Exam 1

MAN 6501 - Operations Management
Examination 1

Instructions
1. Give answers up to two decimal points only.
2. This is an open book/open notes examination. Students are required to work individually on the examination. 3.

There are 30 questions. Questions 1 through 20 carry 2.5 points each and questions 21 through
30 carry 5.00 points each.

4. This examination carries 25% weight towards the final grade.
5. You have five hours of continuous time to finish the examination from the time you open the examination to take the examination.
6. Good Luck

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Note: In questions 1 through 1 through 16, “REF” refers to the section in the book.
1.

Comparing goods and services, the similarities stop, and significant differences occur, when the operations involve contact between people.
ANS: T

2.

REF:

1.6 (4)

When bureaucracy gains control of an organization, it strives to remove corrective counter swings and maintain existing conditions.
ANS: T

4.

1.7.3

Production and operations management is linked to all other managerial functions in the organization and is applicable to both manufacturing and services.
ANS: T

3.

REF:

REF:

2.4.2

The stages of history have moved production and operations capabilities from low-volume custom work through high-volume rapid and continuous output systems.
ANS: T

REF:

2.5

5
With the _____ approach, operations management is expected to perform with minimum reference to other parts of the business. This approach concentrates on the specific tasks that must be done to make the product or deliver the service.
a. systems
c. functional field
b. customer relationship
d. operations
ANS: C

6.

REF:

1.5

Managing a sports team is an excellent example of a purposeful effort that is enhanced by using the
_____ approach.
a. systems
c. functional field
b. customer relationship
d. operations
ANS: A

REF:

1.5.5

7. Similarities between services and manufacturing can be noted when service operations are based upon
_____ in information processing.
a. identical methods
c. high volume
b. repetitive steps
d. similar steps
ANS: B

REF:

1.7.3

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8. One of the most important functions of the P/OM system is _____. Raw materials and components have lower utility (for customers) before this function is employed.
a. transformation
c. creation
b. translation
d. production
ANS: A

REF:

1.11

9. _____ needed to carry out the transformation function determines the production rate.
a. Time
c. Input
b. Space
d. Cost
ANS: A

REF:

1.11

10. A Stage _____ company is a P/OM innovator. It has short and long term planning horizons that are integrated. a. IV
c. I
b. V
d. III
ANS: A

REF:

1.15 (4)

11. _____ is the stage at which P/OM development is internally supportive to the company’s competitive position. a. Stage I
c. Stage III
b. Stage II
d. Stage IV
ANS: C

REF:

1.15 (3)

12. P/OM strategic thinking is used to help find the best product line for the marketplace and then to make these products at the___.
a. lowest cost.
c. maximum productivity level.
b. highest quality.
d. all of the above
ANS: D

REF:

2.2

13. The supplier-producer-customer value chain, by definition adds value at every step, which illustrates strategic impact operating on a _____ scale.
a. local
c. global
b. organizational
d. centralized
ANS: C

REF:

2.4

14. A first major step in the history of P/OM development was
a. scientific management.
c. interchangeable parts.
b. lean production systems.
d. global competition.
ANS: C

REF:

Figure 2.1

15. In 1912, _____ developed sequenced assembly, which allows assembly to be a continuous flow shop process. a. Adam Smith
c. Frederick W. Taylor
b. Henry Ford
d. Walter Shewhart
ANS: B

REF:

2.5.4
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16. Often _____ technology is imposed on _____ processes by employees who lack training and experience with the new technology. Product life is short. This allows little time to enjoy the advantages of new technology applied to evanescent and even obsolescent product lines.
a. new; old
c. old; old
b. new; new
d. old; new
ANS: A

REF:

2.4.1

Q 17: If inputs increase by 30% and outputs decrease by 15%, what is the percentage change in productivity? a) 100% decrease
b) 11.54% increase
c) 34.62% decrease
d) 15% increase
e) 15% decrease
Ans: c

Q 18: A firm produces handbags using three workers. On Tuesday, Jane completed 60 bags in 6 hours, Ron completed 50 bags in 7 hours, and Mary completed 80 bags in 5 hours. What was the overall productivity of the firm?
a) 7.92 bags/hour
b) 11.05 bags/hour
c) 10.00 bags/hour
d) 10.56 bags/hour
e) 61.67 bags/hour
Ans: d

