BU 375 OPERATIONS MANAGEMENT

Final Review Quiz

1. Which of the following is not a general characteristic of a project?

a) A project has a unique purpose.
b) A project has more certainty.
c) A project has more uncertainty.
d) A project often draws resources from various areas in the organization.

2. A(n) ___ is a project team structure that includes members from different functional areas. a)
matrix organization
b) project network
c) organizational breakdown structure
d) work breakdown structure

3. The estimated mean time for an activity with a most likely time (m) equal to 11 days, the
optimistic time (a) equal to 6 days, and the pessimistic time (b) equal to 18 days is a) 9.67
days. b) 11 days. c) 11.33 days. d) 11.67 days.

4. A project consists of the following activities:

Table 1
Activity Activity Predecessor Time (weeks)
A --- 5
B A 8
C A 3
D B 7
E C 6
F D,E 10

Using Table 1, the earliest finish (EF) time for activity D is

a) 7 weeks. b) 13 weeks. c) 20 weeks. d) 30 weeks.

The following table of probabilistic time estimates (in weeks) and activity predecessors are
provided for a project.

Table 2
Time Estimates (weeks)

Activity a m b Activity Predecessor

A 3 5 7 --
B 4 8 10 A
C 2 3 5 A
D 6 9 12 B, C
E 5 9 15 D
5. Using Table 2, the expected time to complete the project is
a) 34.17 weeks. b) 33.23 weeks. c) 31.00 weeks. d) 21.67 weeks.

6. Using Table 2, the variance of the project’s total completion time is

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a) 5.472. b) 5.222. c) 4.872. d) 3.752.

7. Using Table 2, the probability that the project could be completed in 34 weeks or less is
approximately
a) 0.86. b) 0.89. c) 0.91. d) 0.96.

A flower shop uses 250 clay pots a month. The pots are purchased for $2 each. Annual holding
cost is estimated to be 30 percent of purchase cost, and ordering cost is $20 per order.
Assuming all the EOQ assumptions are met.
8. If the manager uses a fixed order quantity of 250 flower pots, what is the average inventory
level?
a) 250 b) 125 c) 200 d) 150
9. If the manager uses a fixed order quantity of 250 flower pots, what is the total annual
inventory holding and ordering cost?
a) 250 b) 350 c) 315 d) 415
10. What is the EOQ?
a) 129 b) 447 c) 449 d) 415
11. What is the total annual inventory holding and ordering cost if using EOQ?
a) 250 b) 268 c) 300 d) 310
A sausage factory can produce a type of European sausage at a rate of 500 kg per day. It
supplies local stores and restaurants at a steady rate of 100 kg per day. The cost to prepare the
equipment for a batch production is $12. Annual holding cost is $4 per kg of sausage. 300 days
a year.
12. What is the EPQ?
a) 740 b) 340 c) 344 d) 474
13. What is the annual inventory cost if using EPQ?
a) 1517.89 b) 2247.56 c) 2290.66 d) 988.87
14. Below is a quantity discount schedule for an item with an annual demand of 4,500 litres,
and 360 working days per year. The company orders regularly at an ordering cost of $10. The
annual holding cost is 40% of the purchase price per year. Determine the optimal order quantity.

Order quantity (litres) Price per unit ($)

1 to 349 $2.00 $1.80

350 to 749 $1.60

750 or more

a) 375 b) 354 c) 335 d) 750

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15. A Card Shop sells calendars. The once-a-year order for each year’s calendar arrives in
September and costs $3 each. The Shop sells them for $6 each, and the salvage value is $1
each the following July. If the demand is normally distributed with mean 600 and standard
deviation 150, what is the optimal order quantity?
a) 638 b) 680 c) 735 d) 854
16. A flower shop faces a demand that is normally distributed with mean 250 clay pots a month
and standard deviation 50. The pots are purchased from an outside supplier with a procurement
lead time 1 month.
What is the standard deviation of demand during lead time?
a) 250 b) 111 c) 100 d) 50
17. If the manager keeps a 95% lead-time service level, what is the reorder point?
a) 425 b) 338 c) 332 d) 414
18. The following question is based on the product structure tree below.
Product Structure Tree
P

K L W

3G 4H 2M 2N 3Z

100 units of product P is needed in week 7. On-hand inventories are 40 Gs, and 200 Hs.
Scheduled receipts are 40 Ks at the start of week 1. How much Gs and Hs are needed?

a)260 Gs and 200 Hs b) 140 Gs and 40 Hs c) 180 Gs and 200 Hs d) None of the above.

19. The following table provides the information necessary to construct a project network
and project crash data.

Activity Time
Activity PredecessorActivity Normal (weeks Crash)
Activity Cost ($)Normal Crash

a — 16 8 2000 4400 b — 14 9 1000 1800 c a 8 6

500 700 d a 5 4 600 1300 e b 4 2 1500 3000 f b 6
4 800 1600 g c 10 7 3000 4500 h d, e 15 10 5000
8000

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Construct the project network, and crash the network the maximum amount possible. What is
the crashed project duration time?

a) 33 b) 31 c) 26 d) 22
20. A company wants to product a weighted moving average forecast for April with the
weights 0.40, 0.35, and 0.25 assigned to March, February, and January, respectively. If the
company had demands of 5,000 in January, 4,750 in February, and 5,200 in March, then April’s
forecast is
a) 4983.33.
b) 4992.50.
c) 4962.50.
d) 5000.00.

21. A company that produces printer cartridges had cost of goods sold last year of
$629,462,423. The average value of inventory for raw materials, work-in-process, and finished
goods of last year are shown in the table below:

Raw Materials $7,367,528

Work-In-Process $22,893,232
Finished Goods $16,523,451

The number of inventory turns would be a)

3.720.
b) 2.493.
c) 13.4546.
d) 28.33.

22. A company that produces printer cartridges had cost of goods sold last year of
$629,462,423. The average value of inventory for raw materials, work-in-process, and finished
goods of last year are shown in the table below:

Raw Materials $7,367,528

Work-In-Process $22,893,232
Finished Goods $16,523,451
If the company operates 50 weeks per year, then the weeks of supply in inventory would be a)
3.716.
b) 2.493.
c) 13.4546.
d) 28.33.

23. Complete the available-to-promise table below. Production of size 100 is needed if
projected on-hand inventory drops to zero. What is the available to promise for week 4?

Period

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On-hand = 10 1234 5 6
Forecast 50 50
50 50
Customer orders 56 17 75 50
16 14
Projected on hand
Master production
schedule
Available-to-promise

a) 27 b) 25 c) 34 d) 86
Product P is composed of three subassemblies: K, L, and W. Subassembly K is assembled
using 3 Gs and 4 Hs; L is made of 2 Ms and 2 Ns; and W is made of 3 Zs. On-hand inventories
are 40 Gs, and 200 Hs. Scheduled receipts are 10 Ks at the start of week 3 and 30 Ks at the
start of week 6.
One hundred Ps must be shipped at the start of week 7. Manufacturing lead times are two
weeks for subassemblies and purchase lead times are one week for the components. Final
assembly of P requires one week for 100 units. Note that 10-percent of planned order receipts
of G are defects. The minimum order size for H is 200 units. For other items, use lot-for-lot
ordering. Develop the material requirements plan for P, K, and H with the following table and
answer the questions.
24. When and how much is the planned-order releases of K?
a) Week 5, 100 b) Week 5, 70 c) Week 4, 100 d) Week 4, 60 25.
When and how much is the planned-order releases of H?
a) Week 2, 160 b) Week 3, 200 c) Week 1, 160 d) Week 1, 200

Beg.
Weeks 1 2 3 4 5 6 7
Production Inv.
Schedule
Quantity

Beg.
P LT = 1 wk. 1 2 3 4 5 6 7
Inv.
Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned-order receipts
Planned-order releases

Beg.
K LT = 2 wk. 1 2 3 4 5 6 7
Inv.

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Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned-order receipts
Planned-order releases

H(4) LT = 1 wk. Beg.

1 2 3 4 5 6 7
Min. lot size = 200 Inv.
Gross requirements
Scheduled receipts
Projected on hand
Net requirements
Planned-order receipts
Planned-order releases