The forecasting time horizon that would typically be easiest to predict for would be the

short-range

A forecast that projects a company’s sales is a(n)

demand forecast

Quantitative methods of forecasting include

exponential smoothing

The method that considers several variables that are related to the variable being predicted is

multiple regression

The forecasting model that is based upon salesperson’s estimates of expected sales is

sales force composite

Decomposing a time series refers to breaking down past data into the components of

trends, cycles, seasonal and random variations

With regard to a regression-based forecast, the standard error of the estimate gives a measure of

the variability around the regression line

When using exponential smoothing, the smoothing constant

can be determined using MAD

A tracking signal

must be either 1, 0, or -1 for the first predicted value

If demand is 106 during January, 120 in February, 134 in March, and 142 in April, what is the 3-month simple moving average for May?

132

Given last period’s forecast of 65, and last period’s demand of 62, what is the simple exponential smoothing forecast with an alpha of 0.4 for the next period?

63.8

A forecasting technique consistently produces a negative tracking signal. This means that

the forecast technique consistently over predicts

A regression model is used to forecast sales based on advertising dollars spent. The regression line is y=500+35x and the coefficient of determination is .90. Which is the best statement about this forecasting model?

The correlation between sales and advertising is positive

Linear regression is most similar to

the trend projection method of forecasting

Time series patterns that repeat themselves after a period of days or weeks are called

seasonality

Which of the following is NOT a time-series model?

linear regression

Listing products in descending order of their individual dollar contribution to the firm is called

product-by-value analysis.

A route sheet

lists the operations necessary to produce the component.

An assembly chart is a(n)

schematic showing how the product is assembled.

Self-checkout at a grocery store is an example of

customer participation in service delivery

Which of the following is characteristic of the maturity phase

Competitors are well established

When ordering a new zagflatz, customers must choose the style of three major components, each of which has about ten variations. This is an example of:

modular design.

Which of the following is NOT a concept of green manufacturing?

Make products so that small variations in production do not adversely affect the product.

Which of the following is an external product development strategy?

joint venture

Which of the following is an internal product development strategy?

migration of existing products

There is a 0.7 probability of experiencing an increase in demand and a 0.3 probability of a decrease. If a company redesigns an existing product, they will gain $400,000 if there is a demand increase and $100,000 if demand falls. If the company designs a new product, they will gain $300,000 if demand increases and $200,000 if demand falls. If the company does nothing, they will not increase revenue at all. Which statement below is best?

The company should redesign the existing product.

In the service industry, the crucial moment that exemplifies, enhances, or detracts from the customer’s expectations is called

the moment of truth.

An umbrella of software programs that may include CAD/CAM, DFMA, product routing, maintenance, and other product concerns is called

product lifecycle management software

When a customer places a request for a product or service with a producer

a work order is created

Product design may be accomplished more quickly through the use of cross-functional teams that work on various aspects of the design at the same time. This approach is known as

concurrent engineering

A house of quality would depict the strength of relationship between which two items?

The customer’s desire for a durable wallet and the company’s choice of material for the walle

Which type of control chart should be used when it is possible to have more than one mistake per item?

c-chart

One type of control chart for attributes is a

p-chart.

C-charts are based on the

Poisson distribution.

If a sample of parts is measured and the mean of the sample measurements is outside the control limits

the process is out of control and the cause can be established.

Process capability

means that the natural variation of the process must be small enough to produce products that meet the standard.

The object of a statistical process control (SPC) system is to

provide a signal when assignable variations are present.

The R-chart

is used to indicate gains or losses in uniformity.

In acceptance sampling, the producer’s risk is the risk of having a

good lot rejected.

Twenty samples of size 5 are taken from a stable process. The average means of the sample means is 42.5, and the average range of the samples is 1.5. What is the UCL for the X-bar chart? *

**NOTE*** Table S6.1, Factors for Computing Control Chart Limits, is available in the Hint portion of this question.43.37

Twenty samples of size 5 are taken from a stable process. The average means of the sample means is 42.5, and the average range of the samples is 1.5. What is the UCL for the R-chart? *

**NOTE*** Table S6.1, Factors for Computing Control Chart Limits, is available in the Hint portion of this question.3.17

Twenty samples of size 100 are taken. The total number of defective items is 75. What is the UCL of the 3-sigma (z=3) p-chart?

0.094

A customer service hotline has received an average of 7 complaints a day for the last 25 days. What type of control chart should be used to monitor this hotline?

c-chart

For the last 30 days, the number of mistakes on the daily report has averaged 4.5. What would the UCL be if a 3-sigma c-chart was constructed?

10.86

A bottling company runs a filling process that should fill bottles with 12 plus or minus 0.04 ounces. A capability study reveals that the process mean is 12 ounces and the standard deviation is 0.01 ounces. What is the capability of the bottling process?

