Which of the following is not an assumption of the EOQ model?

Engineering by Geoffrey

select the best answer for each question. Excel answer sheet .

1. Which of the following is not an assumption of the EOQ model?

a) demand is known and constant
b) no shortages allowed.
c) lead time is determined by quantity ordered.
d) order quantity is received all at once.
2. A service level of 95% means there is a 0.95 probability.
a) Of meeting all demand
b) Of a stock-out
c) That supply will exceed demand
d) That demand will be met during the lead time
3. A company produces a product which is designed to weigh 10 oz., with a tolerance of + 0.5 oz. The
process produces products with an average weight of 9.95 oz. and a standard deviation of 0.10 oz. The
process capability ratio for this process is with z = 3.
a) 1.67
b) 0
c) 0.8333
d) -1.67
Given the following weekly demand figures below, answer the next 2 questions below:
4. Using a three-week moving average, what is your forecast for week six?
a) 30
b) 35
c) 32.5
d) 25
5. What is the exponentially smoothed forecast for week 2? (Use F1 = 25 and alpha = .2)
a) 21.0
b) 24.0
c) 32.0
d) 53.0
6. Companies often outsource to
a) Focus on core competencies.
b) Achieve greater flexibility.
c) Reduce costs.
d) All of the above Week Demand
1 20
2 60
3 30
4 20
5 40

 

Metropolitan State University DSCI 6681 Final Exam Spring 2023 2
7. What is the exponentially smoothed forecast for week 6? (Use F5 = 33 and alpha = 0.0)
a) 33
b) 31.7
c) 30
d) 20
e) Given the following MRP matrix for Item E:
8. The overriding of the S&OP’s production and sales plans with uncoordinated informal plans typically
result in all except:
a) Improved overall company performance
b) Confusion and over reaction
c) Increased stress levels within the company’s staff
d) Decreased ERP performance
e) All of the above
9. A ___________ is an up-and-down movement in demand that repeats itself over a lengthy time period
of more than a year.
a) Trend
b) seasonal pattern
c) random variation
d) cycle
10. The demand for an electronic component is normally distributed with an average daily demand of 500
units and a standard deviation of 50. The lead time for the component is 9 days. If a service level of
95% is desired, then the company’s safety stock for this component is approximately
a) 150 units.
b) 247 units.
c) 336 units.
d) 740 units
11. In a production environment, examples of TOC Exploitation Tactics include all except:
a) Make sure all material is of good quality
b) Assure constraint resource runs as much as possible
c) Schedule the constraining resource the best way possible to maximize throughput
d) Create a buffer between the material release point and the constraining resource
e) None of the above
12. Traditionally, inventory turnover is computed by
a) Dividing the annual cost of goods sold by the average aggregate inventory value.
b) Dividing the average aggregate inventory value by costs of goods sold.
c) Multiplying the average aggregate inventory value by cost of goods sold.
d) Subtracting cost of goods sold from the average aggregate inventory value
13. In general, we know that forecasting has all but the following characteristics.
a) The more elaborate and complex the formula used, the more accurate the forecast will be.
b) Forecasts tend be wrong.
c) Forecasts are more accurate for larger groups of items.
d) Forecasts are more accurate for shorter periods of time.

 

Metropolitan State University DSCI 6681 Final Exam Spring 2023 3
14. A quick oil change company employs 3 people to change the automobile oil for its customers. Before
the customer can get their oil changed, they first meet with the manager to get all needed information,
averaging 1 minute for this process. Once the customer completes order entry, it takes an average of
25 minutes to the complete the oil change. After this, the customer meets with the manager again and
it takes 3 minutes to complete the payment process. On average, 5 customers arrive at the company
per hour. Based on this, what is the average number of customers physically inside the company?
a) 2.42
b) 5.00
c) 10.30
d) 2.08
15. All of the following about S&OP is true except:
a) Performed at the product/service family level
b) Senior management involvement is not needed
c) Operations commits to make/service the operations plan
d) Used as input into the MPS
e) Typically conducted monthly
16. The MRP process of determining requirements for lower-level items based on the master production
schedule is referred to as
a) Lot sizing.
b) Netting.
c) Backward scheduling.
d) Exploding
17. The lessons of Kingsman formula include all except:
a) Management must decide the tradeoffs in the business environment between these factors
b) Large utilization in organizations can result in people burnout
c) If utilization is high, common variation will have small negative impact
d) If used as the primary operations performance measure of resources, it may lead to sub-optimal
system performance (lower profit)
18. In TOC all are true except:
a) The level of utilization of a non-bottleneck is determined by the system constraint
b) In non-bottlenecks, any extra production made there will be used by the market quickly
c) In a true internal bottleneck, all production can be immediately sold and turned into Throughput
d) Most resources are non-bottlenecks
19. In MRP time phasing is
a) The process of scheduling forward from today’s date to determine the earliest time a job can be
completed
b) The process of subtracting an item’s lead time from its due date to determine when an order
should be released
c) The process of scheduling backward from a due date to determine when to begin a job
d) The process of determining requirements for lower-level items by multiplying the planned orders
of parent items by the quantity per assembly of component items
20. Independent demand inventory consists of:
a) Inventory whose demand comes from independent suppliers
b) Inventory that is independent of any known rules of demand and supply
c) Demand that is related to the demand for another item
d) Inventory whose demand is determined by the marketplace
e) None of the above

 

Metropolitan State University DSCI 6681 Final Exam Spring 2023 4
21. Techniques to help reduce the uncertainty of forecasting include all expect:
a) Try to minimize the need to forecast parts of the operation, rather use actual demand instead (Pull)
where possible
b) Utilize a complex computerized forecasting system
c) Assure someone is responsible for the forecast process
d) Use processes that are less reliant on forecasting
e) Try to reduce lead times so the forecasting efforts are minimized i.e.
22. The primary cost associated with the level production strategy is the cost of
a) holding inventory.
b) hiring and firing workers.
c) overtime.
d) outsourcing (subcontracting)
23. When management accepts more orders that can be produced, which law of operations has been
violated?
a) Variation/Uncertainty reduces global output
b) Input into the system must be carefully managed or WIP, Lead Times, Service Levels and Excess
Expediting will reduce throughput
c) The basic rule describing the overall relationship between output, inventory and cycle time is
Little’s Law
d) At any given time, every operational system will have a constraint that limits the global output.
24. The planned order release for period 3 would be
a) 100
b) 200
c) 270
d) 300
25. Bills of materials are kept current with changes using:
a) Master scheduling systems
b) Engineering change order systems
c) Inventory tracking systems
d) Capacity planning systems
e) Manufacturing execution systems
26. Lead time for completion of a job is a function of both:
a) Capacity and demand
b) Demand and priority decisions
c) Capacity and priority decisions
d) Capacity and supply decisions
e) None of the aboveITEM: E
Lot Size: L4L LT: 3
Period
1 2 3 4 5 6 7
Gross Requirements 200 100 200 200 300 200 300
Schedule Receipts 300
Project on Hand 500
Net Requirements
Planned Order Receipts
Planned Order Releases

 

Metropolitan State University DSCI 6681 Final Exam Spring 2023 5
27. On 3/1/24, a private company has $150,000 in building assets, $300,000 in accounts receivable and
$200,000 in accounts payable. The CGS for period is $100,000 and depreciation expenses are
$50,000. What is the owners’ equity for this company at the end of the last period?
a) 200,000
b) 450,000
c) 250,000
d) None of the above
28. All are true about DBR except
a) Time buffers are established to account for common cause variation
b) If there is no true internal constraint, then the market becomes the constraint
c) The Drum is a finite schedule at the constraint
d) Material release schedules are based on forward scheduling from the drum schedule
e) All are true.
29. The primary cause of the key benefits of a pull system is that
a) there is a limit on the maximum amount of inventory in the system
b) It is based on demand.
c) It has short lead times.
d) Variation has been reduced.
30. Which of the following inputs into MRP must have excellent data integrity for MRP to be effective?
I. Bill of Materials
II. Inventory information
III. Master Schedule
IV. Process routing precedence logic
a) I and II
b) II, III and IV
c) I, II, III
d) All are needed.
31. The most effective aggregate planning strategy depends on
a) The demand distribution
b) The competitive position
c) The firm’s cost structure
d) All of the above
32. According to TOC, when a constraint is internal, we should evaluate product mix decisions based on:
a) The product with the highest profit margin
b) The product with the lowest unit cost
c) The product with least activity-based allocations
d) The throughput generated per unit time on the constraint
e) Marketing considerations
Note: The next 2 questions regard product A. Demand for product demand A is 60 a day. The company
reviews its orders every 20 days and maintains a safety stock level of 180. The lead-time A is 2 days and
today there are 260 units in stock.
33. The target inventory level for item A is:
a) 1500
b) 1200
c) 120
d) 1800

