Operations Management 1st Edition

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Chapter 05 Test Bank KEY

1. All flow units should have the same exit point in a production process.

FALSE

Attrition loss is an example of when flow units exit the process before completion. Therefore,
some flow units exit the process earlier than others.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.
Topic: Generalized Process Flow Patterns

2. A bottleneck resource must have an implied utilization less than 100%.

FALSE

5-1
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of McGraw-Hill Education.
An implied utilization less than 100% simply means that the resource has capacity to meet
demand. It has no bearing on whether or not the resource is a bottleneck.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Gradable: automatic
Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.
Topic: How to Find the Bottleneck in a General Process Flow

3. The overall process yield is the sum total of the yields of all resources.

FALSE

The overall process yield is the product of the yields of all resources.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.
Topic: Attrition Losses, Yields, and Scrap Rates

4. When analyzing a process flow with flow unit dependent processing times, the unit of analysis
should be a unit of demand.

FALSE

The unit of analysis for a flow unit becomes a minute or hour of work instead of a unit of
demand when analyzing a process flow with flow unit dependent processing times.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Gradable: automatic
Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.
Topic: Flow Unit–Dependent Processing Times

5. Rework always lowers the process capacity.

FALSE

Rework lowers the process capacity only when it involves a bottleneck resource in restoring
reworked units.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Gradable: automatic
Learning Objective: 05-05 Analyze a process flow with rework.
Topic: Rework

6. Reworked units consume more time at a resource involved with rework than good units.

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of McGraw-Hill Education.
TRUE

Reworked units revisit a resource and therefore consume more time at that resource than good
units.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-05 Analyze a process flow with rework.
Topic: Rework

7. Customers at an e-retailer site abandon their shopping carts without completing their purchase.
This is an example of _____________.
A. attrition loss
B. attrition gain
C. attention loss
D. attention gain
Attrition loss refers to flow units leaving the process without completion.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.
Topic: Generalized Process Flow Patterns

8. A store manager at C&A notices that 20% of customers come to browse but not buy, 5% of
them need assistance to complete their purchases, and 3% simply window shop. This is a
_____________ situation where customers take different paths through the shopping process.

A. process mix
B. operation mix
C. product mix
D. market mix

A product mix refers to a combination of different flow unit types moving through a process.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.
Topic: Generalized Process Flow Patterns

9. A store manager at C&A notices that not all customers who walk into the store will make a
purchase. About 20% come to browse but not buy, 10% need assistance from an assistant
manager, and 5% need assistance from the store manager. C&A has one greeter, two assistant

5-3
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of McGraw-Hill Education.
managers, one store manager, and six cashiers. In setting up a demand matrix, how many rows of
resource type and columns of customer type does C&A need?

A. 10, 3
B. 10, 4
C. 4, 4
D. 5, 5
There are four types of resources and four types of customers.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.
Topic: Generalized Process Flow Patterns

10. Not all of the 100 customers who walk into the C&A store per day will make a purchase.
About 20% come to browse but not buy, 10% need assistance to complete a purchase, and 5%
need assistance but leave without making a purchase. The other 65% purchase something
without requiring assistance. C&A has one greeter (who greets every customer), two assistants
(who deal with customers who need assistance), and two cashiers (who serve customers who
purchase something). What does the demand matrix for C&A look like?

A.

Browse Buy
Greeter 20 80
Assistant 0 10
Cashier 0 75

B.

Browse Help Buy

Greeter 20 15 80
Assistant 0 15 0
Cashier 0 15 75

C.

Browse Help Buy

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 Greeter 20 10 65
Assistant 0 10 0
Cashier 0 10 65

D.

Browse Help + Buy Help + Leave Buy

Greeter 20 10 5 65
Assistant 0 10 5 0
Cashier 0 10 0 65

There are four customer types and three resource types.

AACSB: Analytical Thinking

Blooms: Understand
Difficulty: 2 Medium
Gradable: automatic
Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.
Topic: Generalized Process Flow Patterns

11. Not all of the 100 customers who walk into the C&A store per day will make a purchase.
About 20% come to browse but not buy, 10% need assistance to complete a purchase, and 5%
need assistance but leave without making a purchase. The other 65% purchase something
without requiring assistance. C&A has one greeter (who greets every customer), two assistants
(who deal with customers who need assistance), and two cashiers (who serve customers who
purchase something). What is the total demand rate per day for the greeter?

A. 100
B. 20
C. 15
D. 10
Demand for greeter = 20 + 10 + 5 + 65 = 100.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Gradable: automatic
Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.
Topic: Generalized Process Flow Patterns

12. Not all of the 100 customers who walk into the C&A store per day will make a purchase.
About 20% come to browse but not buy, 10% need assistance to complete a purchase, and 5%
need assistance but leave without making a purchase. The other 65% purchase something

5-5
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent
of McGraw-Hill Education.
without requiring assistance. C&A has one greeter (who greets every customer), two assistants
(who deal with customers who need assistance), and two cashiers (who serve customers who
purchase something). What is the total demand rate per day for assistants?