Q 19: Johnny employs five painters. He collected the following data from last week.
Painter
Hours
Walls Completed
Julius
40
60
Margaret
32
68
Dave
50
78
Suzy
36
70
Fawn
44
74
Which painter was least productive last week?
a) Julius
b) Margaret
c) Dave
d) Suzy
e) Fawn
Ans: a

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Q 20: A company used to produce 300 units every day, but 20% of the units were defective. After installing a new process, the defect rate has been reduced to 5%, while output has remained the same. What is the percent increase in productivity due to installing the new process?
a) 15.79%
b) 0.00%
c) 15.00%
d) 18.75%
e) 75.00%
Ans: d

Q 21: Based on the demand data for an item A for last two weeks, you do a trend analysis and find the trend equation to be Y = 50 + 4X. The company works five days (Monday through Friday) per week. Make a forecast for Tuesday of week 3 for this product.
a)
b)
c)
d)
e)

62
58
98
114
Can not be determined

Answer: 98

Q 22: Given the following data, use exponential smoothing (α = .2) to develop a demand forecast for period 3. Assume the forecast for the initial period (period 1) is 5. What is the forecast for period 3? (Note: You do not need additional information to answer this question). Period
1
2
a)
b)
c)
d)
e)

Demand
7
9

4.68
5.40
6.12
9.00
Can not be determined

Answer: 6.12

Q 23: Joe’s Equipment Distributors sells “Low and Loud” brand lawnmowers. Total demand in 2010 is expected to be 2000 units. Given the historical sales figures listed below, find the forecast for the summer quarter in 2010 using the seasonal forecasting model.

Fall
Winter
Spring
Summer

2007
50
150
500
400

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2008
80
450
600
490

2009
120
510
700
610

a)
b)
c)
d)
e)

close to 452 close to 654 close to 500 close to 610 close to 800

Answer: b

Q 24:

A firm has the following order history over the last 6 months.
January
February
March
April
May
June

120
95
100
75
100
50

What would be a 3-month weighted moving average forecast for July, using weights of 40% for the most recent month, 30% for the month preceding the most recent month, and 30% for the month preceding that one?
a)
b)
c)
d)
e)

Close to 105
Close to 76
Close to 75
Close to 74
Close to 72

Answer: e

Q 25:

What is the mean absolute deviation of the following forecasts?
Month
Jan.
Feb.
Mar.
Apr.

a)
b)
c)
d)
e)

Actual Sales
614
480
500
500

Forecast
600
480
550
600

41
-34
164
100
25

Answer: a

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Q 26:

Consider the data listed below.

Month
Jan.
May

Actual Demand
10,000
14,000

Forecast (using 4-month moving average)
13,500

What is the 4-month moving average forecast for June? Identify the correct answer. (Note:
You do not need additional information to answer this question).

a) 14,000
b) Not enough information is given to answer the question.
c) 14,500
d) 13,500
e) 15,333
Answer: c
Q 27: In exponential smoothing, what values can the smoothing constant, , have?
a) [1 to 1]
b) [1 to ]
c) [0 to ]
d) [0 to 1]
e) [ to ]
Answer d

Q 28: The larger the value of  in the exponential smoothing method of forecasting method, the greater the method's responsiveness to changes in demand.
(a) True

(b) False

Answer: a

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Q 29: Find the value of the tracking signal at the end of month 6 based on the actual demand and forecast given in the following table.

Month
Actual
Demand
Forecast

a)
b)
c)
d)
e)

1
715

2
675

3
640

4
587

5
702

6
760

700

645

660

648

655

718

Close to 1.46 close to 1.48 close to 1.50 close to 35 close to 53

Answer: b

Q 30: Which of the following statements is true on the basis of the six-month data given in the following table?
Month
Actual
Demand
Forecast
a.
b.

1
715

2
675

3
640

4
587

5
702

6
760

700

645

660

648

655

718

The demand is being overestimated.
The demand is being underestimated.

Answer: b

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