Question 1

The following sequence shows four operations for a computer chip assembly process and the effective capacity of each.Step 1: 500 chips/hour Step 2: 250 chips/hour
Step 3: 200 chips/hour
Step 4: 550 chips/hour
Suppose the utilization is 70 percent of effective capacity. What is the actual output of the process?
A)140 chips/hour
B)350 chips/hour
C)175 chips/hour
D)200 chips/hour

Accepted Answer

200(.7) = 140

Question 2

A short-term, highly focused effort for improving a process is known as a:
A)Jidoka Event.
B)Kaizen Event.
C)Chaebol Event.
D)Poka-yoke Event.
E)Enchilada Event.

Accepted Answer

Short-term efforts to improve process performance are called Kaizen Events.

Question 3

Process thinking causes managers to address critical process elements, including:
A)Activities.
B)Inputs and outputs.
C)Flows, structure, resources, and metrics.
D)All of these.

Accepted Answer

All of the items listed are elements of a process.

Question 4

A bottleneck activity in a process is generally the activity with:
A)The smallest number of resources devoted to it.
B)The least capacity.
C)No delays in front of it.
D)The highest cost.

Accepted Answer

The number of resources does not determine a bottleneck. It is determined by the capacity of resources.

Question 5

Suppose you learn that a process has a very long waiting time. Which of the following would decrease the waiting time?
A)Decrease utilization.
B)Increase the coefficient of variation of job arrival times.
C)Increase the coefficient of variation of job processing times.
D)None of these would decrease waiting time.

Accepted Answer

Decreasing utilization by adding resources will reduce waiting times. Increasing variance typically increases waiting times.

Question 6

Government regulations belong to which of the following elements of a process?
A)Activities
B)Inputs/outputs/feedback
C)Process structure
D)Management policies

Accepted Answer

This is a straight definitional question that is covered as part of the discussion in this section.

Question 7

Under Juran's Law, whenever a problem occurs, what percentage of the time is the problem the result of a system/process error?
A)15 percent
B)50 percent
C)85 percent
D)100 percent

Accepted Answer

A straightforward definitional-based question taken directly from the text.

Question 8

One implication of increased utilization in a process is that:
A)Process cost typically will go up.
B)Waiting time typically will go up.
C)Variance typically will be reduced.
D)All of these.

Accepted Answer

Examining the formula for wait time reveals that increased utilization will result in increased wait time.

Question 9

Most processes involve two basic types of flows:
A)Information flows and physical flows.
B)Product flows and decision flows.
C)Information flows and operator flows.
D)Physical flows and documentation flows.

Accepted Answer

The two basic process flows are physical and information flows.

Question 10

You walk into a hair stylist shop. All stylists are busy and you sit in the waiting area. You are in which of the following process activities?
A)Operation
B)Delay
C)Storage
D)You are not in a process activity.

Accepted Answer

Delays occur when resources to perform an operation are not available.

Question 11

A manager is currently unhappy with the capabilities of a particular process and wants to improve its capabilities. To accomplish this, the manager needs to focus on the process:
A)Inputs, outputs, and flows.
B)Activities.
C)Management metrics.
D)Structure.

Accepted Answer

Structure is the element that limits process capabilities.

Question 12

Which of the following is NOT a basic activity type in processes?
A)Delay
B)Operation
C)Reporting
D)Storage
E)Decision

Accepted Answer

All items listed except reporting are process activities.

Question 13

Little's Law suggests that the key to increased throughput is:
A)Shorter flow times.
B)Fewer defects.
C)Eliminating waste.
D)Increased inspection.

Accepted Answer

According to Little's Law, decreasing flow times results in increased throughput.

Question 14

Adam Smith described his company's process as follows: "Under ideal conditions we can produce 10,000 units a day. However, our normal production is 6,000 units a day.Today, we actually produced 8,000 units." Which of the following is true?
A)Utilization is 60 percent of maximum capacity.
B)Yield is 133 percent of effective capacity.
C)Utilization was 133 percent of effective capacity.
D)All of these are true.

