OM323 Operations Management Sample Exam 1 Test Version On the following page is a blank house of quality HoQ After carefully reading the following section fill in as much of the HoQ as possible In some cases you will be able to be quite specific in other cases not quite as specific but the underlying relationship should still be shown Hint Fill in as much as you can and come back to it after completing the multiple choice part of the examination Don t be surprised to find that much of the house of quality is still empty after you finish The U S Widget Inc USW is conducting analysis to determine how to improve the performance of their primary product the Super Widget SW Management has collected a variety of data from a variety of sources and must now organize the information onto a HoQ The SW is a metal disc with a specified diameter The product is used by companies in the framus industry Widget customers valued precise diameters and durability Across the industry widget precision was determined by the acceptance range Loosely speaking the acceptance range for a company represented the deviation permitted in their product and still found acceptable Although widget thickness was not specified by the customer it was well understood that customers preferred thinner widgets However thickness was much less important than either durability or precision diameters Reports from a marketing research effort revealed that USW was perceived as superior to their two main competitors X and Y on both durability and thinness On durability USW was vastly superior to both competitors but on thickness only slightly better than X which was perceived much better than Y On precision Y was far superior to both X and USW Indeed USW was inferior to both their competitors in this area The acceptance range for USW X and Y respectively were 1 05 and 01 An important characteristic was the percentage of titanium in the alloy used for widget production As the amount of titanium increased the widget was more likely to wear out sooner However larger amounts of titanium led to the ability to achieve higher levels of precision USW used a 5 titanium alloy while competitor Y used a 10 alloy and competitor X a 7 alloy The managers believed that acceptance ranges improved with increasing concentrations of titanium in the metal 1 2 3 4 The term that pertains to incorporating customer ideas in product design is a b c d e TQM CAD QFD robust design reverse engineering b The nature of demand for a company s products must be considered in the design of its supply chain Accordingly which of the following are correct a If product demand tends to be predictable and life cycles are relatively long a company should design its supply chain to maximize production and distribution efficiency Unpredictable demand may require substantial excess capacity and buffer inventories Very accurate long range forecasts are essential for launching new and innovative products a and b are correct a and c are correct d e c The House of Quality is used to translate what into how Which of the following best describes the what in the House of Quality matrix a b c d e production requirements relative importance process control characteristics engineering characteristics customer attributes The initial screening stage in the Stage Gate method of new product development involves a b c d e preliminary technical assessment of the product preliminary market assessment preliminary financial assessment two of a b and c are correct all of a b and c are correct 5 Which of the following does not generally lead to higher overall inventory investments a b c d e increasing the size of production batches increasing the number of stocking points buying materials from more distant suppliers using less expensive but more inaccurate forecasts suppliers using faster methods of transportation to accomplish delivery a b c d e a b c d e Braun s strategy was to generate revenues through greater volumes at lower 6 predetermined price points Which of the following design actions are translations of this strategy Using the cheaper polypropylene material Making the water tank part of the appliance housing to reduce the number of parts Adhering to the design principle form follows function a and b are correct a and c are correct 7 Nicholas Hayek s contribution to SMH success included consolidation of suppliers reduction in number of Omega models a carefully implemented JIT philosophy a and b are correct b and c are correct 8 9 10 A small business owner is contemplating the addition of another product line Capacity increases and equipment will result in an increase in annual fixed costs of 50 000 Variable costs will be 25 per unit What selling price must the owner obtain to break even on a volume of 2 500 units per year a b c d e 30 or less between 30 00 and 34 99 between 35 00 and 39 99 between 40 00 and 44 99 45 00 or more The goal of the basic EOQ model is to a b c d e minimize order size minimize order cost minimize holding cost minimize the sum of purchasing and ordering costs minimize the sum of ordering and holding costs In the basic EOQ model if D 60 per month S 12 and H 10 per unit per month EOQ is a b c d e 10 12 24 72 144 Questions 11 12 refer to the following Consider the following supply chain of Kappa a global watch manufacturer The leadtime from Kappa s finished goods warehouse to distributors is 5 weeks from the distributors to the retailers 8 weeks Retailers place orders four times a year Kappa s sales reps visit distributors every two weeks Throughput times in assembly average two weeks Suppose for a particular model O Micron there is no inventory on hand at the 11 retailer distributor and finished goods inventory With the current supply chain performance how long would a customer have to wait for an O Micron watch in the worst possible case in weeks The VP of Operations has estimated the value of a Kappa watch in finished goods 12 inventory at the distributor and at the retailer at 450 630 720 respectively Retailers currently carry four months of inventory twice as much as the distributors Kappa s warehouse holds two months of inventory Monthly demand is 2 000 watches For a 20 inventory carrying cost calculate the total annual inventory carrying cost of watches in the supply chain less than 2 000 000 between 2 000 000 and 2 400 000 between 2 400 000 and 2 800 000 between 2 800 000 and 3 200 000 more than 3 200 000 Practice Solved problems mentioned in the