Student ID

Name

MCU International College 99511 Operations Management 2004 Fall Final Exam Y.-H. Chen, Ph.D.

Academic and Professional Conduct exam policy:

Using unauthorized notes, copying another students
work, or providing another student with answers during
an examination is a violation of the exam policy.

Exam Instruction: Close books and notes. Exam time is

60 minutes. Please write your answers clearly in
designated areas. You are allowed to use calculators
and three pages of blank paper. PDA, laptops, and other
types of computers are not allowed.

There is a total of 25 multiple-choice problems. Please write out the correct choice below each problem number.
Each problem is worth for 4 points with a total of 100 points. Mathematical formula and table are provided at the
end of the paper for your reference.
1.

2.

In a two-bin inventory system, the amount contained in the second bin is equal to the:
A)
ROP
B)
EOQ
C)
amount in the first bin
D)
optimum stocking level
E)
safety stock
Answer: A Page: 487 Difficulty: Medium
Laser scanning of universal product codes at retail checkout counters can provide which of the following
advantages?
I.
II.
III.
IV.

increased speed and accuracy at checkout

continuous information on inventories
improved levels of customer service
elimination of periodic inventories
A)
B)
C)
D)
E)

3.

4.

5.

6.

I, II, and IV
II, III, and IV
I, II, and III
I, III, and IV
I, II, III, and IV

Answer: C Page: 488 Difficulty: Medium

In the A-B-C classification system, items which account for sixty percent of the total dollar-volume for few
inventory items would be classified as:
A)
A items
B)
B items
C)
C items
D)
A items plus B items
E)
B items plus C items
Answer: A Page: 491 Difficulty: Easy
The EOQ model is most relevant for which one of the following?
A)
ordering items with dependent demand
B)
determination of safety stock
C)
ordering perishable items
D)
determining fixed interval order quantities
E)
determining fixed order quantities
Answer: E Page: 492 Difficulty: Medium
In a supermarket, the every Monday morning restocking of shelves by a bread vendor is an example of:
A)
safety stock replenishment
B)
economic order quantities
C)
reorder points
D)
fixed order interval
E)
blanket ordering
Answer: D Page: 512 Difficulty: Medium
A cycle count program will usually require that 'A' items be counted:
A)
daily.
B)
once a week
C)
monthly
D)
quarterly
E)
more frequently than annually
Answer: E Page: 492 Difficulty: Hard
(NoteBoth sides of the paper have exam problems.)

Student ID:

7.

8.

9.

10.

11.

12.

13.

14.

In the basic EOQ model, if lead time increases from five to 10 days, the EOQ will:
A)
double
B)
increase, but not double
C)
decrease by a factor of two
D)
remain the same
E)
none of the above
Answer: D Page: 495 Difficulty: Medium
In the basic EOQ model, if annual demand is 50, carrying cost is $2, and ordering cost is $15, EOQ is
approximately:
A)
11
B)
20
C)
24
D)
28
E)
375
Answer: D Page: 495 Difficulty: Medium
The introduction of quantity discounts will cause the optimum order quantity to be:
A) smaller
B) unchanged
C) greater
D) smaller or unchanged
E) unchanged or greater
Answer: E Page: 500 Difficulty: Hard
If average demand for an inventory item is 200 units per day, lead time is three days, and safety stock is 100
units, the reorder point is:
A)
100 units
B)
200 units
C)
300 units
D)
600 units
E)
700 units
Answer: E Page: 505 Difficulty: Medium
Which one of the following is implied by a "lead time" service level of 95 percent?
A)
Approximately 95 percent of demand during lead time will be satisfied.
B)
Approximately 95 percent of inventory will be used during lead time.
C)
The probability is 95 percent that demand during lead time will exactly equal the amount on hand
at the beginning of lead time.
D)
The probability is 95 percent that demand during lead time will not exceed the amount on hand at
the beginning of lead time.
E)
none of the above
Answer: D Page: 505 Difficulty: Hard
Daily usage is exactly 60 gallons per day. Lead time is normally distributed with a mean of 10 days and a
standard deviation of 2 days. What is the standard deviation of demand during lead time?
A)
60 x 2
B)
60 times the square root of 2
C)
60 times the square root of 10
D)
60 x 10
E)
none of the above
Answer: A Page: 508 Difficulty: Hard
Which of these products would be most apt to involve the use of a single period model?
A)
gold coins
B)
hammers
C)
fresh fish
D)
calculators
E)
frozen corn
Answer: C Page: 514 Difficulty: Easy
In a single period model, if shortage cost is four times excess cost, then the optimum service level is:
A)
100 percent
B)
80 percent
C)
60 percent
D)
40 percent
E)
20 percent

