Answer ALL questions. Each question in Section A is worth 2 marks.

1. Why is operations management essential to all kinds of organisations? a. Because every organisation needs to develop products and/or services. b. Because all organisations need to market products and/or services. c. Because every organisation needs to create and deliver products and/or

   services. d. All of the above.

2. All operations can be classified according to their 4Vs, volume, variety, variation and visibility. Which of the following can be considered a drawback of high visibility? a. High Standardisation

   b. High staff utilisation c. Short waiting tolerance d. Low unit cost

3. The ability to deliver products or services consistently according to their specification is a measure of: a. Quality b. Cost

   c. Flexibility d. Dependability

4. To attain operational effectiveness, organisations need to:

   1. Differentiate themselves by offering a unique set of product or service

      attributes.

   2. Develop process competencies that support their strategic positioning.

   3. Develop lowest-cost processes that support most-efficient operations.

   4. Increase the gap between their current positioning and the operations frontier.

5. According to Littles Law, what condition holds true in any stable process? a. Throughput rate = Average inventory / Average flow time b. Throughput rate = Average inventory * Average flow time c. Throughput rate = Average flow time / Average inventory

   d. Throughput rate = Average flow time * Average inventory

6. In an automobile manufacturing plant two parallel machining centres are used to produce a motor component. On average, each machining centre can produce 10 units of the component per hour and on average there are 5 units of the component being processed or waiting to being processed? What is the average amount of time components spend at the machining centres?

   a. 6 minutes b. 15 minutes c. 30 minutes d. 60 minutes

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7. In a process flowchart, the critical path denotes ... a. The shortest path from start to finish. b. The longest path from start to finish. c. The path with the fewest activities between start and finish. d. The path with the most activities between start and finish.

8. Given a resource pool of 3 non-identical resource units with an effective unit load of {10,15,30} minutes per flow unit, what is the effective capacity? a. 6 units per hour. b. 12 units per hour.

   c. 18 units per hour. d. 24 units per hour.

9. Which of the following actions is not suitable to increase the capacity level of a process?

   a. Increasing the time of operation. b. Subcontracting and outsourcing. c. Move work off the critical path. d. Increase the speed of the operation.

10. What is the difference between cycle inventory and seasonal inventory? a. Seasonal inventory is caused by predictable fluctuations in supply and

    demand while cycle inventory is held in anticipation of changes in material or

    product prices.

    2. Seasonal inventory is caused by unpredictable fluctuations in supply and

       demand while cycle inventory is caused by predictable fluctuations in supply

       and demand.

    3. Cycle inventory is caused by predictable fluctuations in supply and demand

       while seasonal inventories are caused by scale effects in purchasing or

       manufacturing.

    4. Cycle inventory is caused by scale effects in purchasing or manufacturing

       while seasonal inventories are caused by predictable fluctuations in supply and demand.

11. A sports retailer has to decide on its desired level of product availability well ahead of the uncertain customer demand. Given a purchase price of 300 per unit, a regular retail price of 450 per unit and a discount retail price of 250 per unit, what is the optimal level of product availability for the retailer?

    a. The optimal level of product availability is 67%. b. The optimal level of product availability is 75%. c. The optimal level of product availability is 85%. d. The optimal level of product availability is 90%.

12. Which of the following is considered a benefit of single queue processes that pool the capacity of multiple resource units all performing the same activity? a. Reduced variability in order arrivals. b. Reduced variability in order processing.

    c. Increased flexibility of resource units. d. All of the above.

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13. A retail store sells about 250 units of a certain product each month. The product has a unit cost of 50 and the store face annual inventory holding cost of 20% (including physical holding cost and cost of capital). The fixed cost of a replenishment order is 150. Given that the retail store wants to minimize annual ordering and holding cost, what order quantity do you recommend?

    a. 85 b. 215 c. 250 d. 300

14. For its replacement parts, a manufacturer faces a monthly demand with a mean of 4000 units and standard deviation of 300 units. Given that it takes four months to manufacture the replacement parts, how much safety inventory should the manufacturer keep assuring a service level of 98% (note that the safety factor z needs to be equal to 2.05 in this case)?

    a. 300 b. 615 c. 1,230 d. 2,460

15. A capacity management strategy that attempts to reduce fluctuations by stimulating off-peaks and constraining peaks is called: a. Yield management strategy. b. Level capacity strategy.

    c. Chase demand strategy. d. Demand management strategy.

16. After freezing, ice cream must be kept between -15 and -35 degrees Celsius. The refrigeration process needed to keep the temperature has a standard deviation of 2 degrees Celsius while the mean temperature is -25 degrees Celsius. What is the capability ratio (Cp) of this process?

    a. 0.50 b. 0.83 c. 1.67 d. 3.33

17. Which of the following statements is correct? a. Process capability is about keeping performance in control bands. b. Process capability is about meeting the internal expectations. c. Process capability is about meeting the external expectations. d. Process capability is about eliminating abnormal normal variability.

18. Which of the following is not required for Just-in-time (JIT) production a. Dependable suppliers and deliveries. b. Reliable equipment and machines. c. Standardised operations and processes.

    d. Floor space for stocks and equipment.

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19. The supplier of an automobile manufacturer is planning to implement Heijunka (production levelling). The manufacturer has suggested to the supplier to cut the batch size from currently 40 units down to 10 units. To achieve this, the supplier should:

    a. Reduce the setup cost by the factor of 4 b. Reduce the setup cost by the factor of 16 c. Reduce the setup cost by the factor of 4 d. Ignore setup cost as these have no effect on batch size

20. Which of the following measures is suitable to improve the environmental sustainability of material handling activities at warehouses and other facilities? a. Improved logistics planning to reduce transports and travelling distances.

    2. Using more efficient means of transportation with alternative fuel

       technologies.

    3. Improved inventory management that allows for lowered stock levels.

    4. Using modular product designs that ease disassembly and recycling.