BAN 530 Name
VES/VPM May 5, 2006
KEY
EXAM IV
Spring 2006
DIRECTIONS:
Ø Answer the multiple-choice questions directly on the exam by circling the BEST answer.
Ø Your answer to each problem should start on a separate page. 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.
Ø Return the exam with your results.
Ø Your work will be graded based on content and presentation. Make it easy for me to find and read your answers.
Ø You must work on your own. No collaboration is allowed.
Ø You may use your notes, textbook, statistical packages, computer software, or other pre-printed material.
Ø The exam will be collected in Room 315 of the University Center at 6:00 p.m. on Thursday, May 11, 2006. I will leave the University Center at 6:30 p.m. The exam may be turned in anytime prior to 6:00 p.m. on May 11, 2006 at my office (SHB 236H), the Management & Marketing Dept. office (SHB 233A), to Ms. Dina Flores at the University Center, or by e-mail or FAX.
Ø Acknowledge your understanding of the directions by signing below. You must turn in this signed page with your exam.
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.
Signature Date
PART A – Special Question (8 Points)
1. Identify an application for SPC control charts in your work or in your field of study. Discuss your application and the benefits that could be derived from using control charting. Define the data you would need to collect for your application, and the type of control chart(s) that would be appropriate. Remember that control charts can be used in both service and manufacturing applications.
Answers will vary.
PART B Multiple Choice -- Circle the BEST answer. (1 Point Each)
2. The goal of the basic EOQ model is to:
a. minimize order cost.
b. minimize order size.
c. minimize holding cost.
d. minimize the sum of purchasing & ordering costs.
e. minimize the sum of ordering & carrying costs.
3. Which of the following is NOT a basic option for altering DEMAND (re: aggregate planning)?
a. promotion d. subcontracting
b. backordering e. all are demand options
c. pricing
4. Which do you get when you disaggregate the aggregate plan?
a. subcontract list d. inventory level plan
b. master schedule e. staffing plan
c. backorder list
5. The ultimate goal of a JIT system is to
a. reduce inventory d. decrease rejects
b. reduce waste in all forms e. increase market share
c. eliminate inventory
6. In aggregate planning, we develop a plan for matching capacity with demand on an individual item-by-item basis.
a. True b. False
7. Maintenance which is performed to reduce breakdowns is called
a. breakdown maintenance d. proactive maintenance
b. preventive maintenance e. prescribed maintenance
c. lubrication, adjustment, & cleaning
8. A process that is predictable based on its control chart(s)—i.e. it is behaving the way it was designed to—is said to be
a. capable. d. meeting specifications.
b. statistically accurate. e. a six sigma process.
c. in control.
9. Which of the following can show the ability of a process to meet specifications?
a. Process Capability d. Pareto Chart
b. Control Chart e. Flowchart
c. Cause and Effect Diagram
10. The quality tool that shows the steps in a process and can be used to understand a process with which you have no previous familiarity is the:
a. Control Chart d. Pareto Chart
b. Scatter Diagram e. Flowchart
c. Cause and Effect Diagram
11. Data such as height, weight, length, width, and concentration are best referred to as:
a. attribute data.
b. variables data.
c. control chart data.
d. discontinuous data.
e. measurement data.
PART C Multiple Choice -- Circle the BEST answer. (2 Points Each)
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 system d. modified MRP
b. hidden inventory system e. modified ROP
c. two-bin system
13. The kanban in the JIT demonstration we conducted in class was a(n)
a. card d. red pen
b. golf ball e. empty space between stations
c. packing peanut
14. The jobs shown below must be processed through two work centers. They must be processed in work center A before going to work center B.
Job Times (hours)
Job Work Center A Work Center B
A 2.5 4.2
B 3.8 1.5
C 2.2 3.0
D 5.8 4.0
E 4.5 2.0
The optimum sequence for processing the jobs listed above using Johnson’s Rule is
a. A B C D E d. B E A C D
b. C A D E B e. B E C A D
c. B E D A C
15. Which of the following actions would likely reduce a company’s need for decoupling inventory?
a. Locating an alternative supplier in the Far East where prices may be lower.
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.
