Question 1

A company currently has 500 items in inventory.The demand for the next 2 months is 900 and 1200 units.Assuming a level production rate of 1000 units per month,determine the ending inventory at the end of the second month.
A) 300
B) 400
C) 500
D) 600

Accepted Answer

The total demand is 2100 units (900+1200).
The total production during this period is 2000 units (1000/month x 2 months).
Therefore, the ending inventory will be: 
Ending inventory = Total production - Total demand + Beginning inventory
Ending inventory = 2000 - 2100 + 500
Ending inventory = 400 units (Option B)

Question 2

Which of the following lot sizing rules is best applied when setup or order costs are high?
A) The fixed-order quantity rule
B) The lot-for-lot rule
C) The periodic-order quantity rule
D) The gross requirements rule

Accepted Answer

When setup or order costs are high, it is best to use the fixed-order quantity rule, as it balances the cost of ordering (which is high) with the holding cost (which is low). This rule allows for larger order quantities to be made, reducing the number of orders placed and thus the number of setup costs incurred.

Question 3

Which of the following is true of process selection models?
A) The objective is usually to minimize cost,and typical constraints are meeting demand requirements and resource limitations.
B) The goal is to use machines with identical capabilities.
C) They seek to determine quantities of different products to produce and sell in order to maximize contribution to profit.
D) Typical constraints include marketing requirements such as minimum and maximum amounts to produce.

Accepted Answer

Process selection models aim to minimize costs while meeting demand and resource constraints, focusing on choosing the most efficient production process.

Question 4

The lot-for-lot (LFL)rule is best applied when:
A) inventory-carrying costs are high.
B) space constraints are low.
C) costs associated with purchase orders are high.
D) setup costs are moderate.

Accepted Answer

The lot-for-lot (LFL) ordering policy is most effective when inventory-carrying costs are high because it aims to minimize inventory levels by ordering just enough to meet immediate needs, thus reducing the costs associated with holding inventory.

Question 5

In a garments factory,a part requires 0.10 hours of labor per unit in Work Center B and 1 hour of setup time.The planned order release (order size)for a week is 2000 units.Which of the following is the capacity requirement for a week at Work Center B?
A) 101
B) 151
C) 201
D) 251

Accepted Answer

First, we need to calculate the total work time required to produce 2000 units in Work Center B.

Total work time = (0.10 hours/unit x 2000 units) + 1 hour/unit x 1 setup = 201 hours

Therefore, the capacity requirement for a week at Work Center B is 201 hours. The closest option is 201, so the answer is C.

Question 6

In manufacturing,a _____ is a statement of how many finished items are to be produced and when they are to be produced.
A) master production schedule
B) capacity requirements plan
C) materials requirements plan
D) planned order receipt

Accepted Answer

A master production schedule is a statement that specifies the quantity and timing of finished items to be produced. It takes into account factors such as customer demand, production capacity, and inventory levels. A capacity requirements plan and materials requirements plan are related to the production process but do not specifically address the quantity and timing of finished items. A planned order receipt is a document that specifies when and how many units of a specific material or component are to be received.

Question 7

Which of the following lot sizing rules bases the order quantity on a standard-size container or pallet load?
A) The lot-for-lot rule
B) The fixed-order quantity rule
C) The periodic-order quantity rule
D) The gross requirements rule

Accepted Answer

The fixed-order quantity rule bases the order quantity on a standard-size container or pallet load. The lot-for-lot rule only orders the exact amount needed for a specific period, the periodic-order quantity rule specifies ordering at fixed intervals, and the gross requirements rule calculates the total amount required without specifying an ordering rule.

Question 8

Capacity requirements are computed by multiplying the number of units scheduled for production at a work center by the:
A) the unit resource requirements and then adding in the setup time.
B) the setup time and then subtracting the unit resource requirements.
C) the setup time and then adding in the unit resource requirements.
D) the unit resource requirements and then subtracting the setup time.

Accepted Answer

Capacity requirements are calculated by multiplying the number of units scheduled for production by the unit resource requirements (which includes time per unit for labor and machine) and then adding the setup time required for the production run. This approach ensures that both the variable time per unit and the fixed time for setup are accounted for in determining total capacity needs.

Quiz 14: Resource Management

A company currently has 500 items in inventory.The demand for the next 2 months is 900 and 1200 units.Assuming a level production rate of 1000 units per month,determine the ending inventory at the end of the second month.

Which of the following lot sizing rules is best applied when setup or order costs are high?

Which of the following is true of process selection models?

The lot-for-lot (LFL) rule is best applied when:

In a garments factory,a part requires 0.10 hours of labor per unit in Work Center B and 1 hour of setup time.The planned order release (order size) for a week is 2000 units.Which of the following is the capacity requirement for a week at Work Center B?

In manufacturing,a _____ is a statement of how many finished items are to be produced and when they are to be produced.

Which of the following lot sizing rules bases the order quantity on a standard-size container or pallet load?

Capacity requirements are computed by multiplying the number of units scheduled for production at a work center by the: