BAN 530Name
VES/VPMMay 10, 2007
KEY
EXAM IV
Spring 2007
DIRECTIONS:
Answer the multiple-choice questions directly on the exam by circling the BEST answer. You do NOT need to show your work for multiple choice questions.
Your answers to the problems and short answers should start and be presented on separate pages for each problem. For problems, you MUST show your work. If you use a calculator, set up the problem on the exam sheet then show the answer you obtained from your calculator. If you use software, embed the output in your examination document.
Return the exam with your results.
Your work will be graded based on content and presentation.
You must work on your own. No collaboration is allowed.
You may use your notes, textbook, statistical packages, computer software, or other pre-printed material.
The exam must be e-mailed to me by 8:00 p.m. on Thursday, May 10, 2007. The exam may be turned in any time prior to class on May 10, 2007. If you have e-mail problems, you may turn in a hard copy to me at SHSU or to Ms. Dina Flores at The University Center by the deadline.
Acknowledge your understanding of the directions by signing below. You must turn in this page with your exam. If you e-mail your exam, you must include a signed copy of this page (you may FAX it separately or scan the page with your signature and include it with your e-mail).
I, , understand that I must complete this exam on my own. By signing below I am indicating that I did not seek help from anyone and the submitted work is solely my own.
SignatureDate
BAN 530
Spring 2007
Exam IV
Multiple Choice (1 point each). Circle the BEST answer on the test sheet.
1.Which of the following layout types is generally best for a job shop?
a.Product
b.Process
c.Fixed Position
d.FMS
e.CAM
2.The model which evaluates a location decision based exclusively upon an economic comparison of total production costs is:
a.center-of-gravity method
b.locational break-even (or cost-volume) analysis.
c.factor-rating method.
d.transportation model.
e.geographic information systems model.
3.Department A
A
Department B X
XA
Department C U
O
Department D
Based on this Muther grid
a.Department A must not be located close to Department D.
b.Department A must not be located close to Department C.
c.Department B must be located close to Department C.
d.Location X is preferred over Location U
e.Department C must not be located near Department D.
4.The location analysis technique that allows for the inclusion of both quantitative and qualitative inputs is
a.Locational Cost-Profit-Volume (Breakeven) Analysis
b.Factor Rating
c.Transportation Model
d.Center of Gravity Model
e.Delphi Analysis
5.The primary objective of both manufacturing and service layouts is always efficiency.
a.Trueb.False
A
$
B
C
01020304050607080
Units (1,000’s)
6. Marketing has forecast potential sales for our new retail outlet to be 10,000 units. Based on the total cost curves shown above, what would be the best location for our new retail outlet?
a.A
b.B
c.C
d.Either A or C – We are indifferent between these two locations.
e.Either A or B – We are indifferent between these two locations.
7.Actual output for a process is 200 units per day. Design capacity is 300 units is day. Effective capacity is 260 units per day. The efficiency of this process is
a.66.7%d.35.7%
b.76.9%e.130%
c.86.7%
8.Using the information in the previous problem, what is the utilization of this process?
a.66.7%d.35.7%
b.76.9%e.130%
c.86.7%
A company used the transportation model to evaluate location alternatives for a new factory. Answer the next two questions using these printouts from POM for Windows.
Destination 1 / Destination 2 / Destination 3A / 30
B / 10 / 20
C / 30
Las Vegas / 20
Total Cost = 280
Destination 1 / Destination 2 / Destination 3A / 30
B / 30
C / 30
San Francisco / 10 / 10
Total Cost = 300
9.Based on these printouts the best location for a new factory would be
a.Ad.San Francisco
b.Be.Las Vegas
c.C
10.This analysis method allows the company to select a location alternative that
a.minimizes total costs.
b.minimizes the cost of transporting product from factories to destinations.
c.provides the best customer service.
d.provides the most transportation mode alternatives.
e.the best range of qualitative alternatives.
11.Which of the following actions would likely reduce a company’s need for decoupling inventory?
a. Increasing the number of raw material suppliers.
b. Determining whether customers would accept a smaller selection of merchandise.
c. Implementing a preventative maintenance program.
d. Reducing the incidence of shrinkage.
e. Improving the quality of incoming raw materials.
12.The inventory management system discussed in class where inventory is stored in two locations with the quantity in the second location equal to the demand during lead time is called
a.safety stock systemd.modified MRP
b.hidden inventory systeme.modified ROP
c.two-bin system
13.The inventory management system where we receive orders on a regular schedule but the quantity received varies is called
a.EOQ/ROPd.Economic Lot Size
b.Single Period Modele.Fixed-Period System
c.Probabilistic Model
14.An appropriate technique for studying nonrepetitive jobs, such as those performed by secretaries and maintenance technicians, is
a. work measurement d. work sampling
b. Gantt charts e. MTM
c. stopwatch time study
15.Giving a worker a larger portion of the total task by horizontal loading is called
a.specialization.d.job enrichment
b.ergonomicse.job enlargement
c.job design
16.Incorporation of human factors in the design of the workplace is called
a.specialization.d.job enrichment
b.ergonomicse.job enlargement
c.job design
17.One premise of supply chain management is
a.long-term relationships with fewer suppliers.
b.encouraging more suppliers to provide leverage during negotiations.
c.focusing negotiations on initial price of purchased products.
d.limiting information sharing to protect trade secrets.
e.all are premises of supply chain management.
