Name:___________________

Section:___________________

Final Exam
BA 301
Fall 2002
S.K. Norman

Version 1

Final Exam

Fall 2002

3 Points each
1.

We strive to lead in the creation, development, and manufacture of the most advanced
information technologies. This is an excerpt from IBMs _________.
a. total quality management plan
b. mission statement
c. competitive advantage
d. strategies

2. An example of a product that is produced using a continuous-process strategy is

a. cars
b. washing machines
c. petroleum
d. cakes
3. Operations management is the
a. management of processes or systems that create goods and/or services.
b. system in which lower-skilled workers use specialized machines to produce high
volumes of standardized goods.
c. plan for achieving organizational goals
d. philosophy that involves everyone in an organization in a continual effort to
improve quality and achieve customer satisfaction.
4. A linear programming goal is called a (an)
a. constraint
b. inequality
c. objective function
d. function
5. A new video arcade is to be constructed in the mall next to the movie theater. A manager
must decide on the size of the arcade. The manager has narrowed the choices to two:
large or small. Two levels of demand are possible: low and high. Payoffs for all
combinations of size choices and demand levels can be estimated. What is the best tool
for this problem?
a. Decision trees
b. Simulation
c. Linear programming
d. Waiting-line analysis
6. Which of the following is used to measure forecast accuracy?
a. expected value of perfect information
b. mean absolute deviation
c. pareto charts
d. X-bar charts
7. A hair salon is an example of
a. job-shop process strategy
b. batch process strategy
c. repetitive-focused strategy
d. continuous process strategy

Final Exam

Fall 2002

8. An ambulance firm in a large metropolitan area is concerned with its response time. For
the last 20 days, they have randomly sampled 4 ambulance calls and measured the
response time for each. The firm has decided to implement statistical process control to
monitor average response time. What is the most appropriate chart(s)?
a. c-chart
b. p-chart
c. x -chart and R chart
d. z-chart
9. What is an advantage of outsourcing?
a. Allows firms to focus on core competition
b. Can be more cost effective
c. Adds capacity without additional fixed costs and overhead
d. All of the above
10. Which of the following is not part of the inventory cost structure?
a. Ordering cost
b. Setup cost
c. Variable cost
d. Holding cost
11. The R chart does which of the following:
a. Calculates intervals of data
b. Collects, organizes, and interprets data
c. Shows sample ranges and monitors variability
d. None of the above
12. The process of identifying other organizations that are best at some facet of your
operations and then modeling them is:
a. Copying
b. Benchmarking
c. Copycatting
d. Continuous improvement
13. The EOQ model reflects the trade-off between
a. Carrying costs and setup/ordering costs
b. Stockout costs and carrying costs
c. Penalty costs and ordering cost
d. Quantity discounts and setup costs
14. An airline ticket counter, with several agents for one line of customers is an example of a
a. single channel, single phase system
b. single channel, multi-phase system
c. multi-channel, single phase system
d. multi-channel, multi-phase system

Final Exam

Fall 2002

15. What combination of x and y will yield the optimum for this problem? NOTE: You do
not need to use the graphical method to answer this question.
Maximize
subject to
a.
b.
c.
d.

$3x + $15y
2x + 4y < 12
5x + 2y < 10
x 0, y 0
x = 2, y = 0
x = 0, y = 3
x = 1, y = 1
x = 1, y = 5

16. Most inventory models attempt to minimize

a. The likelihood of a stockout
b. The number of items ordered
c. The number of orders placed
d. Total inventory based costs
17. The national competition designed to stimulate efforts to improve quality, to recognize
quality achievements of U.S. companies, and to publicize successful programs is the
a. Demming Award
b. Baldrige Award
c. Pareto Award
d. National Benchmark Award
18. A repetitive production system in which the processing/movement of materials/goods
occur just as they are needed and usually in small batches is
a. Supply chain management
b. Just-in-time system
c. MRP system
d. ERP system
19. An appliance manufacturer produces two models of microwave ovens. Both models
require fabrication and assembly work. There are 600 fabrications hours available and
480 hours of assembly. One model has $40 profit, the other contributes $30 profit. The
manufacturer wants to determine how much of each model to produce in order to
maximize profits. The best tool to use for this problem is
a. Decision trees
b. Simulation
c. Linear programming
d. Waiting-line analysis
20. Which of the following describes a vertical integration strategy?
a. having one of a few suppliers
b. integration of activities that procure materials
c. buying suppliers to obtain the ability to produce goods previously purchased
d. none of the above

