subject: operations management

Book: Managerial Decision Modeling with Spreadsheets : Balakrishnan Render Stair : Third Edition

Question 1 (3 points) A cake factory can produce cakes at the rate of 560 per day. The factory supplies its cakes to local grocery stores at a rate of 300 per day. The cost to prepare the equipment for producing the cakes is $45 and lead time for setup is 2 days. Annual holding costs are $3.50 per cake. Assume that the factory operates 285 days a year. What is the Total annual inventory Cost? Your Answer: Answer Question 2 (2 points) A forecasting method has produced the following over the past five months. What is the mean absolute deviation Your Answer: Answer Question 3 (1 point) The expected monetary value of a decision alternative is the sum of all possible payoffs from the alternative, each weighted by the probability of that payoff occurring. True False The difference between the expected payoff under perfect information and the maximum expected payoff under risk is expected monetary payoff. expected value of perfect information. PERT. expected monetary value. economic order quantity. Page 4 of 31 Question 5 (1 point) The first step, and a key element, in the decision-making process is to consult a specialist. develop objectives. select the best alternative. monitor the results. clearly define the problem. Question 6 (10 points) Consider the information provided below for the project and answer the following questions. A seasonal index for a monthly series is about to be calculated on the basis of three years' accumulation of data. The three previous July values were 185,165 and 165 . The average demand over all months during the three-year time period was 190 . What is the approximate seasonal index for July? Your Answer: Answer Question 31 (1 point) For a given product demand, the time-series trend equation is 31011x. What is the forecast for period 9? Your Answer: Answer Question 29 (10 points) Tha annual damand ardarina ract and tha annuial inuantanu ramine rost rate for a certain 5 established by the Question 28 (8 points) The following payoff table that represents the profits earned for each alternative (A, B, and C) under the states of nature Good, normal and poor Question 27 (2 points) IKOP uses a weighted moving average method to forecast pancake sales. It assigns a weight of 9 to the previous month's demand, 4 to demand two months ago, and 4 to demand three months ago. If sales amounted to 2,400 pancakes in July, 1,500 pancakes in August, and 5,000 pancakes in September, what should be the forecast for October? Your Answer: Answer Qualitative forecasting techniques generally take advantage of the knowledge of experts and therefore do not require much judgment. True False Question 24 (1 point) Which of the following is true regarding the two smoothing constants of the Forecast Including Trend (FIT) model? Their values are determined independently. Alpha is always smaller than beta. One constant is positive, while the other is negative. One constant smooths the regression intercept, whereas the other smooths the regression slope. They are called MAD and cumulative error. Question 25 (1 point) Cyclical influences on demand are often expressed graphically as a linear function that is either upward or downward sloping. True False Question 26 (1 point) Demand cycles for individual products can be driven by product life cycles. True False Consider the following data and its associated Excel output for a simple linear regression model. How would you describe the linear relationship between Y and X ? Intercept 2.267 Slope 0.843 SE 1.810 Correlation 0.890 r-squared 0.791 inverse relationship negative relationship no relationship positive relationship not enough information is provided For a given product demand, the time-series trend equation is 534x. The negative sign on the slope of the equation: is an indication that product demand is declining. is a mathematical impossibility. implies that the coefficient of determination will also be negative. is an indication that the forecast is biased, with forecast values lower than actual values. implies that the cumulative error will be negativ Question 20 (1 point) Demand for a certain product is forecast to be 151 units per month, averaged over all 12 months of the year. The product follows a seasonal pattern, for which the January monthly index is 1.80. What is the seasonally-adjusted sales forecast for January? Your Answer: Answer Question 21 (1 point) Given an actual demand this period of 88 , a forecast value for this period of 89 , and an alpha of 0.30, what is the exponential smoothing forecast for next period? Your Answer: Answer For a given product demand, the time-series trend equation is 534x. The negative sign on the slope of the equation: is an indication that product demand is declining. is a mathematical impossibility. implies that the coefficient of determination will also be negative. is an indication that the forecast is biased, with forecast values lower than actual values. implies that the cumulative error will be negativ Question 20 (1 point) Demand for a certain product is forecast to be 151 units per month, averaged over all 12 months of the year. The product follows a seasonal pattern, for which the January monthly index is 1.80. What is the seasonally-adjusted sales forecast for January? Your Answer: Answer Question 21 (1 point) Given an actual demand this period of 88 , a forecast value for this period of 89 , and an alpha of 0.30, what is the exponential smoothing forecast for next period? Your Answer: Answer Which of the following would not generally be a motive for a firm to hold inventories? to minimize holding costs to provide a stock of goods that will provide a selection for customers to eliminate safety stock to decouple or separate parts of the production process to take advantage of quantity discounts Question 16 (1 point) The average inventory level is inverselyegatively related to order size. True False Question 17 (1 point) In cycle counting, the frequency of item counting and stock verification usually varies from item to item depending upon the item's classification. True False Question 18 (1 point) The optimal Economic Order Quantity (EOQ) minimizes the sum of ordering and purchasing costs. True False Question 13 (2 points) A shoe store sells 1,800 pairs of shoes each year. Each pair carried in stock incurs a holding cost of $14 per year. Each order costs approximately $35 in shipping and receiving. What are the total ordering and carrying costs? Your Answer: Answer Question 14 (2 points) Kitchen Project ( 2 questions). Activities of a kitchen project is given with their duration and precedence relationship below: For the project, which of the following is the critical path? ACDF ABCDEF ACEF ABEF A project has three paths. A-B-C has a length of 25 days. A-D-C has a length of 15 days. Finally, A-E-C has a length of 20 days. Which one of the following statements is TRUE? The expected duration of this project is 25+15+20=60 days. A-B-C has the most slack. The expected duration of this project is 25 days. A-D-C is the critical path. Question 11 (1 point) What is the forecast for May using a four-month moving average? Your Answer: Answer Question 12 (1 point) A time-series trend equation is 23+3.0X. What is your forecast for period 4 ? Your Answer: Answer Question 7 (1 point) Which of the following statements regarding critical paths is true? Some activities on the critical path may have slack. The duration of the critical path is the average duration of all paths in the project network. On a specific project, there can be multiple critical paths, all with exactly the same duration. The shortest of all paths through the network is the critical path. Every network has only one critical path. Question 8 (1 point) Ethical issues that may arise in projects large and small due to accurate expense reports. pressure to mask delays with false status reports. enforcement of safety or health standards. adherence to quality standards fair selection of contractors. Question 9 (1 point) A project manager should stop crashing a project if the time budget has been met or if the crash costs have exceeded the savings in indirect and penalty costs. True False