Professor Blake
OPM 101
Spring 2010
Name__________________________
EXAMINATION 3, Version C
Use a Scantron Form No. 886-E to record your choice of the best answer to each of the
following questions. You have the full period to answer the questions.
The following questions are worth three (3) points each.
1. What are purchased items or extracted materials that will be transformed into components or
products called?
a) work-in-process inventory
b) finished goods inventory
c) raw materials inventory
d) distribution inventory
e) MRO inventory
2. In inventory management, when discussing customer service we mean:
a) whether the customer is available when the product is.
b) whether the product is available regardless if the customer desires it or not.
c) whether the product is available when the customer wants it.
d) whether the customer wants the available product.
e) whether repair of the product is available.
3. If annual demand is 48,000 units, orders are placed in quantities of 2000 units at a time, and the
cost to place an order is $80, what is the annual ordering cost?
a) $1,920
b) $3,840,000
c) $160,000
d) $80
e) $4,160
4. The ranking in ABC inventory analysis is based on what?
a) annual dollar usage
b) annual demand in units
c) alphabetical order
d) unit price
e) item number
5. A company’s
plan is a statement of the resources available to the operations
group during the next 6 to 18 months.
a) aggregate
b) master
c) strategic
d) project
e) tactical
6. What type of aggregate plan maintains a constant workforce and produces the same amount of
product in each time period?
a) uniform
b) level
c) chase
d) mixed
e) steady
1
Professor Blake
OPM 101
Spring 2010
Name__________________________
7. A proactive marketing approach in aggregate planning involves ____________________________.
a) varying inventory levels
b) modifying work force size
c) back orders
d) shifting the demand patterns to level demand fluctuations
e) varying overtime rate
8. Evaluating an aggregate plan in terms of inventory levels is using what perspective?
a) cost
b) customer service
c) quality
d) operations
e) human resources
9. What does ERP stand for?
a) educational resources planning
b) enterprise resource planning
c) enterprise reliability production
d) end routing procedure
e) easy resource planning
10. What information system enables companies to have the right material in the right amounts
available at the right time?
a) manufacturing resources planning
b) multifunctional requirements planning
c) material requirements planning
d) material relationships planning
e) manufacturing requirements planning
11. The
file lists the materials needed to build a product.
a) master production schedule
b) bill of material
c) inventory records
d) material needs
e) build structure
12. The
is (are) checked for the materials on hand and those that need to be
procured.
a) master production schedule
b) bill of material
c) inventory records
d) material inventories
e) promised deliveries
13. Which of the following techniques loads jobs up to a predetermined capacity level?
a) finite loading
b) infinite loading
c) forward scheduling
d) backward scheduling
e) input/output control
2
Professor Blake
OPM 101
Spring 2010
Name__________________________
14. Which of the following techniques determines when the job must begin in order to be completed by
the due date?
a) infinite loading
b) finite loading
c) forward scheduling
d) backward scheduling
e) input/output control
15. What does makespan measure?
a) WIP inventory
b) due-date performance
c) the amount of time it takes to finish a batch of jobs
d) job tardiness
e) job lateness
16. What is a unique, one-time event that is intended to achieve an objective in a given time period?
a) a project
b) a job
c) a task
d) an activity
e) an event
17. If a delay in an activity will delay completion of the whole project, the activity _________________.
a) is on the critical path
b) has slack
c) is costly
d) is a dummy
e) is represented by a node
18. An activity in a network diagram has an optimistic time estimate of five days, a most likely time
estimate of seven days, and a pessimistic time estimate of 15 days. Its expected time is _______.
a) 5 days
b) 7 days
c) 8 days
d) 10 days
e) 15 days
19. Inventory record accuracy is especially critical for master production schedule users.
a) True
b) False
20. An advantage of the chase aggregate plan is that it minimizes finished good holding costs.
a) True
b) False
21. The primary objective of ERP is to integrate all departments and functions, internal and external,
onto a single computer system to serve the enterprise’s needs.
a) True
b) False
3
Professor Blake
OPM 101
Spring 2010
Name__________________________
22. The backlog at a work center increases when the work center receives more work than it finishes.
a) True
b) False
23. A local priority rule sets priority based only on the jobs waiting at that individual work center.
a) True
b) False
24. In network diagramming, arrows represent precedence relationships.
a) True
b) False
The following problems are worth ten (10) points each.
1. Suppose that your company sells a product for which the annual demand is 10,000 units. Holding
costs are $1.00 per unit per year, and setup costs are $200 per order.
(a) What is the economic order quantity for your product?
2(10,000)(200)
Q = √2𝐷𝑆/𝐻 = √
1
= √4,000,000 = 2,000 units
(b) What is the total annual cost of ordering and holding?
TC = D/Q*S + Q/2*H = 10,000/2000*200 + 2000/2*1 = 1,000 + 1,000 = $2,000
2. Given the following data:
Item
J
K
L
M
N
O
P
Q
Usage per
Parent
3
1
2
4
2
1
6
Lead Time
(weeks)
3
2
1
2
3
2
1
2
Gross
Requirements
10
30
10
20
120
60
60
360
The end product J is made from components K, L, and M. K is made from N and O. O is made from P
and Q.
(a) What is the replenishment lead time for J, assuming there are no inventories?
JL=3+1=4 JM=3+2=5 JKN=3+2+3=8 JKOP=3+2+2+1=8 JKOQ=3+2+2+2=9
Replenishment time is 9 weeks
(b) Calculate the gross requirements for each of the components if the company plans to build 10 of
its J model. Assume that there are no beginning inventories.
See above
4
Professor Blake
OPM 101
Spring 2010
Name__________________________
3. Jackie is the owner and the manager of an auto repair company. In order to be fair to all the
customers, Jackie decides to use the FCFS priority rule in job sequencing. Currently, four cars
need to be repaired. Assume that the cars arrive in the order listed, that is, A first, then B, then C,
then D. The estimated labor times (in days) and promise dates are shown in the following table.
Customers usually do not pick up their cars early. Today is day 0.
Car
Estimated Labor Time
Promise Date
A
5
5
B
10
18
C
1
12
D
3
15
Based on the FCFS sequence, calculate the following performance measures: (a) makespan, (b)
average job flow time, (c) average number of jobs in the system, (d) average job tardiness.
Jobs
A
B
C
D
a.
b.
c.
d.
Labor
Time
5
10
1
3
19
Flow
Time
5
15
16
19
55
Due
Date
5
18
12
15
Tardiness
0
0
4
4
8
Makespan = 19 days
Avg. Job Flow Time = 55/4 = 13.75 days
Avg. Number of Jobs = 55/19 = 2.89 jobs
Avg. Job Tardiness = 8/4 = 2 days
5