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GSCM 520 Final Exam

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Question 1. 1. (TCOs 1 and 2) A major competitive dimension that forms a company’s strategic operational competitive position in their strategic planning is which of the following?

(Points : 4)

Cost or price

Focus

Automation

Straddling

Activity-system mapping

 

Question 2. 2. (TCO 1) One of the package of features that make up a service is

(Points : 4)

appearance.

facilitating goods.

packaging.

cost.

implied use.

 

 

Question 3. 3. (TCO 5) You are using an exponential smoothing model for forecasting. The running sum of the forecast error statistics (RSFE) are calculated each time a forecast is generated. You find the last RSFE to be 34. Originally, the forecasting model used was selected because its relatively low MAD of 0.4. To determine when it is time to reevaluate the usefulness of the exponential smoothing model, you compute tracking signals. Which of the following is the resulting tracking signal? (Points : 4)

85

60

13.6

12.9

8

 

Question 4. 4. (TCO 5) The way to build in greater flexibility in your workers is to do which of the following? (Points : 4)

Pay higher wages to motivate a willingness to do a variety to tasks.

Provide a broader range of training.

Provide a wide variety of technology to augment workers skills.

Institute a “pay for skills” program.

Use part-time employees with specialized skills as needed.

 

Question 5. 5. (TCO 6) The Malcolm Baldrige National Quality Award is given to organizations that have done which of the following? (Points : 4)

Instituted a six-sigma approach to total quality control

Demonstrated a high level of product quality

Demonstrated outstanding quality in their products and processes

Have a world-class quality control function

Most significantly improved their product quality levels

 

 

Question 6. 6. (TCOs 3 and 7) Which of the following is considered a high-contact service operation?

(Points : 4)

Online brokerage house

Internet sales for a department store

Physician practice

Telephone life insurance sales and service

Automobile repair

 

 

Question 7. 7. (TCOs 7 and 8) Which of the following is a dynamic lot-sizing technique that adds ordering and inventory carrying cost for each trial lot size and divides by the number of units in each lot size, picking the lot size with the lowest unit cost?

(Points : 4)

Economic order quantity

Lot-for-lot

Least total cost

Least unit cost

Inventory item averaging

 

Question 8. 8. (TCOs 4 and 8) Which of the following is a dynamic lot-sizing technique that calculates the order quantity by comparing the carrying cost and the setup (or ordering) costs for various lot sizes and then selects the lot size in which these are most nearly equal? (Points : 4)

Kanban

Just-in-time system

MRP

Least unit cost

Least total cost

 

Question 9. 9. (TCO 3) When considering outsourcing, what should firms be sure to avoid? (Points : 4)

Losing control of noncore activities that don’t distinguish the firm

Allowing outsourcing to develop into a substitute for innovation

Giving the outsourcing partner opportunities to become a strong competitor

Allowing employees transferred to the outsourcing partner to rejoin the firm

Adverse corporate tax implications of asset transfers to the outsourcing partner

 

Question 10. 10. (TCO 9) In which of the following situations should we not use the transportation method of linear programming? (Points : 4)

To find a new site location for a plant

To minimize costs of shipping n units to m destinations

To maximize profits of shipping n units to m destinations

To determine which corner of a street intersection to locate a retail service facility

To locate a finished goods distribution warehouse

 

 

Page 2

Question 1. 1. (TCO 4) a company has recorded the last 5 days of daily demand on their only product. Those values are 120, 125, 124, 128, and 133. The time from when an order is placed to when it arrives at the company from its vendor is 5 days. Assuming the basic fixed-order quantity inventory model fits this situation and no safety stock is needed, which of the following is the reorder point (R)?
@See Chapter 11, page 367. Using equation 11.4, average demand is 120 + 125 + 124 + 128 + 133/5 = 126. Lead time = 5 days so the reorder point is 126 x 5 = 630. (Points : 10)

120
126
630
950
1,200
 

 

Question 2. 2. (TCO 4) You would like to use the fixed-time period inventory model to compute the desired order quantity for a company. You know that vendor lead time is 5 days and the number of days between reviews is 7. Which of the following is the standard deviation of demand over the review and lead time if the standard deviation of daily demand is 8?
@See Chapter 11, page 374. Using equation 11.12, the standard deviation of demand over the 12 days of time between reviews and lead time is the square root of (12 x 64) = 27.71. (Points : 10)

About 27.7
About 32.8
About 35.8
About 39.9
About 45.0
 

 

