# Operations Management 1st Edition by Cachon- Test Bank

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Operations Management 1st Edition by Cachon- Test Bank

Sample  Questions

Chapter 03 Test Bank KEY

1. The primary purpose of a process analysis is to crowdsource new product ideas.

FALSE

The purpose of process an alysisis to improve a process.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-01 Draw a process flow diagram.

Topic: How to Draw a Process Flow Diagram

1. The capacity of a resource is the average flow rate of that resource.

FALSE

The capacity of a resource is the maximum number of flow units that can flow through that resource per unit of time.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-02 Determine the capacity for a one-step process.

Topic: Capacity for a One-Step Process

1. Cycle time is the same as lead time.

FALSE

Cycle time is the time between completing two consecutive flow units, whereas lead time is the time between when an order is placed and when it is received.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-03 Determine the flow rate, the utilization, and the cycle time of a process.

Topic: How to Compute Flow Rate, Utilization, and Cycle Time

1. A bottleneck is the resource with the lowest capacity.

TRUE

A bottleneck is the resource with the lowest capacity in a multistep process.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-04 Find the bottleneck of a multi-step process and determine its capacity.

Topic: How to Analyze a Multistep Process and Locate the Bottleneck

1. A resource with a utilization of less than 100% is never the bottleneck.

FALSE

When the process is demand constrained, even the bottleneck will have a utilization of strictly less than 100%

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-04 Find the bottleneck of a multi-step process and determine its capacity.

Topic: How to Analyze a Multistep Process and Locate the Bottleneck

1. It matters whether the process starts empty or not when computing the time it takes to produce a certain order quantity.

TRUE

If the process is already running, the time it takes to produce X units is equal to Cycle time of the process × X. If the process starts empty, the time it takes to produce the first unit should be added to Cycle time of the process × (X – 1).

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-05 Determine how long it takes to produce a certain order quantity.

Topic: The Time to Produce a Certain Quantity

1. Which of the following statements about process analysis is TRUE?

1. Process analysis only matters to those who are in accounting.
2. Process analysis is all about keeping track of revenue and costs.
3. Process analysis is all about creating demand.
4. Process analysis helps one analyze all the activities involved in providing one unit of supply.

Process analysis helps in analyzing a process to make improvements.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-01 Draw a process flow diagram.

Topic: How to Draw a Process Flow Diagram

1. Resources are shown in a process flow diagram as:

1. boxes.
2. arrows.
3. spheres.
4. triangles.

Resources are represented as boxes in a process flow diagram.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-01 Draw a process flow diagram.

Topic: How to Draw a Process Flow Diagram

1. Inventory is shown as ____________ in a process flow diagram.

1. boxes
2. arrows
3. spheres
4. triangles

Inventory is shown as triangles in a process flow diagram.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-01 Draw a process flow diagram.

Topic: How to Draw a Process Flow Diagram

1. Which of the following is a resource in an outpatient clinic?

1. Flu shot
2. X-ray machine
3. Ambulance
4. Reputation

Equipment such as an X-ray machine is a resource at an outpatient clinic.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-01 Draw a process flow diagram.

Topic: How to Draw a Process Flow Diagram

1. You are filling your prescription at a pharmacy and are waiting in line in front of the pickup window. Which one of the following processes will be upstream relative to your current position in the process?

1. Paying for the prescription
2. Waiting to take the prescription
3. Inspecting the prescription
4. Dropping off the prescription

You have to drop off the prescription before picking it up.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-01 Draw a process flow diagram.

Topic: How to Draw a Process Flow Diagram

1. _______________ are used to show the journey of a flow unit from input to output.

1. Boxes
2. Arrows
3. Spheres
4. Triangles

Arrows are used to show the journey of a flow unit from input to output.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-01 Draw a process flow diagram.

Topic: How to Draw a Process Flow Diagram

1. Refer to the process flow diagram below. Station 1 is at the ______________ of the process.
2. downstream
3. upstream
4. target
5. bottleneck

The beginning of the flow (where Station 1 is) is called the upstream of the process.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-01 Draw a process flow diagram.

Topic: How to Draw a Process Flow Diagram

1. Refer to the process flow diagram below. Station 3 is at the ______________ of the process.

1. downstream
2. upstream
3. target
4. bottleneck

The end of the flow (where Station 3 is) is called the downstream of the process.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-01 Draw a process flow diagram.

Topic: How to Draw a Process Flow Diagram

1. Refer to the process flow diagram below. Station 2 is the ______________ of Station 1.

1. customer
2. supplier
3. target
4. bottleneck

Resources downstream are the customers of resources upstream.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-01 Draw a process flow diagram.

Topic: How to Draw a Process Flow Diagram

1. A process analysis of a hospital’s emergency room can answer all of the following questions EXCEPT:

1. What is the average waiting time of a patient?
2. How many patients can be treated each day?
3. How busy are the physicians in the outpatient clinic?
4. How many beds are in the emergency room?

A process analysis of a hospital’s emergency room can answer questions related to all activities involved in providing medical care to patients in the emergency room.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-03 Determine the flow rate, the utilization, and the cycle time of a process.

Topic: How to Draw a Process Flow Diagram

1. Which of the following process flow diagrams is a correct depiction of the checkout process at a store: “Customers wait in line at a common area and will be checked out by the next available cashier.”

B.

C.

One triangle indicates one common waiting area and the three boxes represent three cashiers serving the next customers waiting in line at the common area.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-01 Draw a process flow diagram.

Topic: How to Draw a Process Flow Diagram

1. Which of the following process flow diagrams is a correct depiction of the checkout process at a store: “Customers wait in line in front of one of three cashiers for checkout.”

B.

C.

There are three triangles (waiting area), one in front of each box (cashier) showing that each cashier has its own waiting line.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-01 Draw a process flow diagram.

Topic: How to Draw a Process Flow Diagram

1. Which of the following process flow diagrams is a correct depiction of the checkout process at a store: “Customers wait in line to drop off their order in one station before waiting to pick their order up in another station.”

B.

C.

There are two steps in the checkout process: drop off and pick up. Each step requires waiting. Therefore, a triangle (waiting area) will be placed in front of each of the two boxes (stations).

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-01 Draw a process flow diagram.

Topic: How to Draw a Process Flow Diagram

1. The _______________ of a resource is how long that particular resource takes to complete one flow unit.

1. flow time
2. flow rate
3. processing time
4. processing rate

The time it takes for a resource to complete one flow unit is called the processing time.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-02 Determine the capacity for a one-step process.

Topic: Capacity for a One-Step Process

1. The capacity of a resource determines the ___________ number of flow units that can flow through that resource per unit of time.

1. maximum
2. minimum
3. average
4. medium

The capacity of a resource determines the maximum number of flow units that can flow through that resource per unit of time.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-02 Determine the capacity for a one-step process.

Topic: Capacity for a One-Step Process

1. The process capacity determines the ______________ a process can provide per unit of time.

1. minimum flow rate
2. maximum flow rate
3. maximum flow time
4. minimum flow time

The process capacity determines the maximum flow rate a process can provide per unit of time.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-02 Determine the capacity for a one-step process.

Topic: Capacity for a One-Step Process

1. One employee is in charge of the following activities at a drive-through of a bank:
 Activity Activity Time per Customer Greet customer 2 seconds Take order 3 seconds Process order 2 minutes Print receipt 10 seconds

What is the processing time (in seconds) of the drive-through process at the bank?

1. 4.25
2. 17
3. 33.75
4. 135

The processing time of a process is the sum of the activity times of all its activities.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-02 Determine the capacity for a one-step process.

Topic: Capacity for a One-Step Process

1. One employee is in charge of the following activities at a drive-through of a bank:
 Activity Activity Time per Customer Greet customer 2 seconds Take order 3 seconds Process order 2 minutes Print receipt 10 seconds

What is the capacity (in customers per hour) of the employee?

1. 0.007
2. 0.44
3. 26.67
4. 33.75

Capacity = 1/[2 + 3 + (2 × 60) + 10] = 0.007 customer per second = 0.007 ×60 (seconds/minute) ×60 (minutes/hour) = 26.67 customers per hour.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-02 Determine the capacity for a one-step process.

Topic: Capacity for a One-Step Process

1. One employee is in charge of the following activities at a drive-through of a bank:
 Activity Activity Time per Customer Greet customer 2 seconds Take order 3 seconds Process order 2 minutes Print receipt 10 seconds

What is the bank’s process capacity (in customers per minute)?

1. 0.007
2. 0.44
3. 26.67
4. 33.75

Since there is only one employee, the process capacity = 1/[2 + 3 + (2 × 60) + 10] = 0.007 customer per second = 0.007 × 60 (seconds/minute) = 0.44 customer per minute.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-02 Determine the capacity for a one-step process.

Topic: Capacity for a One-Step Process

1. A bank has three tellers. It takes a teller 6 minutes to serve one customer. What is the capacity of the bank in customers per hour?

1. 6
2. 18
3. 20
4. 30

Capacity = 3/6 × 60 = 30 customers per hour.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-02 Determine the capacity for a one-step process.

Topic: Capacity for a One-Step Process

1. A bank has three tellers. It takes a teller 6 minutes to serve one customer. What is the capacity of the bank (in customers per hour) over the course of an 8-hour workday?

1. 48
2. 144
3. 160
4. 240

Capacity = 3/6 × 60 customers per hour × 8 hours = 240 customers per hour.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-02 Determine the capacity for a one-step process.

Topic: Capacity for a One-Step Process

1. Customers are driving away after failing to find a place to park at a supermarket. The process currently is:

1. capacity constrained.
2. demand constrained.
3. supply exceeds demand.
4. capacity unconstrained.

Customers leaving without being served means that the demand exceeds supply or the supermarket is capacity constrained.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-03 Determine the flow rate, the utilization, and the cycle time of a process.

Topic: How to Compute Flow Rate, Utilization, and Cycle Time

1. Capacity is constrained when _________ exceeds _____________ and the flow rate is equal to ____________.

1. supply, demand, process capacity
2. supply, demand, demand
3. demand, supply, process capacity
4. demand, supply, demand

Flow rate is the minimum of demand or process capacity. Capacity is constrained when demand exceeds supply; flow rate is limited to the process capacity.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-03 Determine the flow rate, the utilization, and the cycle time of a process.

