Operations Management 3251

Practice Final Exam

NAME ________________
STUDENT NUMBER _________
Please read the following set of instructions. Do not open the exam until all of the
students are seated and the instructor begins the exam.
There are 34 multiple choice questions counting 3&1/3 points each (for a maximum of
100 points). Please choose the best of the answers provided. If questions seem
ambiguous or incorrectly stated either make assumptions as needed or ask the
instructor for clarification (the instructor reserves the right to refuse to answer). A
formula sheet and a standard normal table can be found on the last pages of the exam.
Be sure to clearly mark your response on both the exam and the answer key.
Note: Be sure to use a number 2 pencil--the scanner can fail to read black ink.
GOOD LUCK!
I have read and understand the above instructions.
Signature _________________

Manufacturing Strategy
1.

2.

Which of the following is (are) true as we move across the spectrum of

manufacturing processes from project to continuous manufacturing.
I.
II.
III.

The amount of work accomplished by each line worker goes down.

Quality control procedures become more formal.
Relative inventory (inventory/production) goes down.

a.
b.
c.
d.
e.

I only
II only
II and III only
all of the above are incorrect
all of the above are correct

Which one of the following statements concerning productivity trends is best?

a.
b.
c.
d.

3.

Manufacturing firms in Europe and Japan have been able to recover from
the devastation of World War II and are able to meet or surpass the
standards of quality set by U.S. firms.
The United States will always be a major industrial power because of
superior cost accounting procedures.
The Germans and Japanese have a much higher level of nonmanufacturing exports per capita than all other industrialized nations.
U.S. manufacturing practices are preeminent, there is nothing that can be
learned from studying foreign firms.

Which of the following is (are) true of the field of operations management (in
your instructors opinion):
I.
II.
III.

Its roots date back to World War II.

It is a matter of national security.
It and marketing are the two key elements of a business.

a.
b.
c.
d.
e.

I only
II only
II and III only
I and III only
all of the above (I, II, and III) are correct

4.

Which of the following would not be considered a true statement by your

instructor.
a.

b.
c.
d.
5.

The relationship between high quality and low price goes beyond the
assertion by Jack Welch (former CEO of General Electric), that without
being the best in both you are not in the game. Rather, high quality
leads to low costs.
History shows that a strong manufacturing base is essential for protecting
a nation and preserving human rights and dignity.
The innovative and entrepreneurial nature of the American people has
made it possible to learn from, and adapt to, a global economy using skills
and methodologies taught at institutions of higher education.
The Operations Research and Management Science disciplines have
grown out of Operations Management.

Which of the following would your instructor consider true?

b.
c.

a.
Financial activities, accounting, finance, and the like, are the most
fundamental activities a business can engage in.
Operations focuses on less important (low dollar) parts of the business.
Because uncertainty is such a pervasive part of life there is little need for
formal instruction in basic statistics.
d.
Frequently, innovations in the areas of operations (purchasing,
operations, and logistics) can be kept proprietary (secret) while
competitors can easily adopt or improve on new product, marketing, or
sales ideas.

Forecasting
Use the following data set to answer the next 3 questions:
Year
2005
2006
2007
2008
2009
2010
2011
2012

Demand
270
356
398
456
358
500
410
376

6.

Using the Nave method, what is your forecast for 2013?

a.
b.
c.
d.

7.

What would be your forecast for 2013 using 3-period moving average?
a.
b.
c.
d.

8.

390.5
376
341.33
438

376
428.67
438
341.33

Which of the forecasts you calculated in the last two question is better (and
why):
I.
II.
III.

3 period MA because the Bias is positive

Nave because the MAPE is lower
3 period MA because the MAPE is lower

a.
b.
c.
d.
e.

I only
II only
III only
I and III only
all of the above (I, II, and III) are correct

Critical Path Method/PERT

Use the following information to construct a PERT diagram and use the result to answer
the next four questions.
Activity
A
B
C
D
E
F
G
H
I

Immediate
Predecessor
---A
C
A
BCD
F
EG
4

Expected
Activity Time
2
5
2
2
3
5
4
5
2

9.

What is the critical path for this network?

a.
b.

10.

How long will it take to complete this project?

a.
b.

11.

A-C-G
A-D-G-I
c.
A-F-H
d.
A-G-I
e.
None of the above

12
14
c.
d.
e.

10
8
None of the above

What is the slack for activity G?

a.
b.
c.
d.
e.

