process
b. product
c. fixed-position
d. mass
e. unit

26.   According to Heizer and Render, an office layout
a. groups workers, their equipment, and spaces/offices to provide for movement of information
b. addresses the layout requirements of large, bulky projects such as ships and buildings
c. seeks the best personnel and machine utilization in repetitive or continuous production
d. allocates shelf space and responds to customer behavior
e. deals with low-volume, high-variety production

27.   According to Heizer and Render, a retail/service layout
a. groups workers, their equipment, and spaces/offices to provide for movement of information
b. addresses the layout requirements of large, bulky projects such as ships and buildings
c. seeks the best personnel and machine utilization in repetitive or continuous production
d. allocates space and responds to customer behavior
e. deals with low-volume, high-variety production

28.   Balancing low-cost storage with low-cost material handling is important in
a. a fixed-position layout
b. a process-oriented layout
c. an office layout
d. a product-oriented layout
e. a warehouse layout

29.   Which type of layout is used to achieve a smooth and rapid flow of large volumes of output?
a. process
b. batch
c. product
d. unit
e. fixed-position
30.   Which of the following are strongly associated with "crossdocking"?
a. non-value-adding activities such as receiving and storing
b. multi-modal transportation facilities at seaports
c. processing items as soon as they are received into a distribution center
d. use of manual product identification systems
e. all of the above

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under
a. long-range plans
b. intermediate-range plans
c. short-range plans
d. mission-related planning
e. strategic planning

32.   Dependence on an external source of supply is found in which of the following aggregate planning
strategies?
a. varying production rates through overtime or idle time
b. using part-time workers
c. backordering during high demand periods
d. subcontracting
e. hiring and laying off

33.   Which of the following aggregate planning strategies might direct your client to a competitor?
a. using part-time workers
b. subcontracting
c. changing inventory level
d. varying production rates through overtime or idle time
e. varying workforce size by hiring or layoffs

34.   Which of the following statements about aggregate planning is true?
a. Advertising/promotion is a way of manipulating product or service supply.
b. Work station loading and job assignments are examples of aggregate production planning.
c. Overtime/idle time is a way of manipulating product or service demand.
d. Aggregate planning uses the adjustable part of capacity to meet production requirements.
e. All of the above are true.

35.   Which of the following statements about aggregate planning is true?
a. In aggregate planning, backorders are a means of manipulating demand while part-time
workers are a way of manipulating product or service supply.
b. A pure chase strategy allows lower inventories when compared to pure level and hybrid
strategies.
c. In spite of the research into mathematical models, aggregate production planners continue to
use trial and error methods when developing their plans.
d. All of the above are true.
e. None of the above are true.

36.   Which of the following is not consistent with a pure level strategy?
a. variable work force levels
b. little or no use of inventory to meet demand requirements
c. varying production levels and/or work force to meet demand requirements
d. varying the use of subcontracting
e. all of the above are inconsistent with the pure level strategy

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37.   In level scheduling, what is kept uniform from month to month?
a. product mix
b. inventory levels
c. demand levels
d. production/workforce levels
e. sub-contracting levels

38.   Which of the following is consistent with a pure chase strategy?
a. vary production levels to meet demand requirements
b. vary work force to meet demand requirements
c. vary production levels and work force to meet demand requirements
d. little or no use of inventory to meet demand requirements
e. all of the above.

39.   Which of the following aggregate planning methods does not work if hiring and layoffs are
possible?
a. linear decision rule
b. management coefficients model
c. transportation method
d. simulation
e. charting method

40.   Aggregate planning for service firms with high-volume tangible output is directed toward
a. yield management
c. decreasing the demand rate during peak periods
d. planning for human resource requirements and managing demand
e. smoothing the production rate

41.   "Yield management" is best described as
a. a situation where management yields to labor demands
b. capacity allocation to different classes of customers in order to maximize profits
c. a situation where the labor union yields to management demands
d. process designed to increase the rate of output
e. management's selection of a product mix yielding maximum profits

42.   Which of the following is true regarding forward scheduling? Forward scheduling is the
scheduling of
a. the end items or finished products
b. the start items or component parts
c. the final operation first beginning with the due date
d. jobs as soon as the requirements are known
e. jobs according to their profit contributions

