MCQ - 205 - Om

GOEL INSTITUTE OF TECHNOLOGY & MANAGEMENT, LUCKNOW
KMB 205 – Operations Management

MCQ TEST – April 15th 2020 (WEDNESDAY)
Time: 10:30am-12pm Marks: 50

1. Which of the following statements about the northwest corner rule is false?
a. One must exhaust the supply for each row before moving down to the next row.
b. One must exhaust the demand requirements of each column before moving to the next column.
c. When moving to a new row or column, one must select the cell with the lowest cost.
d. One must check that all supply and demand constraints are met.

2. In transportation model analysis the stepping-stone method is used to
a. obtain an initial optimum solution
b. obtain an initial feasible solution
c. evaluate empty cells for potential solution improvements
d. evaluate empty cells for possible degeneracy
3. A transportation problem has a feasible solution when

a. all of the improvement indexes are positive
b. the number of filled cells is one less than the number of rows plus the number of columns
c. the solution yields the lowest possible cost
d. all demand and supply constraints are satisfied

4. When the number of shipments in a feasible solution is less than the number of rows plus the
number of columns minus one
a. the solution is optimal
b. there is degeneracy, and an artificial allocation must be created
c. a dummy source must be created
d. a dummy destination must be created
5. The total cost of the optimal solution to a transportation problem

a. is calculated by multiplying the total supply (including any dummy values) by the average cost of
the cells
b. can be calculated from the original non-optimal cost, by adding the savings made at each
improvement
c. is found by multiplying the amounts in each cell by the cost for that cell for each row and then
subtract the products of the amounts in each cell times the cost of each cell for the columns
d. can be calculated based only on the entries in the filled cells of the solution

6. The stepping-stone method
a. is an alternative to using the northwest corner rule
b. often involves tracing closed paths with a triangular shape
c. is used to evaluate the cost effectiveness of shipping goods via transportation routes not currently in
the solution
d. is used to identify the relevant costs in a transportation problem

7. In a minimization problem, a positive improvement index in a cell indicates that
a. the solution is optimal
b. the total cost will increase if units are reallocated to that cell
c. the total cost will decrease if units are reallocated to that cell
d. there is degeneracy

8. An improvement index indicates
a. whether a method other than the stepping stone should be used
b. whether a method other that the northwest corner rule should be used
c. whether the transportation cost in the upper left-hand corner of a cell is optimal
d. how much total cost would increase or decrease if a single unit was reallocated to that cell
9. Which of the following would not generally be a motive for a firm to hold inventories? To
a. take advantage of quantity discounts
b. minimize holding costs
c. reduce stockout risks
d. decouple production from distribution
10. Which of the following statements about ABC analysis is false?

a. ABC analysis is based on the presumption that controlling the few most important items produces
the vast majority of inventory savings.
b. In ABC analysis, "A" Items are tightly controlled, have accurate records, and receive regular review
by major decision makers.
c. ABC analysis is based on the presumption that all items must be tightly controlled to produce
important cost savings.
d. In ABC analysis, "C" Items have minimal records, periodic review, and simple controls
11. Among the advantages of cycle counting is that it

a. makes the annual physical inventory more acceptable to management
b. allows more rapid identification of errors and consequent remedial action than is possible with
annual physical inventory
c. does not require the detailed inventory records necessary when annual physical inventory is used
d. does not require highly trained people
12. The two most basic inventory questions answered by the typical inventory model are
a. timing and cost of orders
b. quantity and cost of orders
c. timing and quantity of orders
d. order quantity and service level
13. Which of the following statements about the basic EOQ model is true?
a. If the ordering cost were to double, the EOQ would rise.
b. If annual demand were to double, the EOQ would increase.
c. If the carrying cost were to increase, the EOQ would fall.
d. If annual demand were to double, the number of orders per year would decrease.
e. All of the above statements are true.
14. An inventory decision rule states that "when the inventory level goes down to 14 gearboxes, 100
gearboxes will be ordered." Which of the following statements is true?
a. 100 is the reorder point, and 14 is the order quantity.
b. The number 100 is a function of demand during lead time.
c. 14 is the safety stock, and 100 is the reorder point.
d. 14 is the reorder point, and 100 is the order quantity.
15. The Production Order Quantity model

