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FINALTERM EXAMINATION 
Fall 2011
MGT613- Production / Operations Management

Question No: 1 ( Marks: 1 ) - Please choose one 
Which one of the following is a measure of productivity that involves measuring inputs and outputs using a common unit of measurement? 
► Multifactor 
► Partial 
► Single 
► Total 

Question No: 2 ( Marks: 1 ) - Please choose one 
Which of the following is NOT usually considered a general characteristic of a service? 
► Production and sales cannot easily be separated functionally 
► Many services involve both tangible and intangible outputs 
► Production and consumption can always be separated 
► Degree of customer contact is high 

Question No: 3 ( Marks: 1 ) - Please choose one 
Which of the following statements corresponds to an order-winning characteristic? 
► A factor which may be significant in other parts of the organization 
► A factor which gives an organization a competitive edge 
► A factor which serves as a minimum standard for purchase 
► A factor which increases the profitability of the organization 

Question No: 4 ( Marks: 1 ) - Please choose one 
Which one of the following correctly explains the elements of a good forecast? 
► Timely, having a purpose, accurate, written, reliable, meaningful 
► Timely, accurate, judgmental, correctness, verbal, simple to use 
► Timely, accurate, reliable, meaningful, written, simple to use 
► Timely, accurate, reliable, consistent, meaningful, written, simple to use 

Question No: 5 ( Marks: 1 ) - Please choose one 
Which one of the following factors provides a basis for comparing alternative forecasting techniques? 
► Time dimension 
► Reliability factor 
► Degree of accuracy 
► Measuring units 

Question No: 6 ( Marks: 1 ) - Please choose one 
Which one of the following is an outcome of MINIMAX regret? 
► The best of the worst possible payoff 
► The best possible payoff 
► The best average payoff 
► The least of the worst regret 

Question No: 7 ( Marks: 1 ) - Please choose one 
Which one of the following is NOT a step of decision making process? 

► Develop alternatives 
► Monitor results 
► Consider risk averseness strategies 
► Specify criteria for decision 

Question No: 8 ( Marks: 1 ) - Please choose one 
Effective capacity is influenced by all of the following factors EXCEPT: 


► Facilities 
► Product mix 
► Processes 
► Operations 

Question No: 9 ( Marks: 1 ) - Please choose one 
Which one of the following defines the range of the smoothing constant (Alpha)? 
► 2 and -2 
► 1 and -1 
► 0 and -1 
► 0 and 1 (not sure) 

Question No: 10 ( Marks: 1 ) - Please choose one 
In exponential smoothing model, α denotes: 


► Smoothing constant 
► Actual forecast 
► Forecast error 
► Previous forecast 

Question No: 11 ( Marks: 1 ) - Please choose one 
Which one of the following refers to using some of the components of old products in the manufacturing of new products? 

► Manufacturability 
► Remanufacturing 
► Robust design 
► Automation 

Question No: 12 ( Marks: 1 ) - Please choose one 
Which one of the following refers to a team having representatives from different functional areas of the organization? 
► Traditional work ***** 
► Self-directed team 
► Cross-functional team (no ref, my opinion) 
► Self motivated team 

Question No: 13 ( Marks: 1 ) - Please choose one 
Who introduced the use of statistical control charts to Japanese manufacturers? 
► Edwards Deming 
► Joseph Juran 
► Kaoru Ishikawa 
► Philip Crosby 
The originally concept is of Walter Shewhart but was promoted to Japanese manufacturers by the Edward Deming 

Question No: 14 ( Marks: 1 ) - Please choose one 
Mr. Ali purchased a TV set. After a period of a year, the picture quality started deteriorating. He went to the company and complained and the company responded subsequently. Which of the following dimensions of quality would come into play? 
► Reliability 
► Conformance 
► Serviceability 
► Aesthetics 

Question No: 15 ( Marks: 1 ) - Please choose one 
Who proposed the concept of "total quality control" in the mid 1950s? 
► Armand Feigenbaum 
► G.S Radford 
► W. Shewhart 
► David Gravin 

Question No: 16 ( Marks: 1 ) - Please choose one 
Which of the following is a pair of service quality dimensions? 
► Reliability and Responsiveness 
► Uniqueness and Universality 
► Specification and Security 
► Reliability and Reputation 

Question No: 17 ( Marks: 1 ) - Please choose one 
Which of the following best describes the ISO? 
► International Organization for Statements 
► International Operations for Statements 
► International Organization for Standardization 
► International Operations for Statements 

Question No: 18 ( Marks: 1 ) - Please choose one 
Which of the following stage of Deming's wheel involves evaluating the improvement plan? 
► Plan 
► Do 
► Check 
► Act 

Question No: 19 ( Marks: 1 ) - Please choose one 
What would be the total cost of inventory, if a firm holds 1000 units of a product 'A', where the carrying cost is Rs. 5 per unit? 
► Rs. 995 
► Rs. 5000 
► Rs. 1050 
► Rs. 200 

