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Unformatted text preview: KEY BUS 370 — Fall 2007 — 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 pharmaceutical company is evaluating whether to build a new plant in the RTP
(Raleigh) area. They are making which type of capacity decision: a) Tactical
b) Planning and Control c) Moderate @ Strategic Please use the following information for the next question: Fixed Cost Variable Cost (Qer Unit)
Option 1 $25,000 $15 Option 2 $10,000 $25
TC: F C + V C " X TC,: 29,000 + 1; Wow : zqoawwpwc gslooo \i TC} : [0'000 + zrxmoao ml 000 1 30/000 7 60, 000
2. At a sales level of 2,000 units, the following statement is true:
@ ption 1 is $ 5,000 less expensive than Option 2
) Option 1 is $ 10,000 less expensive than Option 2 c) Option 1 is $ 5,000 more expensive than Option 2
d) Option 1 is $ 10,000 more expensive than Option 2 3. The variable cost to manufacture a standard television set is $ 75 and it can be sold for
$200. If we have invested $1,000,000 in ﬁxed costs, the breakeven point in units is:
a 5,000
@ 8,000
c) 1 3,3 3 3 (1) 20,000 sf h Fa _ 1,000,000
EEP' eVC ' (Zoo—'7? 2 3,000 Va:+f Please use the following information for the next question: Fixed Cost Variable Cost (per Unit) Option 1 $25,000 $15
Option 2 $10,000 $25
Sales Probability
4,000 20% 7,000 40% _ ' ~
9,000 40% E VJ ’ Pi C~ 4,}! 4. The expected value (expected cost) of Option 2 is: :3 : . 2 (“000 {RS 005* 'q 4' 35(200812450’00043251904;
49 190,000 ' e
d) 210,000 : 22,000+ 79,000+ 77,000 : (70,000 5. A call center operator for a credit card company is in training. The ﬁrst call takes her
10 minutes to open a credit card account. The second call takes her 8 minutes to open a
credit card account. Based on learning curve, about how long will the ﬁrst 10 calls in totaltakeher:
Learn.“ M : ‘12;— : 500/0
a) 5Minutes
b) IOMmutes g7”: 7" » gn‘ ; [aha‘ukgi‘ 4.3K: éZJSMWS
@ 63 Mmutes d) 82 Minutes 6. As the waiting time increases, the following statement is true: a Cost of waiting would go down
Cost of service would go down 0 Capacity utilization would go down
d) Customer satisfaction would go up 7. The single line at a fast food restaurant has 15 customers arriving per hour on average. The average service rate is 20 customers per hour. What is the average time spent in the
waiting line system (in hours): a) .15 ,l: (S > 2,0
@20 ’h
c) .25 l
d3.00 ; ———'——— : __——~ ; L :
) T5 juA 204; g '7' 8. In the Forster’s Market case, Robbie Forster could lower the cost of coffee from $3 per pound down to $1.60 per pound, however, to get the lower cost, he would have to do
which of the following: a) Buy from a lower quality supplier
b Import the coffee from overseas
Buy a coffee roaster d) Double the amount of coffee he is buying to get a lower price 9. When the situation is vague and little data exists, as in the case of new products or
technologies, which of the following forecasting approaches should be used: @ Qualitative Method
b) Quantitative Method
c) Time Series Forecast d) Linear Regression Forecast 10. A qualitative forecasting method in which the approach is to base the forecast for the
new product or service on the actual history of a similar product or service (such as using the demand history of the last version of the iPod to predict the demand pattern for the
current version of the iPod): a) Buildup Forecast
b) Delphi Method c Panel Consensus
@ Life cycle analogy 1 1. Period Demand
1 62 2 57 3 71 4 66 Using the data above and a four period weighted average model (with Wt = .4, WM = .3,
Wt.2 = .2 and Wt_3 = .1), the forecast for Period 5 is: a)58.8 Flt I : 2 tum; b+H4
b)62.7 ’ cu ‘ @639
65.3
1’ .Wéé)‘ .2(1I)+ .1(§7)4 .441) =
14H * 74? + Il.‘/ *é.l : 65.3 12. Period Demand E; (Exponential Smoothing} Trend AF;
1 208 2 1 5 1 5 23 0 Using the data above and an exponential smoothing with Trend model (ct = 0.6, B = .4), the forecast for Period 2 is:
a 211 AF”: F‘ + T”
@5213 F17 db.*(ld) F, = .Q(‘7/03)4.Y(215)=2I0.Y
(1)226 T): [8 (Fz’E)4(”l3)T.: ‘/{1Io.3~2:§)+ .é('5): 4,63 +7,7‘;Z
AF» = Fun: 2:0er 7.?2 = 1,3.» Use the following information for the next question (Tip: Use the number, not the
decimal, for the interest rate — i.e. use 6 for 6%, not .06) X x‘
W Interest Rate(%1 x Y ——
if 2 (14 '3!
6
.13 .10. 3;“: Foo
‘lo 20 £177 1V7,
_, iK Zr 703‘20
, éxy Ix : V77 ’ .1 #7) SIC ‘{X ‘
€961 ‘ (€10 2'41 ——'——3‘f1 I 2V7, "n( “(7 2'827
. k — 10 , (, ) 3’9) 2 4 ’3 «— 8
: y ' L k k : Y Y 74’, " 3 IE?
