Chapter 7

CHAPTER 7
Multiple Choice
1. Which of the following represents value-added time in the manufacturing cycle?
a. Inspection time b. Queue time c. Move time d. Process time
2. Throughput time consists of:

a. Process time
b. Inspection time and move time.
c. Process time, inspection time, and move time
d. Process time, inspection time, move time, and queue time
3. Manufacturing Cycle Efficiency (MCE) is computed as:

a. Throughput Time ÷ Delivery Cycle Time
b. Process Time ÷ Delivery Cycle Time
c. Value-Added Time ÷ Throughput Time
d. Value-Added Time ÷ Delivery Cycle Time
4. Lorenzo Corporation has provided the following data for one of its products: Process time 3 days
Queue time 4 days Inspection time 0.7 days Move time 0.3 days Wait time 9 days The manufacturing
cycle efficiency for this operation would be closest to:
a. 0.375
b. 0.45
c. 0.18
d. 0.33
Use the following information to answer questions 5 through 8.

Rainee Manufacturing Corporation has the following information: Moving time 8 days Inspection
time 2 days Processing time 10 days Storage time 30 days
5. What is the total amount of value-added time?

a. 10 days
b. 30 days
c. 40 days
d. 50 days
6. What is the total amount of nonvalue-added time?

a. 10 days b. 30 days c. 40 days d. 50 days
7. What is the product’s cycle time?

8. What is the manufacturing cycle efficiency?

a. 25.0% b. 80.0% c. 20.0% d. 60.0%
Use the following information to answer questions 9 and 10. Nicole Corporation has the following
information: Moving time 10 days Inspection time 5 days Processing time 15 days Storage time 20
days.
9. What is the product’s cycle time?
10. What is the manufacturing cycle efficiency?

a. 30.0% b. 20.0% c. 50.0% d.70.0%
CHAPTER 8 Multiple Choice
1. The critical success factors for a business today are all:

a. planning-oriented. c. sales-oriented. b. production-oriented. d. customer-oriented.
2. The Theory of Constraints (TOC) focuses on improving cycle time, the rate at which raw materials
are converted to finished product. This strategic management technique is primarily concerned with
the critical success factor of:
a. energy. c. originality. b. quality. d. speed.
3. The key concept in TOC is:

a. benchmarking. c. the bottleneck b. throughout d. reengineering
4. Which of the following determines the desired cost for a product based upon a given competitive
price?
a. benchmarking. c. reengineering b. target costing. d. life-cycle costing.
5. Target costing forces the firm to become more competitive, like:

a. reengineering. c. activity-based costing b. life-cycle costing. d. benchmarking.
6. Which of the following is not one of the steps in the life cycle of a product?
a. manufacturing, inspecting, packaging and warehousing
b. research and development
c. purchasing and receiving
d. marketing, promotion and distribution
7. In comparison to the Cost Life Cycle of a product, the Sales Life Cycle of a product is:
a. much shorter
b. much longer
c. exactly parallel, except that it is expressed in sales terms.
d. different because it represents a sequence of phases relating to sales, not production.
8. In each of the phases of a product's sales life cycle, management's focus will be:
a. parallel c. different b. on the next phase as well as the current one. d. undifferentiated
9. generally, firms will price a product more competitively at which stage of the products sales life
cycle?
a. Product Introduction c. Maturity b. Growth d. Decline
10. Because of the four stages of a product's sales life cycle has a different emphasis, the cost
management system will be expected to provide data that is:
a. different at each stage.
b. common to all stages.
c. lesser in amount in the later stages.
d. lesser in amount in the early stages.
11. The sequence of activities within the firm which begins with research and development, followed
by design, and manufacturing, marketing / distribution, and customer service is the:
a. sales life cycle c. market life cycle b. target life cycle d. critical life cycle
12. The sequence of phases in the product or service's life in the market - from the introduction of
the product or service to the growth in sales and finally maturity, decline, and withdrawal from the
market is the:
a. sales life cycle c. market life cycle b. target life cycle d . cost life cycle
13. When a firm determines the desired cost for a product or service, given a competitive market
price, in order to earn a desired profit, the firm is exercising
a. target costing b. life cycle costing c. variable costing d. absorption costing
14. Which one of the following is used in target costing to reduce product cost by analyzing the
tradeoffs between (1) different types and levels of product functionality and (2) total product cost?
a. Benchmarking c. productivity analysis b. functional analysis d. value engineering
15. Which one of the following is a common type of value engineering in which each major function
or feature of the product is examined in terms of its performance and cost?
a. benchmarking c. productivity analysis b. functional analysis d. functional engineering
16. Which one of the following is a common form of value engineering in which the designing team
prepares several possible designs of the product?
a. benchmarking c. productivity analysis b. functional analysis d. design analysis
17. Which one of the following is not one of the five steps in TOC analysis?
a. Identify the binding constraint(s).
b. Determine the most efficient utilization for each binding constraint.
c. Manage the flow through the binding constraint.
d. Deduct capacity from the constraint.
18. Which one of the following is true concerning TOC? Short-Term Focus Long-Term Focus Cost
Drivers
a. No No Yes
b. No Yes No
c. Yes No No
d. No Yes Yes
19. Which one of the following is a downstream cost?

a. research and development c. purchasing b. packaging d. prototyping
20. which one of the following industries has high upstream costs?
a. retail c. cosmetics b. perfumes d. computer software
21. Which of the following is not a critical success factor at the design stage?
a. improved ease-of-manufacture
b. reduced time-to-market
c. reduced expected service costs
d. enhanced quality
22. Which one of the following is not a common design method?

a. concurrent engineering. b. design engineering c. templating d. prototyping
23. Sales begin to grow rapidly and product variety increases in:
a. phase three c. phase five b. phase two d. phase four
24. Sales continue to increase but at a decreasing rate is:

25. Sales begin to decline, as does the number of competitors, in:


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CHAPTER 7

2. Throughput time consists of:

3. Manufacturing Cycle Efficiency (MCE) is computed as:

Use the following information to answer questions 5 through 8.

5. What is the total amount of value-added time?

6. What is the total amount of nonvalue-added time?

7. What is the product’s cycle time?

8. What is the manufacturing cycle efficiency?

10. What is the manufacturing cycle efficiency?

CHAPTER 8 Multiple Choice

1. The critical success factors for a business today are all:

3. The key concept in TOC is:

5. Target costing forces the firm to become more competitive, like:

19. Which one of the following is a downstream cost?

22. Which one of the following is not a common design method?

24. Sales continue to increase but at a decreasing rate is:

25. Sales begin to decline, as does the number of competitors, in:

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