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43.   The assignment method is
a. a computerized method of determining appropriate tasks for an operation
b. a form of linear programming for optimally assigning tasks or jobs to resources
c. the same thing as the Gantt schedule chart
d. a method for achieving a balance between forward and backward scheduling
e. a method to highlight overloads in a given work center

44.   The most appropriate sequencing rule to use if the goal is to dynamically track the progress of jobs
and establish relative priority on a common basis is
a. shortest processing time
b. earliest due date
c. longest processing time
d. critical ratio
e. Johnson's rule

45.   A recent advance in short term scheduling that makes use of expert systems and simulation in
solving dynamic scheduling problems is
a. forward scheduling
b. finite scheduling
c. backward scheduling
d. infinite scheduling
e. progressive scheduling

46.   Which of the following techniques does not contribute to increasing throughput at a bottleneck?
a. increase capacity of constraint
b. have cross-trained employees available to operate the constraint
c. develop alternate routings
d. move inspections and tests to a position immediately after the bottleneck
e. schedule throughput to match capacity of the bottleneck

47.   Factory X is trying to use level use scheduling. If their first target were to cut the current lot size in
half, by what proportion must setup cost change?
a. setup cost must also be cut in half from its current value
b. setup cost must double from its current value
c. setup cost must be cut to one fourth its current value
d. cannot be determined
e. none of the above

48.   Which of the following is true regarding services scheduling?
a. the emphasis is on staffing levels, not materials
b. reservation systems are often used a means of manipulating the supply of services
c. labor use can be intensive, and labor demand is usually stable
d. the Critical Ratio sequencing rule is widely used for fairness to customers
e. all of the above are true

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49.    Which of the following statements regarding project management is false?
a. Project organization works well when the work contains simple, independent tasks.
b. Gantt charts give a timeline for each of a project's activities, but do not adequately show the
interrelationships of activities.
c. Project organization is most suitable for projects that are temporary but critical to the
organization.
d. All of the above are true.
e. None of the above are true.

50.    Which of the following statements regarding PERT times is true?
a. Optimistic time estimate is an estimate of the minimum time an activity will require.
b. Optimistic time estimate is an estimate of the maximum time an activity will require.
c. The probable time estimate is calculated as t = (a + 4m + b)/6.
d. Pessimistic time estimate is an estimate of the minimum time an activity will require.
e. Most likely time estimate is an estimate of the maximum time an activity will require.

51.    Which of the following statements regarding critical paths is true?
a. The shortest of all paths through the network is the critical path.
b. Some activities on the critical path may have slack.
c. Every network has exactly one critical path.
d. On a specific project, there can be multiple critical paths, all with exactly the same duration.
e. The duration of the critical path is the average duration of all paths in the project network.

52          Which of the following statements concerning CPM activities is false?
a.   The late finish of an activity is the earliest late start of all preceding activities.
b.   The early finish of an activity is the early start of that activity plus its duration.
c.   The late finish is the earliest of the late start times of all successor activities.
d.   The late start of an activity is its late finish less its duration.
e.   The early start of an activity is the latest early finish of all preceding activities.

53.    Which of the following statements regarding CPM networks is true?
a. The early finish of an activity is the latest early start of all preceding activities.
b. The late finish of an activity is the earliest late start of all preceding activities.
c. On a specific project, there can be multiple critical paths, all of which will have exactly the
same duration.
d. A project does not have to have a critical path.
e. All of the above are true.

54.    Which of the following statements regarding project management is true?
a. Both PERT and CPM require that network tasks have unchanging durations.
b. Shortening the project by assigning more resources to one or more of the critical tasks is called
"project crashing."
c. Crashing need not consider the impact of crashing an activity on other paths in the network.
d. Project crashing is an optimizing technique.
e. Crash cost depends upon the variance of the activity to be crashed.

55     Which of these statements regarding time-cost tradeoffs in CPM networks is true?
a. Crashing is not possible unless there are multiple critical paths.
b. Crashing a project often reduces the length of long-duration, but non-critical, activities.
c. Activities not on the critical path can never be on the critical path, even after crashing.
d. Crashing shortens the project duration by assigning more resources to one or more of the
e. None of the above.

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