TAKE HOME MIDTERM EXAM (due May 4, 2004)
Dr. Greg Magnan
MBA 518, Spring, 2004NAME:
•Select the best answer for each multiple-choice question.
•Please ask for clarification if you are not sure what the question is asking.
•Do NOT make the questions harder than they are.
•The exam has a total of 27 points possible (eight 1-point multiple choice, four 3-point short answer, one 3-point problem, and one 4-point short answer).
1.After an airplane arrives at its gate and passengers disembark, it is cleaned, restocked with food and beverages, and refueled by maintenance workers before the next set of passengers board and the airplane departs. The activities performed by maintenance workers are considered:
a.customer actionsb.“onstage” contact employee actions
c.audience actionsd.support processes
e.“backstage” contact employee actions
2.Positioning strategy (product focus vs. process focus) is linked closely to factors such as product volume and the flow pattern. Which of the following patterns is most consistent?
a.low volume / line flow / product focus
b.high volume / “spaghetti” flow / product focus
c.low volume / “spaghetti” flow / process focus
d.high volume / line flow / process focus
3.Which one of the following statements regarding positioning strategy is best?
a.When more emphasis is placed on low prices, a process focus is more attractive.
b.When particular emphasis is given to product flexibility and breadth, a product focus is more appropriate.
c.A process focus is more appropriate in the earlier stages of a life cycle.
d.A product focus is more attractive for products with short life cycles.
4.Which of the following statements regarding inventory is true?
- Maintaining inventory can contribute to a firm’s ability to compete on delivery speed.
- Lower inventory levels reduce the burden on a firm’s working capital.
- Firms that substitute their cost of capital rate as their inventory carrying cost rate often overestimate their total carrying costs.
- Inventory used to account for differences in processing speed between adjacent processes is called replacement inventory
- “E-tailers” such as Amazon.com can reduce their carrying costs by centralizing inventory, rather than holding inventory in multiple branch locations as brick-and-mortar stores must.
- I, II, and III b.I, IV, and V
c.II, III, and Vd.I, II, and V
e.II, IV, and V
- Which of the following statements is false:
- Mt.AuburnHospital responded to medication dispensing errors with the new POE system.
- Perhaps 60-70% of product costs are determined at the design stage.
- Eli Whitney was among the first to develop standard methods of production.
- American Connector produced both custom and standard parts using the same production system.
- Adopting a “mass customization” strategy requires a process-focused approach to manufacturing.
6. Which one of the following statements about internal failure costs is true?
a.They include items such as process design, product design, vendor
programs, failsafing, and employee training.
b.They result in increased market share[change this]
c.They increase as process quality increases
d.They include hidden costs such as labor hours, longer lead times and
increased inventory levels.
e.none of the above are true.
7. The line-flow layout organizes resources around products or product families. Which of the following best characterizes a line-flow layout?
- jumbled flow of materials
- particularly vulnerable to changes in product mix/broad product lines
- larger WIP inventory
- flexible materialhandling devices
- use of general purpose equipment
8.Competitive priorities define the dimensions on which a firm’s products or services should excel. Which one of the following statements regarding this concept is best?
a.The strategy of emphasizing lower price is most appropriate when the product is highly differentiated and currently in the growth stage of the life cycle.
b.All competitive priorities should be equally emphasized in order to service an increasingly competitive market.
c.There sometimes are tradeoffs among the multiple dimensions of competitive priorities; thus the best emphasis is situational and depends on customers and markets.
d.It is impossible for a firm to improve cost and quality simultaneously.
e.A firm that competes on the dimension of customization tends to offer products or services with long life cycles.
Short Answer Section
NOTE: Questions 9-14 are worth 3 points and each answer should be no longer than two paragraphs. Please type your responses (double-spaced). Be sure to address the questions! [A “paragraph” need not be a full page in length--about 3 or 4 sentences will work. If you want to write more you can, although full credit can be earned with two, 3-4 sentence paragraphs.]
Select any FOUR 3-point questions from questions 9-14
9.What are the possible consequences of defining a marketing strategy without consideration of the firm’s process strategy/process selection?
- Combining the notion of creating and implementing variety from Ramdas (Managing Product Variety: An Integrative Review And Research Directions,” Ramdas, 2003) and the experiences of NMS (“Driven By Demand: A Case Study,” Arntzen and Shumway, 2002), identify, classify and describe THREE initiatives undertaken at NMS to support a move to build-to-order (BTO).
11.In what ways can reducing setup/changeover time help a company? Why? What is the relationship between setup/changeover time and lot sizes?
12.In the articleCritical Success Factors for Controlling and Managing Hospital Errors” by McFadden (2004), they mention seven critical success factors. In the article, “Nobody Ever gets Credit for Fixing Problems that Never Happened”” by Repenning and Sterman (2001), they present a system view of why quality programs fail. For three of the CSFs, identify and briefly describe how theyappear in the system dynamics model of Repenning & Sterman.
13.From Industry Week’s Best Plants 2003 competition, identify six techniques General Cable is using to improve their operations and company. Briefly describe how each technique or tactic contributes. (Click here forlink to article)
14.From the American Connector case, identify and briefly describe threeways in which ACC supported the competitive priority of product flexibility and three ways in which DJC supported the competitive priority of cost.
All students must answer questions 15 AND 16
15.(3 points) Wayne’s Hardware is proud of their service commitment and they like to claim that customers can find what they want on the shelf 99 percent of the time. Given the following information regarding a specific hammer, determine (a) the order quantity (using EOQ) and (b) the re-order point. Also, determine (c) the difference in cost of this policy vs. one calling for an 80% service level.
annual demand=10,000 units
average demand=35 units/day
lead time=4 days (fixed)
standard deviation of demand=5 units/day
hammer cost to Wayne’s=$10/unit
annual holding cost=30% of cost of product
ordering cost=$50/order
16.(4 points)Both in class and through several readings, we have discussed the trend of firms moving toward “build-to-order” models. What benefits / competitive priorities are supported by a move to BTO? What are the challenges in moving to BTO? [use examples from the readings to support your claims.]
THESE QUESTIONS DO NOT COUNT TOWARD YOUR GRADE
Please hand in this page separately when you turn in your exam.
There is no need to put your name on this page.
1.Please rate the level of difficulty of the multiple choice questions.
a.very difficultb.fairly difficult
c.reasonabled.fairly easye.too easy
2.Please rate the level of fairness of the multiple choice questions.
a.very unfairb.fairly unfair
c.reasonabled.quite faire.hey, like wow, really fair
3.Please rate the level of difficulty of the short answer questions.
a.very difficultb.fairly difficult
c.reasonabled.fairly easye.too easy
4.Please rate the level of fairness of the short answer questions.
a.very unfairb.fairly unfair
c.reasonabled.quite faire.hey, like wow, really fair
5.Was this exam easier, about the same, or more difficult than you expected (circle one)?
6.Approximately how many hours did you spend on this exam?
7.Was this less, about the same, or more work than expected (circle one)?
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