Question 3. 3. (TCOs 3, 4, and 5) If the average aggregate inventory value is $45,000 and the cost of goods sold is $10,000, which of the following is weeks of supply?
@See Chapter 13, page 451. Weeks of supply = (Average Aggregate Inventory/Cost of goods sold) x 52 = (45,000/10,000) x 52 = 4.5 x 52 = 234. Note that Cost of Goods sold is an income statement item and refers to an annual figure. Average Aggregate Inventory is a balance sheet item. (Points : 10)

45,000
234
120
23.4
4.5

 

Question 4. 4. (TCO 5) If a firm produced a standard item with relatively stable demand, the smoothing constant alpha (reaction rate to differences) used in an exponential smoothing forecasting model would tend to be in which of the following ranges?
@See Chapter 3, page 56. If a firm produced a standard item with relatively stable demand, the reaction rate to differences between actual and forecast demand would tend to be small, perhaps just 5 or 10 percentage points.(Points : 10)

5% to 10%
20% to 50%
20% to 80%
60% to 120%
90% to 100%

 

Question 5. 5. (TCO 2) Various financial data for SunPath Manufacturing for 2012 and 2013 follow.
What is the percentage change in the multifactor labor and raw materials productivity measure for SunPath between 2012 and 2013?

2012 2013
Output: Sales: $300,000 $330,000
Inputs: Labor: $40,000 $43,000
Raw Materials: $45,000 $51,000
Energy: $10,000 $9,000
Capital Employed: $250,000 $262,000
Other $2,000 $6,000

@SeeChapter 2, page 38. The multifactor labor and raw materials productivity measure for 2012 is $300,000 divided by the sum $40,000 + $45,000 or 3.53. For 2013, it is $330,000 divided by the sum $51,000 + $43,000 or 3.51. The percentage change between 2012 and 2013, then is (3.511 – 3.529)/3.529 or -0.018 divided by 3.529 = -0.53%. (Points : 10)

-9.22
2.33
-0.53
-2.88
10.39
 

 

Question 6. 6. (TCO 5) A company wants to forecast demand using the weighted moving average. If the company uses three prior yearly sales values (i.e., year 2011 = 160, year 2012 = 140, and year 2013 = 170), and we want to weight year 2011 at 30%, year 2012 at 30%, and year 2013 at 40%, which of the following is the weighted moving average forecast for year 2014?
@See Chapter 3, page 53. Forecast for 2014 = (160×0.3) + (140×0.3) + (170×0.4) = 158. (Points : 10)

170
168
158
152
146
 

 

Question 7. 7. (TCO 5) If demand for product “A” were forecast at 1,000,000 units for the coming year and your factory has one machine capable of producing 75,000 units per month, how much of product “A” might you plan to acquire through outsourcing?
@See Chapter 4, page 102. The answer is 100,000 units. You can produce 75,000 units times 12 months = 900,000 units. The shortfall is 1,000,000 minus 900,000 or 100,000 units. (Points : 10)

500
10,000
100,000
200,000
600
 

 

Question 8. 8. (TCO 3) You have been called in as a consultant to set up a Kanban control system. The first thing to do is to determine the number of Kanban card sets needed. Your research shows that the expected demand during lead time for a particular component is 150 per hour. You estimate the safety stock should be set at 25% of the demand during lead time. The tote trays used as containers can hold eight units of stock and the lead time it takes to replenish an order is 2 hours. Which of the following is the number of Kanban card sets necessary to support this situation?
@SeeChapter 12, page 416. Using equation 12.1: k = 150 x 2 x 1.25/8 = 46.875 = 47. (Points : 10)

42
47
68
89
94

 

Question 9. 9. (TCO 7) Using the cut-and-try method for aggregate operations planning, we can determine the production requirement in units of product. If the beginning inventory is 100 units, the demand forecast is 1,200, and the necessary safety stock is 20% of the demand forecast, which of the following is the production requirement?
@See Chapter 8, page 252. Demand = 1,200; 20% of demand = 240; Inventory = 100; produce 1,200 + 240 – 100 = 1,340. (Points : 10)

1,200
1,300
1,340
1,500
1,540
 

 

Question 10. 10. (TCO 8) If annual demand is 6,125 units, annual holding cost is $5 per unit, and setup cost per order is $50, which of the following is the EOQ lot size?
@See Chapter 9, page 290. From the equation: EOQ = 350 = Square root of (2 x 6125 x 50/5). (Points : 10)

350
247
23
185
78

 

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Time Remaining:

Page 3

Question 1. 1. (TCOs 1, 2, and 5) Discuss the role of efficiency and effectiveness in the creation of value. (Points : 30)

Question 2. 2. (TCOs 3, 5, and 6) Describe the relationship between capacity utilization and quality in a service operation. (Points : 30)

Question 3. 3. (TCOs 4, 6, and 7) Describe the aggregate sales and operations planning process. (Points : 30)

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