a. relaxes the assumption of known and constant demand
b. uses Ordering Cost, not Setup Cost, in its formula
c. results in larger average inventory than an equivalent EOQ model
d. is appropriate when units are sold/used as they are produced
16. Which of the following statements regarding the Production Order Quantity model is true?
a. It applies only to items produced in the firm's own production departments.
b. It relaxes the assumption that the demand rate is constant.
c. It minimizes the total production costs.
d. It relaxes the assumption that all the order quantity is received at one time.
17. Which of the following statements about quantity discounts is false?

a. The cost-minimizing solution may, or may not, be where annual holding costs equal annual
ordering costs.
b. In inventory management, item cost becomes relevant to inventory decisions only when a quantity
discount is available.
c. The larger annual demand, the less attractive a discount schedule will be.
d. If carrying costs are expressed as a percentage of value, EOQ is larger at each lower price in the
discount schedule.
18. The layout strategy that deals with low-volume, high-variety production is
a. fixed-position layout
b. retail/service layout
c. warehouse layout
d. all of the above
e. none of the above
19. For which of the following operations would a fixed-position layout be most appropriate?
a. assembly of an automobile
b. production of cameras and TV sets
c. construction of a ship
d. refining of crude oil
20. The type of layout which features departments or other functional groupings in which similar
activities are performed is
a. process
b. product
c. fixed-position
d. mass
21. According to Heizer and Render, an office layout

a. groups workers, their equipment, and spaces/offices to provide for movement of information
b. addresses the layout requirements of large, bulky projects such as ships and buildings
c. seeks the best personnel and machine utilization in repetitive or continuous production
d. allocates shelf space and responds to customer behavior
22. According to Heizer and Render, a retail/service layout

a. groups workers, their equipment, and spaces/offices to provide for movement of information
b. addresses the layout requirements of large, bulky projects such as ships and buildings
c. seeks the best personnel and machine utilization in repetitive or continuous production
d. allocates space and responds to customer behavior
23. Balancing low-cost storage with low-cost material handling is important in

a. a fixed-position layout
b. a process-oriented layout
c. an office layout
d. a warehouse layout
24. which type of layout is used to achieve a smooth and rapid flow of large volumes of output?
a. process
b. batch
c. product
d. unit
25. Which of the following are strongly associated with "cross-docking"?

a. non-value-adding activities such as receiving and storing
b. multi-modal transportation facilities at seaports
c. processing items as soon as they are received into a distribution center
d. use of manual product identification system
26. The measure of location which is the most likely influenced by extreme values in the data set is the
a. range
b. median
c. mode
d. mean
27. Responsibilities of the operations manager are:
a) planning, organizing, staffing, procuring, and reviewing
b) planning, organizing, staffing, directing, and controlling
c) forecasting, designing, planning, organizing, and controlling
d) forecasting, designing, operating, procuring, and reviewing
28. Which of these layouts is most suitable for processing sugar from sugar beets or sugar cane?
a. process-oriented layout
b. fixed-position layout
c. focused factory
d. product-oriented layout
29. Which of the following is not true about systems approach?
a. A systems viewpoint is usually beneficial in decision making.
b. A systems approach emphasizes interrelationships among subsystems.
c. A systems approach concentrates on efficiency within subsystems.
d. A systems approach is essential whenever something is being redesigned or improved.
30. Production systems with customized outputs typically have relatively:
a. high volumes of output
b. low unit costs
c. high amount of specialized equipment
d. skilled workers
31. According to the Chase and Dasu (2001) study which of the following are behavioral
concepts that should be applied to enhance customer perceptions of a service encounter?
a. Flow of the service experience
b. Flow of time
c. Judging encounter performance
d. All of the above
e. None of the above
32. Which is not a significant difference between manufacturing and service operations?
a. cost per unit
b. uniformity of output
c. labor content of jobs
d. Measurement of productivity.
33. Which of the following is not a characteristic of service operations?
a. intangible output
b. high customer contact
c. high labor content
d. easy measurement of productivity
34. Which of the following is a recent trend in business?
a. pollution control
b. total quality management
c. supply chain management
d. competition from foreign manufacturers
35. Dealing with the fact that certain aspects of any management situation are more important than
others is called:
a. analysis of tradeoffs
b. sensitivity analysis
c. recognition of priorities
d. analysis of variance
36. The fact that a few improvements in a few key areas of operations will have more impact than
many improvements in many other areas is consistent with the:
a. Irwin phenomenon
b. Pareto phenomenon
c. Stevenson phenomenon
d. Tellier phenomenon
37. Which of the following “best practices emphasized by service executives” had the highest
mean emphasize rating?
a. Leadership
b. Accessibility
c. Quality values
d. Customer orientation
38. The process of comparing outputs to previously established standards to determine if corrective
action is needed is called:
a. planning
b. directing
c. controlling
d. budgeting
39. Which of the following does not relate to system design?
a. altering the system capacity
b. location of facilities
c. inventory management
d. selection and acquisition of equipment
40. Taking a systems viewpoint with regard to operations in today's environment increasingly leads
decision-makers to consider _ in response to the .
a. flexibility; pressure to be more efficient
b. off shoring; need to promote domestic production
c. sustainability; threat of global warming
d. technology; impact of random variation
41. Which of the following is not a benefit of using models in decision-making?
a. They provide a standardized format for analyzing a problem.
b. They serve as a consistent tool for evaluation.
c. They are easy to use and less expensive than dealing with the actual situation.
d. All of the above are benefits.
e. None of the above is a benefit.
42. Which of the following statements is true of Lean-Six Sigma?

a. Lean principles focus on advanced statistical methods.
b. Lean principles and Six-Sigma are separate bodies of knowledge
c. Lean principles have been developed over a lengthy period.
d. Lean principles include the 5Ss framework and practices.
43. Which of the following terms best defines the nature of Total Quality Management?
a. An art
b. A philosophy
c. A science
d. A social activity
44. Which of the following terms reflects Japanese view of continuous improvement?
a. Kaizen
b. Poka-yoke
c. Six sigma
d. Control limits
45. Which of the following is NOT an element of TQM?

a. Leadership
b. Perceived quality
c. Employee empowerment
d. Customer focus
46. Refer to the stage of PDCA (Plan, Do, Check, Act) cycle that involves evaluating the
improvement plan.
a. Plan
b. Do
c. Check
d. Act
47. Which of the following refers to a continuous measurement of an organization’s products and
processes against a company recognized as a leader in that industry?
a. Benchmarking
b. Gap analysis
c. Statistical process control
d. Continuous improvement
48. Which of the following is the focus of statistical process control?

a. Determining the efficiency of an operations system
b. Measuring the amount of re-work required to rectify faulty goods
c. Identifying the security needs of an operations system
d. Measuring and controlling process variations
49. Which of the following does not relate to system design?

a. altering the system capacity
b. location of facilities
c. inventory management
d. selection and acquisition of equipment
50. Based on the Service-System Design Matrix, which of the following has a lower level of
“production efficiency”?
a. Face-to-face loose specs
b. Phone contact
c. Internet and on-site technology
d. Face-to-face tight specs

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GOEL INSTITUTE OF TECHNOLOGY & MANAGEMENT, LUCKNOW

KMB 205 – Operations Management

3. A transportation problem has a feasible solution when

5. The total cost of the optimal solution to a transportation problem

10. Which of the following statements about ABC analysis is false?

11. Among the advantages of cycle counting is that it

15. The Production Order Quantity model

17. Which of the following statements about quantity discounts is false?

21. According to Heizer and Render, an office layout

22. According to Heizer and Render, a retail/service layout

23. Balancing low-cost storage with low-cost material handling is important in

25. Which of the following are strongly associated with "cross-docking"?

42. Which of the following statements is true of Lean-Six Sigma?

45. Which of the following is NOT an element of TQM?

48. Which of the following is the focus of statistical process control?

49. Which of the following does not relate to system design?

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