Production and Operations Management
Exam Answer Key
Course Introduction
Production and Operations Management explores the processes involved in the creation of goods and the delivery of services within organizations. The course covers key topics such as process design, capacity planning, inventory management, scheduling, quality control, and supply chain management. Emphasis is placed on understanding how efficient operations contribute to organizational competitiveness, the role of technology in operations, and strategies for continuous improvement. Through case studies and practical examples, students learn to analyze production systems, solve operational problems, and make data-driven decisions that enhance productivity and customer satisfaction.
Recommended Textbook
Operations Management 11th Edition by William
J. Stevenson
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Page 2
Chapter 1: Introduction to Operations Management
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Sample Questions
Q1) Service involves a much higher degree of customer contact than manufacturing.
A)True
B)False
Answer: True
Q2) The lean production philosophy has been slow to be adopted in service industries.
A)True
B)False
Answer: False
Q3) People who work in the field of operations should have skills that include both knowledge and people skills.
A)True
B)False
Answer: True
Q4) Most people encounter operations only in profit-making organizations.
A)True
B)False
Answer: False
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Chapter 2: Competitiveness, Strategy, and Productivity
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Q1) Which of the following is considered to be a cause of poor U.S.global competitiveness?
A)the tendency to view labor as a cost factor to be minimized
B)decision-making based on short-term horizons
C)weaknesses in technological practice
D)powerful trading partners
E)all of the above
Answer: E
Q2) Productivity tends to be only a very minor factor in an organization's ability to compete.
A)True
B)False
Answer: False
Q3) The ratio of good output to quantity of raw material input is called
A)non-defective productivity
B)process yield
C)worker quality measurement
D)total quality productivity
E)quantity/quality ratio
Answer: B
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Chapter 3: Forecasting
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Sample Questions
Q1) In order to compute seasonal relatives, the trend of past data must be computed or known which means that for brand new products this approach can't be used.
A)True
B)False
Answer: True
Q2) A persistent tendency for forecasts to be greater than or less than the actual values is called:
A)bias
B)tracking
C)control charting
D)positive correlation
E)linear regression
Answer: A
Q3) Organizations that are capable of responding quickly to changing requirements can use a shorter forecast horizon and therefore benefit from more accurate forecasts.
A)True
B)False
Answer: True
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Chapter 4: Product and Service Design
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Sample Questions
Q1) Service design generally differs from product design in which of the following ways?
A)Service design tends to focus on tangible factors.
B)There is less latitude in detecting and correcting errors prior to delivery.
C)There is a lesser requirement to be aware of competitors' offerings.
D)There is less visibility to customers.
E)There is no difference.
Q2) Concurrent Engineering is another term for sequential development.
A)True
B)False
Q3) The term failure as applied to reliability means that a part or item does not function at all.
A)True
B)False
Q4) Global teams provide diversity while eliminating conflicts and miscommunication.
A)True
B)False
Q5) Consumers tend to resist purchasing products containing recycled materials.
A)True
B)False
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Chapter 5: Strategic Capacity Planning for Products and Services
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Sample Questions
Q1) If the unit cost to buy something is less than the variable cost to make it, the decision to make or buy is based solely on the fixed costs.
A)True
B)False
Q2) What profit (loss) would there be for a quantity of 10,000?
Q3) How many prisoners would they have to process annually to make a profit of $100,000 at this new location?
A)5,000
B)8,000
C)2,000
D)4,000
E)6,000
Q4) Outsourcing some production is a means of supporting a constraint. A)True B)False
Q5) What are total costs for the break-even quantity?
Q6) Design capacity refers to the maximum output that can possibly be attained. A)True B)False
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Chapter 6: Process Selection and Facility Layout
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Sample Questions
Q1) Determine the minimum number of workstations needed for this situation: Operating time is 450 minutes per day.
Desired output is 80 units per day. The sum of task times is 56 minutes.
Q2) Information technology refers to competitive data.
A)True
B)False
Q3) A process layout is more susceptible to shutdowns caused by equipment breakdowns than a product layout.
A)True
B)False
Q4) There are three basic process types - Input, Processing and Output. A)True
B)False
Q5) Heuristic approaches to line balancing are the only approach that will guarantee an optimal solution.
A)True
B)False
Q6) If transportation costs are $.25 per load per foot moved, what are total monthly costs for an optimum layout?
