Consider the following flow process which consists of three process steps performed by three

machines. Work is processed in batches at each step. Before a batch is processed at Step 1, the
machine in step 1 has to be set up. During a setup, the machine is unable to process any
product. No setups are needed at step 2 and step 3.
1. Assume that the batch size is 50 parts, which step is the bottleneck?
A. Step 1 B. Step 2 C. Step 3 D. Step 1 and step 2 E. Step 1 and step 3
2. Using batch size of 40 parts, what is the capacity of the whole process? (Pick the closest
answer!)
A. 1/100 batch per minute B. 1/90 batch per minute C. 1/80 batch per minute D. 1/31.5 batch per
minute E. 0.48 batch per hour
3. Whats the minimum batch size that maximizes the capacity of the whole process? (Pick the
closest answer!) A. 10 parts B. 20 parts C. 30 parts D. 40 parts E. 50 parts
4. Using batch size of 30 parts, how long would it take to produce the first 20 parts starting with
an empty system? Assume that the parts in the same batch have to stay together (no smaller
transfer batches allowed) when transfer to step 2 and to step 3. However, a finished part can
leave the system the moment it completes at Step 3. (Pick the closest answer!)

A. 120 minutes B. 150 minutes C. 180 minutes D. 185 minutes E. 210 minutes 5. A point which
is outside of the lower control limit on an R-chart:
A. is an indication that no cause of variation is present
B. should be ignored because it signifies better than average quality
C. should be investigated because an assignable cause of variation might be present
D. should be ignored unless another point is outside that limit
E. is impossible since the lower limit is always zero
6. The purpose of control charts is to:
A. estimate the proportion of output that is acceptable
B. weed out defective items
C. determine if the output is within tolerances/specifications
D. distinguish between random variation and assignable variation in the process
E. provide meaningful work for quality inspectors
7. The range chart (R-chart) is most likely to detect a change in:
A. Proportion
B. Mean
C. number defective
D. Variability
E. sample size
8. Effective inventory management includes
A. minimize holding costs
B. indicate how much to order / make
C. minimize ordering costs
D. indicate when to order / re-order /make
E. all of above
9. In A-B-C analysis, the typical percentage of the number of items in inventory for A items is
about: A. 10 -20% B. 20 -50% C. 50 -70% D. 70 -80% E. 80% and above
10. In the basic EOQ model, if annual demand doubles, the effect on the EOQ is:
A. It doubles. B. It is four times of its previous amount. C. It is half of its previous amount.
D. It is about 70+ percent of its previous amount. E. It increases by about 40+ percent.

