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STUDENT IDENTIFICATION NO MULTIMEDIA UNIVERSITY SECOND TRIMESTER FINAL EXAMINATION, 2009/2010 SESSION BOM 2O64 – QUALITY AND OPERATIONS MANAGEMENT (All Sections / Groups) DECEMBER 2009 a. m. – a. m. (2 Hours) INSTRUCTIONS TO STUDENT 1. This Question paper consists of 9 pages with TWO SECTIONS.
2. Attempt ALL questions in Section A and B. The marks for each question are given. 3. Answer Section A in the OMR Form provided, and answer Section B in the Answer Booklet provided. BOM 2064 QUALITY AND OPERATIONS MANAGEMENT DECEMBER 2009 SECTION A Answer ALL questions in this section. 40 Marks)
1. Manufacturing work sent to other countries is called: __________________. A) downsized B) outsourced C) internationalization D) vertical integration E) entrepreneurial ship 2. Production systems with customized outputs typically have relatively: ____________. A) high volumes of output B) low unit costs C) high amount of specialized equipment D) fast work movement E) skilled workers 3. Which of the following is not emphasized in a lean production system? A) falling prices B) high quality C) worker involvement D) continual improvement E) customer satisfaction 4.

Which of the following is not a benefit of using models in decision making? A) They provide a standardized format for analyzing a problem. B) They serve as a consistent tool for evaluation. C) They are easy to use and less expensive than dealing with the actual situation. D) All of the above are benefits. E) None of the above is a benefit. 5. Which of the following is not an ongoing trend in manufacturing competition? A) globalization B) quality improvement C) flexibility and agility D) mass production for economies of scale E) technological advances . Product design and choice of location are examples of ______________ decisions. A) strategic B) tactical C) operational D) customer focused E) design Continued… TPK page 1 of 9 BOM 2064 QUALITY AND OPERATIONS MANAGEMENT DECEMBER 2009 7. A productivity increase in one operation that doesn’t improve overall productivity of the business isn’t:__________________. A) effective B) efficient C) politically justified D) productive E) financially justified 8. Which of the following is true? A) Corporate strategy is shaped by functional strategies.
B) Corporate mission is shaped by corporate strategy. C) Functional strategies are shaped by corporate strategy. D) External conditions are shaped by corporate mission. E) Corporate mission is shaped by functional strategies. 9. The external elements of SWOT analysis are: ___________________. A) strengths and weaknesses B) strengths and threats C) opportunities and threats D) weaknesses and opportunities E) strengths and opportunities 10. For an organization to grow their market share, they must: _______________.
A) advertise using multi-media B) lower their prices C) meet minimum standards of acceptability for their products or services D) establish an internet website E) broaden their mission statement 11. A disadvantage of global teams for product design is that:_______________. A) Customers may have different needs in different countries B) The product designed may have increased marketability and utility C) The diversity of an international team may be a detriment D) Ease of face to face meetings is absent since members are located everywhere E) Technology allows constant contact with team members 12. One step that isn’t part of service lueprinting is: _______________. A) Eliminate boundaries for the service and decide on the level of interaction needed B) Identify and determine the sequence of customer and service actions and interactions C) Develop time estimates for each phase of the process D) Understand the time variability involved E) Identify potential failure points and develop a plan to minimize them Continued… TPK page 2 of 9 BOM 2064 QUALITY AND OPERATIONS MANAGEMENT DECEMBER 2009 13. The process of dismantling and inspecting a competitor’s new or revised product for the purpose of gleaning design ideas is called: ____________________.
A) design by imitation B) product analysis C) reverse engineering D) benchmarking E) disassembly 14. Which of the following is an issue that designers must take into account in product and service design? A) legal, environmental, and ethical issues B) reliability C) standardization D) range of operating conditions E) all of the above 15. A formal way to document customer requirements is: __________________. A) consumer surveys B) quality function deployment (QFD) C) focus groups D) Delphi technique E) sales/marketing matrix 16. Which of the following is not a goal of supply chain management?
