OSCM 373 EXAM 3 QUESTIONS WITH CORRECT ASNSWERS LATEST UPDATE 2026
inventory management - Answers establish a system for tracking items in inventory and makes
decisions about what to order and how much
A-B-C approach classification system - Answers Classifying inventory according to some measure of
importance, and allocating control efforts accordingly
A items (ABC) - Answers very important, 10-20% of the number of items in the inventory, and about
60-70% of the annual dollar value
B items (ABC) - Answers moderatley important
C items (ABC) - Answers 50-60% of the number of items in inventory but only 10-15% of the annual
dollar value
How to do ABC classification - Answers 1. For each item, multiply annual volume by unit price to get
annual dollar value
2. arrange annual values in descending order
in an A-B-C system, C items typically represent about this percentage of items: - Answers 50%
Periodic System - Answers physical count of items in inventory made at periodic intervals. many items
ordered at the same time; savings in processing and shipping of orders
perpetual inventory system - Answers System that keeps track of removals from inventory
continuously, thus monitoring current levels of each item. continuous control; can optimize Q and
place orders when inventory drops to a predetermined minimum level
periodic system cons - Answers lack of control between reviews; having to keep extra stock to protect
against shortages
perpetual inventory system cons - Answers added cost of record keeping; usually has to be
accompanied by a periodic physical count
when is the best time to embed the RFID tag in the good? - Answers assembly
Economic Order Quantity models - Answers identify the optimal order quantity by minimizing the sum
of annual costs that vary with order size and frequency
re-order point - Answers when the quantity on hand of an item drops to this amount (quantity-
trigger), the item is reordered
what does Economic Order Quantity (EOQ) solve - Answers how much to order
holding (carrying) costs - Answers cost to carry an item in inventory for a length of time, usually a year
ordering costs (setup costs) - Answers the costs involved in placing an order or preparing equipment
for a job
what is not a component of holding costs? - Answers delivery
what should you do to prevent running out of gas (inventory)? - Answers increase ROP (amount left)
Using the EOQ model, if an item's holding cost increases, its order quantity will: - Answers decrease
Single-period model - Answers model for ordering of perishables and other items with limited useful
lives
the goal of the single-period model is to - Answers identify an order quantity that will maximize profit
by minimizing the long-run excess and shortage costs
Service Level - Answers probability that demand will not exceed the stocking level (S)
high inventory (costly) leads to - Answers a higher service-level and a low probabiliy to stock-out
low inventory leads to - Answers a lower service-level and a high probability to stock-out
quality - Answers the ability of a product or service to consistently meet or exceed customer
expectations
Dimensions of Service Quality - Answers convenience, reliability, responsiveness, time, assurance,
courtesy, tangibles, consistency
dimensions of product (good) quality - Answers performance, aesthetics, special features,
conformance, reliability, durability, perceived quality, serviceability
internal failure costs - Answers Costs incurred to fix problems that are detected before the
product/service is delivered to the customer.
external failure costs - Answers All costs incurred to fix problems that are detected after the
product/service is delivered to the customer
tasting fires is an example of - Answers appraisal costs
courtesy gift cards are an example of: - Answers external failure cost
what are the two basic questions concerning variability? - Answers is the process in control and what
is the process capability
, process in-control - Answers are the variations random, if nonrandom variations is present, the
process is said to be unstable
process capability - Answers given the stable process (in-control), is the inherent variability of the
process within a range that conforms to performance criteria
quality control - Answers A process that evaluates output relative to a standard and takes corrective
action when output doesn't meet standards
typical inspection points - Answers Raw materials and purchased parts
Finished products
Before a costly operation
Before an irreversible process
Before a covering process
what is not a typical inspection point? - Answers after about 50% of the product is completed
operating a control-room at a casino is part of? - Answers appraisal costs
sedia system having to replace the seat backs in Berger is an example of: - Answers external failure
cost
statistical process control (SPC) - Answers statistical evaluation of the outputs of a process
control chart - Answers a time ordered plot of sample statistics obtained from an ongoing process,
used to distinguish between random and nonrandom variability
control limits - Answers the dividing lines between random and nonrandom deviations from the mean
of the distribution
Type I error - Answers narrow control limits, concluding a process is not in control when it actually is
(manufacturer's risk)
Type II error - Answers wide control limits (high z), concluding a process is in control when it is not
(consumer's risk)
process in-control and a alarm - Answers type I
process-out of control and no alarm - Answers Type II
x-bar charts - Answers used to monitor the central tendency of a process
R charts - Answers used to monitor the process of dispersion
p-chart - Answers control chart used to monitor the proportion of defectives in a process
c-chart - Answers control chart used to monitor the number of defects per unit
concluding a process is not in control when it actually is, may happen when? - Answers control limits
are too narrow
process capbility - Answers the inhernet variability of process output (process width) relative to the
variation by the design specification (specification width)
specifications - Answers a range of acceptable values established by engineering design or customer
requirements
six sigma - Answers a methodology for improving quality, reducing costs, and increasing customer
satisfaction
how often does dell generate material requests? - Answers every 2 hours
lean operations goal - Answers a balanced system where supply is synchronized to meet customer
demand in a smooth uninterrupted rapid flow of materials and/or work through the system (lower
costs, shorter cycle times, greater productivity, and higher quality)
three basic elements of lean operations - Answers demand driven, waste reduction, and continuous
improvement
sources of waste - Answers -Inventory
-Overproduction
-Waiting time
-Unnecessary transportation
-Processing waste
-Inefficient work methods
-Product defects
-under utilizing worker skills
lean building blocks - Answers 1. Product design
2. Process design
3. Personnel/organizational elements
4. Manufacturing planning and control
product design (lean) - Answers standard parts, modular design, quality, concurrent engineering
