QUESTION 1

1. A Company produces product X. The current process uses 10 employees and produces 200 units/hr. Someone suggests that you should change the process with new methods that increase output to 300 units/hr but will require 14 employees. Summary is given in Table below.

   

   Employees are paid $10 per hour, and overhead is charged at 140% of labor costs. Finished switches sell for $20 / unit.
   What is the multifactor productivity of the current process?

   		< or = 8.0
   		> 8.0 but < or = 10:0
   		>10.0 but < or = 12.0
   		> 12.0

10 points

QUESTION 2

1. A Company produces product X. The current process uses 10 employees and produces 200 units/hr. Someone suggests that you should change the process with new methods that increase output to 300 units/hr but will require 14 employees. Summary is given in Table below.

   

   Workers are paid at a rate of $10 per hour, and overhead is charged at 140% of labor costs. Finished switches sell for $20 / unit.
   What is the multifactor productivity of the new process?

   		less than or equal to 8.0
   		greater than 8.0 but less than or equal to 10.0
   		greater than 10.0 but less than or equal to 12.0
   		greater than 12.0

10 points

QUESTION 3

1. what decision should do you make?

   		implement the new process
   		stay with the current process
   		need more information to make a decision
   		Either process is acceptable (since the multi-factor productivities are the same).

10 points

QUESTION 4

1. You currently make a part for an equipment at a cost of $20 / unit. The annual fixed cost for this equipment is $50,000. You have found an outside supplier who will make the part for $15 / unit if you will pay their annual fixed costs of $200,000 / year:

   

   What is the break even quantity between buying and making?

   		30,000 units per year
   		40,000 units per year
   		50,000 units per year
   		60,000 units per year

10 points

QUESTION 5

1. Analyze the following decision tree. Determine the missing probabilities, and identify the alternative that maximizes the expected payoff.

   
   

   		Option 1, with an expected payoff of less than $25
   		Option 1, with an expected payoff of $25 or more
   		Option 2, with an expected payoff of less than $25
   		Option 2, with an expected payoff of $25 or more

10 points

QUESTION 6

1. The UCL and LCL for an chart are 25 and 15 respectively. The nominal line is 20, and the process variability is considered to be in statistical control. The results of the next six sample means are 18, 23, 17, 21, 24, and 16. What should you do?

   		Explore the assignable causes because the second, fourth, and fifth samples are above the mean.
   		Nothing; everything is fine.
   		Explore the assignable causes because there is a run.
   		Explore the assignable causes because there is a trend.

10 points

QUESTION 7

1. An operation has a target of 20 and consistently of 19.8 with a standard deviation of 0.5. The upper specification limit of 22 and a lower specification limit of 18 is designed for this process. Which statement concerning this process is TRUE?

   		The process capability ratio is 1.46.
   		The process capability index is 1.33.
   		The process is in control.
   		None of the above.

10 points

QUESTION 8

1. Service time is targeted for 15 minutes with an upper and lower specification of 16 and 14 min., respectively. The process standard deviation is 0.2 min. and the process average is 14.8 min. What is the process capability ratio?

   		1.33
   		1.50
   		1.66
   		2.00

10 points

QUESTION 9

1. The upper and lower specification limits are 4.0 and 4.04, respectively. The process standard deviation is .004, and the process average is 4.02. Which of the following is TRUE?

   		This process is capable of meeting the target for 4-sigma process standard and capable of producing products with 4-sigma variability specifications
   		This process is capable of meeting the target for 4-sigma process standard but not capable of producing products with 4-sigma variability specifications
   		This process is capable of meeting the target for 5-sigma process standard but not capable of producing products with 5-sigma variability specifications
   		Assuming that this process is in statistical control (inside the upper and lower control limits), it has a process capability index that is acceptable.

10 points

QUESTION 10

1. Consider this: You have a process that exhibit the following: R(bar)=2.5 with LCL(R)=0, UCL(R)=5.5 and X(bar-bar)=72 with LCL (X-bar)=70.5, UCL(X-bar)=73.5
   The current chart shows 5 samples: for R: 3.1, 2, 2.7, 1.9, and 2.9; and for X(bar): 71.5, 71, 71.9, 73, 72.5.An operator comes to your office giving you 6 new samples that are taken recently for which: the R samples are: 1.5, 2.5, 3.7, 1.8, 3.1, 2.8 and the X(bar) samples are: 72.5, 73, 72.2, 72.8, 71.1, 71.8.Which of the following is TRUE?

   		Process is in control but we need to monitor the process
   		Process is somewhat in control but we need to take more samples to make sure
   		Process is in control and no action is needed
   		Process is not in control and we need to take action.