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Practice exam for MGT 325 Exam 3

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Ben Burkett
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MGT 325 Exam 3

MGT 325 Exam 3

Question 1 of 72

1

In the A-B-C system, the typical percentage of the number of items in inventory for A items is about:

Select one of the following:

  • 50

  • 10

  • 70

  • 30

  • 90

Explanation

Question 2 of 72

1

In the A-B-C classification system, which account for 15% of the total dollar-volume for a majority of the inventory items would be classified as:

Select one of the following:

  • A items

  • B items

  • C items

  • A items plus B items

  • B items plus C items

Explanation

Question 3 of 72

1

In the A-B-C classification system, items which account for 60% of the total dollar-volume for few inventory items would be classified as:

Select one of the following:

  • A items

  • B items

  • C items

  • A items plus B items

  • B items plus C items

Explanation

Question 4 of 72

1

The EOQ model is most relevant for which one of the following?

Select one of the following:

  • ordering items with dependent demand

  • determination of safety stock

  • ordering perishable items

  • determining fixed interval order quantities

  • determining fixed order quantities

Explanation

Question 5 of 72

1

Which is not a true assumption in the EOQ model?

Select one of the following:

  • production rate is constant

  • lead time doesn't vary

  • no more than 3 items are involved

  • usage rate is constant

  • no quantity discounts

Explanation

Question 6 of 72

1

A cycle count program will usually require that 'A' items be counted:

Select one of the following:

  • daily

  • once a week

  • monthly

  • quarterly

  • more frequently than annually

Explanation

Question 7 of 72

1

In the basic EOQ model, if annual demand doubles, the effect on the EOQ is:

Select one of the following:

  • it doubles

  • it is four times the previous amount

  • it is half its previous amount

  • it is about 70% of its previous amount

  • it increases by about 40%

Explanation

Question 8 of 72

1

In the basic EOQ model, if lead time increases from 5 to 10 days, the EOQ will:

Select one of the following:

  • double

  • increase, but not double

  • decrease by a factor of 2

  • remain the same

  • none of the above

Explanation

Question 9 of 72

1

In the basic EOQ model, an annual demand of 40 units, an ordering cost of $5, and a holding cost of $1 per unit per year will result in an EOQ of:

Select one of the following:

  • 20

  • square root of 200

  • 200

  • 400

  • none of these

Explanation

Question 10 of 72

1

In the basic EOQ model, if D=60 per month, S=$12, and H=$10 per unit per month, EOQ is:

Select one of the following:

  • 10

  • 12

  • 24

  • 72

  • 144

Explanation

Question 11 of 72

1

In the basic EOQ model, if annual demand is 50, carrying cost is $2, and ordering cost is $15, EOQ is approximately:

Select one of the following:

  • 11

  • 20

  • 24

  • 28

  • 375

Explanation

Question 12 of 72

1

If average demand for an inventory item is 200 units per day, lead time is 3 days, and safety stock is 100 units, the reorder point is:

Select one of the following:

  • 100 units

  • 200 units

  • 300 units

  • 600 units

  • 700 units

Explanation

Question 13 of 72

1

If no variations in demand or lead time exist, the ROP will equal:

Select one of the following:

  • the EOQ

  • expected usage during the lead time

  • safety stock

  • the service level

  • the EOQ plus safety stock

Explanation

Question 14 of 72

1

Which one of the following isa implied by a "lead time" service level of 95%?

Select one of the following:

  • Approximately 95% of the demand during lead time will be satisfied

  • Approximately 95% of inventory will be used during lead time

  • The probability is 95% that demand during the lead time will exactly equal the amount on hand at the beginning of lea time

  • The probability is 95% that demand during lead time will not exceed the amount on hand at the beginning of lead time.

  • none of the above

Explanation

Question 15 of 72

1

Which one of the following is implied by an "annual" service level of 95%?

