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DSC2006 Unofficial Mid-Term Mock Test Essay

DSC2006 Unofficial Mid-Term Mock Test
2010/11 Semester 2

Select the best answer

1. Business organizations consist of three major functions which, ideally: a) support one another
b) are mutually exclusive
c) exist independently of each other
d) function independently of each other
e) do not interface with each other
2. Revenue management is concerned with:
a) a process designed to determine the best use of funds generated through sales. b) the use of marketing tools to increase revenue.
c) the use of accounting tools to monitor cash flow.
d) the use of pricing to increase the profit generated from a limited supply of supply chain assets.
e) the appropriate use of operational tools to improve operational efficiency with a view to increasing revenue.
3. In order to make differential pricing effective, which of the following issues are to be dealt with?
a) The firm must differentiate between the market segments and structure its pricing to make one segment pay more than the other.
b) The firm must control demand such that the lower paying segment does not utilize the entire availability of the asset.
c) The firm must secure enough capacity to meet demand from each segment. d) The firm should structure pricing according to different market segments and also control demand in such a way that the lower segment does not utilize the entire availability of the asset.

e) The firm must secure enough capacity to meet demand of each segment and also control demand in such a way that the lower segment does not utilize the entire availability of the asset.
4. In order to differentiate between different market segments, the firm must: a) negotiate separately with different market segments that value
product or service attributes differently.
b) create barriers by identifying product or service attributes that the segments value differently.
c) develop pricing structures based on the volume of various product or service attributes.
d) eliminate barriers that identify product or service attributes that the segments value differently.
e) create barriers by identifying product or service attributes that the segments value differently and also negotiate separately with different market segments.

5. Under which of the following condition(s) is the concept of revenue management is applicable?
a) Capacity is perishable.
b) The same unit of capacity can be used to deliver product or service to different submarkets having their own demand curves with different price elasticity. c) Using appropriate booking rules, a firm can create a fence among the relevant submarkets.

d) Capacity is perishable, the same capacity can be used to different submarkets having their own demand curves with different price elasticity and also the firm can create a fence among the relevant submarkets.

e) Capacity is perishable and the same capacity can be used to different submarkets having their own demand curves with different price elasticity 6. Throughput time cannot be reduced in a process by:

a) Reducing the utilization of bottleneck equipment
b) Performing activities using a serial approach
c) Changing the sequence of activities
d) Reducing interruptions
e) All of the above are ways by which throughput time can be reduced 7. According to Little’s Law, which of the following ratios is used to find throughput time?
a) Cycle time/Process time
b) Throughput time/Process velocity
c) Process velocity/Throughput time
d) Work-in-Process/Throughput rate
e) Value added time/Process velocity
8. A firm can participate in the quantity discount illustrated below when purchasing a product. It costs $20 to place an order each time. The holding cost rate is 20%. The annual demand for the product is 10,000 units. Lead time for the product is 1 month. Quantity

520

Cost
$12
$10
$9

What is the minimum total cost that this firm can purchase and inventory this item while facing a quantity discount?
a) 90,468
b) 90,853
c) 90,894
d) 100,000
e) 100,894
9. Which of the following determines the capacity of a production line? a) the takt time
b) the throughput time
c) the theoretical minimum number of work stations
d) the efficiency