Topic: How to Compute Flow Rate, Utilization, and Cycle Time

1. The process is ___________ constrained when ___________ exceeds ___________ and the flow rate is equal to the demand rate.

1. Demand, supply, demand
2. Capacity, supply, demand
3. Demand, demand, supply
4. Capacity, demand, supply

Flow rate is equal to the demand rate means demand is constrained, which happens when supply exceeds demand.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-03 Determine the flow rate, the utilization, and the cycle time of a process.

Topic: How to Compute Flow Rate, Utilization, and Cycle Time

1. Process utilization is the ratio between __________ and ______________.

1. flow time, flow rate
2. flow rate, process capacity
3. process capacity, flow time
4. process time, process capacity

Process utilization is the ratio between flow rate and process capacity.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-03 Determine the flow rate, the utilization, and the cycle time of a process.

Topic: How to Compute Flow Rate, Utilization, and Cycle Time

1. You observe a long line at C&A Bakery with customers leaving every 4 minutes. What is the capacity (in customers per hour) of the bakery?

1. 0.25
2. 4
3. 15
4. Cannot be determined.

Flow rate = 1/Cycle time = 1/4 = 0.25 minute. Capacity = Flow rate when capacity is constrained = 0.25 customer per minute = 0.25 × 60 (minutes/hour) = 15 customers per hour.

AACSB: Analytical Thinking

Blooms: Analyze

Difficulty: 3 Hard

Learning Objective: 03-03 Determine the flow rate, the utilization, and the cycle time of a process.

Topic: How to Compute Flow Rate, Utilization, and Cycle Time

1. A help desk can answer 200 calls per hour. The demand rate is 250 calls per hour. What are the cycle time (in minutes per call) and utilization of the call center?

1. 0.005, 1
2. 0.004, 0.8
3. 0.24, 0.8
4. 0.3, 1

Flow rate = Min(demand, capacity) = Min(250, 200) = 200 calls per hour. Cycle time = 1/Flow rate = 1/200 hour per call = 1/200 × 60 (minutes/hour) = 0.3 minute per call. Utilization = Flow rate/Capacity = 200/200 = 1.

AACSB: Analytical Thinking

Blooms: Analyze

Difficulty: 3 Hard

Learning Objective: 03-03 Determine the flow rate, the utilization, and the cycle time of a process.

Topic: How to Compute Flow Rate, Utilization, and Cycle Time

1. Which of the following statements is TRUE?

1. Utilization of a resource is at its maximum when the flow rate exceeds its capacity.
2. Utilization of a resource is at its maximum when the flow rate is equal to its capacity.
3. Utilization of a resource is at its minimum when the flow rate exceeds its capacity.
4. Utilization of a resource is at its minimum when the flow rate is equal to its capacity.

Utilization of a resource is at its maximum when it is equal to one or the flow rate is equal to its capacity.

AACSB: Analytical Thinking

Blooms: Analyze

Difficulty: 3 Hard

Learning Objective: 03-03 Determine the flow rate, the utilization, and the cycle time of a process.

Topic: How to Compute Flow Rate, Utilization, and Cycle Time

1. One employee is in charge of the following activities at a refreshment stand:
 Activity Activity Time per Customer Greet customer 5 seconds Take order 25 seconds Process order 1.5 minutes Print receipt 30 seconds

If demand rate is 20 customers per hour, what are the flow rate (in customers per hour), utilization, and cycle time (in minutes per customer)?

1. 24, 1, 0.04
2. 24, 1, 2.5
3. 20, 0.83, 0.05
4. 20, 0.83, 3

Processing time = 5 + 25 + (1.5 × 60) + 30 = 150 seconds. Process capacity = 1/150 × 60 (seconds/minute) × 60 (minutes/hour) = 24 customers per hour. Flow rate = Min(Demand, Process capacity) = Min(20, 24) = 20 customers per hour. Utilization = Flow rate/Process capacity = 20/24 = 0.83. Cycle time = 1/Flow rate = 1/20 × 60 (minutes/hour) = 3 minutes per customer.

AACSB: Analytical Thinking

Blooms: Analyze

Difficulty: 3 Hard

Learning Objective: 03-03 Determine the flow rate, the utilization, and the cycle time of a process.

Topic: How to Compute Flow Rate, Utilization, and Cycle Time

1. A patient leaves an outpatient clinic every 5 minutes. There are 5 patients in the clinic waiting to be seen by the physician. How long will a patient be in the clinic?
2. 5
3. 10
4. 15
5. 25

Flow time = Inventory × Cycle time = 5 patients × 5 minutes per patient = 25 minutes.

AACSB: Analytical Thinking

Blooms: Analyze

Difficulty: 3 Hard

Learning Objective: 03-03 Determine the flow rate, the utilization, and the cycle time of a process.

Topic: How to Compute Flow Rate, Utilization, and Cycle Time

1. A team of 10 volunteers is visiting families in a local community to deliver canned goods. It takes one volunteer 4 hours to complete one visit. What is the capacity of the team over the course of an 8-hour workday?

1. 2.5
2. 2
3. 20
4. 25

Process time = 4 hours. Capacity = 1/Process time = 1/4 = 0.25 family per hour per volunteer. Capacity of 10 volunteers over an 8-hour day = 0.25 × 10 × 8 = 20 families per day.

AACSB: Analytical Thinking

Blooms: Analyze

Difficulty: 3 Hard

Learning Objective: 03-03 Determine the flow rate, the utilization, and the cycle time of a process.

Topic: How to Compute Flow Rate, Utilization, and Cycle Time

1. Guests are arriving at a party at a rate of 12 per minute. Each guest will be checked in, served a drink, and accompanied to his/her table by one receptionist, one bartender, and one usher respectively. Both the receptionist and usher can serve 10 guests per minute, whereas the bartender takes 5 minutes to serve one guest. Which of the following conclusions can be drawn?

1. The capacity of the bartender is the same as that of the receptionist.
2. The capacity of the bartender is higher than that of the receptionist.
3. The capacity of all three resources is the same.
4. The capacity of the usher is higher than that of the bartender.

Capacity = 1/Process time. Capacity for both the receptionist and usher = 10 guests per minute. Capacity of the bartender is  1/5 = 0.2 guest per minute. Because demand is higher than the capacity of any of the three resources, Flow rate = Capacity. Therefore, the capacity for both the receptionist and usher = 10 guests per minute, which is higher than that of the bartender’s 1/5 = 0.2 guest per minute.

AACSB: Analytical Thinking

Blooms: Analyze

Difficulty: 3 Hard

Learning Objective: 03-04 Find the bottleneck of a multi-step process and determine its capacity.

Topic: How to Analyze a Multistep Process and Locate the Bottleneck

1. Guests are arriving at a party at a rate of 12 per minute. Each guest will be checked in, served a drink, and accompanied to his/her table by one receptionist, one bartender, and one usher respectively. Both the receptionist and usher can serve 10 guests per minute, whereas the bartender takes 5 minutes to serve one guest. Which resource is the bottleneck and what is the process capacity in guests per minute?

1. Receptionist, 10
2. Bartender, 5
3. Bartender, 0.2
4. Usher, 5

Capacity = 1/Process time. Capacity for both the receptionist and usher = 10 guests per minute. Capacity of the bartender is  1/5 = 0.2 guest per minute. The bottleneck is the bartender because it is the resource with the lowest capacity. The lowest capacity also defines the process capacity, which is 0.2 guest per minute.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-04 Find the bottleneck of a multi-step process and determine its capacity.

Topic: How to Analyze a Multistep Process and Locate the Bottleneck

1. Guests are arriving at a party at a rate of 12 per minute. Each guest will be checked in, served a drink, and accompanied to his/her table by one receptionist, one bartender, and one usher respectively. Both the receptionist and usher can serve 10 guests per minute, whereas the bartender takes 5 minutes to serve one guest. The _____ is a nonbottleneck resource and its utilization is ____.

1. Usher, 2%
2. Bartender, 100%
3. Usher, 100%
4. Receptionist, 20%

Capacity for both the receptionist and usher = 10 guests per minute. Capacity of the bartender is  1/5 = 0.2 guest per minute. Process capacity = Bottleneck capacity = 0.2 guest per minute. Flow rate = Min(Demand, Process capacity) = Min(12, 0.2) = 0.2 guest per minute. Utilization = Flow rate/Capacity. Utilization for both the receptionist and usher (nonbottleneck) = 0.2/10 = 2%.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-04 Find the bottleneck of a multi-step process and determine its capacity.

Topic: How to Analyze a Multistep Process and Locate the Bottleneck

1. Which of the following statements is FALSE?
2. Nonbottleneck resources have slack capacity.
3. A bottleneck resource must have a utilization of 100%.
4. Nonbottleneck resources have a less than 100% utilization.
5. A bottleneck resource does not always have the longest processing time.

A bottleneck resource can have a less than 100% utilization if demand constrained the process.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 2 Medium

Learning Objective: 03-04 Find the bottleneck of a multi-step process and determine its capacity.

Topic: How to Analyze a Multistep Process and Locate the Bottleneck

1. Patients are arriving at a clinic at a rate of two per minute. Each patient’s visit consists of four steps: check in, record vital signs, receive treatment, and check out. A receptionist takes 1 minute to check a patient in. A nurse takes 2 minutes to record the patient’s vital signs. A doctor spends 10 minutes with a patient. A staff member takes 3 minutes to check a patient out. What is the process capacity in patients per hour?

1. 60
2. 30
3. 20
4. 6

Capacity = 1/Processing time. Capacity at check in, record vital signs, receive treatment, and check out is 1, 0.5, 0.1, and 0.3 patient per minute respectively. The lowest capacity is the bottleneck and is Process capacity = 0.1 patient per minute = 0.1 × 60 (minutes/hour) = 6 patients per hour.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-04 Find the bottleneck of a multi-step process and determine its capacity.

