Question 1

ProofSmart Inc.
ProofSmart Inc., a supplier of home insulation materials, was burned down in a recent fire. From the remains of what used to be the accounting ledger, the following information was recovered:

Prior to the fire, ProofSmart saw a sales growth of $ 48 \% $ in 2007 , a record performance for the 18 year-old company. (NOTE: Gross margin is defined as 1 -(COGS/Sales).)
-What was the inventory turns for 2012? Circle the answer closest to the correct answer.
A)10
B)11
C)12
D)13
E)14
F)15

Accepted Answer

F

Question 2

Penne Pesto
Penne Pesto is a small restaurant in the financial district of San Francisco. Customers order from a variety of pasta dishes. The restaurant has 50 seats and is always full during the four hours in the evening. It is not possible to make reservations at Penne, most guests show up spontaneously on their way home from work. If there is no available seat, guests simply move on to another place.
On average, a guest spends 50 minutes in the restaurant, which includes 5 minutes until the waiter has taken the order, an additional 10 minutes until the food is served, 30 minutes to eat, and 5 minutes to handle the check-out (including waiting for the check, paying, and leaving). It takes the restaurant another 10 minutes to clean the table and have it be ready for the next guests (of which there are always plenty).The average guest leaves $20 at Penne, including food, drink, and tip (all tips are collected by the restaurant, employees get a fixed salary).
The restaurant has 10 waiters and 10 kitchen employees, each earning $90 per evening (including any preparation, the 4 hours the restaurant is open, and clean-up). The average order costs $5.50 in materials, including $4.50 for the food and $1 for the average drink. In addition to labor costs, fixed costs for the restaurant include $500 per day of rent and
$500 per day for other overhead costs.
The restaurant is open 365 days in the year and is full to the last seat even on week-ends and holidays. There are about $200k of capital tied up in the restaurant, largely consisting of furniture, decoration, and equipment.
-What is the Return on Invested Capital for the owner of the restaurant?

Accepted Answer

ROIC = Return/(Invested Capital) = (Return/Sales)x(Sales/Invested Capital)
Sales (per evening)= 200*20 = $4000 Sales (per year) = 4000*365 = 1,460,000
Return = Sales - [(labor costs) + (material costs) + rent + overhead]
= 4000 - [ 20*90 + 200*5.50 + 500 + 500 ]
= 4000 - [ 1800 + 1100 + 500 + 500 ]
= 100
Invested Capital = 200,000
Sales (per year) = 4000*365 = 1,460,000
Plugging in,
ROIC = 0.025*7.3 = 18.25%

Question 3

Mr. K's is a very popular hair salon. It offers high-quality hair-styling and physical relaxation services at a reasonable price, so it always has unlimited demand. The service process includes five activities that are conducted in the sequence described below. (The time required for each activity is shown in parenthesis):
Activity 1: Welcome a guest and offer homemade herb tea. (10 minutes)
Activity 2: Wash and condition hair. (10 minutes)
Activity 3: Neck, shoulder, and back stress release massage. (10 minutes)
Activity 4: Design the hair style and do the hair. (25 minutes)
Activity 5: Check out the guest. (5 minutes)
Three servers (S1, S2, and S3) offer the services in a worker-paced line. The assignment of tasks to servers is the following:
S1 does Activity 1.
S2 does Activities 2 and Activity 3. S3 does Activities 4 and Activity 5.
-Which server is the bottleneck of the process?

Accepted Answer

S1 can process 1/10 customers per minute.S2 can process 1/20 customers per minute.S3 can process 1/30 customers per minute.
S3 has the lowest capacity and is hence the bottleneck.

Question 4

Toyota and Capital One Cases
-In the case of Capital One where is the bottleneck found?
A)Q&A
B)Closing
C)Underwriting
D)Interviewing

Accepted Answer

In the Capital One case, the bottleneck is found in the underwriting process. This is because underwriting is the stage where the financial risk of issuing a loan or credit is assessed, which can often be a complex and time-consuming process, leading to delays or bottlenecks in the overall procedure.