Select one of the following:

  • Approximately 95% of demand during lead time will be satisfied

  • The probability is 95% that demand will exceed supply during lead time

  • The probability is 95% that demand will equal supply during lead time

  • The probability is 95% that demand will not exceed supply during lead time

  • None of the above

Explanation

Question 16 of 72

1

Daily usage is exactly 60 gallons per day. Lead time is normally distributed with a mean of 10 days and a standard deviation of 2 days. What is the standard deviation of demand during lead time?

Select one of the following:

  • 60 x 2

  • 60 times the square root of 2

  • 60 times the square root of 10

  • 60 x 10

  • None of the above

Explanation

Question 17 of 72

1

Lead time is exactly 20 days long. Daily demand is normally distributed with a mean of 10 gallons per day and a standard deviation of 2 gallons. What is the standard deviation of demand during lead time?

Select one of the following:

  • 20 x 2

  • 20 x 10

  • 2 times the square root of 20

  • 2 times the square root of 10

  • none of the above

Explanation

Question 18 of 72

1

Which of these products would be most apt to involve the use of a single-period model?

Select one or more of the following:

  • gold coins

  • hammars

  • fresh fish

  • calculators

  • frozen corn

Explanation

Question 19 of 72

1

In a single-period model, if shortage and excess costs are equal, then the optimum service level is:

Select one of the following:

  • 0

  • .33

  • .50

  • .67

  • none of these

Explanation

Question 20 of 72

1

In a single-period model, if shortage cost is four times excess cost, then the optimum service level is percent.

Select one of the following:

  • 100

  • 80

  • 60

  • 40

  • 20

Explanation

Question 21 of 72

1

In the single-period model, if excess cost is double shortage cost, the approximate stockout risk, assuming an optimum service level, is percent.

Select one of the following:

  • 100

  • 67

  • 50

  • 33

  • 5

Explanation

Question 22 of 72

1

If, in a single-period inventory situation, the probabilities of demand being 1, 2, 3, or 4 units are .3, .3, .2, and .2, respectively. If two units are stocked, what is the probability of selling both of them?

Select one of the following:

  • .5

  • .6

  • .7

  • .8

  • none of these

Explanation

Question 23 of 72

1

If average demand for an item is 20 units per day, safety stock is 50 units, and lead time is four days, the ROP will be:

Select one of the following:

  • 20

  • 50

  • 70

  • 80

  • 130

Explanation

Question 24 of 72

1

Suppose that usage of cooking oil at Harry's Fish Fry is normally distributed with an average of 15 gallons/day and a standard deviation of two gallons/day. Harry has just fired the manager and taken over operating the restaurant himself. Harry has asked you to help him decide how to reorder cooking oil in order to achieve a service level which is seven times the risk of stockout (7/8). Lead time is eight days. Assume that cooking oil can be ordered as needed.

Select one of the following:

  • 185.30

  • 126.50

  • 150

  • 122.50

  • 167.85

Explanation

Question 25 of 72

1

A bakery's use of corn sweetener is normally distributed with a mean of 80 gallons per day and a standard deviation of four gallons per day. Lead time for delivery of the corn sweetener is normal with a mean of six days and a standard deviation of two days. If the manager wants a service level of 99 percent, what reorder point should be used?

Select one of the following:

  • 502.8

  • 852.8

  • 853.5

  • 480

Explanation

Question 26 of 72

1

A manufacturer is contemplating a switch from buying to producing a certain item. Setup cost would be the same as ordering cost. The production rate would be about double the usage rate.

Compared to the EOQ, the economic production quantity would be approximately:

Select one of the following:

  • the same

  • 20% larger

  • 40% larger

  • 20% smaller

  • 40% smaller

Explanation

Question 27 of 72

1

A manufacturer is contemplating a switch from buying to producing a certain item. Setup cost would be the same as ordering cost. The production rate would be about double the usage rate.

Compared to the EOQ, the maximum inventory would be approximately:

Select one of the following:

  • 70% higher

  • 30% higher

  • the same

  • 30% lower

  • 70% lower

Explanation

Question 28 of 72

1

The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $.80 per six-pack (each case of Stein beer contains four six-packs). Orders arrive three days from the time they are placed. Daily holding costs are equal to five percent of the cost of the beer.

