1. Statistical process control charts a. display the measurements on - 88251

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1. Statistical process control charts a. display the measurements on every item being produced b. display upper and lower limits for process variables or attributes, and signal when a process is no longer in control c. indicate to the process operator the average outgoing quality of each lot d. indicate to the operator the true quality of material leaving the process e. none of the above 2. For an x-bar chart where the standard deviation is known, the Upper Control Limit a. is below the mean of sample means for a control chart b. is above the mean of sample means for a control chart c. is below the mean of sample means for a control chart d. is above the mean of sample means for a control chart e. cannot be calculated unless the average range is known 3. If = 23 ounces, = 0.4 ounces, and n = 16, the ?3 control limits will be a. 21.8 to 24.2 ounces b. 23 ounces c. 22.70 to 23.30 ounces d. 22.25 to 23.75 ounces e. none of the above 4. Which of the following is a function of inventory? a. to decouple or separate parts of the production process b. to decouple the firm from fluctuations in demand and provide a stock of goods that will provide a selection for customers c. to take advantage of quantity discounts d. to hedge against inflation e. All of the above are functions of inventory. 5. Which of the following is not one of the four main types of inventory? a. raw material inventory b. work-in-process inventory c. maintenance/repair/operating supply inventory d. safety stock inventory e. All of these are main types of inventory. 6. ABC analysis is based upon the principle that a. all items in inventory must be monitored very closely b. there are usually a few critical items, and many items which are less critical c. an item is critical if its usage is high d. the safety stock (in terms of volume) should be higher for A items than for C items e. an item is critical if its unit price is high 7. The primary purpose of the basic economic order quantity model shown below is a. to calculate the reorder point, so that replenishments take place at the proper time b. to minimize the sum of carrying cost and holding cost c. to maximize the customer service level d. to minimize the sum of setup cost and holding cost e. to calculate the optimum safety stock 8. A certain type of computer costs $1,000, and the annual holding cost is 25%. Annual demand is 10,000 units, and the order cost is $150 per order. What is the approximate economic order quantity? a. 16 b. 70 c. 110 d. 183 e. 600 9. A product has demand of 4000 units per year. Ordering cost is $20 and holding cost is $4 per unit per year. The cost-minimizing solution for this product is to order a. all 4000 units at one time b. 200 units per order c. every 20 days d. 10 times per year e. none of the above 10. A specific product has demand during lead time of 100 units, with a standard deviation of 25 units. What safety stock (approximately) provides a 95% service level? a. 41 b. 55 c. 133 d. 140 e. 165 11. If daily demand is constant at 10 units per day, and lead time averages 12 days with a standard deviation of 3 days, 95 percent service requires a safety stock of approximately a. 28 units b. 30 units c. 49 units d. 59 units e. 114 units 12. Your company has compiled the following data on the small set of products that comprise the specialty repair parts division. Perform ABC analysis on the data. Which products do you suggest the firm keep the tightest control over? Explain. SKU Annual Demand Unit Cost R11 250 $250 S22 75 $90 T33 20 $60 U44 150 $150 V55 100 $75 Answer: R11 and U44 represent over 80% of the firm's volume in this area. R11 is classified A, U44 is classified B, and all others are C. The tightest controls go to R11, then U44 because of their high percentage of sales volume. 13. The following terms -- interchangeability of parts, division of labor, highly repetitive tasks -- best relate to focus on __________. a. Quality b. Cost and efficiency c. Quality d. Time 14. A support process could be all of the following except a. Assembling automobiles b. Purchasing materials and supplies c. Managing inventory d. Installation 15. "Kaizen" is a Japanese term meaning a. a foolproof mechanism b. just-in-time (JIT) c. a fishbone diagram d. setting standards e. continuous improvement 16. A simple CPM network has three activities, D, E, and F. D is an immediate predecessor of E and of F. E is an immediate predecessor of F. The activity durations are D=4, E=3, F=8. a. The critical path is D-E-F, duration 15. b. The critical path is D-F, duration 12. c. Slack at D is 3 units d. Slack at E is 3 units e. Both a and c are true 17. Pareto charts are used to a. identify inspection points in a process b. outline production schedules c. organize errors, problems, or