OPSM 3830 Exam 3 Practice | Complete Solutions (Verified Answers)

OPSM 3830 Exam 3 Practice | Complete Solutions (Verified Answers) When the results of quality control are unacceptable, what is the next step? corrective action Statistical process control is ______. quality control efforts that occur during production What is the best synonym for inspection from the below list? Appraisal Inspection during transformation is called what? process control What are the basic issues of quality control inspection? (Check all that apply.) How much and how often to inspect At what stage of the process inspection should occur Where inspection should take place Whether to inspect attributes or variables Select the best definition of Quality Control. A process that measures output relative to a standard and takes action when discrepancies occur. Which product characteristics would prompt the most intensive inspection? Low-volume, high-cost Which is/are examples of Acceptance Sampling? (Select all that apply.) Inspection of raw material batches before production Inspection of final assembly lots after production What are some examples of inspection points in the service sector? (Select all applicable answers.) Outgoing patient billing accuracy at medical clinic. Kitchen cleanliness at fast food restaurant at shift start. Which of the following statements is/are correct about Inspection? Inspection involves checking for conformance against a quality standard. Inspection can occur before, during or after production. Which type of inspection occurs before and after production? acceptance sampling One basic issue of inspection is what type of data to collect. If we can measure the value of a characteristic, we are collecting ______ data. Variable Which of the following statements about inspection frequency are is/are correct? The more lots being produced the more inspections are needed. A stable process will require less frequent checks than an unstable process. What are the different inspection points in manufacturing? (Select all correct answers.) Raw materials & purchased parts before production Before a costly, irreversible or covering operation/process. Finished goods after production Under which conditions would on-site inspection be better than off-site at a specialized test lab? Need for quick inspection results due to delivery schedule Alteration or contamination of samples during transfer to lab True or false: In acceptance sampling, a type of quality control inspection, 100% of product in a given lot are checked for conformance. False What is the rationale and basis for statistical process control? Acceptable variation within probability limits Given a stable process, we must ask the question whether the ______ of process output is within an acceptable range. inherent variability Select the best definition of assignable variation. Special, non-random variation traceable to a definite cause. Which scenario would indicate the need for off-site testing at a centralized testing facility? Customer specifications for satellite component require dust-free, no vibration test What is the best definition of statistical process control? Analyze data from some point in the process to determine if the process is likely to be in or out of control. When comparing a sampling to a process distribution, what are the most important things to note? They have the same means, are normally distributed, and sampling has less variability. Random variation in a process indicates __________; whereas non-random variation indicates process __________. stability/instability What does the central limit theorem tell us about the sampling distribution? It approaches a normal distribution as sample size increases. Select the best definition of random variation. Common variation inherent in a process occurring by chance. What is the first step in the control process? Define in sufficient detail what is to be controlled. Select the best definition of a control chart. A time-ordered plot of sample statistics used to determine randomness or non-randomness. Which of the following statements is/are correct about the sampling distribution? (Select all applicable answers) Sampling distribution is a plot of many sample means. Sampling distribution is narrower than the process distribution. When +/- 2 standard deviation control limits are used in a process control chart, which of the below statements are true? Approximately 95.5% of the time random data points will fall within (inside) the upper and lower control limits. Comparing a theoretical sampling distribution to the process distribution, which of the following is true? The sampling distribution curve is narrower than the process distribution. Which of the following statements about Type I error is/are correct? A Type I error is concluding non-randomness and being mistaken. A Type I error's alpha risk equals the probability (area) in the two "tails." True or false: In the control process, only those characteristics that can be counted or measured are candidates for control. True What is the difference between variable and attribute data? (Select the best answer.) Variable data is measured on a continuous scale and attribute data is counted using discrete numbers. In a control chart when a data point falls outside the control limits (upper and lower), what must be concluded? The process appears non-random and should be checked. A mean control chart is used to check ______. for central tendency of a variable The "average of the sample means" is also known by