Exam 14 September 2020, questions and answers PDF

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Chapter 3 Forecasting techniques generally assume an existing causal system that will continue to exist in the future. TRUE For new products in a strong growth mode, a low alpha will minimize forecast errors when using exponential smoothing techniques. FALSE Once accepted by managers, forecasts should be held firm regardless of new input since many plans have been made using the original forecast. FALSE Forecasts for groups of items tend to be less accurate than forecasts for individual items because forecasts for individual items don't include as many influencing factors. False Organizations that are capable of responding quickly to changing requirements can use a shorter forecast horizon and therefore benefit from more accurate forecasts. TRUE The purpose of the forecast should be established first so that the level of detail, amount of resources, and accuracy level can be understood. TRUE Forecasts based on time-series (historical) data are referred to as associative forecasts. FALSE The Delphi approach involves the use of a series of questionnaires to achieve a consensus forecast. TRUE Exponential smoothing adds a percentage (called alpha) of the last period's forecast to estimate the next period's demand. FALSE The shorter the forecast horizon, the more accurately the forecasts tend to track what actually happens. TRUE Forecasts based on an average tend to exhibit less variability than the original data. TRUE The naive forecast can serve as a quick and easy standard of comparison against which to judge the cost and accuracy of other techniques. TRUE A moving average forecast tends to be more responsive to changes in the data series when more data points are included in the average. FALSE Forecasts of future demand are used by operations people to plan capacity. TRUE An advantage of a weighted moving average is that recent actual results can be given more importance than what occurred a while ago. TRUE Exponential smoothing is a form of weighted averaging. TRUE A smoothing constant of .1 will cause an exponential smoothing forecast to react more quickly to a sudden change than a smoothing constant value of .3. FALSE The sample standard deviation of forecast error is equal to the square root of MSE. TRUE MAD is equal to the square root of MSE, which is why we calculate the easier MSE and then calculate the more difficult MAD. FALSE In exponential smoothing, an alpha of 1.0 will generate the same forecast that a naive forecast would yield. TRUE A control chart involves setting action limits for cumulative forecast error. FALSE Bias exists when forecasts tend to be greater or less than the actual values of time series. TRUE

Chapter 5 Among decision environments, risk implies that certain parameters have probabilistic outcomes. TRUE Among decision environments, uncertainty implies that states of nature have wide-ranging probabilities associated with them. FALSE In decision theory, states of nature refer to possible future conditions. TRUE The maximin approach involves choosing the alternative with the highest payoff. FALSE The maximin approach involves choosing the alternative that has the "best worst" payoff. TRUE The Laplace criterion treats states of nature as being equally likely. TRUE The maximax approach is a pessimistic strategy. FALSE

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1. Operations managers are responsible for assessing consumer wants and needs and selling and promoting the organization's goods or services. FALSE 2. Often, the collective success or failure of companies' operations functions will impact the ability of a nation to compete with other nations. TRUE 3. Companies are either producing goods or delivering services. This means that only one of the two types of operations management strategies are used. FALSE4. Operations, marketing, and finance function independently of each other in most organizations. FALSE 5. The greater the degree of customer involvement, the more challenging the design and management of operations. TRUE 6. Goods producing organizations are not involved in service activities. FALSE 7. Service operations require additional inventory because of the unpredictability of consumer demand. FALSE

8. The value of outputs is measured by the prices customers are willing to pay for goods or services. TRUE 9. The use of models will guarantee the best possible decisions. FALSE

10. People who work in the field of operations should have skills that include both knowledge and people skills. TRUE 11. Assembly lines achieved productivity but at the expense of standard of living. FALSE Productivity and standard of living go hand in hand.

