Download OTM FINAL EXAM WITH CORRECT ANSWERS 100% VERIFIED and more Exams Production and Operations Management in PDF only on Docsity!
OTM FINAL EXAM WITH CORRECT ANSWERS 100% VERIFIED
Which sources of data would you use in a time-series-based forecast of the amount of soda to be sold in the cafeteria next week? - ANSWER Old Demand Data
The manager of the local grocery store notices that the demand for beer always increases on Fridays, as people stock up in preparation for partying over the weekend. This is a form of what type of component of demand? - ANSWER seasonality
When using the simple exponential smoothing forecasting method, for which of the following reasons would one prefer to use a = 0.1 instead of a = 0.5? - ANSWER If the demand of the product is highly fluctuating with no discernable reason
A company estimates from its past demand data that the seasonality index for the summer season is 1.5. What does this mean? - ANSWER Demand is higher than average in the summer.
A store has the following demand figures for the last four years: Year. Demand
- 100
- 150
- 98
- 112 What is the exponential smoothing forecast for year 5? Assume alpha = 0.3 and the forecast for year 4 is 100. Round your answer to one decimal. - ANSWER 103.
A police station had to deploy a police officer for an emergency multiple times in the last four evenings. The table below presents the number of emergencies each evening Day Number of emergencies
Monday 6 Tuesday 6 Wednesday 8 Thursday 10
What would be their forecast for the emergencies on Friday using a two-day moving average approach? - ANSWER 9
Elon Musk, the CEO of SpaceX, is trying to forecast the demand for tickets to Mars. Which forecasting method should he use? - ANSWER Market research
Culver's has been using two different forecasting methods to forecast its sales of chicken fingers: Method 1 and Method 2. Below are the MAEs and average errors of the two methods. Method 1. Method 2 MAE 30 10 Average Error -20 -
What can you say about the two forecasting methods in terms of the magnitude of forecasting error? - ANSWER The magnitude of error is larger in Method 1 than in Method 2. because the MAE is larger
What do you look at when seeing if methods of forecasting are under or over estimating demand - ANSWER the AVERAGE error if negative-underestimate if positive- overestimate
What is a forecast error? - ANSWER The difference between the forecast and the actual
discounted.
- Productions are long compared to selling and hence replenishment opportunities for the company does not exists.
- The firm places an order based on its inventory costs and the forecast for demand.
- Jackets that are not sold this year can be sold for the same price the following year - ANSWER 4. Jackets that are not sold this year can be sold for the same price the following year.
Adam wants to maximize his expected profit from selling product X. He calculates that the critical ratio for product X is 0.45. Which of the following statements is FALSE?
Adam should choose the order quantity that achieves an in-stock probability of 45%
If Adam chooses the optimal order quantity, then the service level is 45%.
If demand uncertainty increases, then Adam should stock fewer units of product X. - ANSWER ALL are true
Jerry sells ice cream at the local park. Every day, he needs to decide how many ice cream cones to bring with him. After some calculations, he found that to maximize his daily expected profit, he would need to bring 240 cones with him. This corresponds to a critical ratio of 0.85. However, Jerry is also aware that he is the only source of refreshments in the locality, so he wants to have at least a service level of 70%. How many cones should he bring along? - ANSWER 240
EOQ minimizes the sum of ordering cost, purchasing cost and which of the following costs? - ANSWER Holding cost
If a firm wanted to reduce the EOQ quantity by a factor of 2, how would the demand have to change? - ANSWER reduce by factor of 4
The EOQ model captures the tradeoff between which two costs - ANSWER Ordering cost and holding cost
A firm's demand is 1200 units per year. If the firm orders 400 units per order, how many orders does the firm make per year on average? - ANSWER 3.
Demand in each period is drawn from the same normal distribution with mean mu and standard deviation sigma. If demand is independent across periods, then which of the following is true of the standard deviation of demand over five periods? - ANSWER Greater than sigma but less than 5*sigma
A firm manages its inventory with an order-up-to level, i.e., a base stock level. The review period is one day, the lead time is two days and the order-up-to level is 10. Suppose its inventory position at the start of a day, before it submits an order for that day, is -4. Which of the following is definitely true? ANSWER The firm should order 14 units today
Demand each period is normally distributed and an order-up-to model is used to decide order quantities. Which of the following influences the chosen order-up-to level I. The mean of demand in one period. II. The standard deviation of demand over (L+P) periods. III. The target in-stock probability. - ANSWER ALL I, II, and III
You follow an (r, Q) policy with re-order point r=100 units. You have 40 on-hand inventory, no backorders and on-order inventory of 80. Did you forget to place an order?
