CC131 Operations Management II - JIT Systems Exam

Mark Gregory Yamane

Name

TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.

1) TPS stands for Total Production Streamlining. 1)

F

2) Product storage is an example of waste, in the sense that no value is added. 2)

T

T
3) In a JIT system, product inspection adds value by identifying defective items. 3)

F
4) Customer demand will always remain an unknown, so it is not considered a source of variation. 4)

5) Variability in manufacturing can occur because engineering drawings or specifications are 5) T

incomplete or inaccurate.

6) A push system means providing the next station with exactly what is needed when it is needed. 6)
F

F
7) JIT brings about competitive advantage by faster response to the customer regardless of cost. 7)

T
8) Many suppliers feel that having a variety of customers is better than being tied to long-term 8)
contracts with one customer.

F
9) JIT systems carry inventory just in case something goes wrong. 9)

T
10) Hidden problems are generally uncovered during the process of reducing inventory. 10)

11) Level scheduling means producing at a constant rate, regardless of customer demands. 11) F

F
12) The number of kanbans decreases as safety stock is increased. 12)

T
13) A kanban system requires little variability in lead time because shortages have their impact on the 13)
entire productive system.

F
14) The quality management tool called poka-yoke is not relevant to JIT systems. 14)

F
15) Because most services cannot be inventoried, there is little place for JIT to help service 15)
organizations achieve competitive advantage.

16) When implemented as a comprehensive manufacturing strategy, JIT, TPS, and lean systems sustain 16)
T
competitive advantage and result in increased overall returns.

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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

17) Which of the following is generally found in most JIT environments? 17) B
A) push systems
B) pull systems
C) a push system for high margin items and a pull system for low margin items
D) a push or pull system, depending upon the rate of demand
E) a push system for purchased parts and a pull system for manufactured parts

18) Which of the following is not a reason for variability? 18) E

A) Drawings or specifications are incomplete.
B) Customer demand is unknown.
C) Engineering drawings are inaccurate.
D) Employees, machines, and suppliers produce units late.
E) Employees, machines, and suppliers produce units that conform to standards.

19) Manufacturing cycle time is best defined as the 19) A

A) sum of all the task times to make one unit of a product
B) length of the work shift, expressed in minutes per day
C) time from raw materials receipt to finished product exit
D) time it takes a unit to move from one workstation to the next
E) time between the start of one unit and the start of the next unit

20) Which of the following is specifically characterized by the elimination of waste through a focus on 20) A
exactly what the customer wants?
A) Lean operations
B) Just-in-time (JIT)
C) kanban
D) Toyota Production System (TPS)
E) Material requirements planning (MRP)

21) The list of 5S's, although it looks like a housekeeping directive, supports lean production by 21) B
A) eliminating wasted motion through ergonomic studies, in the "support" item
B) identifying non-value items and removing them, in the "sort/segregate" item
C) building good safety practices, in the "shine/sweep" item
D) reducing inventory, in the "standardize" item
E) increasing variability through standardized procedures, in the "standardize" item

22) Concerning relationships with suppliers, which of the following combinations is critical to the 22) C
success of JIT?
A) distant relationships with skepticism
B) close relationships with skepticism
C) close relationships with trust
D) distant relationships with trust
E) none of the above

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 23) A
23) If the goals of JIT partnerships are met, which of the following is a result?
A) In-transit inventory falls as suppliers are located closer to facilities.
B) In-plant inventory replaces in-transit inventory.
C) For incoming goods, receiving activity and inspection are outsourced.
D) The number of suppliers increases.
E) All of the above are consequences of meeting the JIT partnership goals.