Final Exam

Fall 2002

21. A successful TQM program incorporates all of the following except

a. continuous improvement
b. employee involvement
c. benchmarking
d. centralized decision-making
22. One of the advantages of Just-In-Time is:
a. Many suppliers
b. Large lot sizes
c. Low product cycle time
d. Push system motivation
23. Which of the following is true regarding the use of simulation?
a. It is always very easy to build a simulation model
b. It is very inexpensive to use a simulation model
c. It always yields optimum solutions
d. It allows time-compression in testing major policy decisions
24. A regional airline is concerned about its record of on-time performance. The Memphis
hub experiences 20 flights each day of the week. The on-time departures for the previous
10 days are: 17, 16, 18, 19, 16, 15, 20, 17, 18, 16. The airline is implementing statistical
process control to monitor on-time performance. What is the most appropriate chart(s)?
a. c-chart
b. p-chart
c. x -chart and R chart
d. z-chart
25. For the two constraints given below, which point is in the feasible solution space of this
maximization problem?
(1) 14x + 6y < 42
(2) x - y < 3
(3) x 0, y 0
a. x = 1, y = 5
b. x = -1, y = 1
c. x = 4, y = 4
d. x = 2, y = 1
26. You are creating a forecast using time-series data for the next year for Nantucket Nectars.
The Juice Guys (Nantucket Nectars) experience particularly high demand during April,
May, June, and July. This type of demand behavior is
a. trend
b. seasonality
c. cyclical
d. random variations
27. Which of the following is an example of dependent demand?
a. demand for burgers at a local McDonalds restaurant
b. demand for ski-lift passes at Snowbowl
c. demand for tires at a Ford truck assembly plant
d. demand for dog food at a Nestle-Purina production plant

Final Exam

Fall 2002

28. Which of the following is NOT a characteristic of a dummy activity?

a. maintain precedence in the CPM network
b. consume time and resources
c. are represented by a dashed line
d. are used when two activities with identical starting and ending events are
encountered.
29. Which of the following was not discussed as part of the psychology of waiting?
a. The more valuable the service, the longer people will wait.
b. The longer the wait, the more likely people will cut in line.
c. Solo waiting feels longer than group waiting.
d. Anxiety makes waiting feel longer.
30. What aggregate planning strategy produces the same amount of product every month?
a. level
b. chase
c. service
d. production
31. If the food service for the university operates a cafeteria with a single serving line, that
system behaves most like a
a. single channel, single phase system
b. single channel, multi-phase system
c. multi-channel, single phase system
d. multi-channel, multi-phase system
32. The planning horizon for aggregate planning is
a. 1-4 weeks
b. 1-2 months
c. 3-18 months
d. 10-20 years
33. Which of the following is not a project scheduling technique?
a. Gantt chart
b. CPM
c. MRP
d. PERT
34. A firm has many options for influencing and absorbing the variation in demand. Which
of the following is a method that attempts to manipulate product demand?
a. inventories
b. part-time workers
c. subcontracting
d. price cuts
35. A waiting line is also known as:
a. channel
b. phase
c. queue
d. arrival rate

Final Exam

Fall 2002

36. Which of the following is NOT an advantage of level scheduling?

a. stable employment
b. lower absenteeism
c. lower turnover
d. matching production exactly with sales
37. What is the longest path through a CPM network called?
a. the information superhighway
b. the key path
c. the critical path
d. the waiting line
38. Which of these is not part of the few suppliers strategy?
a. Little openness
b. Partnership
c. Long term relationship
d. Frequent, small lots
39. In the 4-hour House video several techniques were used to crash the project. Which of
the following was NOT a technique used to crash the 4-Hour House project?
a. increase labor
b. utilize high-technology processes
c. purchase more materials than needed to allow for errors
d. increase planning effort
40. In lot-for-lot ordering, you should order
a. for the entire year
b. for the week
c. what is needed
d. the EOQ
41. In the Juice Guys (Nantucket Nectars) video, a cross-disciplinary project team was
created to
a. implement a new inventory system
b. implement an MRP system
c. implement the Just-in-time approach
d. implement an ERP system
42. Which of the following is NOT a type of inventory held by companies?
a. Raw materials inventory
b. Work-in-process (WIP) inventory
c. Maintenance, repair and operating supplies (MRO) inventory
d. Just-in-time (JIT) inventory
43. What is a benefit of CPM?
a. mathematically complex
b. uses graphical displays
c. subjective time estimates
d. all of the above