Topic: How to Analyze a Multistep Process and Locate the Bottleneck

1. Patients are arriving at a clinic at a rate of two per minute. Each patient’s visit consists of four steps: check in, record vital signs, receive treatment, and check out. A receptionist takes 1 minute to check a patient in. A nurse takes 2 minutes to record the patient’s vital signs. A doctor spends 10 minutes with a patient. A staff member takes 3 minutes to check a patient out. What is the utilization of the checkout resource?

1. 100%
2. 33%
3. 20%
4. 10%

Capacity = 1/Processing time. Capacity at check in, record vital signs, receive treatment, and check out is 1, 0.5, 0.1, and 0.3 patient per minute respectively. The lowest capacity is the bottleneck and is Process capacity = 0.1 patient per minute = 0.1 × 60 (minutes/hour) = 6 patients per hour. Flow rate = Min(Demand, Process capacity) = Min(2, 0.1) = 0.1. Utilization of checkout = Flow rate/Capacity of checkout = 0.1/0.3 = 33%.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-03 Determine the flow rate, the utilization, and the cycle time of a process.

Topic: How to Analyze a Multistep Process and Locate the Bottleneck

1. Patients are arriving at a clinic at a rate of two per minute. Each patient’s visit consists of four steps: check in, record vital signs, receive treatment, and check out. A receptionist takes 1 minute to check a patient in. A nurse takes 2 minutes to record the patient’s vital signs. A doctor spends 10 minutes with a patient. A staff member takes 3 minutes to check a patient out. What is the cycle time of the process in minutes?

1. 10
2. 20
3. 30
4. Cannot be determined

Capacity = 1/Processing time. Capacity at check in, record vital signs, receive treatment, and check out is 1, 0.5, 0.1, and 0.3 patient per minute respectively. The lowest capacity is the bottleneck and is Process capacity = 0.1 patient per minute = 0.1 × 60 (minutes/hour) = 6 patients per hour. Flow rate = Min(Demand, Process capacity) = Min(2, 0.1) = 0.1. Cycle time = 1/Flow rate = 1/0.1 = 10 minutes.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-03 Determine the flow rate, the utilization, and the cycle time of a process.

Topic: How to Analyze a Multistep Process and Locate the Bottleneck

1. When will the utilization of a bottleneck resource be less than 100%?

1. When the process is capacity constrained
2. When the process is demand constrained
3. When demand is higher than process capacity
4. When demand is equal to process capacity

A process that is demand constrained will have a flow rate less than the bottleneck capacity, which means there is slack capacity at the bottleneck resources causing a less than 100% utilization.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-04 Find the bottleneck of a multi-step process and determine its capacity.

Topic: How to Analyze a Multistep Process and Locate the Bottleneck

1. The capacity of a nonbottleneck resource is __________ the capacity of the process.

1. equal to
2. smaller than
3. larger than
4. The answer depends on the specific process under consideration.

A nonbottleneck resource has a higher capacity than the bottleneck of the process.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-04 Find the bottleneck of a multi-step process and determine its capacity.

Topic: How to Analyze a Multistep Process and Locate the Bottleneck

1. Job candidates are leaving an office every 50 minutes. Each candidate goes through three activities during the office visit: verification, written test, and interview. Verification takes 1 minute, the written test takes 40 minutes, and the interview takes 10 minutes. Assume there is only one resource dedicated to each activity. What is the bottleneck capacity in candidates per hour?

1. 1.5
2. 1.2
3. 2.0
4. 2.5

Bottleneck capacity = Min(1, 1/40, 1/10) = 0.025 candidate per minute or 1.5 candidates per hour.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 03-04 Find the bottleneck of a multi-step process and determine its capacity.

Topic: How to Analyze a Multistep Process and Locate the Bottleneck

1. Job candidates are leaving an office every 50 minutes. Each candidate goes through three activities during the office visit: verification, written test, and interview. Verification takes 1 minute, the written test takes 40 minutes, and the interview takes 10 minutes. Assume there is only one resource dedicated to each activity. Which of the following conclusions can be drawn?

1. The process is capacity constrained.
2. The process is demand constrained.
3. The interview resource is the bottleneck.
4. The process capacity is equal to the bottleneck capacity.

Process capacity = Min(1, 1/40, 1/10) = 0.025 candidate per minute. Flow rate = 1/Cycle time = 1/50 = 0.02 candidate per minute. The process is demand constrained because the flow rate is less than the process capacity.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 3 Hard

Learning Objective: 03-04 Find the bottleneck of a multi-step process and determine its capacity.

Topic: How to Analyze a Multistep Process and Locate the Bottleneck

1. Job candidates are leaving an office every 50 minutes. Each candidate goes through three activities during the office visit: verification, written test, and interview. Verification takes 1 minute, the written test takes 40 minutes, and the interview takes 10 minutes. Assume there is only one resource dedicated to each activity. What is the utilization of the bottleneck resource?

1. 100%
2. 80%
3. 20%
4. 2%

Cycle time = 50 minutes. Flow rate = 1/50 = 0.02 customer per minute. Bottleneck capacity = Min(1, 1/40, 1/10) = 0.025 customer per minute. Utilization of the bottleneck resource = Flow rate/Capacity = 0.02/0.025 = 80%.

AACSB: Analytical Thinking

Blooms: Analyze

Difficulty: 3 Hard

Learning Objective: 03-04 Find the bottleneck of a multi-step process and determine its capacity.

Topic: How to Analyze a Multistep Process and Locate the Bottleneck

1. There are four steps in the manufacturing process of a stuffed toy: cutting, stuffing, sealing, and packaging. There are two employees each for cutting and stuffing but one each for sealing and packaging. The processing times of cutting, stuffing, sealing, and packaging are 8, 5, 3, and 2 seconds per toy. What is the bottleneck in the process?

1. Cutting
2. Stuffing
3. Sealing
4. Packaging

Capacity = Number of workers/Processing time. Capacity = 2/8, 2/5, 1/3, and 1/2 for cutting, stuffing, sealing, and packaging. The bottleneck is the lowest capacity = 2/8, which is cutting.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-04 Find the bottleneck of a multi-step process and determine its capacity.

Topic: How to Analyze a Multistep Process and Locate the Bottleneck

1. There are four steps in the manufacturing process of a stuffed toy: cutting, stuffing, sealing, and packaging. There are two employees each for cutting and stuffing but one each for sealing and packaging. The processing times of cutting, stuffing, sealing, and packaging are 8, 5, 3, and 2 seconds per toy. What is the capacity in toys per minute at the resource “stuffing”?

1. 24
2. 12
3. 0.4
4. 0.2

Capacity = Number of resources/Processing time = 2/5 toy per second = 2/5 × 60 (seconds/minute) = 24 toys per minute.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-04 Find the bottleneck of a multi-step process and determine its capacity.

Topic: How to Analyze a Multistep Process and Locate the Bottleneck

1. There are four steps in the manufacturing process of a stuffed toy: cutting, stuffing, sealing, and packaging. There are two employees each for cutting and stuffing but one each for sealing and packaging. The processing times of cutting, stuffing, sealing, and packaging are 8, 5, 3, and 2 seconds per toy. What is the utilization at the “packaging” resource if demand is unlimited?

1. 100%
2. 75%
3. 63%
4. 50%

Capacity of packaging = 1/2. Process capacity = Min(2/8, 2/5, 1/3, 1/2) = 1/4. Flow rate = Min(Demand, Process capacity) = 1/4. Utilization = Flow rate/Capacity = 0.25/0.5 = 50%.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-03 Determine the flow rate, the utilization, and the cycle time of a process.

Topic: How to Analyze a Multistep Process and Locate the Bottleneck

1. Students are going through a three-step process to obtain their ID cards. Each student will spend 2 minutes at the registration desk before going to one of three cashiers to pay a fee for the card. After that, he/she will visit one of four ID processing stations to have his/her picture taken and the ID card printed. Registration takes 2 minutes. Visits to the cashier and ID processing station take 10 and 20 minutes respectively. If the demand rate is 0.5 student per minute, which of the following conclusions can be drawn if resources are doubled at the processing station?

1. The cashier station becomes the bottleneck.
2. There will be no bottleneck in the process.
3. Registration becomes the bottleneck.
4. The processing station becomes the bottleneck.

Bottleneck capacity = Min(1/2, 3/10, 4/20) = 0.2 student per minute at the processing station. If four additional ID stations are added, Bottleneck capacity = Min(1/2, 3/10, 8/20) = 0.3 student per minute at the cashier station.

AACSB: Analytical Thinking

Blooms: Analyze

Difficulty: 3 Hard

Learning Objective: 03-04 Find the bottleneck of a multi-step process and determine its capacity.

Topic: The Time to Produce a Certain Quantity

1. There are four steps in the manufacturing process of a stuffed toy: cutting, stuffing, sealing, and packaging. There are two employees each for cutting and stuffing but one each for sealing and packaging. The processing times of cutting, stuffing, sealing, and packaging are 8, 5, 3, and 2 seconds per toy. Assuming demand is unlimited, how long does it take (in seconds) to produce 2000 toys starting with an empty system?

1. 8028
2. 8014
3. 8000
4. 7996

Process capacity = Min(2/8, 2/5, 1/3, 1/2) = 1/4. Flow rate = Min(Demand, Process capacity) = 1/4. Cycle time = 1/Flow rate = 1/0.25 = 4 seconds. Time to complete the first toy = 8 + 5 + 3 + 2 = 18 seconds. Time to complete the remaining 1999 toys = 1999 × Cycle time = 1999 × 4 = 7996 seconds. Time to make 2000 toys = 7996 + 18 seconds, or 8014 seconds.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-05 Determine how long it takes to produce a certain order quantity.

Topic: The Time to Produce a Certain Quantity

1. There are four steps in the manufacturing process of a stuffed toy: cutting, stuffing, sealing, and packaging. There are two machines each for cutting and stuffing but one each for sealing and packaging. The processing times of cutting, stuffing, sealing, and packaging are 8, 5, 3, and 2 seconds per toy. Assuming demand is unlimited, how long does it take (in seconds) to produce 2000 toys starting with a full system?

