MBA Operations Management - Test Bank - Chapter 16

Operations Management, 12e (Heizer/Render/Munson)
Chapter 16  Lean Operations

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Section 1   Lean Operations

1) TPS stands for Toyota Production System.
Answer:  TRUE
Diff: 1
Key Term:  Toyota Production System (TPS)
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

2) TPS stands for Total Production Streamlining.
Answer:  FALSE
Diff: 1
Key Term:  Toyota Production System (TPS)
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

3) Product storage is an example of waste in the sense that no value is added.
Answer:  TRUE
Diff: 2
Key Term:  Seven wastes
Objective:  LO 16.2 Define the seven wastes and the 5Ss
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

4) In a JIT system, product inspection adds value by identifying defective items.
Answer:  FALSE
Diff: 2
Key Term:  Just-in-Time (JIT)
AACSB:  Reflective thinking
Objective:  LO 16.2 Define the seven wastes and the 5Ss
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.


5) Customer demand will always remain an unknown, so it is not considered a source of variability.
Answer:  FALSE
Diff: 2
Key Term:  Variability
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
6) Variability in manufacturing can occur because engineering drawings or specifications are incomplete or inaccurate.
Answer:  TRUE
Diff: 2
Key Term:  Variability
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.


7) A push system means providing the next station with exactly what is needed when it is needed.
Answer:  FALSE
Diff: 2
Key Term:  Pull system
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

8) Waste is anything that does not add value from the consumer's perspective.
Answer:  TRUE
Diff: 2
Key Term:  Seven wastes
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

9) Increasing inventory exposes variability in production processes.
Answer:  FALSE
Diff: 2
Key Term:  Variability
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

10) The 5Ss—sort/segregate, simplify/straighten, shine/sweep, standardize, and sustain/self-discipline—are important to lean production because they act as a means to reduce waste.
Answer:  TRUE
Diff: 1
Key Term:  5Ss
Objective:  LO 16.2 Define the seven wastes and the 5Ss
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

11) When implemented as a comprehensive operations strategy, JIT, TPS, and lean systems sustain competitive advantage and result in increased overall returns.
Answer:  TRUE
Diff: 2
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
12) What does TPS stand for?

1. A) Total Production Streamlining
2. B) Toyota Production System
3. C) Taguchi's Production S's
4. D) Total Process Simplification
5. E) Transparent Processing System

Answer:  B
Diff: 1
Key Term:  Toyota Production System (TPS)
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.


13) Which of the following is generally found in most Lean environments?

1. A) a push or pull system, depending upon the rate of demand
2. B) a push system for high margin items and a pull system for low margin items
3. C) a push system for purchased parts and a pull system for manufactured parts
4. D) push systems
5. E) pull systems

Answer:  E
Diff: 2
Key Term:  Pull system
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

14) Which of the following is NOT a source of variability?

1. A) Employees, machines, and suppliers produce units late.
2. B) Customer demand is unknown.
3. C) Employees, machines, and suppliers produce units that conform to standards.
4. D) Engineering drawings are inaccurate.
5. E) Drawings or specifications are incomplete.

Answer:  C
Diff: 1
Key Term:  Variability
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

15) Which of the following is specifically characterized by a focus on continuous improvement, respect for people, and standard work practices?

1. A) Just-in-time (JIT)
2. B) Toyota Production System (TPS)
3. C) Lean operations
4. D) Material requirements planning (MRP)
5. E) kanban

Answer:  B
Diff: 2
Key Term:  Toyota Production System (TPS)
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
16) Which of the following is specifically characterized by continuous and forced problem solving via a focus on throughput and reduced inventory?

1. A) Just-in-time (JIT)
2. B) Toyota Production System (TPS)
3. C) Lean operations
4. D) Material requirements planning (MRP)
5. E) kanban

Answer:  A
Diff: 2
Key Term:  Just-in-Time (JIT)
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

17) Which of the following statements regarding a pull system is TRUE?

1. A) Large lots are pulled from upstream stations.
2. B) Work is pulled to the downstream stations before it is actually needed.
3. C) Manufacturing cycle time is increased.
4. D) Problems become more obvious.
5. E) None of the above is true of a pull system.

Answer:  D
Diff: 2
Key Term:  Pull system
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

18) Manufacturing cycle time is best defined as the:

1. A) length of the work shift, expressed in minutes per day.
2. B) time it takes a unit to move from one workstation to the next.
3. C) time between the start of one unit and the start of the next unit.
4. D) sum of all the task times to make one unit of a product.
5. E) time from raw materials receipt to finished product exit.

Answer:  E
Diff: 2
Key Term:  Manufacturing cycle time
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

19) Which of the following is specifically characterized by the elimination of waste through a focus on exactly what the customer wants?

1. A) Just-in-time (JIT)
2. B) Toyota Production System (TPS)
3. C) Lean operations
4. D) Material requirements planning (MRP)
5. E) kanban

Answer:  C
Diff: 2
Key Term:  Lean operations
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
20) Which of the following is NOT one of the Seven Wastes?

