Font size
WorksheetsPRE FINAL TEST OPM530
Total questions: 70
Worksheet time: 38mins
What does the Economic Order Quantity (EOQ) model help to determine?
The optimal order size that minimizes total inventory cost
The maximum level of inventory to hold
The minimum level of inventory to hold
The reorder point for inventory
In the context of inventory management, what does the term 'safety stock' refer to?
The amount of inventory kept to protect against stockout
The total amount of inventory in the warehouse
The inventory that is obsolete and needs to be written off
The inventory that is in transit
What is the purpose of a reorder point in inventory management?
To determine the quantity of inventory to be ordered
To identify the safety stock level
To specify when a new order should be placed to replenish inventory
To classify inventory items based on their value
In the context of inventory management, what does 'lead time' refer to?
The time taken to manufacture a product
The time between placing an order and receiving it
The time taken to count inventory
The time taken to classify inventory items
Which inventory cost includes expenses such as warehousing, insurance, and obsolescence?
Ordering Cost
Carrying Cost
Stockout Cost
Setup Cost
The EOQ model primarily aims to balance which two types of costs?
Transportation costs and warehousing cost
Ordering costs and carrying cost
Labor costs and production cost
Stockout costs and setup cost
How does the EOQ model handle variations in demand?
It ignores variations and assumes constant demand
It adjusts order quantities based on historical data
It incorporates safety stock to handle variations
It uses a complex algorithm to predict future demand
In inventory management, what is a 'stockout'?
The condition where excess inventory is held
The condition where inventory is replenished
The condition where inventory is depleted and unable to meet demand
The condition where inventory is written off due to obsolescence
What is the primary objective of the quantity discount model in inventory management?
To reduce the number of suppliers
To minimize total inventory costs by considering discounts for larger order quantities
To classify inventory items based on their value
To implement a perpetual inventory system
If a company uses the quantity discount model and finds that the EOQ is higher than the minimum quantity required for a discount, what should they do?
Ignore the discount and order the EOQ
Recalculate the EOQ considering the discount
Order the minimum quantity required for the discount if it results in a lower total cost
Always order the maximum quantity offered by the supplier
What is the main challenge of implementing the quantity discount model in inventory management?
Accurately predicting demand
Maintaining accurate inventory records
Balancing the trade-off between ordering costs, holding costs, and purchase cost
Determining the correct lead time
What is the key difference between the EOQ model and the POQ model?
The EOQ model is used for continuous production, while the POQ model is used for batch production
The EOQ model considers setup costs, while the POQ model does not
The EOQ model assumes instantaneous replenishment, while the POQ model assumes a finite production rate
The EOQ model is used for perishable goods, while the POQ model is used for non-perishable goods
Which of the following would NOT generally be a motive for a firm to hold inventories?
to decouple various parts of the production process
to provide a selection of goods for anticipated customer demand and to separate the firm from fluctuations in that demand
to take advantage of quantity discounts
to minimize holding cost
A production company has the following data about their inventory. D = 6000 per year, S = $100, holding cost = $5 per unit per year what is the economic order quantity?
490
24
141
600
If EOQ for company A is 200 and the annual demand is 1000 what is the number of orders per year for the company?
50 units
5 times
200000 units
0.2
Calculate the period between orders if a company operates for 250 days a year and have an annual demand of 2000 and average inventory of 100.
50 days
10 days
40 days
25 days
For a certain item, the cost-minimizing order quantity obtained with the basic EOQ model is 200 units, and the total annual inventory (carrying and setup) cost is $600. What is the inventory carrying cost per unit per year for this item?
$1.50
$2.00
$3.00
not enough data to determine
A product has a demand of 4000 units per year. Ordering cost is $20, and holding cost is $4 per unit per year. The cost-minimizing solution for this product is to order:
all 4000 units at one time.
200 units per order
every 20 days
10 times per year
Most inventory models attempt to minimize:
the likelihood of a stockout.
the number of items ordered
total inventory-based cost
the number of orders placed
Cycle counting:
is a process by which inventory records are verified once a year
eliminates annual inventory adjustment
provides a measure of inventory turnover
assumes that all inventory records must be verified with the same frequency
Which of the following statements regarding the production order quantity model is TRUE?
It applies only to items produced in the firm's own production departments.
It relaxes the assumption that all the order quantity is received at one time.
It relaxes the assumption that the demand rate is constant.
It minimizes the total production costs.
The assumptions of the production order quantity model are met in a situation where annual demand is 3650 units, setup cost is $50, holding cost is $12 per unit per year, the daily demand rate is 10 and the daily production rate is 100. What is the production order quantity for this problem?