Page 8
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Chapter 7: Work Design and Measurement
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Sample Questions
Q1) The methods analysis chart which describes the overall sequence of operations, transportation, storage, delays, and inspection is a:
A)flow process chart
B)worker-machine chart
C)gang process chart
D)simultaneous-motion (SIMO) chart
E)time/efficiency chart
Q2) A technique for estimating the proportion of time a worker spends on various activities is:
A)stopwatch time study
B)standard elemental (historical) times
C)simultaneous motion study
D)predetermined (published) time standards
E)work sampling
Q3) Job enrichment involves an increase in the level of responsibility for planning and coordinating tasks.
A)True
B)False
Q4) What is the observed time for this task?
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Chapter 8: Location Planning and Analysis
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Sample Questions
Q1) For what quantity would you be indifferent between selecting site B or site C?
Q2) Global Positioning Systems (GPS) use the Center of Gravity method to establish starting grid co-ordinates.
A)True
B)False
Q3) An example of a regional factor in location planning is the location of our markets (either existing or potential).
A)True
B)False
Q4) Shipments of fabric to each plant vary per week as follows: plant A, 200 units; plant B, 400 units; plant C, 300 units; plant D, 300 units; and plant E, 200 units.What is the optimal location for the fabric plant?
A)6.2, 3.0
B)6.0, 4.0
C)6.5, 5.3
D)5.6, 4.4
E)5.0, 3.0
Q5) For what range of output would you prefer site A?
Q6) Which site would you prefer for a quantity of 20,000 units per year?
Page 10
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Chapter 9: Management of Quality
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Sample Questions
Q1) Management behaviors supporting an organizational culture that encourages continuous improvement include which of the following? (I) develop a vision statement for the organization (II) develop a reward system that promotes the philosophy (III) institute continuous training programs (IV) make decisions that adhere to the philosophy
A)I, II, and IV
B)I, II, III, and IV
C)I and III
D)II, III, and IV
E)II and IV
Q2) When problems arise in a total quality managed organization, it is important to assign blame and punish the worker responsible for causing the problem.
A)True
B)False
Q3) The PDSA cycles is also referred to as the Baldrige Wheel.
A)True
B)False
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Chapter 10: Quality Control
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Sample Questions
Q1) Control limits tend to be wider for more variable processes.
A)True
B)False
Q2) A p-chart is used to monitor the fraction of defectives in the output of a process.
A)True
B)False
Q3) What is the sample mean service life for sample 2?
A)460 hours
B)495 hours
C)500 hours
D)515 hours
E)525 hours
Q4) Type I and Type II errors refer to the magnitude of variation from the standard.
A)True
B)False
Q5) "Assignable variation" is variation due to a specific cause, such as tool wear.
A)True
B)False
Q6) What is the sample proportion of defectives for sample #1? #2? #3?
Page 12
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Chapter 11: Aggregate Planning and Master Scheduling
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Sample Questions
Q1) In order to use the "level capacity strategy," variations in demand are met by:
A)varying output during regular time without changing employment levels
B)varying output during regular time by changing employment levels
C)(a) and (b)
D)using combination of inventories, overtime, part time, and back orders
E)price adjustments
Q2) Which term is most closely associated with the term disaggregation?
A)subcontracting
B)master schedule
C)diversity
D)varying inventory levels
E)firing and laying off
Q3) Ultimately the overriding factor in choosing a strategy in aggregate planning is overall cost.
A)True
B)False
Q4) An advantage of a "chase" strategy for aggregate planning is that inventories can be kept relatively low.
A)True
B)False
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Chapter 12: MRP and ERP
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Sample Questions
Q1) The development and application of MRP depended upon two developments: (1) the recognition of the difference between independent and dependent demand, and (2): A)computers
B)development of the EOQ model
C)inventory control systems
D)blanket purchase orders
E)the internet
Q2) Which statement concerning MRP II is false?
A)It is basically a computerized system.
B)It can handle complex planning and scheduling quickly.
C)It involves other functional areas in the production planning process.
D)It involves capacity planning.
E)It produces a production plan which includes all resources required.
Q3) What is the net requirement for Dark Chocolate Truffles to fill this order?
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Page 14
Chapter 13: Inventory Management
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Sample Questions
Q1) For the economic order quantity, what are average weekly ordering costs?
Q2) An inventory buffer adds value and lowers cost in all supply chains. A)True
B)False
Q3) Suppose that you are the manager of a production department that uses 400 boxes of rivets per year.The supplier quotes you a price of $8.50 per box for an order size of 199 boxes or less, a price of $8.00 per box for orders of 200 to 999 boxes, and a price of $7.50 per box for an order of 1,000 or more boxes.You assign a holding cost of 20 percent of the price to this inventory.What order quantity would you use if the objective is to minimize total annual costs of holding, purchasing, and ordering? Assume ordering cost is $80/order.
