OM- Reviewer - Notes PDF

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In the context of causal forecasting models with multiple regression, an R-squared (R 2 ) value of 0.70 means that 30 percent of the variation in the dependent variable is explained by the independent variable 'False'. Question 2 The philosophy and principles of the TOC are valuable in understanding demand and capacity management. 'True'. Question 3 Offering complementary goods or services is an example of a short-term capacity strategy. 'False'. Question 4 Single-period inventory models are used in situations involving items that can be carried in inventory and sold in future periods.

Setup costs include costs associated with maintaining storage facilities, such as gas and electricity, taxes, and insurance. 'False'. Question 10 Marketing and operations prefer high inventory levels, whereas finance would prefer small inventories. 'True'. Question 11 Judgmental forecasting relies only upon historical data in developing forecasts. 'False'. Question 12 Forecasting is a key component in customer relationship management.

'False'.

'True'.

Question 5

Question 13

The ideas and methods surrounding a revenue management system are often called yield management.

A work order is a specification of work to be performed for a customer or a client.

'True'. Question 6 In a fixed-order-quantity system, when demand is uncertain, using economic order quantity (EOQ) based only on the average demand will result in a low probability of a stockout.

'True'. Question 14 In the context of using technology to manage inventories, radio-frequency identification (RFID) chips offer an accuracy of less than 70 percent. 'False'.

'False'.

Question 15

Question 7

Long-term capacity decisions usually involve adjusting schedules or staffing levels.

Call center service training is a preproduction service that requires forecasts to create value in a value chain.

'False'.

'False'.

Question 16

Question 8

Simulation models are not well equipped to capture the dynamic behavior of queues over time.

Total process output is at the throughput rate of the bottleneck.

'False'.

'True'.

Question 17

Question 9

The Theory of Constraints focuses on eliminating all bottleneck activities in a process.

'False'. Question 18 The imputed cost of waiting is the reasonable value that might reflect the potential loss of future revenue or customer dissatisfaction. 'True'. Question 19 Flow time depends not only on the actual time to perform the tasks required, but also on how many other entities are in the work-in-process stage. 'True'. Question 20 A moving average (MA) method is most appropriate for data with major identifiable trends.

Stable demand is usually called _____ demand. → STATIC, _____ is the average time it takes to complete one cycle of a process. → FLOW TIME, In fixed-quantity systems, _____ is defined as the onhand quantity (OH) plus any orders placed but which have not arrived minus any backorders (BO). → INVENTORY POSITION, It matches capacity additions with demand as closely as possible. → CAPACITY STRADDLE STRATEGY, A strategy for expanding capacity that waits until demand has increased to a point where additional capacity is necessary. → CAPACITY LAG STRATEGY, _____= Troughput x Flow Time → WORK IN PROCESS

'False'

Question 1

A(n) _____ is the work activity that effectively limits the throughput of the entire process. → BOTTLENECK,

In the context of ABC inventory analysis, which of the following statements is true of class C items?

This is an inventory is inventory that results from purchasing or producing in larger lots than are needed for immediate consumption or sale.

They can be managed using automated computer systems.

→ CYCLE INVENTORY, In the context of inventory costs, _____ costs can reflect backorders or service interruptions for external customers. → STOCKOUT COSTS, What is achieved when the average unit cost of a good or service decreases as the capacity and/or volume of throughput increases? → ECONOMIES OF SCALE, The number of units or tasks that are completed per unit time from a process is the _____? → THROUGHPUT, This is the typical queueing system used by banks and airline ticket counters. → SEVERAL PARALLEL SERVERS FED BY THEIR OWN QUEUES, A warehouse is capable of processing 600 returns per day, and the average number of returns in a day is 200. Based on the data in the question, what is being calculated by dividing 600 by 200? → FLOW TIME, Another term for waiting line. → QUEUE,

Question 2 An international pharmaceutical group of companies manufactures an antiepileptic prescription drug in huge volumes. The setup time for manufacturing the drug is 75 minutes, the processing time is 8 minutes, and the order size is 700 units. In this case, which of the following is the total time required to meet the given production volume? 5,675 minutes Question 3 What is the common approach to gather data for judgmental forecasts? Survey Questionnaire Question 4 Which of the following describes the general process for identifying a bottleneck? Identify the work activity that has the smallest throughput.

