EMBA 638 Operations Management
Summer 2013 Final Exam

IMPORTANT:

This exam is open book, open Blackboard and open
notes. You may use Excel as needed or a
calculator. You are not allowed to use other persons help or material from Internet
(with the exception of Blackboard) in taking the exam.

You have until
Sunday August 25th, 2013 midnight EST to finish this
exam.

Show your work on the word document. This will
allow you to obtain partial credit for your work even if the final answer is
not correct.

Your interpretation of a question, if any, is part of the exam. Only clarification
questions will be answered.

Part

Topic

Value

Grade

I

Quality Control

11

II

Inventory Management

11

II

Process Analysis and Queuing

35

IV

Short Answer Questions

18

V

Multiple Choice, T/F Questions

25

Total

100

* 2 = ____/200

The Honor Pledge:

On my honor, I have neither given nor received unauthorized aid on this
exam.

__________ _________________
Student Signature
(type your name)

GOOD LUCK!

Part I Quality
Control (11 points)

Southwest keeps gate time of its planes at a minimum
in order to maximize the flying time, hence capacity utilization of its
planes. They want to achieve a turnaround time of 20 minutes on average
with a maximum of 25 minutes and a minimum of 15 minutes. (Although faster
would be fine with them, the FAA and passengers might think they are
cutting corners and not doing everything correctly).

At the Baltimore
airport (BWI), 3 gates a day were sampled over four days to determine how the
Southwest ground crew at BWI was doing on this standard. The average of the
process was 20.5 minutes and the standard deviation was 1.5 minutes.

(2 points)
Fill in the following table.

.gif”>

20
minutes

USL

25
minutes

LSL

15
minutes

(5 points)
Is the process centered and capable? Why or why not?

Yes, the process is centered and
capable.
Why?

c.
(4 points) What is the probability that a plane will
have a turnaround time of greater than 25 minutes?

.gif”>

Part II: Inventory Management (11 points)

2.
Southside restaurant uses a fixed
quantity (continuous replenishment) system. Daily demand for bags of coffee is
normally distributed with a mean of 36 and standard deviation of 8. The lead
time is constant at 5 days. The management wants to have a 92 percent service
level and the restaurant is open 365 days per year. Holding costs are $0.50 per
year and the ordering costs are $2.5 per order. .

a.
(3
points) Determine the order quantity at which the total inventory costs would
be minimized?

b.
(4
points) What is the reorder point and the time between orders?

c. (4 points) Illustrate the order quantity, re-order point,
safety stock and lead time on a diagram where the Y-axis represents the number
of coffee bags and the x-axis represents the time? What is the maximum possible
inventory in the system at any point of time?

Part V Multiple Choice and True/False (25 points)

Multiple choice (16 points, 2 points each): Please highlight (in
yellow) the correct answer.

1. Animal
shelters tend to order Sodium Barbipentathol in large batches (e.g., enough to
last 6 months or more). Smaller
quantities would be ordered (e.g., a couple of weeks worth) except government
regulations require extensive and detailed paperwork to be submitted with each
order. This example is most closely
related to the following managerial insight:
a.
the order quantity increases as the holding cost rate
decreases
b.
the order quantity increases as the cost per order increases
c.
the order quantity increases as the shortage cost rate
decreases
d.
the order quantity increases as the trade balance
decreases

2. Which one of the
following does not exemplify JIT/Lean used for competitive advantage?
a.
Acme
Foods decides to decrease the number of its suppliers to just a few.
b.
Cajun
Contractors has reduced the amount of space for inventory.
c.
Cheramie Trucking trains workers to
specialize and become very efficient in one job.
d.
Ardoyne
Builders has a scheduled preventive maintenance program.
e.
Ajax,
Inc. is proud to announce that incoming goods are delivered directly to the
point of use.

A
tennis ball manufacturer has identified several causes of variability in
the bounce and has collected data on the number of times those causes have
led to high variability over the past month. They now need to decide which
causes to try to eliminate first. Which tool should they use?

a.
5S
b.
Pareto diagram
c.
ABC Analysis
d.
R-chart
e.
PDCA

4. Which of the following offers a potential for
reducing inventory costs in a supply chain?
a. sharing POS data across the supply chain
b. sharing components across different products
c. having more warehouses
d.
a and b
e. a and c
f. b and c

5.
Another term
for a postponement strategy is
a.
Speculation
b.
delayed differentiation
c.
mass
customization
d.
decreased
differentiation
e.
None of the above

6. Which of the following phrases describes the chart below about the reasons for unsatisfying hotel
stays?
a. H is the most important problem
b.
80%
of the reasons cause 20% of the dissatisfaction.
c. A is the most important problem
d.
20% of the reasons
cause 60% of the dissatisfaction
e. None of the above.

.jpg” alt=”chart.BMP”>

7. Which of the following statements is not a
characteristic of pull supply chains?
a.
Inventory levels are
typically low
b. Ordering decisions
are based on long-term forecasts
c.
Firms respond to
specific customer orders
d.
Allows faster response
to changing markets

8. If a production process is in
statistical control , which of the following statements is incorrect
a.
There are no special
causes of variation in the process
b. The process will
always be capable of meeting the customer specifications
c.
There are common
causes of variation in the process
d.
The range of the process
is in statistical control

True/False (1 point each, 9 points)
1.
________ Variation in production systems that is
caused by factors that can be clearly identified and possibly even managed is
called assignable variation.
2.
________ EOQ
balances purchase cost and ordering cost.
The balance inventory order costs and carrying costs.
3. ____ Your
suppliers supplier is a third tier supplier.
4.
______ Under the assumptions of the Basic EOQ
model, if one increases the order quantity, then the length of the order cycle
decreases (with demand and cost parameters remaining the same).
5. ___ A high-end, customized furniture
manufacturer, would most likely employ an assembly-line type of process.
6.
________ Productivity
is the total value of outputs produced divided by the total value of all inputs
to the transformation process.
7.
_____ Under constant lead time, the key drivers of
safety stock are lead time, standard deviation of demand, and the safety
factor (or service level).
8.
________ The
idea behind Pareto charts is that working with the majorityof possible causes is needed
to significantly improve quality.
9.
_____
Under the assumptions of EOQ model, if the total optimal cost (fixed ordering
cost + holding cost) is $10,000, then the holding cost part is $5,000.