1. A) overproduction
2. B) transportation
3. C) assignment
4. D) defective product
5. E) motion

Answer:  C
Diff: 1
Key Term:  Seven wastes
Objective:  LO 16.2 Define the seven wastes and the 5Ss
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.


21) The 5Ss:

1. A) have the "flavor" of a housekeeping list.
2. B) are a checklist for lean operations.
3. C) have become a list of seven items in American practice.
4. D) can be used to assist with necessary changes in organizational culture.
5. E) All of these are true.

Answer:  E
Diff: 2
Key Term:  5Ss
Objective:  LO 16.2 Define the seven wastes and the 5Ss
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

22) The list of 5Ss, although it looks like a housekeeping directive, supports lean production by:

1. A) identifying non-value items and removing them, in the "sort/segregate" category.
2. B) reducing inventory, in the "standardize" category.
3. C) increasing variability through standardized procedures, in the "standardize" category.
4. D) eliminating wasted motion through ergonomic studies, in the "support" category.
5. E) building good safety practices, in the "shine/sweep" category.

Answer:  A
Diff: 2
Key Term:  5Ss
Objective:  LO 16.2 Define the seven wastes and the 5Ss
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

23) ________ is any deviation from the optimum process that delivers perfect product on time, every time.
Answer:  Variability
Diff: 2
Key Term:  Variability
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
24) A(n) ________ is a concept that results in material being produced only when requested and moved to where it is needed just as it is needed.
Answer:  pull system
Diff: 2
Key Term:  Pull system
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

25) The ________ is the time between the arrival of raw materials and the shipping of finished products.
Answer:  manufacturing cycle time
Diff: 2
Key Term:  Manufacturing cycle time
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.


26) TPS stands for ________.
Answer:  Toyota Production System
Diff: 1
Key Term:  Toyota Production System (TPS)
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

27) The 5S category ________ includes analysis to improve workflow and reduce wasted motion.
Answer:  simplify/straighten or simplify
Diff: 2
Key Term:  5Ss
Objective:  LO 16.2 Define the seven wastes and the 5Ss
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

28) Handling material more than once is an example of the waste called ________.
Answer:  transportation
Diff: 2
Key Term:  Seven wastes
Objective:  LO 16.2 Define the seven wastes and the 5Ss
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

29) What does TPS stand for?
Answer:  Toyota Production System
Diff: 1
Key Term:  Toyota Production System (TPS)
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
30) Differentiate between a push and a pull system.
Answer:  A push system dumps orders on the next downstream workstation, regardless of timeliness and resource availability. A pull system uses signals to request production and delivery from upstream stations to the station that has production facilities available. In a pull system, materials or parts are pulled where they are needed when they are needed.
Diff: 2
Key Term:  Pull system
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

31) Define manufacturing cycle time.
Answer:  Manufacturing cycle time is the time between the arrival of raw materials and shipment of finished products.
Diff: 2
Key Term:  Manufacturing cycle time
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.


32) Identify three major sources of variability.
Answer:

1. Poor production processes that allow employees and suppliers to produce improper quantities or late or non-conforming units
2. Unknown customer demands
3. Incomplete or inaccurate drawings, specifications, and bills of material

Diff: 3
Key Term:  Variability
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

33) What are the 5Ss? Why does the list of the 5Ss sometimes have seven elements?
Answer:  The five categories are sort/segregate, simplify/straighten, shine/sweep, standardize, and sustain/self-discipline. American practice often adds safety and support/maintenance.
Diff: 2
Key Term:  5Ss
Objective:  LO 16.2 Define the seven wastes and the 5Ss
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

34) Identify Ohno's Seven Wastes.
Answer:  The seven are: overproduction, queues, transportation, inventory, motion, overprocessing, and defective product.
Diff: 2
Key Term:  Seven wastes
Objective:  LO 16.2 Define the seven wastes and the 5Ss
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
35) How are lean operations and the Toyota Production System (TPS) alike? How are they different?
Answer:  Lean operations and TPS are basically synonymous, and the two terms are often used interchangeably. Lean operations places more emphasis on understanding the customer; TPS places more emphasis on employee learning and empowerment in an assembly-line environment.
Diff: 2
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

Section 2   Lean and Just-in-Time

1) JIT brings about competitive advantage by faster response to the customer regardless of cost.
Answer:  FALSE
Diff: 2
Key Term:  Just-in-Time (JIT)
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

2) One goal of JIT partnerships is the removal of in-plant inventory by delivery in small lots directly to the using department as needed.
Answer:  TRUE
Diff: 1
Key Term:  JIT partnerships
Objective:  LO 16.3 Identify the concerns of suppliers when moving to supplier partnerships
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

3) Many suppliers feel that having a variety of customers is better than being tied to long-term contracts with one customer.
Answer:  TRUE
Diff: 2
Key Term:  JIT partnerships
Objective:  LO 16.3 Identify the concerns of suppliers when moving to supplier partnerships
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

4) JIT suppliers have concerns that the JIT firm's demands for small lot sizes are simply a way of transferring holding cost from the JIT firm to the suppliers.
Answer:  TRUE
Diff: 2
Key Term:  JIT partnerships
Objective:  LO 16.3 Identify the concerns of suppliers when moving to supplier partnerships
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

5) A common JIT layout tactic is to minimize distance.
Answer:  TRUE
Diff: 2
Key Term:  Just-in-Time (JIT)
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
6) Cross-training is a common JIT layout tactic to improve flexibility.
Answer:  TRUE
Diff: 2
Key Term:  Just-in-Time (JIT)
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

7) JIT systems carry inventory just in case something goes wrong.
Answer:  FALSE
Diff: 2
Key Term:  Just-in-time inventory
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

8) Hidden problems are generally uncovered during the process of reducing inventory.
Answer:  TRUE
Diff: 2
Key Term:  Just-in-time inventory
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

9) A scheduler may find that freezing the portion of the schedule closest to the due dates allows the production system to function and the schedule to be met.
Answer:  TRUE
Diff: 2
Key Term:  Just-in-Time (JIT)
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.


10) The first step in reducing setup times is the separation of setup into preparation activities and actual setup, so that as much work as possible can be done while the machine or process is operating.
Answer:  TRUE
Diff: 2
Key Term:  Just-in-Time (JIT)
Objective:  LO 16.4 Determine optimal setup time
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

11) Level scheduling means producing at a constant rate, regardless of customer demands.
Answer:  FALSE
Diff: 1
Key Term:  Level schedules

12) With level schedules, a few large batches, rather than frequent small batches, are processed.
Answer:  FALSE
Diff: 2
Key Term:  Level schedules
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
13) The number of kanbans decreases as safety stock is increased.
Answer:  FALSE
Diff: 1
Key Term:  Kanban
AACSB:  Written and oral communication
Objective:  LO 16.5 Define kanban
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

14) A kanban system requires that the process has little variability in lead time because shortages impact the entire production system.
Answer:  TRUE
Diff: 2
Key Term:  Kanban
AACSB:  Written and oral communication
Objective:  LO 16.5 Define kanban
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

15) The quality management tool called poka-yoke is not relevant to JIT systems.
Answer:  FALSE
Diff: 2
Key Term:  Just-in-Time (JIT)
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.


16) Concerning relationships with suppliers, which of the following combinations is critical to the success of JIT?

1. A) close relationships with trust
2. B) close relationships with skepticism
3. C) distant relationships with trust
4. D) distant relationships with skepticism
5. E) none of the above

Answer:  A
Diff: 1
Key Term:  JIT partnerships
Objective:  LO 16.3 Identify the concerns of suppliers when moving to supplier partnerships
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

17) Which one of the following is not a benefit of JIT implementation?

1. A) cost reduction
2. B) variability increase
3. C) rapid throughput
4. D) quality improvement
5. E) rework reduction

Answer:  B
Diff: 1
Key Term:  Just-in-Time (JIT)
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
18) If the goals of JIT partnerships are met, which of the following is a result?

1. A) For incoming goods, receiving activity and inspection are outsourced.
2. B) In-transit inventory falls as suppliers are located closer to facilities.
3. C) Suppliers maintain a variety of customers to reduce risk.
4. D) In-plant inventory replaces in-transit inventory.
5. E) All of the above are consequences of meeting the JIT partnership goals.

Answer:  B
Diff: 2
Key Term:  JIT partnerships
Objective:  LO 16.3 Identify the concerns of suppliers when moving to supplier partnerships
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

19) Which one of the following is a characteristic of a JIT partnership?

1. A) third-party logistics never used
2. B) maximal product specifications imposed on supplier
3. C) active pursuit of vertical integration
4. D) removal of incoming inspection
5. E) frequent deliveries in large lot quantities

Answer:  D
Diff: 2
Key Term:  JIT partnerships
Objective:  LO 16.3 Identify the concerns of suppliers when moving to supplier partnerships
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.


20) Characteristics of just-in-time partnerships do NOT include:

1. A) removal of in-transit inventory.
2. B) large lot sizes to save on setup costs and to gain quantity discounts.
3. C) long-term contracts.
4. D) produce with zero defects.
5. E) focus on core competencies.

Answer:  B
Diff: 2
Key Term:  JIT partnerships
Objective:  LO 16.3 Identify the concerns of suppliers when moving to supplier partnerships
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

21) Which of the following is not a goal of JIT partnerships?

1. A) removal of unnecessary activities
2. B) removal of in-plant inventory
3. C) removal of in-transit inventory
4. D) inspect all incoming shipments to ensure zero defects
5. E) All of the above are goals of JIT partnerships.

Answer:  D
Diff: 2
Key Term:  JIT partnerships
Objective:  LO 16.3 Identify the concerns of suppliers when moving to supplier partnerships
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
22) Which of the following is NOT a goal of JIT partnerships?

