MGT 2070 – Sample Midterm

This examination will give you some additional practice and experience with the type of problems to be expected on the midterm examination.

Information on the Actual Midterm Examination

Time: Three hoursQuestions: 40% multiple choice, 60% problem / calculationMaterials: Closed-book and closed-notes. The formulae shown will be provided in the midterm examination.Calculators: Any calculator may be used, but programmable calculators containing notes or additional formulae will be considered cheating.Chapters Covered: 1 through 9 inclusive

Formulae

1. Moving Average Forecast =

2. Weighted Moving Average Forecast =

3. Exponential Smoothing Forecast Ft = Ft-1 + (At-1 – Ft-1)

4. Mean Absolute Deviation =

5. Mean Squared Error =

6. Exponential Smoothing with Trend Adjustment Forecast Ft = (At-1) + (1 - )(Ft-1 + Tt-1)

7. Exponential Smoothing with Trend Adjustment Trend Tt = (Ft – Ft-1) + (1 - )T t-1

8. Least Squares Trend Projection , ,

9. Seasonal Forecast Average Monthly Demand =

10. Seasonal Forecast Seasonal Index =

11. Regression Analysis , ,

12. Standard Error of Estimate

13. Correlation Coefficient

14. Statistical Process Control

Multiple Choice

1. Which of the following is not a typical service attribute?

a) intangible product b) often easy to automatec) customer interaction is high d) simultaneous production and consumption

2. Gibson Valves produces cast bronze valves on an assembly line, currently producing 1600 valves each 8-hour shift. If the production is increased to 2400 valves each 8-hour shift, the productivity will increase by

a) 50% b) 40%c) 25% d) 20%

3. Which of the following statements about organizational missions is false?

a) They reflect a company’s purpose. b) They define a company’s reason for existence.c) They provide guidance for functional d) They are formulated after strategies are known. area missions.

4. Which of the following is not an operations strategy?

a) response b) low costc) differentiation d) technology

5. Firms are dispersing production processes to take advantage of national differences in

a) labour cost b) facilitiesc) capital d) all of the above

6. Which of the international operations strategies involves high cost reductions and high local responsiveness?

a) international strategy b) global strategyc) transnational strategy d) multidomestic strategy

7. A forecast with a time horizon of about 3 months to 3 years is typically called a

a) long-range forecast b) medium-range forecastc) short-range forecast d) strategic forecast

8. What is the approximate forecast for May using a four-month moving average?

Nov Dec Jan Feb Mar Apr39 36 40 38 48 46

a) 38 b) 41c) 42 d) 43

9. In which stage of the product life cycle should product strategy focus on process modifications?

a) introduction b) growthc) maturity d) decline

10. The dimensions, tolerances, materials, and finishes if a component are typically shown on

a) an engineering drawing b) a bill of materialsc) an assembly drawing d) a route sheet

11. ISO 9000 seeks standardization in terms of

a) products b) production proceduresc) procedures to manage quality d) suppliers’ specification

12. The process improvement technique that sorts the “vital few” from the “trivial many” is

a) Pareto analysis b) benchmarkingc) brainstorming d) Yamaguchi analysis

__13. The purpose of an X chart is to determine whether there has been a

a) gain or loss in uniformity b) change in the percent defectivec) change in the number of defects in a sample d) change in the central tendency of the process

output

14. The mean and the standard deviation for a process for which we have a substantial history are 160 and 2, respectively. What is the mean of the sampling distribution?

a) 0.125 b) 2c) 40 d) none of the above

15. A job shop is an example of a(n)

a) repetitive process b) intermittent processc) continuous process d) line process

16. A drawing of the movement of material, product, or people is a(n)

a) process chart b) service blueprintingc) process map d) flow diagram

17. “Automatic placement and withdrawal of parts and products into and from designated places in a warehouse” describes

a) ASRS b) AGVc) CAD/CAM d) CIM

18. A location decision for a traditional department store (The Bay) would tend to have a(n)

a) cost focus b) revenue focusc) labour focus d) environmental focus

19. The main issue in designing process layouts concerns the relative positioning of

a) work stations b) raw materialsc) departments d) entrances, loading docks, etc.