inventory management - Answers establish a system for tracking items in inventory and makes
decisions about what to order and how much
A-B-C approach classification system - Answers Classifying inventory according to some measure of
importance, and allocating control efforts accordingly
A items (ABC) - Answers very important, 10-20% of the number of items in the inventory, and about
60-70% of the annual dollar value
B items (ABC) - Answers moderatley important
C items (ABC) - Answers 50-60% of the number of items in inventory but only 10-15% of the annual
dollar value
How to do ABC classification - Answers 1. For each item, multiply annual volume by unit price to get
annual dollar value
2. arrange annual values in descending order
in an A-B-C system, C items typically represent about this percentage of items: - Answers 50%
Periodic System - Answers physical count of items in inventory made at periodic intervals. many items
ordered at the same time; savings in processing and shipping of orders
perpetual inventory system - Answers System that keeps track of removals from inventory
continuously, thus monitoring current levels of each item. continuous control; can optimize Q and
place orders when inventory drops to a predetermined minimum level
periodic system cons - Answers lack of control between reviews; having to keep extra stock to protect
against shortages
perpetual inventory system cons - Answers added cost of record keeping; usually has to be
accompanied by a periodic physical count
when is the best time to embed the RFID tag in the good? - Answers assembly
Economic Order Quantity models - Answers identify the optimal order quantity by minimizing the sum
of annual costs that vary with order size and frequency
re-order point - Answers when the quantity on hand of an item drops to this amount (quantity-
trigger), the item is reordered
what does Economic Order Quantity (EOQ) solve - Answers how much to order
holding (carrying) costs - Answers cost to carry an item in inventory for a length of time, usually a year
ordering costs (setup costs) - Answers the costs involved in placing an order or preparing equipment
for a job
what is not a component of holding costs? - Answers delivery
what should you do to prevent running out of gas (inventory)? - Answers increase ROP (amount left)
Using the EOQ model, if an item's holding cost increases, its order quantity will: - Answers decrease
Single-period model - Answers model for ordering of perishables and other items with limited useful
lives
the goal of the single-period model is to - Answers identify an order quantity that will maximize profit
by minimizing the long-run excess and shortage costs
Service Level - Answers probability that demand will not exceed the stocking level (S)
high inventory (costly) leads to - Answers a higher service-level and a low probabiliy to stock-out
low inventory leads to - Answers a lower service-level and a high probability to stock-out
quality - Answers the ability of a product or service to consistently meet or exceed customer
expectations
Dimensions of Service Quality - Answers convenience, reliability, responsiveness, time, assurance,
courtesy, tangibles, consistency
dimensions of product (good) quality - Answers performance, aesthetics, special features,
conformance, reliability, durability, perceived quality, serviceability
internal failure costs - Answers Costs incurred to fix problems that are detected before the
product/service is delivered to the customer.
external failure costs - Answers All costs incurred to fix problems that are detected after the
product/service is delivered to the customer
tasting fires is an example of - Answers appraisal costs
courtesy gift cards are an example of: - Answers external failure cost
what are the two basic questions concerning variability? - Answers is the process in control and what
is the process capability
, process in-control - Answers are the variations random, if nonrandom variations is present, the
process is said to be unstable
process capability - Answers given the stable process (in-control), is the inherent variability of the
process within a range that conforms to performance criteria
quality control - Answers A process that evaluates output relative to a standard and takes corrective
action when output doesn't meet standards
typical inspection points - Answers Raw materials and purchased parts
Finished products
Before a costly operation
Before an irreversible process
Before a covering process
what is not a typical inspection point? - Answers after about 50% of the product is completed
operating a control-room at a casino is part of? - Answers appraisal costs
sedia system having to replace the seat backs in Berger is an example of: - Answers external failure
cost
statistical process control (SPC) - Answers statistical evaluation of the outputs of a process
control chart - Answers a time ordered plot of sample statistics obtained from an ongoing process,
used to distinguish between random and nonrandom variability
control limits - Answers the dividing lines between random and nonrandom deviations from the mean
of the distribution
Type I error - Answers narrow control limits, concluding a process is not in control when it actually is
(manufacturer's risk)
Type II error - Answers wide control limits (high z), concluding a process is in control when it is not
(consumer's risk)
process in-control and a alarm - Answers type I
process-out of control and no alarm - Answers Type II
x-bar charts - Answers used to monitor the central tendency of a process
R charts - Answers used to monitor the process of dispersion
p-chart - Answers control chart used to monitor the proportion of defectives in a process
c-chart - Answers control chart used to monitor the number of defects per unit
concluding a process is not in control when it actually is, may happen when? - Answers control limits
are too narrow
process capbility - Answers the inhernet variability of process output (process width) relative to the
variation by the design specification (specification width)
specifications - Answers a range of acceptable values established by engineering design or customer
requirements
six sigma - Answers a methodology for improving quality, reducing costs, and increasing customer
satisfaction
how often does dell generate material requests? - Answers every 2 hours
lean operations goal - Answers a balanced system where supply is synchronized to meet customer
demand in a smooth uninterrupted rapid flow of materials and/or work through the system (lower
costs, shorter cycle times, greater productivity, and higher quality)
three basic elements of lean operations - Answers demand driven, waste reduction, and continuous
improvement
sources of waste - Answers -Inventory
-Overproduction
-Waiting time
-Unnecessary transportation
-Processing waste
-Inefficient work methods
-Product defects
-under utilizing worker skills
lean building blocks - Answers 1. Product design
2. Process design
3. Personnel/organizational elements
4. Manufacturing planning and control
product design (lean) - Answers standard parts, modular design, quality, concurrent engineering
