National University of Computer and Emerging Sciences

FAST School of Management Fall 2020 Islamabad Campus

Serial No:
MG320 Operations
Sessional-1 Exam
Management
Fall- 2020
Sections: BBA-A, B, C Total Time: 1 Hour
Wednesday, November 25, 2020 Total Marks: 55
Course Instructor
________________
M. Hammad Majeed Signature of Invigilator

________________ _______ _______ ___________________

Student Name Roll No Section Signature

DO NOT OPEN THE QUESTION BOOK OR START UNTIL INSTRUCTED.

Instructions:

1. Verify at the start of the exam that you have a total of Two (02) parts printed on Eight
(08) Pages including this title page.
2. Attempt all questions on the answer-book and in the given order.
3. The exam is closed books, closed notes. Please see that the area in your threshold is
free of any material classified as ‘useful in the paper’ or else there may a charge of
cheating.
4. Read the questions carefully for clarity of context and understanding of meaning and
make assumptions wherever required, for neither the invigilator will address your
queries, nor the teacher/examiner will come to the examination hall for any assistance.
5. Fit in all your answers in the provided space. You may use extra space on the last page
if required. If you do so, clearly mark question/part number on that page to avoid
confusion.
6. Use only your own stationery and calculator. If you do not have your own calculator,
use manual calculations.
7. Use only permanent ink-pens. Only the questions attempted with permanent ink-pens
will be considered. Any part of paper done in lead pencil cannot be claimed for
checking/rechecking.

Part - 1 Part - 2 Total

Total
25 30 55
Marks
Marks
Obtained
 National University of Computer and Emerging Sciences
FAST School of Management Fall 2020 Islamabad Campus

Please read the questions carefully and answer all the questions. Marks of each question
are written in front of that question. Therefore, give due time to each question so that you
can finish the paper well in time.

Question 1 25 Marks
Select one of the options given to answer/ complete the statement and mark respective
option in the table given below.
Any cutting/ overwriting will lead to ZERO mark

Q# Answer Q# Answer
A B C D E A B C D E
1 15
2 16
3 17
4 18
5 19
6 20
7 21
8 22
9 23
10 24
11 25
12
13
14

1) A graphic technique for defining the relationship between customer desires and product (or service) is:
A) product lifecycle management.
B) the house of quality.
C) the moment of truth.
D) the assembly drawing.
E) modular design.
Answer: B
2) A result of concurrent engineering in product design is:
A) speedier product development.
B) lower quality.
C) less customer demand.
D) higher costs.
E) all of the above.
Answer: A
3) Manufacturability and value engineering has which of the following benefits?
I. Reduced complexity of the product
II. Reduction of environmental impact
III. Additional standardization of components
IV. Robust design
V. Improved job design and safety
A) I, III, V
B) II, IV
C) I, III, IV

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 National University of Computer and Emerging Sciences
FAST School of Management Fall 2020 Islamabad Campus
D) IV
E) I, II, III, IV, V
Answer: E
4) Which of the following is TRUE regarding computer-aided design?
A) It is too expensive to use in most manufacturing and design settings.
B) It is an obsolete technology.
C) It results in longer development cycles for virtually all products.
D) It is the use of computers to interactively design products and prepare engineering documentation.
E) It is the use of information technology to control machinery.
Answer: D
5) Which of the following is TRUE concerning advantages of CAD?
A) It provides accurate information flows to other departments.
B) Most product costs are determined at the design stage.
C) Design options are easier to review before final commitments are made.
D) Virtually all products have their development cycle shortened.
E) All of the above are true.
Answer: E
6) What is the use of information technology to control machinery?
A) CAM
B) CAD
C) QFD
D) DFMA
E) STEP
Answer: A
7) Value analysis takes place:
A) when the product is selected and designed.
B) during the initial stages of production when something needs to be done to assure product success.
C) when the product is first conceived.
D) during the production process when it is clear that the new product is a success.
E) when the product cost is very low.
Answer: D
8) What technology "builds" products by laying down successive thin layers of plastic, metal, glass, or
ceramics?
A) CAM
B) STEP
C) 3-D printing
D) replicator
E) virtual reality
Answer: C
9) Three broad categories of definitions of quality are:
A) product quality, service quality, and organizational quality.
B) user based, manufacturing based, and product based.
C) internal, external, and prevention.
D) low-cost, response, and differentiation.
E) Pareto, Shewhart, and Deming.
Answer: B
10) According to the manufacturing-based definition of quality:
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.

