BUS 370 Test 2 10-30-08 v4

# BUS 370 Test 2 10-30-08 v4 - BUS 370 Fall 2008 Test 2...

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BUS 370 – Fall 2008 – Test 2 Directions: Fill in your name and student ID. Shade the corresponding letters and numbers on the answer sheet. Answer each question with the one best choice by marking the letter of the answer on the attached answer sheet. Each of the 25 questions is worth 4 points for a total of 100 points. 1. A computer assembly line has three assembly lines and a maximum of two 8-hour shifts per day. Capacity = (600 units per line per shift) x (number of lines) x (number of shifts). If demand is 1800 units, the minimum number of assembly lines needed to meet demand is: a) 0 b) 1 c) 2 d) 3 2. Herbie is a toymaker. He is automating his toy factory and downsizing elves (early retirement to Florida). His first option is to buy a toy machine that costs \$200,000 and produces toys for \$4 per unit. His second option is to buy a toy machine that costs \$500,000 and produces toys for \$2 per unit. Herbie estimates he will produce 150,000 toys. Herbie should select the following: a) Option 1 b) Option 2 c) Both Options d) He is indifferent between the two options

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3. Similar to the Forster’s Market case, Forster could buy a roaster with a capacity of 40,000 pounds per year for a fixed cost of \$50,000 per year which would lower his per unit cost of coffee from \$5 per pound to \$3 per pound. He can sell 10,000 pounds of coffee in his market for \$8 per pound and can sell coffee to restaurants for \$4 per pound. There is a 40% chance he can sell 20,000 pounds total and a 60% chance he can sell 25,000 pounds total. The following statement is true about the expected value of buying the roaster: a) \$13,000 higher than not buying it b) \$67,000 lower than not buying it c) \$27,000 lower than not buying it d) \$17,000 lower than not buying it 4. Fixed Cost Variable Cost (per Unit) Option 1 \$50,000 \$12 Option 2 \$150,000 \$8 Sales Probability 15,000 20% 20,000 65% 30,000 15% The expected value of Option 1 is: a) \$ 36,000 less expensive than Option 2 b) \$ 18,000 less expensive than Option 2 c) \$ 18,000 more expensive than Option 2 d) \$ 36,000 more expensive than Option 2
5. A new employee is in training at a call center. The first call takes 10 minutes. The second call takes 8 minutes. Based on learning curve, the first 14 calls will take him: a) 4.3 Minutes b) 8.1 Minutes c) 80.9 Minutes d) 140 Minutes 6. For a typical restaurant, as capacity increases, the following is true: a) Non-value added time for the Customer goes down b) Fixed costs go down c) Customer waiting times go up d) The lines get longer 7. The single line at a bank has 8 customers arriving per hour on average. The average service rate is 10 customers per hour. The number of minutes per hour in which the teller will not be serving a customer is: a) 2 minutes b) 12 minutes c) 20 minutes d) 48 minutes 8. A consumer products company has captured demand data over time on a laundry detergent they have sold for the last 40 years. The demand is relatively stable. Based on the forecasting situation, the following forecasting technique should be selected:

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## This note was uploaded on 04/21/2009 for the course BUS 370 taught by Professor Favre during the Spring '08 term at N.C. State.

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BUS 370 Test 2 10-30-08 v4 - BUS 370 Fall 2008 Test 2...

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