18.Which of the following is NOT a component of holding cost?
a.purchase priced.risk of obsolescence
b.insurancee.inventory shrinkage
c.cycle count costs
19.There are methods available to adjust the basic EOQ/ROP model for such things as quantity discounts, variation in lead time, and variation in demand.
a.Trueb.False
20.It is okay to round the EOQ because of such things as standard package sizes because
a.the EOQ is just an estimate.
b.you should never round the EOQ.
c.the TC curve is relatively flat near the EOQ.
d.the TC curve slopes sharply up near the EOQ.
e.Deming said it is okay.
21.The EOQ/ROP inventory management system is best suited for
a.irregular demand items.d.near-constant demand items.
b.items such as Easter candye.dependent demand items.
c.decoupling inventory.
22.Aggregate planning is
a.short-term planningd.chase strategy
b.level schedulinge.long-term planning
c.intermediate-term planning
23.The tool my secretary used to justify hiring a receptionist to answer my phone is
a.time studyd.Pareto analysis
b.ROIe.work sampling
c.methods analysis
24.An alternative to time studies that divides the job into small basic elements sometimes called Therbligs that have widely accepted times is called
a.methods analysisd.work sampling
b.ergonomicse.job analysis
c.predetermined time standards
25.______should always be done before doing a time study.
a.Methods analysisd.Ergonomic study.
b.Job enlargement studye.Training
c.Focus groups
26.Time study should be conducted on a subject who is
a.the best workerd.the worst worker
b.an average trained workere.all workers
c.a randomly selected worker
27.Which of the following is used to help set prices and set quotas for workers?
a.Average observed timed.Normal time
b.Adjusted timee.Standard time
c.Greenwich meridian time
28.______are the most important asset of an organization.
a.Workersd.Cash balance
b.Quality processese.Total assets
c.Most costly equipment
29.The following data have been collected using stopwatch time study.
Observation in minutesPR
12345
Element A8109159110
Average observed time in minutes is
a. 9d.51
b.10.2e.11.22
c.1,122
30.The inclass demonstration of JIT vs traditional manufacturing, showed that changing from a push system to a pull system
a. reduced the production rate of the line
b. decreased the idle time at all stations
c. reduced inventory without reducing output
d. required increased attention by the supervisor
e. none of these
31.Which do you get when you disaggregate the aggregate plan?
a. subcontract list d. inventory level plan
b. master schedulee. staffing plan
c. backorder list
32.In aggregate planning, we develop a plan for matching capacity with demand on an individual item-by-item basis.
a.Trueb.False
33.Computer-based information system that translates master schedule requirements for end items into time-phased requirements for sub-assemblies, components, and raw materials is the definition of
a.ERPd.EOQ
b.MRPe.SAP
c.ROP
34.In the demonstration of JIT we moved from
a.MRP to JITd.SPC to JIT
b.EOQ to JITe.L-4-L to EOQ
c.a push to a pull system
35.The kanban in the JIT demonstration we conducted in class was a(n)
a.cardd.red pen
b.golf balle.empty space between stations
c.packing peanut
Multiple Choice (3 points each). Circle the BEST answer on the test sheet.
36.A location analysis has been narrowed down to these locations. The critical factors, their weights, and the ratings for each location are shown below. If the selection criterion is to select the location with the greatest composite (weighted) score, which location would you recommend?
Location
FactorWt. Never-NeverLand North Pole Whoville
Labor Cost.4609070
Transport. Cost.3708090
Quality of Schools.1907070
Market Access.1507090
Utility Cost.1807080
a.Whovilled. North Pole, but do sensitivity analysis
b.North Polee. Whoville, but do sensitivity analysis
c.Never-NeverLand
37.A manufacturer of tables has collected the following data: Fixed cost for the operation is $10,000; variable cost per table is $85; the tables sell for $250 each. The breakeven point for this manufacturer is
a.117.6 tablesd.60.6 tables
b.40 tablese.$60.6
c.$40
38.A service garage uses 204 boxes of cleaning cloths a year. The boxes cost $12 each. The cost to place one order is $15, and the cost to hold one box in inventory for a year is $2.40. The EOQ is
a. 40.4 boxesd. 626.7 boxes
b. 174.9 boxese. 50.5 boxes
c. 156.5 boxes
39.Using the information in the previous question, what is our total holding and ordering cost if we currently order 12 boxes at a time?