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 National University of Computer and Emerging Sciences
FAST School of Management Fall 2020 Islamabad Campus
D) quality is the degree to which a specific product conforms to standards.
E) quality lies in the eyes of the beholder.
Answer: D
11) Which of the following is NOT one of the major categories of costs associated with quality?
A) prevention costs
B) appraisal costs
C) internal failure costs
D) external failure costs
E) None of the above; they are all major categories of costs associated with quality.
Answer: E
12) All of the following costs are likely to decrease as a result of better quality EXCEPT:
A) customer dissatisfaction costs.
B) inspection costs.
C) scrap costs.
D) warranty and service costs.
E) maintenance costs.
Answer: E
13) 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
E) None is hard to quantify.
Answer: D
14) Which of the following statements is NOT true?
A) Self-promotion is not a substitute for quality products.
B) Inferior products harm a firm's profitability and a nation's balance of payments.
C) Product liability transfers from the manufacturer to the retailer once the retailer accepts delivery of the
product.
D) Quality–be it good or bad–will show up in perceptions about a firm's new products, employment
practices, and supplier relations.
E) Legislation such as the Consumer Product Safety Act sets and enforces product standards by banning
products that do not reach those standards.
Answer: C
15) Stakeholders who are affected by the production and marketing of poor quality products include:
A) stockholders, employees, and customers.
B) suppliers and creditors, but not distributors.
C) only stockholders, creditors, and owners.
D) suppliers and distributors, but not customers.
E) only stockholders and organizational executives and managers.
Answer: A
16) Regarding the quality of design, production, and distribution of products, an ethical requirement for
management is to:
A) determine whether any of the organization's stakeholders are being wronged by poor quality
products.
B) gain ISO 9000 certification for the organization.
C) obtain a product safety certificate from the Consumer Product Safety Commission.
D) have the organization's legal staff write disclaimers in the product instruction booklets.
E) compare the cost of product liability to the external failure cost.
Answer: A
17) PDCA, developed by Shewhart, stands for which of the following?

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 National University of Computer and Emerging Sciences
FAST School of Management Fall 2020 Islamabad Campus
A) Plan-Do-Check-Act
B) Plan-Develop-Check-Accept
C) Problem-Develop Solution-Check-Act
D) Problem-Do-Continue-Act
E) Prepare-Develop-Create-Assess
Answer: A
18) A Three Sigma program has how many defects per million?
A) 34
B) 3
C) 3 times the standard deviation
D) 2700
E) 1500
Answer: D
19) Ten samples of a process measuring the number of returns per 100 receipts were taken for a local
retail store. The number of returns were 10, 9, 11, 7, 3, 12, 8, 4, 6, and 11. Find the standard deviation of
the sampling distribution for the p-bar chart.
A) There is not enough information to answer the question.
B) .081
C) 8.1
D) .0273
E) .0863
Answer: D
20) An x-bar control chart was examined and no data points fell outside of the limits. Can this process be
considered in control?
A) Not yet, there could be a pattern to the points.
B) Not yet, the R-chart must be checked.
C) Not yet, the number of samples must be known.
D) Yes.
E) Both A and B
Answer: E
21) Statistical process control charts:
A) display the measurements on every item being produced.
B) display upper and lower limits for process variables or attributes and signal when a process is no
longer in control.
C) indicate to the process operator the average outgoing quality of each lot.
D) indicate to the operator the true quality of material leaving the process.
E) are a graphic way of classifying problems by their level of importance, often referred to as the 80-20
rule.
Answer: B
22) The Central Limit Theorem:
A) is the theoretical foundation of the c-chart.
B) states that the average of assignable variations is zero.
C) allows managers to use the normal distribution as the basis for building some control charts.
D) states that the average range can be used as a proxy for the standard deviation.
E) controls the steepness of an operating characteristic curve.
Answer: C
23) Up to three standard deviations above or below the centerline is the amount of variation that
statistical process control allows for:
A) Type I errors.
B) about 95.5% variation.
C) natural variation.