139
174
184
365
Montegut Manufacturing produces a product for which the annual demand is 10,000 units. Production averages 100 units per day, while demand is 40 units per day. Holding costs are $2.00 per unit per year, and setup cost is $200.00. What is the production order quantity for this problem?
500 units
1,000 units
1,826 units
2,500 units
The annual demand is 600 units, the ordering cost is $20 per order, and the annual inventory carrying cost is 30% of the item price. The following quantity discount schedule establishes the price: What should the order quantity be in order to minimize the total annual cost?
49 units
50 units
100 units
250 units
A printing company estimates that it will require 1,000 reams of a certain type of paper in a given period. The annual cost of carrying one unit in inventory for that period is $0.50. The company buys the paper from a wholesaler in the same town, sending its own truck to pick up the orders at a fixed cost of $20.00 per trip. What is the total annual inventory cost if the company follows the Economic Order Quantity (EOQ) model?
$100.50
$200.42
$141.42
$140.50
Which of the following is a benefit of supply chain integration?
Increased product variety
Higher production cost
Improved coordination and collaboration across the supply chain
Longer lead time
Which of the following can help reduce the risk of supply chain disruptions?
Single sourcing
Building strong relationships with multiple suppliers
Increasing lead time
Reducing inventory level
What is supply chain risk?
The possibility of increased production cost
The potential for disruptions or failures within the supply chain that can impact operations
The likelihood of achieving higher sales
The risk of employee turnover
Which of the following is a common source of supply chain risk?
High employee morale
Stable market demand
Supplier bankruptcy
Consistent delivery schedule
How can natural disasters impact the supply chain?
By increasing customer satisfaction
By disrupting the flow of goods and raw materials
By reducing production cost
By improving supply chain efficiency
What is the primary goal of supply chain risk management?
To increase product price
To identify, assess, and mitigate risks to ensure continuity and resilience in the supply chain
To decrease inventory level
To expand the number of suppliers
Which of the following strategies can help mitigate supply chain risks?
Single sourcing
Increasing lead time
Diversifying the supplier base
Reducing inventory level
How can geopolitical events create supply chain risks?
By stabilizing supply chain operations
By causing changes in trade policies, tariffs, and regulations that can disrupt supply chains
By reducing transportation cost
By improving supplier reliability
Which of the following is an example of 'demand risk' in supply chain management?
Changes in customer preferences leading to sudden shifts in demand
Supplier bankruptcy
Natural disasters impacting production facilities
Increasing production cost
What role does 'insurance' play in managing supply chain risks?
It eliminates all supply chain risk
It provides financial protection against certain types of losses and disruptions
It decreases production cost
It increases the number of suppliers
Which of the following is a proactive approach to managing supply chain risks?
Ignoring potential risk
Developing risk mitigation strategies in advance
Reacting to disruptions as they occur
Increasing production rate
What is 'cyber risk' in the context of supply chain management?
The risk of physical theft of goods
The risk associated with disruptions due to cyber-attacks on supply chain IT systems
The risk of natural disaster
The risk of increased transportation cost
What does 'outsourcing' mean in the context of supply chain management?
Bringing production processes in-house
Contracting out certain business processes or production functions to external suppliers
Reducing inventory level
Increasing the number of employees
Which of the following is a potential benefit of outsourcing?
Increased control over production processes
Reduced flexibility in operations
Access to specialized skills and cost saving
Increased internal capacity requirement
What is the main focus of 'supplier development'?
Reducing the number of suppliers
Collaborating with suppliers to improve their processes and performance for mutual benefit
Increasing production lead time
Focusing on short-term gains
Which of the following is an example of backward vertical integration?
A car manufacturer acquiring a tire company
A retail chain opening more stores
A software company outsourcing its customer service
A clothing brand launching a new fashion line
Which of the following is an example of forward vertical integration?
A bakery purchasing a wheat farm
A computer manufacturer opening its own retail store
A smartphone company acquiring a microchip manufacturer
A beverage company outsourcing its bottling process
How can vertical integration impact a company's cost structure?
By increasing external supplier cost
By reducing costs through greater control and economies of scale
By increasing advertising cost
By reducing the number of product lines
Which of the following is a potential outcome of working with certified suppliers?
Increased risk of supply chain disruptions
Reduced need for incoming inspections and higher confidence in product quality
Higher costs due to certification fee
Lower product innovation
What term is used to describe the outsourcing of logistics?
sub-logistics
e-logistics
third-party logistics (3PL)
shipper-managed inventory (SMI)
What is the primary goal of job design in operations management?
To increase the number of tasks assigned to each worker
To create jobs that maximize employee satisfaction and productivity
To reduce the number of employees required
To standardize tasks across all departments
In job design, what does 'job rotation' involve?