what term? X-double bar When a sample average falls inside the control limits, what can be concluded about the process? Random variation is suggested and the process is probably in control. A Type I Error is referred to by what other name? Alpha Risk For a mean control chart, when the process standard deviation is not known, what is used in its place as a measure of process variability? Average Range Which of the following are measured using attributes? Number of defects Number of calls in a day We do not use the process standard deviation in a range control chart, because ______. the underlying sampling distribution is not normal A range control chart is used to check ______. the dispersion of a variable For attribute data a c-chart is used to monitor ______. the number of defects per unit What symbol or letter signifies the number of standard deviations the control limits are based on, in the formula for a mean control chart? Z In a p-chart, as the sample size increases, how does the standard deviation of the sampling distribution for the proportion of defective items change? the standard deviation decreases For practical reasons, the c-chart uses which probability distribution as an approximation to the Poisson? Normal When the standard deviation is not known, mean control chart upper and lower control limits are computed by adding and subtracting ______ from the grand mean. A2 x Average Range What is the range control chart upper control limit formula? D4 x Average Range For attribute data a p-chart is used to monitor ______. the proportion of defective items generated by a process The decision about where to use control charts should focus on aspects of the process that _______. have a tendency to go out of control, and affect product or service characteristics When computing the control limits for the p-chart, what value is used when the population proportion of defective items is not known? Sample proportion of defective items Why do statistical process control analysts perform run tests, even when control charts demonstrate all points within the limits? To determine whether patterns can be detected. For c-charts, the sample average number of defects is computed by which of the following formulas? Number of defects divided by number of samples What characteristic is measured in a run test? anything observable What are the two different types of run tests? Median and Up/Down Managers must make a number of important decisions about the use of control charts. What are they? How often samples should be taken At what points in the process to use control charts What type of control chart to use What size samples to take When control charts and run tests are used together, rank the order in which actions should be taken to compute control limits for process output. (1 is first, 3 is last.) 1. Determine appropriate control chart based upon data type 2. Compute upper and lower control limits 3. If sample statistics fall outside control limits, stop and look for a cause. If all are inside, conduct run tests to check for randomness. Run tests can reveal non-random patterns in time-ordered data. Select three patterns that might be seen. Cycles Bias Trend Select the best definition of a "run." sequence of observations with a certain characteristic When is the nonrandom variation shown on a control chart a positive outcome? An observation below the lower control limit on a R-chart. An observation below the lower control limit on a c-chart. An observation below the lower control limit on a p-chart. True or false: In order to create new samples, the runs are transformed into a series of Us and Ds and into a series of As and Bs. False How do Specifications differ from Control Limits? Specifications refer to the entire process and control limits are set on the sampling distribution. True or false: All processes have variation. True If the number of standard deviations is not specified when computing control charts, what is an appropriate default value? +/- 2 standard deviations Select the best definition of process capability. the inherent variability of process output relative to the variation allowed by the design specifications Which of the following exemplify a capable process? The range of process variability is much less than the width of customer specifications. True or false: Sometimes non-random variation can indicate excellent quality. True What is the formula for Cp? Cp = Specification Width / Process Width Which of the following statements is/are correct about Specifications? Specifications are tolerances established by Engineering and/or the Customer. Specifications are a range of values in which all units of output must fall to be acceptable. A six sigma process will have a process capability index equal to: 2.00 Select the best definition of process variability. The natural or inherent variability in a process. When is the capability analysis statistic Cpk used, instead of Cp? When a process is not centered between the upper and lower tolerances. Which of the following statements about process capability is correct? (Select all that apply.) For a process to be capable, the output must fall within tolerances. A capable process exhibits natural, random variability. Though process improvement initiatives come with a cost, benefits of more capable processes may outweigh and can include which of the following? (Select all that apply.) Lower warranty costs Less need for inspection Fewer service complaints Select the best definition of capability analysis. To determine