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 National University of Computer and Emerging Sciences
FAST School of Management Fall 2020 Islamabad Campus
D) all types of variation.
E) assignable variation.
Answer: C
24) Jars of pickles are sampled and weighed. Sample measures are plotted on control charts. The ideal
weight should be precisely 11 oz. Which type of chart(s) would you recommend?
A) p-chart
B) c-chart
C) both an x-bar chart and an R-chart
D) an x-bar chart, but not an R-chart
E) both a p-chart and a c-chart
Answer: C
25) The usual purpose of an R-chart is to signal whether there has been a:
A) gain or loss in dispersion.
B) change in the percent defective in a sample.
C) change in the central tendency of the process output.
D) change in the number of defects in a sample.
E) change in the consumer's risk.
Answer: A

Question 2 5x6=30 Marks

The Air Green, an airline company calculated the passengers traveling the airline to a famous tourist
destination in the summer months in the country XYZ. The management of Air Green believes that number
of passengers is heavily related to the number of tourists visiting to the country XYZ. The data of past 12
years is given below;
Years Number of visitors (millions) Passengers (millions)
1 7 1.5
2 2 1.0
3 6 1.3
4 4 1.5
5 14 2.5
6 15 2.7
7 16 2.4
8 12 2.0
9 14 2.7
10 20 4.4
11 15 3.4
12 7 1.7

a) Develop a regression relationship.

b) What is your forecast of passengers with 10 million visitors? 13 million?
c) What is standard error of the estimate?
d) What number of visitors is needed to have 3 million passengers?
e) What is correlation of the two variables?
f) How much degree of change in profit with respect to sales is explained by your regression
relationship?

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 National University of Computer and Emerging Sciences
FAST School of Management Fall 2020 Islamabad Campus

Years Number of visitors Passengers X2 Y2 XY

(millions) (X) (millions) (Y)
1 7 1.5 49 2.25 10.5
2 2 1.0 4 1.00 2.0
3 6 1.3 36 1.69 7.8
4 4 1.5 16 2.25 6.0
5 14 2.5 196 6.25 35.0
6 15 2.7 225 7.29 40.5
7 16 2.4 256 5.76 38.4
8 12 2.0 144 4.00 24.0
9 14 2.7 196 7.29 37.8
10 20 4.4 400 19.36 88.0
11 15 3.4 225 11.56 51.0
12 7 1.7 49 2.89 11.9
∑ 132 27.1 1796 71.59 352.9

(a)

𝑋̅ = 11, 𝑌̅ = 2.26

b = {352.9 – (12*11*2.26)} / [{1796 – (12*112)}] = 0.159

a = 2.26 – (0.159*11) = 0.511

Y = 0.511 + 0.159X

(b)
Y = 0.511 + (0.159*10) = 2.101 million
Y = 0.511 + (0.159*13) = 2.578 million

(c)
(∑𝑌^2−𝑎∑𝑌−𝑏∑𝑋𝑌)
Syx = √ = √{71.59 − (0.511 ∗ 27.1) − (0.159 ∗ 352.9)}/(12 − 2) = 0.404
𝑛−2
The estimated ridership may vary by 0.404 million

(d)
Y = 0.511 + 0.159X
3 = 0.511 + 0.159X
3−0.511
=X
0.159
15.65 million visitors could lead to 3 million passengers

(e)
r = 0.917

(f)
r2 = (0.917)2 = 0.840

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 National University of Computer and Emerging Sciences
FAST School of Management Fall 2020 Islamabad Campus
≈ 84% variance in the ridership due to number of tourists visiting the city is explained by this
relationship

, , ,

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