Accepted Answer

8,000/6,000 = 133 percent; this is how utilization of effective capacity is determined.

Question 15

An example of a short-term capacity decision is:
A)Adding specialized labor.
B)Installing new equipment.
C)Adding new facilities.
D)Adding low-skilled labor.

Accepted Answer

The first three are examples of long- or medium-term planning. Adding low-skilled labor is a short-term planning decision.

Question 16

Which of the following forms of capacity can only be determined AFTER the completion of activities?
A)Demonstrated capacity
B)Maximum capacity
C)Design capacity
D)Effective capacity

Accepted Answer

This recognizes that demonstrated capacity is always calculated after the fact.

Question 17

If a company can eliminate all sources of variance in a process:
A)It will be able to operate at maximum capacity at all times.
B)There will be no constraints in the process.
C)Continuous improvement will not be necessary.
D)None of these are true.

Accepted Answer

Even if variance is eliminated, processes cannot always operate at maximum capacity, bottlenecks may still exist, and continuous improvement is necessary.

Question 18

The following sequence shows four operations for a computer chip assembly process and the effective capacity of each. Which step is the bottleneck? Step 1: 500 chips/hour
Step 2: 250 chips/hour
Step 3: 200 chips/hour
Step 4: 550 chips/hour
A)Step 1
B)Step 2
C)Step 3
D)Step 4

Accepted Answer

The bottleneck is the process step that limits capacity of the overall process.

Question 19

Which of the following statements about economies of scale is NOT true?
A)One reason economies of scale occur is because fixed costs can be spread over more units of production as output increases.
B)One reason economies of scale occur is because employees become more efficient as volume increases.
C)Economies of scale refers to the fact that as volume increases, total cost of production decreases.
D)Economies of scale may not exist at all levels of production.

Accepted Answer

Economies of scale refer to cost per unit of production, not total cost of production (which increases as volume goes up).

Question 20

Joe Jones, plant manager at Waco Industries, told a friend that if it was necessary, his plant could produce 1,000 items a day if all conditions were just right. Joe is describing his plant's:
A)Effective capacity.
B)Yield rate.
C)Utilization.
D)Maximum capacity.

Accepted Answer

The output possible under ideal conditions is maximum capacity.

Quiz 3: Managing Processes and Capacity

A short-term, highly focused effort for improving a process is known as a:

Process thinking causes managers to address critical process elements, including:

A bottleneck activity in a process is generally the activity with:

Suppose you learn that a process has a very long waiting time. Which of the following would decrease the waiting time?

Government regulations belong to which of the following elements of a process?

Under Juran's Law, whenever a problem occurs, what percentage of the time is the problem the result of a system/process error?

One implication of increased utilization in a process is that:

Most processes involve two basic types of flows:

You walk into a hair stylist shop. All stylists are busy and you sit in the waiting area. You are in which of the following process activities?

A manager is currently unhappy with the capabilities of a particular process and wants to improve its capabilities. To accomplish this, the manager needs to focus on the process:

Which of the following is NOT a basic activity type in processes?

Little's Law suggests that the key to increased throughput is:

Adam Smith described his company's process as follows: "Under ideal conditions we can produce 10,000 units a day. However, our normal production is 6,000 units a day.Today, we actually produced 8,000 units." Which of the following is true?

An example of a short-term capacity decision is:

Which of the following forms of capacity can only be determined AFTER the completion of activities?

If a company can eliminate all sources of variance in a process:

The following sequence shows four operations for a computer chip assembly process and the effective capacity of each. Which step is the bottleneck? Step 1: 500 chips/hour Step 2: 250 chips/hour Step 3: 200 chips/hour Step 4: 550 chips/hour

Which of the following statements about economies of scale is NOT true?

Joe Jones, plant manager at Waco Industries, told a friend that if it was necessary, his plant could produce 1,000 items a day if all conditions were just right. Joe is describing his plant's: