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Exam 9: Production and Operations Management

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Question 21

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To create their Deluxe Beef Sandwiches,Robbie's Roast Beef finely slices prime roast beef,stacks it on a sesame bun,adds special seasonings,cheese,onions,and mushrooms.The value added by Robbie's when it combines these ingredients to make a sandwich is known as:

A) consumer surplus.
B) the analytic function.
C) marginal utility.
D) form utility.

E) All of the above
F) C) and D)

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Question 22

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ERP is the acronym for:

A) Educated Rights Planning.
B) Extensive Research Planning.
C) Enterprise Resource Planning.
D) Emphatic Requirements Planning.

E) B) and C)
F) All of the above

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Question 23

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The decreased use of enterprise resource planning (ERP)reflects the fact that firms are not interested in combining the computerized functions of all divisions and subsidiaries of a firm.

In analyzing the importance of a PERT network,it is reasonable to claim:

The three basic requirements of production are: (1) creating a finished good (2) making sure you created it at the lowest cost possible, and (3) selling it.

Mini-Case "These are exciting times for our company.We've made a lot of changes over the past two years that have really improved our operations and lowered our costs.Now we are ready to expand into new markets.Minimotors is on its way to becoming a global player." The speaker was Sparky Weyer,president and CEO of Minimotors,Inc. ,a growing manufacturer of small (some of them downright tiny) electric motors used in a variety of power tools and appliances.Sparky was meeting with potential financial backers in an effort to obtain funding for some expensive new machinery he wanted to purchase."You may have heard about some of the ways we've cut costs," Sparky continued."We've developed a new arrangement with several of our biggest suppliers.They've agreed to make more frequent deliveries tied directly to our production schedules.This will help us reduce our inventory costs dramatically.We've also greatly reduced the number of defective motors we produce by carefully keeping tabs on all of our manufacturing processes.In fact,we have set a goal of reducing our defects to 3.4 parts per million.The main purpose of my meeting with you today is because we want to install some sophisticated new machinery and software that will allow us to quickly design and produce motors to the exact specifications of our customers.The machinery is computer-controlled and can produce custom-designed products at very little increase in cost compared to our mass produced motors.We feel this flexibility and quick response time will give us a tremendous competitive advantage and help us attract new customers.Installing the new equipment and training our workers to use it properly will be a complex project,but I'm confident that once we get everything up and running we'll be able to strengthen our position as the leading maker of high-quality electric motors." -One of Sparky's goals is to expand globally.He is most interested in doing business with the nations of the European Union.In order to do business with the European Union,Sparky's company should:

Under the six sigma quality standard the idea is to detect potential problems,in order to prevent their occurrence.

So far,the high cost of CAD/CAM techniques has limited their use to large,expensive manufactured goods such as automobiles.

MRP is a technique that helps managers:

Lean manufacturing is a strategy of producing standardized products that have no frills or extra features in order to keep prices low.

A(n) __________ puts together components to make a product.

ERP software enables multiple firms to manage all of their operations on the basis of a single,integrated set of corporate data.

New developments in information technology have:

Sarah works for an architectural firm.The partners in the firm have always drawn the plans for projects by hand.While Sarah learned how to draw by hand in college,she also became skilled on computer programs that permitted her to create designs in three dimensions.She plans to demonstrate the effectiveness of such programs to the firm's partners.The computer program she will recommend to the partners is:

Materials requirement planning (MRP)enables a firm to make sure that the right amount of each material or component is available at the right time to satisfy its production needs.

One of the reasons mass production techniques lost favor is that,despite their ability to keep costs relatively low,mass production lacks flexibility.

In manufacturing,one way to compete with cheap labor is to:

Mini-Case "These are exciting times for our company.We've made a lot of changes over the past two years that have really improved our operations and lowered our costs.Now we are ready to expand into new markets.Minimotors is on its way to becoming a global player." The speaker was Sparky Weyer,president and CEO of Minimotors,Inc. ,a growing manufacturer of small (some of them downright tiny) electric motors used in a variety of power tools and appliances.Sparky was meeting with potential financial backers in an effort to obtain funding for some expensive new machinery he wanted to purchase."You may have heard about some of the ways we've cut costs," Sparky continued."We've developed a new arrangement with several of our biggest suppliers.They've agreed to make more frequent deliveries tied directly to our production schedules.This will help us reduce our inventory costs dramatically.We've also greatly reduced the number of defective motors we produce by carefully keeping tabs on all of our manufacturing processes.In fact,we have set a goal of reducing our defects to 3.4 parts per million.The main purpose of my meeting with you today is because we want to install some sophisticated new machinery and software that will allow us to quickly design and produce motors to the exact specifications of our customers.The machinery is computer-controlled and can produce custom-designed products at very little increase in cost compared to our mass produced motors.We feel this flexibility and quick response time will give us a tremendous competitive advantage and help us attract new customers.Installing the new equipment and training our workers to use it properly will be a complex project,but I'm confident that once we get everything up and running we'll be able to strengthen our position as the leading maker of high-quality electric motors." -In order to schedule deliveries,Minimotors's suppliers need detailed information about when parts are needed.Minimotors will purchase a sophisticated computer application that will link its operation to sales forecasts to make sure needed parts and supplies are available at the right time to meet customer demands.This planning system is known as:

A continuous production process is characterized by long production runs that turn out finished goods over time.

The process layout simplifies production by using the same sequence of processes regardless of the design of the item being produced.