Deck 14: Products and Processes

Question 1

A manufacturer has a choice of purchasing and installing a heat- treating oven or having the heat treating done by an outside supplier. For the in- house treatment the fixed costs are $28,000 with a variable cost of $10. To purchase outside, the variable costs are $17 per unit.
What is the cost equalization point. Should the company have the heat treating done outside if the annual volume is 3,000 units? 5,000 units?

Answer 1

CEP is at 4,000 units. For 3,000 units the company should purchase outside at a cost of $17 per unit. For a quantity of 5,000 units, the in- house production is cheaper at
$15 per unit.

Question 2

Discuss the use of special- purpose machinery.

Answer 2

Special- purpose machinery is designed to perform specific operations on one work piece or a small number of similar work pieces. It is more costly and less- flexible but parts can be produced with it much quicker than with general purpose machinery.

Question 3

________are the resources used in changing inputs to outputs.

A) Process boundaries
B) Customers
C) Suppliers
D) Components

Answer 3

Components

Question 4

To find a better method when analyzing a process:

A) work to eliminate changes in the sequence of operations
B) eliminate all unnecessary work
C) separate operations wherever possible for efficiency
D) all of the above

Question 5

What are some of the reasons to purchase externally as opposed to making in- house)?

Question 6

What is product standardization and why is it important?

Question 7

An example of the vital few is:

A) a few problems account for most process downtime
B) a few suppliers account for most rejected parts
C) a few processes account for the bulk of scrap
D) all of the above

Question 8

Discuss CPI.

Question 9

Given the following fixed and variable costs and the volumes, calculate the total and unit costs.

Question 10

In continuous process improvement, the first step is:

A) record the existing method to collect the necessary data in a useful form
B) analyze the recorded data to generate alternative improved methods
C) decide what to study
D) none of the above

Question 11

Identify the six steps in the the CPI process.

Question 12

Indicators that show areas most needing improvement include:

A) no bottlenecks
B) low scrap
C) excessive overtime
D) none of the above

Question 13

A process costs $200 to set up. The run time is 5 minutes per piece and the run cost is $30 per hour. Determine the fixed cost, the variable cost and the total cost and unit cost for a lot of 500.

Question 14

________record in sequence only the main operation and inspections.

A) Movement or delay reports
B) Process flow diagrams
C) Operations process charts
D) Both A and B

Question 15

Job________ trains workers to do several jobs so they can be moved from one job to another.

A) design
B) enrichment
C) rotation
D) enlargement

Question 16

Starting and ending points form the________of the process.

A) flow
B) boundaries
C) components
D) inputs and outputs

Question 17

A principle of motion economy is:

A) arrange work so motions are balanced
B) preposition tools and materials
C) locate materials within the working area
D) all of the above

Question 18

Given the following fixed and variable costs and the volumes, calculate the total and unit costs.
Fixed costs Variable costs Volume in units Total cost Unit cost $$\begin{array} { l l l } \$ 1000 & \$ 12 & 1000 \\\$ 2500 & \$ 17 & 100 \\\$ 500 & \$ 150 & 2 \\\$ 1,500 & \$ 19 & 21 \\\$ 50 & \$ 200 & 50\end{array}$$

Question 19

Job ________ expands a worker's job by clustering similar or related tasks into one job.

A) enrichment
B) rotation
C) enlargement
D) design

Question 20

A manufacturer has a choice of purchasing and installing a drilling machine having the drill work done by an outside supplier. For the in- house drilling the fixed costs are
$100,000 with a variable cost of $12. To purchase outside, the variable costs are $20 per unit.
What is the cost equalization point. Should the company have the heat treating done outside if the annual volume is 1,000 units? 10,000 units?

Question 21

A process flow diagram shows graphically and sequentially the various steps and operations that make up a process.

Question 22

Costs that vary with the quantity produced are fixed costs.

Question 23

Standardization of parts is a major characteristic of modern mass production.

Question 24

Sometimes called a fishbone or an Ishikawa diagram, the cause- and- effect diagram is useful for identifying root causes.

Question 25

Intermittent processes are not flexible.

Question 26

In intermittent manufacturing, goods are not made continuously as in a flow system but are made at intervals in lots or batches.

Question 27

The cost equalization point is the volume for which total cost and unit cost) of using one method is the same as another.

Question 28

One of the features of CPI is team involvement.

Question 29

Flow systems product a wide range of varied products.

Question 30

Project manufacturing is mostly used for large, complex projects such as ships or buildings.