whether the variability of a stable process falls within tolerances. When is the capability analysis statistic Cp used? when a process is centered between the upper and lower specifications Simplify Eliminate steps, reduce the number of parts, use modular design Standardize Use standard parts, standard procedures Make mistake-proof Design parts that can only be assembled the correct way; have simple checks to verify a procedure has been performed correctly Automate Substitute automated processing for manual processing Upgrade Equipment Replace worn-out equipment; take advantage of technological improvements Six Sigma refers to achieving a process variability so small that the design specifications represent ___ standard deviations above and below the process mean. Six How does Taguchi's belief about quality differ from the traditional view? The cost of poor quality increases as the output approaches the specification limit. Which of the following elements are part of the calculation for the capability analysis statistic Cpk? (Select all that apply.) Take the smaller of the two calculation values for Cpk. Calculate the distance from the mean to the upper tolerance then do the same to the lower. What happens when a process is not stable? Capability index is meaningless What are some ways operations managers can improve process capability? Reduce the process variability Upgrade or automate equipment Standardize process steps Select all the ways quality assurance can be part of an organization's operations strategy. Improve process capability to reduce need for inspection Adopt continuous process improvement methods to increase customer satisfaction with product quality. The implication for Taguchi is that reducing the variation inherent in a process will result ______. (Select all that apply.) lowering the loss to society lowering the cost of poor quality What are some risks of using capability indexes? (Select all that apply.) If the process output is not normally distributed, statistical inferences are incorrect. If the process is not centered but Cp is used anyway, it gives misleading indications. If the process is not stable, Cp and Cpk are meaningless. A stock or store of goods is _______. Inventory The inventory models in this chapter relate primarily to ______ items, that is, items that are ready to be sold or used. independent-demand Which of the following is not a way inventory affects performance measures? Dividends Which of the following are considered types of inventory in a manufacturing facility? Raw materials Maintenance and repairs Finished goods In-transit goods Work-in-process One of the reasons a firm carries inventory is to ______, that is, to achieve constant output and use inventory to meet overly high requirements during seasonal periods. smooth production requirements Inventory is a ________ or ________ of goods. stock, store Which of the following is NOT a normal function of inventory? To take advantage of existing storage space. Which of the following types of inventory are items that are ready to be sold? Independent-demand items Which of the following statements about inventory management is/are true? -One of the goals is to keep inventory costs within reasonable bounds.-One of the goals is to achieve good customer service.-Inventory managers must decide how much to order. Because firms tend to have about 30 percent of current assets invested in inventory, a reduction in inventories can result in a significant ______. increase in ROI With inventory turnover, a _____ ratio is better, because that implies more efficient use of inventory. Higher MRO stands for ______ inventory. maintenance and repairs ______ inventory systems continuously keep track of changes to the inventory system and a fixed quantity is ordered when the amount on hand reaches a predetermined level. Perpetual Which of the following is NOT a normal function of inventory? To provide an investment vehicle. One reason firms carry inventory is to ______, that is, to use inventory as a buffer between successive internal operations to avoid disruption in the event of equipment breakdowns or accidents. decouple operations Which of the following statements about inventory control systems is/are true? Orders in two-bin systems may not be placed at the right time. Some businesses are moving towards using RFID tags to track inventory. The overall objective of inventory management is to achieve satisfactory levels of ______ while keeping inventory ______ reasonable. customer service; costs Which is the definition of holding cost in the EOQ model? The cost to carry a single unit in inventory for a length of time. Which of the following statements about inventory turnover is not true? Turnover is the ratio of sales to inventory. _______ cost is incurred by a firm when demand for inventory exceeds supply. Shortage ________ inventory systems take physical inventory counts at fixed intervals and decide how much to reorder of each item. Periodic The ______ approach classifies inventory items according to a measure of importance, such as annual dollar value. A-B-C Place the following steps for the A-B-C approach in the correct order. 1. Multiply annual volume by unit price for each item 2. Arrange items in descending order by annual dollar value. 