5/5/2019

1) Which of the following features would not generally be

considered common to all forecasts?
PRODUCTION PLANNING AND
CONTROL A) Assumption of a stable underlying causal system
B) Actual results will differ somewhat from predicted values.
QUESTIONS C) Historical data is available on which to base the forecast.
D) Forecasts for groups of items tend to be more accurate than
forecasts for individual items.
Prepared by:
PROF. RENE D. ESTEMBER
May 6, 2019 Answer: C

2) Minimizing the sum of the squared deviations around the line 3) Accuracy in forecasting can be measured by:
is called:
A) MSE
A) mean squared error technique B) MRP
B) mean absolute deviation C) MAPE
C) double smoothing D) Both A & C
D) least squares line

Answer: D
Answer: D

4) One reason for using the Delphi method in forecasting is 5) The primary difference between seasonality and cycles is:
to:
A) the duration of the repeating patterns
A) avoid premature consensus (bandwagon effect) B) the magnitude of the variation
B) achieve a high degree of accuracy C) the ability to attribute the pattern to a cause
C) maintain accountability and responsibility D) the direction of the movement
D) prevent hurt feelings

Answer: A Answer: A

1
 5/5/2019

6) Averaging techniques are useful for: 7) A forecast based on the previous forecast plus a percentage of
the forecast error is:
A) distinguishing between random and non-random variations
B) smoothing out fluctuations in time series A) a naive forecast
C) eliminating historical data B) a simple moving average forecast
D) providing accuracy in forecasts C) a centered moving average forecast
D) an exponentially smoothed forecast

Answer: B Answer: D

8) Simple exponential smoothing is being used to forecast 9) The primary method for associative forecasting is:
demand. The previous forecast of 66 turned out to be four
units less than actual demand. The next forecast is 66.6, A) sensitivity analysis
implying a smoothing constant, alpha, equal to: B) regression analysis
C) simple moving averages
A) 0.01 D) centered moving averages
B) 0.10
C) 0.15
D) 0.20 Answer: B

Answer: C

11) Which of the following is not one of the assumptions of the

10) The mean absolute deviation (MAD) is used to:
basic EOQ model?
A) estimate the trend line
A) Annual demand requirements are known and constant.
B) eliminate forecast errors
B) Lead time does not vary.
C) measure forecast accuracy
C) Quantity discounts are available.
D) seasonally adjust the forecast
D) All of the above are necessary assumptions.

Answer: C
Answer: C

2
 5/5/2019

12) In a two-bin inventory system, the amount contained in the 13) The purpose of "cycle counting" is to:
second bin is equal to the:
A) count all the items in inventory
A) ROP B) count bicycles and motorcycles in inventory
B) EOQ C) reduce discrepancies between inventory records and actual
C) amount in the first bin D) count 10% of the items each month
D) optimum stocking level
Answer: C
Answer: A

14) Which is not a true assumption in the EOQ model? 15) In the basic EOQ model, if annual demand doubles, the
effect on the EOQ is:
A) Production rate is constant
B) Lead time doesn’t vary A) It doubles.
C) No more than 3 items are involved B) It is four times its previous amount.
D) Usage rate is constant C) It is half its previous amount.
D) It increases by about 40 percent.

Answer: C Answer: D

16) The introduction of quantity discounts will cause the 17) An operations strategy which recognizes high carrying costs
optimum order quantity to be: and reduces ordering costs will result in:

A) smaller A) unchanged order quantities

B) unchanged B) slightly decreased order quantities
C) smaller or unchanged C) greatly decreased order quantities
D) unchanged or greater D) greatly increased order quantities

Answer: D Answer: C

3
 5/5/2019

18) The need for safety stocks can be reduced by an operations 19) With an A-B-C system, an item that had a high demand but
strategy which: a low annual dollar volume would probably be classified
as:
A) increases lead time
B) increases lead time variability A) A
C) decreases ordering costs B) B
D) decreases lead time variability C) C
D) none of these

Answer: D
Answer: C

20) Which one of these would not be a factor in determining 21) Which of the following is not a basic option for altering the
the reorder point? availability of capacity in a service environment?