1. 8028
2. 8014
3. 8000
4. 7996

Process capacity = Min(2/8, 2/5, 1/3, 1/2) = 1/4. Flow rate = Min(Demand, Process capacity) = 1/4. Cycle time = 1/Flow rate = 1/0.25 = 4 seconds. Time to complete 2000 toys = 4 × 2000 seconds, or 8000 seconds.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-05 Determine how long it takes to produce a certain order quantity.

Topic: The Time to Produce a Certain Quantity

1. Students are going through a three-step process to obtain their ID cards. Each student will spend 2 minutes at the registration desk before going to one of three cashiers to pay a fee for the ID card. After that, he/she will visit one of four ID processing stations to have his/her picture taken and ID card printed. Visits to the cashier and ID processing station take 10 and 20 minutes respectively. If the demand rate is 0.125 student per minute, how long does it take to process 20 students assuming the system is full?

1. 100 minutes
2. 152 minutes
3. 160 minutes
4. 184 minutes

Process capacity = Min(1/2, 3/10, 4/20) = 0.2 student per minute. Flow rate = Min(Demand, Process capacity) = Min(0.125, 0.2) = 0.125 student per minute. Cycle time = 1/Flow rate = 1/0.125 = 8 minutes. Time to process 20 students = 20 × 8 = 160 minutes.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-05 Determine how long it takes to produce a certain order quantity.

Topic: The Time to Produce a Certain Quantity

1. Students are going through a three-step process to obtain their ID cards. Each student will spend 2 minutes at the registration desk before going to one of three cashiers to pay a fee for the ID card. After that, he/she will visit one of four ID processing stations to have his/her picture taken and ID card printed. Visits to the cashier and ID processing station take 10 and 20 minutes respectively. If the demand rate is 0.125 student per minute, how long does it take to process 20 students assuming the system is empty?

1. 100 minutes
2. 152 minutes
3. 160 minutes
4. 184 minutes

Process capacity = Min(1/2, 3/10, 4/20) = 0.2 student per minute. Flow rate = Min(Demand, Process capacity) = Min(0.125, 0.2) = 0.125 student per minute. Cycle time = 1/Flow rate = 1/0.125 = 8 minutes. Time to process the first student = 2 + 10 + 20 = 32 minutes. Time to process 20 students = (19 × 8) + 32 = 184 minutes.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-05 Determine how long it takes to produce a certain order quantity.

Topic: The Time to Produce a Certain Quantity

1. Students are going through a three-step process to obtain their ID cards. Each student will spend 2 minutes at the registration desk before going to one of three cashiers to pay a fee for the ID card. After that, he/she will visit one of four ID processing stations to have his/her picture taken and ID card printed. Visits to the cashier and ID processing station take 10 and 20 minutes respectively. If the demand rate is 0.5 student per minute, how long does it take to process 20 students assuming the system is empty?

1. 95 minutes
2. 100 minutes
3. 127 minutes
4. 160 minutes

Process capacity = Min(1/2, 3/10, 4/20) = 0.2 student per minute. Flow rate = Min(Demand, Process capacity) = Min(0.5, 0.2) = 0.2 student per minute. Cycle time = 1/Flow rate = 1/0.2 = 5 minutes. Time to process the first student = 2 + 10 + 20 = 32 minutes. Time to process 20 students = (19 × 5) + 32 = 127 minutes.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-05 Determine how long it takes to produce a certain order quantity.

Topic: The Time to Produce a Certain Quantity

1. Students are going through a three-step process to obtain their ID cards. Each student will spend 2 minutes at the registration desk before going to one of three cashiers to pay a fee for the ID card. After that, he/she will visit one of four ID processing stations to have his/her picture taken and ID card printed. Visits to the cashier and ID processing station take 10 and 20 minutes respectively. If the demand rate is 0.5 student per minute, how long does it take to process 20 students assuming the system is full?

1. 95 minutes
2. 100 minutes
3. 127 minutes
4. 160 minutes

Process capacity = Min(1/2, 3/10, 4/20) = 0.2 student per minute. Flow rate = Min(Demand, Process capacity) = Min(0.5, 0.2) = 0.2 student per minute. Cycle time = 1/Flow rate = 1/0.2 = 5 minutes. Time to process 20 students = 20 × 5 = 100 minutes.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-05 Determine how long it takes to produce a certain order quantity.

Topic: The Time to Produce a Certain Quantity

1. Every student who wishes to enter the public library at Hotel de Ville (HdV) in the center of Paris, needs to go through the following steps:
1. Show your ID to one of the two guards at the entrance of the HdV building—20 seconds
2. Have your bag go through the metal detector—30 seconds
3. Give your ID card to the ground floor desk clerk, who will give you in exchange a magnetic badge—1 minute
4. Take the stairs up to the fourth floor of the building, where the library is located—2 minutes (Note: multiple people can be on the stairs at the same time)
6. Enter the library and get assigned to a numbered seat by one of the two librarians—40 seconds

When the library opens at 9 a.m., there is usually a very long queue of people waiting to get in. How long does it take for the 25 seats in the library to be occupied (assuming there are at least 25 people in the queue)?

1. 9 minutes
2. 18 minutes
3. 29 minutes
4. 45 minutes

Use the “Time to finish X units starting with an empty system” equation: The first customer requires 20 + 30 + 60 + 120 + 30 + 40 = 300 seconds, or 5 minutes. Cycle time after that is based on the bottleneck, step 3, at 1 minute. 24 × 1 = 24 minutes for the remaining 24 seats. Total time is 5 + 24 = 29 minutes.

AACSB: Reflective Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-05 Determine how long it takes to produce a certain order quantity.

Topic: The Time to Produce a Certain Quantity

1. A community health system’s nurse team consists of 12 nurses working in the local community. It takes a nurse 1.5 hours to complete one patient visit (including travel times and breaks). What is the capacity of the nurse team over the course of a 9-hour workday?

1. 162 patients
2. 12 patients
3. 72 patients
4. 100 patients

The capacity of 1 nurse is 1/Processing time, or 1/1.5 hours = 0.667 patient per hour. 0.667 × 9 hours = 6 patients per day. There are 12 nurses × 6 patients = 72 patients per day.

AACSB: Reflective Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-02 Determine the capacity for a one-step process.

Topic: Capacity for a One-Step Process

1. A community health system’s nurse team consists of 12 nurses working in the local community. It takes a nurse 1.5 hours to complete one patient visit (including travel times and breaks). Assuming the demand for the nurses is 60 patients per day, what is the utilization of the nurse team?

1. 100%
2. 33.3%
3. 66.66%
4. 83.33%

Utilization is Flow rate/Capacity, or 60/72 = 0.8333, or 83.33%.

AACSB: Reflective Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-03 Determine the flow rate, the utilization, and the cycle time of a process.

Topic: How to Compute Flow Rate, Utilization, and Cycle Time

1. An electric car company operates a manufacturing facility with 160 robots and 3000 employees. The process produces some 500 vehicles each week. It takes a car about 5 days to move from the beginning of the process to the end. The plant operates for 16 hours per day, 5 days a week. What is the cycle time of the process?

1. 5 minutes/car
2. 0.0009 minute/car
3. 9.6 minutes/car
4. 40 minutes/car

Cycle time = 1/Flow rate. Flow rate is 500 cars per week, or 16 × 5 = 80 hours. Cycle time = 1/(500/80) = 0.16 hour per car, or 0.16 × 60 minutes = 9.6 minutes per car.

AACSB: Reflective Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 03-03 Determine the flow rate, the utilization, and the cycle time of a process.

Topic: How to Compute Flow Rate, Utilization, and Cycle Time

Chapter 03 Test Bank Summary

 Category # of Questions AACSB: Analytical Thinking 59 AACSB: Reflective Thinking 4 Accessibility: Keyboard Navigation 53 Blooms: Analyze 9 Blooms: Remember 22 Blooms: Understand 32 Difficulty: 1 Easy 21 Difficulty: 2 Medium 32 Difficulty: 3 Hard 10 Gradable: automatic 63 Learning Objective: 03-01 Draw a process flow diagram. 13 Learning Objective: 03-02 Determine the capacity for a one-step process. 10 Learning Objective: 03-03 Determine the flow rate, the utilization, and the cycle time of a process. 17 Learning Objective: 03-04 Find the bottleneck of a multi-step process and determine its capacity. 15 Learning Objective: 03-05 Determine how long it takes to produce a certain order quantity. 8 Topic: Capacity for a One-Step Process 10 Topic: How to Analyze a Multistep Process and Locate the Bottleneck 17 Topic: How to Compute Flow Rate, Utilization, and Cycle Time 13 Topic: How to Draw a Process Flow Diagram 14 Topic: The Time to Produce a Certain Quantity 9

Chapter 05 Test Bank KEY

1. All flow units should have the same exit point in a production process.

FALSE

Attrition loss is an example of when flow units exit the process before completion. Therefore, some flow units exit the process earlier than others.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.

Topic: Generalized Process Flow Patterns

1. A bottleneck resource must have an implied utilization less than 100%.

FALSE

An implied utilization less than 100% simply means that the resource has capacity to meet demand. It has no bearing on whether or not the resource is a bottleneck.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.

Topic: How to Find the Bottleneck in a General Process Flow

1. The overall process yield is the sum total of the yields of all resources.

FALSE

The overall process yield is the product of the yields of all resources.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.

Topic: Attrition Losses, Yields, and Scrap Rates

1. When analyzing a process flow with flow unit dependent processing times, the unit of analysis should be a unit of demand.

FALSE

The unit of analysis for a flow unit becomes a minute or hour of work instead of a unit of demand when analyzing a process flow with flow unit dependent processing times.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.

Topic: Flow Unit–Dependent Processing Times

1. Rework always lowers the process capacity.

FALSE

Rework lowers the process capacity only when it involves a bottleneck resource in restoring reworked units.

AACSB: Analytical Thinking

Blooms: Analyze

Difficulty: 3 Hard

Learning Objective: 05-05 Analyze a process flow with rework.

Topic: Rework

1. Reworked units consume more time at a resource involved with rework than good units.

TRUE

Reworked units revisit a resource and therefore consume more time at that resource than good units.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-05 Analyze a process flow with rework.

Topic: Rework

1. Customers at an e-retailer site abandon their shopping carts without completing their purchase. This is an example of _____________.
2. attrition loss
3. attrition gain
4. attention loss
5. attention gain

Attrition loss refers to flow units leaving the process without completion.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.