« 3
9: 3 +5 xx : 38,43 + (r1.8).v)('7)= 3?.é7I9.77:[2.‘1/ 13. Using the data above, forecast the number of loans if the interest rate is 7%:
a) 23
b)  l é” l9 Please use the following information for the next question: Capacity = 1500 units Unadjusted Adjusted
Month Total Demand Forecast Ft Trend Tt Forecast AFt marlan 14. Using the same logic and calculations as the Top Slice Drivers case, about how many
months until we run out of capacity: @ZMonths '500“(00 _.
b) 3 Months S 0 ' '1
c) 4 Months
d) 5 Months
15.
Period Demand Forecast i PE 
1 46 52 g,
2 55 64 q
3 71 83 I 1
4 76 81 5
5 86 91 5
6 90 96 __L_ W3 “Abtfllﬂgil 1;: “7.17 A ' é Using the data above, the Mean Absolute Deviation is:
a)  43
b)  7.2 @ 7.2 d) 43 16. On average, cost of materials consumes approximately % of a manufacturer’s
revenue: a) 30%
b) 40% @50% d) 60% Please use the following information for the next question: It
. Cost of Unit Failure = $ 500
Cost of Late Delivery = $250
Total Number of Units Purchased = 2000 ‘ r g
KJN L‘cr l.‘ 1000 K " 8 t at?" Low “$00 + S *LCO = [Wow 2:000*".750 :
FM, 134) 5 ’ 6' 4' r 3
{Wm M“; v. 1 000: 4é + $9 K1000; 5&0 +1012); 0 :(1100‘94 5/00.»; f Slam: 21pm 17. Based on Total Cost of Ownership, which of the following statements is true: a) Supplier 1 is $ 750 more expensive than Supplier 2
b) Supplier 1 is $ 2,750 more expensive than Supplier 2
c Supplier 2 is $ 750 more expensive than Supplier l
é Supplier 2 is $ 2,750 more expensive than Supplier 1 18. One of the advantages of multiple sourcing is: Can ensure that suppliers do not become complacent
) Build stronger relationship with the supplier
c) Volume leveraging d) Transportation economics 19. Toyota has developed a technology lead and scaled production in greater quantities
than their competitors in hybrid engine automobiles. There is low competition in the
supplier base for hybrid engines. In regards to hybrid engines, Toyota should: a Outsource
Insource
c Neither Use the following information for the next question
Summary Data for 3 possible suppliers Performance Dimension Supplier A Supplier B Supplier C Price $lOOO/unit $1200/unit $800/unit
Quality 0.1% defects 0.3% defects 0.5% defects
Delivery 2 week 4 weeks 8 weeks Rating Values 1 2 3
Price >$1 lOO/unit $9001 100/ unit <$900/unit
Quality >O.4% defects 0.20.4% defects <0.2% defects
Delivery >6 weeks 36 weeks <3 weeks Wei ts Price Qualig Deliveg .3 .5 .2 {v/P’I‘er 413”l+5*3+.1~3 : .é+l.§+.é=2."l
731,3xl +,Cx2 £1.52 ; '3+L0+.V: L.) C5 ,ng +.§~I hurl : .7*.f*.1=/é 20. From the information above, using the weighted point evaluation systems, which
supplier is the best: ' @Supplier A b) Supplier B
c) Supplier C
(1) Not enough information to tell 21. Which of the following is a current trend in procurement:
@Long term contracts and consolidation
b) Local purchasing
0) Supply base increases
d) Long cycle times 22. The transportation mode which is typically the most expensive mode on a perpound
basis is:
a) Highway
b) Water
c Rail
Air 23. Current Solution: Every week, BosssMustang of Oakland, California, receives 15
individual shipments ﬁom suppliers in the Los Angeles area. Each shipment weighs
about 400 pounds. A direct truck shipment from Los Angeles to Oakland costs $1,500. A Los Angeles 3 PL provider has offered to run a consolidation warehousing operation
for BosssMustang. The 3PL provider would pick up the shipments form each supplier,
process them and put them on a single truck bound for Oakland. The pickup fee would
be $200 per supplier, and the warehousing cost would be $80 per hundredweight (per
hundred pounds). The direct, consolidated shipment would cost $1,500. Which of the
following statements is true: 4‘ a {s
ermi'éogf.‘ 19: ((00 , 11,500 4
3PL 609+: 5’1005slf + [Looﬁksx yogis,‘ [Ssklyws 1,, H vl’YDO:
k‘r‘wwe r r
453,000 + V,300+1,raa: “13200 a) The current solution is $11,700 more expensive than the 3PL provider’s
solution
The current solution is $13,200 more expensive than the 3PL provider’s
olution
c) The current solution is $14,700 more expensive than the 3PL provider’s
solution
d) The current solution is less expensive than the 3PL provider’s solution 24. Large, economical
shipments in /Fl
"7.x: small shipments out. The diagram above depicts which type of transportation and warehousing system: a) Consolidation
Crossdocking
c Breakbulk d) Hub and Spoke 25. J osABank is a men’s apparel retailer. They stock each style and color of men’s
slacks in 10 different waist sizes but leave the pants unhemmed. After the customer chooses their slacks, JosABank hems the slacks to the speciﬁc length required by the
customer. This type of operational ﬂexibility is known as: @Postponement
b) Spot Stock c) Assortment
d) Crossdocking ...
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 Spring '08
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