Thats the end!
EMBA 638 Operations ManagementSummer 2013 Final ExamIMPORTANT:
This exam is open book, open Blackboard and open
notes. You may use Excel as needed or a
calculator. You are not allowed to use other persons help or material from Internet
(with the exception of Blackboard) in taking the exam.
You have until
Sunday August 25th, 2013 midnight EST to finish this
exam.
Show your work on the word document. This will
allow you to obtain partial credit for your work even if the final answer is
not correct.
Your interpretation of a question, if any, is part of the exam. Only clarification
questions will be answered.PartTopicValueGradeIQuality Control11IIInventory Management11IIProcess Analysis and Queuing35IVShort Answer Questions18VMultiple Choice, T/F Questions 25Total100 * 2 = ____/200The Honor Pledge:On my honor, I have neither given nor received unauthorized aid on this
exam.__________ _________________Student Signature
(type your name)GOOD LUCK! Part I Quality
Control (11 points)At the Baltimore
airport (BWI), 3 gates a day were sampled over four days to determine how the
Southwest ground crew at BWI was doing on this standard. The average of the
process was 20.5 minutes and the standard deviation was 1.5 minutes..gif”>20
minutesUSL25
minutesLSL15
minutesYes, the process is centered and
capable.Why?c.
(4 points) What is the probability that a plane will
have a turnaround time of greater than 25 minutes?.gif”>Part II: Inventory Management (11 points)2.
Southside restaurant uses a fixed
quantity (continuous replenishment) system. Daily demand for bags of coffee is
normally distributed with a mean of 36 and standard deviation of 8. The lead
time is constant at 5 days. The management wants to have a 92 percent service
level and the restaurant is open 365 days per year. Holding costs are $0.50 per
year and the ordering costs are $2.5 per order. .a.
(3
points) Determine the order quantity at which the total inventory costs would
be minimized? b.
(4
points) What is the reorder point and the time between orders?c. (4 points) Illustrate the order quantity, re-order point,
safety stock and lead time on a diagram where the Y-axis represents the number
of coffee bags and the x-axis represents the time? What is the maximum possible
inventory in the system at any point of time?Part V Multiple Choice and True/False (25 points)Multiple choice (16 points, 2 points each): Please highlight (in
yellow) the correct answer.1. Animal
shelters tend to order Sodium Barbipentathol in large batches (e.g., enough to
last 6 months or more). Smaller
quantities would be ordered (e.g., a couple of weeks worth) except government
regulations require extensive and detailed paperwork to be submitted with each
order. This example is most closely
related to the following managerial insight:a.
the order quantity increases as the holding cost rate
decreasesb.
the order quantity increases as the cost per order increasesc.
the order quantity increases as the shortage cost rate
decreasesd.
the order quantity increases as the trade balance
decreases2. Which one of the
following does not exemplify JIT/Lean used for competitive advantage? a.
Acme
Foods decides to decrease the number of its suppliers to just a few. b.
Cajun
Contractors has reduced the amount of space for inventory. c.
Cheramie Trucking trains workers to
specialize and become very efficient in one job. d.
Ardoyne
Builders has a scheduled preventive maintenance program. e.
Ajax,
Inc. is proud to announce that incoming goods are delivered directly to the
point of use. a.
5Sb.
Pareto diagramc.
ABC Analysisd.
R-charte.
PDCA4. Which of the following offers a potential for
reducing inventory costs in a supply chain? a. sharing POS data across the supply chain b. sharing components across different products c. having more warehousesd.
a and be. a and cf. b and c5.
Another term
for a postponement strategy isa.
Speculationb.
delayed differentiationc.
mass
customizationd.
decreased
differentiatione.
None of the above6. Which of the following phrases describes the chart below about the reasons for unsatisfying hotel
stays?a. H is the most important problemb.
80%
of the reasons cause 20% of the dissatisfaction.c. A is the most important problemd.
20% of the reasons
cause 60% of the dissatisfaction e. None of the above..jpg” alt=”chart.BMP”>7. Which of the following statements is not a
characteristic of pull supply chains? a.
Inventory levels are
typically low b. Ordering decisions
are based on long-term forecasts c.
Firms respond to
specific customer orders d.
Allows faster response
to changing markets 8. If a production process is in
statistical control , which of the following statements is incorrect a.
There are no special
causes of variation in the process b. The process will
always be capable of meeting the customer specifications c.
There are common
causes of variation in the process d.
The range of the process
is in statistical control True/False (1 point each, 9 points)1.
________ Variation in production systems that is
caused by factors that can be clearly identified and possibly even managed is
called assignable variation.2.
________ EOQ
balances purchase cost and ordering cost. The balance inventory order costs and carrying costs.3. ____ Your
suppliers supplier is a third tier supplier.4.
______ Under the assumptions of the Basic EOQ
model, if one increases the order quantity, then the length of the order cycle
decreases (with demand and cost parameters remaining the same). 5. ___ A high-end, customized furniture
manufacturer, would most likely employ an assembly-line type of process. 6.
________ Productivity
is the total value of outputs produced divided by the total value of all inputs
to the transformation process.7.
_____ Under constant lead time, the key drivers of
safety stock are lead time, standard deviation of demand, and the safety
factor (or service level).8.
________ The
idea behind Pareto charts is that working with the majorityof possible causes is needed
to significantly improve quality.9.
_____
Under the assumptions of EOQ model, if the total optimal cost (fixed ordering
cost + holding cost) is $10,000, then the holding cost part is $5,000.Thats the end!