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(ISMT162)2006fall_Explanation_Quiz_2_ISMT162.pdf
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Quiz 2
Time: 9:00am C 9:50am
(15 Questions, 20 Points)
Note: Each question has 5 choices. There is only ONE correct answer for each question.
Name: Student No.:
Question 1. (1 point) Which is NOT a cost of quality?
A) Prevention cost
B) External failure
C) Extended service contracts
D) Internal failure
E) Appraisal costs
Answer:
Question 2. (1 Point) Fixing a problem will often cost money; to minimize these costs it is best to find and fix the problem:
A) Just before shipping our product to the customer
B) Immediately after we complete the last operation
C) During the design phase
D) Just before we begin the first production operation
E) Regardless of when you fix the problem, costs are about the same
Answer:
Question 3. (1 Point) If average demand for an inventory item is 200 units per day, lead time is three days, and safety stock is 100 units, the reorder point is:
A) 100 units
B) 200 units
C) 300 units
D) 600 units
E) 700 units
Answer:
Question 4. (2 points) Which one of the following is implied by a "lead time" service level of 95 percent?
A) Approximately 95 percent of demand during lead time will be satisfied.
B) Approximately 95 percent of inventory will be used during lead time.
C) The probability is 95 percent that demand during lead time will exactly equal the amount on hand at the beginning of lead time.
D) The probability is 95 percent that demand during lead time will not exceed the amount on hand at the beginning of lead time.
E) None of the above
Answer:
Question 5. (1 point) The quality control improvement tool which distinguishes between the "important few" and the "trivial many" is:
A) Brainstorming.
B) Check sheets.
C) Pareto analysis.
D) Cause-and-effect diagrams.
E) Control charts.
Answer:
Question 6. (2 points) In the Newvendor model, if overage cost is double underage cost, the optimal service level is ___ percent.
A) 100
B) 67
C) 50
D) 33
E) 5
Answer:
Question 7. (1 point) A Type II error occurs when:
A) A bad lot is accepted.
B) A good lot is rejected.
C) A bad lot is rejected.
D) A good lot is accepted.
E) None of the above
Answer:
Question 8. (1 point) Lead time is exactly 20 days long. Daily demand is normally distributed with a mean of 10 gallons per day and a standard deviation of 2 gallons. What is the standard deviation of demand during lead time?
A) 20 x 2
B) 20 x 10
C) 2 times the square root of 20
D) 2 times the square root of 10
E) None of the above
Answer:
Question 9. (2 points) In the quantity discount model, with carrying cost stated as a percentage of unit purchase price, i