3. Classify the items as A, B, or C. Which of the following statements about inventory control systems is/are not true? Perpetual inventory systems are always able to accurately report inventory levels. UPCs and point-of-sale systems do not work well together. An advantage of periodic systems is the lack of safety stock required. What are the key questions for management concerning cycle counting? (Select all that apply.) Who should count it? How much accuracy is needed? When should cycle counting be performed? Which of the following statements about inventory costs is/are true? Holding costs can include the cost of insurance. Ordering and setup costs are treated the same. What is the definition of ordering cost? The fixed cost of placing and receiving a single order. How much to order, and when to order, are the two basic issues in an _______. inventory ordering policy Which of the following statements about the A-B-C approach is/are true? Approximately 10% to 20% of items account for about 60% to 70% of annual dollar value. Its purpose is to identify inventory items that are the most important to the business. It is intended to help firms allocate control efforts based on the relative importance of items in inventory. Which of the following statements about the EOQ model is/are true? The EOQ minimizes the sum of annual ordering and holding costs. Orders are placed when there is just enough inventory left to cover the lead time demand. In order to rank inventory items in an A-B-C analysis, we arrange annual dollar values for all items in ______. descending order Match the following inventory categories with the APICS recommendations for accuracy. A= .2 percent B= 1 percent C= 5 percent Which is the correct formula for the annual ordering cost in the EOQ model? (D/Q)S Which statement is true for the economic production quantity (EPQ) model? It is used when production occurs in batches. Which of the following is/are the basic issue/s of inventory management? When to order How much to order In the economic production quantity (EPQ) model, ______ costs are analogous to ordering costs. Setup Which of the following are assumptions of the EOQ model? Annual demand is known. Lead time is known. Which is the correct formula for the economic production quantity? √2DSH2DSH√pp−u Which of the following statements about quantity discount models is/are true? Total cost must include product cost to evaluate options. The optimal quantity may not be the same as the EOQ. Which is the correct formula for the economic order quantity? √2DSH When carrying costs are expressed as a percentage of price, what happens to carrying costs as the quantity discount increases? Carrying costs per unit decline Which of the following statements about the economic production quantity is/are not true? The assumptions are the same as in the EOQ model. The maximum inventory level is the same as the EPQ. Which of the following statements about reorder point ordering is/are true? Safety stock is required if demand is variable. Safety stock is required if lead time is variable. In the economic production quantity (EPQ) model, the larger the production run size, the ______ the number of runs needed per year, and the _______ the annual setup cost. fewer; lower What does LT represent in the reorder point formula? Lead Time Which is the correct formula for the maximum inventory in the EPQ model? (Qp/p)(p-u) Which is the correct formula for the total cost in the quantity discount model? (Q/2)H + (D/Q)S + PD Service level is the _______that demand will not exceed supply. Service level = 100% - ._____________ _____________ probability, stockout, risk Place the following steps for finding the EOQ in a quantity discount model with variable H in the correct order. 1. Start with the lowest price. Compute the minimum point for each price range until you find a feasible point. 2. If the minimum point at the lowest cost is feasible, it is the optimal solution. 3. Otherwise, compare total cost at the price breaks for all lower prices with the total cost of feasible minimum point. 4. The optimal point is the quantity that yields the lowest total cost. Which of these is NOT a factor that determines the appropriate amount of safety stock? Average quantity discount ________ stock is the amount of inventory required to meet expected demand. Cycle What does 'z' represent in the safety stock formula? The stockout risk a manager is willing to accept Which is the correct formula for the reorder point with no variability? d x LT If annual demand is 10,000 units and 9,000 units of demand was filled directly from inventory, with shortages totaling 1,000 units, the annual fill rate is ______. 90% Which of the following statements about the fixed-order-interval model is/are true? It can produce savings in shipping costs. The order point is fixed. A service level of 95% implies a 95% probability that __________. demand will not exceed supply during leadtime Which of the following is correct regarding inventory monitoring under the fixed-order-interval-model? Only periodic checks of inventory required At which point in an order cycle is the risk of a stockout occurring the greatest? During the lead time for an order that has been placed If both the demand rate and lead time are constant, how do the fixed-interval model and the fixed-quantity model compare? They function identically What does the formula zσdLT represent? Safety stock given variability in demand during lead time. In a fixed-order-interval model, larger-than-expected demand causes which of the following situations to occur? Larger order size than expected The ________ _________ is the percentage of demand filled by the inventory on hand. fill, rate Which of the following statements about the single-period model is/are true?