Managerial Decision Making Test
Bank
Course Introduction
Managerial Decision Making explores the processes and frameworks that managers use to make effective choices in complex business environments. The course examines both the rational and behavioral approaches to decision making, incorporating concepts such as risk assessment, uncertainty, problem analysis, and ethical considerations. Through case studies, simulations, and group discussions, students learn to recognize common decision-making biases, utilize quantitative and qualitative tools, and develop practical strategies for overcoming challenges in individual and group decision contexts. This course prepares future managers to make informed, strategic decisions that drive organizational success.
Recommended Textbook operations management an integrated approach 6th edition by r. dan reid
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Page 2
Chapter 1: Introduction to Operations Management
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Sample Questions
Q1) Which of the following is not true for business process reengineering?
A) It can increase efficiency.
B) It cannot be used to improve quality.
C) It can reduce costs.
D) It involves asking why things are done in a certain way.
E) It involves redesigning processes.
Answer: B
Q2) A key feature of scientific management is that workers are limited only by their tools.
A)True
B)False
Answer: False
Q3) Today's business must think in terms of:
A) regional trade zones
B) the EPA
C) the U.S. Defense Department
D) the global market place
E) the curved world
Answer: D
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Chapter 2: Operations Strategy and Competitiveness
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Sample Questions
Q1) How does Federal Express maintain its ability to compete on time during peak demand periods?
A) it subcontracts overload to other firms
B) it purchases more planes
C) overtime
D) it uses a very flexible part-time workforce
E) it purchases more vans
Answer: D
Q2) Rapid technological change includes the risk of ________________________ . Answer: obsolescence.
Q3) Productivity = input/output.
A)True
B)False
Answer: False
Q4) A mission statement answers what three overriding questions?
Answer: (1) What business is the organization in?, (2) Who are the customers?, (3) How will the company's core beliefs shape its business?
Q5) Environmental scanning helps organizations recognize
Answer: opportunities and threats.
Page 4
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Chapter 3: Product Design and Process Selection
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Sample Questions
Q1) For which of the following is break-even analysis not appropriate?
A) deciding how much of a product must be sold to make a profit
B) evaluating different processes
C) deciding whether it is better to make or buy a product
D) deciding between different products
E) deciding how to allocate overhead
Answer: E
Q2) Approximately what percentage of ideas do not make it past the screening stage?
A) 30%
B) 50%
C) 60%
D) 80%
E) 90%
Answer: D
Q3) Triangle symbols are used in a process flowchart to represent decision points?
A)True
B)False
Answer: True
Q4) Name a company that hurt its business success by changing its Operations Type.
Answer: Babcock & Wilcox is one example.
Page 5
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Chapter 4: Supply Chain Management
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Sample Questions
Q1) Insourcing incurs a fixed cost of $1000 and a $5 variable cost. Outsourcing incurs a fixed cost of $2000 and a $2 variable cost. What is the indifference point?
Q2) The time between order placement and the receipt of goods is called lead time.
A)True
B)False
Q3) Leveraging core competence is about sharing:
A) workers
B) knowledge
C) machines
D) expenses
E) financial hedges
Q4) Collection of point-of-sale (POS) information is most useful for which bullwhip effect remedy?
A) Allocate units based on past demand
B) Price stabilization
C) Fill orders based on a set percentage
D) Eliminate order batching
E) Information sharing
Q5) Logistics includes what two major management functions?
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Chapter 5: Total Quality Management
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Sample Questions
Q1) What is a schematic diagram of the sequence of steps involved in an operation or process?
A) Checklist
B) Control chart
C) Scatter diagram
D) Flow chart
E) Process chart
Q2) TQM team meetings take place
A) After work
B) During lunch breaks
C) When the boss calls them
D) When all the other work is finished
E) During time in the workday set aside for them
Q3) Studying business practices of companies considered "best in class" is called
A) Pairwise comparison
B) Benchmarking
C) Competition
D) Dreamscaping
E) Discouraging
Q4) What are the seven categories for Malcolm Baldrige Award criteria?
