MGSC 395 Exam 1 Practice Questions And Answers 100% Verified.

White Tiger Electronics produces CD players using an automated assembly line process. The standard cost of CD players is $143 per unit (labor, $31; materials, $67;and overhead, $45). The sales price is $300 per unit. To achieve a 13 percent multifactor productivity improvement by reducing materials costs only, one needs to reduce the materials cost by __ percent - correct answers300 / 143 = 2.0979 2.0979*1.13 = 2.370629 300/2.370629= 126.54867 143-126.54867 = 16.451327 16.451327/66*100 = 24.926% external customer - correct answers may be end users or intermediaries (e.g., manufacturers, financial institutions, or retailers) buying the firm's finished services or products internal customer - correct answersmay be employees in the firm whose process inputs are actually the outputs of earlier processes managed within the firm manufacturing processes - correct answers- longer response times - more capital intensive - their quality can be measured more easily than those of service processes service (or nonmanufacturing) process - correct answerstend to produce intangible, perishable outputs, higher customer contact examples of highly divergent service processes where many steps in them change - correct answersconsulting, law, architecture product-process matrix brings together three elements - correct answers(1) volume (2) product customization (3) process characteristics job process - correct answers- needs considerable divergence to produce a wide variety of products - Customization is high and volume for any one product is low - each order is handled as a single unit and is not produced ahead of the order batch process - correct answers- volumes are higher because the parts going into them are produced repeatedly - process divergence is still too great to warrant dedicating a separate process for each product line process - correct answers- volumes are high and products are standardized - Production and material handling equipment is specialized -Standard products are produced in advance of their need and held in inventory, but little inventory is needed in between processing steps continuous flow - correct answers- materials flow through the process without stopping until the whole batch is finished design-to-order strategy - correct answersdesigning new products that do not currently exist, and then manufacturing them to meet unique customer specifications (most likely used for a job process) make-to-order straight - correct answersmake products to customer specifications in low volume (most likely used for a small batch) assemble-to-order strategy - correct answersproducing a wide variety of products from relatively few subassemblies and components after the customer orders are received (involve the line process for assembly and a batch process for fabrication) postponement - correct answersused in assemble-to-order strategy where final activities in the provision of a product are delayed until the orders are received make-to-stock strategy - correct answersfeasible for standardized products with high volumes and reasonably accurate forecast (used for line or continuous-flow processes) service blueprint - correct answersfinds out which steps have high customer contact prevention cost - correct answers-quality planning - training - capability analysis - design reviews what are some examples of prevent costs? - correct answerscost of supplier programs, process design appraisal cost - correct answers- test and inspection - supplier acceptance sampling - auditing processes internal failure - correct answers- in process scrap and rework - troubleshooting and repair - design changes - retesting - downgrading external failure - correct answers- sales returns and allowances - service level agreement penalties - complaint holding ethical failure - correct answersarises from internal or external failures when one deceptively passes defective services or products to internal or external customers Total Quality Management (TQM) - correct answersstresses the importance of customer satisfaction, employee involvement, and continuous improvement in performance three approaches to teamwork - correct answersproblem-solving teams, special-purpose teams, and self-managed teams kaizen, or continuous improvement - correct answers- uses problem solving-techniques with working teams to reduce waste plan-do-study-act cycle - correct answersa cycle, also called the Deming Wheel, used by firms actively engaged in continuous improvement to train their work teams in problem solving True or False: Problem-solving projects often focus on those aspects of processes that do not add value to the service or product - correct answersTrue The idea of continuous improvement is to reduce or eliminate activities that do not add value Six Sigma - correct answersfocuses on reducing variation in processes as well as centering processes on their target measures of performance DMAIC - correct answersUsed for six sigma Define, Measure, Analyze, Improve, Control Statistical process control (SPC) - correct answers- "control charts" are used primarily to detect defective services or products or to indicate that the process has changed and that services or products will deviate from their design specifications - inform management of improved process changes performance can be measured through - correct answersvariables (measurements) or attributes ("yes/no" decisions) example of attributes - correct answers- number of insurance forms containing errors that cause underpayments or overpayments - the proportion of airline flights arriving within 15 minutes of scheduled times - the number of stove-top assemblies with spotted paint True or False: A sampling size specifies a sampling plan - correct answersFalse the opposite is true process distribution - correct answers- has a mean and variance that will be known only with a complete inspection with 100 percent accuracy - sampling is often used instead to get a general idea Common causes of variation - correct answerspurely random, unidentifiable sources of variation that are unavoidable with the current process A process distribution can be characterized by its - correct answerslocation, spread, and shape spread is measured by - correct answersrange or standard deviation assignable causes of variation (special causes) - correct answersany variation-causing factors that can be identified and eliminated type I error - correct answersthe incorrect rejection of a null hypothesis type II error - correct answersthe incorrect acceptance of a null hypothesis True or False: setting control limits at ±3 standard deviations from the mean reduces the type I error, but the type II error may be significant - correct answersTrue chances are only 0.26 percent that a sample result will fall outside of the control limits unless the process is out of statistical control, but more subtle shifts in the nature of the process distribution will go undetected because of the wide spread in the control limits True or false: As a general rule, use more narrow limits when the cost for searching for assignable causes is large relative to the cost of not detecting a shift in the process distribution - correct answersFalse Use wider limits Control Charts used for attributes - correct answersp-chart and c-chart True or False: A firm targeting four-sigma performance will use a critical value of 1.33 (or 4/3), a firm targeting five-sigma performance will use 1.67 (or 5/3), and a firm striving for six-sigma performance will use 2.00 (or 6/3). - correct answersTrue _____ measures of capacity are best utilized when applied to individual processes within the firm or when the firm provides a relatively small number of *standardized* services and products - correct answersoutput _____ measures are generally used for low-volume, *flexible* processes - correct answersinput Utilization - correct answers[average output / maximum capacity] * 100% economies of scale can drive costs down when output increases due to - correct answers- Fixed costs are spread over more units - construction costs are reduced - costs of purchased materials are cut - process advantages are found diseconomies of scale - correct answers excessive size can bring complexity, loss of focus, and inefficiencies that raise the average unit cost of a service or product The more capital intensive the industry, the ___ o