At what point should he reorder Stein beer?

Select one of the following:

  • 0 cases remaining

  • 4 cases remaining

  • 12 cases remaining

  • 16 cases remaining

  • 20 cases remaining

Explanation

Question 29 of 72

1

The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $.80 per six-pack (each case of Stein beer contains four six-packs). Orders arrive three days from the time they are placed. Daily holding costs are equal to five percent of the cost of the beer.

If he were to order 16 cases of Stein beer at a time, what would be the length of an order cycle?

Select one of the following:

  • 0.25 days

  • 3 days

  • 1 day

  • 4 days

  • 20 days

Explanation

Question 30 of 72

1

The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $.80 per six-pack (each case of Stein beer contains four six-packs). Orders arrive three days from the time they are placed. Daily holding costs are equal to five percent of the cost of the beer.

If he were to order 16 cases of Stein beer at a time, what would be the average inventory level?

Select one of the following:

  • 4 cases

  • 12 cases

  • 8 cases

  • 20 cases

  • 16 cases

Explanation

Question 31 of 72

1

The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $.80 per six-pack (each case of Stein beer contains four six-packs). Orders arrive three days from the time they are placed. Daily holding costs are equal to five percent of the cost of the beer.

If he were to order 16 cases of Stein beer at a time, what would be the daily total inventory costs, EXCLUDING the cost of the beer?

Select one of the following:

  • $2.00

  • $4.00

  • $1.28

  • $3.28

  • $2.56

Explanation

Question 32 of 72

1

The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $.80 per six-pack (each case of Stein beer contains four six-packs). Orders arrive three days from the time they are placed. Daily holding costs are equal to five percent of the cost of the beer.

What is the economic order quantity for Stein beer?

Select one of the following:

  • 8 cases

  • 11 cases

  • 14 cases

  • 20 cases

  • 32 cases

Explanation

Question 33 of 72

1

A design engineer wants to construct a sample mean chart for controlling the service life of a halogen headlamp his company produces. He knows from numerous previous samples that this service life is normally distributed with a mean of 500 hours and a standard deviation of 20 hours. On three recent production batches, he tested service life on random samples of four headlamps, with these results:

Sample Service Life (hours)
1 195 500 505 500
2 525 515 505 515
3 470 480 460 470

90. What is the sample mean service life for sample 2?

Select one of the following:

  • 460 hours

  • 495 hours

  • 500 hours

  • 515 hours

  • 525 hours

Explanation

Question 34 of 72

1

A design engineer wants to construct a sample mean chart for controlling the service life of a halogen headlamp his company produces. He knows from numerous previous samples that this service life is normally distributed with a mean of 500 hours and a standard deviation of 20 hours. On three recent production batches, he tested service life on random samples of four headlamps, with these results:

Sample Service Life (hours)
1 195 500 505 500
2 525 515 505 515
3 470 480 460 470

What is the mean of the sampling distribution of sample means when service life is in control?

Select one of the following:

  • 250 hours

  • 470 hours

  • 495 hours

  • 500 hours

  • 515 hours

Explanation

Question 35 of 72

1

A design engineer wants to construct a sample mean chart for controlling the service life of a halogen headlamp his company produces. He knows from numerous previous samples that this service life is normally distributed with a mean of 500 hours and a standard deviation of 20 hours. On three recent production batches, he tested service life on random samples of four headlamps, with these results:

Sample Service Life (hours)
1 195 500 505 500
2 525 515 505 515
3 470 480 460 470

What is the standard deviation of the sampling distribution of sample means for whenever service life is in control?

Select one of the following:

  • 5 hours

  • 6.67 hours

  • 10 hours

  • 11.55 hours

  • 20 hours

Explanation

Question 36 of 72

1

A design engineer wants to construct a sample mean chart for controlling the service life of a halogen headlamp his company produces. He knows from numerous previous samples that this service life is normally distributed with a mean of 500 hours and a standard deviation of 20 hours. On three recent production batches, he tested service life on random samples of four headlamps, with these results:

Sample Service Life (hours)
1 195 500 505 500
2 525 515 505 515
3 470 480 460 470

If he uses upper and lower control limits of 520 and 480 hours, what is his risk (alpha) of concluding service life is out of control when it is actually under control (Type I error)?