defects d. show material flow e. all of the above 18. A fishbone diagram is also known as a a. cause-and-effect diagram b. poka-yoke diagram c. Kaizen diagram d. Kanban diagram e. Taguchi diagram 19. Which of the following is true regarding control charts? a. Values above the upper and lower control limits indicate points out of adjustment. b. Control charts are built so that new data can be quickly compared to past performance data. c. Control charts graphically present data. d. Control charts plot data over time. e. All of the above are true. 20. The critical path for the network activities shown below is _____ with duration ______. Activity Duration Immediate Predecessors A 4 --- B 2 A C 7 -- D 4 A E 5 B,C,D a. A-B-D; 10 b. A-B-E; 11 c. C-E; 12 d. A-D-E; 13 e. A-B-C-D-E; 22 21. The critical path for the network activities shown below is _____ with duration ______. Activity Duration Immediate Predecessors A 2 -- B 4 -- C 6 A,B D 1 A,B E 2 B,C,D a. A-D-E; 5 b. B-E; 6 c. B-D-E; 7 d. A-C-E; 10 e. B-C-E; 12 22. The staff training center at a large regional hospital provides training sessions in CPR to all employees. Assume that the capacity of this training system was designed to be 1200 employees per year. Since the training center was first put in use, the program has become more complex, so that 1050 now represents the most employees that can be trained per year. In the past year, 950 employees were trained. The efficiency of this system is approximately _____ and its utilization is approximately _____. a. 79.2 percent; 90.5 percent b. 90.5 percent; 79.2 percent c. 87.5 percent; 950 employees d. 950 employees; 1050 employees e. 110.5 percent; 114.3 percent 23. If demand exceeds capacity, an organization can use which of the following to adjust demand to an existing facility? a. aggressive marketing b. lower prices c. build a facility of the correct size d. add a complementary product e. reduce lead times 24. Break-even is the number of units at which a. total revenue equals price times quantity b. total revenue equals total variable cost c. total revenue equals total fixed cost d. total profit equals total cost e. total revenue equals total cost 25. Fabricators, Inc. wants to increase capacity by adding a new machine. The fixed costs for machine A are $90,000, and its variable cost is $15 per unit. The revenue is $21 per unit. The break-even point for machine A is a. $90,000 dollars b. 90,000 units c. $15,000 dollars d. 15,000 units e. cannot be calculated from the information provided 26. A fabrication company wants to increase capacity by adding a new machine. The firm is considering proposals from vendor A and vendor B. The fixed costs for machine A are $90,000 and for machine B, $75,000. The variable cost for A is $15.00 per unit and for B, $18.00. The revenue generated by the units processed on these machines is $21 per unit. If the estimated output is 5000 units, which machine should be purchased? a. machine A b. machine B c. either machine A or machine B d. no purchase because neither machine yields a profit at that volume e. purchase both machines since they are both profitable 27. A shop wants to increase capacity by adding a new machine. The firm is considering proposals from vendor A and vendor B. The fixed costs for machine A are $90,000 and for machine B, $75,000. The variable cost for A is $15.00 per unit and for B, $18.00. The revenue generated by the units processed on these machines is $22 per unit. If the estimated output is 9,000 units, which machine should be purchased? a. machine A b. machine B c. either machine A or machine B d. no purchase because neither machine yields a profit at that volume e. purchase both machines since they are both profitable 28. The staff training center at a large regional hospital provides training sessions in CPR to all employees. Assume that the capacity of this training system was designed to be 1800 employees per year. Since the training center was first put in use, the program has become more complex, so that 1400 now represents the most employees that can be trained per year. In the past year, 1350 employees were trained. Calculate the efficiency and the utilization of this system. Efficiency = 1350 / 1400 = .964 or 96.4 percent; utilization = 1350 / 1800 = .75 or 75 percent (Capacity, moderate) {AACSB: Analytic Skills} 29. An executive conference center has the physical ability to handle 1,100 participants. However, conference management personnel believe that only 1,000 participants can be handled effectively for most events. The last event, although forecasted to have 1,000 participants, resulted in the attendance of only 950 participants. What are the utilization and efficiency of the conference facility? Design Capacity = 1,100 participants Effective Capacity = 1,000 participants Actual Output = 950 participants 30. A fleet repair facility has the capacity to repair 