OMGT Final Review Study Guide | Operations & Supply Chain Management Key Concepts &
Practice Questions
In a lean production system we expect to see which of the following? - ANS ✔✔no "just in case"
extra inventory
In trying to implement a lean production system you should work with suppliers to do which of
the following? - ANS ✔✔reduce lead times
The effect of the lack of synchronization among supply-chain members is referred to as which of
the following? - ANS ✔✔Bullwhip effect
A company wants to determine its reorder point (R). Demand is variable and the company
wants to build a safety stock into R. If the average daily demand is 12, the lead time is 5 days,
the desired z value is 1.96, and the standard deviation of usage during lead time is 3, which of
the following is the desired value of R? - ANS ✔✔R = (d x LT) + (z x stdev of LT)
R = (12 x 5)+(1.96 x 3)
R = 65.88 units
A company wants to forecast demand using the weighted moving average. If the company uses
two prior yearly sales values (i.e., year 2007 = 110 and year 2008 = 130) and we want to weight
year 2007 at 10% and year 2008 at 90%, which of the following is the weighted moving average
forecast for year 2009? - ANS ✔✔f = (year 1 x weight) + (year 2 x weight)
f = (110 x 10%) + (130 x 90%)
f = 128
Given a prior forecast demand value of 230, a related actual demand value of 250 and a
smoothing constant alpha of 0.1, what is the exponential smoothing forecast value for the
following period?
,Group of answer choices - ANS ✔✔F = forecast demand + alpha*(actual demand - forecast
demand)
F = 230 + 0.1(250-230)
F= 232
If you were selecting a forecasting model based on MAD, which of the following MAD values
reflects the most accurate model? - ANS ✔✔0.2
Which of the following are fixed-order quantity inventory models? - ANS ✔✔economic order
quantity model
If annual demand is 12,000 units, the ordering cost is $6 per order and the holding cost is $2.50
per unit per year, which of the following is the optimal order quantity using the fixed-order
quantity model? - ANS ✔✔Optimal order quantity = √(2 x Annual demand x Ordering cost /
Holding cost) = √(2 x 12000 x 6/2.5) = 240
Using the regression analysis to predict the sales volume if Tony has 4 salespeople and 45 cars
on the lot for sale. The predicted sales volume is ___________.
(Intercept: 0.008927538;
Salespeople: 1.110211716
Number of cars: 0.138552312) - ANS ✔✔= 0.0089+ 1.11(Sales people) + 0.14(Num of cars)
___________% of variation in monthly sales volume is explained by number of salespeople and
number of cars - ANS ✔✔R squared value
Conformance quality refers to - ANS ✔✔the degree to which the product or service design
specifications are met
, (NOT: relative level of performance of a product as compared to competing products...)
Quality at the source refers to - ANS ✔✔frequently discussed in the context of conformance
quality. This means that the person who does the work takes responsibility for making sure that
his or her output meets specifications
(NOT: the degree to which product or service design specifications are met.)
T/F: ISO 14000 is primarily concerned with environmental management. - ANS ✔✔True
T/F: ISO standards ask a company first to document and implement its systems for quality
management and then to verify, by means of an internal audit, the compliance of those systems
with the requirements of the standards. - ANS ✔✔False
These standards ask a company first to document and implement its systems for quality
management and then to verify, by means of an audit conducted by an independent accredited
third party, the compliance of those systems with the requirements of the standards.
The philosophical leaders of the quality movement, Philip Crosby, W. Edwards Deming, and
Joseph M. Juran, had the same general message about what it took to achieve outstanding
quality. Which of the following was not part of that message?
-Quality is free
-Leadership from senior management
-Customer Focus
-Total involvement of the workforce
-Continuous improvement - ANS ✔✔Quality is Free
Practice Questions
In a lean production system we expect to see which of the following? - ANS ✔✔no "just in case"
extra inventory
In trying to implement a lean production system you should work with suppliers to do which of
the following? - ANS ✔✔reduce lead times
The effect of the lack of synchronization among supply-chain members is referred to as which of
the following? - ANS ✔✔Bullwhip effect
A company wants to determine its reorder point (R). Demand is variable and the company
wants to build a safety stock into R. If the average daily demand is 12, the lead time is 5 days,
the desired z value is 1.96, and the standard deviation of usage during lead time is 3, which of
the following is the desired value of R? - ANS ✔✔R = (d x LT) + (z x stdev of LT)
R = (12 x 5)+(1.96 x 3)
R = 65.88 units
A company wants to forecast demand using the weighted moving average. If the company uses
two prior yearly sales values (i.e., year 2007 = 110 and year 2008 = 130) and we want to weight
year 2007 at 10% and year 2008 at 90%, which of the following is the weighted moving average
forecast for year 2009? - ANS ✔✔f = (year 1 x weight) + (year 2 x weight)
f = (110 x 10%) + (130 x 90%)
f = 128
Given a prior forecast demand value of 230, a related actual demand value of 250 and a
smoothing constant alpha of 0.1, what is the exponential smoothing forecast value for the
following period?
,Group of answer choices - ANS ✔✔F = forecast demand + alpha*(actual demand - forecast
demand)
F = 230 + 0.1(250-230)
F= 232
If you were selecting a forecasting model based on MAD, which of the following MAD values
reflects the most accurate model? - ANS ✔✔0.2
Which of the following are fixed-order quantity inventory models? - ANS ✔✔economic order
quantity model
If annual demand is 12,000 units, the ordering cost is $6 per order and the holding cost is $2.50
per unit per year, which of the following is the optimal order quantity using the fixed-order
quantity model? - ANS ✔✔Optimal order quantity = √(2 x Annual demand x Ordering cost /
Holding cost) = √(2 x 12000 x 6/2.5) = 240
Using the regression analysis to predict the sales volume if Tony has 4 salespeople and 45 cars
on the lot for sale. The predicted sales volume is ___________.
(Intercept: 0.008927538;
Salespeople: 1.110211716
Number of cars: 0.138552312) - ANS ✔✔= 0.0089+ 1.11(Sales people) + 0.14(Num of cars)
___________% of variation in monthly sales volume is explained by number of salespeople and
number of cars - ANS ✔✔R squared value
Conformance quality refers to - ANS ✔✔the degree to which the product or service design
specifications are met
, (NOT: relative level of performance of a product as compared to competing products...)
Quality at the source refers to - ANS ✔✔frequently discussed in the context of conformance
quality. This means that the person who does the work takes responsibility for making sure that
his or her output meets specifications
(NOT: the degree to which product or service design specifications are met.)
T/F: ISO 14000 is primarily concerned with environmental management. - ANS ✔✔True
T/F: ISO standards ask a company first to document and implement its systems for quality
management and then to verify, by means of an internal audit, the compliance of those systems
with the requirements of the standards. - ANS ✔✔False
These standards ask a company first to document and implement its systems for quality
management and then to verify, by means of an audit conducted by an independent accredited
third party, the compliance of those systems with the requirements of the standards.
The philosophical leaders of the quality movement, Philip Crosby, W. Edwards Deming, and
Joseph M. Juran, had the same general message about what it took to achieve outstanding
quality. Which of the following was not part of that message?
-Quality is free
-Leadership from senior management
-Customer Focus
-Total involvement of the workforce
-Continuous improvement - ANS ✔✔Quality is Free