Q4) A manager intends to order a new machine and must now decide on the number of spare parts to order along with the machine.The parts cost $400 each and have no salvage value.The manager has compiled a frequency distribution for the probable usage of spare parts, as shown.For what range of shortage costs would stocking one spare part constitute an optimal decision?
Number of
Q5) What is the economic order quantity for this item?
Q6) For the economic order quantity, what is the length of an order cycle?
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Chapter 14: Jit and Lean Operations
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Sample Questions
Q1) In the lean philosophy, the ideal lot size is:
A)the economic order quantity
B)the economic run size
C)one unit
D)the capacity of the standard container
E)N= (DT(1+X))/C
Q2) The lean philosophy suggests that workers are _________.
A)Assets
B)Liabilities
C)Interchangeable
D)Replaceable
E)To be phased out
Q3) Process design supporting lean doesn't include ______.
A)Production flexibility
B)Duplicate facilities
C)Setup time reduction
D)Minimal inventory storage
E)Small lot sizes
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Chapter 15: Supply Chain Management
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Sample Questions
Q1) One disadvantage to RFID is that they require a 'line of sight' for reading.
A)True
B)False
Q2) Delayed differentiation is a means of increasing product variety without building the customized product from scratch or keeping large inventories of custom products.
A)True
B)False
Q3) Gate keeping manages the cost of shipping returned goods.
A)True
B)False
Q4) Information technology is the key to success of global supply chains.
A)True
B)False
Q5) Which of the following is not a benefit of RFID?
A)increased productivity
B)elimination of paper work
C)frequent deliveries of smaller shipments
D)reduction in clerical labor
E)increased accuracy
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Chapter 16: Scheduling
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Sample Questions
Q1) The sequence that would result using the SPT rule is:
A)e-b-c-d-a
B)c-a-b-e-d
C)a-d-c-e-b
D)d-e-b-a-c
E)e-d-b-a-c
Q2) Use Johnson's Rule to determine the optimum processing sequence for the jobs listed below.Chart total throughput time.
Q3) A schedule chart depicts the loading and idle times for a group of machines or departments.
A)True
B)False
Q4) If he uses the first come, first served (FCFS) priority rule to schedule these jobs, what will be the average completion time?
A)7.5 hours
B)5 hours
C)3 hours
D)2.5 hours
E)2 hours
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Chapter 17: Project Management
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Sample Questions
Q1) What is the estimated expected (mean) time for project completion?
A)160 days
B)170 days
C)200 days
D)210 days
E)300 days
Q2) The latest starting time for an activity is equal to the latest finish time minus the activity time.
A)True
B)False
Q3) In PERT, the path with the fewest activities is referred to as the critical path.
A)True
B)False
Q4) What is the total cost of reducing the project to 18 weeks?
Q5) Consider the project depicted by the following A-O-A diagram:
Q6) In the project network presented below, numbers on each arrow refer to the expected time and standard deviation in weeks for that particular activity.For example, "8,2" indicates an activity with an expected time of 8 and a standard deviation of two weeks.
Page 19
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Chapter 18: Management of Waiting Lines
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Q1) Compared to a single channel a system with exponential service time, a single channel system with a constant service time causes a reduction of 50 percent in the average number waiting in line.
A)True
B)False
Q2) An approach to reducing the variability in processing times might include greater standardization.
A)True
B)False
Q3) Two troubleshooters handle service calls for 10 machines.The average time between service requirements is 18 days, and service time averages 2 days.Assume exponential distributions.While running, each machine can produce 1,500 pieces per day.Determine:
(A) the percentage of time troubleshooters are idle
(B) each machine's net productivity
(C) If troubleshooters represent a cost of $150 per day, and machine downtime cost is $600 per day, would another troubleshooter be justified? Explain.
Q4) What is the average number of high priority items waiting in line for service?
Q5) What is average time in line for a low priority item?
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Chapter 19: Linear Programming
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Q1) A novice linear programmer is dealing with a three decision-variable problem.To compare the attractiveness of various feasible decision-variable combinations, values of the objective function at corners are calculated.This is an example of _________.
A)empiritation
B)explicitation
C)evaluation
D)enumeration
E)elicitation
Q2) In the range of feasibility, the value of the shadow price remains constant.
A)True
B)False
Q3) What is the time constraint?
A)2 L + 3 D \(\le\) 480
B)2 L + 4 D \(\le\) 480
C)3 L + 2 D \(\le\) 480
D)4 L + 2 D \(\le\) 480
E)5 L + 3 D \(\le\) 480
Q4) Is the production combination 15 A's and 15 B's feasible?
