Chapter 4:

4.1.1 A forecast with a time horizon of about three months to three years is typically called
a:
a) long-range forecast.
b) medium-range forecast.
c) short-range forecast.
d) weather forecast.

4.1.2 Which of the following mostly requires long-range forecasting (as opposed to short-
range or medium-range forecasting) for its planning purposes?
a) Job scheduling
b) Production levels
c) Cash budgeting
d) Capital expenditures

4.2.1 Which of the following forecasting techniques uses these three types of participants:
decision makers, staff personnel, and respondents?
a) Delphi method
b) Sales force composite
c) Jury of executive opinion
d) Associative models

4.2.2 The forecasting technique that pools the opinions of a group of experts or managers is
known as:
a) the expert judgment model.
b) multiple regression.
c) a jury of executive opinion.
d) a market survey.

4.3.1 Gradual upward or downward movement of data over time is called:

a) seasonality.
b) a cycle.
c) a trend.
d) exponential variation.

4.3.2 John’s House of Pancakes uses a weighted moving average method to forecast
pancake sales. It assigns a weight of five to the previous month’s demand, three to demand
two months ago, and one to demand three months ago. If sales amounted to 1,000
pancakes in May, 2,200 pancakes in June, and 3,000 pancakes in July, what should be the
forecast for August?
a) 2,400
b) 2,511
c) 2,067
d) 3,767

4.4.1 The primary purpose of the mean absolute deviation (MAD) in forecasting is to:
 a) estimate the trend line.
b) eliminate forecast errors.
c) seasonally adjust the forecast.
d) measure forecast accuracy.

4.4.2 Suppose that the last four months of sales were 8, 10, 15, and 9 units, respectively.
Suppose, further, that the last four forecasts were 5, 6, 11, and 12 units, respectively. What
is the mean absolute deviation (MAD) of these forecasts?
a) 2
b) -10
c) 3.5
d) 9

4.5.1 A seasonal index for a monthly series is about to be calculated on the basis of three
years’ accumulation of data. The three previous July values were 110, 150, and 130. The
average demand over all months during the three-year time period was 190. What is the
approximate seasonal index for July?
a) 0.487
b) 0.684
c) 1.462
d) 2.053

4.5.2 Demand for a certain product has been forecasted to be 800 units per month,
averaged over all twelve months of the year. The product follows a seasonal pattern, for
which the January monthly index is 1.25. What is the seasonally-adjusted sales forecast for
January?
a) 640 units
b) 798.75 units
c) 801.25 units
d) 1,000 units

Given an actual demand this period of 61, a forecast for this period of 58, and an alpha of
0.3, what would the forecast for the next period be using exponential smoothing?
a) 45.5
b) 57.1
c) 58.9
d) 61.0

Given forecast errors of -1, 4, 8, and -3, what is the mean absolute deviation?
a) 4
b) 3
c) 2
d) 8
A time-series trend equation is 25.3 + 2.1x. What is your forecast for period seven?
a) 23.2
b) 25.3
c) 27.4
d) 40.0
________ expresses the error as a percentage of the actual values.
a) MAD (mean absolute deviation)
b) MSE (mean squared error)
c) MAPE (mean absolute percentage error)
d) FIT (forecasting including trend)

Which of the following values of alpha (α) would cause exponential smoothing to respond
the slowest to forecast errors?
a) 0.10
b) 0.2246
c) 0.50
d) 0.90

Given an actual demand this period of 103, a forecast value for this period of 99, and an
alpha of .4, what is the exponential smoothing forecast for next period?
a) 94.6
b) 97.4
c) 100.6
d) 101.6
Chapter 6:

6.1.1 Quality can improve profitability by reducing costs. Which of the following is NOT an
aspect of reduced costs by quality improvements?
a) Flexible pricing
b) Increased productivity
c) Lower rework and scrap costs
d) Lower warranty costs

6.1.2 According to the manufacturing-based definition:

a) quality is ‘the degree of excellence at an acceptable price and the control of
variability at an acceptable cost’.
b) quality ‘depends on how well the product fits patterns of consumer preferences’.
c) even though quality cannot be defined, you know what it is’.
d) quality is ‘the degree to which a specific product conforms to standards’.