Question No: 20 ( Marks: 1 ) - Please choose one 
The optimal order quantity shows a trade-off between which one of the following sets of costs? 
► Carrying costs and shortage costs 
► Carrying costs and ordering costs 
► Carrying costs and stockout costs 
► Carrying costs and setup costs 

Question No: 21 ( Marks: 1 ) - Please choose one 
Which one of the following mathematical expressions can be employed to compute annual carrying cost? 
► (Q-2)H 
► (Q+2)H 
► (Q÷2)H 
► (Q×2)/H 

Question No: 22 ( Marks: 1 ) - Please choose one 
Which of the following is used to store information about the status of each item with respect to time period? 
► Master schedule 
► Bill of materials file 
► Inventory records file 
► Rough – cut capacity plan 

Question No: 23 ( Marks: 1 ) - Please choose one 
Which of the following compares the known and estimated future capacity requirements? 
► Capacity reports 
► Operations reports 
► Load reports 
► Inventory records 

Question No: 24 ( Marks: 1 ) - Please choose one 
Which of the following is the first step of Capacity planning? 

► Initial feasibility report is prepared 
► Master schedule is tested for feasibility 
► Adjustments are made in master schedule before it finalizes 
► Material requirements are ascertained 

Question No: 25 ( Marks: 1 ) - Please choose one 
Which of the following are the priorities emphasized most often in JIT system? 
► High quality and minimal wastage 
► Low cost and consistent quality 
► Low inventory and consistent material supply 
► Low cost and low inventory 
(Organizations should develop a demand base system so less waste is generated and good management of high quality, small lot sizes, good quality, standardized components and work methods is ensured.) (page no. 165) 

Question No: 26 ( Marks: 1 ) - Please choose one 
Just Just in Time system maintains inventory with which of the following lot size/sizes? 
► Small 
► Medium 
► Large 
► Can be small and medium both 

Question No: 27 ( Marks: 1 ) - Please choose one 
Which of the following statements is TRUE about a Gantt chart? 
► It represents an important event in the completion of a project 
► It relates interdependent activities to their completion time 
► It arranges events in order of importance 
► It is used to schedule independent activities 

Question No: 28 ( Marks: 1 ) - Please choose one 
Network activities are used to determine all of the following EXCEPT: 
► Critical path 
► Budgeted cost 
► Slack time 
► Expected project duration 

Question No: 29 ( Marks: 1 ) - Please choose one 
With reference to Network activities, what does the term 'EF' stand for? 
► Equal Finish 
► Economic Finish 
► Early Finish 
► Easy Finish 

Question No: 30 ( Marks: 1 ) - Please choose one 
Which one of the following is NOT an element of a queuing system? 
► Population source 
► Waiting line 
► Order processing 
► Logistics 

Question No: 31 ( Marks: 1 ) - Please choose one 
Which one of the following refers to translating the voice of the customer into technical design requirements? 
► Concurrent design 
► Design for manufacture 
► Robust design 
► Quality function deployment 

Question No: 32 ( Marks: 1 ) - Please choose one 
Which one of the following is the goal of work sampling? 


► Studying Individual human motions that are used in a job task 
► Determining the length of time it will take to undertake a particular task
► Determining the amount of time a worker spends on various activities
► Specifying the content and methods to perform a job 

Question No: 33 ( Marks: 1 ) - Please choose one 
Training program and quality audits come under which type of costs that an organization has to bear as cost of service quality? 
► Internal failure cost 
► Recovery cost 
► Prevention cost 
► Detection cost 

Question No: 34 ( Marks: 1 ) - Please choose one 
Which one of the following is the most important criteria in selecting winners for a quality award? 
► Strong motivation 
► Quality management practices 
► Employee empowerment 
► Business performance results 

Question No: 35 ( Marks: 1 ) - Please choose one 
Which of the following is NOT a disadvantage of excessive overtime? 
► Decline quality of work 
► Work schedules become well-defined 
► 150 percent expensive of the regular time-pay rate 
► Low Productivity 

Question No: 36 ( Marks: 1 ) - Please choose one 
A company mostly involved in transportation and shipping costs than construction and land costs is probably part of which of the following industries? 
► Heavy manufacturing 
► Retail and service 
► Warehouse and distribution 
► Light industry 

Question No: 37 ( Marks: 1 ) - Please choose one 
A company is operating under a continuous review system. It has an average demand of 50 units per week for the item it produces. The lead time for the item is 6 weeks, and it costs the company $30 to process each order. The holding cost for each unit is $10 per year. The company operates 52 weeks per year. What is the economic order quantity (EOQ) for this item? 
► Greater than 175 units but less than or equal to 200 units 
► Less than 175 units 
► Greater than 200 units but less than or equal to 230 units 
► Greater than 230 units 

Annual Holding Cost 
EOQ sqr root of 2DS 
H 
= 2(Annual Demand)(Order or Setup Cost) 
Annual Holding Cost 
Sqr root of = 2(50)(30) 
10 
Question No: 38 ( Marks: 1 ) - Please choose one 
Perpetual system of inventory management is also known as which of the following? 
► First-in-first-out 
► Probability model 
► Fixed-order quantity 
► Periodic review 