a. $ 14.40d.$ 130.80
b. $269.40e.$2,448.00
c. $255.00
40.If the owner of the service garage in the previous question orders the EOQ, instead of 12 boxes at a time, how much will he save?
a.$121.20d.$ 14.40
b.$ 60.60e.$148.20
c.$269.40
41.A company sells an average of 35 tires per day. Lead time for an order of tires is 10 days. The supplier has never been late in delivering an order of tires. What should the reorder point (ROP) be for tires?
a.35d.10
b.350e.3.5
c.45
42.A job has an average observed cycle time of 4 minutes, a performance rating of 120 percent, and an allowance factor of 30 percent. Normal time for the job in minutes is:
a. 4.8 d. 16.0
b. 6.25 e. none of these
c. 5.76
43.In the preceding question
a.The worker is working at a normal pace.
b.The worker is working faster than a normal pace.
c.The worker is working slower than a normal pace.
d.The worker is becoming fatigued
e.The time study analyst has made a mistake.
44.A job has a normal time of 5 minutes, a performance rating of 130 percent, and total allowances of 20 percent. Standard time for the job in minutes is:
a. 4.8 d. 25.0
b. 6.25 e. none of these
c. 3.85
45.Using ABC analysis, which of these should be classified as A items?
ITEM UNIT COST ANNUAL USAGE OTHER
F101 1.50 100,000
F106 200.00 50,000
F112 100.00 200 Only 1 source (in Tibet)
F115 2.00 10,000
F119 8.00 500 Will be replaced with new part in 2 months
F122 19.00 1,000
F125 3.00 60,000
F130 10.00 1,000
a.F-106d.F-106, F112, F-119
b.F-106, F-112e.F-101
c.F-101, F-125, F-106
Part IIProblems(Points as shown). Answer on test sheet. See cover page for more complete instructions. You MUST show your work and include any computer printouts if applicable in order to receive full credit for your answer.
46.(15 points)You are scheduling production for an order of 60 garage door openers due to be shipped in week 7. Assume lot-for-lot ordering. Below is information about the openers.
ItemLead TimeOn HandComponents
Opener 2 30A(1), B(2), C(3)
A 1 10D(2), F(3)
B 1 0E(1), F(4)
C 2 20
D 1 30
E 1 10
F 3 5
a)Develop a product structure bill of materials.
b)Develop a net materials plan for D.
Opener / 1 / 2 / 3 / 4 / 5 / 6 / 7Gr. Req. / 60
Sch. Rec. / 0
Pr. O/H / 30 / 30 / 30 / 30 / 30 / 30 / 30
Net Req. / 30
Pl. O.Rec. / 30
Pl. O. Rel. / 30
A(1) / 1 / 2 / 3 / 4 / 5 / 6 / 7
Gr. Req. / 30
Sch. Rec.
Pr. O/H / 10 / 10 / 10 / 10 / 10
Net Req. / 20
Pl. O.Rec. / 20
Pl. O. Rel. / 20
D(2) / 1 / 2 / 3 / 4 / 5 / 6 / 7
Gr. Req. / 40
Sch. Rec. / 0
Pr. O/H / 30 / 30 / 30 / 30
Net Req. / 10
Pl. O.Rec. / 10
Pl. O. Rel. / 10
47.(10 points)Sower and Sons, Inc. wants to determine the best way to distribute products from its 3 factories to its 4 distribution warehouses (DW) in order to minimize transportation costs. It has collected the following data:
DW W / DW X / DW Y / DW Z / SupplyFactory A / $132 / $116 / $250 / $110 / 220
Factory B / $220 / $230 / $180 / $178 / 300
Factory C / $152 / $173 / $196 / $164 / 435
Demand / 160 / 120 / 200 / 230
Use POM for Windows and completely interpret your printout including the implications of the Dummy.
100 units shown being shipped from Factory B to the Dummy will not be produced.
145 units shown being shipped from Factory C to the Dummy will not be produced.
48.(5 points)Discuss why I said in class that you should first update your resume if your boss tells you to implement an MRP system by the end of next month.
You cannot expect to implement MRP in one month.
What are some of the things that you would have to do before implementing an MRP system?
Check inventory accuracy – should be > 95%
Check BOM accuracy – should be >95%
Insure that you are using discipline in your scheduling system.
Select MRP software.
Select and install hardware.
Test system.
Train employees.
49. (5 points) Based on our class discussion, what actions might be appropriate if work sampling revealed the following data for maintenance technicians working from a centralized maintenance shop? Your maintenance technicians are very highly paid.
Walking to the job site to repair a machine25331.5%
Working on machine32540.5%
Filling out repair tickets22528.0%
Only about 40% of the technician’s time is spent using his skills for which he receives high pay. About 60% of the time is spent on moving to the job or completing paperwork.
Consider decentralizing maintenance to minimize travel distance.
Consider computerizing some of the paperwork.