1. Capacity in excess of expected demand that is intended to offset uncertainty is a:

Answer:  capacity cushion.

2. Students at a major university must go through several registration steps. Officials have observed that it is typically the case that the waiting line at the fee-payment station is the longest. This would seem to suggest that the fee-payment station is the ___________ in the student registration process.

Answer: Bottleneck 

3. The decision to outsource opens the firm up to certain risks, among them _________ and ________.

Answer:  lower costs; fewer task-specific investments

4. When buying component parts, risk does not include:

A. need to disclose proprietary information.

B. vendor viability.

C. product liability.

D. loss of control.

E. interest rate fluctuations.

Answer:interest rate fluctuations.

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. What would be the county’s annual profit if they were to process 4,000 prisoners per year at this new location?

Answer: $50,000.

Step-by-Step explanation

     To compute, get the product of the number of prisoners and the $75 commission. Then, subtract the product of the number of prisoners and the estimated paperwork cost. Lastly, subtract the $50,000 needed to be paid per lease. Hence, the counties annual profit would be:

      Annual Profit = $75 × $4,000 – $50 × $4,000 – $50,000 

                             = $300,000 – $200,000 – $50,000

                             =  $100,000 – $50,000

      Annual Profit = $50,000

    Therefore, the correct answer for the question is the third option: $50,000.

6. Which of the following is not a characteristic of layout decisions in system design?

A. substantial investment of both money and effort

B. long-term commitment

C. significant impact on short-term efficiency

D. usually well-received by operative personnel

E .all of the above

Answer: usually well-received by operative personnel

7. Laser technology used in surgical procedures is an example of technological advances in:

Answer: Process

8. Daily capacity of a product layout is determined by:

Answer: operating time divided by cycle time.

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 should be the actual cycle time for this production?

Without considering forecasted demand, what is the minimum possible cycle time for this production line?
A. 34 seconds
B. 38 seconds
C. 10 seconds
D. 152 seconds
E. 20 seconds

Answer: 38 seconds

10. 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 total flow (loads per week) between department Y and department Z?

Answer: Total Loads(Y,Z) = loads (YZ) + loads (ZY) = 160 + 140 = 300 loads

11. A methods and measurements analyst needs to develop a time standard for a certain task. 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) 84 76 80 84 76

What is the standard time for this task if the employee worked at a 25 percent faster pace than average and an allowance of 20 percent of job time is used?

Answer: 80seconds

12. In a stopwatch time study, the number of cycles that must be timed is a function of:

(I) the variability of observed times.

(II) the desired accuracy for the estimated job time.

(III) the desired level of confidence for the estimated job time.

Answer: the variability of observed times.

13. The manager of Lawn and Garden Services would like to estimate the proportion of her employees’ time spent performing various gardening and lawn care activities. She has made 400 random observations of a typical worker, with the following results:

Activity Time Observed

Mowing 200

Trimming 80

Raking 40

Miscellaneous 80

________________________________________

Between what limits can the manager be 68.26 percent confident about the true proportion of time spent mowing?

Answer: 2,500

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

What is the standard time for this task if the employee worked at a 20 percent faster pace than average, and an allowance of 20 percent of the workday is used?

A. 24 seconds
B) 25 seconds
C) 30 seconds <–
D) 20 seconds
E) 28.8 seconds
Answer: ST = NT x AF
AFday = 1/1-A
NT = OT x PR
OT = Mean
PR = 1.2

NT = 20 x 1.2 = 24
AFday = 1/1-.2 = 1.25
ST = 24 x 1.25 = 30

15. Which of the following is not an advantage of time-based pay systems?

Answer: incentives to increase output

16. Location choice I has monthly fixed costs of $100,000 and per-unit variable costs of $10. Location choice J has monthly fixed costs of $150,000 and per-unit variable costs of $9. At what volume would these locations have equal total costs?

Answer: The indifference point is 50,000 units. Explanation: Giving the following information: Location choice I has monthly fixed costs of $100,000 and per-unit variable costs of $10.

17. Nearness to raw materials would be most important to a:

Answer: manufacturing company

18. In location planning, the location of raw materials, the location of markets, and labor factors are:

Answers: regional factors

19. A location analysis has been narrowed down to three locations. The management needs to select the best location. The critical success factors, their weights, and the ratings for each location are shown below:

	Location	Location	Location
Factor	Wt.	A	B	C
Labor Cost	0.3	70	85	75
Transportation Cost	0.2	82	85	80
Market Access	0.3	90	70	90
Raw Materials Cost	0.1	75	70	90
Utility Cost	0.1	65	90	75

a) The composite score for location A is _____

b) The best location is _____

Answer and Explanation:

The formula for determining composite score is:

CompositeScore=Weights×Location′sRatingCompositeScore=Weights×Location′sRating

a) Calculation of Location A’s composite score:

Factors	Weights (A)	Location A rating (B)	Composite Score (A*B)
Labor cost	0.3	70	21
Transportation cost	0.2	82	16.4
Market access	0.3	90	27
Raw material costs	0.1	75	7.5
Utility Cost	0.1	65	6.5
Total			78.4

Location A’s composite score is 78.4

b) The determination of the composite score is essential to determine the best location, so the locations B and C’s composite scores are as follows:

Location A composite score is 78.4

Calculation of Location B’s composite score

Factors	Weights (A)	Location B rating (B)	Composite Score (A*B)
Labor cost	0.3	85	25.5
Transportation cost	0.2	85	17
Market access	0.3	70	21
Raw material costs	0.1	70	7
Utility Cost	0.1	90	9
Total			79.5

Location B’s composite score is 79.5

Calculation of Location C’s composite score

Factors	Weights (A)	Location C rating (B)	Composite Score (A*B)
Labor cost	0.3	75	22.5
Transportation cost	0.2	80	16
Market access	0.3	90	27
Raw material costs	0.1	90	9
Utility Cost	0.1	75	7.5
Total			82

Location C’s composite score is 82.

Therefore, Location C is the best location.

20. Some communities offer financial and other incentives to ______ new businesses.

Answer: attract

21. Outsourcing some production is a means of supporting a constraint.

Answer: FALSE 

22. The minimum number of workstations for a production line is determined in part by the desired output rate.

Answered: True

23. One important factor that influences productivity is trust between workers and managers.

Answered: True

24. The center of gravity method uses the earth’s center to establish starting grid coordinates (i.e., the 0,0,0 point) in three dimensions (x, y and z).

Answer: FALSE 

25. A strategy that emphasizes convenience for the customers would probably select a single very large facility.

Answer: FALSE 

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