Question No: 39 ( Marks: 1 ) - Please choose one 
If a manager wants to see the effect of change in Master Production Schedule (MPS) on purchasing requirements for certain suppliers, which of the following system would help in this regard? 
► Material Resource Planning system (MRP) 
► Enterprise Resource Planning system (ERP) 
► Capacity Requirement Planning system (CRP) 
► Manufacturing Resource Planning system (MRPII) 

Question No: 40 ( Marks: 1 ) - Please choose one 
If alpha = 0, how many containers are needed with the given data? 
K = 1500 (0.8 + 0.2) (1 + 0) 
270 
► 6.5 Containers 
► 7 Containers 
► 6 Containers 
► 9 Containers 

Question No: 41 ( Marks: 1 ) - Please choose one 
Eliminating disruptions and excess inventory are _____________ in Just-In-Time production systems. 



► Tactical goals 
► Strategic goals 
► Secondary goals 
► Primary goals 

Question No: 42 ( Marks: 1 ) - Please choose one 
In supply chain management Electronic Data Interchange (EDI) and Bar coding is a characteristic of which of the following? 
► Logistics 
► Technology 
► Autonomation 
► Just-In-Time System 

Question No: 43 ( Marks: 1 ) - Please choose one 
In labor-limited environment, in which resource constraint is the amount of worker available, which of the following is the best option for effective scheduling in a manufacturing firm? 
► Hire more skilled labor for the job to be completed 
► Workers should be trained to work on a variety of machines 
► Assign labor to the next workstation irrespective of their skills 
► More machines should be installed for flexibility of operations 

Question No: 44 ( Marks: 1 ) - Please choose one 
Tasks are easily scheduled in which of the following production environments? 
► Intermediate-volume-systems 
► Low-to-medium volume production (Job shop) 
► Medium-to-high volume production (Flow shop) 
► Optimal production mixes 

Question No: 45 ( Marks: 1 ) - Please choose one 
Which of the following is the necessary qualification for a project manager? 


► PMP certification 
► PMD certification 
► FMA certification 
► CMP certification 

Question No: 46 ( Marks: 1 ) - Please choose one 
Queuing analysis aims to minimize which of the given costs? 
► Both customer waiting cost and service capacity cost 
► None of the given options 
► Customer waiting cost 
► Service capacity cost 

Question No: 47 ( Marks: 1 ) - Please choose one 
Which of the following is a cause of development of waiting lines? 
► Customer arrival rate varies through out the day 
► Time required to process a customer may vary 
► Some transactions are complicated and require above average process time 
► All of the given options 

Question No: 48 ( Marks: 1 ) - Please choose one 
During the period of high unemployment or when low-skilled labor is acceptable, which of the following strategy would be cost effective? 
► Chase demand strategy 
► Level capacity strategy 
► Proactive strategy 
► Mixed or hybrid strategies 

Question No: 49 ( Marks: 3 ) 
As an operations manager of a firm what significant issues you have to consider while implementing supply chain management? 

Elements of Supply Chain Management (page no, 174) 

Question No: 50 ( Marks: 3 ) 
How would you reveal the importance of maintaining good relationship with suppliers in a JIT system? 

Increased emphasis on supplier relationships: A company without inventory does not want a supply system problem that creates a part shortage. This makes supplier relationships extremely important. 
Supplies come in at regular intervals throughout the production day. Supply is synchronized with production demand and the optimal amount of inventory is on hand at any time. When parts move directly from the truck to the point of assembly, the need for storage facilities is reduced. 


Question No: 51 ( Marks: 5 ) 
As operations manager of a manufacturing firm, how can you judge the effectiveness of inventory management? 
An Inventory Management System would be called Effective if it is able to fulfill the following requirements. 
1. A system to keep track of inventory. 
2. A reliable forecast of demand. 
3. Knowledge of lead times. 
4. Reasonable estimates of: 
a. Holding costs 
b. Ordering costs 
c. Shortage costs 
5. A classification system. 


Question No: 52 ( Marks: 5 ) 
What is bullwhip effect? What are its consequences? 

Bullwhip effect represents the real life time situation that Inventories are progressively larger moving backward through the supply chain. 

Consequences: 
In addition to greater safety stocks, the described effect can lead to either inefficient production or excessive inventory as the producer needs to fulfill the demand of its predecessor in the supply chain. This also leads to a low utilization of the distribution channel. In spite of having safety stocks there is still the hazard of stock-outs which result in poor customer service. Furthermore, the Bullwhip effect leads to a row of financial costs. Next to the (financially) hard measurable consequences of poor customer services and the damage of public image and loyalty an organization has to cope with the ramifications of failed fulfillment which can lead to contract penalties. Moreover the hiring and dismissals of employees to manage the demand variability induce further costs due to training and possible pay-off