midterm solutions

midterm solutions - Operations Management BUSI 403...

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Unformatted text preview: Operations Management BUSI 403 February 14, 2008 Professor Lu Spring 2008 Midterm #1 A. Exam rules: 1. This exam is closed book & closed notes . Computers are not allowed. You can only use a simple non-programmable calculator . 2. You have 75 min to complete the exam. The total score is 100 . B. Before you start: 1. You should have 10 numbered pages. Make sure you write your name in capital letters in the box below and sign it. 2. This exam has 8 questions. Question 1-3 are short questions (open ended or True/False). The rest are long questions that each contains a few related questions (quantitative or qualitative). DO NOT WORRY ABOUT ROUNDING IN THIS TEST. 3. Remember these tips: • Budget your time wisely • Show all your work to allow me to give you partial credit if appropriate. • Write legibly and clearly. Good Luck! The Honor Pledge: On my honor, I have neither given nor received any unauthorized aid on this examination. NAME (print): ............................................... (signature):…………………………………….… Section: 12:30pm or 2:00pm 1 (4pts) 2 (3pts) 3 (3pts) 4 (20pts) 5 (9pts) 6 (32pts) 7 (15pts) 8 (14pts) Sum /100 To assist alphabetic ordering, write first letter of your last name here: Step 1 of 4 Step 3: Sign. Step 4: Circle the section you are registered in. Step 2: Print name in capital letters. Page 2 of 10 Question 1 [4 points] Why do companies hold inventory? Give four reasons. 1. Take advantage of economies of scale (e.g. quantity discounts, fixed costs,…) 2. Buffer against uncertainty (e.g. demand may be higher than your forecast) 3. Speculate on price changes to avoid paying more later 4. Smooth production in anticipation of peak demand to avoid investing in lots of capacity Question 2 [3 points] What is plant-within-a-plant? Explain the concept and briefly illustrate it with a real-world example. Plant-within-a-plant is the idea of segmenting larger operations into smaller operating units (i.e., miniplants) with focused objectives. For example, American Airlines is a long- haul carrier. It runs American Eagle as a plant-within-a-plant to effectively compete in the regional flight market. Question 3 [3 points] Mark True or False • ABC Inventory Classification method ranks inventory items according to their unit dollar values. True False • Order winners may become order qualifiers over time. True False • An hour lost at a non-bottleneck resource is lost forever. T r u e False Page 3 of 10 Question 4 [20 points] You are one of the consultants working for the marketing department of a computer manufacturer. You are asked to generate demand forecasts for one of their popular laptops. You are given the demand data for the past four months....
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This document was uploaded on 11/04/2011 for the course BUSI 403 at UNC.

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midterm solutions - Operations Management BUSI 403...

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