Question 5

Question 11

Based on the constant demand assumption in the economic order quantity (EOQ) model, the average cycle inventory is:

Which of the following is a way to manage capacity by shifting and stimulating demand?

Half of the order quantity. Question 6 In the context of data patterns in a time series, _____ are characterized by repeatable periods of ups and downs over short periods of time. Seasonal Patterns Question 7 A hotel has 200 rooms. If, on a given day, 150 rooms are occupied, which number represents the utilization of hotel rooms? 75% Question 8 What will happen if the time series in an exponential smoothing model exhibits a negative trend? Forecast will overshoot the actual values. Question 9 The process for applying for a work permit is as follows: First, the administrator fills out an application (5 minutes) and takes a picture (1 minute). Then, a clerk enters the information and processes the permit (5 minutes). There are two administrators and three clerks. If the number of licenses per hour for the administrators is 16 and the number of licenses per hour for the clerks is 20.57, what can be concluded? The administrators are the bottleneck resources. Question 10 Grinder Mills, Inc. owns 600 machines. Due to the recent decrease in harvested agricultural crops for milling, only 500 are used in a given year. Given this information, what is the value in the utilization of machines at Grinder Mills, Inc? 0.83

Adding peripheral goods and/or services Question 12 Which of the following statements is true of a fixedIt orders sufficient stock at the time of review to bring the inventory position up to the replenishment level (M). Question 13 In forecasting errors, _____ eliminates the measurement scale factor. Mean Absolute Percentage Error Question 14 Lumeris Inc., an automobile manufacturer, has an inflexible work schedule and requires its workers to work nine hours a day and six days a week. Its laborers do not have adequate skills to perform their job efficiently. The inflexible work schedule and inadequate labor skills are examples of _____. Nonphysical constraints Question 15 In managing inventories in supply chains, _____ is the time between placement of an order and its receipt. The lead time Question 16 A doctor’s office charges no-show patients Php300.00 if they do not cancel their appointment 24 hours prior to the appointment. In this scenario, which of the following can be used by the doctor’s office to handle the risk of idle service capacity? Revenue Management System Question 17 Which of the following statements is true of the independent demand for a stock-keeping unit (SKU)? It needs to be forecasted.

Question 18

Question 4

In the context of strategies for expanding capacity, which of the following statements is true of one large capacity increase?

What is the average time a bouquet stays in a florist shop if they sell 100 bouquets per day and they maintain an average inventory of 200 bouquets?

An advantage of using this strategy is that the fixed costs of construction and operating system setup need to be incurred only once.

TWO

The reorder point is defined as the demand during the lead time for the item. In cases of long lead times, the lead-time demand and thus the reorder point may exceed the economic order quantity, Q*. In such cases the inventory position will not equal the inventory on hand when an order is placed, and the reorder point may be expressed in terms of either inventory position or inventory on hand. A product with an annual demand of 1,000 SKUs has C0 = $30 and Ch = $8. The demand exhibits some variability such that the lead-time demand follows a normal distribution, with a mean of 25 and a standard deviation of 5.

What is the recommended order quantity? EOQ=86.6 Question 2 The process for applying for a work permit at the Manchester department of labor is as follows. First, the administrator fills out an application (5 minutes) and takes a picture (1 minute). Then, a clerk enters the information and processes the permit (5 minutes). There are two administrators and three clerks. If the number of licenses per hour for the administrators is 16 and the number of licenses per hour for the clerks is 20.57, what is the hourly service rate for clerks? TWELVE LICENSES/HOUR/CLERK Question 3 What is the inventory position if the on-hand quantity is 462 units, scheduled receipts are 200 units, and 130 units are on backorder? IP=532 units

Question 5 The process for applying for a work permit at the Manchester department of labor is as follows. First, the administrator fills out an application (5 minutes) and takes a picture (1 minute). Then, a clerk enters the information and processes the permit (5 minutes). There are two administrators and three clerks. If the number of licenses per hour for the administrators is 16 and the number of licenses per hour for the clerks is 20.57, what is the hourly service rate for administrators? TEN LICENSES/HOUR/ADMINISTRATOR...