MGT 2070 – Sample Midterm This examination will give you some additional practice and experience with the type of problems to be expected on the midterm examination. Information on the Actual Midterm Examination Time: Three hours Questions: 40% multiple choice, 60% problem / calculation Materials: Closed-book and closed-notes. The formulae shown will be provided in the midterm examination. Calculators: Any calculator may be used, but programmable calculators containing notes or additional formulae will be considered cheating. Chapters Covered: 1 through 9 inclusive Formulae 1. Moving Average Forecast = demand in previous n periods n 2. Weighted Moving Average Forecast = (weight for period n) (demand in period n) weights 3. Exponential Smoothing Forecast Ft = Ft-1 + (At-1 – Ft-1) 4. Mean Absolute Deviation = forecast errors n forecast errors 2 5. Mean Squared Error = n 6. Exponential Smoothing with Trend Adjustment Forecast Ft = (At-1) + (1 - )(Ft-1 + Tt-1) 7. Exponential Smoothing with Trend Adjustment Trend Tt = (Ft – Ft-1) + (1 - )T t-1 xy - nxy , a y - bx x nx 8. Least Squares Trend Projection ŷ a bx , b 2 9. Seasonal Forecast Average Monthly Demand = 2 Average Annual Demand 12 months Average Annual Demand 10. Seasonal Forecast Seasonal Index = Average Monthly Demand 11. Regression Analysis ŷ a bx , b y 12. Standard Error of Estimate S y ,x 13. Correlation Coefficient r 14. Statistical Process Control n x xy - nxy , a y - bx x nx 2 2 2 a y - b xy n2 n xy x y 2 x n y 2 y 2 UCLX X A2 R LCLX X A2 R UCLR D4 R LCLR D3 R 2 Multiple Choice 1. Which of the following is not a typical service attribute? a) intangible product c) customer interaction is high b) often easy to automate d) simultaneous production and consumption 2. Gibson Valves produces cast bronze valves on an assembly line, currently producing 1600 valves each 8-hour shift. If the production is increased to 2400 valves each 8-hour shift, the productivity will increase by a) 50% c) 25% b) 40% d) 20% 3. Which of the following statements about organizational missions is false? a) They reflect a company’s purpose. c) They provide guidance for functional area missions. b) They define a company’s reason for existence. d) They are formulated after strategies are known. 4. Which of the following is not an operations strategy? a) response c) differentiation b) low cost d) technology 5. Firms are dispersing production processes to take advantage of national differences in a) labour cost c) capital b) facilities d) all of the above 6. Which of the international operations strategies involves high cost reductions and high local responsiveness? a) international strategy c) transnational strategy b) global strategy d) multidomestic strategy 7. A forecast with a time horizon of about 3 months to 3 years is typically called a a) long-range forecast c) short-range forecast b) medium-range forecast d) strategic forecast 8. What is the approximate forecast for May using a four-month moving average? Nov 39 Dec 36 Jan 40 Feb 38 Mar 48 Apr 46 a) 38 c) 42 b) 41 d) 43 9. In which stage of the product life cycle should product strategy focus on process modifications? a) introduction c) maturity b) growth d) decline 10. The dimensions, tolerances, materials, and finishes if a component are typically shown on a) an engineering drawing c) an assembly drawing b) a bill of materials d) a route sheet 11. ISO 9000 seeks standardization in terms of a) products c) procedures to manage quality b) production procedures d) suppliers’ specification 12. The process improvement technique that sorts the “vital few” from the “trivial many” is a) Pareto analysis c) brainstorming b) benchmarking d) Yamaguchi analysis __ 13. The purpose of an X chart is to determine whether there has been a a) gain or loss in uniformity c) change in the number of defects in a sample b) change in the percent defective d) change in the central tendency of the process output 14. The mean and the standard deviation for a process for which we have a substantial history are 160 and 2, respectively. What is the mean of the sampling distribution? a) 0.125 c) 40 15. A job shop is an example of a(n) b) 2 d) none of the above a) repetitive process c) continuous process b) intermittent process d) line process 16. A drawing of the movement of material, product, or people is a(n) a) process chart c) process map b) service blueprinting d) flow diagram 17. “Automatic placement and withdrawal of parts