(NoteBoth sides of the paper have exam problems.)

2 of 4

Student ID:

15.

16.

17.

18.

Answer: B Page: 515 Difficulty: Medium

If average demand for an item is 20 units per day, safety stock is 50 units, and lead time is four days, the
ROP will be:
A)
20
B)
50
C)
70
D)
80
E)
130
Answer: E Page: 505 Difficulty: Medium
Which item would be least likely to be ordered under a fixed order interval system?
A) textbooks at a college bookstore
B) auto parts at an assembly plant
C) cards at a gift shop
D) canned peas at a supermarket
E) none of these
Answer: B Page: 512 Difficulty: Medium
Once a project is underway, the project manager is responsible for effectively managing:
A)
the people
B)
costs
C)
(a) and (b)
D)
time
E)
all of the above
Answer: E Page: 731-732 Difficulty: Medium
The advantage(s) a Gantt chart has over other project scheduling techniques is(are):
A)
its ability to reveal relationships among activities
B)
It can easily show networks.
C)
(a) and (b)
D)
its simplicity
E)
all of the above
Answer: D Page: 736 Difficulty: Medium

19.

Given the portion of the network shown above, what is the latest start time of activity 6-7 if the latest finish
of activity 7-8 is 26, and the latest finish of activity 7-9 is 23?
A)
18
B)
17
C)
13
D)
12
E)
10

20.

21.

Answer: D Page: 743-744 Difficulty: Medium

Activity C has an early start time of 8, an early finish time of 12, a latest start time of 13, and a latest finish
time of 17. Its slack is:
A)
0
B)
1
C)
4
D)
5
E)
9
Answer: D Page: 746-747 Difficulty: Medium
A PERT/CPM activity has an optimistic time estimate of three days, a most likely time estimate of eight
days, and a pessimistic time estimate of 10 days. The expected time (in days) of this activity is:
A)
7.0
B)
7.5
C)
8.0
(NoteBoth sides of the paper have exam problems.)

3 of 4

Student ID:

D)
E)

22.

23.

24.

Answer: B Page: 748 Difficulty: Medium

There are four activities on the critical path. Coincidentally, their standard deviations are all equal to 4. The
standard deviation of the critical path is therefore equal to:
A)
2
B)
4
C)
8
D)
16
E)
64
Answer: C Page: 748-749 Difficulty: Medium
In crashing a project, a manager will generally focus on activities which:
A)
are not on the critical path
B)
are the least costly to crash
C)
are costly to crash and are on the critical path
D)
are on the critical path and are the least costly to crash
E)
are the easiest to crash
Answer: D Page: 754 Difficulty: Medium
Which of the following are advantages of PERT?
I.
II.
III.

It is visual.
It is automatically updated.
Activities that need to be watched closely can be identified.
A)
B)
C)
D)
E)

25.

8.5
10.0

I and II
II and III
III only
I and III
I, II, and III

Answer: D Page: 756-757 Difficulty: Medium

Which of the following are limitations of PERT?
I.
II.
III.

Time estimates may include a fudge factor.

Important activities may be overlooked.
It is an after-the-fact analysis.
A)
B)
C)
D)
E)

I and II
I, II, and III
I and III
II and III
I only

Answer: A Page: 756-757 Difficulty: Medium

(NoteBoth sides of the paper have exam problems.)

4 of 4