MQM 227 Actual Questions and Correct Answers
Q1
Which of the following statements is incorrect? The purpose of forecast accuracy is to
determine when the forecasting method is no longer tracking actual demand and should be
reset. Forecasting is only used to predict future events. Through planning, we consciously
attempt to alter future events. Whenever demand is not constrained by capacity, inventory, or
other management policies; the forecasting of demand should be the same as the forecasting
of sales. The purpose of forecast accuracy is to monitor predictable demand observations or
outliers (which should be carefully evaluated and perhaps excluded from data analysis).
Answer: e. The purpose of forecast accuracy is to monitor predictable demand
observations or outliers (which should be carefully evaluated and perhaps excluded
from data analysis). Correct: The purpose is to monitor erratic demand observations.
Q2
Which of the following statements is incorrect? The critical path is the one that takes the
longest time to complete. Crash times are applied to all activities on the critical path(s). PERT
requires three time estimates for each activity: an optimistic, most likely, and pessimistic time
estimate. Slag (if any) is the difference between ES and LS at each operation. PERT refers to the
program evaluation review technique.
Answer: b. Crash times are applied to all activities on the critical path(s). Correct:
Crash times are only applied to the critical path. D is wrong if not a typo.
Q3
Which of the following statements is incorrect? Forecasts will almost always be incorrect
because the future is relatively uncertain. When a major employer leaves an area, past sales
data may not be a reliable predictor of the future. Qualitative forecasting methods are useful
when past data is not reliable predictors of the future. In forecasting, a lack of data may occur
when the product is a new innovation or invention. Quantitative forecasting methods are useful
when there is a lack of data.
Answer: e. Quantitative forecasting methods are useful when there is a lack of data.
Correct: They are useful with ample data.
Q4
Which of the following tasks do not occur during the scheduling phase of a project? Finish all
work Develop a detailed work-breakdown structure Estimate the time required for each task
Develop a detailed budget for each task
Answer: a. Finish all work
, Q5
Which of the following options is not listed as a method of adding capacity to bottlenecks?
adding machine time (e.g., coverage during breaks) reducing setup time subcontracting using
different equipment if equally efficient
Answer: d. using different equipment if equally efficient Correct: Using different
equipment if less efficient
Q6
Which of the following statements is incorrect? FCS assumes that a job cannot be split into two
or more parts if this will facilitate scheduling. Backward scheduling involves working backward
from a due date to determine when work must be started in order to be completed by the due
date. Finite Capacity Scheduling assumes that alternate routings of a job through the work
centers may also be available. Bottlenecks are work center(s) that has more work to perform
than it has time to perform (i.e., less capacity than is needed). Its capacity is also less than the
capacities of other equipment used to produce products.
Answer: a. FCS assumes that a job cannot be split into two or more parts if this will
facilitate scheduling. Correct: FCS assumes that jobs can pass each other, or change
their sequence, as they are processed, depending on their priority.
Q7
Which of the following statements is incorrect? For the weighted average, the sum of
coefficients always equals to 1.0. Capacity is the maximum output that can be produced over a
specific period of time. Capacity decisions are based on forecasted estimate of present
demand. Firms make capacity planning decisions that are long range, medium range, and short
range. Facilities, aggregate planning, and scheduling form a hierarchy of capacity decisions
about the planning of operations.
Answer: c. Capacity decisions are based on forecasted estimate of present demand.
Correct: They are based on future demand.
Q8
Regarding utilization, which of the following statements is incorrect? Utilization is a useful
measure for estimating how busy a facility is. Utilization is the relationship between actual
output and capacity. Utilization equals the actual output/inventory x 100. In the short term, it is
possible to operate above 100% utilization using such approaches as overtime or speeding up
the line.
Answer: c. Utilization equals the actual output/inventory x 100. Correct: Utilization
equals the actual output/capacity x 100.
Q1
Which of the following statements is incorrect? The purpose of forecast accuracy is to
determine when the forecasting method is no longer tracking actual demand and should be
reset. Forecasting is only used to predict future events. Through planning, we consciously
attempt to alter future events. Whenever demand is not constrained by capacity, inventory, or
other management policies; the forecasting of demand should be the same as the forecasting
of sales. The purpose of forecast accuracy is to monitor predictable demand observations or
outliers (which should be carefully evaluated and perhaps excluded from data analysis).
Answer: e. The purpose of forecast accuracy is to monitor predictable demand
observations or outliers (which should be carefully evaluated and perhaps excluded
from data analysis). Correct: The purpose is to monitor erratic demand observations.
Q2
Which of the following statements is incorrect? The critical path is the one that takes the
longest time to complete. Crash times are applied to all activities on the critical path(s). PERT
requires three time estimates for each activity: an optimistic, most likely, and pessimistic time
estimate. Slag (if any) is the difference between ES and LS at each operation. PERT refers to the
program evaluation review technique.
Answer: b. Crash times are applied to all activities on the critical path(s). Correct:
Crash times are only applied to the critical path. D is wrong if not a typo.
Q3
Which of the following statements is incorrect? Forecasts will almost always be incorrect
because the future is relatively uncertain. When a major employer leaves an area, past sales
data may not be a reliable predictor of the future. Qualitative forecasting methods are useful
when past data is not reliable predictors of the future. In forecasting, a lack of data may occur
when the product is a new innovation or invention. Quantitative forecasting methods are useful
when there is a lack of data.
Answer: e. Quantitative forecasting methods are useful when there is a lack of data.
Correct: They are useful with ample data.
Q4
Which of the following tasks do not occur during the scheduling phase of a project? Finish all
work Develop a detailed work-breakdown structure Estimate the time required for each task
Develop a detailed budget for each task
Answer: a. Finish all work
, Q5
Which of the following options is not listed as a method of adding capacity to bottlenecks?
adding machine time (e.g., coverage during breaks) reducing setup time subcontracting using
different equipment if equally efficient
Answer: d. using different equipment if equally efficient Correct: Using different
equipment if less efficient
Q6
Which of the following statements is incorrect? FCS assumes that a job cannot be split into two
or more parts if this will facilitate scheduling. Backward scheduling involves working backward
from a due date to determine when work must be started in order to be completed by the due
date. Finite Capacity Scheduling assumes that alternate routings of a job through the work
centers may also be available. Bottlenecks are work center(s) that has more work to perform
than it has time to perform (i.e., less capacity than is needed). Its capacity is also less than the
capacities of other equipment used to produce products.
Answer: a. FCS assumes that a job cannot be split into two or more parts if this will
facilitate scheduling. Correct: FCS assumes that jobs can pass each other, or change
their sequence, as they are processed, depending on their priority.
Q7
Which of the following statements is incorrect? For the weighted average, the sum of
coefficients always equals to 1.0. Capacity is the maximum output that can be produced over a
specific period of time. Capacity decisions are based on forecasted estimate of present
demand. Firms make capacity planning decisions that are long range, medium range, and short
range. Facilities, aggregate planning, and scheduling form a hierarchy of capacity decisions
about the planning of operations.
Answer: c. Capacity decisions are based on forecasted estimate of present demand.
Correct: They are based on future demand.
Q8
Regarding utilization, which of the following statements is incorrect? Utilization is a useful
measure for estimating how busy a facility is. Utilization is the relationship between actual
output and capacity. Utilization equals the actual output/inventory x 100. In the short term, it is
possible to operate above 100% utilization using such approaches as overtime or speeding up
the line.
Answer: c. Utilization equals the actual output/inventory x 100. Correct: Utilization
equals the actual output/capacity x 100.
