BSOP 334 Week 8 Final Exam

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1. (TCO 1) Which of the following functions involves budgeting, analysis of investment

proposals, and provision of funds? (Points : 5)
Operation
Marketing
Purchasing
Finance
Internal audit

Question 2. 2. (TCO 1) Transformation includes all of the following, except (Points : 5)

assembling.
teaching.
staffing.
farming.
consulting.

Question 3. 3. (TCO 1) Which of the following is providing new opportunities for productivity
improvements? (Points : 5)

Pollution control
Total quality management
Supply chain management
Competition from foreign manufacturers
Technological change

Question 4. 4. (TCOs 3 & 6) In an effort to reduce inventory, which of the following interactions
with vendors would potentially be helpful? (Points : 5)
Reducing lead times
Increasing safety stock
Less frequent purchases
Larger batch quantities
Longer order intervals

Question 5. 5. (TCOs 3 & 6) Which of the following costs related to order size is nonlinear?
(Points : 5)
Interest
Insurance
Taxes
Receiving
Space

Question 6. 6. (TCO 2) Which of the following is a computer-based information system

designed to handle ordering and scheduling of dependent-demand inventories? (Points : 5)

Question 7. 7. (TCO 2) Net material requirements can be described as (Points : 5)

Question 8. 8. (TCO 2) When an MRP system is periodically updated to account for all changes
that have occurred within a given time interval, the process is called (Points : 5)

Question 9. 9. (TCOs 4, 5, & 6) How does a net-change system work? (Points : 5)

Question 10. 10. (TCOs 4, 5, & 6) The MRP approach that is used for components or

subassemblies to compensate for variations in lead times is called (Points : 5)

Question 11. 11. (TCOs 4, 5, & 6) A lead time service level of 90 percent implies which of the
following? (Points : 5)

Question 12. 12. (TCOs 5, 7, & 9) The dynamic store of information on the status of each item
by time period (e.g., scheduled receipts, lead time, lot size), which is an input to the MRP, is the
(Points : 5)

Question 13. 13. (TCOs 5, 7, & 9) What will be the quantity of the first planned receipt if net
requirements for component J are as follows: 60 units in Week 2, 40 units in Week 3, and 60
units in Week 5? A fixed-period, two-period lot-sizing method is used. (Points : 5)

Question 14. 14. (TCO 11, 12, 13, & 14) Given a product mix, scheduling difficulties, quality
factors, and so on, the maximum expected output is (Points : 5)

Question 15. 15. (TCOs 11, 12, 13, & 14) Given the following information, calculate the
efficiency.
Effective capacity = 50 units per day
Design capacity = 100 units per day
Actual output = 30 units per day (Points : 5)

Question 16. 16. (TCOs 10, 15, & 16) In an assignment method problem, it takes Abe 3 hours to
build a birdhouse and 4 hours for a doghouse, while Betty takes 4 hours for a birdhouse and 3
hours for a doghouse. What is the reduced cost (in hours) of assigning Abe to build the
doghouse? (Points : 5)

Question 17. 17. (TCOs 10, 15, & 16) The matrix below shows relative costs for various jobmachine combinations. Which set of pairs constitutes the minimum cost solution using the
assignment method?
Machine

Job 1

$6

(Points : 5)

1. (TCO 1) A company has found that introducing one additional worker enables a process
improvement that reduces processing time for each unit so that output is increased by 25% with
less material. Under the old process, five workers could produce 60 units per hour. Labor costs
are $12/hour, and material input was previously $16/unit. For the new process, material is now
$10/unit. Overhead is charged at 1.6 times direct labor cost. Finished units sell for $31 each.
What increase in productivity is associated with the process improvement? (Points : 30)
2. (TCOs 3 & 6) If instantaneous replenishment is assumed when given the same demand,
setup/ordering costs, and carrying costs, then the EOQ calculated using incremental
replenishment will be _____.
Illustrate using a numeric example. (Points : 30)
What is the optimal production size?
3. (TCO 2) For the product tree below, how many Cs are needed if 17 Ps are needed and on-hand
inventory consists of 10 As, 15 Bs, 20 Cs, 12 Ms, and 5 Ns? Show your work.

(Points : 30)

4. (TCOs 4, 5, & 6) Given the tree below, develop a material requirements plan for end-item P
and its components. Assume that all lead times are one week and that lot-for-lot ordering is used,
except for Item F, which is ordered in multiples of 400 units.
6. (TCOs 11, 12, 13, & 14) A small business owner is contemplating the addition of another
product line. Capacity increases, and equipment will result in an increase in annual fixed costs of
$50,000. Variable costs will be $25 per unit. What unit selling price must the owner obtain to
break even on a volume of 2,500 units a year?

B) Because of market conditions, the owner feels a revenue of $47 is preferred to the value
determined in part A. What volume of output will be required to achieve a profit of $16,000
using this revenue?(Points : 30)
5. (TCOs 5, 7, & 9) Explain the advantages and disadvantages of frequent deliveries of small
shipments.(Points : 25)
7. (TCOs 10, 15,& 16) Compare and contrast kanban and CONWIP. (Points : 20)
8. (TCOs 8 & 9) MPS planners use what is referred to as time fences? What are they, and why
are they used? (Points : 20)