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(ISMT162)2006fall_Explanation_Quiz_2[1].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: C

Solution:
Please refer to the section of The Costs of Quality at Page 409.


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: C

Solution:
Please refer to the sections of The Determinants of Quality at Page 405 and Responsibility for Quality at Page 408.







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: E

Solution:
R = 2003+100 =700 units

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: D

Solution:
Please refer to Slide 7 and 8 in the lecture note of Reorder Point Systems.


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: C

Solution:

Please refer to the section of Pareto Analysis at Page 427.



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: D

Solution:
Overage cost = 2 Underage cost
Service Level = 1/(1+2) =33%


Question 7. (1 point) A Type II error occurs when:
A) A bad lot is accepted.
B) A good lot is rejected.
C)