Select one of the following:

  • 0.0026

  • 0.0456

  • 0.3174

  • 0.6826

  • 0.9544

Explanation

Question 37 of 72

1

A design engineer wants to construct a sample mean chart for controlling the service life of a halogen headlamp his company produces. He knows from numerous previous samples that this service life is normally distributed with a mean of 500 hours and a standard deviation of 20 hours. On three recent production batches, he tested service life on random samples of four headlamps, with these results:

Sample Service Life (hours)
1 195 500 505 500
2 525 515 505 515
3 470 480 460 470

If he uses upper and lower control limits of 520 and 480 hours, on what sample(s) (if any) does service life appear to be out of control?

Select one of the following:

  • sample 1

  • sample 2

  • sample 3

  • both samples 2 and 3

  • all samples are in control

Explanation

Question 38 of 72

1

The Chair of the Operations Management Department at Quality University wants to construct a p-chart for determining whether the four faculty teaching the basic P/OM course are under control with regard to the number of students who fail the course. Accordingly, he sampled 100 final grades from last year for each instructor, with the following results:
Instructor Number of Failures
Prof. A 13
Prof. B 0
Prof. C 11
Prof. D 16

What is the sample proportion of failures (p) for Prof. D?

Select one of the following:

  • 0

  • .04

  • .11

  • .13

  • .16

Explanation

Question 39 of 72

1

The Chair of the Operations Management Department at Quality University wants to construct a p-chart for determining whether the four faculty teaching the basic P/OM course are under control with regard to the number of students who fail the course. Accordingly, he sampled 100 final grades from last year for each instructor, with the following results:
Instructor Number of Failures
Prof. A 13
Prof. B 0
Prof. C 11
Prof. D 16

What is the estimate of the mean proportion of failures for these instructors?

Select one of the following:

  • .10

  • .11

  • .13

  • .16

  • .40

Explanation

Question 40 of 72

1

The Chair of the Operations Management Department at Quality University wants to construct a p-chart for determining whether the four faculty teaching the basic P/OM course are under control with regard to the number of students who fail the course. Accordingly, he sampled 100 final grades from last year for each instructor, with the following results:
Instructor Number of Failures
Prof. A 13
Prof. B 0
Prof. C 11
Prof. D 16

What is the estimate of the standard deviation of the sampling distribution for an instructor's sample proportion of failures?

Select one of the following:

  • .0075

  • .03

  • .075

  • .3

  • .75

Explanation

Question 41 of 72

1

The Chair of the Operations Management Department at Quality University wants to construct a p-chart for determining whether the four faculty teaching the basic P/OM course are under control with regard to the number of students who fail the course. Accordingly, he sampled 100 final grades from last year for each instructor, with the following results:
Instructor Number of Failures
Prof. A 13
Prof. B 0
Prof. C 11
Prof. D 16

What are the .95 (5% risk of Type I error) upper and lower control limits for the p-chart?

Select one of the following:

  • .95 and .05

  • .13 and .07

  • .1588 and .0412

  • .16 and .04

  • .1774 and .0226

Explanation

Question 42 of 72

1

The Chair of the Operations Management Department at Quality University wants to construct a p-chart for determining whether the four faculty teaching the basic P/OM course are under control with regard to the number of students who fail the course. Accordingly, he sampled 100 final grades from last year for each instructor, with the following results:
Instructor Number of Failures
Prof. A 13
Prof. B 0
Prof. C 11
Prof. D 16

Using .95 control limits, (5% risk of Type I error), which instructor(s), if any, should he conclude is (are) out of control?

Select one of the following:

  • none

  • Prof. B

  • Prof. D

  • both Prof. B and Prof. D

  • all

Explanation

Question 43 of 72

1

A Quality Analyst wants to construct a control chart for determining whether four machines, all producing the same product, are under control with regard to a particular quality attribute. Accordingly, she inspected 1,000 units of output from each machine in random samples, with the following results:

Machine Total Defectives
#1 23
#2 15
#3 29
#4 13

What is the sample proportion of defectives for machine #1?

