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Q:
Which of the following statements regarding linear programming is best?
A) A parameter is also known as a decision variable.
B) Linearity assumes proportionality and additivity.
C) Since nonnegativity is required, parameters must be greater than or equal to zero.
D) Linear programming ensures the decision maker will reach a single, optimal solution.
Q:
A manager is interested in using linear programming to analyze production for the ensuing week. She knows that it will take exactly 1.5 hours to run a batch of product A and that this batch will consume two tons of sugar. This is an example of the linear programming assumption of:
A) linearity.
B) certainty.
C) continuous variables.
D) whole numbers.
Q:
One assumption of linear programming is that a decision maker cannot use negative quantities of the parameters.
Q:
In linear programming, each parameter is assumed to be known with certainty.
Q:
A parameter is a region that represents all permissible combinations of the decision variables in a linear programming model.
Q:
Decision variables are represented in both the objective function and the constraints while formulating a linear program.
Q:
An = (equal to) constraint is often used for certain mandatory relationships.
Q:
Linear programming is useful for allocating scarce resources among competing demands.
Q:
In a one-period inventory model, the after-season sales price may be zero.
Q:
If demand exceeds the order quantity in a single period situation, then the payoff is simply the order quantity times the per unit profit.
Q:
Why are there discontinuities (areas where the curve jumps up or down and is not smooth) in the total cost curve in the quantity discount model?
Q:
When faced with a quantity discount situation, the first EOQ should be calculated using the ________ price.
Q:
As an inventory manager, you must decide on the order quantity for an item. Its annual demand is 350 units. Ordering cost is $20 each time an order is placed, and the holding cost is 30 percent of the per-unit price. Your supplier provided the following price schedule. Price per Unit
Order Quantity $4.00
000 - 199 $3.75
200 - 399 $3.50
400 and more What is the annual cost discrepancy between the optimal order policy and the second best order policy?
A) Less than $5
B) Between $5 and $10
C) Between $10 and $20
D) More than $20
Q:
Which one of the following statements about quantity discounts is best?
A) The minimum cost point on each price curve is always feasible.
B) A price break is the maximum quantity needed to get a discount.
C) If the EOQ for the lowest price is feasible, this is the best lot size.
D) Either price or quantity is sufficient for the search for the best lot size.
Q:
A pencil supplier just introduced quantity discounts. The price schedule follows. Order Quantity
Price per Unit 000 - 199
$4.00 200 - 399
$3.75 400 and more
$3.50 XYZ store's annual demand remains at 350 units and ordering cost at $2 per order. If annual holding cost is 30 percent of the pencils' per-unit price, what order quantity should XYZ select to minimize all costs?
A) fewer than or equal to 150 units
B) greater than 150 units but fewer than or equal to 199 units
C) greater than 199 units but fewer than or equal to 399 units
D) greater than 399 units
Q:
When facing quantity discounts, the EOQ found with the lowest price level is always the lowest total cost plan.
Q:
Briefly explain why the economic production lot size (ELS) is actually larger than the EOQ when there are noninstantaneous replenishments.
Q:
In an economic production lot size situation, the producer is producing half the time if the ratio of production rate to demand rate is ________.
Q:
In an economic production lot size situation, the production rate is always ________ than the demand rate.
Q:
The pile of inventory accumulated in an economic production lot size situation is ________ than the lot size dictated by the ELS calculation.
Q:
A manufacturer produces aluminum cans internally rather than purchasing them and uses the economic production lot size equation to govern this process. The length of time that the aluminum can batch runs is given by the equation ________ and the time between the start of one batch of cans to the next is found by the equation ________.
Q:
The ________ is the optimal lot size in situations in which replenishment is not instantaneous.
Q:
In a noninstantaneous replenishment model, as the daily demand approaches the daily production rate, the:
A) number of production runs per year decreases.
B) length in days of a production run increases.
C) economic lot size increases.
D) time between production runs decreases.
Q:
Warren's Ice Cream makes 4 different flavors of ice cream using their secret process and top-secret recipes. Each of their flavors is equally popular and experiences a demand of 5,000 gallons/year. Warren's process is capable of producing 100 gallons/day once they incur the $25 setup cost. The ice cream holding cost is 10% of the $5 per gallon price. Warren's plant runs 250 days a year and stays busy doing so, but management feels they can add another flavor to their product line and increase their revenue. Which of the following statements is appropriate for this scenario?
A) Warren's can comfortably add a fifth flavor without increasing the number of days they operate.
B) Warren's cannot add the fifth flavor because the holding cost would increase.
C) Warren's can add the fifth flavor only if there is zero setup time between flavors.
D) Warren's cannot add the fifth flavor because demand would exceed capacity.
Q:
Consider a manufacturer that uses the economic production lot size (ELS) model. What must the relationship be between production rate and demand rate for the producer to realize a maximum inventory that is exactly two-thirds of their lot size?
A) p = 2d
B) p = 0.5d
C) p = 0.33d
D) p = 3d
Q:
The time between orders is given by the formula ELS/D. What is the significance of its inverse, D/ELS?
A) the number of orders per year
B) the time between consuming an order
C) the ratio of demand only to production and demand cycles
D) the ratio of the maximum inventory to the production quantity
Q:
Consider a manufacturer that uses the economic production lot size (ELS) model. What must be the relationship be between production rate and demand rate for the producer to spend exactly the same time in the production and demand portion of the inventory cycle as they spend in only the demand portion of the inventory cycle?
A) p = d
B) p = 0.5d
C) p = 2d
D) p = 1.5d
Q:
Consider a manufacturer that uses the economic production lot size (ELS) model. What must be the relationship be between production rate and demand rate for the producer to spend double the time in the production and demand portion of the inventory cycle than they spend in only the demand portion of the inventory cycle?
A) p = 1.5d
B) p = d
C) 2p = d
D) p = 2d
Q:
Scenario C.1 Jerry Allison is in charge of production for a small producer of plumbing supplies. The cricket model has an estimated annual demand of 12,000 units and can be produced at a production rate of 90 units per day. The company produces (and sells) the cricket 300 days per year. Setup cost to produce this model averages $22 and the item has a holding cost of $3 per unit per year. Use the information in Scenario C.1. If Jerry chooses to produce the batch size suggested by the economic production lot size (ELS) model, what is the annual cost? A) less than or equal to $900 B) greater than $900 but less than or equal to $950 C) greater than $950 but less than or equal to $1,000 D) greater than $1,000
Q:
Consider a noninstantaneous replenishment situation in which the production rate is 100 units per day, the demand rate is four units per day, and the economic production lot size is 500 units. Which of the following statements is true? A) The average cycle inventory is fewer than 225 units. B) The average cycle inventory is greater than 300 units. C) The rate of buildup in cycle inventory during the production cycle is fewer than 100 units per day. D) The rate of buildup in cycle inventory during the production cycle is greater than or equal to 400 units per day.
Q:
For analysis using the economic production lot size (ELS) model to be useful, the producer must be able to produce the item faster than it is consumed.
Q:
The economic production lot size represents the maximum quantity of on-hand inventory for a manufacturer.
Q:
Explain why in any given season, the one-period decision model may result in a poor choice for a stocking level?
Q:
Pick any three products that occupy both extremes and the midpoint of the one-period model continuum. Explain why the products occupy these positions and identify the ideal inventory model for determining the best order quantity or each.
Q:
When do one-period decisions on inventory arise in practice?
Q:
In a single period model, if the in-season demand is unexpectedly high, then the profit can be calculated as ________.
Q:
In a single period model, if purchase quantity Q exceeds demand rate D, then the number of units sold after the season is ________.
Q:
The need for one-time inventory decisions also can arise in manufacturing plants when ________ items are made to a single order and ________ are high.
Q:
Which of these statements about the one-period model is best?
A) Purchasing a quantity with the highest expected payoff will result in a positive payoff regardless of the actual demand during the period.
B) The loss per unit cannot exceed the profit per unit.
C) If demand exceeds the purchased quantity then the actual payoff exceeds the expected payoff for that quantity.
D) The expected payoff for a purchase quantity is always less than the actual payoff for that quantity.
Q:
A world traveler prepares to leave the comforts of home for a back to nature visit to Gilligan's Island, where all transactions are conducted in coconuts and the banking system is completely undeveloped. The traveler can buy coconuts for $2 each before the journey. If he fails to bring enough coconuts with him and runs out, he must get some coconuts flown in at a cost of $5 each. If he finishes his vacation and has leftover coconuts he can cash them in when he returns home, but will receive only $1.50 per coconut. What is his loss per unit if he overstocks on coconuts prior to leaving home?
A) $0.50
B) $1
C) $3.50
D) $4.50
Q:
Scenario C.3 Consider an item with the following discrete demand distribution for a one-period inventory decision. Demand (D) Demand Probability 10 0.15 20 0.20 30 0.30 40 0.20 50 0.15 This item experiences a seasonal demand pattern. A profit of $15 per unit is made if the item is sold in season, but a loss of $10 per unit is incurred if the item is sold after the season is over. Use the information in Scenario C.3. What is the order quantity with the highest expected payoff? A) 20 units B) 30 units C) 40 units D) 50 units
Q:
Use the information in Scenario C.2. What is the best order quantity? A) 20 units B) 40 units C) 60 units D) 80 units
Q:
Use the information in Scenario C.2. What is the payoff with an order quantity (Q) of 80 units if the demand (D) is 60 units?
A) less than or equal to $3,000
B) greater than $3,000 but less than or equal to $4,000
C) greater than $4,000 but less than or equal to $5,000
D) greater than $5,000
Q:
Use of the single-period model will maximize profit in every season.
Q:
The closer the in-season and after season sales price are, the lower the order placed at the start of the season.
Q:
In a one-period inventory model, the more profitable the item during the sales season, the manager should place a higher order at the start of the season.
Q:
In a one-period inventory model, the higher the after-season sales price, the higher the order placed at the start of the season.
Q:
Create a table that lists any three performance measures for a service system in the left column. In the center column, indicate what steps management can take to improve system performance on those metrics. In the rightmost column indicate what steps management can take to improve customers' perceptions of performance on those metrics.
Q:
A customer support call center grades their employees on how quickly they resolve customer problems (average call time) and how many times the customer request escalates to the point that a supervisor must be summoned to resolve the dispute. What might an employee do to perform well on these metrics without actually providing good customer service? What could management do to prevent such behaviors?
Q:
If the nature of the customer population, constraints on the line, the priority rule, and the service time distribution renders waiting line theory no longer useful, then an operations manager should rely on:
A) decision tree analysis.
B) linear programming.
C) simulation.
D) Little's Law.
Q:
Instead of having one worker perform all eight steps to process a customer, an operations manager assigns each step to a different worker. In doing so, the operations manager has increased the:
A) number of phases.
B) number of channels.
C) arrival rate.
D) interarrival rate.
Q:
An operations manager organizes a process improvement team and the resulting process has a lower mean (). Which statement is the best description of this change?
A) Arrival rate has fallen.
B) There are fewer phases in the new system.
C) Interarrival time has fallen.
D) Server efficiency has declined.
Q:
An operations manager decides that customers should be processed based on the anticipated duration of their request instead of their arrival time. The system has been changed in what fashion?
A) number of phases
B) server efficiency
C) priority rule
D) line arrangement
Q:
In a waiting-line problem, assigning additional employees to a service facility will have a direct effect on:
A) the line arrangement.
B) service rates.
C) the size of the customer population.
D) the number of service phases.
Q:
In a waiting-line problem, increasing advertising expenditures, increasing the number of promotions, or changing the price of a service is most likely to affect:
A) customer arrival rates.