2
1
0
4
None of the above

Use the following standard deviations for each of the activities described in the last
problem to answer the next question.
Activity

Standard
Deviation
0.33
1.00
0.33
0.33
0.66
0.66
1.00
1.00
0.33

A
B
C
D
E
F
G
H
I

12.

What is the variance of the expected completion time for the project described in
the prior question?
a.
2.236
b.
4.99
c. 1.99
d. 1.5445
e.
None of the above

13.

A critical path contains 4 activities (A, C, G, and M). The average completion
time for each is 10, 12, 5, and 7 respectively with associated variances of 9, 4,
36, and 16. Express the statistical properties of completion time Te (the time to
complete the whole project) using standard nomenclature.
a.
b.
c.
d.
e.

14.

For the situation described in the prior question, what is the probability the
project will be completed between weeks 33 and 40?
a.
b.
c.
d.

15.

N~[34,15]
N~[34,152]
N~[34,65]
N~[34,651/2]
None of the above

=1-NORMDIST(33,34, 651/2,TRUE)
= NORMDIST(40,34,651/2,TRUE) - NORMDIST(33,34, 651/2,TRUE)
= NORMDIST(40,34, 651/2,TRUE.
None of the above

For the situation described in the prior question, what would you tell your boss if
she wanted to use the model to determine the likelihood of finishing this project
on time?
a.
b.
c.
d.
e.

Sure, what is the required completion date?

Most contractors overestimate their capability, it is almost certain the
project will be late.
This is a deterministic model, there is only one planned finish date.
It will be completed on time because we will be able to use crashing.
None of the above.

16.

In a CPM analysis if each activity time is known with certainty we can use which
of the following methodologies to analyze the project?
a.
b.
c.
d.
e.

17.

Single Time Estimate

Three Activity Time Estimates
Expected Activity Time
Probability Analysis
None of the above

You have just performed a Single Time Estimate CPM analysis and have found
that more than one path through the project network have zero slack values.
What can you conclude?
a.
b.
c.
d.
e.

You have incorrectly performed the analysis

You have found the critical path
Only one path is in fact optimal
You have a degenerate solution
None of the above

Use the following information to formulate CPM diagram and use that diagram to
answer the next question.

18.

Activity

Immediate
Predecessor(s)

te

A
B
C
D
E
F
G

-A
B
B
C
D,E
F

3
5
4
7
1
5
4

What is the critical path for this network?

a.
b.

A-C-D-F-G
A-B-C-F-G
c.
A-B-D-F-G
d.
A-B-C-E-F-G

Breakeven Analysis
Use the following business scenario to answer the next two questions.
Some entrepreneurially oriented students have decided to capitalize on the community
colleges decision to start charging students for copying. They are going to offer a
bare bones coping service built around an internet enabled copy machine. Nearing
graduation, they are very concerned about recouping their investment. They can either
rent a machine ($50/month for the next 18 months they expect to be students) or
purchase a machine for a net cost of $2,500 (the cost of the machine less its expected
resale value once they begin their careers). They are confident that copies will sell for
11 cents each, and the variable cost of each copy (paper, ink, and maintenance on the
machine) would be 3 cents a copy if they purchase a copy machine. Under the terms
of the rental agreement, the cost of each copy would be 6 cents.
19.

If they purchase, how many copies would they have to sell in order to break
even?
a.
b.
c.
d.

20.

31,250
18,000
63,000
25,610

Because internet accessibility will enable their fellow students to drop off the
orders electronically and the entrepreneurs will deliver the copies to anywhere
on campus, they are confident they will be able to sell an average of 3,500
copies a month. If this turns out to be the case, what is the difference in profit
between renting the machine versus buying it outright?
a.
b.
c.
d.

$18,000
$2,250
They are at the BE point, there is no difference
$290

Queuing Theory
The Kiwanis Club of Daltons annual Pancake Day has continued to grow and
maintaining an adequate service level is increasingly a concern. During the peak
period, 8:30 to 10:30, one of the Clubs token academics (TA. has estimated that
patrons arrive for take-out orders at a rate of 1 every 6 seconds. Three frantic
Kiwanians (FKs) each take an average of 6 seconds to accept the payment and provide
the takeout order.
21.

What type of queuing system is this?

a.
b.
c.
d.
e.

22.

M/M/1
M/D/N
M/M/N
M/M/F
None of the above

Behavioral science offers which of the following insights into managing service
encounters:
I.
II.
III.

Let the customer control the process

Pay attention to norms and rituals
People are easier to blame than systems

a.
b.
c.
d.
e.