1.33

A manufacturing engineer is designing a process that must be able to produce a shaft with a diameter of 2.5 cm plus or minus 0.01 cm. If the process capability must be 1.5, what is the maximum process standard deviation?

0.00222

Which is the best statement regarding an operating characteristic curve?

As the AQL decreases, the producer’s risk also decreases.

A box of 1000 parts is subjected to an acceptance sampling plan that examines only 50 parts. The actual fraction defective in the box is 0.02 and the sampling plan has a 0.53 probability of accepting a box of this quality. What is the average outgoing quality for this scenario?

0.01

A fundamental weakness of associative forecasting methods is that we must first provide a forecast of the value of the independent variable, and then apply that value in the forecast of the dependent variable.

TRUE

Exponential smoothing is an example of an associative model.

FALSE

When the data are highly variable, the forecaster should choose a high value of alpha if exponential smoothing is to be used.

TRUE

No single forecast methodology is appropriate under all conditions.

TRUE

The alpha that generates the lowest mean absolute deviation (MAD) is the best choice.

TRUE

A weighted moving average is the only moving average technique that responds to trends.

FALSE

Unfortunately, regression analysis can only be used to develop a forecast based upon a single independent variable.

FALSE

The naive approach to forecasting is a qualitative model.

FALSE

A cycle represents a longer period of time than a season.

TRUE

The larger the n in a moving average forecast, the more sensitive it is to real changes in the data

FALSE

If forecasting model A has a higher MSE than forecasting model B, then model A is more accurate than model B.

FALSE

The slope in a trend projection equation represents the value of the dependent variable when time is equivalent to zero.

FALSE

Due to a typo, Jim uses a linear trend equation with a value for b of 25 instead of the value 15 that should be used. The tracking signal computed on a series of forecasts made using this model will be positive.

FALSE

A robust design is a product design such that small variations in production or assembly do not adversely affect the product.

TRUE

During the maturity stage of the product life cycle, the product is still being “fine-tuned.”

FALSE

Migration of existing products is an example of an external product development strategy.

FALSE

One factor influencing market opportunities is political/legal change.

TRUE

The house of quality is a graphical technique for defining the relationship between customer desires and product.

TRUE

Time-based competition involves rapidly developing products and moving them to market.

TRUE

Using less material is one example of green manufacturing.

TRUE

The cash flow graph is almost identical to the product life cycle graph.

FALSE

A product that has been developed with robust design principles is insensitive to variations in the production process.

TRUE

Waste minimization represents ethical behavior on the part of the manufacturer.

TRUE

Increasing the standardization of components tends to make products more difficult to manufacture because a standard component must fit many different uses.

FALSE

One way for a company to rapidly develop a new product is to buy a firm that has already developed one.

TRUE

Cause-and-effect diagrams are a schematic technique used to discover possible locations of quality problems.

TRUE

Company reputation is one reason quality is important.

TRUE

Employee empowerment means involving employees in every step of the production process.

TRUE

Inspection must be conducted at the point of customer contract.

FALSE

ISO 14000 provides an international standard for quality management.

FALSE

ISO 9000 is the only quality standard with international recognition.

TRUE

Kaizen is the Japanese word for the ongoing process of incremental improvement.

TRUE

One cost of quality is internal failure costs.

TRUE

TQM refers to a quality emphasis that encompasses the entire organization.

TRUE

A Green Belt in a Six Sigma program spends more time on his normal job duties than a Master Black Belt does.

TRUE

Joseph Juran is famous for his 14 points for implementing quality improvement.

FALSE

Benchmarking involves selecting a target at which to shoot and measuring your performance against it.

TRUE

Taguchi’s quality loss function says that a product is OK as long as its performance or measurement falls in between an upper tolerance limit and a lower tolerance limit.

FALSE

The personal component of services is more difficult to measure than the quality of the tangible component.

TRUE

The service operations manager must accept the fact that the customer’s perception of service quality depends in part on their before-service expectation.

TRUE

A process is said to be operating in statistical control when the only natural variation is present.

TRUE

When the process average is under control, the process dispersion is also under control.

FALSE

The central limit theorem states that regardless of the distribution of all parts (or services), the distribution of x-bars will tend to follow a normal curve as the number of samples increases.

TRUE

Control charts for variables classify items as defective or not defective.

FALSE

One popular measure of process capability is Cpk.

TRUE

Acceptance sampling is a form of testing that involves taking random samples of lots or batches of products and comparing them against predetermined standards.

TRUE

For a process exhibiting only natural variation, 95% of the sample averages will fall within three standard deviations of the sampling distribution.

FALSE

When the process fraction defective is low, the p-chart may have a negative lower control limit.

FALSE

Six sigma capability means that the process specifications are six standard deviations wide.

FALSE

If the producer’s risk increases, then the consumer’s risk decreases.

TRUE

The average outgoing quality limit (AOQL) tells the producer the maximum fraction defective possible for a sampling plan

TRUE

If a process is in control, then all of the output produced is acceptable for use.

FALSE