OM 300 FINAL STUDY GUIDE TEST
QUESTIONS WITH COMPLETE
SOLUTIONS
Long-range Forecast - Answer-Covers 3 or more years and is typically used for
strategic decisions like capacity planning or building a new plant.
Qualitative Methods (Forecasting) - Answer-Methods relying on judgments and
experience rather than mathematical data, such as the Jury of Executive Opinion (group
of experts), Delphi Method (anonymous expert surveys), Sales Force Composite, and
Consumer Market Survey.
Quantitative Methods (Forecasting) - Answer-Methods using mathematical models,
including the Naïve Approach (Next period = last period), Moving Averages, Weighted
Moving Average, Exponential Smoothing, Trend Projection, and Linear Regression.
Time Series Components - Answer-Elements that make up time series data: Trend,
Seasonal, Cyclical, and Random variations.
Quality - Answer-Meeting or exceeding customer expectations.
Three Views of Quality - Answer-User-based (based on customer preferences, e.g.,
'You like it'), Manufacturing-based (meets established standards), and Product-based
(quantifiable features).
Costs of Quality (Examples) - Answer-Includes Prevention (training), Appraisal
(inspection), Internal failure (scrap), and External failure (returns).
TQM (Total Quality Management) - Answer-A management system focused on
continuous improvement, comprehensive employee involvement, and customer focus.
Six Sigma - Answer-A quality benchmark aiming for 3.4 defects per million.
Benchmarking - Answer-The process of comparing an organization's practices and
performance to the best practices available in the industry.
Statistical Process Control (SPC) - Answer-The use of charts to monitor variation within
a process.
Assignable Variations - Answer-Variation that can be traced to a specific cause and
subsequently fixed.
, Control Charts (Examples) - Answer-Charts used in SPC to monitor various metrics,
such as the X-Bar Chart (monitors the mean), R Chart (monitors the range), p Chart
(monitors percentage defective), and c Chart (monitors the number of defects).
Process Focus - Answer-A production strategy characterized by low-volume and high-
variety. Example: A hospital.
Product Focus - Answer-A production strategy characterized by high-volume and low-
variety. Example: A paper mill.
Repetitive Focus - Answer-A production strategy utilizing modules and an assembly
line. Example: Automobile manufacturing.
Mass Customization - Answer-A strategy achieving both high variety and high volume.
Design Capacity - Answer-The maximum possible output a system can achieve.
Effective Capacity - Answer-The expected output achievable under typical operating
conditions.
Bottleneck - Answer-The slowest part or constraint within a production system.
SCM Definition - Answer-The coordination of all activities across the supply chain.
Vertical Integration - Answer-A sourcing strategy where an organization owns the
elements of its supply chain.
Virtual Companies - Answer-Organizations that heavily rely on outside vendors to
perform services or produce goods.
Bullwhip Effect - Answer-A phenomenon where small changes in consumer demand at
the retail end lead to large, amplified fluctuations in the required supply further up the
supply chain.
Logistics Management - Answer-The activities involved in efficiently moving materials
throughout the supply chain.
Inventory Types - Answer-Categories of materials held, including Raw materials, Work
in Process (WIP), Maintenance/repair/operating (MRO) supplies, and Finished goods.
ABC Analysis - Answer-A system for classifying inventory based on dollar value, where
A items are high value, B items are medium value, and C items are low value.
Cycle Counting - Answer-The practice of continuously counting inventory throughout the
year, rather than relying only on periodic physical counts.
QUESTIONS WITH COMPLETE
SOLUTIONS
Long-range Forecast - Answer-Covers 3 or more years and is typically used for
strategic decisions like capacity planning or building a new plant.
Qualitative Methods (Forecasting) - Answer-Methods relying on judgments and
experience rather than mathematical data, such as the Jury of Executive Opinion (group
of experts), Delphi Method (anonymous expert surveys), Sales Force Composite, and
Consumer Market Survey.
Quantitative Methods (Forecasting) - Answer-Methods using mathematical models,
including the Naïve Approach (Next period = last period), Moving Averages, Weighted
Moving Average, Exponential Smoothing, Trend Projection, and Linear Regression.
Time Series Components - Answer-Elements that make up time series data: Trend,
Seasonal, Cyclical, and Random variations.
Quality - Answer-Meeting or exceeding customer expectations.
Three Views of Quality - Answer-User-based (based on customer preferences, e.g.,
'You like it'), Manufacturing-based (meets established standards), and Product-based
(quantifiable features).
Costs of Quality (Examples) - Answer-Includes Prevention (training), Appraisal
(inspection), Internal failure (scrap), and External failure (returns).
TQM (Total Quality Management) - Answer-A management system focused on
continuous improvement, comprehensive employee involvement, and customer focus.
Six Sigma - Answer-A quality benchmark aiming for 3.4 defects per million.
Benchmarking - Answer-The process of comparing an organization's practices and
performance to the best practices available in the industry.
Statistical Process Control (SPC) - Answer-The use of charts to monitor variation within
a process.
Assignable Variations - Answer-Variation that can be traced to a specific cause and
subsequently fixed.
, Control Charts (Examples) - Answer-Charts used in SPC to monitor various metrics,
such as the X-Bar Chart (monitors the mean), R Chart (monitors the range), p Chart
(monitors percentage defective), and c Chart (monitors the number of defects).
Process Focus - Answer-A production strategy characterized by low-volume and high-
variety. Example: A hospital.
Product Focus - Answer-A production strategy characterized by high-volume and low-
variety. Example: A paper mill.
Repetitive Focus - Answer-A production strategy utilizing modules and an assembly
line. Example: Automobile manufacturing.
Mass Customization - Answer-A strategy achieving both high variety and high volume.
Design Capacity - Answer-The maximum possible output a system can achieve.
Effective Capacity - Answer-The expected output achievable under typical operating
conditions.
Bottleneck - Answer-The slowest part or constraint within a production system.
SCM Definition - Answer-The coordination of all activities across the supply chain.
Vertical Integration - Answer-A sourcing strategy where an organization owns the
elements of its supply chain.
Virtual Companies - Answer-Organizations that heavily rely on outside vendors to
perform services or produce goods.
Bullwhip Effect - Answer-A phenomenon where small changes in consumer demand at
the retail end lead to large, amplified fluctuations in the required supply further up the
supply chain.
Logistics Management - Answer-The activities involved in efficiently moving materials
throughout the supply chain.
Inventory Types - Answer-Categories of materials held, including Raw materials, Work
in Process (WIP), Maintenance/repair/operating (MRO) supplies, and Finished goods.
ABC Analysis - Answer-A system for classifying inventory based on dollar value, where
A items are high value, B items are medium value, and C items are low value.
Cycle Counting - Answer-The practice of continuously counting inventory throughout the
year, rather than relying only on periodic physical counts.