10. Which of the following types of manufacturing layout is considered a hybrid? a) Process layout
b) Product layout
c) Fixed-position layout
d) Cellular layout
11. Compute the required cycle time for a process that operates 8 hours daily
with a required output of 300 units per day.
a) 0.625 minutes
b) 1.6 minutes
c) 37.5 minutes
d) 0.027 minutes
12. Which of the following is NOT a mark of a good layout in manufacturing? a) Straight line flow patter (or adaption)
b) Predictable production line
c) Bottleneck operations
d) Work stations close together
e) Open plant floors (high visibility)
13. Revenue management is not especially useful where:
a) Capacity is relatively fixed
b) The market can be fairly clearly segmented
c) The service cannot be sold in advance
d) The service/product can be stored
14. Which is the correct order for process types starting with low volume/high variety and moving to high volume/low variety?
a) Batch processes, project processes, job shop processes, mass processes, continuous processes
b) Project processes, batch processes, mass processes, job shop processes, continuous processes
c) Project processes, job shop processes, batch processes, mass processes, continuous processes
d) Job shop processes, batch processes, mass processes, continuous processes, project processes
15. Which is the correct sequence in order of increasing process flexibility? a) Job shop / batch / project / continuous / product
b) Project / job shop/ batch / continuous / product
c) Job shop/ batch / project / product / continuous
d) Project / job shop/ batch / product / continuous
e) Continuous / product / batch / job shop/ project
16. Which of these statements is correct?
The Economic Order Quantity (EOQ):
a) Is a formula that calculates a realistic purchase price for an item b)
Will depend on how many related parts are required in the same period

c) Is used to calculate how much safety stock should be carried d) Determines the lowest order quantity by balancing the cost of ordering against the cost of holding stock
e) Should be calculated once a year
17. Under the ABC system of inventory priorities a Class A item is: a) The 80% of high-value items that account for around 20% the total stock turnover value
b) The 20% of high-value items that account for around 20% the total stock turnover value
c) The 20% of high-value items that account for around 80% the total stock turnover value
d) The 80% of high-value items that account for around 80% the total stock turnover value
18. The layout where the equipment, machinery, plant and people move as necessary is known as:
a) Product layout
b) Fixed-position layout
c) Cell layout
d) Process layout
19. A supermarket is usually positioned as:
a) Cell layout
b) Process layout
c) Fixed-position layout
d) Product layout
20. A self-service cafeteria is usually positioned as:
a) Cell layout
b) Product layout
c) Fixed-position layout
d) Process layout
21. Which of the following is usually considered a characteristic of a product or line layout?
a) This layout can easily handle high volume but low variety b) This layout tends to be very flexible
c) Transforming resources are costly to maintain
d) This layout can easily handle high variety but low volume e) Transforming resources move to the work
22. A product layout:
a) Groups transforming resources into dedicated cells
b) Involves locating the transforming resources entirely for the convenience of the transformed resources
c) Is appropriate for low volume operations
d) Allows a wide variety of products to be manufactured on the same equipment e) Moves resources to the place where the operation is to be carried out

23. Cell layouts typically:
a) Locate transforming resources entirely for the convenience of the transformed resources
b) Cost more to run than other types of process layout
c) Involve all the operations on a product being located adjacent to each other d) Are dominated by the transforming resources
e) Are the most efficient form of process layout
24. Which of the following is the least likely decision to be made by Operations Managers?
a) Designing and improving the jobs of the workforce
b) Selecting the location and layout of a facility
c) How much capacity is required to balance demand
d) How to use quality techniques to reduce waste
e) Deciding which market areas to manufacture products for
25. Which of the following would not normally be considered a general characteristic of a service?
a) Many services involve both tangible and intangible outputs b) Production and consumption are simultaneous
c) Production and consumption can always be spatially separated d) Low contact services can often be made more efficient than high contact services
e) Production and sales cannot easily be separated functionally

26. Which of the following is not usually considered a characteristic of a fixed position layout?
a) Fixed position layouts are often used for large or delicate products or services b) Transforming resources are grouped in cells
c) The recipient of the process or the work being undertaken remain in the same place
d) Fixed position layouts are able to offer high flexibility e) Transforming resources often move to the work
27. Operations management is:
a) decision making involving the design, planning, and control of the processes that produce goods and services.
b) decision making involving accounting, engineering, marketing, and strategy formulation that affect operations.
c) decision making involving operations productivity and the reliability, durability, and manufacturability of products.
d) decision making involving analyzing the competitive environment, appraising the organizations skills and resources, and examining the limitations of economics and technology on operations.
28. Inputs to the transformation process of operations include: a) Labour, capital, management, and material.
b) Product design, materials planning, production planning, and product distribution.