Select one of the following:

  • .023

  • .02

  • .0115

  • .0058

  • .005

Explanation

Question 44 of 72

1

A stint for use is coronary surgery requires a special coating. Specifications for this coating call for it to be at least 0.05 millimeters but no more than 0.15 millimeters.

Suppose the criterion for evaluating this process is that the appropriate capability index must be at least 1.3.
With a long-run process mean of 0.09 and a standard deviation of 0.015, is this process capable?

Select one of the following:

  • Yes

  • No

Explanation

Question 45 of 72

1

Studies on a bottle-filling machine indicates it fills bottles to a mean of 16 ounces with a standard deviation of 0.10 ounces. What is the process specification, assuming the Cpk index of 1?

Select one of the following:

  • 0.10 ounces

  • 0.20 ounces

  • 0.30 ounces

  • 16.0 ounces plus or minus 0.30 ounces

  • none of the above

Explanation

Question 46 of 72

1

Studies on a machine that molds plastic water pipe indicate that when it is injecting 1-inch diameter pipe, the process standard deviation is 0.05 inches. The one-inch pipe has a specification of 1-inch plus or minus 0.10 inch. What is the process capability index (Cpk) if the long-run process mean is 1 inch?

Select one of the following:

  • 0.50

  • 0.67

  • 1.00

  • 2.00

  • none of the above

Explanation

Question 47 of 72

1

The specification limit for a product is 8 cm and 10 cm. A process that produces the product has a mean of
9.5 cm and a standard deviation of 0.2 cm. What is the process capability, Cpk?

Select one of the following:

  • 3.33

  • 1.67

  • 0.83

  • 2.50

  • none of the above

Explanation

Question 48 of 72

1

The specifications for a product are 6 mm ± 0.1 mm. The process is known to operate at a mean of 6.05 with a standard deviation of 0.01 mm. What is the Cpk for this process?

Select one of the following:

  • 3.33

  • 1.67

  • 5.00

  • 2.50

  • none of the above

Explanation

Question 49 of 72

1

138. A process results in a few defects occurring in each unit of output. Long-run, these defects should be monitored with___________________.

Select one of the following:

  • p-charts

  • c-charts

  • x-bar charts

  • r-charts

  • o-charts

Explanation

Question 50 of 72

1

When a process is in control, it results in there being, on average, 16 defects per unit of output. C-chart limits of 8 and 24 would lead to a ________________ chance of a Type I error.

Select one of the following:

  • 67%

  • 92%

  • 33%

  • .03%

  • 5%

Explanation

Question 51 of 72

1

When a process is in control, it results in there being, on average, 16 defects per unit of output. C-chart limits of 4 and 28 would lead to a chance of a Type I error.

Select one of the following:

  • 67%

  • 92%

  • 33%

  • 0.3%

  • 5%

Explanation

Question 52 of 72

1

A tool that is not used for quality management is ________________.

Select one of the following:

  • Flowchart

  • Histogram

  • Perato Analysis

  • Redesign

  • Check sheets

Explanation

Question 53 of 72

1

The four dimensions of quality that are sometimes used to determine fitness for use of a product are

Select one of the following:

  • performance, special features, durability, and service after sale

  • performance, special features, conformance, and reliability

  • special features, conformance, reliability, and durability

  • performance, conformance, reliability, and durability

  • special features, conformance, durability, and service after sale

Explanation

Question 54 of 72

1

A tool that depicts process variation graphically is a(n) .

Select one of the following:

  • Affinity diagram

  • Check list

  • Control Chart

  • Flow Chart

  • Relationship diagram

Explanation

Question 55 of 72

1

Which isn't a cost of quality?

