What is one of the fundamental differences between the Malcom Baldridge Award and ISO9000 certification?
A. One applies to manufacturing and the other applies to only purchasing.
B. One is fairly simple to achieve and the other is extremely difficult.
C. There is essentially no difference between the two.
D. One applies to U.S. firms, while the other applies to companies anywhere in the world.
E. One originated in Canada and the other in Europe.
D. One applies to U.S. firms, while the other applies to companies anywhere in the world.
Converting quarterly and annual business plans into broad output and labor requirements for the intermediate-term is known as:
A. Aggregate planning.
B. Master production scheduling.
C. Rough-cut capacity planning.
D. Materials requirements planning.
E. Capacity requirements planning.
A. Aggregate planning.
Which of the following is NOT a method used in aggregate planning to cope with fluctuations in demand?
A. Backordering demand in peak periods
B. Building inventory in advance of peak periods
C. Hiring additional workers in peak periods
D. Construction of a new plant and/or finished goods warehouse
E. All of the above are methods used to cope with fluctuating demand in
D. Construction of a new plant and/or finished goods warehouse
Which aggregate planning strategy typically results in greater inventory carrying costs?
A. Level strategy.
B. Chase strategy.
C. Subcontracting strategy.
D. Material requirements production strategy
E. It depends on other factors
A. Level strategy.
Suppose a company is using pure chase strategy for its aggregate production planning. Which of the following policies would a manager use to deal with (or hedge against) the fluctuation in demand?
A. Hire additional workers when demand increases and outplace them when demand decreases
B. Stock up excessive inventory during the periods of low demand.
C. Purchase the shortages from subcontractors.
D. Allow the employees to work overtime when the demand is low.
E. All of the above
A. Hire additional workers when demand increases and outplace them when demand decreases
The Bloomington Bicycle Bearing company wishes to use a level output plan to plan for the rest of the year. Here is the forecasted demand for all bearing types:
Month Demand May 800 Jun 650 July 720 August 690 Sept 530 Oct 610 Nov 630 Dec 610 If the beginning inventory is 300 units and the desired ending inventory at the end of December is 500 units, how many units will be in inventory at the end of August? Assume that backorders are allowed.
A. 140
B. 150
C. 160
D. 170
E. 180
C. 160
A pure level strategy for aggregate production planning:
A. Maintains a stable workforce working at a constant output rate.
B. Varies the output by changing the number of hours worked through flexible work schedules or overtime
C. Matches the production rate to monthly demand by hiring and laying off
D. Uses a part-time workforce when the demand exceeds the production rate.
E. Never uses inventory to buffer against the changes in demand.
A. Maintains a stable workforce working at a constant output rate.
Which of the following circumstances would provide an incentive for employing a level (vs. chase) plan?
A. The product is perishable
B. Warehouse space for finished goods is limited.
C. Inventory carrying costs are very high.
D. The production process requires highly trained labor.
E. None of the above (i.e., all are incentives for a chase plan).
D. The production process requires highly trained labor.
Mole Mfg. has asked you to develop a chase plan for the production of its earth moving equipment. Below is the beginning inventory, monthly demand, and relevant work force information. Determine the total hire/fire costs and the number of workers employed at the end of October. Note: The ending inventory for October should be 0. July Beginning Inventory 1200: Demand is July 3300; Aug 3000; Sept 2550; Oct 2400. Hiring costs $50 per worker; firing costs $100 per worker; production rate 15 units per month per worker; starting workforce 200 workers
A. $6,000 and 160 workers
B. $13,000 and 160 workers
C. $6,000 and 170 workers
D. $13,000 and 170 workers
E. $19,000 and 170 workers
B. $13,000 and 160 workers
The BBC Company is forecasting demand to fluctuate over the next four periods. If the beginning inventory level is 120 units and the company wants a pure level output plan, what level of production is required to avoid back orders during any period and to keep ending inventory for period 4 at a minimum? The forecast is: Period 1-1900; Period 2-1930; Period 3-2260; Period 4-910.
A. 1720
B. 1855
C. 1990
D. 2030
E. None of the above answers are correct.
C. 1990
Which of the following costs are NOT considered in developing an aggregate production plan?
A. Inventory holding costs.
B. Basic production costs (fixed and variable).
C. Hiring and training costs.
D. Layoff and firing expenses
E. Depreciation costs.
E. Depreciation costs.
Which of the following is not a type of inventory?
A. reorder point stock
B. pipeline stock
C. safety stock
D. cycle stock
A. reorder point stock
In a saw tooth diagram, the peak of each inventory cycle represents?
A. Q
B. ROP
C. SS
D. DLT
A. Q
Which of the following is not a cost associated with cost of quality?
A. Scrap cost
B. Test equipment cost
C. Inspection cost
D. Warranty cost
E. None of the above, all are a cost of quality.
E. None of the above, all are a cost of quality.
Which of the following are characteristic of the companies who have won the Malcolm Baldrige National Quality Award?
I. A strategic vision for the organization was developed.
II. Senior management was actively involved in improvement efforts.
III. They produced highly profitable, high technology products.
IV. Quality control and improvement efforts were carefully planned and implemented.
I, II, and IV
Which of the following statements best describe one a basic difference between the Malcolm Baldrige Award and ISO 9000 certification?
A. One originated in Japan, the other in Europe
B. There is essentially no difference between the two
C. ISO 9000 is more important in international commerce
D. One applies to only U.S. firms, one applies to only European firms
E. ISO 9000 focuses on customer satisfaction, unlike the Baldrige Award
C. ISO 9000 is more important in international commerce
Comparing an organization’s performance on critical business processes against the best performance on the same or similar processes in other organizations is known as:
A. Root cause analysis.
B. Value engineering.
C. Quality function deployment.
D. Benchmarking.
E. Walking the cat backwards.
D. Benchmarking.
The degree to which the product or service design specifications are met during the transformation process is known as:
A. Design quality
B. Conformance quality
C. Quality function deployment
D. Fitness for use
E. None of the above
B. Conformance quality
The Shingo system relies on which of the following approaches?
A. Introduction of numerically controlled machine tools into the process.
B. Introduction of quality control checks at the end of the process.
C. Introduction of quality controls within the process so feedback can occur immediately.
D. Utilization of statistical quality control.
E. Utilization of fishbone or cause-and-effect diagrams.
C. Introduction of quality controls within the process so feedback can occur immediately.
Which one of the following lists best describes the four steps of the Deming Wheel?
A. Purchase, Distribute, Coordinate, Account.
B. Plan, Do, Check, Act.
C. Plan, Direct, Critical, Align.
D. Plan, Do, Critique, Articulate
E. None of the above is an accurate description for the Deming Wheel method.
B. Plan, Do, Check, Act.
Which of the following statements is not true about the continuous improvement process?
A. Results are usually accumulated as a series of small improvements.
B. It utilizes tools such as the Deming Wheel, Pareto analysis, and Histograms
C. It requires creative thinkers to come up with break-through innovations.
D. It utilizes team and employee involvement
E. It utilizes control charts.
C. It requires creative thinkers to come up with break-through innovations.
Which of the following are the characteristics of a Baldridge Award winner or a company that emphasizes on customer satisfaction and business results?
A. The company formulates a vision of what quality is and how to achieve it.
B. Senior management is actively involved
C. The company carefully plans and organizes its quality effort.
D. The company vigorously controls the overall process.
E. All of the above.
E. All of the above.
Which of the following measures is most appropriately monitored by a p chart?
A. The weight off a 3 month old baby.
B. the diameter of a piston.
C. the proportion of students absent from class each day.
D. the weight of a bushel of wheat.
E. the temperature of a class room.
C. the proportion of students absent from class each day.
Which of the following control charts is (are) most appropriate for detecting process failure with attribute measurements?
A. p chart
B. R chart
C. X-bar chart
D. Both R chart and X-bar chart
E. Both p chart and R chart
A. p chart
It is quite common in Statistical Process Control to track both the sample average and the sample range. Which of the following statements are accurate with respect to why both measures are considered?
A. Since the sample mean and range are independent measures, each must be tracked separately.
B. the sample average must always be used when using the sample range since either used separately only convey part of the situation.
C. for a given sample, the sample mean can be in control while the range can be out of control.
D. it is necessary to control both the sample average and the sample variation in order to assure the process is in control.
E. all of the above.
E. all of the above.
An X-bar control chart has an upper limit of .65 inch and lower control limit of .35 inch. The results of the next six samples are .6, .37, .45, .48, .53, and .62 inches. What should you do?
A. Nothing, the process is in control.
B. Investigate because three observations are above the mean.
C. Investigate because there is a run.
D. Investigate because there is a trend.
E. Increase the sample size.
D. Investigate because there is a trend.
aggregate production planning
-a managerial statement of time-phased production rates, work-force levels, and inventory investment (3 capital intensive resources), which takes into account customer requirements and capacity limitations
-varying levels of each resource to meet customer requirements and limitations
-helps us attain our goals
-plan with longest time horizon
NATURE OF APP
AGGREATE (combine)
-classes of products
-labor or other inputs
-geographic location of production
-aften abstract
TIME HORIZON
-medium term (tactical)
TIME BUCKETS
-divisions of horizons (ie: month, day, week, etc.)
ROLLING HORIZON
-always moving forward
NATURE OF BUSINESS DETERMINES
-typically one year with one month buckets
lower levels of planning
-after APP
-manufacturing
MASTER PRODUCTION SCHEDULING (MPS)
-medium range (tactical)
-1st level of disaggregation
-break-down into more real end-items
-horizon and buckets are no larger than APP (often shorter)
-formulated and evaluated at a lower organizational level than the APP
MATERIAL REQUIREMENTS PLANNING (MRP)
-extreme detail, down to each nit and bolt
-medium range (tactical)
SHOP FLOOR SCHEDULING
-detailed, actual production schedule
-short range (operational)
*as you go down list, level of detail increases and flexibility decreases
three pure aggregate plans
*at least one resource has to move to accommodate changes in sales forecast
-companies usually implement some plan which falls somewhere in the middle
CHASE
-production and manpower fluctuate (FREEZE INVENTORY)
-favorable is temporary employees are paid lower than full time
-unfavorable is employees are highly skilled/in high demand, require lots of training/less experience
LEVEL
-inventory levels fluctuate (FREEZE WORKFORCE AND PRODUCTION LEVEL
-favorable is raw material deliveries must be determined will in advance, inventory storage is cheap
-when demand is low, store more in inventory for busy season
-no backorders (demand > production)-in one of time buckets, ending inventory will be zero (if it never falls to zero, we are keeping more inventory than needed)
STABLE WORKFORCE
-number of hours worked fluctuates (FREEZE SIZE OF WORKFORCE)
types of inventory (transformation stage)
RAW MATERIAL
-inventory which has not yet undergone any transformation by the company
-overseen by sourcing department of organization
WORK-IN-PROGRESS (WIP)
-inventory which has undergone some transformation but not yet completed
-overseen by those involved in scheduling
FINISHED GOODS
-inventory which has undergone all transformations and it ready to be passed to the customer
-controlled by marketing
reasons for holding inventory
SAFETY STOCK
-a buffer against some form of uncertainty
-ie: uncertainty of demand or supply
CYCLE STOCK
-due to the supply/source of product is not continuous
-batching: some resource required must be shared with more than one product (ie: plastic injection molding), may not be economically efficient to produce the product continuously
-ie: store-self
PIPELINE STOCK
-inventory that is located somewhere in the production or delivery process
-“in the pipeline”
-transit stock
-ie: raw materials
SEASONAL STOCK
-to buffer against seasonality
-what aggregate plan does
measures of inventory
NUMBER OF UNITS
-absolute measure
-not very useful from evaluative standpoint
DOLLAR VALUE OF UNITS
-(units x value per unit)
-cost measure
WEEKS OF SUPPLY
-a relative measure
-inventory equivalent of ROI
-(units of inventory/weekly demand rate)
INVENTORY TURNS
-a relative measure
-inverse of the “years of supply” measure
-(annual sales volume/units of inventory)
why is inventory an important issue?
MATERIAL AVALIABILITY
-assuring customer orders are met
*INVENTORY COSTS MONEY
-expensive
**must find a solution that insures customer demand is met while minimizing costs
basic FOQ assumptions
-restrictive to isolate movement in single cost
-demand is constant
-item is produced or purchased in lots
-independence between orders
-no uncertainty in demand or supply
-*replenishment is instantaneous (drives model, you receive all of your order at once-no partial shipment)
-holding, setup, and purchasing are the only relevant costs
total annual holding cost (TAHC)
-holding=carrying: cost of storing item
-cost of insurance, capital, warehousing, shrinkage (inventory reduction due to theft, decreased sales, etc.), and others
-if increases inventory increases cost->holding
-TAHC= avg inventory level x per unit annual cost
-(Q/2)iC
-Q/2= avg inv (max-min)/2
-i=% value of cost to hold for one year
-C=value of item
-order smaller quantity to minimize cost
total annual setup cost (TASC)
-setup=ordering: acquisition costs
-administrative charges, delivery charges, labor costs, defects, testing, etc.
-if costs increase with frequency of ordering->setup cost
-ie: cost to have amazon prime
-TASC=# of setups per yr x cost of a setup
-(D/Q)S
-D=annual demand rate
-Q=size of lot/batch/order
-S=cost per setup/order (fixed)
-inverse of TAPC
-as lot size increases-> cost decreases
-order large quantities to minimize costs
total annual purchasing cost (TAPC)
-actual cost/value of a year’s demand
-cost of item x annual demand for item
-C x D
-C=cost of item
-D=annual demand for item
-cost doesn’t differ with lot size
optimal Q
-minimization of TAHC+TASC
-intersection at point TAHC=TASC
-if you know one of these values at Q, you know the other
-if you know these combined at Q, you divide in half
-Q=sqrt(2DS/iC)
-D=annual demand
-S=cost of one setup
-iC=% of cost of item to hold in inventory (holding cost)
-i and D must be for the same time frame
-D and C must be for the same size product
-reorder point (RP)= demand during lead time (DLT)
FOQ with gradual replenishment (usage)
-eliminate assumption of instantaneous replenishment
-in-house manufacture vs partcial delivery
-create inventory yourself
-don’t make one product at time, sell at same time
-inventory fluctuating
-ie: don’t make one donut at a time
-use inventory as build inventory
-never attain highest point of Q in instantaneous-> new Imax is Q(P-D)/P
-holding cost decreased
-Q increased
-TAHC=((Q/2)(iC))((P-D)/P)
-Q=sqrt((2DS)/iC)(P/(P-D))
FOQ with uncertain demand
-remove assumption of certain demand (still constant)
-demand is assumed normally distributed
-instantaneous replenishment
-service level: % chance no stockout during a given inventory cycle (no backorders)
-RP-Dlt=SS
-D differs between inventory cycles
-Zsl=(RP-Dlt)/SDlt
-RP=Dlt+ZslSDlt
*remember- can’t add SD, must convert to variance
-SS=z*SDlt
-ROP=expected lead time demand+SS
**higher service level and inventory cycles have relationship
-more inventory levels-> greater chance of running out
-high service level doesn’t guarantee not running out (depends on other things too)
**if lead time is anything other than 1 day, need to convert it
Total Quality Management (TQM)
-history: focused used to be on output, NOT quality
-managing the entire organization so that it excels on all dimensions of products and services that are important to the customer
-processes in all areas of firm must be high quality
-latest approach: six sigma
dimensions of quality (garvin)
*customer ultimately defines quality (both explicitly and implicitly)
*possible mix and match ways customers judge quality
PERFORMANCE
-primary operating characteristics
FEATURES
-supplements to a product’s basic function
-what the product offers
-“bells and whistles”
-ie: bluetooth in car
RELIABILITY
-time until a product malfunctions
-needs repair when?
DURABILITY
-time until a product needs replacement
-needs replacement when?
-ie: batteries, lightbulbs
CONFORMANCE
-degree to which a product conforms to established standards
-ie: McDonald’s fries always the same
SERVICEABILITY
-ease of maintaining and repairing a product
AESTHETICS
-overall appearance/appeal
-how it looks, feels, sounds, tastes, or smells
PERCEIVED QUALITY
-consumers perceptions of a product, based on inferences from reputation, brand image, advertising, marketing approach, packaging, etc.
costs of quality
*hierarchy- as list does down, cost goes up exponentially
*increase prevention cost-> decrease external failure exponentially-> save money
*can choose to invest a lot of money in conformity or take the cost of non-conformity (trade-off)
*”quality is free”-the expenditures to improve quality typically are less than the savings returned in the form of fewer failures
PREVENTION
-costs associated with improving quality
-ie: worker training, design for quality/manufacturability, supplier certification, maintenance, etc.
APPRAISAL
-costs associated with evaluating quality
-ie: inspecting incoming materials, testing finished products, and quality audits
INTERNAL FAILURE
-cost of product or process failing before it reaches the customer
-ie: defective metal scrap, rework, machine repair
-discovered before customer gets it
EXTERNAL FAILURE
-cost of product failure after it has reached the customer
-ie: warranty costs, field maintenance and repair, loss of customer good will and reputation, and product liabilities
-most expensive
*the closer a failure occurs to the customer, the more expensive it is
*the father removed from its course that a quality problem is discovered, the more expensive it is
Deming’s 14 points to management
-1950s-Japan created recognition for highest quality manufacturing plants (Deming prize)-American’s wouldn’t listen
CEASE DEPENDENCE ON INSPECTION TO ACHIEVE QUALITY
-engage in statistical sampling (more accurate)
-not every defect will be caught, no correction
-don’t just weed out- must eliminate cause
-not 100% reliable
-acceptance sampling: determines if entire batch is acceptable
-cost: expensive
-destructive: destroy product to test quality (ie: crash testing cars, can’t crash test all)
END THE PRACTICE OF AWARDING BUSINESS TO THE LOWEST BIDDER. INSTEAD, REDUCE COST BY REDUCING VARIATION
-okay to pay more for consistency
-don’t choose cheapest
INSTITUTE TRAINING ON THE JOB
DRIVE OUT FEAR
-employees don’t have to worry about safety, be proud
-“I would never want to work for someone I could not argue with, and respect”
ELIMINATE SLOGANS, EXHORTATIONS, AND TARGETS
-wrong emphasis as to who is most responsible
-fake slogans: “we are number 1”
REMOVE BARRIERS TO PRIDE OF WORKMANSHIP
-what is my job?
-allow employees to speak up to make changes
PCDA
-another Deming contribution
-before engaging in cycle, need to see where you currently are
PLAN
-identifying and analyzing the problem
-what do you want to improve?
DO
-developing and testing a potential solution
CHECK
-measuring how effective the test solution was, and analyzing whether it could be improved in any way
ACT
-implementing the improved solution fully
Baldrige Award
-national quality award in U.S. (U.S. late to quality)
-similar to Deming in Japan
-established by Raegan in 1987
-rated on 7 core values
-externally rated on customers’ rate of quality/satisfaction and strategic position
-every December in white house
CATEGORIES
-manufacturing companies or subsidiaries that:
-produce and sell manufactured products or manufacturing processes or
-produce agricultural, mining, or construction products
-service companies or subsidiaries that sell service
-small businesses
-health care organizations
-educational institutions
-not for profits
-cyber security firms
CHARACTERISTICS OF WINNER
-companies formulated a vision of what they thought quality was and how they would achieve it
-senior management was actively involved
-companies carefully planned and organized their quality effort to be sure it would be effectively initiated
-vigorously controlled the overall process
-responsibilities of the winner include full disclosure of their practices to the general public
ISO 9000
-overseen by organization of standardization (predetermined minimum quality standards of processes within industry)
-different set of standards for each step in production flow
-international
-doesn’t limit the number of firms that can be recognized
-rapidly becoming standard that is required to do business in the European Community
NOT AN AWARD: QUALITY CERTIFICATION PROCESS
LESS BROAD THAN BALDRIGE
-are processes documented, consistently performed, and suited to task?