c) Strategic planning, marketing, engineering, and purchasing d) Steel, plastics, fibres, food crops, or other raw materials. 29. Some characteristics of services that differentiate them from goods (manufactured products) are:

a) intangible, immediate consumption, high customer contact
b) inventory, immediate consumption, options available
c) delayed consumption, intangible, customer contact
d) immediate consumption, options available, inventory
30. The concept of value-added means
a) the customer must add value to a product by paying for it b) machines add value to the production process because of their low cost c) only service operations add value for the customer
d) outputs of a process are worth more to customers than the sum of inputs
31. Computer-integrated manufacturing (CIM) differs from a flexible manufacturing system (FMS) in that:
a) CIM usually includes one or more FMSs as components.
b) An FMS does not use computers at all.
c) CIM is only one component of an FMS.
d) CIM is concerned only with data while FMS involves production processes. 32. A company is planning to produce a product that will compete in a high-volume market that is very price-competitive. What type of process would be most appropriate?

a) project
b) job shop
c) batch
d) continuous
33. Which of the following is NOT a characteristic of a product layout? a) standard product.
b) high volume production.
c) same sequence of operations for each unit.
d) each order may require a unique sequence of operations.
34. The desired production rate for an assembly line is 120 units-per hour. What would be the cycle time?
a) 30 seconds per unit
b) 40 seconds per unit
c) 0083 minutes per unit
d) 2 minutes per unit
35. Which of the following is an advantage of a cellular layout? a) higher volume than an assembly line.
b) greater f1exibility than a job shop.
c) reduced material handling.
d) use of more employees.

36. A company has a set of tasks that must be completed to assemble a product. The total time for these tasks is 96 minutes. The cycle time is 3 minutes and the company has found that 40 work stations are required to balance the line. What is the efficiency (or utilization) for this assembly
line?

a) 95%
b) 90%
c) 85%
d) 80%
37. Which of the following IS NOT a use of inventory?
a) Buffer against uncertainly
b) Allow for large variations in production
c) Decouple different processes
d) Allow for smooth production
38. A retailer stocks a certain product that is sold at the rate of 10,000 units per year. Each replenishment order from the outside supplier costs $50. The price is $40 per unit and inventory carrying cost per year is 10% of unit price, how many units should be ordered each time to minimize total annual cost?

a) 100
b) 250
c) 500
d) 1,000
39. Referring to the preceding problem, suppose the supplier requires that orders be placed for 2,000 units at a time. What would be the total annual variable cost of ordering and carrying inventory?

a) $ 2,000
b) $ 2,500
c) $ 4,250
d) $ 8,000
40. A certain item is subject to quantity discounts as shown below: Quantity Price
1 – 49
50 – 999
1000 or more

Purchased Per Unit
$ 2.50
$ 2.00
$ 1.80

If 1,000 units are used per year and it costs $450 to place an order due to high shipping costs, how many should be ordered at a time to minimize variable costs if carrying cost per unit per year is 50% of unit value?

a) 1000
b) 500
c) 100
d) 50
41. A company has 100 inventory items with total annual dollar usage of $3,000,000. Which of the following is most likely a C Inventory Item based on ABC analysis?

a)
b)
c)
d)

Part #
1078
2365
1287
7864

Annual $ Usage
$500,000
$250,000
$52,000
$1,000

42. A company manufactures repair parts. These parts are used at the rate of
5,000 units per year. It costs $100 every time more are produced. The cost of holding these parts in inventory is 20% of unit price, which is $25 per unit. The parts can be produced at the rate of 6,250 per year. How many units should be produced at a time to minimize total annual cost?

a) 500
b) 1000
c) 1500
d) 2000


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