11. In the basic EOQ model, an annual demand of 400 units, an ordering cost of $5, and a
holding cost of $1 per unit per year will result in an EOQ of:
A. 40
B. square root of 40
C. square root of 400
D. square root of 4000
E. none of above 12. A company operates 7/24 to meet an annual demand of 18,250 units. Its
production setup cost is $10 per setup, holding cost is $0.125 per unit per day, and its production
rate is 250 units per day. What is the optimal production quantity that minimizes total average
annual holding and setup costs? A. 100 B. 1000 C. Square root of 100 D. Square root of 1000 E.
none of above 13. In our quantity discount model, with holding costs given as a percentage of
unit purchasing price, in order for EOQ at the lowest price to be optimal, it must A. have the
lowest TIC B. be feasible C. be to the left of the piece break quantity for that price D. have the
largest quantity compared to all other EOQs E. None of above 14. In basic EOQ model, if lead
time increases from 5 to 10 days, the EOQ will: A. double B. increase, but not double C.
decrease by a factor of 2 D. remain the same E. none of above 15. Which of the following about
basic EOQ model is false: A. A decrease in demand will decrease the EOQ B. If the actual order
quantity is smaller than the EOQ, the annual holding costs is less than the annual ordering costs
C. An increase in holding costs will decrease the EOQ value D. In the EOQ formula there is an
inverse relationship between setup and holding costs E. Annual holding costs and annual
ordering costs are the same at the EOQ point 16. The introduction of quantity discounts will
cause the optimum order quantity to be: A. smaller B. unchanged C. greater D. smaller or
unchanged E. unchanged or greater 17. Which of the following concerning smaller batch size of
production is true? A. processes hold less inventory B. processes is more flexible C. quality
problems are easier to detect D. all of above E. none of above is true 4 18. Aggregate planning
requires which of the following information? A. forecast of expected demand B. current levels of
inventory C. policies regarding employment levels D. all of the above E. none of above 19.
Aggregate planners seek to match supply with demand: A. at minimum overall cost B. by staying
within company policy C. keeping inventories at a minimum D. all of the above E. non of above
20. The direct result of disaggregating the aggregate plan is the: A. marketing plan B. production
plan C. rough-cut capacity plan D. master production schedule E. material requirements plan 21.
Which one of the following most closely describes net material requirements? A. gross
requirements - amount on-hand - scheduled receipts B. gross requirements - planned receipts C.
gross requirements - order releases + amount on-hand D. gross requirements - planned order
releases E. gross requirements - amount on-hand + planned order releases 22. In MRP, under
lot-for-lot ordering, "planned-order receipts" are: A. identical to "scheduled receipts" B. identical
to "planned-order releases" C. open orders (that is, ordered before the first time bucket, but not
delivered yet) D. "gross requirements" E. available to promise inventory 23. The identification of
parent items is called: A. Paternity B. Pegging C. Requirement I.D. D. Relationship tracking E.
Master Scheduling 24. Which of the following is not usually necessary in order to have an
effective MRP system? A. a computer and software B. an accurate bill of materials C. lot-for-lot
ordering D. an up-to-date master schedule E. integrity of file data 5 Questions 25 and 26 are
based on the following: Use the product structure given below (numbers inside brackets indicate
multiplicity). 25. If the net requirements for items A, B, and C are 5, 10, and 5 units respectively,
how many units of item F do we need? Assume no initial on hand stocks. A. 44 B. 160 C. 170 D.
230 E. None of above 26. If there are 100 units initial on-hand inventory for item D, how many
units of item F do we need? A. 80 B. 160 C. 190 D. 210 E. None of above Questions 27 to 31 are
based on the following: Best-law.sg is a recent start-up trying to cater to customers in search of
legal services who are intimidated by the idea of talking to a lawyer or simply too lazy for entering
a law office. Unlike traditional law firms, Best-law.sg allows for extensive interaction between

lawyers and their customers via telephone and the internet. This process is used in the upfront
part of the customer interaction, largely consisting of answering some basic customer questions
prior to entering a formal relationship. In order to allow customers to interact with the firms
lawyers (in fact, the firm rents out lawyers from the prestigious law firm Cohen, Fisher, Pearson,
Terwiesch and Partners), customers are encouraged to send emails to bestlawyer@best-law.sg.
From there, the incoming emails are distributed to the lawyer who is currently on call. Given the
broad skills of the lawyers, each lawyer can respond to each and every incoming request. Emails
arrive from 8am to 6pm at a rate of 10 emails per hour (coefficient of variation for the interarrivals is 1). At each moment in time, there is exactly one lawyer on call, i.e. sitting at his/her
desk, waiting for incoming emails. It takes the lawyer, on average, 5 minutes to write a response
email. The standard deviation of this service time is 4 minutes. 27. What is the average time a
customer has to wait for a response to her/his email, ignoring any transmission times? A. 2
Minutes B. 2.5 Minutes C. 18 Minutes D. 20.5 Minutes E. None of the above 28. How many
emails on average will a lawyer have received at the end of a 10 hour day? A. 10 B. 12 6 C. 100
D. 120 E. None of the above 29. While not responding to emails, the lawyer on call is
encouraged to actively pursue cases that potentially could lead to large settlements. How much
time on a typical average 10h day can a lawyer dedicate to this activity (Assume the lawyer can
instantly switch between emails and work on a settlement)? A. 600 minutes B. 120 minutes C.
100 minutes D. 80 minutes E. None of the above To increase the responsiveness of the firm, the
board of best-law.sg proposes a new operating policy. Under the new policy, the response would
be highly standardized, reducing the standard deviation for writing the response email to 0.5
minutes. The average writing time would remain unchanged. 30. How would the amount of time
that a lawyer dedicates to the search for large settlement cases change with this new policy? A. It
would go up B. It would go down C. It would remain unchanged D. Cannot be determined 31.
What is the average time a customer has to wait for the response to her /his email with this new
policy? A. 5.05 minutes B. 10.225 minutes C. 12.625 minutes D. 14.135 minutes E. None of the
above service time = 5 min, CVservice = 0.5 min / 5 min = 0.1; waiting time = 5 min * [5/6 / (15/6)] * [(12 + 0.12)/2] = 12.63 min Questions 32 and 33 are based on the following: Marisol is
new to town and is in the market for cellular phone service. She has settled on Wildcat Cellular,
which will give her a free phone if she signs a one-year contract. Wildcat offers several calling
plans. One plan that she is considering is called Pick Your Minutes. Under this plan, she would
specify a quantity of minutes, say x, per month that she would buy at 5 per minute. Hence, her
upfront cost would be $0.05x. If her usage is less than this quantity x in a given month, she loses
the minutes. If her usage in a month exceeds this quantity x, she would have to pay 40 for each
extra minute (that is, each minute used beyond x). For example, if she contracts for x=120
minutes per month and her actual usage is 40 minutes, her total bill is $120*0.05 = $6.00.
However, if actual usage is 130 minutes, her total bill would be $120*0.05 + (130 120)*0.40 =
$10.00. The same rates apply whether the call is local or long distance. Once she signs the
contract, she cannot change the number of minutes specified for the one-year contract. Marisol
estimates that her monthly needs are best approximated by the Normal distribution, with a mean
of 250 minutes and a standard deviation of 24 minutes. 32. If Marisol chooses the Pick Your
Minutes plan described above, how many minutes should she contract for? (Pick the closest
answer.) A. 250 B. 260 7 C. 270 D. 280 E. 290 The answer is cu 40 5 35 (not 40!). co 5. Hence
cu 35 0.875. Using z = 1.16, the optimal number of minutes = 250 + 24*1.16 = cu co 40 277.84
minutes. 33. A friend who is studying in the NUS BBA program advises Marisol to increase her
monthly contracted minutes to 280, to reduce her 40-per-minute payments. Under this
recommended contract, whats the probability that Marisol can avoid the 40-per-minute
payments? (Pick the closest answer.) A. 12% B. 34% C. 67% D. 89% E. 95% z = (280250)/24=1.25. P(x<280) = F(z)=0.8944 34. JIT philosophy suggests that workers are A. Assets
B. Liabilities C. Interchangeable D. Replaceable E. To be phased out 35. In the JIT philosophy,

