1. [28 points, 4 points each] Please circle the answers you think are correct.
(a) (single choice) In the EOQ model, the demand rate has no impact on the order quantity.
(b) (single choice) Metal frames for kick scooters are manufactured in two steps: Stamping
and assembly. The parts are fabricated by a single stamping machine that requires a set
up time of 90 minutes and a processing time of 30 seconds for each scooter. Currently,
the stamping machine produces in batches of size 60. At assembly, parts are assembled
manually to form the finished products. Each scooter requires 30 minutes of labor time to
assemble. There are 12 workers in assembly. There is sufficient demand to sell every
scooter the system can make. One way to increase process capacity is to
A. increase the batch size at the Stamping step
B. decrease the batch size at the Stamping step
C. add more workers at Assembly
D. none of the above
(c) (single choice) In the newsvendor model, if we keep other parameters the same,
increasing the salvage value per unit
A. increases order quantity.
B. decreases order quantity.
C. both A and B are possible.
(d) (single choice) If the average A/F ratio is 0.8, this means
A. on average, the forecasts are overly optimistic.
B. on average, the forecasts are overly pessimistic.
C. the demand has a large variation.
D. the retailer did not order enough inventories.
(e) (single choice) Which of the following are correct?
A. In service design, complexity is the number of ways a customer or service
provider interaction can vary at each step.
B. In product design, a company should manage all major functions, because this is a
sign of core competency.Operations Management