Q5) What is the constraint for resource I?
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Chapter 20: Extension 4: Reliability
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Q1) If a system depends on two sub-systems functioning when activated, the reliability of that system is equal to the lower reliability of the two sub-systems.
A)True
B)False
Q2) Redundancy is often more cost-effective than increasing individual component reliability.
A)True
B)False
Q3) An electrical appliance will not work unless component QK does.Component QK's reliability is 0.95.Every other part of the appliance is 100% reliable.What would the reliability of the appliance be if a backup QK were added?
A).95
B).9975
C).9025
D).9205
E).9795
Q4) Product reliability involves both short-term and long-term perspectives.
A)True
B)False
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Chapter 21: Extension 5: Decision Theory
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Q1) If she uses the maximax criterion, how many beauticians will she decide to hire?
A)one
B)two
C)three
D)either one or two
E)either two or three
Q2) The difference between expected payoff under certainty and expected payoff under risk is the expected:
A)monetary value
B)value of perfect information
C)net present value
D)rate of return
E)profit
Q3) If she uses the minimax regret criterion, what size outlet will she decide to lease?
A)small
B)Medium
C)large
D)either small or Medium
E)either medium or large
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Chapter 22: Extension 7: Learning Curves
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Q1) A job will have a learning rate of 75 percent.If the 3<sup>rd</sup> unit requires 10 hours, the 12<sup>th</sup> unit should require about this many hours:
A)5.6
B)6.5
C)7.4
D)8.3
E)9.2
Q2) In which of the following scenarios would an 80% learning curve be especially relevant?
A)the pursuit of an innovation strategy to stay ahead of competitors
B)the pursuit of a flexibility-based strategy to increase customer satisfaction
C)the pursuit of a customization-based strategy to command premium prices
D)the pursuit of a time-based strategy to gain market share
E)the pursuit of a quality-based strategy to gain customer loyalty
Q3) Ron has noted that the first accounting problem he did in a set of similar problems took him one hour, and the ninth problem took 24 minutes.
(A) Estimate Ron's learning curve.
(B) About how long did it take Ron to do his set of 10 problems?
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Chapter 23: Extension 8: The Transportation Model
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Q1) Which of the following is a constraint for the customer (campaign headquarters)?
A)2X<sub>11</sub> + 9X<sub>21</sub> + X<sub>31</sub> = 20
B)5X<sub>12</sub> + 3X<sub>22</sub> + 8X<sub>32</sub> = 70
C)X<sub>11</sub> + X<sub>12</sub> + X<sub>13</sub> = 50
D)X<sub>12</sub> + X<sub>22</sub> + X<sub>32</sub> = 70
E)all of the above
Q2) An automobile manufacturer that has eight assembly plants and thousands of dealers throughout the United States can find the optimal distribution plan by using:
A)linear programming model
B)transportation model
C)weighted factor rating
D)either A or B
E)Global Information Systems
Q3) For a transportation model to be used, more than one location must be considered.
A)True
B)False
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Chapter 24: Extension 10: Acceptance Sampling
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Q1) If he uses an acceptance sampling plan of n = 20 and c = 1, what will be the average outgoing quality (AOQ) for batches with 15% defectives?
A)0.0263
B)0.1237
C)0.1756
D)0.8244
E)0.9737
Q2) A lot can be "accepted" or "rejected" in a double-sampling plan:
A)after one sample is taken.
B)after two samples are taken.
C)only after two samples are taken.
D)All of the above are correct.
E)Only a and b are correct.
Q3) If the value for Average Outgoing Quality increases, this means that __________ defective units are being passed on.
Q4) What is the point of indifference between 100 percent inspection and shipment without inspection?
Q5) Suppose a batch is of unacceptable quality.There's a 10% chance that it will be accepted.Thus, ________ is 10%.
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Chapter 25: Extension 14: Maintenance
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Q1) The average time before breakdown of a machine is normally distributed and has a mean of 7 weeks and a standard deviation of 1.5 weeks.If breakdown cost averages $2,500 and preventive maintenance costs $500, what is the optimal preventive maintenance interval?
Q2) Factors affecting the decision of how much preventive maintenance is desirable typically include all of the following except:
A)age of equipment
B)type of product
C)degree of technology
D)type of production process
E)how critical to the production process
Q3) Pareto analysis (using the 80/20 rule) is one method of determining when preventive maintenance activities should be performed.
A)True
B)False
Q4) Breakdown maintenance includes activities such as equipment inspection and adjustment.
A)True
B)False
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