INTERNALLY FOCUSED ON PROCESSES
-not external result
-a lot of companies don’t apply because they don’t want to reveal secretes
CRITICISM
-no central certification body exists (often achieved through one of several independent certification “agents”)
STRENGTH
-flexible due to vague guidelines-> audit can be tailored to fit each firm
six sigma
-six sigma quality: goal of firms to produce at the highest quality possible
METHODOLOGY (DMAIC cycle)
1. DEFINE
-identify customers and their priorities
2. MEASURE
-determine how to measure the process and how it is performing
3. ANALYZE
-determine the most likely causes of defects
4. IMPROVE
-identify the means to remove the causes of defects
5. CONTROL
-determine how to maintain the improvements
continuous improvement
-small, incremental changes over time to existing processes to improve quality in the long run (collectively add up exponentially)
-treats no process as one that is complete and perfected, a process is considered to be at all times a work in progress, with constant effort to analyze and improve
-7 tools of quality (magnificent seven)
-process flow charts
-cause and effect diagrams
-control charts
-histograms
-check sheet
-pareto charts
-scatter diagrams
process flow chart
-a picture which describes the main steps, branches, and eventual outputs of a process
-sketch showing how everything connects
-help understand the overall process
-facilitate communication among the different stages
cause and effect diagram
-fishbone or ishikawa
-a tool that uses a graphical description of the process elements to analyze potential sources of process variation
-effect you want to improve
control charts
-very popular
-a time sequence chart showing platted values of a statistic, including a central line and one or more statistically derived control limits
-measure and plot any variable overtime that shows the resulting type of variability
-uses actual variation in observed data to determine if a process is “in control” (common cause variation) or “out of control” (special cause variation)
-categorizes/analyzes variation
histogram
-a distribution showing the frequency of occurrences between the high and low range of data
-see frequency of problems
checksheet
-count number of times type of problem occurs
-an organized method for recording data
-direct interpretation of the data
-easy to interpret and encourage the involvement of process operators
pareto analysis
-a coordinated approach for identifying, ranking, and working to permanently eliminate defects. focuses on important error sources
*80% of the problems may be attributed to 20% of the causes
-rank order histogram
-makes it clear what are the greatest payback opportunities for your efforts
scatter diagram
-correlation chart
-a graph of the value of one characteristic versus another characteristic
-relationship and behavior of different variables
-indicates relationships, but not causes and effects
benchmarking
-potential quality tool
-identify those processes needing improvement
-identify a firm that is the world leader in performing the process
-contact the managers of that company and make a personal visit to interview managers and workers
-analyze data
-compare against best in class and learn from their techniques
-identify what we want to improve and study competitors
Fail-Safe Design: The Shingo System
SHINGO’S ARGUEMENT
-SQC methods do not prevent defects
-defects arise when people make errors
-defects can be prevented by providing working with feedback on errors
-mechanism of immediate feedback-> know they aren’t making error
POKA-YOKE INCLUDES:
-fail proof systems
-safety
-ie: car won’t start if foot not on brake
common cause variation
-“good” variation-> still want to minimize
-common causes are the process inputs and conditions that contribute to the regular, everyday variation in a process
-common causes are a part of the process
-they contribute to output variation because they themselves vary
-each common cause contributes a small part of the total variation by looking at a process over time, we know how much variation to expect from common causes
-the process is stable, or predictable, when all the variation is due to common causes
-ie: sampling error
special cause variation
-“bad” variation-> want to remove
-assign a cause/reason for variation
-special causes are factors that are not always present in a process but that appear because of some particular circumstance
-special causes are not usually present
-they may come and go sporadically; may be temporary or long-term pronounced effect on the process
-we can’t predict when a special cause will occur or how it will affect the process
-the process is unstable, or unpredictable, when special causes contribute to the variation
-also called “assignable cause” variation
control limits
-defines the bounds of common cause variation in the process
-a control limit is a tool we use to help us take the right actions:
-if all points are between the limits, assume only common cause variation is present (unless one of the other signals or a special cause is present)
-if a point falls outside the limit, you treat it as a special cause
in control
-functioning as it has historically, exhibiting only common cause of variation (sampling error)
-stable, only variation from common cause
-desired
-process needs no adjustment
-if you make an unneeded adjustment-> increase variation->decrease quality
-H0: null hypothesis
out of control
-process is not functioning as it has in the past, exhibiting evidence that a special or attributable cause of variation has entered the process
-needs some type of attention or adjustment
-Ha: alternative hypothesis
DATA PATTERNS TO SUGGEST OUT OF CONTROL:
-a single ample statistic that is outside of the control limits
-two consecutive sample statistics near control limits
-five consecutive points above or below the central line
-a trend of five consecutive points
-very erratic behavior
type 1 error
-false positive
-when a system that is in control is judged to be out of control and adjustments are made
-producer’s risk- the risk a producer takes when adjusting system
-overreact
-to reduce probability, increase control limits (as you increase the limits, it increases the chance of a type 2 error)
type 2 error
-when a system that is out of control is judged to be in control, and we fail to intervene in the system
-false negative
-consumer’s risk- the risk a consumer tasks when buying a product from an out of control process
-greater risk of external defect
-to reduce probability, decrease control limits (as you decrease the limits, it increases the chance of a type 1 error)
specification limits
-different from control limits
-any observation outside those limits would be classes as defective, while anything within those would be considered non-defective
Converting quarterly and annual business plans into broad output and labor requirements for the intermediate term is known as:
Aggregate planning.
Master production scheduling.
Rough-cut capacity planning.
Materials requirements planning.
Capacity requirements planning.
aggregate planning
Which of the following is NOT a method used in aggregate planning to cope with fluctuations in demand?
Backordering demand in peak periods
Building inventory in advance of peak periods
Hiring additional workers in peak periods
Construction of a new plant and/or finished goods warehouse
All of the above are methods used to cope with fluctuating demand in
Construction of a new plant and/or finished goods warehouse
Which aggregate planning strategy typically results in greater inventory carrying costs?
Level strategy.
Chase strategy.
Subcontracting strategy.
Material requirements production strategy
It depends on other factors
level strategy
Suppose a company is using pure chase strategy for its aggregate production planning. Which of the following policies would a manager use to deal with (or hedge against) the fluctuation in demand?
Hire additional workers when demand increases and outplace them when demand decreases
Stock up excessive inventory during the periods of low demand.
Purchase the shortages from subcontractors.
Allow the employees to work overtime when the demand is low.
All of the above
Hire additional workers when demand increases and outplace them when demand decreases
A pure level strategy for aggregate production planning:
Maintains a stable workforce working at a constant output rate.
Varies the output by changing the number of hours worked through flexible work schedules or overtime
Matches the production rate to monthly demand by hiring and laying off
Uses a part-time workforce when the demand exceeds the production rate.
Never uses inventory to buffer against the changes in demand.
Maintains a stable workforce working at a constant output rate.
Which of the following circumstances would provide an incentive for employing a level (vs. chase) plan?
The product is perishable
Warehouse space for finished goods is limited.
Inventory carrying costs are very high.
The production process requires highly trained labor.
None of the above (i.e., all are incentives for a chase plan).
The production process requires highly trained labor.
Which of the following costs are NOT considered in developing an aggregate production plan?
Inventory holding costs.
Basic production costs (fixed and variable).
Hiring and training costs.
Layoff and firing expenses
Depreciation costs.
depreciation costs
Which of the following is not a type of inventory?
reorder point stock
pipeline stock
safety stock
cycle stock
reorder point stock
In a saw tooth diagram, the peak of each inventory cycle represents?
Q
ROP
SS
DLT
Q
Which of the following is not a cost associated with cost of quality ?
Scrap cost
Test equipment cost
Inspection cost
Warranty cost
None of the above, all are a cost of quality.
None of the above, all are a cost of quality.
What is one of the fundamental differences between the Malcom Baldridge Award and ISO9000 certification?
