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1. (TCO 1) Which of the following functions involves budgeting, analysis of investment proposals, and provision of funds? (Points : 5)

Operation
Marketing
Purchasing
Finance
Internal audit

 

Question 2. 2. (TCO 1) Transformation includes all of the following, except (Points : 5)

assembling.
teaching.
staffing.
farming.
consulting.

 

Question 3. 3. (TCO 1) Which of the following is providing new opportunities for productivity improvements? (Points : 5)

Pollution control
Total quality management
Supply chain management
Competition from foreign manufacturers
Technological change

 

Question 4. 4. (TCOs 3 & 6) In an effort to reduce inventory, which of the following interactions with vendors would potentially be helpful? (Points : 5)

Reducing lead times
Increasing safety stock
Less frequent purchases
Larger batch quantities
Longer order intervals

 

Question 5. 5. (TCOs 3 & 6) Which of the following costs related to order size is nonlinear? (Points : 5)

Interest
Insurance
Taxes
Receiving
Space

 

Question 6. 6. (TCO 2) Which of the following is a computer-based information system designed to handle ordering and scheduling of dependent-demand inventories? (Points : 5)

Computer-aided manufacturing (CAM)
Computer-integrated manufacturing (CIM)
Economic order quantity (EOQ)
Material requirements planning (MRP)
Economic run size (ERS)

 

Question 7. 7. (TCO 2) Net material requirements can be described as (Points : 5)

gross requirements – amount on-hand – scheduled receipts.
gross requirements – planned receipts.
gross requirements – order releases + amount on-hand.
gross requirements – planned order releases.
gross requirements – amount on-hand + planned order releases.

 

Question 8. 8. (TCO 2) When an MRP system is periodically updated to account for all changes that have occurred within a given time interval, the process is called (Points : 5)

pegging.
planned order release.
net change.
regenerative.
exception report.

 

Question 9. 9. (TCOs 4, 5, & 6) How does a net-change system work? (Points : 5)

It is a batch-type system that is periodically updated.
It is usually run at the beginning of each month.
The basic production plan is modified to reflect changes as they occur.
It is used to authorize the execution of planned orders.
It indicates the amount and timing of future changes.

 

Question 10. 10. (TCOs 4, 5, & 6) The MRP approach that is used for components or subassemblies to compensate for variations in lead times is called (Points : 5)

pegging.
safety stock.
increased order sizes.
safety time.
low-level coding.

 

Question 11. 11. (TCOs 4, 5, & 6) A lead time service level of 90 percent implies which of the following? (Points : 5)

Approximately 10 percent of demand during lead time will be satisfied.
Approximately 10 percent of inventory will be used during lead time.
The probability is 90 percent that demand during lead time will exactly equal the amount on-hand at the beginning of lead time.
The probability is 90 percent that demand during lead time will not exceed the amount on-hand at the beginning of lead time.
None of the above

 

Question 12. 12. (TCOs 5, 7, & 9) The dynamic store of information on the status of each item by time period (e.g., scheduled receipts, lead time, lot size), which is an input to the MRP, is the (Points : 5)

master production schedule.
bill of materials.
inventory records.
assembly time chart.
net requirements chart.

 

Question 13. 13. (TCOs 5, 7, & 9) What will be the quantity of the first planned receipt if net requirements for component J are as follows: 60 units in Week 2, 40 units in Week 3, and 60 units in Week 5? A fixed-period, two-period lot-sizing method is used. (Points : 5)

60 units
120 units
180 units
Cannot be determined
None of the above

 

Question 14. 14. (TCO 11, 12, 13, & 14) Given a product mix, scheduling difficulties, quality factors, and so on, the maximum expected output is (Points : 5)

utilization.
design capacity.
efficiency.
effective capacity.
available capacity.

 

Question 15. 15. (TCOs 11, 12, 13, & 14) Given the following information, calculate the efficiency.
Effective capacity = 50 units per day
Design capacity = 100 units per day
Actual output = 30 units per day (Points : 5)

40%
50%
60%
80%
90%

 

Question 16. 16. (TCOs 10, 15, & 16) In an assignment method problem, it takes Abe 3 hours to build a birdhouse and 4 hours for a doghouse, while Betty takes 4 hours for a birdhouse and 3 hours for a doghouse. What is the reduced cost (in hours) of assigning Abe to build the doghouse? (Points : 5)

0 hours
1 hour
2 hours
3 hours
4 hours

 

Question 17. 17. (TCOs 10, 15, & 16) The matrix below shows relative costs for various job-machine combinations. Which set of pairs constitutes the minimum cost solution using the assignment method?

Machine
A B C
Job 1 $6 0 0
2 0 3 4
3 0 1 2

(Points : 5)

1-B, 2-C, 3-A
1-B, 2-A, 3-C
1-A, 2-C, 3-B
1-A, 2-B, 3-C
1-C, 2-A, 3-B

 

 

 

 

 

 

 

 

 

 

 

  1. (TCO 1) A company has found that introducing one additional worker enables a process improvement that reduces processing time for each unit so that output is increased by 25% with less material. Under the old process, five workers could produce 60 units per hour. Labor costs are $12/hour, and material input was previously $16/unit. For the new process, material is now $10/unit. Overhead is charged at 1.6 times direct labor cost. Finished units sell for $31 each. What increase in productivity is associated with the process improvement? (Points : 30)

 

Factor                   Old System                         New System

Output                       60                                     60(1.25) = 75

# of workers             5                                              6

Worker cost           $12/hr                                                   $12/hr

Material                                 $16/unit                                                 $10/unit

Overhead                1.6(labor cost)                               1.6(labor cost)

Price                            31                                             31

 

  1. a) Compute labor productivity for the old system

 

 

 

 

 

  1. (TCOs 3 & 6) If instantaneous replenishment is assumed when given the same demand, setup/ordering costs, and carrying costs, then the EOQ calculated using incremental replenishment will be _____.
    Illustrate using a numeric example. (Points : 30)

If instantaneous replenishment is assumed when given the same demand, setup/ordering costs, and carrying costs, then the EOQ calculated using incremental replenishment will be greater than EOQ.

 

 

  1. (TCO 2) For the product tree below, how many Cs are needed if 17 Ps are needed and on-hand inventory consists of 10 As, 15 Bs, 20 Cs, 12 Ms, and 5 Ns? Show your work.(Points : 30)

 

 

 

  1. (TCOs 4, 5, & 6) Given the tree below, develop a material requirements plan for end-item P and its components. Assume that all lead times are one week and that lot-for-lot ordering is used, except for Item F, which is ordered in multiples of 400 units.
  1. (TCOs 11, 12, 13, & 14) A small business owner is contemplating the addition of another product line. Capacity increases, and equipment will result in an increase in annual fixed costs of $50,000. Variable costs will be $25 per unit. What unit selling price must the owner obtain to break even on a volume of 2,500 units a year?B) Because of market conditions, the owner feels a revenue of $47 is preferred to the value determined in part A. What volume of output will be required to achieve a profit of $16,000 using this revenue? (Points : 30)

 

 

 

  1. (TCOs 5, 7, & 9) Explain the advantages and disadvantages of frequent deliveries of small shipments. (Points : 25)
  2. (TCOs 10, 15,& 16) Compare and contrast kanban and CONWIP. (Points : 20)
  1. (TCOs 8 & 9) MPS planners use what is referred to as time fences? What are they, and why are they used? (Points : 20)