Question 5

Penne Pesto
Penne Pesto is a small restaurant in the financial district of San Francisco. Customers order from a variety of pasta dishes. The restaurant has 50 seats and is always full during the four hours in the evening. It is not possible to make reservations at Penne, most guests show up spontaneously on their way home from work. If there is no available seat, guests simply move on to another place.
On average, a guest spends 50 minutes in the restaurant, which includes 5 minutes until the waiter has taken the order, an additional 10 minutes until the food is served, 30 minutes to eat, and 5 minutes to handle the check-out (including waiting for the check, paying, and leaving). It takes the restaurant another 10 minutes to clean the table and have it be ready for the next guests (of which there are always plenty).The average guest leaves $20 at Penne, including food, drink, and tip (all tips are collected by the restaurant, employees get a fixed salary).
The restaurant has 10 waiters and 10 kitchen employees, each earning $90 per evening (including any preparation, the 4 hours the restaurant is open, and clean-up). The average order costs $5.50 in materials, including $4.50 for the food and $1 for the average drink. In addition to labor costs, fixed costs for the restaurant include $500 per day of rent and
$500 per day for other overhead costs.
The restaurant is open 365 days in the year and is full to the last seat even on week-ends and holidays. There are about $200k of capital tied up in the restaurant, largely consisting of furniture, decoration, and equipment.
-What would be the new ROIC if over-head charges could be reduced by $100 per day? Answer this question independent of the previous question.

Accepted Answer

The answer of Penne Pesto
Penne Pesto is a small restaurant...

Question 6

Given the long wait times for Precinct A, the city of Philadelphia is thinking of alternative solutions to improve voting conditions. One of the proposed solutions is as follows.
Proposal 1: Deploy an additional voting machine in precinct A.
Assume that the voter turnout is expected to have similar characteristics in 2008 as in the previous election.
-Suppose Proposal 1 is rejected and that only one machine will be deployed in precinct A.In sign of protest, voters at precinct A decide to adopt the following rule: if the voting machine is busy, the voter will not vote and will leave (and not vote at all).What is the expected number of people who will end up voting on election day in precinct A (assume that the voting station accepts voters for 12 hours from 8:00am to 8:00pm)
A)Less than 100
B)Between 100 and 150
C)Between 150 and 250
D)More than 250

Accepted Answer

The answer of Given the long wait times for Precinct...

Question 7

Mr. K's is a very popular hair salon. It offers high-quality hair-styling and physical relaxation services at a reasonable price, so it always has unlimited demand. The service process includes five activities that are conducted in the sequence described below. (The time required for each activity is shown in parenthesis):
Activity 1: Welcome a guest and offer homemade herb tea. (10 minutes)
Activity 2: Wash and condition hair. (10 minutes)
Activity 3: Neck, shoulder, and back stress release massage. (10 minutes)
Activity 4: Design the hair style and do the hair. (25 minutes)
Activity 5: Check out the guest. (5 minutes)
Three servers (S1, S2, and S3) offer the services in a worker-paced line. The assignment of tasks to servers is the following:
S1 does Activity 1.
S2 does Activities 2 and Activity 3. S3 does Activities 4 and Activity 5.
-.Assume a wage rate of $18 per hour.What are the direct labor costs for one guest?

Accepted Answer

The answer of Mr. K's is a very popular hair...

Question 8

Mr. K's is a very popular hair salon. It offers high-quality hair-styling and physical relaxation services at a reasonable price, so it always has unlimited demand. The service process includes five activities that are conducted in the sequence described below. (The time required for each activity is shown in parenthesis):
Activity 1: Welcome a guest and offer homemade herb tea. (10 minutes)
Activity 2: Wash and condition hair. (10 minutes)
Activity 3: Neck, shoulder, and back stress release massage. (10 minutes)
Activity 4: Design the hair style and do the hair. (25 minutes)
Activity 5: Check out the guest. (5 minutes)
Three servers (S1, S2, and S3) offer the services in a worker-paced line. The assignment of tasks to servers is the following:
S1 does Activity 1.
S2 does Activities 2 and Activity 3. S3 does Activities 4 and Activity 5.
-What is the average labor utilization of the servers? Assume the process operates at its capacity.

