SPC and operations basics
1
In statistical process control, a process is in control if the only source of variation is normal (or natural) variation. True or False?
2
The critical path method determines the minimum possible time to complete a project. True or False?
3
Benchmarking is the process of selecting the best practices to use as a standard for performance. True or False?
4
A type-I error in statistical process control is when we take a corrective action but the process is really in control. True or False?
5
Typically, the higher the gross margin of a product, the higher the inventory turns per year. True or False?
6
In an EOQ inventory system, order sizes are always the same. True or False?
7
Assuming deterministic demand and known demand rate, in the EOQ model there should be no lost sales. True or False?
8
One reason a company holds inventory is to take advantage of quantity discounts in shipment. True or False?
9
Under the wholesale contract, the retailer orders more units than under the first-best solution. True or False?
10
In a supply chain, capital flows from downstream to upstream; while materials flow from upstream to downstream. True or False?
11
When performing the greedy method of project crashing, it is possible to crash two or more activities on the same critical path in the same time period.
12
In statistical process control, assuming that all else is held constant, if we decrease the upper control limit on the R-chart and increase the lower control limit on the R-chart, then the probability of committing a Type I error decreases.
13
The critical path method finds the minimal amount of time to complete the project.
14
The greedy method of project crashing will always produce an optimal solution.
15
The main goal of 6 sigma is to reduce the number of defects in manufacturing processes by reducing process variability.
16
The optimal amount to order in the EOQ model is where average fixed ordering costs per unit time are double the average inventory holding costs per unit time.
17
One of the key features of the Newsvendor problem is that demand is know.
18
In a wholesale contract, the supplier chooses a price to maximizes the total profit of the supply chain.
19
A shoe company hired a logistic firm to manage and transport its inventories. Then that
logistic firm is part of the supply chain.
20
In project management, the latest start time of an activity is equal to the mini-
mum of the earliest finish times of the activities immediately preceding it.
21
In project crashing, the greedy method never yields the optimal solution.
22
One of the key features of the newsvendor problem is that demand is stochastic
(i.e., random).
23
In statistical process control, increasing the upper control limit on the ¯x-chart will
increase the probability of committing a Type II error.
24
All else being equal in the EOQ model, the optimal frequency at which to place
orders decreases as the fixed ordering cost increases.
25
Assume that we are using the greedy algorithm for project crashing for three steps
(each step, we are crashing one time period). If in the first step an activity is non-critical, then this activity will always remain non-critical for the next steps.
26
In the EOQ model, if one orders according to the optimal order quantity, then average
fixed ordering costs per unit time are equal to the average purchasing costs per unit time.
27
In the Cargo case, Cargo needed to convince its supplier that the supplier’s profit
under a properly designed revenue sharing contract is higher than the supplier’s profit under the optimal wholesale price contract, in order to persuade the supplier to choose the revenue sharing contract.
28
Regarding the comparison between the constant order policy and the order-up-to policy, which of the following statement is FALSE
29
Regarding the difference between the Newsvendor model and the EOQ model, which of the following statements is FALSE ?
30
Which of the following statement about the lead time (time between placing and receiving an order) is FALSE?
31
Which of the following is NOT a property of the EOQ model when the optimal order quantity is used ?
32
Which of the following is not an objective in the management of a supply
chain?
33
Which statement is TRUE about Project Management ?
34
Which of the following statement about the concept of ”six-sigma” in quality management is TRUE?
Feedback
In control means only natural variation remains.
CPM identifies the longest path that governs project duration.
Benchmarking adopts superior practices as standards.
Type I = false alarm; action taken though in control.
Higher margin often means slower turnover, not higher.
EOQ assumes fixed order quantities to minimize total cost.
With known demand, inventory policy aims to meet all demand.
Quantity discounts encourage stock buildup.
Double marginalization typically reduces orders under wholesale contracts.
Cash moves toward customers; materials move toward the end consumer.
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Test your knowledge about the 5 seeing habits discussed in the text 'UPS 5 seeing habits'.