A company sells two products, product A and product B. It is estimated that the coefficient of variation in demand for product A is 3, while the coefficient of variation in demand for product B is 1. Which of the following statements is true? - ANSWER demand for A is more uncertain than demand for B
In risk based production sequencing associated with the quick response system, which of the following is true about safe and risky products - ANSWER The firm should produce safe products first and risky products later.
are aggregate forecasts accurate? - ANSWER yes they are
How to choose an alpha smaller use when bigger use when - ANSWER smaller- variation is high bigger- when trend needs to be followed
when looking at magnitude of error look at - ANSWER MAE
when looking at direction of erroe - ANSWER look at Avg. Error
in regards to inventory, what is a precautionary motive? - ANSWER unpredictable events, supply uncertainty
in terms of inventory, what is a speculative motive? - ANSWER flucuating value, ordering cost and selling price
other term for in stock prob. - ANSWER service level
in excel, how to get Z score to probability - ANSWER z score - NORMS.INV(Critical ratio)
Can you have positive on hand inventory and positive backorder? - ANSWER NO
to achieve the same service level, periodic reviews requires - ANSWER MORE safety
stock
continuous review of stock is preferred when - ANSWER inventory is updated in real time continuous monitoring is not too costly
Complete Price Discrimination - ANSWER best for revenue
self select segmentation - ANSWER customers are separated by how much willing to pay (ex. ski is cheaper on tuesday)
Direct Segmentation - ANSWER not self select; Age, gender, etc.
challenged to price discrimination - ANSWER canibalization fairness
what is a supply chain - ANSWER a sequence of activities and organizations involved in producing and delivering a good or service
Functional product vs. innovative product - ANSWER functional sales highly predictable versus setting trends in innovative
supply chain- continuous replenishment - ANSWER increase flow of information/product to achieve goal of lower cost
supply chain-just in time - ANSWER keep holding cost as low as possible (no safety stock)
what are the two combos of "mismatch" in supply versus products - ANSWER innovative products with efficient supply
- cylce
- randomness - ANSWER Seasonality
what it major difference between seasonality and cycle? - ANSWER cycle's time limit is unknown
When using the moving average forecast method, in a project, the use of an average of just 10 weeks versus 50 weeks is because demand for the project is A. highly fluctuating B. seasonal C. experiencing growth - ANSWER Experiencing growth
What type of forecast models is best suited for the forecasting of driverless cars? - ANSWER market research
understanding the cost of the lost customer goodwill could lead us to underestimate which cost? - ANSWER shortage cost
which of the following is primarily concerned with the tradeoff between FIXED ORDERING COST vs. INVENTORY HOLDING COST a. newsvendor model b. (r, Q) model c. economic order quantity model d. order up to model - ANSWER economic order quantity model
which of the following is NOT a newsvendor type model A. Christmas tree B. fashionable ski wear C. fresh baked cookies
D. pencils - ANSWER pencils
in the basic EOQ model, if the lead time doubles, the optimal order quanitity will. - ANSWER remain the same
weekly demand has a normal distribution with mean 100 and SD of 20. lead time is 5 and the demand is independent. what is the SD during lead time? - ANSWER 20 X sqrt. 5
which of the following would typically lead an inventory manager to increase its reorder point A. increased service level requirement B. increased avg. demand C. increased Lead time D. All of the above - ANSWER ALL of the above
A company sells white socks. Daily demand is 50 with SD of 10. it can only place order at beginning of month. which inventory model should they use and why - ANSWER (r,Q) model because it is periodic review
Which is an example of direct segmentation A. Disneyland cheaper for children and Seniors B. AMC tickets are cheaper on Tuesdays C. Bar on State St. has "Ladies Night" D. A and C E. A, B, C - ANSWER A and C
which is a challenge regarding price differentiation A. Cannibalization B. Cannot be implemented online