24) Which one of the following is a characteristic of a JIT partnership? 24) C

A) large number of suppliers
B) maximal product specifications imposed on supplier
C) removal of incoming inspection
D) frequent deliveries in large lot quantities
E) active pursuit of vertical integration

25) Which one of the following is not a benefit of the implementation of JIT? 25) C
A) rapid throughput
B) rework reduction
C) variability increase
D) cost reduction
E) quality improvement

26) Characteristics of just-in-time partnerships do not include 26) C

A) long-term contracts
B) buyer helps supplier to meet the quality requirements
C) large lot sizes to save on setup costs and to gain quantity discounts
D) few suppliers
E) removal of in-transit inventory

27) Which of the following is not a goal of JIT partnerships? 27) D

A) removal of in-plant inventory
B) removal of unnecessary activities
C) removal of in-transit inventory
D) removal of engineering changes
E) All of the above are goals of JIT partnerships.

28) A characteristic of JIT partnerships with respect to quality is to 28) D

A) impose maximum product specifications on the supplier
B) draw up strict contracts ensuring that all defectives will be immediately replaced
C) inspect all incoming parts
D) help suppliers meet quality requirement
E) maintain a steady output rate

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29) Which one of the following is a concern expressed by suppliers? 29) B
A) elimination of in-plant inventory
B) production with zero defects
C) delivery to the point of use
D) customers' infrequent engineering changes
E) large lot sizes

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 30) E
30) Which of the following is not a concern of suppliers as they prepare to enter into JIT partnerships?
A) Suppliers feel that they would be less at risk if they contracted with more than one customer.
B) Suppliers are concerned that frequent delivery of small quantities is economically prohibitive.
C) Suppliers are concerned that customers will present frequent engineering changes with
inadequate lead time to deal with them.
D) Suppliers feel that their processes are suited for larger lot sizes than the customer wants.
E) All of the above represent JIT supplier concerns.

31) A firm wants to develop a level material use schedule based on the following data. What should be 31) D
the setup cost?

Desired lot size: 60

Annual demand: 40,000
Holding cost: $20 per unit per year
Daily production rate: 320
Work days per year: 250

A) $45 B) $450 C) $500 D) $0.45 E) $4.50

32) A product has annual demand of 100,000 units. The plant manager wants production to follow a 32) A
four-hour cycle. Based on the following data, what setup cost will enable the desired production
cycle? d=400 per day (250 days per year), p=4000 units per day, H=$40 per unit per year, and
Q=200 (demand for four hours, half a day).
A) $1,036.80 B) $2.00 C) $18.00 D) $64.00 E) $7.20

33) Which of the following is true regarding the steps to reducing setup times? 33)
E
A) The cycle of steps is repeated until setup time is reduced to under a minute.
B) The first step involves performing as much setup preparation as possible while the
process/machine is operating.
C) Standardize tooling and standardize training are included in the same step.
D) Improved material handling and move material closer are done before operator training.
E) All of the above are true.

A
34) Kanban is associated with all of the following except 34)
A) increased material handling
B) small lot sizes
C) reductions in inventory
D) signals, such as cards, lights, or flags
E) moving inventory only as needed

35) The word "kanban" means 35) E

A) continuous improvement
B) lot size of one
C) employee empowerment
D) low inventory
E) card

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36) Lead time for computers is 7 days with daily demand of 5 computers and a safety stock of 1 day. 36) C
Each kanban holds 8 computers. What is the correct number of kanbans?
A) not enough information
B) 1
C) 5
D) 8
E) 7

37) JIT makes quality cheaper because 37) D

A) the cost of low quality can be hidden as inventory cost
B) JIT spots defects early
C) JIT prevents long runs of defects
D) B and C
E) A, B and C

38) Which of the following is an illustration of employee empowerment? 38) C

A) Unionization of the work place brings better morale and therefore better quality.
B) UPS drivers are trained to perform several motions smoothly and efficiently.
C) "No one knows the job better than those who do it."
D) all of the above
E) none of the above

39) Which of the following is not an attribute of lean operations? 39) D

A) eliminating almost all inventory through just-in-time techniques
B) minimizing space requirements by reducing the distance a part travels
C) educating suppliers to accept responsibility for helping meet customer needs
D) pushing responsibility to the highest level possible through centralized decision making
E) All of the above are attributes of lean operations.

40) In the quest for competitive advantage, which of the following is a JIT requirement? 40) E
A) small number of job classifications
B) reduced space for inventory
C) reduced number of vendors
D) quality by suppliers
E) All of the above are JIT requirements.

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SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.

41) Differentiate between a push and a pull system. 41)

A push system is when a company makes products based on what they think customers will buy or a set
rate, and builds up inventory ahead of time to meet that demand. A pull system is when a company only
makes what customers have actually ordered, in the right amount and at the right time. The goal of a pull
system is to reduce waste and inventory, and to make the manufacturing process more efficient. Push
systems can lead to too much inventory, higher costs, and wasted resources.
42) What are the goals of JIT partnerships? 42)

JIT partnerships are all about building long-term relationships with suppliers, working together to
continuously improve processes and reduce waste, sharing risks and rewards, and sharing information and
knowledge to enhance decision-making and coordination. The ultimate goal is to create a lean, agile, and
responsive supply chain that meets customer demand efficiently and effectively.
43) Identify the inventory tactics appropriate for a JIT environment. 43)

1 Suppliers are like parts of the factory.

2 Design things that work well and are good for making and using.
3 Arrange the factory efficiently around the product.
4 Flexible set-up’s which leads to easy changeovers processes.
5 Safety measures which has preventive maintenance at the warehouse.
6 Elimination of defects by making the product right in first time.
7 Multifunctional & cross functional workers with developed skill set.
8 Flexible communication channels

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 ESSAY. Write your answer in the space provided or on a separate sheet of paper.

44) A repetitive manufacturing firm is planning on level material use. The following information has been
collected. Currently, the firm operates 250 days per year.

Annual demand 22,000

Daily demand 88
Daily production 250
Desired lot size (2 hours of production) 63
Holding cost per unit per year $50

a. What is the setup cost, based on the desired lot size?

b. What is the setup time, based on $40 per hour setup labor?

Given:

The firm operates = 250 days per year

Annual demand = 22,000

Daily demand = 88

Daily production = 250

Desired lot size = 63 (2 hours of production)

Holding cost = $50 per unit per year

a) Setup Cost = {Q^2 * H * [1-(d/p)]}/2D

Setup Cost = [{(63^2)×50×(1−(88/250))}/(2×22,000)] = {(3,969×50×0.648)/44,000} = $2.9226

Setup Cost = $2.9226

Where,

Q is Desired lot size

H is Holding cost

d is Daily demand

D is Annual demand

p is Daily production

b) Setup time:

Setup time=(Setup Cost / Setup Labour)

Setup time = ($2.9226×60min/hr) / $40 = 4.3839min Setup time = 4.3839min

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 45) Daily usage of a part is 20 in a facility that operates 250 days of the year. Setup cost is $20 and annualized
carrying cost is $210. Production of this part occurs at the rate of 50 per day when production of the part is
underway. Lead time is 1 day; safety stock is 1/2 day's production. What is the optimum kanban size, and
number of kanbans?

KANBAN CARD

d = daily usage/demand rate = 20 units/day

Working days in a year = 250 days

A = Annual Demand = 20 x 250 = 5,000 units

p = daily production rate = 50 units/day

S = Cost per Setup= $20 per batch

H = Holding cost ($) = $210 per unit per annum

L = Lead time = 1 days

SS (days) = 0.50 days production

Determine container size:

Economic batch size = container size

Q* = {2*A*S/[H(1-d/p)]}^(1/2)
Q* = {2*5000*20/[210(1-20/50)]}^(1/2)
Q* = 40 Units

Kanban size:

First determine demand during lead time as follows:

Demand during lead time = dL = Daily demand x Lead time
dL = d x L = 20 x 1 = 20 units
Safety stock = SS in days x daily demand
SS = 0.5 x 20 = 10 mainshafts
The number of Kanbans (N) required is given by following formula:
N = (Demand during LT + Safety stock)/Container size
N = (dL + SS)/k = (20 + 10)/40 = 0.75
Number of Kanbans (N) required is 1 container.