the ideal lot size is: A. the economic order quantity (EOQ) B. the economic run size (EPQ) C. one
unit D. None of above 36. Which of the following is characteristic of the JIT philosophy? A.
Inventories are an asset. B. Lot sizes are optimized by formula. C. Vendors are co-workers,
essentially other departments of our organization. D. Queues are a necessary investment. E. all
of the above 37. A potential obstacle to conversion to a JIT system is: A. lack of management
commitment B. lack of worker cooperation C. supplier resistance D. all of the above E. none of
above 38. Which of the following contributes to the competitive advantage enjoyed by firms using
JIT/lean production? A. Backup employees to cover for absenteeism B. 100% inspection to
remove defects C. Dedicated equipment to reduce unit costs D. Safety stocks to prevent stockouts E. Greater flexibility to cope with change 39. With regard to suppliers, JIT systems typically
involve: 8 A. B. C. D. E. delivery of large lots on short notice the highest quality at the lowest
price long-term relationships multiple suppliers to assure continuous availability dedicated
staging areas for material 40. A common objective of both MRP and JIT is to: A. smooth
production B. minimize inventory C. obtain high quality D. reduce overhead E. eliminate
inventory 41. Which of the following is not a goal of supply chain management? A. fewer
suppliers and long-term relationship B. small lot sizes C. on time deliveries D. lowest possible
transportation costs E. more frequent of delivery 42. Logistics includes all of these except: A. the
movement of materials within a production facility B. incoming shipments of goods or materials
C. outgoing shipments of goods or materials D. customer selection E. returned goods processing
43. Small changes in consumer demand can result in large variations in orders placed by
suppliers due to ___ A. Supply chain B. Safety stock requirement C. Lead time effect D. Bullwhip
effect E. FCFS scheduling 44. Which of the following is not a benefit of effective supply chain
management? A. lower inventory costs B. higher productivity C. shorter lead times D. greater
customer loyalty E. none of above 45. Which of the following is a barrier to integration of
separate organizations in the supply chain? I. conflicting objectives of the companies in the
chain. II. different level of capacity of the companies in the chain. III. reluctance of the
organizations in the chain to allow other organizations access to their data. A. I only B. I and II C.
II and III D. I and III E. I, II and III 9 ...