Select one of the following:

  • Prevention cost

  • External failure

  • Extended Service Contracts

  • Internal failure

  • Appraisal costs

Explanation

Question 56 of 72

1

Lost production time, scrap, and rework are examples of

Select one of the following:

  • internal failure costs

  • external failure costs

  • appraisal costs

  • prevention costs

  • replacement costs

Explanation

Question 57 of 72

1

Warranty service, processing of complaints, and costs of litigation are examples of

Select one of the following:

  • internal failure costs

  • external failure costs

  • appraisal costs

  • prevention costs

  • replacement costs

Explanation

Question 58 of 72

1

Costs of inspectors, testing, test equipment, and labs are examples of

Select one of the following:

  • internal failure costs

  • external failure costs

  • appraisal costs

  • prevention costs

  • replacement costs

Explanation

Question 59 of 72

1

Loss of business, liability, productivity and costs are consequences of

Select one of the following:

  • Labor Unions

  • Globalization

  • Poor Quality

  • Robotics

  • Micro-factories

Explanation

Question 60 of 72

1

Quality planning and administration, quality training, and quality control procedures are examples of

Select one of the following:

  • internal failure costs

  • external failure costs

  • appraisal costs

  • prevention costs

  • replacement costs

Explanation

Question 61 of 72

1

ISO 9000 standards do not have a requirement for

Select one of the following:

  • resource

  • remedial

  • systems

  • training

  • management

Explanation

Question 62 of 72

1

A quality circle is

Select one of the following:

  • responsible for quality

  • total quality control

  • an inspection stamp found on meat

  • a voluntary group of employees

  • none of the above

Explanation

Question 63 of 72

1

ISO 9000 currently requires of a certified organization

Select one of the following:

  • Quarterly reporting

  • Product diversity

  • Annual audits

  • A minimum of four supervisory levels

  • Continuous improvement

Explanation

Question 64 of 72

1

The quality control improvement tool which distinguishes between the "important few" and the "trivial many" is

Select one of the following:

  • brainstorming

  • check sheets

  • Pareto analysis

  • cause-and-effect diagrams

  • fail-safe methods

Explanation

Question 65 of 72

1

TQM stands for:

Select one of the following:

  • Taguchie Quality Methods

  • Tactical Quality Measurements

  • The Quality Matrix

  • Total Quality Management

  • Total Quantity Measurement

Explanation

Question 66 of 72

1

Which of the following is an element of TQM?

Select one of the following:

  • continuous improvement

  • competitive benchmarking

  • employee empowerment

  • team approach

  • all of the above

Explanation

Question 67 of 72

1

85. Management behaviors supporting an organizational culture that encourages continuous improvement include which of the following?
(I) develop a vision statement for the organization
(II) develop a reward system that promotes the philosophy
(III) institute continuous training programs
(IV) make decisions that adhere to the philosophy

Select one of the following:

  • I, II, and IV

  • I, II, III, and IV

  • I and III

  • II, III, and IV

  • II and IV

Explanation

Question 68 of 72

1

The tool that is useful in the collection and organization of data is:

Select one of the following:

  • a control chart

  • a Pareto chart

  • a check sheet

  • a flow chart

  • none of the above

Explanation

Question 69 of 72

1

A quality improvement technique that involves the sharing of thoughts and ideas in a way that encourages unrestrained collective thinking is:

Select one of the following:

  • Pareto analysis

  • benchmarking

  • brainstorming

  • a control chart

  • a check sheet

Explanation

Question 70 of 72

1

In order for TQM to be successful, it is essential that most of the organization be

Select one of the following:

  • members of quality circles

  • under contract

  • ISO certified

  • trained in error detection techniques

  • in agreement with the philosophy and its goals

Explanation

Question 71 of 72

1

The typical difference between "quality circles" and "continuous improvement teams" is

Select one of the following:

  • Quality circles work on product design only

  • Continuous improvement teams work on product and process design

  • Continuous improvement teams use only engineers while quality circles use just the workers doing the work

  • the amount of employee empowerment

  • There is no difference-they are just the same

Explanation

Question 72 of 72

1

Which of the following is not a goal of process improvement?

Select one of the following:

  • increasing customer satisfaction

  • reducing waste

  • achieving higher quality

  • identifying the cause of a problem

  • All are the goals

Explanation

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