Increasing the complexity of tasks performed by employees
Moving employees between different jobs or tasks to reduce monotony
Combining multiple tasks into a single job to increase variety
Allowing employees to design their own jobs
What is the primary focus of job specialization in operations management?
To create jobs with a broad range of tasks
To reduce the number of employees required for production
To assign specific tasks to workers to increase efficiency and expertise
To increase the variety of tasks performed by each worker
What is the primary objective of job expansion in operations management?
To reduce the number of tasks assigned to employees
To increase the variety and scope of tasks performed by employees
To decrease employee workload and stress
To narrow the focus of job roles to specific tasks
In job expansion, what does 'skill variety' refer to?
The number of different tasks an employee performs
The level of complexity in each individual task
The frequency of job rotation within the organization
The degree to which tasks are repetitive and monotonous
What is a common effect of job enrichment on employee motivation?
It decreases motivation by increasing job complexity
It has no effect on employee motivation
It enhances motivation by providing more meaningful work and greater responsibility
It reduces motivation due to increased workload
How can job enlargement impact employee performance?
How can job enlargement impact employee performance?
It typically reduces performance due to increased task complexity
It can improve performance by providing employees with more varied tasks and reducing monotony
It has no effect on employee performance
It decreases performance by overloading employees with additional tasks
What is the primary characteristic of a self-directed team?
The team works under strict supervision and follows detailed instructions
The team members are responsible for their own work and decisions without direct supervision
The team has a designated leader who makes all decisions
The team members only focus on specific, narrowly defined tasks
Which of the following is a key benefit of self-directed teams?
Increased need for direct management and supervision
Improved flexibility and responsiveness to changes
Reduced employee autonomy and decision-making
Higher levels of task specialization and monotony
Which management style is most compatible with the concept of self-directed teams?
Autocratic management
Transformational leadership
Micromanagement
Bureaucratic management
How does the performance evaluation of self-directed teams typically differ from traditional teams?
Performance is assessed based on individual tasks rather than team outcomes
Performance is evaluated based on the team’s overall results and collaborative efforts
Performance is solely based on adherence to managerial directives
Performance is not formally evaluated in self-directed teams
What is the primary purpose of incentive systems in operations management?
To increase the number of tasks performed by employees
To provide rewards and recognition that enhance employee motivation and performance
To reduce the number of employees required
To standardize job roles and responsibilities
Which of the following is an example of an extrinsic incentive?
Job enrichment
Acknowledgment and praise from supervisors
Employee recognition programs
Increased salary and bonuses
Which of the following incentive systems is designed to link rewards directly to individual or team performance?
Profit sharing
Merit-based pay
Job rotation
Team-building activities
Suppose that the allowance factor for a job is 0.5 and the normal time is 5 hours. What is the standard time?
5 hours
2.5 hours
10 hours
7.5 hours
The average observed time for a given job is 10 minutes. The performance rating is 80%, and allowances are set by contract at 10%. What is the standard time?
8.80 minutes
8.89 minutes
10.00 minutes
19.00 minutes
A brake system installer in an auto factory has an actual average time of 10 minutes on her task. The performance rating of the worker timed was estimated at 110%. Practice in this department is to allow 9% for allowances. Compute the standard time for the operation.
10 minute
11.09 minutes
12 minute
12.09 minutes
An operation in a television factory has an average observed time of 6 minutes. The performance rating of the worker timed was estimated at 90%. Practice in this department is to provide 8% for allowances. Compute the standard time for the operation.
5.0 minutes
5.40 minutes
5.87 minutes
6.02 minutes
A task involves positioning two metal parts with a rubber gasket sandwiched between them, inserting two bolts into predrilled holes, threading a nut onto each bolt, and tightening each bolt with a pneumatic wrench. In a preliminary study, the manager observed one of his workers performing this task five times. The observations were made in an air-conditioned, well-lit training facility, at ground level, with all tools and equipment clean and readily available. What is the average observed time for this task?
70.0 seconds
71 seconds
71.5 second
67.2 seconds
Observed time = 6.5 hours. Performance rating = 110%. Find the normal time
6.5 hrs
7 hrs
7.15 hrs
7.5 hr
A worker takes 15 hours observed time to complete a task. The performance rating is 95%. What is the normal time?
14 hrs
14.25 hrs
14.5 hrs
15 hrs
A worker takes 18 hours observed time with a performance rating of 80%. Allowance = 40% of standard time. What is the standard time?
22.5 hrs
23.5 hrs
24 hrs
25 hr
The data below represent time study observations for an assembly operation. Assume a 10% allowance factor. What is the normal time for element 2?
1.54 min
1.69 min
1.88 min
1.95 min
A worker records a normal time of 9 hours. Allowance is 25% of standard time. What is the standard time?
10.5 hrs
11.5 hrs
12.5 hrs
12 hrs