20. In a product layout, the process of deciding how to assign tasks to work stations is referred to as

a) process balancing b) task allocationc) line balancing d) work allocation

Problem / Calculation

1. Weekly sales of copy paper at Cubicle Suppliers are in the table below. Forecast week 8 with a three-period moving average and with a four-period moving average. Compute MAD for each forecast. Which model is more accurate?

Week Sales (cases)1 172 223 274 325 196 187 22

2. The following trend projection is used to predict quarterly demand: Y = 350 – 2.5t, where t = 1 in the first quarter of 1998. Seasonal (quarterly) relatives are Quarter 1 = 1.5, Quarter 2 = 0.8, Quarter 3 = 1.1, and Quarter 4 = 0.6. What is the seasonally adjusted forecast for the four quarters of 2000?

3. Favors Distribution Company purchases small imported trinkets in bulk, packages them, and sells them to retail stores. They are conducting an inventory control study of all their items. The following data are for one such item, which is not seasonal.a) Use trend projection to estimate the relationship between time and sales (state the equation).b) Calculate forecasts for the first four months of the next year.

Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecSales 51 55 54 57 50 68 66 59 67 69 75 73

4. Marie Bain is the product manager at a company that manufactures hot water heaters. Marie needs a demand forecast for the next few years to help decide whether to add new production capacity. The company’s sales history (in thousands of units) is shown in the table below. Use exponential smoothing with trend adjustment, to forecast demand for period 6. The initial forecast for period 1 was 10 units; the initial estimate of trend was 0. The smoothing constants are = 0.4 and = 0.3.

Period 1 2 3 4 5 6Actual 12 15 16 16 18 20

5. Arnold Tofu owns and operates a chain of 12 vegetable protein “hamburger” restaurants in northern Louisiana. Sales figures and profits for the stores are in the table below. Sales are given in millions of dollars; profits are in hundreds of thousands of dollars. Calculate a regression line for the data. What is your forecast of profit for a store with sales of a) $24 million, and b) $30 million?

Store Sales Profits Store Sales Profits1 7 15 7 16 242 2 10 8 12 203 6 13 9 14 274 4 15 10 20 445 14 25 11 15 34

6 15 27 12 7 17

6. A contractor for the military is looking for a new location for a supply depot. The depot will supply four bases whose tonnage (demand) and map coordinates are shown below. If management wants the depot to have a central location, what should its map coordinates be?

Base (X,Y) Coordinates TonnageFort Able (35,120) 40,000Base Baker (70,45) 50,000Camp Charlie (100,15) 25,000Camp Delta (60,90) 80,000

7. An assembly line has been designed to make battery-powered beverage mixers. Task details are shown in the table below:

Station Task Assigned Task Time (minutes)1 1 3.02 3; 4 1.5; 2.03 2; 5; 6 0.5; 1.5; 1.04 7 3.05 8 2.56 9; 10; 11 2.0; 1.0; 0.5

a) What is the assigned cycle time (in minutes).b) What is the maximum output rate of this line in mixers per hour?c) What is the total idle time per cycle?d) What is the assembly line’s efficiency?

Answers – Multiple Choice

1. b 2. a 3. b 4. d 5. d 6. c 7. b

8. d 9. a 10. a 11. c 12. a 13. d 14. d

15. b 16. d 17. a 18. b 19. c 20. c

Answers – Problem / Calculation

1. The forecast with 3ma is 19.7; with 4ma the forecast is 22.8. The four-week moving average is more accurate.

2. Period Projection Adjusted9 327.5 491.2510 325 26011 322.5 354.7512 320 192

3. The trend equation is Y = 48.32 + 2.105 T. The next four months are forecast to be 75.68, 77.79, 79.89, and 82.00.

4. FIT = 19.24

5. The regression equation is Y = 5.0601 + 1.593X where Y = profit, X = sales.a) $43.3 b) $52.85

6. The depot should be located near X=63, Y=75

7. a) 3.5 minutes (governed by stations 2 and 6)b) 60 / 35 = 17.14 units per hourc) 0.5 + 0 + 0.5 + 0.5 + 1.0 + 0 = 2.5 minutesd) 18.5 / 21 = 88.1%