12. The operations manager has primary responsibility for making operations system design decisions, such as system capacity and location of facilities. FALSE 13. The word "technology" is used only to refer to "information technology". FALSE 14. ‘Value added' by definition is always a positive number since 'added' implies increases. FALSE 15. Service often requires greater labor content, whereas manufacturing is more capital intensive. TRUE 16. Measurement of productivity in service is more straightforward than in manufacturing since it is not necessary to take into account the cost of materials. FALSE 17. Special-purpose technology is a common way of offering increased customization in manufacturing or services without taking on additional labor costs. FALSE 18. One concern in the design of production systems is the degree of standardization. TRUE 19. Most people encounter operations only in profit-making organizations. FALSE 20. Service involves a much higher degree of customer contact than manufacturing. TRUE 21. A systems approach emphasizes interrelationships among subsystems, but its main theme is that the whole is greater than the sum of its individual parts. TRUE 22. The Pareto phenomenon is one of the most important and pervasive concepts that can be applied at all levels of management. TRUE 23. Operations managers, who usually use quantitative approaches, are not really concerned with ethical decision-making. FALSE

24. The optimal solutions produced by quantitative techniques should always be evaluated in terms of the larger framework. TRUE 25. Managers should most often rely on quantitative techniques for important decisions since quantitative approaches result in more accurate decisions. FALSE

10. People who work in the field of operations should have skills that include both knowledge and people skills. TRUE 11. Assembly lines achieved productivity but at the expense of standard of living. FALSE Productivity and standard of living go hand in hand. 12. The operations manager has primary responsibility for making operations system design decisions, such as system capacity and location of facilities. FALSE 13. The word "technology" is used only to refer to "information technology". FALSE 14. ‘Value added' by definition is always a positive number since 'added' implies increases. FALSE 15. Service often requires greater labor content, whereas manufacturing is more capital intensive. TRUE 16. Measurement of productivity in service is more straightforward than in manufacturing since it is not necessary to take into account the cost of materials. FALSE 17. Special-purpose technology is a common way of offering increased customization in manufacturing or services without taking on additional labor costs. FALSE 18. One concern in the design of production systems is the degree of standardization. TRUE 19. Most people encounter operations only in profit-making organizations. FALSE 20. Service involves a much higher degree of customer contact than manufacturing. TRUE 21. A systems approach emphasizes interrelationships among subsystems, but its main theme is that the whole is greater than the sum of its individual parts. TRUE

22. The Pareto phenomenon is one of the most important and pervasive concepts that can be applied at all levels of management. TRUE 23. Operations managers, who usually use quantitative approaches, are not really concerned with ethical decision-making. FALSE 24. The optimal solutions produced by quantitative techniques should always be evaluated in terms of the larger framework. TRUE 25. Managers should most often rely on quantitative techniques for important decisions since quantitative approaches result in more accurate decisions. FALSE

10. People who work in the field of operations should have skills that include both knowledge and people skills. TRUE 11. Assembly lines achieved productivity but at the expense of standard of living. FALSE Productivity and standard of living go hand in hand. 12. The operations manager has primary responsibility for making operations system design decisions, such as system capacity and location of facilities. FALSE 13. The word "technology" is used only to refer to "information technology". FALSE 14. ‘Value added' by definition is always a positive number since 'added' implies increases. FALSE 15. Service often requires greater labor content, whereas manufacturing is more capital intensive. TRUE 16. Measurement of productivity in service is more straightforward than in manufacturing since it is not necessary to take into account the cost of materials. FALSE 17. Special-purpose technology is a common way of offering increased customization in manufacturing or services without taking on additional labor costs. FALSE 18. One concern in the design of production systems is the degree of standardization. TRUE 19. Most people encounter operations only in profit-making organizations. FALSE 20. Service involves a much higher degree of customer contact than manufacturing. TRUE 21. A systems approach emphasizes interrelationships among subsystems, but its main theme is that the whole is greater than the sum of its individual parts. TRUE

22. The Pareto phenomenon is one of the most important and pervasive concepts that can be applied at all levels of management. TRUE 23. Operations managers, who usually use quantitative approaches, are not really concerned with ethical decision-making. FALSE 24. The optimal solutions produced by quantitative techniques should always be evaluated in terms of the larger framework. TRUE 25. Managers should most often rely on quantitative techniques for important decisions since quantitative approaches result in more accurate decisions. FALSE...