Topic: Generalized Process Flow Patterns

1. A store manager at C&A notices that 20% of customers come to browse but not buy, 5% of them need assistance to complete their purchases, and 3% simply window shop. This is a _____________ situation where customers take different paths through the shopping process.

1. process mix
2. operation mix
3. product mix
4. market mix

A product mix refers to a combination of different flow unit types moving through a process.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.

Topic: Generalized Process Flow Patterns

1. A store manager at C&A notices that not all customers who walk into the store will make a purchase. About 20% come to browse but not buy, 10% need assistance from an assistant manager, and 5% need assistance from the store manager. C&A has one greeter, two assistant managers, one store manager, and six cashiers. In setting up a demand matrix, how many rows of resource type and columns of customer type does C&A need?

1. 10, 3
2. 10, 4
3. 4, 4
4. 5, 5

There are four types of resources and four types of customers.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.

Topic: Generalized Process Flow Patterns

1. Not all of the 100 customers who walk into the C&A store per day will make a purchase. About 20% come to browse but not buy, 10% need assistance to complete a purchase, and 5% need assistance but leave without making a purchase. The other 65% purchase something without requiring assistance. C&A has one greeter (who greets every customer), two assistants (who deal with customers who need assistance), and two cashiers (who serve customers who purchase something). What does the demand matrix for C&A look like?

 Browse Buy Greeter 20 80 Assistant 0 10 Cashier 0 75

 Browse Help Buy Greeter 20 15 80 Assistant 0 15 0 Cashier 0 15 75

C.

 Browse Help Buy Greeter 20 10 65 Assistant 0 10 0 Cashier 0 10 65

 Browse Help + Buy Help + Leave Buy Greeter 20 10 5 65 Assistant 0 10 5 0 Cashier 0 10 0 65

There are four customer types and three resource types.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.

Topic: Generalized Process Flow Patterns

1. Not all of the 100 customers who walk into the C&A store per day will make a purchase. About 20% come to browse but not buy, 10% need assistance to complete a purchase, and 5% need assistance but leave without making a purchase. The other 65% purchase something without requiring assistance. C&A has one greeter (who greets every customer), two assistants (who deal with customers who need assistance), and two cashiers (who serve customers who purchase something). What is the total demand rate per day for the greeter?

1. 100
2. 20
3. 15
4. 10

Demand for greeter = 20 + 10 + 5 + 65 = 100.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.

Topic: Generalized Process Flow Patterns

1. Not all of the 100 customers who walk into the C&A store per day will make a purchase. About 20% come to browse but not buy, 10% need assistance to complete a purchase, and 5% need assistance but leave without making a purchase. The other 65% purchase something without requiring assistance. C&A has one greeter (who greets every customer), two assistants (who deal with customers who need assistance), and two cashiers (who serve customers who purchase something). What is the total demand rate per day for assistants?

1. 100
2. 20
3. 15
4. 10

Demand for assistants = 10 + 5 = 15.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.

Topic: Generalized Process Flow Patterns

1. Not all of the 100 customers who walk into the C&A store per day will make a purchase. About 20% come to browse but not buy, 10% need assistance to complete a purchase, and 5% need assistance but leave without making a purchase. The other 65% purchase something without requiring assistance. C&A has one greeter (who greets every customer), two assistants (who deal with customers who need assistance), and two cashiers (who serve customers who purchase something). What is the total demand rate per day for cashiers?

1. 100
2. 75
3. 65
4. 25

Demand for cashiers = 10 + 65 = 75.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 2 Medium

Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.

Topic: Generalized Process Flow Patterns

1. A ________ is a combination of different flow unit types moving through a process.

1. capacity mix
2. demand matrix
3. product matrix
4. product mix

A product mix is a combination of different flow unit types moving through a process.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.

Topic: Generalized Process Flow Patterns

1. A __________ determines how many flow units of each type are flowing through each __________.

1. demand matrix, process
2. demand matrix, resource
3. product mix, process
4. product mix, resource

A demand matrix determines how many flow units of each type are flowing through each resource.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.

Topic: Generalized Process Flow Patterns

1. All students register with the receptionist upon arrival at the orientation. The receptionist will assign each student to one of four groups for a campus tour. Each campus tour has its designated tour guide. In setting up a demand matrix, how many rows of resource type and columns of flow unit type does the situation have?

1. 5, 2
2. 2, 2
3. 5, 4
4. 2, 4

Each student will be assigned to one of the four tour groups. Therefore, there will be four types of students and five types of resources-the receptionist and tour guides 1-4.

AACSB: Analytical Thinking

Blooms: Understand

Difficulty: 1 Easy

Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.

Topic: Generalized Process Flow Patterns

1. C&A makes two types of products using four machines. Product A visits machines 1, 2, and 4. Product B only visits machines 1 and 3. The demand per day is 40 units for Product A and 160 units for Product B. What does the demand matrix for C&A look like?

 All products Machine 1 200 Machine 2 40 Machine 3 160 Machine 4 40

 Product A Product B Machine 1 1 1 Machine 2 1 0 Machine 3 0 1 Machine 4 1 0

 Product A Product B Machine 1 40 160 Machine 2 40 0 Machine 3 0 160 Machine 4 40 0

 Product A Product B All machines 40 160

Demand rate for Product A is 40 units per day. Demand rate for Product B is 160 units per day. Machine 1 is visited by Products A and B. Machine 2 is visited by Product A only. Machine 3 is visited by Product B only. Machine 4 is visited by Product A only.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.

Topic: Generalized Process Flow Patterns

1. Which of the following statements is TRUE regarding implied utilization?
2. A resource with an implied utilization of 1.7 means that capacity exceeds demand by 1.7%.
3. A resource with an implied utilization of 1.7 means that demand exceeds capacity by 1.7%
4. A resource with an implied utilization of 1.7 means that demand exceeds capacity by 70%.
5. A resource with an implied utilization of 1.7 means that capacity exceeds demand by 70%.

Implied utilization = Total demand at the resource/Capacity at the resource. Therefore, if implied utilization is 1.7, that means demand exceeds capacity by 1.7 – 1 = 70%.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.

Topic: How to Find the Bottleneck in a General Process Flow

1. Which of the following statements is TRUE regarding utilization and implied utilization?
2. Utilization measures by how much demand exceeds the capacity of the resource.
3. Utilization can exceed 1.
4. Implied utilization can exceed 1.
5. Implied utilization is a measure of demand variability.

Implied utilization measures by how much demand exceeds the capacity of the resource. If it exceeds 1, then it means the process is capacity constrained.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.

Topic: How to Find the Bottleneck in a General Process Flow

1. _________ is constrained if the implied utilization of any resource is above 100%.
2. Capacity
3. Demand
4. Bottleneck
5. Inventory

Capacity is constrained if the implied utilization of any resource is above 100%.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.

Topic: How to Find the Bottleneck in a General Process Flow

1. A process is ______________ constrained if the highest implied utilization of all resources is less than or equal to 100%.
2. capacity
3. demand
4. bottleneck
5. supply

Demand is constrained if the implied utilization of the resource is below 100%.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.

Topic: How to Find the Bottleneck in a General Process Flow

1. The steps involved in finding the bottleneck in a process with a product mix include all the following EXCEPT:
2. compute the total demand rate for each resource.
3. compute the capacity level for each resource.
4. compute the flow rate for each resource.
5. compute the implied utilization for each resource.

The bottleneck in a process with a product mix is the resource with the highest implied utilization for each process and does not involve the flow rate. Besides, flow rate should be computed in relation to each flow unit type.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.

Topic: How to Find the Bottleneck in a General Process Flow

1. The resource with the ____________ is the bottleneck in a process with multiple types of flow units.
2. highest capacity
3. lowest capacity
4. highest implied utilization
5. lowest implied utilization

The resource with the highest implied utilization is the bottleneck in a process with multiple types of flow units.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.

Topic: How to Find the Bottleneck in a General Process Flow

1. C&A makes two types of products using four machines from 9 a.m. to 5 p.m. each day. Product A visits machines 1, 2, and 4. Product B only visits machines 1 and 3. The capacity is 0.4 unit per minute at machine 1, 0.12 unit per minute at machine 2, 0.2 unit per minute at machine 3, and 0.3 unit per minute at machine 4. The demand per day is 40 units for Product A and 160 units for Product B. Which is the implied utilization for the bottleneck resource?

1. 1.67
2. 1.04
3. 0.69
4. 0.28

Total demand rate for machine 1 = 40 + 160 = 200 units per day. Total demand rate for machine 2 = 40 units per day. Total demand rate for machine 3 = 160 units per day. Total demand rate for machine 4 = 40 units per day. Implied utilization for machine 1 = 200/(0.4 × 8 × 60) = 1.04. Implied utilization for machine 2 = 40/(0.12 × 8 × 60) = 0.69. Implied utilization for machine 3 = 160/(0.2 × 8 × 60) = 1.67. Implied utilization for machine 4 = 40/(0.3 × 8 × 60) = 0.28. The bottleneck is the resource with the highest implied utilization, which is machine 3.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.

Topic: How to Find the Bottleneck in a General Process Flow

1. C&A makes two types of products using four machines from 9 a.m. to 5 p.m. each day. Product A visits machines 1, 2, and 4. Product B only visits machines 1 and 3. The capacity is 0.4 unit per minute at machine 1, 0.12 unit per minute at machine 2, 0.2 unit per minute at machine 3, and 0.3 unit per minute at machine 4. The demand per day is 40 units for Product A and 160 units for Product B. What is the implied utilization for machine 1?

1. 1.67
2. 1.04
3. 0.69
4. 0.28

Total demand rate for machine 1 = 40 + 160 = 200 units per day. Capacity for machine 1 = 0.4 unit per minute or 0.4 × 8 × 60 units per day. Implied utilization for machine 1 = 200/(0.4 × 8 × 60) = 1.04.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.

