BUSI 411 Operations Management Final Exam 2. Questions & Answers (Graded A)

Question 1 Which of the following is a key question in capacity planning? Selected Answer: When do we need the capacity? Question 2 Utilization is defined as the ratio of: Selected Answer: actual output to design capacity. Question 3 Selected Answer: 25% Question 4 An alternative will have fixed costs of $10,000 per month, variable costs of $50 per unit, and revenue of $70 per unit. The break-even point volume is: Selected Answer: 500. Question 5 A Virginia county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Washington, D.C. They estimate it will cost $50 per prisoner to process the paperwork at this new location. The county is paid a $75 commission for each new prisoner they process. How many prisoners would they have to process annually to break even at this new location? Selected Answer: 2,000 Question 6 An operations strategy for process selection should recognize that: Selected Answer: flexibility is not always the best choice. Question 7 Computer-aided manufacturing refers to the use of computers in: Selected Answer: process control. Question 8 A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load per meter moved. An analyst has prepared the following distances and flow matrices: Distances (meters) From/To I II III I - 10 20 II - 10 III - Flows (loads per week) From/To X Y Z X - 60 90 Y 40 - 160 Z 110 140 - What is the distance (in meters) from area III to area I in this new facility? Selected Answer: 20 Question 9 QRS Corp. is designing a product layout for a new product. They plan to use this production line 10 hours a day in order to meet forecasted demand of 900 units per day. The following table describes the tasks necessary to produce this product: Task Time(secs) Immediate Predecessor a 34 none b 20 a c 10 b d 16 b e 10 c f 24 d,e g 38 f For output to equal forecasted demand, what will be the efficiency of the production line that uses the least number of workstations? Selected Answer: 95 percent Question 10 What is it about job shops that make them appropriate for products in the introductory phase of their life cycle? Selected Answer: flexibility Question 11 Which of the following most closely describes job enlargement? Selected Answer: horizontal loading Question 12 A methods and measurements analyst for Digital Devices needs to develop a time standard for the task of assembling a computer mouse. In a preliminary study, she observed one of her workers perform this task six times with the following results: Observation 1 2 3 4 5 6 Time(Seconds) 46 38 40 34 42 40 What is the normal time for this task if the employee worked at a 20 percent faster pace than average? Selected Answer: 48 seconds Question 13 The symbols for operation, storage, transportation, inspection, and delay would usually be found on which type of chart? Selected Answer: flow process Question 14 A methods and measurements analyst for Timepiece, Inc., needs to develop a time standard for the task of attaching a watch to a wristband. In a preliminary study, he observed one of his workers perform this task five times, with the following results: Observation 1 2 3 4 5 Time(Seconds) 27 19 20 21 13 How many observations should be made if he wants to be 95.44 percent confident that the maximum error in the observed time is one second? Assume that the standard deviation of the task time is five seconds. Selected Answer: 100 Question 15 A methods and measurement analyst wants to develop a time standard for a certain task. In a preliminary study, he observed one worker perform the task six times with an average observed time of 20 seconds and a standard deviation of two seconds. What is the normal time for this task if the employee worked at a 20 percent faster pace than average? Selected Answer: 24 seconds Question 16 Nearness to raw materials would be most important to a: Selected Answer: manufacturing company. Question 17 A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows: Location FC (annual) VC (per unit) Atlanta $ 80,000 $ 20 Phoenix $ 140,000 $ 16 ________________________________________ What would the total annual costs be for the Phoenix location with an annual output of 10,000 units? Selected Answer: $300,000 Question 18 Location choice I has monthly fixed costs of $100,000 and per-unit variable costs of $10. What would its total cost be at a monthly volume of 250 units? Selected Answer: $102,500 Question 19 A hardware distributor has regional warehouses at the locations shown below. The company wants to locate a new central distribution center to serve this warehouse network. Location (x, y) A 2, 3 B 3, 7 C 5, 5 D 7, 3 E 8, 7 ________________________________________ If weekly shipments to each warehouse will be approximately equal, what is the optimal location for the distribution center? Selected Answer: 5, 5 Question 20 The center of gravity method is used to _______ travel time or shipping costs. Selected Answer: minimize Question 21 Capacity planning requires an analysis of needs: what kind, how much, and when. Selected Answer: True Question 22 The goal of line balancing is to assign tasks to workstations in such a way that the workstations have approximately equal time requirements. Selected Answer: True Question 23 Predetermined time standards use historical data from a company's own files. Selected Answer: False Question 24 Web-based, retail businesses should be located near the customer to reduce their long distance phone charges. Selected Answer: False Question 25 The fact that most types of firms are located in every section of the country suggests that in many cases, location decisions are not overly important; one location typically is as good as another. Selected Answer: False