One applies to manufacturing and the other applies to only purchasing.
One is fairly simple to achieve and the other is extremely difficult.
There is essentially no difference between the two.
One applies to U.S. firms, while the other applies to companies anywhere in the world.
One originated in Canada and the other in Europe.
One applies to U.S. firms, while the other applies to companies anywhere in the world.
Which of the following are characteristic of the companies who have won the Malcolm Baldrige National Quality Award?I. A strategic vision for the organization was developed.II. Senior management was actively involved in improvement efforts.III. They produced highly profitable, high technology products.IV. Quality control and improvement efforts were carefully planned and implemented.
I only
I, II, and III
I, III, and IV
I, II, and IV
I, II, III and IV
I, II, and IV
Which of the following statements best describe one a basic difference between the Malcolm Baldrige Award and ISO 9000 certification?
One originated in Japan, the other in Europe
There is essentially no difference between the two
ISO 9000 is more important in international commerce
One applies to only U.S. firms, one applies to only European firms
ISO 9000 focuses on customer satisfaction, unlike the Baldrige Award
ISO 9000 is more important in international commerce
Comparing an organization’s performance on critical business processes against the best performance on the same or similar processes in other organizations is known as:
Root cause analysis.
Value engineering.
Quality function deployment.
Benchmarking.
Walking the cat backwards.
benchmarking
The degree to which the product or service design specifications are met during the transformation process is known as:
Design quality
Conformance quality
Quality function deployment
Fitness for use
None of the above
conformance quality
The Shingo system relies on which of the following approaches?
Introduction of numerically controlled machine tools into the process.
Introduction of quality control checks at the end of the process.
Introduction of quality controls within the process so feedback can occur immediately.
Utilization of statistical quality control.
Utilization of fishbone or cause-and-effect diagrams.
Introduction of quality controls within the process so feedback can occur immediately.
Which one of the following lists best describes the four steps of the Deming Wheel?
Purchase, Distribute, Coordinate, Account.
Plan, Do, Check, Act.
Plan, Direct, Critical, Align.
Plan, Do, Critique, Articulate
None of the above is an accurate description for the Deming Wheel method.
Plan, Do, Check, Act.
Which of the following statements is not true about the continuous improvement process?
Results are usually accumulated as a series of small improvements.
It utilizes tools such as the Deming Wheel, Pareto analysis, and Histograms
It requires creative thinkers to come up with break-through innovations.
It utilizes team and employee involvement
It utilizes control charts.
It requires creative thinkers to come up with break-through innovations.
Which of the following are the characteristics of a Baldridge Award winner or a company that emphasizes on customer satisfaction and business results?
The company formulates a vision of what quality is and how to achieve it.
Senior management is actively involved
The company carefully plans and organizes its quality effort.
The company vigorously controls the overall process.
All of the above.
All of the above.
Which of the following measures is most appropriately monitored by a p chart?
The weight of a 3 month old baby.
The diameter of a piston.
The proportion of students absent from class each day.
The weight of a bushel of wheat.
The temperature of a class room
The proportion of students absent from class each day.
Which of the following control charts is(are) most appropriate for detecting process failure with attribute measurements?
p chart
R chart
X-bar chart
Both Rchart and X-bar chart
Both pchart and R chart
p chart
It is quite common in Statistical Process Control to track both the sample average and the sample range. Which of the following statements are accurate with respect to why both measures are considered?
Since the sample mean and range are independent measures, each must be tracked separately.
The sample average must always be used when using the sample range since either used separately only convey part of the situation.
For a given sample, the sample mean can be in control while the range can be out of control.
It is necessary to control both the sample average and the sample variation in order to assure the process is in control.
All of the above are correct.
All of the above are correct.
A X-bar control chart has an upper control limit of 0.65 inch and a lower control limit of 0.35 inch. The results of the next six samples are 0.60, 0.37, 0.45, 0.48, 0.53, and 0.62 inches. What should you do?
Nothing, the process is in control
Investigate because three observations are above the mean.
Investigate because there is a run.
Investigate because there is a trend.
increase the sample size.
Investigate because there is a trend.
