Florida Institute of Technology

BUSINESS FTMT011B

QUIZ 3

1)Which of the following is the cost of quality classification for costs such as cost incurred when the firm assesses the performance level of its process?

1. 1. Appraisal costs
   2. Prevention costs
   3. External failure costs
   4. Customer return cost
   5. Workmanship costs

2. A point which is outside of the lower control limit on a p-­?chart
   1. is an indication that no cause of variation is present
   2. should be ignored because it signifies better than average quality
   3. should be investigated because an assignable cause of variation might be present
   4. should be ignored unless another point is outside that limit
   5. is impossible since the lower limit is always zero

3. You have just used the capability index (Cpk) formulas to compute the two values "min [1.2, 1]". Which of the following is the interpretation of these numbers?
   1. The true capability index value is 1.
   2. The mean of the production process has shifted to the left of the design limits.
   3. The mean of the production process has shifted to the right of the design limits.
   4. The mean has not shifted at all.
   5. The true capability index value is between 1.2 and 1.

4. Lean production
   1. works in all circumstances.
   2. never runs out of inventory.
   3. requires a stable environment
   4. may run underproduction.
   5. requires preventive maintenance.

5. In setting up a kanban control system you need to determine the number of kanban card sets needed. If the expected demand during lead time is 25 per hour, the safety stock is 20% of the demand during lead time, the container size is 5, and the lead time to replenish an order is 5 hours, what is the number of kanban card sets needed?
   1. 5
   2. 20
   3. 27
   4. 30
   5. 34

6. A company wants to forecast demand using the weighted moving average. If the company uses four prior yearly sales values (i.e., year 2003 = 100, year 2004

= 120, year 2005 = 140, and year 2006 = 210), which of the following is the weighted moving average forecast with w1=0.4, w2=0.3, w3=0.2, w4=0.1 for year 2007?

A. 100

B. 125

C. 145

D. 155

E. 160

7. A company wants to forecast demand using the Simple Exponential Smoothing. If the company uses four prior yearly sales values (i.e., year 2003 = 100, year 2004 = 120, year 2005 = 140, and year 2006 = 210), which of the following is the Exponential Smoothing

forecast with            =0.5 for year 2007?

Exhibit 3-­?1

The demand for the first 3 periods and the Simple Exponential Smoothing forecast with =0.5 for the first four periods are as follows:

8. Based on Exhibit 3-­?1, calculate MFE an MAD
   1. MFE=1.6667 and MAD=0.8333 (If you count first period forecast error zero).
   2. MFE=0.25 and MAD=1.25
   3. MFE=1.25 and MAD=1.50
   4. MFE=1.20 and MAD=1.45
   5. MEF=0 and MAD=1.25

9. In business forecasting, what is usually considered a short-­?term time period?

1. Four weeks or less
2. More than three months
3. Six months or more
4. Less than three months
5. One year

10. From Sport Obermeyer case, we learnt that risk-­?based production sequencing strategy is

1. a strategy that uses reactive production capacity to make low-­?risk products and postpones production of high-­?risk products until after additional market information reduces those products’ demand uncertainty.
2. a strategy that uses non-­?reactive production capacity to make low-­?risk products and postpones production of high-­?risk products until after additional market information reduces those products’ demand uncertainty.
3. a strategy that uses non-­?reactive production capacity to make high-­?risk products and postpones production of low-­?risk products until after additional market information becomes available.
4. a strategy that uses reactive production capacity to make high-­?risk products and postpones production of low-­?risk products until after additional market information becomes available.
5. None of above