6.2.1 Which of the following is NOT encouraged to be established by the ISO 9000?
a) Detailed recordkeeping
b) Detailed work instructions
c) Detailed market analysis
d) Quality management procedures

6.2.2 Which of the following is NOT a quality management principle for ISO 9000?
a) Customer satisfaction
b) Cost leadership
c) Process analysis
d) Continual improvement

6.3.1 A three-sigma program has how many defects per million?

a) 34
b) 3
c) Three times the standard deviation
d) 2,700

6.3.2 A six-sigma program has how many defects per million?

a) 3.4
b) 34
c) 1,000
d) Six times the standard deviation

6.4.1 The process of identifying other organizations that are best at some facet of your
operations and then modeling your organization after them is known as:
a) continuous improvement.
b) employee empowerment.
c) benchmarking.
d) copycatting.
6.4.2 One of Britain’s largest children’s hospitals working with a Ferrari racing team to learn
how to improve patient hand-off quality is an example of:
a) internal benchmarking.
b) external benchmarking.
c) Taguchi concepts.
d) employee empowerment.

6.5.1 A manager tells her production employees, “It’s no longer good enough that your work
falls just anywhere within the specification limits. I need your work to be as close to the
target value as possible.” Her thinking is reflective of:
a) internal benchmarking.
b) six-sigma.
c) ISO 9000.
d) Taguchi concepts.

6.5.2 What shape does the quality loss function exhibit?

a) Quadratic
b) Linear
c) S-shaped
d) Concave

6.6.1 Among the tools of TQM (total quality management), the tool ordinarily used to aid
understanding the sequence of events through which a product travels is a:
a) Pareto chart.
b) flowchart.
c) check sheet.
d) Taguchi map.

6.6.2 Pareto charts are used to:

a) identify inspection points in a process.
b) outline production schedules.
c) classify errors, problems, or defects.
d) show material flow.

The saying ‘quality lies in the eyes of the beholder’ is:

a) an unrealistic definition of quality.
b) a user-based definition of quality.
c) a manufacturing-based definition of quality.
d) a product-based definition of quality.

Which writer expressed the basic philosophy that “the employee cannot produce products
that, on average, exceed the quality of what the process is capable of producing”?
a) Vilfredo Pareto
b) Armand Feigenbaum
c) Joseph M. Juran
d) W. Edwards Deming
Which of the four major categories of quality costs is particularly hard to quantify?
a) Prevention costs
b) Appraisal costs
c) Internal failure costs
d) External failure costs

PDCA, developed by Shewhart, stands for which of the following?

a) Plan-Do-Check-Act
b) Plan-Develop-Check-Accept
c) Problem-Develop Solution-Check-Act
d) Problem-Do-Continue-Act

The saying ‘making it right the first time’ is:

a) an unrealistic definition of quality.
b) a user-based definition of quality.
c) a manufacturing-based definition of quality.
d) a product-based definition of quality.

If one million passengers pass through Heathrow airport with checked baggage each month,
a successful six-sigma program for baggage handling would result in how many passengers
with misplaced luggage?
a) 3.4
b) 6.0
c) 34
d) 2,700

A hospital benchmarked itself against a Ferrari racing team in an effort to:

a) increase surgery prep time.
b) improve patient hand-off quality.
c) lengthen surgery duration.
d) reduce the number of doctors.

Costs of dissatisfaction, repair costs, and decreased future demand are elements of cost in
the:
a) quality loss function.
b) Pareto chart.
c) ISO 9000 quality-cost calculator.
d) process chart.

The process improvement technique that sorts the vital few from the trivial many is:
a) Taguchi analysis.
b) Pareto analysis.
c) benchmarking.
d) Deming analysis.
A customer service manager at a retail clothing store has collected numerous customer
complaints from the forms they fill out on merchandise returns. To analyze trends or
patterns in these returns, she has organized these complaints into a small number of
sources or factors. This is most closely related to the ________ tool of TQM (total quality
management).
a) quality loss function
b) cause-and-effect diagram
c) scatter diagram
d) histogram

A quality circle holds a brainstorming session and attempts to identify the factors
responsible for flaws in a product. Which tool do you suggest they use to organize their
findings?
a) Ishikawa diagram
b) Pareto chart
c) Flowchart
d) Control chart

If a sample of parts is measured and the mean of the measurements is outside the control
limits, the process is:
a) in control, but not capable of producing within the established control limits.
b) out of control and the process should be investigated for assignable variation.
c) within the established control limits, with only natural causes of variation.
d) monitored closely to see if the next sample mean will also fall outside the control
limits.

What is a popular measurement scale for service quality that compares service expectations
with service performance?
a) COQ (costs of quality)
b) SPC (statistical process control)
c) Kaizen
d) SERVQUAL (service quality)

Which of the determinants of service quality involves having the customer’s best interests
at heart?
a) Access
b) Courtesy
c) Credibility
d) Responsiveness

The goal of inspection is to:

a) detect a bad process immediately.
b) add value to a product or service.
c) correct deficiencies in products.
d) correct system deficiencies.