OM323 Operations Management First Half Practice Questions 1 The process of dismantling and inspecting a competitor s new or revised product for the purpose of gleaning design ideas is called A Benchmarking B Disassembly C Reverse engineering D Design by imitation E Product analysis A Less than 5 00 B Between 5 00 and 9 99 C Between 10 00 and 14 99 D Between 15 00 and 19 99 E 20 00 or greater A Production requirements B Relative importance C Process control characteristics D Engineering characteristics E Customer attributes 2 Assuming a retail channel margin of 33 and gross margin for profit sales and marketing and G A expenses of 50 the target cost for a product that retails for 30 is 3 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 4 The initial stage in the new product development funnel involves A Preliminary technical assessment of the product B Preliminary market assessment C Assessment of pilot production data D A and B are correct E A B and C are correct 5 Which of the following does not generally lead to higher overall inventory levels units A Taking advantage of quantity discounts B Using faster methods of transportation for delivery from suppliers C Buying materials from more distant suppliers D Using less expensive but more inaccurate forecasts E Increasing the size of replenishment orders 6 Braun s strategy was to generate revenues through greater volumes at lower predetermined price points Which of the following design actions are translations of this strategy A Using the cheaper polypropylene material B Making the water tank part of the appliance housing to reduce the number of parts C Adhering to the design principle form follows function D A and B are correct E A B and C are correct 7 An injection molding machine is equipped with a 10 cavity mold i e it produces 10 parts on each cycle and operates with a 20 second cycle time If the machine is used for two eight hour shifts per day five days per week 50 weeks per year and has a 90 up time then the annual capacity of the machine in parts is A Less than 4 000 000 B Between 4 000 000 and 5 500 000 C Between 5 500 001 and 7 000 000 D Between 7 000 001 and 8 500 000 E Greater than 8 500 000 8 A small business owner is contemplating the addition of another product line Production capacity for the new line would result in an annual fixed cost of 50 000 Variable costs would be 25 per unit What selling price must the owner obtain to break even for the new product line on a volume of 2 500 units per year A Less than 30 B Between 30 00 and 34 99 C Between 35 00 and 39 99 D Between 40 00 and 44 99 E 45 or more 9 The goal of the basic EOQ model is to A Minimize order size B Minimize order cost C Minimize holding cost D Minimize the sum of purchasing and ordering costs E Minimize the sum of ordering and holding costs 10 In the basic EOQ model if demand is 60 units per month it costs 12 to place each order and the annual holding cost is 120 per unit the EOQ is A Less than 5 B 10 C 12 D 24 E 144 11 The reorder point for an inventory item is 900 units If the average demand is 100 units per day and the lead time is five days then the amount of safety stock is 12 In the single period model if excess cost is double shortage cost the approximate stockout risk assuming an optimum service level is A 100 units B 400 units C 500 units D 800 units E 900 units A 100 B 67 C 50 D 33 E 5 13 A company is introducing a new product and believes the first year sales will be 2 000 units If things go better than expected they think sales could reach as high as 2 900 units in year one Or if the product is poorly received the first year demand could be as low as 1 100 units If the lead time is four weeks the service level target is 90 and they use the PERT distribution to estimate demand parameters how many units of finished goods safety stock should they hold in year one A Less than 50 units B Between 50 and 149 units C Between 150 and 349 units D Between 350 and 499 units E 500 or more 14 Which of the following is not a determinant of effective capacity A Facility design B Product mix C Actual output D Employee training and motivation E Product standards and safety regulations 15 Implementation of ISO 14000 calls for which of the following actions I Ensuring that a product or service conforms to the customers quality requirements II Demonstrating that office equipment with reused components performs equivalent to III Measuring and managing emissions effluents and other waste streams IV Documenting procedures and undergoing an on site assessment new A B C D E I and IV II and III III and IV II III and IV I II III and IV 16 Which of the following types of products would typically not be an attractive candidate for outsourcing to an overseas low wage country A A product that uses well understood and publicly available technologies B A light and compact product C A stable product that is unlikely to undergo any engineering changes D A product with highly automated manufacturing E None of the above 17 A potential supplier to a SM323 team quotes a price of 3 00 per part When asked about quantity discounts the supplier agrees to lower the price to 2 90 for orders larger than or equal to 10 000 units and 2 80 for orders larger than or equal to 20 000 units The team forecasts its demand to be 40 000 units per year It also estimates a fixed ordering cost of 5 per order and an annual inventory holding cost rate of 30 of purchase price If it decides to work with this supplier in what quantities should the team order its parts A Less than 500 B 500 to 9 999 C 10 000 to 19 999 D 20 000 to 39 999 E 40 000 or more 18 Ideas for new or improved designs can come from A Customers B Competitors products and services C Research and development departments D Production departments E All of the above 19 Renewable resources are resources that A We can find more of such as newly discovered iron deposits B We can use to extend the economic life of other resources such as energy efficient light bulbs stretching out our use of electric power C Natural processes create more of such as wind or plants D We can reuse in recycling programs such as plastic being reused to …