800 trucks per month. However, due to scheduled maintenance of their equipment, management feels that they can repair no more than 600 trucks per month. Last month, two of the employees were absent several days each, and only 400 trucks were repaired. What are the utilization and efficiency of the repair shop? Design Capacity = 800 trucks Effective Capacity = 600 trucks Actual Output = 400 trucks 31.An innovative restaurateur owns and operates a dozen "Ultimate Low-Carb" restaurants in northern Arkansas. His signature item is a cheese-encrusted beef medallion wrapped in lettuce. Sales (X, in millions of dollars) is related to Profits (Y, in hundreds of thousands of dollars) by the regression equation Y = 8.21 + 0.76 X.What is your forecast of profit for a store with sales of $40 million? $50 million? The sales is the independent variable and profits is dependent; the problem is not a time series. A store with $40 million in sales: 40 x 0.76 = 30.4; 30.4 + 8.21 =38.61, or $3,861,000 in profit; $50 million in sales is estimated to profit 46.21 or $4,621,000. 32. Weekly sales of copy paper at Cubicle Suppliers are in the table below. Compute a three-period moving average and a four-period moving average for weeks 5, 6, and 7. Compute MAD for each forecast. Which model is more accurate? Forecast week 8 with the more accurate method. Week Sales (cases) 1 17 2 21 3 27 4 32 5 19 6 18 7 22 33. What is the forecast for May and June based on a weighted moving average applied to the following past demand data and using the weights: 4, 3, 2 (largest weight is for most recent data)? Nov. Dec. Jan. Feb. Mar. April 37 36 40 42 47 43 The four-week moving average is more accurate. The forecast with the 4-moving average is 22.0 34. Weekly sales of ten-grain bread at the local organic food market are in the table below. Based on this data, forecast week 9 using a five-week moving average. Week Sales 1 415 2 389 3 420 4 382 5 410 6 432 7 405 8 421 (382+410+432+405+421)/5 = 410.0 The answer is 410. 35. Given the following data, calculate the three-year moving averages for years 4 through 10. Year Demand 1 74 2 90 3 59 4 91 5 140 6 98 7 110 8 123 9 99 36. An innovative restaurateur owns and operates a dozen "Ultimate Low-Carb" restaurants in northern Arkansas. His signature item is a cheese-encrusted beef medallion wrapped in lettuce. Sales (X, in millions of dollars) is related to Profits (Y, in hundreds of thousands of dollars) by the regression equation Y = 9.25 - 0.26 X. What is your forecast of profit for a store with sales of $25 million? $47 million? An innovative restaurateur owns and operates a dozen "Ultimate Low-Carb" restaurants in northern Arkansas. His signature item is a cheese-encrusted beef medallion wrapped in lettuce. Sales (X, in millions of dollars) is related to Profits (Y, in hundreds of thousands of dollars) by the regression equation Y = 8.21 + 0.76 X.What is your forecast of profit for a store with sales of $40 million? $50 million? The sales is the independent variable and profits is dependent; the problem is not a time series. A store with $25 million in sales: 25 x 0.26 = 0.065 ; 0.065+ 9.25 = 9.315, or $ 9.315,000 in profit; $47 million in sales: 47 x 0.26 = 12.22 ; 12.22+ 9.25 =, or $ 21,470,000 in profit 37. This year, a small state college is funded at $10,000,000 from the state. The college currently charges students $6,000 a year for tuition and fees. The college estimates its fixed costs at $8,000,000 and its variable costs at $8,000 per student. Up to what level increase in enrollment will operations be economical? a. 1200 students b. 125 students c. 1000 students d. 500 students 38. This year, a small state college is funded at $10,000,000 from the state. The college currently charges students $6,000 a year for tuition and fees. The college estimates its fixed costs at $8,000,000 and its variable costs at $8,000 per student. If the school lowered its tuition and fees to $5000 a year, up to what level increase in enrollment will operations be economical? a. 666.67 students b. 1100 students c. 1000 students d. 1200 students 39. A firm starting a business is trying to decide whether to purchase or lease a phone system. Leasing will cost $600 per year, and the firm must pay an additional $0.08 per call. Purchasing a phone system will cost $1500 per year, plus $100 per year for a service contract. With either system, a long-distance provider will be needed. What number of calls will make purchasing a phone system worthwhile? a. 11,250 b. 750 c. 20,000 d. 12,500 40.XYZ manufactures plastic shelving. The annual fixed cost for its current injection equipment is $100,000; variable cost is $25 per unit. The annual fixed cost for a new system is $250,000, but variable cost is only $10 per unit. What is their break-even quantity? a. 10,000 b. 4,000 c. 16,667 d. 13,000
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