BUSA 304

Answer all questions in 45 minutes. 1.

Formal Quiz 2

04-03-2001

"Making it right the first time" is a. an unrealistic definition of quality b. a user-based definition of quality c. a manufacturing-based definition of quality d. a product-based definition of quality e. the definition proposed by the American Society for Quality According to the manufacturing-based definition of quality, a. quality is the degree of excellence at an acceptable price and the control of variability at an acceptable cost b. quality depends on how well the product fits patterns of consumer preferences c. even though quality cannot be defined, you know what it is d. quality is the degree to which a specific product conforms to standards e. quality lies in the eyes of the beholder Which of the following is not a typical inspection point? a. upon receipt of goods from your supplier b. during the production process c. before the product is shipped to the customer d. at the supplier's plant while the supplier is producing e. after a costly process A manager tells her production employees, "It's no longer good enough that your work fall anywhere within the specification limits. I need your work to be as close to the target value as possible." Her thinking is reflective of a. internal benchmarking b. Six Sigma c. ISO 9000 d. Taguchi concepts e. process control charts Natural variations a. are variations that are to be identified and eliminated b. are variations that can be traced to a specific cause c. are the same as assignable variations d. lead to occasional false findings that processes are out of control e. play no role in statistical process control If a. b. c. d. e.

2.

3.

4.

5.

6.

x = 23 ounces, = 0.4 ounces, and n = 16, the 3 control limits will be 21.8 to 24.2 ounces 23 ounces 22.70 to 23.30 ounces 22.25 to 23.75 ounces none of the above

7.

Acceptance sampling's primary purpose is to a. estimate process quality b. estimate lot quality c. detect and eliminate defectives d. decide if a lot meets predetermined standards

e. determine whether defective items found in sampling should be replaced 8. Which of the following transformations generally has the highest equipment utilization? a. process-focused process b. repetitive process c. product-focused process d. specialized process e. modular process An assembly line is an example of a. Product-focused process b. Process-focused process c. Repetitive process d. Line process e. Specialized process Which of the following phrases best describes product focus? a. low volume, high variety b. finished goods are usually made to order c. processes are designed to perform a wide variety of activities d. high fixed costs, low variable costs e. raw material inventories are low relative to the value of the product Process X has fixed costs of $10,000 and variable costs of $2.40 per unit. Process Y has fixed costs of $9,000 and variable costs of $2.25 per unit. Which of the following statements is true? a. The crossover point is approximately 6667 units. b. It is impossible for one process to have both of its costs lower than those of another process. c. Process Y is cheaper than process X at all volumes; there is no crossover point. d. Process X should be selected for very large production volumes. e. Process X is more profitable than process Y and should be selected. Service blueprinting a. provides the basis to negotiate prices with suppliers b. mimics the way people communicate c. determines the best time for each step in the process d. focuses on the provider's interaction with the customer e. can only be successful with two-dimensional processes Strategies for improving productivity in services are a. separation, self-service, automation, and scheduling b. lean production, strategy-driven investments, automation, and process focus c. reduce inventory, reduce waste, reduce inspection, and reduce rework d. high interaction, mass customization, service factory, and just-in-time e. none of the above A drawing of the movement of material, product, or people is a a. flow diagram b. process chart c. service blueprint d. process map e. none of the above Process reengineering is the fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in performance.

9.

10.

11.

12.

13.

14.

15.

16.

A product is currently made in a process-focused shop, where fixed costs are $9,000 per year and variable cost is $50 per unit. The firm is considering a fundamental shift in process, to repetitive manufacture. The new process would have fixed costs of $90,000, and variable costs of $5.For what range of outputs is each process appropriate? The crossover is at 1800 units annually. For volumes under 1800, the process focus is cheaper; for volumes over 1800 units, the repetitive focus is cheaper. If demand exceeds capacity at a new facility, an organization can use which of the following to move demand to an existing facility? a. aggressive marketing b. lower prices at all facilities c. build a facility of the correct size d. add a complementary product e. reduce lead times Of the four approaches to capacity expansion, the approach that "straddles" demand a. uses incremental expansion b. uses one-step expansion c. at some times leads demand, and at other times lags d. works best when demand is not growing but is stable e. Choices a and c are both correct. Fabricators, Inc. wants to increase capacity by adding a new machine. The fixed costs for machine A are $90,000, and its variable cost is $15 per unit. The revenue is $21 per unit. The break-even point for machine A is a. $90,000 dollars b. 90,000 units c. $15,000 dollars d. 15,000 units e. cannot be calculated from the information provided A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next four years. If the cost of capital is 5 percent, the net present value of this investment is approximately a. $20,920 b. $26,160 c. $49,840 d. $70,920 e. $106,990 Efficiency is actual output as a percent of effective capacity. Governmental attitudes toward issues such as private property, intellectual property, zoning, pollution, and employment stability may change over time. The term associated with this phenomenon is a. bureaucratic risk b. political risk c. legislative risk d. judicial risk e. democratic risk A firm is seeking a new factory location, and is considering several countries worldwide. In some of these countries, child labor is prevalent; in others, working conditions and worker safety are inferior to conditions in the U.S. An operations manager paying attention to __________will factor these issues into the location decision. a. ethical and social responsibility issues b. critical success factors c. factor rating systems d. geographic information systems

17.

18.

19.

20.

21. 22.

23.

e. regression models 24. The center-of-gravity method is used primarily to determine what type of locations? a. service locations b. manufacturing locations c. distribution center locations d. supplier locations e. call center locations Using the factor ratings shown below, determine which location alternative should be chosen on the basis of maximum composite score. Location Factor Weight A B C 0.15 86 72 90 Easy access 0.20 72 77 91 Parking facilities 0.18 86 90 90 Display area 0.21 94 86 80 Shopper (walking) traffic 0.16 99 89 81 Neighborhood wealth 0.10 96 85 75 Neighborhood safety

25.

Location Weighted average

A 87.96

B 83.2

C 85.16

A is best (87.96), followed by C (85.16). B is somewhat further behind (83.20).

Marks Allocation 1 mark for each MCQ 1 mark each for fill-ins 2 marks each for calculations