A) fewer suppliers and long-term relationship B) small lot sizes C) on time deliveries D) lowest possible transportation costs E) delivery often to the place of use 17. Vendor analysis has the greatest potential for savings for items which have: ____________________. A) low cost per unit B) low annual cost-volume C) high cost per unit D) high annual usage E) high annual cost-volume Continued… TPK page 3 of 9 BOM 2064 QUALITY AND OPERATIONS MANAGEMENT DECEMBER 2009 18. Which of the following is not true of vendor analysis? A) It involves an examination of the function of purchased parts or raw materials.
B) Its purpose is to reduce costs and/or improve performance of purchased goods or services. C) It is usually performed only periodically. D) Representatives from design and operations may work with purchasing. E) If improvements are identified, purchasing implements those that purchasing agrees are justified. 19. Which of the following would not usually be a main factor in selecting a vendor? A) location B) price C) quality D) inventory turnover E) vendor services 20. Which of the following is part of the purchasing cycle? (I) Purchasing selects a supplier. II) Orders from vendors are received. (III) Purchasing receives a requisition. A) B) C) D) E) II and III I, II, and III I only I and II I and III 21. An operations strategy for inventory management should work towards: _________. A) increasing lot sizes B) decreasing lot sizes C) increasing safety stocks D) decreasing service levels E) increasing order quantities 22. Which one of the following is not generally a determinant of the reorder point? A) rate of demand B) length of lead time C) lead time variability D) stockout risk E) purchase cost
Continued… TPK page 4 of 9 BOM 2064 QUALITY AND OPERATIONS MANAGEMENT DECEMBER 2009 23. The fixed order interval model would be most likely to be used for this situation: A) A company has switched from mass production to lean production. B) Production is done in batches. C) Spare parts are ordered when a new machine is purchased. D) Grouping orders can save shipping costs. E) none of these 24. All of the following are possible reasons for using the fixed order interval model except: ___________________. A) Supplier policy encourages use.
B) Grouping orders can save in shipping costs. C) The required safety stock is lower than with an EOQ/ROP model. D) It is suited to periodic checks of inventory levels rather than continuous monitoring. E) Continuous monitoring is not practical. 25. The need for safety stocks can be reduced by an operations strategy which: A) increases lead time B) increases lead time variability C) increases lot sizes D) decreases ordering costs E) decreases lead time variability 26. The comprehensive approach used in JIT systems to deal with quality includes: ________________.
A) designing quality into products and processes B) insisting vendors provide high quality materials C) making workers responsible for producing high quality D) A, B and C E) 100% inspection of raw materials, work-in-process and finished goods 27. Which of the following is not a benefit of small lot sizes in JIT systems? A) In-process inventory is considerably less. B) Each product is produced less frequently. C) Carrying costs are reduced. D) There is less clutter in the workplace. E) Inspection and rework costs are less. Continued… TPK page 5 of 9 BOM 2064 QUALITY AND OPERATIONS MANAGEMENT DECEMBER 2009 28.
Which of the following is not characteristic of preventive maintenance in JIT systems? A) maintaining equipment in good operating condition B) replacing parts when they are worn but before they fail C) workers maintaining their own equipment D) eliminating supplies of spare parts to reduce capital investment E) perceiving breakdowns as an opportunity for improvement 29. The Kaizen Philosophy applies to: _______________. A) Employee development B) Safety stock C) Waste D) Supply Chain Management E) MRP III 30. An operations strategy toward the JIT philosophy of production should recognize that JIT: __________________.