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Chapter 6: Statistical Quality Control
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Sample Questions
Q1) For a p-chart or c-chart, what is the implication of a negative value for the LCL?
A) A calculation error must have occurred.
B) The value of sigma must be reduced.
C) The process has too many errors.
D) The process is in a state of control.
E) The LCL can effectively be rounded up to 0.
Q2) A p-chart is an example of what?
A) Traditional statistical tools
B) Fishbone diagramming
C) Acceptance sampling
D) Experimental design
E) Statistical process control
Q3) What is the formula for the basic capability index?
Q4) Given a sample size of 2, the lower limit for the R-chart is 0.
A)True
B)False
Q5) The probability of rejecting a lot or batch of products whose proportion of defective items is not greater than AQL is called producer's risk because
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Chapter 7: Just-In-Time and Lean Systems
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Sample Questions
Q1) Consider a workstation that can process 4000 units per hour. It takes 15 minutes to receive an order from the previous station. The container size is 20 units. The factory sets safety stock at 20 percent of demand during lead time. How many kanbans are needed for the workstation?
A) 16
B) 3600
C) 50
D) 10
E) 60
Q2) According to JIT, by eliminating inventory we can clearly identify obsolete products and work on eliminating them.
A)True
B)False
Q3) In the broad view of the organization everyone should have
A) the same job duration
B) the same retirement plan
C) the same job description
D) the same view of serving the customer
E) a narrow view of the organization that includes only their assigned tasks
Q4) What are the advantages of cell manufacturing using a U-shaped cell?
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Chapter 8: Forecasting
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Sample Questions
Q1) The most frequently used forecasting model is the ____________.
Q2) Nearly all other business decisions depend on _______________.
Q3) What is the statistic that measures the direction and strength of the linear relationship between two variables?
A) r<sup>2</sup>
B) Coefficient of variation
C) Variance
D) Coefficient of kurtosis
E) Correlation coefficient
Q4) Unlike MAD and MSE, the tracking signal's numerator allows positive and negative forecast errors to _____________.
Q5) Suppose that you are using the four-period simple moving average method to forecast sales, and sales have been increasing by 40% every period. How will your forecasts perform?
A) Forecasts will be increasing by 40.0% every period.
B) Forecasts will be higher than actual.
C) Forecasts will equal actual.
D) Forecasts will be decreasing.
E) Forecasts will be increasing by 10.0% every period.
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Chapter 9: Capacity Planning and Facility Location
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Sample Questions
Q1) Long-term capacity requirements are identified on the basis of _____________________.
A) the current trend of the economy
B) the expected lifetime of the facility
C) demographic factors
D) forecasts of future demand
E) future political events
Q2) A firm must choose between remaining where it is, with current capacity, and building a new facility with 50% more capacity. The probability of high demand is estimated to be 75%. The current facility would provide $100,000 profit if there is high demand or $50,000 profit if there is low demand. The replacement facility would provide $160,000,000 profit if there is high demand but would only break even if there is low demand. What is the expected value of each option?
Q3) Which of the following is not a valid assumption of the break?even model?
A) only one product is involved
B) everything which is produced will be sold
C) the revenue per unit will be the same regardless of volume
D) the fixed cost per unit will be the same regardless of volume
E) the variable cost per unit will be the same regardless of volume
Q4) What is the load-distance score formula?
Page 11
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Chapter 10: Facility Layout
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Sample Questions
Q1) Which of the following is more like a product layout as compared to a process layout?
A) Resources used are general purpose.
B) Facilities are less capital intensive.
C) Processing rates are slower.
D) Space requirements for inventory storage are higher.
E) Scheduling resources is less challenging.
Q2) Which of the following is more like a product layout as compared to a process layout?
A) Resources used are general purpose.
B) Facilities are less capital intensive.
C) Processing rates are faster.