1. A) removal of unnecessary activities
2. B) removal of in-plant inventory
3. C) removal of in-transit inventory
4. D) obtain improved quality and reliability
5. E) All of the above are goals of JIT partnerships.

Answer:  E
Diff: 2
Key Term:  JIT partnerships
Objective:  LO 16.3 Identify the concerns of suppliers when moving to supplier partnerships
Learning Outcome:  Discuss factors affecting location decision and describe common methods for location selection

23) Which one of the following is a concern expressed by suppliers in JIT partnerships?

1. A) having too many customers
2. B) delivery to the point of use
3. C) having limited ability to respond to changes in product and quality
4. D) large lot sizes
5. E) customers' infrequent engineering changes

Answer:  C
Diff: 2
Key Term:  JIT partnerships
Objective:  LO 16.3 Identify the concerns of suppliers when moving to supplier partnerships
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.


24) How can a reduction of in-transit inventory be encouraged?

1. A) supplier location near plants
2. B) high setup costs
3. C) low carrying costs
4. D) use of trains, not trucks
5. E) low-cost, global suppliers

Answer:  A
Diff: 2
Key Term:  JIT partnerships
Objective:  LO 16.3 Identify the concerns of suppliers when moving to supplier partnerships
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

25) In JIT partnerships, suppliers have several concerns. Which of the following is NOT such a concern?

1. A) desire for diversification
2. B) poor customer scheduling
3. C) small lot sizes
4. D) producing high enough quality levels
5. E) customers' infrequent engineering changes

Answer:  E
Diff: 1
Key Term:  JIT partnerships
Objective:  LO 16.3 Identify the concerns of suppliers when moving to supplier partnerships
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
26) Which of the following is NOT a concern of suppliers as they prepare to enter into JIT partnerships?

1. A) Suppliers feel that they would be less at risk if they contracted with more than one customer.
2. B) Suppliers are concerned that customers will present frequent engineering changes with inadequate lead time to deal with them.
3. C) Suppliers feel that their processes are suited for larger lot sizes than the customer wants.
4. D) Suppliers are concerned that frequent delivery of small quantities is economically prohibitive.
5. E) All of the above represent JIT supplier concerns.

Answer:  E
Diff: 2
Key Term:  JIT partnerships
Objective:  LO 16.3 Identify the concerns of suppliers when moving to supplier partnerships
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

27) Just-in-time systems make demands on layouts, including the need for:

1. A) distance reduction.
2. B) increased flexibility.
3. C) reduced space and inventory.
4. D) cross-trained, flexible employees.
5. E) all of the above

Answer:  E
Diff: 2
Key Term:  Just-in-Time (JIT)
Objective:  LO 16.1 Define Lean operations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.


28) Which one of the following is NOT a layout tactic in a JIT environment?

1. A) work cells for families of products
2. B) fixed equipment
3. C) minimizing distance
4. D) little space for inventory
5. E) poka-yoke devices

Answer:  B
Diff: 2
Key Term:  Just-in-Time (JIT)
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

29) Who is credited with coining the phrase, "Inventory is evil"?

1. A) Poka Yoke
2. B) Pat "Keiretsu" Morita
3. C) Kanban Polka
4. D) Shigeo Shingo
5. E) Taiichi Ohno

Answer:  D
Diff: 2
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
30) Which one of the following statements is TRUE regarding JIT inventory?

1. A) It exists just in case something goes wrong.
2. B) It is the minimum inventory necessary to keep a perfect system running.
3. C) It hides variability.
4. D) It is minimized with large lot production.
5. E) It increases if setup costs decrease.

Answer:  B
Diff: 2
Key Term:  Just-in-time inventory
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.


31) A firm wants to develop a level material use schedule based on the following data. What should be the setup cost?

Desired lot size:	60
Annual demand:	40,000
Holding cost:	$20 per unit per year
Daily production rate:	320
Work days per year:	250

1. A) $0.45
2. B) $4.50
3. C) $45
4. D) $450
5. E) $500

Answer:  A
Diff: 2
Key Term:  Just-in-time inventory
AACSB:  Analytical thinking
Objective:  LO 16.4 Determine optimal setup time
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

32) A product has annual demand of 100,000 units. The plant manager wants production to follow a four-hour cycle. Based on the following data, what setup cost will enable the desired production cycle?
d = 400 per day (250 days per year), p = 4000 units per day, H = $40 per unit per year, and Q = 200 (demand for four hours, half a day).

2. A) $2.00
3. B) $7.20
4. C) $18.00
5. D) $64.00
6. E) $1,036.80

Answer:  B
Diff: 2
Key Term:  Just-in-time inventory
AACSB:  Analytical thinking
Objective:  LO 16.4 Determine optimal setup time
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
33) Which of the following is TRUE regarding the steps to reducing setup times?

1. A) The first step involves performing as much setup preparation as possible while the process/machine is operating.
2. B) The cycle of steps is repeated until setup time is reduced to under a minute.
3. C) The standardization of both tooling and work procedures is advantageous to setup time reduction.
4. D) Move material closer and improve material handling are done before operator training.
5. E) All of the above are true.

Answer:  E
Diff: 2
Key Term:  Just-in-time inventory
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.


34) If a factory wants to cut its current lot size in half, by what proportion must setup cost change?

1. A) Setup cost must be cut to one fourth its current value.
2. B) Setup cost must also be cut in half from its current value.
3. C) Setup cost must double from its current value.
4. D) Cannot be determined.
5. E) Setup cost must quadruple from its current value.

Answer:  A
Diff: 2
Key Term:  Just-in-time inventory
AACSB:  Analytical thinking
Objective:  LO 16.4 Determine optimal setup time
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

35) Which one of the following statements is TRUE about the kanban system?

1. A) The quantities in the containers are usually large to reduce setup costs.
2. B) It is associated with a push system.
3. C) It is useful to smooth operations when numerous quality problems occur.
4. D) The supplier workstation signals the customer workstation as soon as a batch is completed.
5. E) The customer workstation signals to the supplier workstation when production is needed.

Answer:  E
Diff: 2
Key Term:  Kanban
AACSB:  Written and oral communication
Objective:  LO 16.5 Define kanban
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
36) Kanban is associated with all EXCEPT which of the following?

1. A) small lot sizes
2. B) signals, such as cards, lights, or flags
3. C) moving inventory only as needed
4. D) increased material handling
5. E) reductions in inventory

Answer:  D
Diff: 2
Key Term:  Kanban
AACSB:  Written and oral communication
Objective:  LO 16.5 Define kanban
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

37) What does the Japanese word "kanban" mean?

1. A) low inventory
2. B) employee empowerment
3. C) card
4. D) continuous improvement
5. E) lot size of one

Answer:  C
Diff: 1
Key Term:  Kanban
AACSB:  Written and oral communication
Objective:  LO 16.5 Define kanban
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

38) Which one of the following scenarios represents the use of a kanban to reduce inventories?

1. A) A supervisor tells the operators to stay busy and start producing parts for next month.
2. B) A "supplier" work center signals the downstream workstation that a batch has been completed.
3. C) A supervisor signals to several work centers that the production rate should be changed.
4. D) A "customer" work center signals to the "supplier" workstation that more parts are needed.
5. E) An operator asks the next station's operator to help him fix his machine.

Answer:  D
Diff: 2
Key Term:  Kanban
AACSB:  Written and oral communication
Objective:  LO 16.5 Define kanban
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
39) The number of kanbans should be equal to which of the following?

1. A) one
2. B) the ratio of (demand during lead time + safety stock) to container size
3. C) one-half of the EOQ
4. D) one full day's production divided by the EOQ
5. E) the ratio of demand during lead time to (container size + safety stock)

Answer:  B
Diff: 2
Key Term:  Kanban
AACSB:  Written and oral communication
Objective:  LO 16.6 Compute the required number of kanbans
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

40) Lead time for cakes is 2 days with daily demand of 10 cakes and a safety stock of ½ a day. Each container (kanban) holds 1 cake. What is the correct number of kanbans?

1. A) 4
2. B) 1
3. C) 5
4. D) 10
5. E) 25

Answer:  E
Diff: 2
Key Term:  Kanban
AACSB:  Written and oral communication
Objective:  LO 16.6 Compute the required number of kanbans
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.


41) The cook in a fast-food restaurant knows that 2 hamburger patties and an order of fries should be started for each car that is waiting in line. This is best an example of:

1. A) keiretsu.
2. B) kanban.
3. C) push production.
4. D) kaizen.
5. E) EOQ.

Answer:  B
Diff: 2
Key Term:  Kanban
AACSB:  Written and oral communication
Objective:  LO 16.5 Define kanban
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
42) Lead time for computers is 7 days with daily demand of 5 computers and a safety stock of 1 day. Each kanban holds 8 computers. What is the correct number of kanbans?

4. A) 4.5
5. B) 1
6. C) 5
7. D) 7
8. E) 8

Answer:  C
Diff: 2
Key Term:  Kanban
AACSB:  Written and oral communication
Objective:  LO 16.6 Compute the required number of kanbans
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

43) Lead time for computers is 5 days with daily demand of 25 and safety stock of 5 computers. If management wants to use 10 kanbans how many computers should each one hold?

1. A) 25
2. B) 1
3. C) 5
4. D) 10
5. E) 13

Answer:  E
Diff: 2
Key Term:  Kanban
AACSB:  Written and oral communication
Objective:  LO 16.6 Compute the required number of kanbans
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.


44) A grocery store is attempting to implement a kanban system. Which of the following would not be an application of kanbans?

1. A) An empty doughnut tray signaling the bakery to produce 2 dozen glazed doughnuts.
2. B) A line of 5 people in the Chinese department signaling the department to heat 5 Crab Rangoon.
3. C) A red light on top of the cashier's lane signals that the cashier needs additional change replenished.
4. D) The meat department stocking up on turkeys before Thanksgiving.
5. E) All of the above are kanban applications.

Answer:  D
Diff: 2
Key Term:  Kanban
AACSB:  Written and oral communication
Objective:  LO 16.5 Define kanban
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
45) Which of the following is FALSE regarding the links between JIT and quality?

1. A) Inventory hides bad quality; JIT immediately exposes it.
2. B) JIT reduces the number of potential sources of error by shrinking queues and lead times.
3. C) As quality improves, fewer inventory buffers are needed; in turn, JIT performs better.
4. D) If consistent quality exists, JIT allows firms to reduce all costs associated with inventory.
5. E) JIT increases the cost of obtaining good quality.

Answer:  E
Diff: 2
Key Term:  Just-in-Time (JIT)
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

46) JIT makes quality cheaper because:

1. A) the cost of low quality can be hidden in inventory.
2. B) JIT adds more buffers to the system.
3. C) JIT prevents long runs of defects.
4. D) B and C
5. E) A, B and C

Answer:  C
Diff: 2
Key Term:  Just-in-Time (JIT)
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

47) Great Lakes Barge and Baggage Company makes, among other things, battery-operated bilge pumps. Which of the following activities is NOT part of JIT? They:

1. A) communicate their schedules to suppliers.
2. B) produce in long production runs to reduce the impact of setup costs.
3. C) use a pull system to move inventory.
4. D) continuously work on reducing setup time.
5. E) produce in small lots.

Answer:  B
Diff: 2
Key Term:  Just-in-Time (JIT)
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.


48) A manufacturer took the following actions to reduce inventory. Which of these is generally not accepted as a JIT action?

1. A) It used a pull system to move inventory.
2. B) It produced in ever smaller lots.
3. C) It required deliveries directly to the point of use.
4. D) It picked the supplier that offered the lowest price based on quantity discounts.
5. E) It worked to reduce the company's in-transit inventory.

Answer:  D
Diff: 2
Key Term:  Just-in-Time (JIT)
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
49) ________ is the minimum inventory necessary to keep a perfect system running.
Answer:  Just-in-time inventory
Diff: 2
Key Term:  Just-in-time inventory
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

50) ________ is the Japanese word for card that has come to mean "signal."
Answer:  Kanban
Diff: 2
Key Term:  Kanban
AACSB:  Written and oral communication
Objective:  LO 16.5 Define kanban
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

51) When suppliers are encouraged to locate near manufacturing plants, the goal of the JIT partnership is to reduce ________ inventory.
Answer:  in-transit
Diff: 2
Key Term:  JIT partnerships
Objective:  LO 16.3 Identify the concerns of suppliers when moving to supplier partnerships
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

52) ________ allows manufacturing work cells and offices to be easily rearranged.
Answer:  Layout flexibility
Diff: 2
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

53) ________ involve scheduling products so that each day's production meets the demand for that day.
Answer:  Level schedules
Diff: 2
Key Term:  Level schedules
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.


54) What are the goals of JIT partnerships?
Answer:

1. Removal of unnecessary activities, such as receiving, incoming inspection, and paperwork related to bidding, invoicing, and payment.
2. Removal of in-plant inventory by delivery in small lots directly to the using department as needed.
3. Removal of in-transit inventory by encouraging suppliers to locate nearby and provide frequent small shipments.
4. Obtain improved quality and reliability through long-term commitments, communication, and cooperation.

Diff: 3
Key Term:  JIT partnerships
Objective:  LO 16.3 Identify the concerns of suppliers when moving to supplier partnerships
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
55) What are the five reasons given by suppliers for their reluctance to enter into JIT systems?
Answer:  The five reasons are desire for diversification, poor customer scheduling, engineering changes, quality assurance, and small lot sizes.
Diff: 3
Key Term:  JIT partnerships
Objective:  LO 16.3 Identify the concerns of suppliers when moving to supplier partnerships
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

56) Identify the layout tactics appropriate for a JIT environment.
Answer:  Layout tactics for a JIT environment include build work cells for families of products, include a large number of operations in a small area, minimize distance, design little space for inventory, improve employee communication, use poka-yoke devices, build flexible or movable equipment, and cross-train workers to add flexibility.
Diff: 3
Key Term:  Just-in-Time (JIT)
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

57) Identify the inventory tactics appropriate for a JIT environment.
Answer:  Inventory tactics for a JIT environment include a pull system to move inventory, ever smaller lots, just-in-time deliveries from suppliers, deliveries directly to point of use, performance to schedule, setup reduction, and group technology.
Diff: 3
Key Term:  Just-in-time inventory
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

58) What is a kanban?
Answer:  Kanban is the Japanese word for card that has come to mean "signal." A kanban system moves parts through production by means of a "pull" from a signal.
Diff: 2
Key Term:  Kanban
AACSB:  Written and oral communication
Objective:  LO 16.5 Define kanban
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.


59) Describe level schedules. What purpose do they serve?
Answer:  Level schedules act on frequent small batches rather than a few large batches; the small batches are always changing. The practice matches each day's production to the demand for that day.
Diff: 2
Key Term:  Level schedules
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.
60) Identify JIT scheduling tactics.
Answer:  JIT scheduling tactics include communicate schedules to suppliers; make level schedules; freeze part of the schedule; perform to schedule; seek one-piece-make and one-piece-move; eliminate waste; produce in small lots; use kanbans; and make each operation produce a perfect part.
Diff: 2
Key Term:  Just-in-Time (JIT)
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

61) Identify some of the signals that kanban systems use.
Answer:  Kanban systems use a wide variety of signals. These include cards, lights, an empty position, an empty tote tray, or a rag over a rack adjacent to a storage area.
Diff: 2
Key Term:  Kanban
AACSB:  Written and oral communication
Objective:  LO 16.5 Define kanban
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

62) Weekly usage of a product is 8 units. Since the plant operates 50 weeks per year, this leads to annual usage of 400 units. Setup cost is $40 and annualized carrying cost is $80. Weekly production of this product is 12 units. Lead time is four weeks, and safety stock is one week's production. What is optimal kanban size? What is the optimal number of kanbans?
Answer:  35; 44/35→2
Diff: 3
Key Term:  Kanban
AACSB:  Analytical thinking
Objective:  LO 16.6 Compute the required number of kanbans
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

63) Daily usage of a product is 10 in a facility that operates every day of the year. Setup cost is $68 and annualized carrying cost is $100. Daily production of this product is 20. Lead time is 14 days; safety stock is one day's production. What is the optimum kanban size, and number of kanbans?
Answer:  100; 160/100→2
Diff: 3
Key Term:  Kanban
AACSB:  Analytical thinking
Objective:  LO 16.6 Compute the required number of kanbans
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

64) Daily usage of an assembly is 100 in a facility that operates 300 days of the year. Setup cost is $5 and annualized carrying cost is $160. Production of this assembly occurs at the rate of 400 per day when production of the assembly is underway. Lead time is 3 days; safety stock is 1/2 day's production. What is the optimum kanban size, and number of kanbans?
Answer:  50; 500/50 = 10
Diff: 3
Key Term:  Kanban
AACSB:  Analytical thinking
Objective:  LO 16.6 Compute the required number of kanbans
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

65) Daily usage of a part is 20 in a facility that operates 250 days of the year. Setup cost is $20 and annualized carrying cost is $210. Production of this part occurs at the rate of 50 per day when production of the part is underway. Lead time is 1 day; safety stock is 1/2 day's production. What is the optimum kanban size, and number of kanbans?
Answer:  40; 45/40→2
Diff: 3
Key Term:  Kanban
AACSB:  Analytical thinking
Objective:  LO 16.6 Compute the required number of kanbans
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

66) A certain product has been effectively managed in the past, according to its managers. The previous technique used the economic production quantity model, and resulted in an optimum lot size of 100. For this product, setup time is directly proportional to setup cost, and setup time is currently 40 minutes per batch. How much must setup time decline in order for the lot size to fall to 50 units? 25 units? 10 units?
Answer:  Complete data for the problem is not necessary. To cut the lot size in half, S must be cut to 25 percent of its previous value, or from 40 minutes to 10 minutes. The reduction of lot size to 25 units requires another reduction by a factor of four, to 2.5 minutes. Reducing the lot size by a factor of ten requires the reduction in setup time by a factor of 100, the equivalent of 0.4 minutes.
Diff: 3
Key Term:  Just-in-time inventory
AACSB:  Analytical thinking
Objective:  LO 16.4 Determine optimal setup time
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

67) A repetitive manufacturing firm is planning on level material use. The following information has been collected. Currently, the firm operates 250 days per year.

Annual demand	22,000
Daily demand	88
Daily production	250
Desired lot size (2 hours of production)	63
Holding cost per unit per year	$50

1. What is the setup cost, based on the desired lot size?
2. What is the setup time, based on $40 per hour setup labor?

Answer:
(a) S =  leads to =  and S = $2.92
(b) Setup time = 4.38 min

Diff: 2
Key Term:  Just-in-time inventory
AACSB:  Analytical thinking
Objective:  LO 16.4 Determine optimal setup time
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

68) Labor cost for set-up is $500/hour. If the plant plans on level material use and operates 50 days per year, determine the time it takes to setup.

Annual demand	5000
Daily production	1000
Lot size	700
Annual holding cost per unit	$25

Answer:  S = Q^2 ∗ H ∗ (1 - d/p)/(2D) = 700^2 ∗ 25 ∗ (1 - 5000/50/1000)/(2 ∗ 5000) = $1102.5
$1102.5/$500 = 2.205 hours
Diff: 2
Key Term:  Just-in-time inventory
AACSB:  Analytical thinking
Objective:  LO 16.4 Determine optimal setup time
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

69) A bakery uses 5 kanban containers that each hold 5 cakes. If daily demand is 20 cakes and lead time is 1 day determine the safety stock.
Answer:  5 = (20 + SS)/5, thus safety stock = 5 cakes
Diff: 2
Key Term:  Just-in-time inventory
AACSB:  Analytical thinking
Objective:  LO 16.6 Compute the required number of kanbans
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

70) A bakery uses 6 kanban containers that each hold 4 cakes. If safety stock is 2 cakes and lead time is 11 days, determine daily demand.
Answer:  6 = (2 + 11d)/4; d = (24 - 2)/11 = 2 cakes per day
Diff: 2
Key Term:  Just-in-time inventory
AACSB:  Analytical thinking
Objective:  LO 16.6 Compute the required number of kanbans
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

71) A bakery uses 5 kanban containers that each holds 3 cakes. Daily demand is 10 cakes and safety stock is 5 cakes. What is the lead time?
Answer:  5 = (5 + 10LT)/3; LT = 1 day
Diff: 2
Key Term:  Just-in-time inventory
AACSB:  Analytical thinking
Objective:  LO 16.6 Compute the required number of kanbans
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

Section 3   Lean and the Toyota Production System

1) Employee empowerment is unnecessary in the Toyota Production System, because automation and powerful information systems reduce the need for employee creativity and decision making.
Answer:  FALSE
Diff: 1
Key Term:  Toyota Production System (TPS)
Objective:  LO 16.7 Identify six attributes of Lean organizations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

2) The Toyota Production System requires that activities have built-in, automatic tests to signal problems.
Answer:  TRUE
Diff: 1
Key Term:  Toyota Production System (TPS)
AACSB:  Written and oral communication
Objective:  LO 16.7 Identify six attributes of Lean organizations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

3) Which of the following is an illustration of employee empowerment?

1. A) UPS drivers are trained to perform several motions smoothly and efficiently.
2. B) Unionization of the work place brings better morale and therefore better quality.
3. C) "No one knows the job better than those who do it."
4. D) all of the above
5. E) none of the above

Answer:  C
Diff: 2
Key Term:  Toyota Production System (TPS)
Objective:  LO 16.7 Identify six attributes of Lean organizations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

4) Which of the following is not characteristic of a TPS employee?

1. A) knowledgeable
2. B) strict job classifications
3. C) know more about their job than anyone else
4. D) empowered
5. E) All of the above characterize a TPS employee.

Answer:  B
Diff: 2
Key Term:  Toyota Production System (TPS)
Objective:  LO 16.7 Identify six attributes of Lean organizations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

Section 4   Lean Organizations

1) Which of the following is NOT an attribute of lean operations?

1. A) eliminating almost all inventory through just-in-time techniques
2. B) minimizing space requirements by reducing the distance a part travels
3. C) pushing responsibility to the highest level possible through centralized decision making
4. D) educating suppliers to accept responsibility for helping meet customer needs
5. E) building worker flexibility through cross-training and reducing job classifications

Answer:  C
Diff: 2
Key Term:  Lean operations
Objective:  LO 16.7 Identify six attributes of Lean organizations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

2) Lean operations are known for their:

1. A) employee development.
2. B) supplier education.
3. C) supplier partnerships.
4. D) challenging jobs.
5. E) All of the above are attributes of lean operations.

Answer:  E
Diff: 1
Key Term:  Lean operations
Objective:  LO 16.7 Identify six attributes of Lean organizations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

3) Which of the following is characteristic of lean operations?

1. A) inventory buffers between each workstation to minimize system downtime
2. B) easy, mindless jobs
3. C) specialty workers with no cross-training
4. D) low space requirements
5. E) no supplier partnerships

Answer:  D
Diff: 1
Key Term:  Lean operations
Objective:  LO 16.7 Identify six attributes of Lean organizations
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

Section 5   Lean in Services

1) Because most services cannot be inventoried, there is little place for JIT to help service organizations achieve competitive advantage.
Answer:  FALSE
Diff: 2
Key Term:  Just-in-time inventory
Objective:  LO 16.8 Explain how Lean applies to services
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

2) Excess bags of basic commodities such as flour and sugar that are stored in a restaurant's kitchen represent which of the following wastes?

1. A) overproduction
2. B) queues
3. C) transportation
4. D) inventory
5. E) defective product

Answer:  D
Diff: 1
Key Term:  Seven wastes
Objective:  LO 16.8 Explain how Lean applies to services
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

3) Which one is NOT an application of lean principle in services?

1. A) JIT in food supply management
2. B) improving kitchen layout at McDonald's to drive seconds out of the production process
3. C) inventory sharing among members of the pharmaceutical network
4. D) scheduling personnel availability at 15 minute increments to meet demand fluctuations
5. E) securing more inventory to prepare for disruption in production

Answer:  E
Diff: 2
Key Term:  Lean operations
Objective:  LO 16.8 Explain how Lean applies to services
Learning Outcome:  Describe the advantages and disadvantages of various production strategies such as lean.

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Operations Research: An Introduction, 10th Edition, Hamdy A. Taha, 2017
Introduction to Operations and Supply Chain Management, 4th Edition, Cecil B. Bozarth, Robert B. Handfield, 2016 
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