Final Exam

Fall 2002

44. A company produces toy cars. Which part is the parent?

a. axle
b. wheels
c. body
d. toy car
Problems (4 points each)
An office furniture company produces three types of desks. They have 153 labor hours of
welders time and 280 labor hours of assembler time, and 100 hours of packaging time available
per day. Hours required to produce a desk for Type I are 1.8 for welding, 1.9 for assembling and
1.2 for packaging. The corresponding figures for Type II are 2.7, 1.2, and 0.8; for Type III 2.5,
2.2, and 1.4. There is storage for 83 desks total. Each unit of Type I, Type II, and Type III desks
produced result in a profit of $475, $575, $500, respectively. Use T1, T2, T3, to represent the
number of Type I desks, Type II desks, and Type III desks, respectively.
Using the above description, answer the next two questions.
45. The objective function to maximize profits for desks is:
a. Max 153T1 + 280T2 + 100T3
b. Max 475T1 + 575T2 + 500T3
c. 475T1 + 575T2 + 500T3 Profit
d. 153T1 + 280T2 + 100 T3 553
46. Select the appropriate assembly time constraint for desks.
a. 2.7T1 + 1.2T2 + 0.8T3 280
b. 2.5T1 + 2.2T2 + 1.4T3 280
c. 1.9T1 + 1.2T2 + 2.2T3 280
d. Max 1.9T1 + 1.2T2 + 2.2T3
47. Schips Department Store operates a dock for supplier deliveries and customer

deliveries. The trucks arrive at random times throughout the day at the stores
dock to be loaded with new deliveries or to have incoming shipments from the
regional warehouse unloaded. The mean arrival rate per truck is 0.25 trucks per
hour. The mean service rate is 4 trucks per hour. Use the Excel OM output
below, to determine the hourly cost of operations if the cost is $50/hour for
waiting trucks and $30/hour for the dock.
Waiting Lines
Data
Arrival rate ()
Service rate ()

a.
b.
c.
d.

M/M/1 (Single Server Model)

Results
0.25 Average server utilization()
4 Average number of customers in the queue(Lq)
Average number of customers in the system(L)

0.0625
0.0042
0.0667

Average waiting time in the queue(W q)

Average time in the system(W)

0.0167
0.2667

Probability (% of time) system is empty (P0)

0.9375

$30.21
$30.89
$33.33
$43.33
8

Final Exam

Fall 2002

Mark Koslow is the operations manager for the New England Shirt Company. In this capacity he
is required to develop an aggregate plan for the next six months with the goal of meeting
demand during this period. He has gathered the following data to determine the costs of the
plan.

Jan
Feb
Mar
Apr
May
Jun

Demand
2400
1200
2800
3600
3200
3600

Inventory carrying costs

Stockout costs
Hiring cost
Firing cost
Labor per shirt
Hourly wage
Beginning employment level
Beginning inventory level
Hours per employee per day
Work days per month

$1.50 per shirt per month

$3.00 per shirt
$200 per employee
$300 per employee
2 hours
$8.00 per hour
30 employees
0 shirts
8 hours
20 days

Using the above information answer the next three questions.

48. If Mark decides to use a level production strategy, how much will be produced in
February?
a. 1200
b. 2400
c. 2800
d. 3600
49. If Mark decides to use a chase production strategy, how much will be produced in
February?
a. 1200
b. 2400
c. 2800
d. 3600
50. Mark is developing a chase production strategy. The hiring/firing cost for February is:
a. $0 hiring, $0 firing
b. $0 hiring, $4500 firing
c. $0 hiring, $3000 firing
d. $3000 hiring, $0 firing
51. The reference desk at a university library receives requests for assistance. Assume that
an average rate of 10 requests per hour arrive at the reference desk. The average service
time per request is 5 minutes. What is the average number of requests waiting for
assistance?
a. 2.0
b. 4.0
c. 4.2
d. 5.0

Final Exam

Fall 2002

The Outdoor Furniture Company manufactures two products, benches and picnic tables. The
firm has two main resources: its carpenters (labor force) and a supply of redwood. During the
next production cycle, 1,200 hours of labor are available under a union agreement. The firm also
has a stock of 3,500 board feet of quality redwood. Each bench requires 4 labor-hours and 10
board-feet of redwood; each picnic table takes 6 labor-hours and 35 board-feet. Completed
benches will yield a profit of $9 each, and tables will result in a profit of $20 each. Formulate an
LP to determine the number of tables and benches to produce in order to optimize profit. Answer
the following questions regarding the LP formulation. Let B represent the number of benches and
T represent the number of tables.
Adjustable Cells
Cell
Name
$B$7 Number to build Bench
$C$7 Number to build Table

Final Reduced Objective Allowable

Allowable
Value
Cost Coefficient Increase
Decrease
262
0
9
4.3
3.3
25
0
20
11.5
6.5

Constraints
Cell
Name
$D$2 Labor
$D$3 Redwood

Final Shadow Constraint Allowable

Allowable
Value Price
R.H. Side
Increase
Decrease
1198
1.4375
1198
200
598.9
3495
0.325
3495
3493.3
500

Using the above description and the Solver Sensitivity Report, answer the next three questions.
52. The manager has additional budget to invest in additional Labor (overtime) or additional
redwood. How should this budget be used in order to optimize profits?
a. Invest in additional labor.
b. Invest in additional redwood.
c. Invest in both labor and redwood.
d. Cannot be determined.
53. The additional redwood is available as a special order. It would cost $0.35 per board-foot
to acquire this redwood. What is your recommendation to the manager regarding this
purchase?
a. Purchase up to 3493.3 board-feet with an additional profit of $20 per board-foot.
b. Do not purchase the redwood. The additional profit per board-foot is only
$0.325.
c. Purchase up to 3493.3 board-feet with an additional profit of $0.325 per boardfoot.
d. Cannot be determined.
54. What is the optimal solution?
a. B = 1198, T = 3495
b. B = 9, T = 20
c. B = 1.4375, T = 0.325
d. B = 262, T = 25

10

Final Exam

Fall 2002

Use the bill-of-materials for Product J (given below) to answer the next 3 questions.
J
LT = 2

K (2)
LT = 1

N (2)
LT = 2

L (4)
LT = 2

M (1)
LT = 1

O (1)
LT = 1

55. If a time-phased structure is drawn, how many weeks are required to produce Product J?
a. 3
b. 4
c. 5
d. 9
56. If 50 units of Product J have been ordered, how many units of N are required to fill the
order?
a. 2
b. 4
c. 100
d. 200
57. Using the gross requirements plan below, determine which week to release the order for
N.
Gross Requirements Plan
1
J
K
L
M
N

Required Date
Order release data
Required Date
Order release data
Required Date
Order release data
Required Date
Order release data
Required Date

Week
4 5 6

8
50

Order release data

a.
b.
c.
d.

Week 2
Week 3
Week 4
Week 5

11

Final Exam

Fall 2002

Below is an unfinished net requirements plan for Product X. EOQ = 120 is the lot-sizing
technique used. Answer the next 2 questions using this information.
Net Requirements Plan
1
Gross requirements
Scheduled receipts
Lead Time
Projected on-hand | 60
= 2 weeks Planned order receipts
Planned order releases

Product X

3
100

Week
5
6
100

9
100

10

50

58. Using the EOQ = 120 lot-sizing technique, what is the amount of the planned order
release in Week 4?
a. 0
b. 70
c. 100
d. 120
59. Using the EOQ = 120 lot-sizing technique, what is the projected on-hand inventory in
Week 10?
a. 0
b. 10
c. 30
d. 50
60. A crew of mechanics at the Highway Department garage repair vehicles that break down
at an average of = 8 vehicles per day (approximately Poisson in nature). The
mechanic crew can service an average of = 10 vehicles per day with a repair time
distribution that approximates an exponential distribution. What is the average time
before the facility can return a breakdown to service?
a. 0.40 hours
b. 0.40 days
c. 0.50 hours
d. 0.50 days

12

Final Exam

Fall 2002

Below is the output from Excel OM for a project consisting of 10 activities and the completion
time in days. Answer the next 2 questions using this information.
Data
Time
A
B
C
D
E
F
G
H
I
J

Precedence 1Precedence 2
3
5A
10
3B
C
5B
C
10E
8C
3G
2D
H
3F
I

Results
Task
A
B
C
D
E
F
G
H
I
J

Late
Early StartEarly Finish Late Start
Finish
0
3
2
3
8
5
0
10
0
10
13
20
10
15
10
15
25
15
10
18
12
18
21
20
21
23
23
25
28
25
Project
28

Slack
5
10
10
23
15
25
20
23
25
28

2
2
0
10
0
0
2
2
2
0

61. Activity A takes 1 day more than expected. What affect does this have on the length of
the entire project?
a. The entire project takes 1 more day.
b. The entire project takes 2 more days.
c. No effect on the length of the entire project.
d. Cannot be determined.
62. Determine the critical path.
a. A-B-D-G-H-I-J
b. A-B-C-D-E-F-G-H-I-J
c. C-E-F-J
d. A-C-E-F-J

HAPPY HOLIDAYS!

13

Final Exam

Fall 2002

Formula Sheet
M/M/1

Ls

Lq

Ws

Wq

P0 1

Pn k

k 1

TC = CwLs + Csk

14