A) the EOQ A) overtime

B) the lead time B) hiring/layoff
C) the variability of demand C) part time
D) the demand or usage rate D) inventory

Answer: D
Answer: A

22) Which one of the following is not a basic option for altering
demand? 23) One option for altering the pattern of demand is:

A) promotion A) backorders
B) backordering B) overtime
C) pricing C) part-time workers
D) subcontracting D) inventories

Answer: D Answer: A

4
 5/5/2019

24) Which of the following would not be a strategy 25) Which one of the following most closely describes net
associated with adjusting aggregate capacity to meet material requirements?
expected demand?
A) gross requirements - amount on-hand - scheduled receipts
A) subcontract B) gross requirements - planned receipts
B) vary the size of the workforce C) gross requirements - order releases + amount on-hand
C) vary the intensity of workforce utilization D) gross requirements - planned order releases
D) use backorders
Answer: A
Answer: D

26) In MRP, "scheduled receipts" are: 27) In MRP, under lot-for-lot ordering, "planned-order receipts"
are:
A) identical to "planned-order receipts"
B) identical to "planned-order releases" A) identical to "scheduled receipts"
C) open orders (that is, ordered before the first time bucket, B) identical to "planned-order releases"
but not delivered yet) C) open orders (that is, ordered before the first time bucket, but
D) "net requirements" not delivered yet)
D) "gross requirements"
Answer: C
Answer: B

28) Which of the following would be an advantage of using a sales 29) Averaging techniques are useful for:
force composite to develop a demand forecast?
A) distinguishing between random and non-random variations
A) The sales staff is least affected by changing customer needs. B) smoothing out fluctuations in time series
B) The sales force can easily distinguish between customer desires C) eliminating historical data
and probable actions. D) providing accuracy in forecasts
C) The sales staff is often aware of customers' future plans.
D) Salespeople are least likely to be influenced by recent events.

Answer: B
Answer: C

5
 5/5/2019

30) The two most important factors in choosing a forecasting 31) The Japanese manufacturing strategy of recognizing the
technique are: numerous opportunity costs of carrying inventories results in:

A) cost and time horizon A) increased order quantities

B) accuracy and time horizon B) decreased service levels
C) cost and accuracy C) increased safety stocks
D) quantity and quality D) decreased lot sizes

Answer: C Answer: D

32) The need for safety stocks can be reduced by an operations 33) Which one of these would not be a factor in determining the
strategy which: reorder point?

A) increases lead time A) the EOQ

B) increases lot sizes B) the lead time
C) decreases ordering costs C) the variability of demand
D) decreases lead time variability D) the demand or usage rate

Answer: D Answer: A

34) Essentially, the output of aggregate planning is the: 35) Which of the following is not an input to the aggregate planning
process:
A) marketing plan
B) production plan A) resources available
C) rough-cut capacity plan B) demand forecast
D) material requirements plan C) policies on work force changes
D) master production schedules

Answer: B
Answer: D

6
 5/5/2019

36) Uncommitted Inventory is called … 37) Moving from the aggregate plan to a master production
schedule requires:
A) Available to promise inventory
B) Free inventory A) rough cut capacity planning
C) Safety stock B) disaggregation
D) Lead time inventory C) strategy formulation
D) chase strategies

Answer: A
Answer: B

38) In MRP, the gross requirements of a given component part are 39) Periodic updating of an MRP system to account for all changes
calculated from: which have occurred within a given time interval is called:

A) gross requirements of the immediate parent A) pegging

B) planned orders of the end item B) planned order release
C) net requirements of end item C) net change
D) planned orders of the immediate parent D) regenerative

Answer: D
Answer: E

40) Which of the following lot sizing methods does not attempt to 41) Primary considerations in scheduling high volume systems
balance ordering (or setup) and holding costs? involve:
(I) coordinating the flow of inputs
A) economic order quantity (II) overcoming the disruptions to planned outputs
B) economic run size (III)assigning workers to work centers
C) lot-for-lot
D) part-period A) I and III
B) I and II
C) II and III
Answer: C D) I, II, and III

Answer: B

7
 5/5/2019

42) The EDD priority rule usually minimizes ___________. 43) The two different approaches to load work centers in job-shop
scheduling are:
A) Cost
B) Lateness A) load charts and schedule charts
C) Overtime B) Gantt charts and assignment method
D) Makespan C) infinite loading and finite loading
D) linear programming and makespan

Answer: B
Answer: C

44) In a task assignment situation, in how many different ways can 45) . Average completion (flow) time for a schedule sequence at a
five jobs be assigned to five machines? work center is:

A) 1 A) total processing time divided by the number of jobs

B) 25 B) total flow time divided by the number of jobs
C) 120 C) total flow time divided by total processing time
D) 3,125 D) total processing time plus total late time divided by number of
jobs

Answer: C
Answer: B

46) Which sequencing rule is designed specifically to minimize job 47) In an assignment model where there are fewer jobs than
tardiness? resources:

A) EDD A) Dummy jobs are needed to solve the problem.

B) FCFS B) Dummy resources are needed to solve the problem.
C) SPT C) The problem can't be solved using an assignment model.
D) LPT D) The problem will have multiple optimum solutions.

