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BUSI 411 Exam 4 – Question and Answers

1. In the basic EOQ model, if annual demand doubles, the effect on the EOQ is:
2. The manager of the Quick Stop Corner Convenience Store (which never closes) sells four cases of Stein beer each day. Order costs are $8.00 per order, and Stein beer costs $.80 per six-pack (each case of Stein beer contains four six-packs). Orders arrive three days from the time they are placed. Daily holding costs are equal to 5 percent of the cost of the beer. If he were to order 16 cases of Stein beer at a time, what would be the average inventory level?
3. Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and carrying costs are 4 cents per pound per day. Lead time for each order is three days, and the pepperoni itself costs $3.00 per pound. If she were to order 80 pounds of pepperoni at a time, what would be the length of an order cycle?
4. Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and carrying costs are 4 cents per pound per day. Lead time for each order is three days, and the pepperoni itself costs $3.00 per pound. If she were to order 80 pounds of pepperoni at a time, what would be the average inventory level?
5. Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and carrying costs are 4 cents per pound per day. Lead time for each order is three days, and the pepperoni itself costs $3.00 per pound. If she were to order 80 pounds of pepperoni at a time, what would be the average total daily costs, including the cost of the pepperoni?
6. In the Toyota Production System, waste and inefficiency are referred to as __________, and the ongoing effort to reduce this is referred to as __________. 
7. Which of the following contributes to the competitive advantage enjoyed by service firms using lean concepts?
8. A system of lights used at each workstation to signal problems or slowdowns is:
9. A potential obstacle to conversion to a lean system is:
10. Which of the following would you not expect to see in a lean environment?
11. _________ has/have helped firms to concentrate on their core business.
12. Which of the following is not an application of E-business?
13. Which of the following is an advantage of E-business? (I) reduction of transaction costs. (II) shortened supply chain response time. (III) greater customer loyalty
14. A factor that makes it desirable for business organizations to actively manage their supply chains is:
15. It is especially the case for small businesses that closer interactions and increased agility make __________ relatively more attractive.
16. Scheduled due dates are the result of:
17. A work center can be a:
18. There are four resources and four jobs to be done. Assume there must be one-to-one matching between jobs and resources. The time required for each resource to do each job is as follows:
19. Scheduling pertains to:
20. Which of the following is critical to effective yield management?
21. Annual ordering cost is inversely related to order size.
22. The service function of purchasing interfaces with many areas, including legal, accounting, and engineering functions.
23. Starting with the final customer and moving backward through the supply chain, batch sizes and the level of safety stock tend to decrease.
24. Priority rules are used in low-volume systems to identify an optimal processing sequence.
25. Sequencing is concerned with the order in which jobs are done, while loading is concerned with assigning jobs to work centers or workstations.