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| Section | Objectives |
|---|---|
| Competency 4: Supply Chain Management | - Sourcing and procurement - Inventory management - Supply chain design and strategy - Logistics and distribution |
| Competency 5: Capacity Planning and Facility Layout | - Location analysis and decisions - Capacity planning strategies - Facility layout types (process, product, cellular, fixed-position) |
| Competency 1: Operations Management Fundamentals | - Operations strategy and competitive priorities - Product and service design - History and evolution of operations management |
| Competency 6: Production Planning and Scheduling | - Material Requirements Planning (MRP) - Theory of Constraints (TOC) - Aggregate planning - Master Production Schedule (MPS) - Just-in-Time (JIT) and Kanban systems |
| Competency 2: Quality Management | - Cost of quality (prevention, appraisal, internal/external failure) - Total Quality Management (TQM) - Quality management philosophies (Deming, Juran, Crosby) - Malcolm Baldrige National Quality Award criteria |
| Competency 3: Process Improvement and Problem Solving | - Lean operations and waste elimination - Cause-and-effect diagrams (fishbone diagrams) - Plan-Do-Study-Act (PDSA) cycle - Six Sigma methodology - Statistical Process Control (SPC) |
| Competency 7: Forecasting | - Forecast accuracy measures - Qualitative forecasting methods - Quantitative forecasting methods (moving averages, exponential smoothing) |
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NEW QUESTION # 25
Which type of aggregate plan is preferable when a company produces custom or special purpose equipment, one-of-a-kind items, or highly perishable products?
Answer: B
Explanation:
Comprehensive and Detailed Explanation (#270 words):
Achase aggregate planis preferable for environments withcustom, one-of-a-kind, special-purpose, or highly perishable outputsbecause production is designed to"chase" (match) demandrather than build inventory.
In a level plan, the firm maintains a constant production rate and uses inventory/backorders to absorb demand fluctuation. That works best when products can be stored economically and demand variability can be buffered. For one-of-a-kind and highly perishable items, inventory is either impossible (custom items) or risky and costly (perishability, obsolescence). Therefore, the operationally sound strategy is to adjust capacity to align output with demand.
This links directly to aggregate planning's purpose: validating whether the system has sufficient capacity to meet expected requests and defining the most appropriate combination of resources. The document also highlights that one aggregate planning mechanism is to"produce reactively (react to demand) - requires flexibility."That is the core logic of a chase strategy.
A chase plan typically uses capacity levers like hiring/layoffs, subcontracting, flexible staffing, and overtime-chosen based on the duration and magnitude of demand changes. It prioritizes responsiveness and minimal inventory, which is essential when holding finished goods is undesirable or infeasible.
NEW QUESTION # 26
Which two capacity measurement concepts should a firm consider when conducting a location analysis?
Choose 2 answers
Answer: C,D
Explanation:
When conducting a location analysis, firms must considerproximity to sources of supplyandsite considerationsas key capacity-related factors.
Proximity to sources of supplyaffects:
* Transportation cost and reliability
* Lead times
* Inventory requirements
* Production continuity
Reliable supply access directly influences effective capacity by reducing disruptions and variability.
Site considerationsinclude:
* Land availability and cost
* Infrastructure and utilities
* Expansion potential
* Zoning and regulatory constraints
These factors determine how much capacity can be installed, expanded, and operated efficiently over time.
The other options are less relevant:
* Throughput time is a process performance metric
* Employee relations are important but not capacity measurement concepts Operations Management emphasizes that capacity decisions are long-term and capital-intensive. Poor location choices constrain future capacity, flexibility, and growth.
NEW QUESTION # 27
What is a key factor of a location analysis for a service company?
Answer: A
Explanation:
Comprehensive and Detailed Explanation (#250 words):
The most critical factor in a service company's location analysis isproximity to customers.
Service operations differ fundamentally from manufacturing because theservice is often produced and consumed simultaneously. As a result, customer access, convenience, and responsiveness are central determinants of demand and satisfaction.
From an Operations Management perspective, proximity to customers:
* Reduces waiting and travel time
* Increases service usage frequency
* Improves customer perception of reliability and availability
* Enables faster response to service failures
Examples include healthcare facilities, retail stores, hospitality, and professional services. In all cases, distance acts as ademand deterrent.
The other options are secondary:
* Community relations are important but not decisive
* Best operating level and effective capacity are internal capacity measures, not location drivers Thus, service location strategy prioritizesmarket access over production efficiency, reinforcing customer- centric operations.
NEW QUESTION # 28
What are two reasons a company might be hesitant to provide overtime as a capacity-based option?
Choose 2 answers
Answer: A,B
Explanation:
Companies may hesitate to use overtime becauseit is not a long-term solutionandit carries a wage premium
, typically around50% higher than regular pay.
Overtime can quickly increase capacity, but prolonged use leads to:
* Employee fatigue
* Quality deterioration
* Increased absenteeism
* Higher error rates
Additionally, overtime raises labor costs substantially, increasing unit production cost and reducing profitability.
The incorrect options are misleading:
* Overtime does not necessarily build excess inventory
* Overtime increases, not decreases, labor cost per unit
Operations Management views overtime as atemporary capacity buffer, appropriate for short demand spikes but risky if used continuously.
NEW QUESTION # 29
A company is experiencing an unusual amount of deliveries that are either late or an incorrect quantity.
Which type of system is used to identify and manage this type of problem?
Answer: A
Explanation:
Comprehensive and Detailed Explanation (#280 words):
The correct system to identify and manage frequent issues such aslate deliveries or incorrect quantitiesis MRP (Material Requirements Planning)(AnswerD).
MRP is designed to translate demand into detailed plans forwhat materials are needed, in what quantities, and when-and then to time-phased plan purchase and production orders accordingly. The document states that MRP combines detailed demand forecasts and actual requests, translates higher-level forecasts into more detailed requirements, and tracks customer requests. It also emphasizes that the MPS (which sets specific dates) is used to plan material requirements.
When deliveries are late or wrong quantities are shipped, a frequent root cause is that materials were not available when needed, orders were not released correctly, or priorities were mismanaged. MRP directly addresses these by:
* Exploding bills of materials into components
* Time-phasing planned orders
* Coordinating purchasing and production schedules
* Updating plans when demand or system status changes
ERP is broader (enterprise-wide integration), CRP focuses on comparing capacity vs workloads, and FMS is a production technology-not a planning system for material timing and quantities. Because the symptoms described are classic planning/coordination failures in materials and order timing,MRP is the best fit.
NEW QUESTION # 30
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