Accepted Answer

The answer of Mr. K's is a very popular hair...

Question 9

Penne Pesto
Penne Pesto is a small restaurant in the financial district of San Francisco. Customers order from a variety of pasta dishes. The restaurant has 50 seats and is always full during the four hours in the evening. It is not possible to make reservations at Penne, most guests show up spontaneously on their way home from work. If there is no available seat, guests simply move on to another place.
On average, a guest spends 50 minutes in the restaurant, which includes 5 minutes until the waiter has taken the order, an additional 10 minutes until the food is served, 30 minutes to eat, and 5 minutes to handle the check-out (including waiting for the check, paying, and leaving). It takes the restaurant another 10 minutes to clean the table and have it be ready for the next guests (of which there are always plenty).The average guest leaves $20 at Penne, including food, drink, and tip (all tips are collected by the restaurant, employees get a fixed salary).
The restaurant has 10 waiters and 10 kitchen employees, each earning $90 per evening (including any preparation, the 4 hours the restaurant is open, and clean-up). The average order costs $5.50 in materials, including $4.50 for the food and $1 for the average drink. In addition to labor costs, fixed costs for the restaurant include $500 per day of rent and
$500 per day for other overhead costs.
The restaurant is open 365 days in the year and is full to the last seat even on week-ends and holidays. There are about $200k of capital tied up in the restaurant, largely consisting of furniture, decoration, and equipment.
-How many guests will the restaurant serve on an evening?

Accepted Answer

The answer of Penne Pesto
Penne Pesto is a small restaurant...

Question 10

Given the long wait times for Precinct A, the city of Philadelphia is thinking of alternative solutions to improve voting conditions. One of the proposed solutions is as follows.
Proposal 1: Deploy an additional voting machine in precinct A.
Assume that the voter turnout is expected to have similar characteristics in 2008 as in the previous election.
-Under Proposal 1, how long on average would a voter have to wait in line in precinct A in 2008 before casting her/his vote.Circle the closest answer.
A)1 minute
B)5 minutes
C)6 minutes
D)10 minutes
E)11 minutes

Accepted Answer

The answer of Given the long wait times for Precinct...

Question 11

Airport Massage Station
A small company just opened a new massage station at Philadelphia airport. The company has a stand that offers massages to travelers. Customers can select a length of massage between 5 and 20 minutes and there is a unique rate of $30 independently of the length selected by customers. The average length of massage requested by customers is of 15 minutes with standard deviation of 10 minutes.
There are four employees delivering massages. The average number of potential customers requesting a massage is of 20 per hour. The inter-arrival times are assumed to be exponentially distributed.
If no spot is available when the customer arrives, s/he leaves in order not to risk missing her/his flight.
-The station manager is considering the option of hiring additional employees to deliver massages.The hourly wage of an employee is $50/hr.How many ADDITIONAL employees should s/he hire if s/he wants to maximize profits? [Profit = revenues from customers - labor cost] Suppose that there exists sufficient equipment to accommodate as many new employees as needed.
A)none
B)1 additional employee
C)2 additional employees
D)3 additional employees
E)4 additional employees

Accepted Answer

The optimal number of additional employees to hire is 2. This is because the profit is maximized when the number of customers served per hour is equal to the number of employees. In this case, the average number of customers requesting a massage is 20 per hour, so the optimal number of employees is 20 / 30 = 2.

Question 12

The right to vote (and not to wait)
In the past decade, two presidential elections in the United States have witnessed very long wait times at precincts (voting stations) in states that ultimately decided the election (Florida in 2000 and Ohio in 2004).