I only
II only
I and II only
all of the above are correct
None of the above are correct

Learning Curves
Figure 1 is an example of the spreadsheet created to solve learning curve problems.
Use it to answer the next 5 questions.
Figure 1
Learning Curve for T.R. Aerospace, Inc. Space Blaster IV

23.

Which formula would work in cell B17.

a.
b.
c.
d.
e.

24.

A17^ (LOG(C11,10)/LOG(2,10)) * C12

A17 * (LOG(C$11,10)/LOG(2,10)) * C$12
A17/(LOG(C11,10)/LOG(2,10)) * C12
A17/(LOG(C$11,10)/LOG(2,10)) * C$12

None of the above

What formula would be appropriate for cell D17 if we planned to copy it into cells
D17 through D117?
a.
b.
c.
d.
e.

=AVERAGE(C17:C17)
=AVERAGE(C$17:C17)
=SUM(C$17:C17)/A17
=C17/A17
None of the above

10

25.

T.R. Aerospace has produced 5 of the Rocket Gliders shown in figure 1. What
would be the total time required to produce the next 5?
a.
b.
c.
d.
e.

26.

292,423
60,639
639,558
206,211
None of the above

Based on prior experience, TRA knows the market for Rocket Gliders will be
exhausted at 100 units. How much time will it take to produce the last one?
a.
b.
c.
d.
e.

60,639
39,727
231,496
81,398
Cant be determined without a table or spreadsheet

Total Quality Management

27.

A random variable is
a.
A variable that can be solved for algebraically.
b.
A variable (or phenomena described by a distribution)
c.
A prediction of an upcoming event.
d. The result of integrating the probability distribution function.

28.

Process capability is:

a.
b.
c.
d.

29.

the ratio of product tolerances to process spread

a comparison of what the process was designed to do to what it does do
calculated using data collected from the process
a measure of the capacity of the process

The upper and lower control limits (UCL and LCL) should be:
a.
b.
c.
d.
e.

set by the product tolerances.

drawn closer together when customer expectations are very high.
based on the level of variability the customer will accept.
calculated using statistical arguments based on the machines designed
operating characteristics
should be calculated from data collected from the machine

11

Consider a process that fills bottles with 1000 grams (one liter) of grape juice. This
piece of equipment was designed to have filled bottles distributed with a mean of 1000
grams and a variance of 25. Company procedures call for taking a sample of 8 bottles
every hour.
30.

What it the underlying distribution for this process?

a.
b.
c.
d.
e.

Normal
Poisson
Binomial
Exponential
None of the above

Xezet company is a maker of floppy disks. They inspected 50 disks from each days
output and classify them as either good or defective. The following table gives the
number of rejected disks for the last 20 days.
Date
3/18
3/19
3/20
3/21
3/22
3/25
3/26
3/27
3/28
3/29
31.

Number Rejected
3
10
13
4
12
14
8
7
19
1

Date
4/1
4/2
4/3
4/4
4/5
4/8
4/9
4/10
4/11
4/12

Number Rejected
0
4
9
22
7
6
18
3
9
7

What it the underlying distribution for this process?

a.
b.
c.
d.
e.

Normal
Poisson
Binomial
Exponential
None of the above

12

32.

Roughly translated from Japanese, poka-yokes means:

a.
b.
c.
d.
e.

33.

Using a Just-in-Time perspective, which of the following actions is not

appropriate if we are interested in reducing lead times by reducing lot size
quantities?
a.
b.
c.
d.

34.

Make it idiot proof

Design for manufacture
Process control
Avoid mistakes
None of the above

Perfect quality.
Development of the skills and capabilities of the worker.
Implementing Single Minute Exchange of Dies, i.e. quick changeovers.
Rearrange the shop floor so there is extra work-in-progress to prevent
"starving" work stations.

Which of the following statements is (are) true regarding the hierarchy of

production planning activities we discussed in class?
I.
II.
III.
a.
b.
c.
d.

The higher level plans typically have a longer planning horizon.

The higher level plans create constraints within which the lower
level plans must be developed.
The higher level plans are typically more detailed than the lower
level plans.

I only
II only
I and II only
I and III only

13

Useful Formulas
Y x Kx n
n log b / log 2
x

TotalTime x xi i n
i 1

Te t eci
i 1

Te

te

i 1

c
tei

a 4m b
6
ba

te
Z

Slack EFT - EST LFT - LST

Crash Cost/Time

Crash Cost - Normal Cost

Normal Time - Crash Time

Expected Profit P V * Q F
F
BEP(x)
P - V

BEP($)

F
V
1
P

TR PQ
TC F VQ

14

Stationary
t

i=1

F t+1 =

Weighted Moving Average

Ft 1 W 1Dt W 2 Dt 1 . . . + WNDt N 1
N

Where:

W = 1.0
i

i=1

Simple Moving Average

t

F t+1

Di

i=t - N+1

Exponential Smoothing

Ft 1 Dt (1 ) Ft
Where: is a weighting factor 0 < < 1.0

MAD =

/ F -D /
i

/ e /
i

i=1

i=1

Bias =
N

MAPE =

i 1

i=1

Dt Ft
Dt
(100)
N

15

16

Standard Normal Table

Area =
G(z)

G(z)

G(z)

G(z)

G(z)

G(z)

G(z)

-4
-3.95
-3.9
-3.85
-3.8
-3.75
-3.7
-3.65
-3.6
-3.55
-3.5
-3.45
-3.4
-3.35
-3.3
-3.25
-3.2
-3.15
-3.1
-3.05
-3
-2.95
-2.9
-2.85
-2.8
-2.75
-2.7

0.00003
0.00004
0.00005
0.00006
0.00007
0.00009
0.00011
0.00013
0.00016
0.00019
0.00023
0.00028
0.00034
0.00040
0.00048
0.00058
0.00069
0.00082
0.00097
0.00114
0.00135
0.00159
0.00187
0.00219
0.00256
0.00298
0.00347

-2.65
-2.6
-2.55
-2.5
-2.45
-2.4
-2.35
-2.3
-2.25
-2.2
-2.15
-2.1
-2.05
-2
-1.95
-1.9
-1.85
-1.8
-1.75
-1.7
-1.65
-1.6
-1.55
-1.5
-1.45
-1.4
-1.35

0.00402
0.00466
0.00539
0.00621
0.00714
0.00820
0.00939
0.01072
0.01222
0.01390
0.01578
0.01786
0.02018
0.02275
0.02559
0.02872
0.03216
0.03593
0.04006
0.04457
0.04947
0.05480
0.06057
0.06681
0.07353
0.08076
0.08851

-1.3
-1.25
-1.2
-1.15
-1.1
-1.05
-1
-0.95
-0.9
-0.85
-0.8
-0.75
-0.7
-0.65
-0.6
-0.55
-0.5
-0.45
-0.4
-0.35
-0.3
-0.25
-0.2
-0.15
-0.1
-0.05
0

0.09680
0.10565
0.11507
0.12507
0.13567
0.14686
0.15866
0.17106
0.18406
0.19766
0.21186
0.22663
0.24196
0.25785
0.27425
0.29116
0.30854
0.32636
0.34458
0.36317
0.38209
0.40129
0.42074
0.44038
0.46017
0.48006
0.50000

0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
0.55
0.6
0.65
0.7
0.75
0.8
0.85
0.9
0.95
1
1.05
1.1
1.15
1.2
1.25
1.3
1.35

0.51994
0.53983
0.55962
0.57926
0.59871
0.61791
0.63683
0.65542
0.67364
0.69146
0.70884
0.72575
0.74215
0.75804
0.77337
0.78814
0.80234
0.81594
0.82894
0.84134
0.85314
0.86433
0.87493
0.88493
0.89435
0.90320
0.91149

1.4
1.45
1.5
1.55
1.6
1.65
1.7
1.75
1.8
1.85
1.9
1.95
2
2.05
2.1
2.15
2.2
2.25
2.3
2.35
2.4
2.45
2.5
2.55
2.6
2.65
2.7

0.91924
0.92647
0.93319
0.93943
0.94520
0.95053
0.95543
0.95994
0.96407
0.96784
0.97128
0.97441
0.97725
0.97982
0.98214
0.98422
0.98610
0.98778
0.98928
0.99061
0.99180
0.99286
0.99379
0.99461
0.99534
0.99598
0.99653

2.75
2.8
2.85
2.9
2.95
3
3.05
3.1
3.15
3.2
3.25
3.3
3.35
3.4
3.45
3.5
3.55
3.6
3.65
3.7
3.75
3.8
3.85
3.9
3.95
4
4.05

0.99702
0.99744
0.99781
0.99813
0.99841
0.99865
0.99886
0.99903
0.99918
0.99931
0.99942
0.99952
0.99960
0.99966
0.99972
0.99977
0.99981
0.99984
0.99987
0.99989
0.99991
0.99993
0.99994
0.99995
0.99996
0.99997
0.99997

17

Key
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34

C
A
E
D
D
B
B
C
C
A
B
D
C
B
A
A
D
C
A
D
C
D
A
D
A
B
B
A
D
A
C
D
D
C

18