A) is most suited for non-repetitive manufacturing B) cannot be implemented sequentially C) requires a wholesale commitment from the outset D) may provide a competitive advantage E) all of the above SECTION B Essay and Calculation Questions: Answer ALL THREE questions. (60 Marks) QUESTION 1 The general manager of a building materials production plant feels that the demand for plasterboard shipments may be related to the number of construction permits issued in the country during the previous quarter. The manager has collected the data shown in Table 1. 1. a) Review the scatter diagram (Figure 1. ) to see whether the data can be satisfactorily described by a linear equation. b) Determine the linear regression equation for the data [2 marks] [15 marks] c) Determine a point estimate for plasterboard shipments when the number of construction permits is 30. [3 marks] [Total Marks = 20] Continued… TPK page 6 of 9 BOM 2064 QUALITY AND OPERATIONS MANAGEMENT DECEMBER 2009 Table 1. 1 Construction Permits (X) 15 9 40 20 25 25 15 35 Plasterboard Shipments (Y) Shipments Y 18 16 14 12 10 8 6 4 2 0 0 10 20 30 40 50 Permits X 6 4 16 6 13 9 10 16 igure 1. 1 QUESTION 2 a) What are the principles underlying TQM? 10 marks] b) Discuss the long-run effects of quality improvement on a firm’s profitability. [10 marks] [Total marks = 20] QUESTION 3 The Goliaq Tool Company produces slip – ring bearings, which look like flat doughnuts or washers. They fit around shafts or rods, such as drive shafts in machinery or motors. At an early stage in the production process for a particular slip – ring bearing, the outside diameter of the bearing is measured. The company has taken 10 samples (during a 10 – day period) of 5 slip – ring bearings (i. e. , n = 5) and measured the diameter of the bearing.
The individual observations from each sample are shown as follows: TPK page 7 of 9 BOM 2064 QUALITY AND OPERATIONS MANAGEMENT DECEMBER 2009 Continued… Sample k 1 2 3 4 5 6 7 8 9 10 1 5. 02 5. 01 4. 99 5. 03 4. 95 4. 97 5. 05 5. 09 5. 14 5. 01 Observations (Slip – Ring Diameter, cm) 2 3 4 5. 01 4. 94 4. 99 5. 03 5. 07 4. 95 5. 00 4. 93 4. 92 4. 91 5. 01 4. 98 4. 92 5. 03 5. 05 5. 06 5. 06 4. 96 5. 01 5. 10 4. 96 5. 10 5. 00 4. 99 5. 10 4. 99 5. 08 4. 98 5. 08 5. 07 5 4. 96 4. 96 4. 99 4. 89 5. 01 5. 03 4. 99 5. 08 5. 09 4. 99 [6 marks] [10 marks] [4 marks] a) Determine all sample means and the mean of all sample means. ) Calculate upper and lower control limits. c) Is this process in control? [Total marks = 20] Relevant Equations 1) CL = X UCL, LCL (X – bar) = X ? A2 R UCL ( R) = D4 R LCL ( R) = D3 R Table for X – bar & R Charts No of Observation In sub group n 2 3 4 5 6 2) UCL ? = c + 3v c LCL ? = c – 3v c Continued… TPK page 8 of 9 A2 1. 88 1. 02 0. 73 0. 58 0. 48 D3 0 0 0 0 0 D4 3. 27 2. 57 2. 28 2. 11 2 BOM 2064 QUALITY AND OPERATIONS MANAGEMENT DECEMBER 2009 3) p = Total No of Defective from All Samples/ (No of Samples X Sample Size) Sp = v [ p (1 – p )/n] CL = p LCL = p – 3 Sp UCL = p + 3 Sp ) Capacity Utilization = Capacity Used / Best Operating Level 5) r ? n ? XY ? ?? X ? Y ? ?n ? X 2 ? ?? X ? 2 ? ?n ? Y 2 ? ?? Y ? 2 ? ? ?? ? ? ?? ? a ? Y ? bX b= ? XY ? n X Y ? X 2 ? nX 2 6) Exponential smoothing Forecast for the month t: Ft = Ft – 1 + ? (At – 1 – Ft – 1) 7) Exponential smoothing with trend adjustment Forecast for the month t: Ft = ? (At – 1) + (1 – ? )(Ft – 1 + Tt – 1) Trend for the month t: Tt = ? (Ft – Ft – 1) + (1 – ? )Tt – 1 FIT = Ft + Tt 8) Inventory Management: EOQ = Q * ? 2 DS H 2 DS H p p ? u TC ? Q D H? S 2 Q EPQ = Q0 ? I max ? Q ( p ? u) P TC= I m ax D H? S 2 Q End of Page TPK page 9 of 9

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