Operations and Supply Chain Management Chapter 13,14,15,17 HW Solutions

Chapter 13 Carrying cost is a function of order size; the larger the order quantity, the higher the inventory carrying cost. – TRUE Interest, insurance, and opportunity costs are all associated with holding costs. – TRUE The rate of demand is an important factor in determining the ROP. – TRUE Using the EOQ model, the higher an item's carrying costs, the more frequently it will be ordered. – TRUE The overall objective of inventory management is to achieve satisfactory levels of customer service while keeping inventory costs reasonable. TRUE The objective of inventory management is to minimize the cost of holding inventory. FALSE To provide satisfactory levels of customer service while keeping inventory costs within reasonable bounds, two fundamental decisions must be made about inventory: when to order and how much to order. – TRUE One important use of inventories in manufacturing is to decouple operations through the use of work-in-process inventories. TRUE Variability in demand and/or lead time can be compensated for by safety stock. – TRUE In a supermarket, a vendor's restocking the shelves every Monday morning is an example of: FIXED ORDER INTERVALS Which of the following is typically the largest of all inventory costs? – PURCHASE COST The need for safety stocks can be reduced by an operations strategy which: - DECREASES LEAD TIME VARIBILITY Which of the following is not one of the assumptions of the basic EOQ model? – QUANTITY DISCOUNTS ARE AVAILABLE Which one of the following is not generally a determinant of the reorder point? – PURCHASE COST Dairy items, fresh fruit, and newspapers are items that: ARE SUBJECT TO DETERIORATION AND SPOILAGE. A risk avoider would want ______ safety stock. MORE Which of the following interactions with vendors would potentially lead to inventory reductions? REDUCED LEAD TIME The newsvendor model works well for perishable products – TRUE The newsvendor model balances which two costs (choose all that apply)? - COST OF ORDERING TOO MANY - RUNNING OUT AND LOSING PROFITS The basic calculation in the newsvendor model will result in a calculation of: OPTIMAL PROBABILITY OF RUNNING OUT Chapter 14 The ultimate goal of lean operations is to have: a smooth, rapid flow of work through the system. The ultimate goal of lean operations is a system characterized by the smooth, rapid flow of materials True In the Toyota Production System, waste and inefficiency are referred to as __________, and the ongoing effort to reduce this is referred to as __________. muda; kaizen With regard to suppliers, lean systems typically require: long-term relationships and commitments. One problem with lean operations is that they can lead to much stress on workers due to their increased responsibility for process and quality improvement. True Although transitioning to a lean system can be a powerful means of improving performance, some believe that using __________ along with lean can lead to even better results. Six Sigma The ultimate goal in a lean system is: balanced and rapid flow. Preventive maintenance is additional maintenance done immediately after a breakdown has occurred to help prevent any further breakdowns. False Which of the following does not contribute to reduced setup time and cost? custom setup procedures for each product The four building blocks of lean operations are: product design, process design, personnel/organizational elements, and manufacturing planning and control. True In a lean environment, anything not essential to the product or process is viewed as waste. True In a pull system, the accumulation of excessive inventory in front of a workstation is avoided even if there are problems such as equipment failure at that workstation which prevent it from completing its work. True A lean-systems method of asking questions about a process is the __________ approach. 5W2H A conveyance __________ signals parts movement. Kanban Which of the following would not contribute to making services more lean? Have service workers handle multiple tasks simultaneously. Which of the following is not characteristic of preventive maintenance in lean systems? eliminating supplies of spare parts to reduce capital investment The Five S's do not include: Sanitize. The lean philosophy suggests that workers are: assets. Having a vendor be responsible for managing the restocking of inventory is what is meant by the term: JIT II. A common objective of both MRP and the lean philosophy is to: reduce (and ultimately eliminate) “excess” inventory. A Push system requires a high degree of coordination between production stations. False A Pull system is likely to struggle to meet demand during demand spikes. True Which of the following statements is true of Push and Pull systems? Push and Pull systems are opposite but can still be used together Chapter 15 Which of the following is not a benefit of effective supply chain management? larger number of suppliers Disintermediation occurs when the traditional retailer or service provider is reduced or eliminated in a supply chain. True Small changes in consumer demand can result in large variations in orders placed because of the: bullwhip effect. Vendor analysis is the process that evaluates the source of supply in terms of price, quality, reputation, and service. True The more __________ a company's supply chain, the more difficult it is to ensure that the supply chain is managed ethically. Global Which of the following is least likely to be a key consideration when a company chooses a supplier? current inventory Decentralized purchasing can usually offer quicker response than centralized purchasing. True Which of the following is not a benefit of centralized purchasing? quick response to local needs Bullwhip effect refers to a phenomenon in which demand variations that exist at the customer end of the supply chain are magnified as orders are generated back through the supply chain. True Real-time information about product movement on store shelves could benefit from the use of: radio frequency identification tags. Which of the following is not a goal of supply chain management? lowest possible transportation costs Which of the following would not usually be a main factor in selecting a vendor? inventory turnover Delayed differentiation is a means of increasing product variety without building the customized product from scratch or keeping large inventories of custom products. True The purchasing perspective of the supplier as a partner is characterized by: one or a few suppliers. _________ has/have helped firms to concentrate on their core business. Outsourcing Important factors in purchasing include the cost of goods purchased, the quality of goods and services, and the timing of deliveries of goods or services. True Logistics includes all of these except: customer selection. The website and order fulfillment are essential features of: e-commerce. Returned goods are part of reverse logistics. True An advantage of decentralized purchasing is the attention given to local needs. True Chapter 17 A popular visual tool for planning and scheduling simple projects, and for monitoring progress, is the: Gantt chart. One way that project management differs from management of more traditional activities is because of the limited time framework of projects. True In a project network, the critical path is the sequence of activities which has the: longest duration. To _____ an activity means to shorten the time it will take. Crash If two consecutive activities on the same path each have two days of activity slack, this means that each of them can be delayed by two days without delaying the project. False The probability of occurrence of risk events is lower near the beginning of a project and higher near the end of the project since very few activities remain. False The standard deviation of the critical path is equal to the sum of the standard deviations of all of the activities on the critical path. False Matrix organizations transfer control of workers to project managers for the duration of the project. False The costs associated with risk events tend to be lower near the beginning of a project and higher near the end of the project. True Which of the following would probably not involve the use of PERT? writing a poem The sum of times of the longest path in a network indicates expected project duration, and the activities represent the critical activities. True A hierarchical listing of what must be done during a project is called matrix. False Some organizations use a matrix organization to integrate the activities of specialists within a functional framework. True A method used for establishing a logical framework for identifying the required activities for the project is called: work breakdown structure. Activities not on the critical path have a slack time equal to zero. False Chapter 18 “Queuing” means the scientific study of the use of the letter Q in the English language. False Which of the following results in waiting lines? Variability Which of the following are the components of a queuing system? (select all that apply) Servers Servers Arrivals Arrivals Computers What can managers do with queuing theory? Measure and Predict Performance A single-phase queuing system is one which has a single: Operation Little's law states that the average number of people in a waiting line is the average customer arrival rate multiplied by the: Average waiting time In which of these settings would one be least likely to encounter first-come service? An emergency room A multiple-channel queuing system with a Poisson arrival rate and exponential service time has an average arrival rate of four customers per hour and an average service time of 18 minutes per customer. The minimum number of servers required to avoid an overloaded system is: 2 9. A single-bay car wash with a Poisson arrival rate and an exponential service time has cars arriving an average of 10 minutes apart, and an average service time of four minutes. The system utilization is: .40 A customer growing frustrated with the wait and leaving the facility (without being served) is an example of: Reneging A basic difference between infinite-source and finite-source queuing models is the: Size of potential calling population 12. A single-channel queuing system has an average service time of eight minutes and an average time between arrivals of 10 minutes. The arrival rate is: 6 per hour Waiting lines occur even in underloaded systems because of variability in service rates and/or arrival rates. True A system has one service facility that can service 10 customers per hour. The customers arrive at a variable rate, which averages six per hour. Since there is excess capacity, no waiting lines will form. False The goal of queuing analysis is to balance the cost of providing a level of service capacity with the possible loss of business due to customers leaving the line or refusing to wait. False For a system that has a low utilization ratio, decreasing service capacity slightly will have only negligible effect on customer waiting time. True An approach to reducing the variability in processing times might include greater standardization. True To reduce the average number waiting in line, it is important to increase utilization. False