D) Space requirements for inventory storage are higher.
E) Scheduling resources is more challenging.
Q3) A job shop is most likely to use which layout type?
A) inverted
B) hybrid
C) process
D) fixed position
E) product
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Chapter 11: Work System Design
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Sample Questions
Q1) A company uses standard times for ______________________.
A) public relations
B) advertising
C) financial accounting
D) the winter months
E) costing
Q2) Studying the time it takes to do a job is called __________________.
Q3) The average observed time for each work element is its __________________.
Q4) What technique eliminates unnecessary tasks and improves the process for completing tasks?
A) methods analysis
B) job design
C) work measurement
D) task inversion
E) cycle counting
Q5) The first unit of a product took 180 hours to complete. A 70% learning curve is expected. (a) How long will the 19<sup>th</sup> unit take to complete? (b) How long will it take to complete the first 19 units?
Q6) What are the approaches to eliminating employee boredom? Briefly describe each.
Q7) Discuss how job design is related to the supply chain.
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Chapter 12: Inventory Management
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Sample Questions
Q1) Define periodic review system.
Q2) What does WIP stand for?
A) work-in-process
B) waiting inventory position
C) warning of inventory position
D) weight of inventory position
E) waiting inventory potential
Q3) Which of the following is an assumption of the basic EOQ model?
A) Lead time is unknown.
B) Demand may be seasonal.
C) Orders can arrive in partial shipments.
D) Quantity discounts are not considered.
E) Lost sales are allowed, but not back orders.
Q4) Inventory turnover is the reciprocal of years of supply.
A)True
B)False
Q5) What is the total annual inventory cost (using basic EPQ )of a product whose annual demand is 15,000 units, daily demand is 40, daily production is 60, order cost is $80, and holding cost is $6? (Round to the nearest dollar.)
Q6) What does WIP stand for?
Page 14
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Chapter 13: Aggregate Planning
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Sample Questions
Q1) The comparison of aggregate plans is difficult when they produce different quantities and have different ending inventories.
A)True
B)False
Q2) The aggregate plan helps manufacturing with all of the following except:
A) whom to employ
B) how much work to subcontract
C) how much inventory can be held
D) when to add/subtract employees
E) when to use overtime
Q3) Which of the following is not an input to the aggregate planning process?
A) beginning workforce
B) demand forecast
C) beginning inventory
D) master production schedule
E) overtime available per period
Q4) If the marketing plan does not meet the strategic business objectives, top management and marketing revise either the _________ or the ___________.
Q5) What are the disadvantages for firing permanent employees?
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Chapter 14: Resource Planning
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Sample Questions
Q1) The most critical factors in successful ERP programs are __________________ and _________________.
Q2) Capacity requirements planning uses data from _________________________.
A) MRP
B) rough-cut capacity planning
C) aggregate planning
D) MPS
E) the bill of labor file
Q3) ERP is software designed for _____ and ______ business processes.
A) calculating, budgeting
B) deleting, changing
C) organizing, managing
D) organizing, budgeting
E) selecting, managing
Q4) Which of the following is not true concerning replenishment orders?
A) They are generated when there is not enough inventory.
B) MRP specifies when to place the order.
C) The order may be for material from a supplier.
D) They are orders for the final product.
E) The order may be for material from the manufacturing floor.
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Chapter 15: Scheduling
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Sample Questions
Q1) Makespan is a measure of WIP.
A)True
B)False
Q2) Which of the following scheduling rules is often considered the fairest rule?
A) first come, first served
B) last come, first served
C) earliest due date
D) shortest processing time
E) longest processing time
Q3) Optimized production technology (OPT) was introduced by whom in the late 1970s, and what does it do?
Q4) Under OPT, lead times are _____________ rather than ________________.
Q5) Which of the following scheduling rules minimizes mean job flow time?
A) first come, first served
B) last come, first served
C) earliest due date
D) shortest processing time
E) longest processing time
Q6) What are the two major kinds of Gantt charts?