Answer: A Answer: A

8
 5/5/2019

48) Which is an application for RFID tags? 49) In a supermarket, the every Monday morning restocking of
shelves by a bread vendor is an example of:
A) Monitoring the temperature of fruit during shipment
B) Measuring the urine output of hospital patients A) safety stock replenishment
C) Adjusting medications for diabetics B) economic order quantities
D) Assessing audience response to a new movie C) reorder points
D) fixed order interval

Answer: A
Answer: D

50) In the basic EOQ model, if lead time increases from five to 10
days, the EOQ will:

A) double
B) increase, but not double SAMPLE PROBLEM SOLVING
C) decrease by a factor of two
D) remain the same
QUESTIONS

Answer: D

The business analyst for Video Sales, Inc. wants to forecast this Professor Very Busy needs to allocate time next week to include
year's demand for VCR’s based on the following historical data: time for office hours. He needs to forecast the number of students
who will seek appointments. He has gathered the following data:
What is the forecast for this year
using the least squares trend line What is this week's forecast using trend
for these data? adjusted (double) smoothing with alpha(1) =
0.5 and alpha(2) = 0.1, if the forecast for last
A) 163 week was 65, the forecast for two weeks ago
B) 180 was 75, and the trend estimate for last week's
C) 300 forecast was -5?
D) 420
A) 49 B) 50 C) 52 D) 65
Answer: B Answer: C

9
 5/5/2019

A concert promoter is forecasting this year's attendance for one of A concert promoter is forecasting this year's attendance for one of
his concerts based on the following historical data: his concerts based on the following historical data:
What is this year's forecast using the least The previous trend line had predicted
squares trend line for these data? 18,500 for two years ago, and 19,700 for
last year. What was the mean absolute
A) 21,000 deviation (MAD) for these forecasts?
B) 22,000
C) 23,000 A) 100 B) 200
D) 24,000 C) 400 D) 500

Answer: D Answer: C

A concert promoter is forecasting this year's attendance for one of The owner of Darkest Tans Unlimited in a local mall is forecasting
his concerts based on the following historical data: this month's (October's) demand for the one new tanning booth
based on the following historical data:
What is this year's forecast using
exponential smoothing with alpha = .2, if What is this month's forecast using a four-
last year's smoothed forecast was 15,000? month weighted moving average with weights
of .4, .3, .2, and .1?
A) 20,000 B) 19,000
C) 17,500 D) 16,000 A) 120 B) 129
C) 141 D) 135

Answer: D Answer: C

Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 kg of

Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 kg of
pepperoni each day in preparing pizzas. Order costs for pepperoni
pepperoni each day in preparing pizzas. Order costs for pepperoni
are PhP10.00 per order, and carrying costs are 4 centavos per kg
are PhP10.00 per order, and carrying costs are 4 cents per kg per
per day. Lead time for each order is 3 days, and the pepperoni itself
day. Lead time for each order is 3 days, and the pepperoni itself
costs PhP3.00 per kg.
costs PhP3.00 per kg.
At what point should she reorder pepperoni?
If she were to order 80 kg of pepperoni at a time, what would be
A) 20 kg remaining
the length of an order cycle?
B) 40 kg remaining
A) 0 days C) 3 days
C) 60 kg remaining
B) 0.25 days D) 4 days
D) 80 kg remaining
Answer: D
Answer: C

10
 5/5/2019

The following information is for 132-136Ann Chovies, owner of Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 kg of
the Perfect Pasta Pizza Parlor, uses 20 kg of pepperoni each day in pepperoni each day in preparing pizzas. Order costs for pepperoni
preparing pizzas. Order costs for pepperoni are PhP10.00 per order, are PhP10.00 per order, and carrying costs are 4 cents per kg per
and carrying costs are 4 cents per kg per day. Lead time for each day. Lead time for each order is 3 days, and the pepperoni itself
order is 3 days, and the pepperoni itself costs PhP3.00 per kg. costs PhP3.00 per kg.

If she were to order 80 kg of pepperoni at a time, what would be If she were to order 80 kg of pepperoni at a time, what would be the
the average inventory level? total daily costs, including the cost of the pepperoni?
A) 20 kg C) 60 kg A) PhP60.00 C) PhP64.00
B) 40 kg D) 80 kg B) PhP63.20 D) PhP64.10

Answer: B Answer: D

A shop that makes candles offers a scented candle, which has a

monthly demand of 360 boxes. Candles can be produced at a
rate of 36 boxes per day. The shop operates 20 days a month.
Assume that demand is uniform throughout the month. Setup
cost is $60 for a run, and holding cost is $2 per box on a
monthly basis. A) Qo  2DS/H p / p - u  2(360)60 / 2 36 /(36  18)  208 boxes

B) Imax  ( p - u)  (18)  104 boxes

Determine the following: Qo 208
(A) the economic run size p 36
(B) the maximum inventory
C) Days per run 
(C) the number of days in a run Q 208 
5.8 or 6 days
p 36

11