and products into and from designated places in a warehouse” describes a) ASRS c) CAD/CAM b) AGV d) CIM 18. A location decision for a traditional department store (The Bay) would tend to have a(n) a) cost focus c) labour focus b) revenue focus d) environmental focus 19. The main issue in designing process layouts concerns the relative positioning of a) work stations c) departments b) raw materials d) entrances, loading docks, etc. 20. In a product layout, the process of deciding how to assign tasks to work stations is referred to as a) process balancing c) line balancing b) task allocation d) work allocation Problem / Calculation 1. Weekly sales of copy paper at Cubicle Suppliers are in the table below. Forecast week 8 with a three-period moving average and with a four-period moving average. Compute MAD for each forecast. Which model is more accurate? Week Sales (cases) 1 17 2 22 3 27 4 32 5 19 6 18 7 22 2. The following trend projection is used to predict quarterly demand: Y = 350 – 2.5t, where t = 1 in the first quarter of 1998. Seasonal (quarterly) relatives are Quarter 1 = 1.5, Quarter 2 = 0.8, Quarter 3 = 1.1, and Quarter 4 = 0.6. What is the seasonally adjusted forecast for the four quarters of 2000? 3. Favors Distribution Company purchases small imported trinkets in bulk, packages them, and sells them to retail stores. They are conducting an inventory control study of all their items. The following data are for one such item, which is not seasonal. a) Use trend projection to estimate the relationship between time and sales (state the equation). b) Calculate forecasts for the first four months of the next year. Month Jan Sales 51 Feb 55 Mar 54 Apr 57 May 50 Jun 68 Jul 66 Aug 59 Sep 67 Oct 69 Nov 75 Dec 73 4. Marie Bain is the product manager at a company that manufactures hot water heaters. Marie needs a demand forecast for the next few years to help decide whether to add new production capacity. The company’s sales history (in thousands of units) is shown in the table below. Use exponential smoothing with trend adjustment, to forecast demand for period 6. The initial forecast for period 1 was 10 units; the initial estimate of trend was 0. The smoothing constants are = 0.4 and = 0.3. Period Actual 1 12 2 15 3 16 4 16 5 18 6 20 5. Arnold Tofu owns and operates a chain of 12 vegetable protein “hamburger” restaurants in northern Louisiana. Sales figures and profits for the stores are in the table below. Sales are given in millions of dollars; profits are in hundreds of thousands of dollars. Calculate a regression line for the data. What is your forecast of profit for a store with sales of a) $24 million, and b) $30 million? Store 1 2 3 4 5 Sales 7 2 6 4 14 Profits 15 10 13 15 25 Store 7 8 9 10 11 Sales 16 12 14 20 15 Profits 24 20 27 44 34 6 15 27 12 7 17 6. A contractor for the military is looking for a new location for a supply depot. The depot will supply four bases whose tonnage (demand) and map coordinates are shown below. If management wants the depot to have a central location, what should its map coordinates be? Base Fort Able Base Baker Camp Charlie Camp Delta (X,Y) Coordinates (35,120) (70,45) (100,15) (60,90) Tonnage 40,000 50,000 25,000 80,000 7. An assembly line has been designed to make battery-powered beverage mixers. Task details are shown in the table below: Station 1 2 3 4 5 6 Task Assigned 1 3; 4 2; 5; 6 7 8 9; 10; 11 a) What is the assigned cycle time (in minutes). b) What is the maximum output rate of this line in mixers per hour? c) What is the total idle time per cycle? d) What is the assembly line’s efficiency? Task Time (minutes) 3.0 1.5; 2.0 0.5; 1.5; 1.0 3.0 2.5 2.0; 1.0; 0.5 Answers – Multiple Choice 1. b 2. a 3. b 4. d 5. d 6. c 7. b 8. d 9. a 10. a 11. c 12. a 13. d 14. d 15. b 16. d 17. a 18. b 19. c 20. c Answers – Problem / Calculation 1. The forecast with 3ma is 19.7; with 4ma the forecast is 22.8. The four-week moving average is more accurate. 2. Period 9 10 11 12 Projection 327.5 325 322.5 320 Adjusted 491.25 260 354.75 192 3. The trend equation is Y = 48.32 + 2.105 T. The next four months are forecast to be 75.68, 77.79, 79.89, and 82.00. 4. FIT = 19.24 5. The regression equation is Y = 5.0601 + 1.593X where Y = profit, X = sales. a) $43.3 b) $52.85 6. The depot should be located near X=63, Y=75 7. a) 3.5 minutes (governed by stations 2 and 6) b) 60 / 35 = 17.14 units per hour c) 0.5 + 0 + 0.5 + 0.5 + 1.0 + 0 = 2.5 minutes d) 18.5 / 21 = 88.1%