Operations Design

PART A. 20 MULTIPLE CHOICE QUESTIONS (1 mark each, total 20)
Answer Multiple Choice Questions on the mark sense sheet provided.

1. Learning curve effect is

a) The ability to increase a machine’s productive capacity through usage
b) The ability to improve a process capacity through the usage of a machine
c) The human ability to adjust their productive capacity through learning
d) The human ability to increase their productive capacity through learning

2. Value can be added to an entity in all the following ways, EXCEPT:

a) Altering
b) Facilitating
c) Storing
d) Transporting

3. Many organizations are attempting to manage interdependent activities as one process referred to as:

a) Project management
b) Lean management
c) Supply chain management
d) Inventory management

4. A distinction between normal goods and information/knowledge is that

a) Normal goods wear out, but information/knowledge does not
b) Information/knowledge can be given or sold to many others
c) Information/knowledge is subject to diminishing returns, but physical outputs are subject to increasing returns
d) Both A and B

5. Which of the following is a major difference between continuous processes and flow shops?

a) Inputs are fixed for the former and the flow of work is continuous for the latter
b) In flow shops, there is a discrete product or service instead of products not naturally divisible
c) Degree of automation is higher for flow shops
d) Both B and C

6. Which of the following is NOT a well-known problem in flow shops?

a) Boredom
b) Workers may be dehumanized by manufacturing lines
c) Absenteeism
d) All of the above are well-known problems in flow shops

7. Which of the following is FALSE regarding statistical sampling for control purposes?

a) The more samples are taken, the higher the likelihood of accidentally selecting a sample with excessive values when the process actually is still under control
b) Deciding what indicators are high or low enough to be considered out of control is the simplest of the problems facing operation managers
c) Measuring upper and lower control limits are the basis for management by exception
d) Using high thresholds for control increases the risk of not detecting processes that are getting out of control

8. Service defections are important in process control for services because:

a) No advertising is necessary to get the business of long-term customers
b) They are equally important to organizations that produce tangible outputs
c) A customer who takes their business elsewhere is analogous to a product defect
d) Long-time customers are more likely to purchase additional products

9. Which of the following is NOT an original component of reengineering?

a) A radical change in the way work is performed
b) Process-centered reorganization of activities
c) An emphasis in getting rid of unnecessary employees
d) A dramatic improvement in performance

10. Which of the following tools and methodologies is NOT used in the Measure Phase of Six Sigma?

a) Design of experiments (DOE)
b) Pareto Analysis
c) Process Maps
d) Rolled throughput yield (RTY)

11. Choose a common problem from the Measure phase.

a) Calculation of a baseline to evaluate benefits of potential improvements
b) The process mean can shift as much as 1.5 standard deviations
c) Performance metrics based on the availability of data
d) 3.4 defects per million opportunities (DPMO) may occur easily in complex operations

12. A patient diagnosis is an example of what type of activity?

a) Value-added
b) Nonvalue-added but necessary
c) Nonvalue-added and not necessary
d) Necessary and value-neutral

13. A value stream map:

a) Can only be used in manufacturing facilities
b) May also be used for service providers
c) Shows the flow of materials and information with suppliers shown on the left of the diagram and customers on the right
d) Both B and C

14. The goal of this approach is to mistake-proof work activities in a way that prevents errors from being committed in the first place:

a) Kaizen blitz
b) Poka Yoke
c) 5s
d) Six sigma

15. Project charters should contain some level of information regarding which of the following elements:

a) Business case, goals, or scope
b) Overview, general approach, schedules or milestones
c) Work breakdown structure and path dependencies
d) Both A and B

16. The amount of flexibility the project manager has in terms of starting and completing an activity is referred to as its:

a) Slack
b) Variance
c) Flex
d) Both A and B

17. Which of the following is NOT a factor that is increasing the need to better manage the supply chain?

a) Optimization of their own value by most segments in the supply chain
b) Global competition and outsourcing
c) E-commerce and telecommunications
d) Outsourcing and shorter life cycles

18. Which of the following is TRUE about the bullwhip effect?

a) Variability in demand increases from the factory stage downstream to the customer stage
b) This cycle is prevalent in just about every industry
c) Lead times between the stages of the supply chain tend to be very short
d) Information lags stemming from large lot sizes with infrequent orders may be a cause

19. __________ inventories exist because materials must be moved from one location to another.

a) Buffer
b) Anticipation
c) Transit
d) Cycle

20. The four major considerations in selecting a national or overseas region for the facility are:

a) Labor supply, availability of inputs, foreign management, and environment
b) Proximity, labor supply, availability of inputs, and environment
c) Proximity, environment, facility size, and foreign management styles
d) Proximity, environment, facility size, and labor supply

PART B. ANSWER 4 OUT OF 5 SHORT ANSWER QUESTIONS (10 marks each, total 40 marks)
Answer Short Answer Questions in the answer booklet provided. Note, answer 4 questions only.

1. It is commonly said that Japanese firms employ 10 times as many engineers as U.S. firms and 10 times fewer accountants. What effect would you expect this to have on their competitiveness, and why?
(10 marks)

2 Briefly describe the differences in measuring efficiency between service and manufacturing organizations. (10 marks)

3. If a job shop was being laid out in a Third World country, how might the procedure be different in a Western country. What other factors might be considered that would not exist in an industrialized country? Might the layout also differ among industrialized countries such as Europe and Japan? How about a flow shop?
(10 marks)

4. The theory of constraints distinguishes between process batches and transfer batches. It also recommends that process batch is very according to the economics of efficiency at each stage of production. Considering the effects of order size and size of the preceding process batch, how then should transfer batches be determined?
(10 marks)

PART C. CASE STUDY EXERCISES (15 marks each, total 30)
Answer Case Study Exercises in the answer booklet provided. Formula sheet is at the end of the exam paper.

1. The time between patient arrivals to the blood drawing unit of a medical lab averages two minutes. The lab is staffed with two nurses that actually draw the patient’s blood. The nurses work from 9.00 AM to 5:30 PM and get two 10 minute breaks and a half-hour for lunch. What is the takt time for drawing patient’s blood?

2. The Corner Convenience Store [CCS] in northern Chicago, USA receives orders from its distributor in three days from the time an order is placed. Light Cola sells at the rate of 860 cans per day. [You can sell 250 days of the year.] A six-pack of light cola costs CCS $1.20. Annual holding cost is 10% of the cost of the cola. Order cost is $25. What is CCS’s EOQ.?

Formula Sheet

Cycle Time = Available work time / Demand

Efficiency = Output / Input

Takt time = available work time / customer required volume

Activity slack = TLS – TES = TLF – TEF




Sample Solution

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