In Philadelphia as well, some voters complained about the long lines in some precincts, with most complaints coming from precinct A. In 2004, the average number of voters arriving at Precinct $ A $ was of 35 per hour and the arrivals of voters was random with inter-arrival times that had a coefficient of variation of $ 1(\mathrm{CVa}=1) $.
Philadelphia had deployed 1 voting machine in Precinct A. Suppose that each voter spent on average 100 seconds in the voting booth (this is the time needed to cast her/his vote using a voting machine), with a standard deviation of 120 seconds.
-How long on average a voter had to wait in line precinct at A in 2004 before entering in a booth to cast her/his vote.Circle the closest answer.
A)56 minutes
B)58 minutes
C)60 minutes
D)62 minutes
E)71 minutes

Accepted Answer

The average wait time can be calculated using queuing theory formulas, specifically the Pollaczek-Khintchine formula for M/G/1 queues. Given the arrival rate ($\lambda = 35$ voters/hour), service rate ($\mu = 3600 \, \text{seconds/hour} / 100 \, \text{seconds/voter} = 36 \, \text{voters/hour}$), and the variability in service times (coefficient of variation $C_v = 1.2$), the average wait time in the queue can be calculated. The high standard deviation in service times (120 seconds) compared to the mean service time (100 seconds) indicates significant variability, leading to longer wait times. Among the provided options, 71 minutes is the closest to what would be expected under these conditions, considering the high variability and the close arrival and service rates.

Question 13

Toyota and Capital One Cases
-In the Toyota Production System, jidoka refers to
A)Level production, where different models are produced along side each other on the assembly line
B)Continuous improvement, where workers organize meetings to discuss ways of improving the production process
C)The inventory retrieval system where parts are replenished only when they are needed
D)The aggressive reduction of changeover and setup times
E)Continuous line-balancing to maximize utilization
F)The cross-training of workers for a wide range of skills
G)None of the above

Accepted Answer

Jidoka, in the context of the Toyota Production System, refers to the concept of automation with a human touch, or "intelligent automation." It means that when a problem occurs, the equipment stops immediately, preventing defective products from being produced. None of the options provided accurately describe this concept.

Question 14

Given the long wait times for Precinct A, the city of Philadelphia is thinking of alternative solutions to improve voting conditions. One of the proposed solutions is as follows.
Proposal 1: Deploy an additional voting machine in precinct A.
Assume that the voter turnout is expected to have similar characteristics in 2008 as in the previous election.
-Under Proposal 1, on average, at precinct A, what would be the ratio of the average number of people voting (at a booth) over the average number of people in the line (waiting).Circle the closest answer.
A)0.4
B)1.4
C)2.4
D)3.4
E)4.4

Accepted Answer

The answer of Given the long wait times for Precinct...

Question 15

Penne Pesto
Penne Pesto is a small restaurant in the financial district of San Francisco. Customers order from a variety of pasta dishes. The restaurant has 50 seats and is always full during the four hours in the evening. It is not possible to make reservations at Penne, most guests show up spontaneously on their way home from work. If there is no available seat, guests simply move on to another place.
On average, a guest spends 50 minutes in the restaurant, which includes 5 minutes until the waiter has taken the order, an additional 10 minutes until the food is served, 30 minutes to eat, and 5 minutes to handle the check-out (including waiting for the check, paying, and leaving). It takes the restaurant another 10 minutes to clean the table and have it be ready for the next guests (of which there are always plenty).The average guest leaves $20 at Penne, including food, drink, and tip (all tips are collected by the restaurant, employees get a fixed salary).
The restaurant has 10 waiters and 10 kitchen employees, each earning $90 per evening (including any preparation, the 4 hours the restaurant is open, and clean-up). The average order costs $5.50 in materials, including $4.50 for the food and $1 for the average drink. In addition to labor costs, fixed costs for the restaurant include $500 per day of rent and
$500 per day for other overhead costs.
The restaurant is open 365 days in the year and is full to the last seat even on week-ends and holidays. There are about $200k of capital tied up in the restaurant, largely consisting of furniture, decoration, and equipment.
-Assume that you could improve the productivity of the kitchen employees and free up one person who would be helping cleaning up the table.This would reduce the clean- up to 5 minutes instead of 10 minutes.What would be the new ROIC?

Accepted Answer

The answer of Penne Pesto
Penne Pesto is a small restaurant...

Question 16

ProofSmart Inc.
ProofSmart Inc., a supplier of home insulation materials, was burned down in a recent fire. From the remains of what used to be the accounting ledger, the following information was recovered:

Prior to the fire, ProofSmart saw a sales growth of $ 48 \% $ in 2007 , a record performance for the 18 year-old company. (NOTE: Gross margin is defined as 1 -(COGS/Sales).)
-What was the sales for 2012? Circle the answer closest to the correct answer.
A)$318,000
B)$38,000,000
C)$43,000,000
D)$66,000,000
E)$85,000,000

Accepted Answer

The answer of ProofSmart Inc.
ProofSmart Inc., a supplier of home...

Question 17

Mr. K's is a very popular hair salon. It offers high-quality hair-styling and physical relaxation services at a reasonable price, so it always has unlimited demand. The service process includes five activities that are conducted in the sequence described below. (The time required for each activity is shown in parenthesis):
Activity 1: Welcome a guest and offer homemade herb tea. (10 minutes)
Activity 2: Wash and condition hair. (10 minutes)
Activity 3: Neck, shoulder, and back stress release massage. (10 minutes)
Activity 4: Design the hair style and do the hair. (25 minutes)
Activity 5: Check out the guest. (5 minutes)
Three servers (S1, S2, and S3) offer the services in a worker-paced line. The assignment of tasks to servers is the following:
S1 does Activity 1.
S2 does Activities 2 and Activity 3. S3 does Activities 4 and Activity 5.
-What is the utilization of server 2?

Accepted Answer

The answer of Mr. K's is a very popular hair...

Question 18

Mr. K's is a very popular hair salon. It offers high-quality hair-styling and physical relaxation services at a reasonable price, so it always has unlimited demand. The service process includes five activities that are conducted in the sequence described below. (The time required for each activity is shown in parenthesis):
Activity 1: Welcome a guest and offer homemade herb tea. (10 minutes)
Activity 2: Wash and condition hair. (10 minutes)
Activity 3: Neck, shoulder, and back stress release massage. (10 minutes)
Activity 4: Design the hair style and do the hair. (25 minutes)
Activity 5: Check out the guest. (5 minutes)
Three servers (S1, S2, and S3) offer the services in a worker-paced line. The assignment of tasks to servers is the following:
S1 does Activity 1.
S2 does Activities 2 and Activity 3. S3 does Activities 4 and Activity 5.
-What would be the costs of direct labor of serving one guest under each of the two alternatives? Assume that the system operates at its capacity.

Accepted Answer

The answer of Mr. K's is a very popular hair...

Question 19

Toyota and Capital One Cases
-Which of the following statements accurately describe the Toyota Production System?
I.The entire production is shut down every time the on cord is pulled
II.There is zero idle time at each production step
III.The TPS uses no buffers
IV.TPS uses buffer inventories between line segments to avoid blocking and starving of the production line
A)I only
B)II only
C)III only
D)IV only
E)I, II, III and IV
F)II and IV
G)II, III and IV
H)I and IV

Accepted Answer

The Toyota Production System (TPS) uses buffer inventories between line segments to avoid blocking and starving of the production line.

Question 20

Airport Massage Station
A small company just opened a new massage station at Philadelphia airport. The company has a stand that offers massages to travelers. Customers can select a length of massage between 5 and 20 minutes and there is a unique rate of $30 independently of the length selected by customers. The average length of massage requested by customers is of 15 minutes with standard deviation of 10 minutes.
There are four employees delivering massages. The average number of potential customers requesting a massage is of 20 per hour. The inter-arrival times are assumed to be exponentially distributed.
If no spot is available when the customer arrives, s/he leaves in order not to risk missing her/his flight.
-What is average number of customers being serviced per hour at the massage station? Circle the closest answer.
A)7
B)8
C)9
D)10
E)11
F)12
G)13

Accepted Answer

The answer of Airport Massage Station
A small company just opened...

Quiz 1: Operations Management: Quality and Productivity

Toyota and Capital One Cases -In the case of Capital One where is the bottleneck found?

Toyota and Capital One Cases -In the Toyota Production System, jidoka refers to