Q7) Define Johnson's rule.
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Chapter 16: Project Management
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Sample Questions
Q1) The TOC focuses on correct placement of buffers.
A)True
B)False
Q2) The most likely time completion date is the _______________ of the beta distribution.
Q3) CPM was initially developed to plan and _______________ maintenance projects in chemical plants.
Q4) Given this information about an activity: ES = 10, EF = 20, LS = 29, and LF = 39. The amount of slack associated with the activity is ____________________.
A) 29
B) 9
C) 19
D) 38
E) 10
Q5) For projects whose activities have probabilistic time estimates, the probability of completing the project in a specified amount of time is determined by the standard deviation for the critical path only.
A)True
B)False
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Chapter 17: Spreadsheet Modeling: An Introduction
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Sample Questions
Q1) A model is correct if it produces the _______________ correct _________ for the outputs for the current values of the inputs
Q2) __________________ analysis deals with studying the changes to the output of the model as one or more of the inputs change.
A) Scenario
B) Transformation
C) Decision
D) Sensitivity
E) Change
Q3) Describe the difference between the MAX and MIN Excel functions.
Q4) In Excel, what are the three arguments that a MATCH function takes?
A) Lookup_value, Match_type, and Lookup_array
B) Lookup_value, Match_type, and Array
C) Lookup_value, Column_num, and Lookup_array
D) Array, Row_num, and Column_num
E) Lookup_array, Row_num, and Column_num
Q5) You can edit Excel formulas by either double-click the cell, or
Q6) Ideally, a spreadsheet model should be ________________________
Page 19
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Chapter 18: Introduction to Optimization
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Sample Questions
Q1) After running a Linear Program in Excel Solver, what message do you hope to see in the "Solver Results" box?
Q2) What does LP stand for?
A) Linear Partition
B) Linear Program
C) Large-Scale Program
D) Linear Parameter
E) Linear Parallelism
Q3) A specific combination of values of the decision variables such that at least one of the constraints is violated results in a(n) ______________________.
Q4) A feasible solution to an optimization problem is a particular combination of decision variables that satisfies some of the constraints.
A)True
B)False
Q5) Solver's check for a model being linear is not perfect. A)True
B)False
Q6) What are the four steps to setting up an optimization problem with Excel Solver?
Q7) Describe guidelines for spreadsheet model development.
Page 20
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Chapter 19: Waiting Line Models
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Sample Questions
Q1) A single-line service system eliminates jockeying behavior.
A)True
B)False
Q2) Services require a single activity or a series of activities and are identified by what term?
A) round
B) step
C) phase
D) activity set
E) facet
Q3) System server capacity is a function of ______ and _______.
A) phase, lines
B) time, lighting
C) facilities, management
D) facilities, proficiency
E) utilization, proficiency
Q4) Consider a single-line, single-server waiting line system. Suppose that customers arrive according to a Poisson distribution at an average rate of 60 per hour, and the average (exponentially distributed) service time is 45 seconds per customer. What is the average number of customers waiting in line?
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Chapter 20: Master Scheduling and Rough-Cut Capacity Planning
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Sample Questions
Q1) Which of the following statements is true?
A) The "slushy" portion of the MPS comes sooner than the "liquid" portion of the MPS.
B) The planning time fence occurs before the demand time fence.
C) The "frozen" portion of the MPS occurs between the planning time fence and the demand time fence.
D) The master scheduler has more authority during the "frozen" portion of the MPS than during the "slushy" portion of the MPS.
E) The "liquid" portion of the MPS occurs before the demand time fence.
Q2) Demonstrated capacity is the ______ capacity ______ from the actual performance data.
A) proven, calculated
B) desired, derived
C) historical, viewed
D) forecasted, estimated
E) extreme, targeted
Q3) The MPS is said to be ________________________ between final assembly and cumulative manufacturing lead times.
Q4) Discuss the Master scheduler responsibility.
Page 22
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