Topic: How to Find the Bottleneck in a General Process Flow

1. C&A makes two types of products using four machines from 9 a.m. to 5 p.m. each day. Product A visits machines 1, 2, and 4. Product B only visits machines 1 and 3. The capacity is 0.4 unit per minute at machine 1, 0.12 unit per minute at machine 2, 0.2 unit per minute at machine 3, and 0.3 unit per minute at machine 4. The demand per day is 40 units for Product A and 160 units for Product B. Which resource is the bottleneck?

1. Machine 1
2. Machine 2
3. Machine 3
4. Machine 4

Total demand rate for machine 1 = 40 + 160 = 200 units per day. Total demand rate for machine 2 = 40 units per day. Total demand rate for machine 3 = 160 units per day. Total demand rate for machine 4 = 40 units per day. Implied utilization for machine 1 = 200/(0.4 × 8 × 60) = 1.04. Implied utilization for machine 2 = 40/(0.12 × 8 × 60) = 0.69. Implied utilization for machine 3 = 160/(0.2 × 8 × 60) = 1.67. Implied utilization for machine 4 = 40/(0.3 × 8 × 60) = 0.28. The bottleneck is the resource with the highest implied utilization, which is machine 3.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.

Topic: How to Find the Bottleneck in a General Process Flow

1. C&A makes two types of products using four machines from 9 a.m. to 5 p.m. each day. Product A visits machines 1, 2, and 4. Product B only visits machines 1 and 3. The capacity is 0.4 unit per minute at machine 1, 0.12 unit per minute at machine 2, 0.2 unit per minute at machine 3, and 0.3 unit per minute at machine 4. The demand per day is 40 units for Product A and 160 units for Product B. Assume the relative proportion between the two product types remains constant. What is the flow rate for Product B in units per day?

1. 24
2. 96
3. 120
4. Cannot be determined

Because the implied utilization is 1.67 (exceeds 1), the process is capacity constrained. Flow rate for Product B = Demand rate/Implied utilization of the bottleneck = 160/1.67 = 96 units per day.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.

Topic: How to Find the Bottleneck in a General Process Flow

1. About 80% of customers who receive a promotion coupon will visit the store, but only 20% of those in the store will make a purchase. What is the yield of the promotion?

1. 80%
2. 60%
3. 20%
4. 16%

Process yield = 0.8 × 0.2 = 0.16.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.

Topic: Attrition Losses, Yields, and Scrap Rates

1. About 80% of customers who receive a promotion coupon will visit the store, but only 20% of those in the store will make a purchase. How many promotion coupons have to be sent in order to get 100 customers to make a purchase?
2. 1600
3. 625
4. 500
5. 125

Process yield = Number of promotion coupons = 100/0.16 = 625.

Number of coupons started to get Q coupons = Q/Process yield = 100/0.16 = 625.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.

Topic: Attrition Losses, Yields, and Scrap Rates

1. Which of the following is an example of attrition loss?
2. All customers renew their magazine subscriptions.
3. Defective units in a manufacturing process are reworked.
4. More loan applications are received than approved.
5. The number of students at the beginning of the course is the same as that at the end.

Some loan applicants are rejected in their loan application process and are regarded as attrition losses.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.

Topic: Attrition Losses, Yields, and Scrap Rates

1. In a process with attrition loss, all flow units start at _________ resource but then drop out of the process at __________ points.
2. the same, different
3. a different, the same
4. the same, the same
5. a different, different

In a process with attrition loss, all flow units start at the same resource but then drop out of the process at different points.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.

Topic: Attrition Losses, Yields, and Scrap Rates

1. _______ defective flow units that are ________ the process.
2. Rework is, eliminated from
3. Defects are, restored in
4. Scrap is, eliminated from
5. Scrap is, restored in

Scrap is defective flow units that are eliminated from the process.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.

Topic: Attrition Losses, Yields, and Scrap Rates

1. The ________ of a resource measures the percentage of _______ units that are processed at this resource.
2. yield, defective
3. yield, non-defective

1. capacity, defective
2. capacity, non-defective

The yield of a resource measures the percentage of nondefective units that are processed at this resource.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.

Topic: Attrition Losses, Yields, and Scrap Rates

1. Which of the following statements about the yield of a process is FALSE?
2. A process can have a yield of 100%.
3. A process with attrition loss has a lower yield than one without attrition loss.
4. A process without attrition loss will have a yield of 100%.
5. A process can have a yield that exceeds 100%.

The yield of a process is the percentage of units processed correctly. It cannot exceed 100%.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.

Topic: Attrition Losses, Yields, and Scrap Rates

1. A three-step process is used to make a product. The yield of step 1 is 90%; of step 2, 70%; and of step 3 is 50%. What is the yield of the overall process?

1. 70%
2. 40%
3. 31.5%
4. Cannot be determined

The yield of the overall process = 0.9 × 0.7 × 0.5 = 0.315.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.

Topic: Attrition Losses, Yields, and Scrap Rates

1. A three-step process is used to make a product. The yield of step 1 is 50%; of step 2, 80%; and of step 3, 20%. How many units would the process have to process to get 100 units of good outputs?
2. 125
3. 200
4. 167
5. 1250

Process yield = 0.5 × 0.8 × 0.2 = 8%. Number of units = 100/0.08 = 1250.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.

Topic: Attrition Losses, Yields, and Scrap Rates

1. A three-step process is used to make a product. The yield of step 1 is 80%; of step 2, 40%; and of step 3, 50%. Step 1 takes 2 minutes per unit. Step 2 takes 4 minutes per unit. Step 3 takes 5 minutes. Where in the process is the bottleneck and what is its implied utilization?
2. Step 3, 0.2
3. Step 3, 10
4. Step 2, 0.25
5. Step 2, 20

To have one good unit at step 3, demand at step 3 is 1/50% = 2; demand at step 2 is 2/40% = 5; demand at step 1 is 5/80% = 6.25. Capacity at step 1 is ½, step 2 is ¼, step 3 is 1/5. Implied utilization at step 1 is 6.25/0.5 = 12.5, step 2 is 5/0.25 = 20, step 3 is 2/0.2 = 10. The highest implied utilization is at step 2.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.

Topic: Attrition Losses, Yields, and Scrap Rates

1. A three-step process is used to make a product. The yield of step 1 is 80%; of step 2, 40%; and of step 3, 50%. Step 1 takes 2 minutes per unit. Step 2 takes 4 minutes per unit. Step 3 takes 5 minutes. How many good units can the process produce per hour?
2. 0.05
3. 0.1
4. 3
5. 6

To have one good unit at step 3, demand at step 3 is 1/50% =2; demand at step 2 is 2/40% = 5; demand at step 1 is 5/80% = 6.25. Capacity at step 1 is 1/2; at step 2, 1/4; and at step 3, 1/5. Implied utilization at step 1 is 6.25/0.5 = 12.5; at step 2, 5/0.25 = 20; and at step 3, 2/0.2 = 10. The highest implied utilization is 20. The capacity of the process in good units per hour = 1/20 × 60 = 3 units per hour.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.

Topic: Attrition Losses, Yields, and Scrap Rates

1. When analyzing a process flow with flow unit dependent processing time, the flow unit is changed from using ___________ to ______________.
2. a minute of work, a unit of demand
3. a unit of demand, a minute of work
4. a unit of resource, a unit of demand
5. a unit of demand, a unit of resource

When analyzing a process flow with flow unit dependent processing time, the flow unit is changed from using a unit of demand to a minute of work.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.

Topic: Flow Unit–Dependent Processing Times

1. A work load matrix has _________ as columns and _________ as rows.
4. work types, flow unit types
5. flow unit types, resource types

A work load matrix has flow unit types as columns and resource types as rows.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.

Topic: Flow Unit–Dependent Processing Times

1. A work load matrix captures the _________ that each flow unit type requires for each resource.

1. amount of work

1. amount of demand

1. amount of revenue

1. amount of supply

A work load matrix captures the amount of work that each flow unit type requires for each resource.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.

Topic: Flow Unit–Dependent Processing Times

1. Which of the following statements is TRUE regarding a process flow with flow unit dependent processing time?
2. It is a process where the processing times at a given resource are the same across the products/customers in the product mix.
3. It is a process where a unit of demand is used as a flow unit.
4. It is a process where the bottleneck is the resource with the highest implied utilization.
5. It is a process where the bottleneck is the resource with the highest workload.

The bottleneck in a process flow with flow unit dependent processing time is the resource with the highest implied utilization.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.

Topic: Flow Unit–Dependent Processing Times

1. Which of the following statements is FALSE regarding the workload matrix?
2. It has the same number of columns and rows as the demand matrix.
3. The total amount of work requested at a resource is computed by adding up the workloads for that resource across all customer types.
4. It captures the time available at each resource.
5. It has flow unit types as columns and resource types as rows.

The workload matrix does not contain information about the time available at each resource.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.

Topic: Flow Unit–Dependent Processing Times

1. Two types of customers are served by a two-step process. Each resource is staffed by one employee. Customer A spends two minutes at resource X and five minutes at resource Y. Customer B spends five minutes at resource X and two minutes at resource Y. The demand rate per hour is 10 customer A and 15 customer B. Which of the following is the workload matrix for this situation?
 All customers Resource X 95 Resource Y 80

 Customer A Customer B Resource X 2 5 Resource Y 5 2

 Customer A Customer B Resource X 20 75 Resource Y 50 30

 Customer A Customer B All resources 70 105

Workload for customer A at resource X = 10 × 2; Workload for customer A at resource Y = 10 × 5; Workload for customer B at resource X = 15 × 5; Workload for customer B at resource Y = 15 × 2.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.

Topic: Flow Unit–Dependent Processing Times

1. Two types of customers are served by a two-step process. Each resource is staffed by one employee. Customer A spends two minutes at resource X and five minutes at resource Y. Customer B spends five minutes at resource X and two minutes at resource Y. The demand rate per hour is 10 customer A and 15 customer B. What is the workload for resource X across all customer types?
2. 70 minutes per hour
3. 80 minutes per hour
4. 95 minutes per hour
5. 105 minutes per hour

Workload for resource X = (10 × 2) + (15 × 5) = 95 minutes per hour.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.

