Liberty BUSI411 Exam 2 2019

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

a. line balance.

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b. positioning hedge.

c. margin protect.

d. timing bubble.

e. capacity cushion.

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.

A. Economies of scale

B. Bottleneck

C. first station

Answer: Bottleneck

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

A. lower costs; fewer task-specific investments

B. loss of direct control over operations; need to disclose proprietary information

C. access to greater expertise; greater demand variability

D. greater capacity rigidity; tight knowledge control

E. higher marketing costs; small orders

Answer: greater capacity rigidity; tight knowledge control

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

Answer: Payback

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?

A. $0

B. $75,000

C. $50,000

D. $100,000

E. $300,000

Answer: $0

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:

A. product.

B. facility layout.

C. process.

D. information.

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


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?

A. 32 seconds
B. 38 seconds
C. 40 seconds
D. 76 seconds
E. 152 seconds

Answer: 40 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


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?







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: 28.8

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

1. (I) the variability of observed times.

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

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

Answer: all of the above

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?

A.0 and .683

B.475 and .525

C.45 and .55

D.425 and .575

E.4 and .6

Answer: .475 and .525

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: 30 seconds

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?

A.30,000 units

B.25,000 units

C.40,000 units

D.50,000 units

E.60,000 units

Answer: 50,000 units

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:

Answer: regional factors

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


Factor Wt. A B C

Labor Cost .4 70 80 90

Transportation Cost .2 80 80 60

Market Access .2 90 70 60

Raw Materials Cost .1 50 70 90

Utility Cost .1 80 90 70


If the decision rule is to select the location with the greatest composite score exceeding 80, management should choose:


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






Answer: Tax

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

Answer: Reducing the burden placed on a constraint is an example of overcoming the constraint

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

Answer: True

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


• 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).


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

Answer: True

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