 

Metropolitan State University DSCI 6681 Final Exam Spring 2023 6
34. If an order for A is placed today, the order quantity should be:
a) 1130
b) 1500
c) 1240
d) 1340
35. If a chase demand strategy is used, then the number of workers hired at the start of quarter 2 is:
a) 10
b) 20
c) 35
d) 80
36. If a level production strategy is used, then the inventory at the end of quarter 3 is
a) 18,750
b) 12,500
c) 25,650
d) 31,250
37. A computerized inventory system checks inventory levels at the end of the week and produces
suggested orders for the coming week. What kind of system is this?
a) A periodic review system
b) A continuous review system
c) A service level system
d) An ABC inventory system.
38. Examples of fixed costs include all except:
a) Raw materials
b) Rent
c) Salaries
d) Fringe benefits
e) Property taxes
39. Receiving, handling, and shipping costs are examples of
a) shortage costs.
b) carrying costs.
c) ordering costs.
d) none of the above.
40. If a factory has 100,000 units of materials in the system and if the average throughput of system is
5,000 units per day, then the average lead-time is.
a) 0.5 days.
b) 20 days.
c) 0.05 days.
d) 100 days.The information for the next 2 problems is shown here. The following information relates to a
company’s aggregate production planning activities:
§ Beginning Workforce = 35 workers
§ Production per Employee = 1,250 units per
quarter
§ Hiring Cost = $500 per worker
§ Firing Cost = $1,000 per worker
§ Inventory Carrying Cost = $20 per unit per
quarter
Quarter Demand Forecast
1 75,000
2 100,000
3 75,000
4 125,000

 

Metropolitan State University DSCI 6681 Final Exam Spring 2023 7
41. The selection of suppliers is called.
a) Outsourcing
b) Procurement
c) Sourcing
d) None of the above
42. When the company is facing a market constraint, operations should focus on:
a) Reducing operational costs
b) Reducing operation capacity to below the market constraint
c) Do what is needed to support the market.
d) Use variable costing instead of absorption costing
e) All of the above
43. A restaurant currently uses 62,500 boxes of napkins each year at a constant daily rate. The cost to
order napkins is $200.00 per order and the annual carrying cost for one box of napkins is $1.00. If the
restaurant orders the economic order quantity each time an order is placed, then ______orders are
placed during the year.
a) 13
b) 15
c) 20
d) 25
44. The traditional sequencing rule that minimizes average tardiness for a set of jobs to be processed on
one machine is
a) First-come-first served (FCFS).
b) Longest processing time (LPT)
c) Shortest process time (SPT)
d) Due date (DDATE)
45. All of the following about operations management are true except
a) Variation reduces the overall output
b) Every system has a constraint
c) If more material work goes into the system than what the system can produce, we will get more
out of the system assuming we can expedite any material
d) Little’s law is the primary law of flow in a stable operation
e) Various buffers are used to manage variation.
46. In capacity planning, the feasibility of the sales and operations production plan is verified by a
a) Resource requirements plan
b) Rough-cut capacity plan
c) Capacity requirements plan
d) Master production schedule

 

Metropolitan State University DSCI 6681 Final Exam Spring 2023 8
47. A company sells widgets. It is made up of 6 resources, each with the capacity shown in the diagram.
Recent market efforts have pushed sales to 100 widgets/day. The suppliers can provide up to 200
widgets/day in material & information if needed. Customer service can enter up to 115 widgets/day.
Where is this company’s bottleneck?
a) Resource 6
b) Resource 3
c) Customer Service
d) Market/Sales
e) None of the above
48. A forecasting model has produced the following forecasts: At the end of May the tracking signal
would be
a) 0.000.
b) 0.667
c) 1.333.
d) 2.143
49. A load profile compares.
a) requirements for all lower-level items to higher-level items.
b) cumulative lead times to projected lead times.
c) the quantities in which items should be produced to actual demand.
d) released and planned orders with work center capacity.
50. Use the identical original conditions presented in the lecture notes,
the “No-Hassle” plant is shown below. Assume we make a
marketing investment that increases the market demand for P by 10
units/week. What would the new PQ product mix be?
a) 50 P’s, 20 Q’s
b) 110 P’s, 25 Q’s
c) 110 P’s, 30 Q’s
d) 80 P’s, 30 Q’