Topic: Flow Unit–Dependent Processing Times

1. Two types of customers are served by a two-step process. Each resource is staffed by one employee. Customer A spends two minutes at resource X and five minutes at resource Y. Customer B spends five minutes at resource X and two minutes at resource Y. The demand rate per hour is 10 customer A and 15 customer B. What is the workload for resource Y across all customer types?
2. 70 minutes per hour
3. 80 minutes per hour
4. 95 minutes per hour
5. 105 minutes per hour

Workload for resource Y = (10 × 5) + (15 × 2) = 80 minutes per hour.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.

Topic: Flow Unit–Dependent Processing Times

1. Two types of customers are served by a two-step process. Each resource is staffed by one employee. Customer A spends two minutes at resource X and five minutes at resource Y. Customer B spends five minutes at resource X and two minutes at resource Y. The demand rate per hour is 10 customer A and 15 customer B. Where in the process is the bottleneck and what is its implied utilization?
2. Resource X, 1.58
3. Resource X, 1.33
4. Resource Y, 1.33
5. Resource Y, 1.58

Workload for resource X = (10 × 2) + (15 × 5) = 95 minutes per hour; Implied utilization for resource X = 95/60 = 1.58. Workload for resource Y = (10 × 5) + (15 × 2) = 80 minutes per hour; Implied utilization for resource Y = 80/60 = 1.33. Resource X has the higher implied utilization and therefore is the bottleneck.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.

Topic: Flow Unit–Dependent Processing Times

1. Two types of customers are served by a two-step process. Each resource is staffed by one employee. Customer A spends two minutes at resource X and five minutes at resource Y. Customer B spends five minutes at resource X and two minutes at resource Y. The demand rate per hour is 10 customer A and 15 customer B. What is the flow rate for customer A holding the mix of A and B constant?

1. Cannot be determined
2. 6.3 customers per hour
3. 7.5 customers per hour
4. 9.5 customers per hour

Workload for resource X = (10 × 2) + (15 × 5) = 95 minutes per hour; Implied utilization for resource X = 95/60 = 1.58. Workload for resource Y = (10 × 5) + (15 × 2) = 80 minutes per hour; Implied utilization for resource Y = 80/60 = 1.33. Resource X has the higher implied utilization of 1.58, which is greater than 1. The process is capacity constrained. Flow rate for customer A = 10/1.58 = 6.3 customers per hour.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.

Topic: Flow Unit–Dependent Processing Times

1. Two types of customers are served by a two-step process. Each resource is staffed by one employee. Customer A spends two minutes at resource X and five minutes at resource Y. Customer B spends five minutes at resource X and two minutes at resource Y. The demand rate per hour is 10 customer A and 15 customer B. What is the flow rate for customer B holding the mix of A and B constant?

1. Cannot be determined
2. 6.3 customers per hour
3. 9.5 customers per hour
4. 11.25 customers per hour

Workload for resource X = (10 × 2) + (15 × 5) = 95 minutes per hour; Implied utilization for resource X = 95/60 = 1.58. Workload for resource Y = (10 × 5) + (15 × 2) = 80 minutes per hour; Implied utilization for resource Y = 80/60 = 1.33. Resource X has the higher implied utilization of 1.58, which is greater than 1. The process is capacity constrained. Flow rate for customer B = 15/1.58 = 9.5 customers per hour.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.

Topic: Flow Unit–Dependent Processing Times

1. Rework is a ___________ of activities that have to be completed by a ____________ flow unit in order to be restored to a good flow unit.
2. reduction, defective
3. reduction, nondefective
4. repetition, defective
5. repetition, nondefective

Rework is to repeat activities that have to be completed by a defective flow unit in order to be restored to a good flow unit.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-05 Analyze a process flow with rework.

Topic: Rework

1. Which of the following process flow diagrams does not represent a process with rework?

B.

C.

D.

Rework is represented as a loop showing resources that it has revisited.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-05 Analyze a process flow with rework.

Topic: Rework

1. Which of the following statements concerning rework is TRUE?
2. Rework does not involve performing an extra set of activities.
3. Rework does not involve inventories.
4. Rework can never return a process yield to 100%.
5. Rework increases the demand rate for a particular resource.

Rework revisits a particular resource and thus increases the demand rate for that resource.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-05 Analyze a process flow with rework.

Topic: Rework

1. Which of the following statements concerning rework is TRUE?

1. Rework involves only bottleneck resources.
2. Rework does not affect overall process capacity.
3. Rework leads a lower overall process yield than scrap.

1. Rework leads to a higher overall process yield than scrap.

Rework attempts to restore the overall process yield to 1. Scrap, on the other hand, simply exits the process according to the yield at a particular resource.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-05 Analyze a process flow with rework.

Topic: Rework

1. Students who failed a course last semester are retaking it this semester. This is an example of ____________.
2. attrition loss
3. rework
4. compliance
5. process reengineering

Rework refers to a repetition of activities or an extra set of activities that have to be completed by a defective unit in order to be restored to a good flow unit.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-05 Analyze a process flow with rework.

Topic: Rework

1. _________ refers to a ________ of activities or an extra set of activities that have to be completed by a defective unit in order to be restored to a good flow unit.
2. Rework, removal
3. Reduce, removal
4. Rework, repetition
5. Reduce, repetition

Rework refers to a repetition of activities or an extra set of activities that have to be completed by a defective unit in order to be restored to a good flow unit.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-05 Analyze a process flow with rework.

Topic: Rework

1. A four-step process is used to make a product. The first resource takes 8 minutes per unit, the second takes 7 minutes per unit, the third takes 2 minutes per unit, and the fourth takes 10 minutes per unit. 20% of all units have to be reworked. For that, they have to revisit the third and fourth resources. Each resource is staffed by one worker. Rework takes the same processing times as the first pass and always fixes the problem. Where is the bottleneck?

1. Resource 1
2. Resource 2
3. Resource 3
4. Resource 4

Workload for resource 1 = (0.8 × 8) + (0.2 × 8) = 8 minutes per unit; Workload for resource 2 = (0.8 × 7) + (0.2 × 7) = 7 minutes per unit; Workload for resource 3 = (0.8 × 2) + [0.2 × (2 + 2)] = 2.4 minutes per unit; Workload for resource 4 = (0.8 × 10) + [0.2 × (10 + 10)] = 12 minutes per unit. Each resource has one worker who can provide one minute of work each minute. The implied utilization for resource 1 is 8; for resource 2, 7; for resource 3, 2.4; and for resource 4, 12. The highest implied utilization is 12 at resource 4.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-05 Analyze a process flow with rework.

Topic: Rework

1. A four-step process is used to make a product. The first resource takes 8 minutes per unit, the second takes 7 minutes per unit, the third takes 2 minutes per unit, and the fourth takes 10 minutes per unit. 20% of all units have to be reworked. For that, they have to revisit the third and fourth resources. Each resource is staffed by one worker. Rework takes the same processing times as the first pass and always fixes the problem. What is the capacity of the process in units per minute?

1. 0.08

1. 0.125

1. 0.143

1. 0.417

Workload for resource 1 = (0.8 × 8) + (0.2 × 8) = 8 minutes per unit; Workload for resource 2 = (0.8 × 7) + (0.2 × 7) = 7 minutes per unit; Workload for resource 3 = (0.8 × 2) + [0.2 × (2 + 2)] = 2.4 minutes per unit; Workload for resource 4 = (0.8 × 10) + [0.2 × (10 + 10)] = 12 minutes per unit. Each resource has one worker who can provide one minute of work each minute. The implied utilization for resource 1 is 8; for resource 2, 7; for resource 3, 2.4; and for resource 4, 12. The highest implied utilization is 12. Capacity = 1/12 = 0.08 unit per minute.

AACSB: Analytical Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-05 Analyze a process flow with rework.

Topic: Rework

1. The salesforce of Small Travel Company (STC) is selling cultural immersion programs to U.S. college students that allow them to spend 3 months in Europe.

STC advertises in various college newspapers, as well as via social media. Potential customers fill out an online application form expressing their interest in more information about this experience. The form also includes their phone number for follow-up discussion, which sometimes, but not always, leads to the customer purchasing the package (more details below).

On 60 consecutive days in the winter, STC’s employees work hard to sell these programs to elite university students. The goal of the company is to sell, on average, two packages per day, leading to a total of 120 sold packages. The sales process works in four steps:

1. One salesperson reaches out to the potential customer by phone in order to put together a full profile of the customer, including skills and location preferences (Germany, Italy, France, etc.). The call takes on average 20 minutes. After the call, each profile is forwarded to a language teacher.
2. The language teacher looks at the student’s profile and also organizes a quick follow-up call. This takes, on average, 40 minutes per profile. The teacher rejects 60% of the profiles as the student would not have the language skills to benefit from an STC trip. From the remaining 40% of the profiles, half tell the teacher that they are no longer interested in participating. The teacher then forwards the remaining profiles to the STC accountant.
3. STC’s accountant then contacts the student to make a 10% down payment. This takes about 20 minutes per customer.
4. Finally, the teacher’s assistant contacts the customer to confirm the trip and start working on a travel schedule. At this point, an average of one-third of the students decide that they will not participate in the trip (in which case, STC and the student agree to give the 10% down payment to a charitable cause). This takes on average 50 minutes per student.

All employees work 8 hours per day.

How many students does STC have to contact each day through its call center to fill, on average, its target of 120 students per season (2 students per day)?

1. 5 students/day
2. 15 students/day
3. 35 students/day
4. 120 students/day

Step 1 passes 100%. Step 2 passes 20%. Step 3 passes 100%. Step 4 passes 67%. Starting with step 4, 1/0.667 = 1.5 (rounded). For step 3, 1.5/1 = 1.5. For step 2, 1.5/0.2 = 7.5. For step 1, 7.5/1 = 7.5. To get 1 customer through the process takes 7.5 starts. To get 2 good units per day, 7.5 × 2 = 15.

AACSB: Reflective Thinking

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.

Topic: Attrition Losses, Yields, and Scrap Rates

1. The salesforce of Small Travel Company (STC) is selling cultural immersion programs to U.S. college students that allow them to spend 3 months in Europe.

STC advertises in various college newspapers, as well as via social media. Potential customers fill out an online application form expressing their interest in more information about this experience. The form also includes their phone number for follow-up discussion, which sometimes, but not always, leads to the customer purchasing the package (more details below).

On 60 consecutive days in the winter, STC’s employees work hard to sell these programs to elite university students. The goal of the company is to sell, on average, two packages per day, leading to a total of 120 sold packages. The sales process works in four steps:

1. One salesperson reaches out to the potential customer by phone in order to put together a full profile of the customer, including skills and location preferences (Germany, Italy, France, etc.). The call takes on average 20 minutes. After the call, each profile is forwarded to a language teacher.
2. The language teacher looks at the student’s profile and also organizes a quick follow-up call. This takes, on average, 40 minutes per profile. The teacher rejects 60% of the profiles as the student would not have the language skills to benefit from an STC trip. From the remaining 40% of the profiles, half tell the teacher that they are no longer interested in participating. The teacher then forwards the remaining profiles to the STC accountant.
3. STC’s accountant then contacts the student to make a 10% down payment. This takes about 20 minutes per customer.
4. Finally, the teacher’s assistant contacts the customer to confirm the trip and start working on a travel schedule. At this point, an average of one-third of the students decide that they will not participate in the trip (in which case, STC and the student agree to give the 10% down payment to a charitable cause). This takes on average 50 minutes per student.

All employees work 8 hours per day.

Which resource is the bottleneck?

1. The salesperson
2. The language teacher
3. The accountant
4. The teacher’s assistant

Calculation of implied utilization

 Resource Yield Demand Capacity Implied utilization Salesperson 1.00 (7.5/1 × 2 ) = 15 1/20 × 60 × 8 = 24 students per day 15/24 = 0.625 Language teacher 0.20 (1.5/0.2 )× 2 = 15 1/40 × 60 × 8 = 12 students per day 15/12 = 1.25 Accountant 1.00 (1.5/1 × 2 ) = 3 1/20 × 60 × 8 = 24 students per day 3/24 = 0.125 Teacher’s assistant 0.67 (1/0.67 × 2 ) = 3 1/50 × 60 × 8 = 9.6 students per day 3/9.6 = 0.3125

Yield is based on “1 good output.” Since the goal is “2 good outputs” per day, demand has been doubled. Demand is calculated in reverse order, starting with teacher’s assistant and finishing with salesperson.

AACSB: Reflective Thinking

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.

Topic: Attrition Losses, Yields, and Scrap Rates

1. Consider the following four-step assembly operation with quality problems. All resources are staffed by one employee.

1. The first resource has a processing time of 5 minutes per unit.
2. The second resource has a processing time of 6 minutes per unit.
3. The third resource has a processing time of 3 minutes per unit. With a 30% probability, the flow unit coming out of the third resource has to be reworked. In that case, the operations at the first, second, and third resources are repeated. You can assume that (a) rework always succeeds (i.e., a unit going through the rework loop will always work after the third resource) and (b) the processing times for units in rework are the same as for regular units.
4. The fourth resource has a processing time of 4 minutes per unit.

Which resource in the process is the bottleneck?

1. The first resource
2. The second resource
3. The third resource
4. The fourth resource

 Good Rework Total per unit IU per minute Resource 1 0.7 × 5 0.3 × [5 + 5] 3.5 + 3 = 6.5 6.5/1 = 6.5 WL = Resource 2 0.7 × 6 0.3 × [6 + 6] 4.2 + 3.6 = 7.8 7.8/1 = 7.8 Resource 3 0.7 × 3 0.3 × [3 + 3] 2.1 + 2.7 = 4.8 4.8/1 = 4.8 Resource 4 1.00 × 4 4 4/1 = 4

The second resource is the bottleneck since it has the highest implied utilization.

AACSB: Reflective Thinking

Blooms: Analyze

Difficulty: 3 Hard

Learning Objective: 05-05 Analyze a process flow with rework.

Topic: Rework

1. Consider the following four-step assembly operation with quality problems. All resources are staffed by one employee.
1. The first resource has a processing time of 5 minutes per unit.
2. The second resource has a processing time of 6 minutes per unit.
3. The third resource has a processing time of 3 minutes per unit. With a 30% probability, the flow unit coming out of the third resource has to be reworked. In that case, the operations at the first, second, and third resources are repeated. You can assume that (a) rework always succeeds (i.e., a unit going through the rework loop will always work after the third resource) and (b) the processing times for units in rework are the same as for regular units.
4. The fourth resource has a processing time of 4 minutes per unit. What is the capacity of the process (in units per hour)?

What is the capacity of the process (in units per hour)?

1. 6.00
2. 7.70
3. 8.90
4. 20.10

 Good Rework Total per unit IU per minute Resource 1 0.7 × 5 0.3 × [5 + 5] 3.5 + 3 = 6.5 6.5/1 = 6.5 WL = Resource 2 0.7 × 6 0.3 × [6 + 6] 4.2 + 3.6 = 7.8 7.8/1 = 7.8 Resource 3 0.7 × 3 0.3 × [3 + 3] 2.1 + 2.7 = 4.8 4.8/1 = 4.8 Resource 4 1.00 × 4 4 4/1 = 4

The second resource is the bottleneck since it has the highest implied utilization.

The capacity is 1/7.8 = 0.1282 unit per minute, × 60 = 7.7 units per hour.

AACSB: Reflective Thinking

Blooms: Analyze

Difficulty: 3 Hard

Learning Objective: 05-05 Analyze a process flow with rework.

Topic: Rework

1. Consider a process that has multiple flow units with different demand rates and different paths through the process flow diagram. Consider the following statements:

1. The resource with the largest total demand rate is the bottleneck.
2. The implied utilization can never be bigger than 100%.

III. The resource that has the highest implied utilization is the bottleneck.

Which of the following choices identifies the correct statement(s)?

1. III only
2. I and II
3. I and III
4. None of these are correct

Implied utilization can be higher than 100%. Total demand and capacity at the resource must be taken into account in determining where the bottleneck is located. The resource with the highest implied utilization is the bottleneck.

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.

Topic: How to Find the Bottleneck in a General Process Flow

1. GV is a small accounting firm supporting wealthy individuals in their preparation of annual income tax statements. Every December, GV sends out a short survey to its customers, asking for the information required for preparing tax statements. Based on 50 years of experience, GV categorizes its cases into the following two groups:

• Group 1 (new customers): 20 percent of cases
• Group 2 (repeat customers): 80 percent of cases

This year, there are 35 income tax statements arriving each week.

In order to prepare the income tax statement, GV has three resources, or employees. The following activities are carried out by employees:

• An administrative support person processes every tax statement.
• A senior accountant (the owner of GV) processes only tax statements for new customers.
• A junior accountant processes tax statements for repeat customers.

The administrative support person can process 40 statements per week. The senior accountant can process 10 statements per week. The junior accountant can process 30 statements per week; these statements can be completed more quickly given past information on file about the clients.

What is the implied utilization for the junior accountant?

1. 33.3%
2. 66.7%
3. 83.3%
4. 93.3%

Implied utilization is Total demand at the resource/Capacity at the resource. Demand for the junior accountant is 80% of the 35 statements arriving weekly, or 28 statements. The capacity is 30 statements per week. IU = 28/30 = 93.3%.

AACSB: Reflective Thinking

Blooms: Apply

Difficulty: 3 Hard

Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.

Topic: How to Find the Bottleneck in a General Process Flow

1. GV is a small accounting firm supporting wealthy individuals in their preparation of annual income tax statements. Every December, GV sends out a short survey to its customers, asking for the information required for preparing tax statements. Based on 50 years of experience, GV categorizes its cases into the following two groups:

• Group 1 (new customers): 20 percent of cases
• Group 2 (repeat customers): 80 percent of cases

This year, there are 35 income tax statements arriving each week.

In order to prepare the income tax statement, GV has three resources, or employees. The following activities are carried out by employees:

• An administrative support person processes every tax statement.
• A senior accountant (the owner of GV) processes only tax statements for new customers.
• A junior accountant processes tax statements for repeat customers.

The administrative support person can process 40 statements per week. The senior accountant can process 10 statements per week. The junior accountant can process 30 statements per week; these statements can be completed more quickly given past information on file about the clients.

Which resource is the bottleneck?

2. The senior accountant
3. The junior accountant
4. There is no bottleneck

The bottleneck is the resource with the highest implied utilization. Administrative support person IU = 35/40 = 87.5%. Senior accountant IU = 7/10 = 70%. Junior accountant IU = 35/40 = 93.3%. Therefore, the junior accountant is the bottleneck resource.

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.

Topic: How to Find the Bottleneck in a General Process Flow

1. Which of the following statements about the concepts of “labor utilization” and “implied utilization” is correct?
2. Labor utilization is above 100% if the process is capacity constrained.
3. Labor utilization is above 100% if the process is demand constrained.
4. Labor utilization is always the same as implied utilization.
5. If the process is capacity constrained, then implied utilization is bigger than the labor utilization.
6. If the process is demand constrained, then implied utilization is bigger than the labor utilization.
7. None of these are correct.

Labor utilization cannot be above 100%. Implied utilization can exceed 100%, as it includes additional information about how much demand exceeds capacity of the resource. In a capacity-constrained process, implied utilization will be bigger than utilization.

AACSB: Reflective Thinking

Blooms: Remember

Difficulty: 1 Easy

Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.

Topic: How to Find the Bottleneck in a General Process Flow

Chapter 05 Test Bank Summary

 Category # of Questions AACSB: Analytical Thinking 57 AACSB: Reflective Thinking 8 Accessibility: Keyboard Navigation 44 Blooms: Analyze 3 Blooms: Apply 3 Blooms: Remember 52 Blooms: Understand 7 Difficulty: 1 Easy 53 Difficulty: 2 Medium 6 Difficulty: 3 Hard 6 Gradable: automatic 57 Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix. 12 Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels. 16 Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss. 13 Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times. 12 Learning Objective: 05-05 Analyze a process flow with rework. 12 Topic: Attrition Losses, Yields, and Scrap Rates 14 Topic: Flow Unit–Dependent Processing Times 12 Topic: Generalized Process Flow Patterns 12 Topic: How to Find the Bottleneck in a General Process Flow 15 Topic: Rework 12