B) service rates.
C) the priority rule.
D) the line arrangement.
Q:
If you were using SimQuick to determine how opening an additional airport security inspection station would affect passenger wait times, a ________ would be used to model each of the waiting lines.
A) workstation
B) buffer
C) decision point
D) entrance
Q:
If you were using SimQuick to determine how opening an additional airport security inspection station would affect passenger wait times, each inspection station would be modeled in SimQuick with a:
A) workstation.
B) buffer.
C) decision point.
D) entrance.
Q:
SimQuick is a process simulation software tool that can provide statistics on cycle time for simple processes such as waiting lines, inventory control, and projects.
Q:
Customer arrival rates vary throughout the day and the priority rules change depending on the customer mix and influence each has over the finances of the firm. Such a situation is best analyzed using simulation rather than one of the queuing formulas.
Q:
What is Little's Law? How might it be applied to determine the average length of time it takes an MBA student to complete the program?
Q:
Customer waiting times for a call center are extremely long. Two possible explanations for this phenomenon are low ________ or low ________.
Q:
________ is a fundamental law that relates the number of customers in a waiting-line system to the waiting time of customers.
Q:
Students arrive at a university business library during peak evening hours at a rate of 40 students every half hour. A periodic count shows that there are 200 students in the library at any one time. On average, how long is each student's stay in the library?
A) less than or equal to one hour
B) greater than 1.0 but less than or equal to 2.0 hours
C) greater than 2.0 but less than or equal to 3.0 hours
D) greater than 3.0 hours
Q:
Students arrive at a university business library during peak evening hours at a rate of 40 students every half hour. Each student stays an average of two hours. On average, how many students are in the library at any one time?
A) greater than 120 students
B) greater than 80 but less than or equal to 120 students
C) greater than 40 but less than or equal to 80 students
D) less than or equal to 40 students
Q:
The manager of a car wash wants to know how fast his new crew is processing cars through the wash area. He notices that it takes cars an average of about 30 minutes in line to reach the car wash, and his spot checks during the day indicated an average of seven cars in line waiting to be washed. What was the processing rate for his new crew that day?
A) less than or equal to 2.0 minutes per car
B) greater than 2.0 but less than or equal to 3.0 minutes per car
C) greater than 3.0 but less than or equal to 4.0 minutes per car
D) greater than 4.0 minutes per car
Q:
A drive thru car wash can process cars at a rate of one every five minutes. The manager notices that during one particular day it takes cars an average of about 30 minutes in line to reach the car wash. What was the average number of cars in line on that day?
A) 1 to 3 cars
B) 4 to 6 cars
C) 7 to 9 cars
D) 10 or more cars
Q:
A drive thru car wash can process cars at a rate of one every five minutes. When you arrive with your car, you see one car just leaving the washer and eight cars in line ahead of you. How long can you expect to wait before you will reach the car wash?
A) less than or equal to 15 minutes
B) greater than 15 but less than or equal to 30 minutes
C) greater than 30 but less than or equal to 45 minutes
D) greater than 45 minutes
Q:
A movie complex experiences its peak ticket sales in the early evening when several movies have about the same start times. The ticket booth can process customers buying tickets at a maximum rate of 45 seconds each (or 80 tickets sold per hour). You arrive to buy your ticket and count 16 people in line ahead of you. How long can you expect to wait in line before getting to the booth to buy your ticket?
A) less than or equal to 5 minutes
B) greater than 5 but less than or equal to 10 minutes
C) greater than 10 but less than or equal to 15 minutes
D) greater than 15 minutes
Q:
Customers arrive at the local grocery store at a steady rate of 40 an hour. Thirty percent of these customers purchase 10 items or less and go to the express line where they enjoy an average checkout time of 5 minutes. Customers that don't meet the express line criterion go to checkout line #2 where they spend an average of 10 minutes checking out. How many people are checking out in both lines on average?
A) less than or equal to 1.0
B) greater than 1.0 but less than or equal to 3.0
C) greater than 3.0 but less than or equal to 5.0
D) greater than 5.0
Q:
Customers arrive at the local grocery store at a steady rate of 40 an hour. Thirty percent of these customers purchase 10 items or less and go to the express line where they enjoy an average checkout time of 5 minutes. Customers that don't meet the express line criterion go to checkout line #2 where they spend an average of 10 minutes checking out. How many people are checking out in line #2 on average?
A) less than or equal to 1.0
B) greater than 1.0 but less than or equal to 3.0
C) greater than 3.0 but less than or equal to 5.0
D) greater than 5.0
Q:
Customers arrive at the local grocery store at a steady rate of 40 an hour. Thirty percent of these customers purchase 10 items or less and go to the express line where they enjoy an average checkout time of 5 minutes. Customers that don't meet the express line criterion go to the other checkout line where they spend an average of 10 minutes checking out. How many people are checking out in the express line on average?
A) 1.0
B) 3.0
C) 12
D) 144
Q:
The average lead time of a unit of product through a manufacturing station is 18 minutes. The average work-in-process inventory at this station has been 30 pieces. What is the production rate?
A) 0.33 piece per minute
B) 0.83 piece per minute
C) 1.66 pieces per minute
D) 3.0 pieces per minute
Q:
The production rate has been steady at 20 units per hour. The average work-in-process inventory at this station is 15 units. What is the average lead time through this manufacturing station?
A) 15 minutes
B) 30 minutes
C) 45 minutes
D) 1.0 hours
Q:
The average lead time of a unit of product through a manufacturing station is 10 minutes. The production rate has been steady at five units per hour. The average work-in-process inventory at this station is:
A) 50 units.
B) 10 units.
C) 5 units.
D) 0.83 units.
Q:
Scenario B.6 The Jackson Machine Company has four cutting tools that need to be refurbished after an average of 30 hours, according to an exponential distribution. The single machine that refurbishes the tools needs 15 hours for each tool on the average, with exponential service times. Use the information in Scenario B.6. What is the average waiting time of tools in line? A) fewer than or equal to 15 hours B) greater than 15 hours but fewer than or equal to 25 hours C) greater than 25 hours but fewer than or equal to 35 hours D) greater than 35 hours
Q:
Scenario B.4 Customers arrive at an airline ticket counter at the rate of 50 customers per hour, according to a Poisson distribution. There are three ticket agents. Customers select the first available agent from one line. Each agent can process 20 customers per hour with exponential service times. Use the information in Scenario B.4. What is the average time spent in the system? A) fewer than or equal to 6.5 minutes B) greater than 6.5 minutes but fewer than or equal to 7.5 minutes C) greater than 7.5 minutes but fewer than or equal to 8.5 minutes D) greater than 8.5 minutes
Q:
Use the information in Scenario B.2. What is the average amount of time a customer spends waiting in line and being served?
A) less than or equal to 1.0 minutes
B) greater than 1.0 minutes but fewer than or equal to 1.50 minutes
C) greater than 1.5 minutes but fewer than or equal to 2.0 minutes
D) greater than 2.0 minutes
Q:
Use the information in Scenario B.2. What is the average time a customer spends in line?
A) less than or equal to 1.0 minute
B) greater than 1.0 but fewer than or equal to 2.0 minutes
C) greater than 2.0 but fewer than or equal to 3.0 minutes
D) greater than 3.0 minutes
Q:
Use the information in Scenario B.2. What is the average number of customers in the system?
A) fewer than or equal to 3.0
B) greater than 3.0 but fewer than or equal to 5.0
C) greater than 5.0 but fewer than or equal to 7.0
D) greater than 7.0
Q:
Use the information in Scenario B.2. What is the average number of customers in line?
A) fewer than or equal to 1.0
B) greater than 1.0 but fewer than or equal to 2.0
C) greater than 2.0 but fewer than or equal to 3.0
D) greater than 3.0