16. 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
17. 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 boxes d. 626.7 boxes
b. 174.9 boxes e. 50.5 boxes
c. 156.5 boxes
18. 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. $ 14.40 d. $ 130.80
b. $269.40 e. $2,448.00
c. $255.00
19. If the owner of the service garage in question 17 orders the EOQ, instead of 12 boxes at a time, how much will he save?
a. $121.20 d. $ 14.40
b. $ 60.60 e. $148.20
c. $269.40
20. 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. 35 d. 10
b. 350 e. 3.5
c. 45
21. 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-106 d. F-106, F112, F-119
b. F-106, F-112 e. F-101
c. F-101, F-125, F-106
22. The red bead experiment we did in class where four workers produced lots of beads by dipping a paddle into a jar full of beads demonstrated:
a. workers respond well to rapid feedback and recognition.
b. workers should not be held responsible for natural (common) variation.
c. the value of motivational signs to improve worker performance.
d. workers should be carefully selected for specific jobs based on their ability.
e. assignable variation is just a natural part of any system.
23. Which one of these processes appears to be in control?
a.
b.
c.
d.
e.
Part D. Problem. You must show your work to receive full credit. (10 Points)
24. 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.
Item Lead Time On Hand Components
Opener 2 30 A(1), B(2), C(3)
A 1 10 D(2), F(3)
B 1 0 E(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
Part E. Problems. You must show your work to receive full credit. For those problems where you use POM for Windows, attach your printout. (8 Points Each)
25. A process is in control based on its X-bar and Range charts. The process distribution appears to be approximately normal. The process mean is 26.0 and the process standard deviation is 0.20. The specification for the product being produced is 26 ± 0.5. Calculate the process capability.
Is the process considered to be capable? Explain.
The process is NOT capable since Cp < 1.33.
26. You have collected data from quality control records which show the reasons why batches of product have been rejected during the previous month. Use an appropriate tool of quality to analyze these data and make a recommendation to the quality manager about where she should focus her attention to reduce the number of rejected batches in the future.
April Reject Summary
Week / Oversize / Undersize / Cracked / Missing Part / Broken / Wrong Label1 / 1 / 8 / 0 / 2 / 12 / 0
2 / 0 / 2 / 1 / 0 / 14 / 1
3 / 0 / 4 / 1 / 1 / 11 / 1
4 / 1 / 3 / 0 / 2 / 15 / 1
Total 2 17 2 5 52 3
Work to discover the cause of broken parts first. This category accounts for more than 50% of the total rejects.
A check sheet instead of a Pareto chart is also acceptable.
27. A production process for jelly bean manufacturing has been studied. Ten (10) samples each consisting of 100 jelly beans have been inspected. The following table shows the number of defective jelly beans in each sample.
Sample
1 2 3 4 5 6 7 8 9 10
No. of
Defective 1 2 2 0 2 1 2 0 2 7
Jelly Beans
Use POM for Windows to construct the appropriate control chart(s).
Is the process in control? No. Sample 10 is beyond UCL.
28. A process produces 4’ x 8’ sheets of custom walnut plywood. Ten (10) samples each consisting of 10 sheets of plywood are selected at random times during the production shift and examined for defects. The results are tabulated below.
Sample
1 2 3 4 5 6 7 8 9 10
No. of
Defects 2 5 2 1 2 1 3 0 2 7
Use POM for Windows to construct the appropriate control chart(s).
Is the process in control? Yes
29. A process produces power cords for home computers. Every hour 3 cords are selected at random for length measurement in cm. The measurements for the three observations in each of 10 samples are shown below:
1 / 17.08 / 17.73 / 19.30
2 / 17.00 / 19.61 / 20.58
3 / 19.44 / 20.17 / 19.64
4 / 19.91 / 21.91 / 19.27
5 / 20.05 / 19.16 / 20.15
6 / 20.98 / 20.77 / 20.03
7 / 20.52 / 19.87 / 21.87
8 / 18.06 / 17.82 / 21.53
9 / 19.71 / 19.82 / 19.69
10 / 20.02 / 20.81 / 19.50
Use POM for Windows to construct the appropriate control chart(s).
Is the process in control? Yes, both charts are in control.
30. Use an appropriate tool to determine the assignment of jobs to machines that will minimize total costs. The numbers in the matrix are the costs of doing each job on each machine.
C / D / E
1 / 14 / 18 / 20 / 17 / 18
2 / 14 / 15 / 19 / 16 / 17
3 / 12 / 16 / 15 / 14 / 17
4 / 11 / 13 / 14 / 12 / 14
5 / 10 / 16 / 15 / 14 / 13
Use assignment model.