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Exam 9: Production and Operations Management

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Question 111

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While mass customization works well for producers it is not used in the service sector.

A) True
B) False

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Question 112

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Service businesses know that in order to delight customers they must be able to anticipate their needs.

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Question 113

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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." -Sparky knows that installing the new equipment and training workers to use it efficiently will be a long and complex process consisting of many different tasks. Which of the following methods would help him determine how long this project is likely to take?

Production creates:

Both PERT diagrams and Gantt charts are useful to managers concerned with:

Mypartz, Inc., is a major supplier of components used by Idle Time Gaming Systems. Idle Time Gaming wants to implement a just-in-time inventory system. Mypartz should benefit from this approach, since JIT systems greatly simplify the task of suppliers.

The purpose of a PERT network is:

CAD has __________ productivity in many firms.

Most new manufacturing facilities use:

You can now put your own photo on a credit card. You can design your own jeans online and have them sent to you in a few days. Dr. Scholl's now features kiosks where you can create your own orthotics to fit inside your shoes. These are examples of the trend toward ________.

The critical path identified by PERT analysis is the sequence of tasks that can be completed in the shortest amount of time.

In a just-in-time inventory system, suppliers:

Trace and Tim own a company that rehabs old houses. Prior to buying a house, they use software to create and design the renovation of each room. The program provides them with an estimation of how much of each kind of material is needed, and the orderly progression of tasks that need to be completed. Trace and Tim use computer-aided design.

The Internet is a very popular place to locate your business today.

A just-in-time inventory system usually reduces costs for:

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:

Northern States Electric is in the process of trying to achieve ISO 14000 certification. Although the criteria for certification involve several milestones, we can be assured they will be evaluated on the regularity and thoroughness of their environmental audits, and how well top management reviews the firm's adherence to policies that are environmentally friendly.

Manufacturers use CAM (computer-aided manufacturing) to create three-dimensional designs of products before they are built.

Millennium, Inc., a leading producer of environmentally friendly cleaning agents, is looking for a site for a new production facility. The company is mainly focusing on sites that are close to major highways and rail hubs and are not too far from some major population centers. This suggests that an important location consideration for Millennium is:

Brian is a construction manager who wants to determine how long a new project will take to complete and which tasks in the project have the greatest potential for delaying the project. The PERT Network model will help Brian answer these questions.