A. 100
B. 20
C. 15
D. 10
Demand for assistants = 10 + 5 = 15.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Gradable: automatic
Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.
Topic: Generalized Process Flow Patterns

13. Not all of the 100 customers who walk into the C&A store per day will make a purchase.
About 20% come to browse but not buy, 10% need assistance to complete a purchase, and 5%
need assistance but leave without making a purchase. The other 65% purchase something
without requiring assistance. C&A has one greeter (who greets every customer), two assistants
(who deal with customers who need assistance), and two cashiers (who serve customers who
purchase something). What is the total demand rate per day for cashiers?

A. 100
B. 75
C. 65
D. 25
Demand for cashiers = 10 + 65 = 75.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Gradable: automatic
Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.
Topic: Generalized Process Flow Patterns

14. A ________ is a combination of different flow unit types moving through a process.

A. capacity mix
B. demand matrix
C. product matrix
D. product mix
A product mix is a combination of different flow unit types moving through a process.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.
Topic: Generalized Process Flow Patterns

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of McGraw-Hill Education.
15. A __________ determines how many flow units of each type are flowing through each
__________.

A. demand matrix, process

B. demand matrix, resource
C. product mix, process
D. product mix, resource
A demand matrix determines how many flow units of each type are flowing through each resource.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.
Topic: Generalized Process Flow Patterns

16. All students register with the receptionist upon arrival at the orientation. The receptionist will
assign each student to one of four groups for a campus tour. Each campus tour has its designated
tour guide. In setting up a demand matrix, how many rows of resource type and columns of flow
unit type does the situation have?

A. 5, 2
B. 2, 2
C. 5, 4
D. 2, 4
Each student will be assigned to one of the four tour groups. Therefore, there will be four types of
students and five types of resources-the receptionist and tour guides 1-4.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.
Topic: Generalized Process Flow Patterns

17. C&A makes two types of products using four machines. Product A visits machines 1, 2, and
4. Product B only visits machines 1 and 3. The demand per day is 40 units for Product A and 160
units for Product B. What does the demand matrix for C&A look like?

A.

All products
Machine 1 200
Machine 2 40
Machine 3 160
Machine 4 40

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of McGraw-Hill Education.
B.

Product A Product B
Machine 1 1 1
Machine 2 1 0
Machine 3 0 1
Machine 4 1 0

C.

Product A Product B
Machine 1 40 160
Machine 2 40 0
Machine 3 0 160
Machine 4 40 0

D.

Product Product
A B
All 40 160
machines

Demand rate for Product A is 40 units per day. Demand rate for Product B is 160 units per day. Machine
1 is visited by Products A and B. Machine 2 is visited by Product A only. Machine 3 is visited by Product
B only. Machine 4 is visited by Product A only.

AACSB: Analytical Thinking

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-01 Compute the demand for a resource in the presence of a product mix.
Topic: Generalized Process Flow Patterns

18. Which of the following statements is TRUE regarding implied utilization?

A. A resource with an implied utilization of 1.7 means that capacity exceeds demand by 1.7%.
B. A resource with an implied utilization of 1.7 means that demand exceeds capacity by 1.7%
C. A resource with an implied utilization of 1.7 means that demand exceeds capacity by 70%.
D. A resource with an implied utilization of 1.7 means that capacity exceeds demand by 70%.
Implied utilization = Total demand at the resource/Capacity at the resource. Therefore, if implied
utilization is 1.7, that means demand exceeds capacity by 1.7 – 1 = 70%.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic

5-8
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of McGraw-Hill Education.
 Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.
Topic: How to Find the Bottleneck in a General Process Flow

19. Which of the following statements is TRUE regarding utilization and implied utilization?
A. Utilization measures by how much demand exceeds the capacity of the resource.
B. Utilization can exceed 1.
C. Implied utilization can exceed 1.
D. Implied utilization is a measure of demand variability.
Implied utilization measures by how much demand exceeds the capacity of the resource. If it exceeds 1,
then it means the process is capacity constrained.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.
Topic: How to Find the Bottleneck in a General Process Flow

20. _________ is constrained if the implied utilization of any resource is above 100%.
A. Capacity
B. Demand
C. Bottleneck
D. Inventory

Capacity is constrained if the implied utilization of any resource is above 100%.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.
Topic: How to Find the Bottleneck in a General Process Flow

21. A process is ______________ constrained if the highest implied utilization of all resources is
less than or equal to 100%.
A. capacity
B. demand
C. bottleneck
D. supply
Demand is constrained if the implied utilization of the resource is below 100%.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.
Topic: How to Find the Bottleneck in a General Process Flow

22. The steps involved in finding the bottleneck in a process with a product mix include all the
following EXCEPT:
A. compute the total demand rate for each resource.
B. compute the capacity level for each resource.
C. compute the flow rate for each resource.
D. compute the implied utilization for each resource.

5-9
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of McGraw-Hill Education.
The bottleneck in a process with a product mix is the resource with the highest implied utilization for each
process and does not involve the flow rate. Besides, flow rate should be computed in relation to each flow
unit type.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.
Topic: How to Find the Bottleneck in a General Process Flow

23. The resource with the ____________ is the bottleneck in a process with multiple types of
flow units.
A. highest capacity
B. lowest capacity
C. highest implied utilization
D. lowest implied utilization
The resource with the highest implied utilization is the bottleneck in a process with multiple types of flow
units.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.
Topic: How to Find the Bottleneck in a General Process Flow

24. C&A makes two types of products using four machines from 9 a.m. to 5 p.m. each day.
Product A visits machines 1, 2, and 4. Product B only visits machines 1 and 3. The capacity is
0.4 unit per minute at machine 1, 0.12 unit per minute at machine 2, 0.2 unit per minute at
machine 3, and 0.3 unit per minute at machine 4. The demand per day is 40 units for Product A
and 160 units for Product B. Which is the implied utilization for the bottleneck resource?

A. 1.67
B. 1.04
C. 0.69
D. 0.28
Total demand rate for machine 1 = 40 + 160 = 200 units per day. Total demand rate for machine 2 = 40
units per day. Total demand rate for machine 3 = 160 units per day. Total demand rate for machine 4 = 40
units per day. Implied utilization for machine 1 = 200/(0.4 × 8 × 60) = 1.04. Implied utilization for
machine 2 = 40/(0.12 × 8 × 60) = 0.69. Implied utilization for machine 3 = 160/(0.2 × 8 × 60) = 1.67.
Implied utilization for machine 4 = 40/(0.3 × 8 × 60) = 0.28. The bottleneck is the resource with the
highest implied utilization, which is machine 3.
AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.
Topic: How to Find the Bottleneck in a General Process Flow

25. C&A makes two types of products using four machines from 9 a.m. to 5 p.m. each day.
Product A visits machines 1, 2, and 4. Product B only visits machines 1 and 3. The capacity is

5-10
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of McGraw-Hill Education.
0.4 unit per minute at machine 1, 0.12 unit per minute at machine 2, 0.2 unit per minute at
machine 3, and 0.3 unit per minute at machine 4. The demand per day is 40 units for Product A
and 160 units for Product B. What is the implied utilization for machine 1?

A. 1.67
B. 1.04
C. 0.69
D. 0.28
Total demand rate for machine 1 = 40 + 160 = 200 units per day. Capacity for machine 1 = 0.4 unit per
minute or 0.4 × 8 × 60 units per day. Implied utilization for machine 1 = 200/(0.4 × 8 × 60) = 1.04.
AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.
Topic: How to Find the Bottleneck in a General Process Flow

26. C&A makes two types of products using four machines from 9 a.m. to 5 p.m. each day.
Product A visits machines 1, 2, and 4. Product B only visits machines 1 and 3. The capacity is
0.4 unit per minute at machine 1, 0.12 unit per minute at machine 2, 0.2 unit per minute at
machine 3, and 0.3 unit per minute at machine 4. The demand per day is 40 units for Product A
and 160 units for Product B. Which resource is the bottleneck?

A. Machine 1
B. Machine 2
C. Machine 3
D. Machine 4
Total demand rate for machine 1 = 40 + 160 = 200 units per day. Total demand rate for machine 2 = 40
units per day. Total demand rate for machine 3 = 160 units per day. Total demand rate for machine 4 = 40
units per day. Implied utilization for machine 1 = 200/(0.4 × 8 × 60) = 1.04. Implied utilization for
machine 2 = 40/(0.12 × 8 × 60) = 0.69. Implied utilization for machine 3 = 160/(0.2 × 8 × 60) = 1.67.
Implied utilization for machine 4 = 40/(0.3 × 8 × 60) = 0.28. The bottleneck is the resource with the
highest implied utilization, which is machine 3.
AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.
Topic: How to Find the Bottleneck in a General Process Flow

27. C&A makes two types of products using four machines from 9 a.m. to 5 p.m. each day.
Product A visits machines 1, 2, and 4. Product B only visits machines 1 and 3. The capacity is
0.4 unit per minute at machine 1, 0.12 unit per minute at machine 2, 0.2 unit per minute at
machine 3, and 0.3 unit per minute at machine 4. The demand per day is 40 units for Product A
and 160 units for Product B. Assume the relative proportion between the two product types
remains constant. What is the flow rate for Product B in units per day?

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of McGraw-Hill Education.
A. 24
B. 96
C. 120
D. Cannot be determined
Because the implied utilization is 1.67 (exceeds 1), the process is capacity constrained. Flow rate for
Product B = Demand rate/Implied utilization of the bottleneck = 160/1.67 = 96 units per day.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.
Topic: How to Find the Bottleneck in a General Process Flow

28. About 80% of customers who receive a promotion coupon will visit the store, but only 20%
of those in the store will make a purchase. What is the yield of the promotion?

A. 80%
B. 60%
C. 20%
D. 16%
Process yield = 0.8 × 0.2 = 0.16.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.
Topic: Attrition Losses, Yields, and Scrap Rates

29. About 80% of customers who receive a promotion coupon will visit the store, but only 20%
of those in the store will make a purchase. How many promotion coupons have to be sent in
order to get 100 customers to make a purchase?
A. 1600
B. 625
C. 500
D. 125

Process yield = Number of promotion coupons = 100/0.16 = 625.

Number of coupons started to get Q coupons = Q/Process yield = 100/0.16 = 625.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.
Topic: Attrition Losses, Yields, and Scrap Rates

30. Which of the following is an example of attrition loss?

A. All customers renew their magazine subscriptions.

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of McGraw-Hill Education.
B. Defective units in a manufacturing process are reworked.
C. More loan applications are received than approved.
D. The number of students at the beginning of the course is the same as that at the end.
Some loan applicants are rejected in their loan application process and are regarded as attrition losses.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.
Topic: Attrition Losses, Yields, and Scrap Rates

31. In a process with attrition loss, all flow units start at _________ resource but then drop out of
the process at __________ points.
A. the same, different
B. a different, the same
C. the same, the same
D. a different, different
In a process with attrition loss, all flow units start at the same resource but then drop out of the process at
different points.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.
Topic: Attrition Losses, Yields, and Scrap Rates

32. _______ defective flow units that are ________ the process.
A. Rework is, eliminated from
B. Defects are, restored in
C. Scrap is, eliminated from
D. Scrap is, restored in
Scrap is defective flow units that are eliminated from the process.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.
Topic: Attrition Losses, Yields, and Scrap Rates

33. The ________ of a resource measures the percentage of _______ units that are processed at
this resource.
A. yield, defective
B. yield, non-defective
C. capacity, defective
D. capacity, non-defective

The yield of a resource measures the percentage of nondefective units that are processed at this resource.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.

5-13
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of McGraw-Hill Education.
 Topic: Attrition Losses, Yields, and Scrap Rates

34. Which of the following statements about the yield of a process is FALSE?
A. A process can have a yield of 100%.
B. A process with attrition loss has a lower yield than one without attrition loss.
C. A process without attrition loss will have a yield of 100%.
D. A process can have a yield that exceeds 100%.
The yield of a process is the percentage of units processed correctly. It cannot exceed 100%.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.
Topic: Attrition Losses, Yields, and Scrap Rates

35. A three-step process is used to make a product. The yield of step 1 is 90%; of step 2, 70%;
and of step 3 is 50%. What is the yield of the overall process?

A. 70%
B. 40%
C. 31.5%
D. Cannot be determined
The yield of the overall process = 0.9 × 0.7 × 0.5 = 0.315.
AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.
Topic: Attrition Losses, Yields, and Scrap Rates

36. A three-step process is used to make a product. The yield of step 1 is 50%; of step 2, 80%;
and of step 3, 20%. How many units would the process have to process to get 100 units of good
outputs?
A. 125
B. 200
C. 167
D. 1250

Process yield = 0.5 × 0.8 × 0.2 = 8%. Number of units = 100/0.08 = 1250.

AACSB: Analytical Thinking

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.
Topic: Attrition Losses, Yields, and Scrap Rates

37. A three-step process is used to make a product. The yield of step 1 is 80%; of step 2, 40%;
and of step 3, 50%. Step 1 takes 2 minutes per unit. Step 2 takes 4 minutes per unit. Step 3 takes
5 minutes. Where in the process is the bottleneck and what is its implied utilization?
A. Step 3, 0.2

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of McGraw-Hill Education.
B. Step 3, 10
C. Step 2, 0.25
D. Step 2, 20

To have one good unit at step 3, demand at step 3 is 1/50% = 2; demand at step 2 is 2/40% = 5;
demand at step 1 is 5/80% = 6.25. Capacity at step 1 is ½, step 2 is ¼, step 3 is 1/5. Implied
utilization at step 1 is 6.25/0.5 = 12.5, step 2 is 5/0.25 = 20, step 3 is 2/0.2 = 10. The highest
implied utilization is at step 2.

AACSB: Analytical Thinking

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.
Topic: Attrition Losses, Yields, and Scrap Rates

38. A three-step process is used to make a product. The yield of step 1 is 80%; of step 2, 40%;
and of step 3, 50%. Step 1 takes 2 minutes per unit. Step 2 takes 4 minutes per unit. Step 3 takes
5 minutes. How many good units can the process produce per hour?
A. 0.05
B. 0.1
C. 3
D. 6
To have one good unit at step 3, demand at step 3 is 1/50% =2; demand at step 2 is 2/40% = 5; demand at
step 1 is 5/80% = 6.25. Capacity at step 1 is 1/2; at step 2, 1/4; and at step 3, 1/5. Implied utilization at
step 1 is 6.25/0.5 = 12.5; at step 2, 5/0.25 = 20; and at step 3, 2/0.2 = 10. The highest implied utilization is
20. The capacity of the process in good units per hour = 1/20 × 60 = 3 units per hour.
AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.
Topic: Attrition Losses, Yields, and Scrap Rates

39. When analyzing a process flow with flow unit dependent processing time, the flow unit is
changed from using ___________ to ______________.
A. a minute of work, a unit of demand
B. a unit of demand, a minute of work
C. a unit of resource, a unit of demand
D. a unit of demand, a unit of resource
When analyzing a process flow with flow unit dependent processing time, the flow unit is changed from
using a unit of demand to a minute of work.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.
Topic: Flow Unit–Dependent Processing Times

40. A work load matrix has _________ as columns and _________ as rows.
A. resource types, load types
B. work types, load types

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of McGraw-Hill Education.
C. work types, flow unit types
D. flow unit types, resource types

A work load matrix has flow unit types as columns and resource types as rows.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.
Topic: Flow Unit–Dependent Processing Times

41. A work load matrix captures the _________ that each flow unit type requires for each
resource.

A. amount of work
B. amount of demand
C. amount of revenue
D. amount of supply

A work load matrix captures the amount of work that each flow unit type requires for each resource.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.
Topic: Flow Unit–Dependent Processing Times

42. Which of the following statements is TRUE regarding a process flow with flow unit
dependent processing time?
A. It is a process where the processing times at a given resource are the same across the
products/customers in the product mix.
B. It is a process where a unit of demand is used as a flow unit.
C. It is a process where the bottleneck is the resource with the highest implied utilization.
D. It is a process where the bottleneck is the resource with the highest workload.
The bottleneck in a process flow with flow unit dependent processing time is the resource with the highest
implied utilization.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.
Topic: Flow Unit–Dependent Processing Times

43. Which of the following statements is FALSE regarding the workload matrix?
A. It has the same number of columns and rows as the demand matrix.
B. The total amount of work requested at a resource is computed by adding up the workloads for
that resource across all customer types.

5-16
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of McGraw-Hill Education.
C. It captures the time available at each resource.
D. It has flow unit types as columns and resource types as rows.
The workload matrix does not contain information about the time available at each resource.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.
Topic: Flow Unit–Dependent Processing Times

44. Two types of customers are served by a two-step process. Each resource is staffed by one
employee. Customer A spends two minutes at resource X and five minutes at resource Y.
Customer B spends five minutes at resource X and two minutes at resource Y. The demand rate
per hour is 10 customer A and 15 customer B. Which of the following is the workload matrix for
this situation?

A.

All
customers
Resource 95
X
Resource 80
Y

B.

Customer Customer
A B
Resource 2 5
X
Resource 5 2
Y

C.

Customer Customer
A B
Resource 20 75
X
Resource 50 30
Y

5-17
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent
of McGraw-Hill Education.
D.

Customer Customer
A B
All 70 105
resources

Workload for customer A at resource X = 10 × 2; Workload for customer A at resource Y = 10 × 5;

Workload for customer B at resource X = 15 × 5; Workload for customer B at resource Y = 15 × 2.

AACSB: Analytical Thinking

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.
Topic: Flow Unit–Dependent Processing Times

45. Two types of customers are served by a two-step process. Each resource is staffed by one
employee. Customer A spends two minutes at resource X and five minutes at resource Y.
Customer B spends five minutes at resource X and two minutes at resource Y. The demand rate
per hour is 10 customer A and 15 customer B. What is the workload for resource X across all
customer types?
A. 70 minutes per hour
B. 80 minutes per hour
C. 95 minutes per hour
D. 105 minutes per hour
Workload for resource X = (10 × 2) + (15 × 5) = 95 minutes per hour.
AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.
Topic: Flow Unit–Dependent Processing Times

46. Two types of customers are served by a two-step process. Each resource is staffed by one
employee. Customer A spends two minutes at resource X and five minutes at resource Y.
Customer B spends five minutes at resource X and two minutes at resource Y. The demand rate
per hour is 10 customer A and 15 customer B. What is the workload for resource Y across all
customer types?
A. 70 minutes per hour
B. 80 minutes per hour
C. 95 minutes per hour
D. 105 minutes per hour
Workload for resource Y = (10 × 5) + (15 × 2) = 80 minutes per hour.
AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.
Topic: Flow Unit–Dependent Processing Times

5-18
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent
of McGraw-Hill Education.
47. Two types of customers are served by a two-step process. Each resource is staffed by one
employee. Customer A spends two minutes at resource X and five minutes at resource Y.
Customer B spends five minutes at resource X and two minutes at resource Y. The demand rate
per hour is 10 customer A and 15 customer B. Where in the process is the bottleneck and what is
its implied utilization?
A. Resource X, 1.58
B. Resource X, 1.33
C. Resource Y, 1.33
D. Resource Y, 1.58
Workload for resource X = (10 × 2) + (15 × 5) = 95 minutes per hour; Implied utilization for resource X =
95/60 = 1.58. Workload for resource Y = (10 × 5) + (15 × 2) = 80 minutes per hour; Implied utilization
for resource Y = 80/60 = 1.33. Resource X has the higher implied utilization and therefore is the
bottleneck.
AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.
Topic: Flow Unit–Dependent Processing Times

48. Two types of customers are served by a two-step process. Each resource is staffed by one
employee. Customer A spends two minutes at resource X and five minutes at resource Y.
Customer B spends five minutes at resource X and two minutes at resource Y. The demand rate
per hour is 10 customer A and 15 customer B. What is the flow rate for customer A holding the
mix of A and B constant?

A. Cannot be determined
B. 6.3 customers per hour
C. 7.5 customers per hour
D. 9.5 customers per hour
Workload for resource X = (10 × 2) + (15 × 5) = 95 minutes per hour; Implied utilization for resource X =
95/60 = 1.58. Workload for resource Y = (10 × 5) + (15 × 2) = 80 minutes per hour; Implied utilization
for resource Y = 80/60 = 1.33. Resource X has the higher implied utilization of 1.58, which is greater than
1. The process is capacity constrained. Flow rate for customer A = 10/1.58 = 6.3 customers per hour.
AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.
Topic: Flow Unit–Dependent Processing Times

49. Two types of customers are served by a two-step process. Each resource is staffed by one
employee. Customer A spends two minutes at resource X and five minutes at resource Y.
Customer B spends five minutes at resource X and two minutes at resource Y. The demand rate
per hour is 10 customer A and 15 customer B. What is the flow rate for customer B holding the
mix of A and B constant?

A. Cannot be determined

5-19
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of McGraw-Hill Education.
B. 6.3 customers per hour
C. 9.5 customers per hour
D. 11.25 customers per hour
Workload for resource X = (10 × 2) + (15 × 5) = 95 minutes per hour; Implied utilization for resource X =
95/60 = 1.58. Workload for resource Y = (10 × 5) + (15 × 2) = 80 minutes per hour; Implied utilization
for resource Y = 80/60 = 1.33. Resource X has the higher implied utilization of 1.58, which is greater than
1. The process is capacity constrained. Flow rate for customer B = 15/1.58 = 9.5 customers per hour.
AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-04 Analyze a process flow with flow unit–dependent processing times.
Topic: Flow Unit–Dependent Processing Times

50. Rework is a ___________ of activities that have to be completed by a ____________ flow

unit in order to be restored to a good flow unit.
A. reduction, defective
B. reduction, nondefective
C. repetition, defective
D. repetition, nondefective
Rework is to repeat activities that have to be completed by a defective flow unit in order to be restored to
a good flow unit.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-05 Analyze a process flow with rework.
Topic: Rework

51. Which of the following process flow diagrams does not represent a process with rework?

A.

B.

C.

5-20
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of McGraw-Hill Education.
D.

Rework is represented as a loop showing resources that it has revisited.

AACSB: Analytical Thinking

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-05 Analyze a process flow with rework.
Topic: Rework

52. Which of the following statements concerning rework is TRUE?

A. Rework does not involve performing an extra set of activities.
B. Rework does not involve inventories.
C. Rework can never return a process yield to 100%.
D. Rework increases the demand rate for a particular resource.
Rework revisits a particular resource and thus increases the demand rate for that resource.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-05 Analyze a process flow with rework.
Topic: Rework

53. Which of the following statements concerning rework is TRUE?

A. Rework involves only bottleneck resources.

B. Rework does not affect overall process capacity.
C. Rework leads a lower overall process yield than scrap.
D. Rework leads to a higher overall process yield than scrap.

Rework attempts to restore the overall process yield to 1. Scrap, on the other hand, simply exits the
process according to the yield at a particular resource.

5-21
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of McGraw-Hill Education.
 AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-05 Analyze a process flow with rework.
Topic: Rework

54. Students who failed a course last semester are retaking it this semester. This is an example of
____________.
A. attrition loss
B. rework
C. compliance
D. process reengineering
Rework refers to a repetition of activities or an extra set of activities that have to be completed by a
defective unit in order to be restored to a good flow unit.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-05 Analyze a process flow with rework.
Topic: Rework

55. _________ refers to a ________ of activities or an extra set of activities that have to be
completed by a defective unit in order to be restored to a good flow unit.
A. Rework, removal
B. Reduce, removal
C. Rework, repetition
D. Reduce, repetition

Rework refers to a repetition of activities or an extra set of activities that have to be completed
by a defective unit in order to be restored to a good flow unit.

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-05 Analyze a process flow with rework.
Topic: Rework

56. A four-step process is used to make a product. The first resource takes 8 minutes per unit, the
second takes 7 minutes per unit, the third takes 2 minutes per unit, and the fourth takes 10
minutes per unit. 20% of all units have to be reworked. For that, they have to revisit the third and
fourth resources. Each resource is staffed by one worker. Rework takes the same processing
times as the first pass and always fixes the problem. Where is the bottleneck?

A. Resource 1
B. Resource 2
C. Resource 3
D. Resource 4

5-22
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of McGraw-Hill Education.
Workload for resource 1 = (0.8 × 8) + (0.2 × 8) = 8 minutes per unit; Workload for resource 2 = (0.8 × 7)
+ (0.2 × 7) = 7 minutes per unit; Workload for resource 3 = (0.8 × 2) + [0.2 × (2 + 2)] = 2.4 minutes per
unit; Workload for resource 4 = (0.8 × 10) + [0.2 × (10 + 10)] = 12 minutes per unit. Each resource has
one worker who can provide one minute of work each minute. The implied utilization for resource 1 is 8;
for resource 2, 7; for resource 3, 2.4; and for resource 4, 12. The highest implied utilization is 12 at
resource 4.
AACSB: Analytical Thinking
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-05 Analyze a process flow with rework.
Topic: Rework

57. A four-step process is used to make a product. The first resource takes 8 minutes per unit, the
second takes 7 minutes per unit, the third takes 2 minutes per unit, and the fourth takes 10
minutes per unit. 20% of all units have to be reworked. For that, they have to revisit the third and
fourth resources. Each resource is staffed by one worker. Rework takes the same processing
times as the first pass and always fixes the problem. What is the capacity of the process in units
per minute?

A. 0.08
B. 0.125
C. 0.143
D. 0.417

Workload for resource 1 = (0.8 × 8) + (0.2 × 8) = 8 minutes per unit; Workload for resource 2 = (0.8 × 7)
+ (0.2 × 7) = 7 minutes per unit; Workload for resource 3 = (0.8 × 2) + [0.2 × (2 + 2)] = 2.4 minutes per
unit; Workload for resource 4 = (0.8 × 10) + [0.2 × (10 + 10)] = 12 minutes per unit. Each resource has
one worker who can provide one minute of work each minute. The implied utilization for resource 1 is 8;
for resource 2, 7; for resource 3, 2.4; and for resource 4, 12. The highest implied utilization is 12.
Capacity = 1/12 = 0.08 unit per minute.

AACSB: Analytical Thinking

Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 05-05 Analyze a process flow with rework.
Topic: Rework

58. The salesforce of Small Travel Company (STC) is selling cultural immersion programs to
U.S. college students that allow them to spend 3 months in Europe.

STC advertises in various college newspapers, as well as via social media. Potential customers
fill out an online application form expressing their interest in more information about this
experience. The form also includes their phone number for follow-up discussion, which
sometimes, but not always, leads to the customer purchasing the package (more details below).

5-23
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of McGraw-Hill Education.
On 60 consecutive days in the winter, STC’s employees work hard to sell these programs to elite
university students. The goal of the company is to sell, on average, two packages per day,
leading to a total of 120 sold packages. The sales process works in four steps:

1. One salesperson reaches out to the potential customer by phone in order to put together a
full profile of the customer, including skills and location preferences (Germany, Italy,
France, etc.). The call takes on average 20 minutes. After the call, each profile is
forwarded to a language teacher.
2. The language teacher looks at the student’s profile and also organizes a quick follow-up
call. This takes, on average, 40 minutes per profile. The teacher rejects 60% of the
profiles as the student would not have the language skills to benefit from an STC trip.
From the remaining 40% of the profiles, half tell the teacher that they are no longer
interested in participating. The teacher then forwards the remaining profiles to the STC
accountant.
3. STC’s accountant then contacts the student to make a 10% down payment. This takes
about 20 minutes per customer.
4. Finally, the teacher’s assistant contacts the customer to confirm the trip and start working
on a travel schedule. At this point, an average of one-third of the students decide that they
will not participate in the trip (in which case, STC and the student agree to give the 10%
down payment to a charitable cause). This takes on average 50 minutes per student.

All employees work 8 hours per day.

How many students does STC have to contact each day through its call center to fill, on average,
its target of 120 students per season (2 students per day)?

A. 5 students/day
B. 15 students/day
C. 35 students/day
D. 120 students/day
Step 1 passes 100%. Step 2 passes 20%. Step 3 passes 100%. Step 4 passes 67%. Starting with step 4,
1/0.667 = 1.5 (rounded). For step 3, 1.5/1 = 1.5. For step 2, 1.5/0.2 = 7.5. For step 1, 7.5/1 = 7.5. To get 1
customer through the process takes 7.5 starts. To get 2 good units per day, 7.5 × 2 = 15.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.
Topic: Attrition Losses, Yields, and Scrap Rates

5-24
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent
of McGraw-Hill Education.
59. The salesforce of Small Travel Company (STC) is selling cultural immersion programs to
U.S. college students that allow them to spend 3 months in Europe.

STC advertises in various college newspapers, as well as via social media. Potential customers
fill out an online application form expressing their interest in more information about this
experience. The form also includes their phone number for follow-up discussion, which
sometimes, but not always, leads to the customer purchasing the package (more details below).

On 60 consecutive days in the winter, STC’s employees work hard to sell these programs to elite
university students. The goal of the company is to sell, on average, two packages per day,
leading to a total of 120 sold packages. The sales process works in four steps:

1. One salesperson reaches out to the potential customer by phone in order to put together a
full profile of the customer, including skills and location preferences (Germany, Italy,
France, etc.). The call takes on average 20 minutes. After the call, each profile is
forwarded to a language teacher.
2. The language teacher looks at the student’s profile and also organizes a quick follow-up
call. This takes, on average, 40 minutes per profile. The teacher rejects 60% of the
profiles as the student would not have the language skills to benefit from an STC trip.
From the remaining 40% of the profiles, half tell the teacher that they are no longer
interested in participating. The teacher then forwards the remaining profiles to the STC
accountant.
3. STC’s accountant then contacts the student to make a 10% down payment. This takes
about 20 minutes per customer.
4. Finally, the teacher’s assistant contacts the customer to confirm the trip and start working
on a travel schedule. At this point, an average of one-third of the students decide that they
will not participate in the trip (in which case, STC and the student agree to give the 10%
down payment to a charitable cause). This takes on average 50 minutes per student.

All employees work 8 hours per day.

Which resource is the bottleneck?

A. The salesperson
B. The language teacher
C. The accountant
D. The teacher’s assistant

5-25
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent
of McGraw-Hill Education.
Calculation of implied utilization

Resource Yield Demand Capacity Implied utilization

Salesperson 1.00 (7.5/1 × 2)=15 1/20×60×8= 24 students per day 15/24 = 0.625
Language teacher 0.20 (1.5/0.2)×2 =15 1/40×60×8= 12 students per day 15/12 = 1.25
Accountant 1.00 (1.5/1 × 2)= 3 1/20×60×8= 24 students per day 3/24 = 0.125
Teacher’s assistant 0.67 (1/0.67 × 2)= 3 1/50×60×8=9.6 students per day 3/9.6 = 0.3125

Yield is based on "1 good output." Since the goal is "2 good outputs" per day, demand has been
doubled. Demand is calculated in reverse order, starting with teacher’s assistant and finishing
with salesperson.

AACSB: Reflective Thinking

Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 05-03 Compute the yield of a process and be able to analyze a process flow with yield loss.
Topic: Attrition Losses, Yields, and Scrap Rates

60. Consider the following four-step assembly operation with quality problems. All resources are
staffed by one employee.

1. The first resource has a processing time of 5 minutes per unit.

2. The second resource has a processing time of 6 minutes per unit.
3. The third resource has a processing time of 3 minutes per unit. With a 30% probability,
the flow unit coming out of the third resource has to be reworked. In that case, the
operations at the first, second, and third resources are repeated. You can assume that (a)
rework always succeeds (i.e., a unit going through the rework loop will always work after
the third resource) and (b) the processing times for units in rework are the same as for
regular units.
4. The fourth resource has a processing time of 4 minutes per unit.

Which resource in the process is the bottleneck?

A. The first resource

B. The second resource
C. The third resource
D. The fourth resource

Good Rework Total per unit IU per minute

Resource 1 0.7×5 0.3×[5 + 5] 3.5+ 3=6.5 6.5/1 = 6.5
WL = Resource 2 0.7×6 0.3×[6 + 6] 4.2+3.6=7.8 7.8/1 = 7.8
Resource 3 0.7×3 0.3×[3 + 3] 2.1+2.7=4.8 4.8/1 = 4.8
Resource 41.00×4 4 4/1 = 4

5-26
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of McGraw-Hill Education.
The second resource is the bottleneck since it has the highest implied utilization.

AACSB: Reflective Thinking

Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-05 Analyze a process flow with rework.
Topic: Rework

61. Consider the following four-step assembly operation with quality problems. All resources are
staffed by one employee.

1. The first resource has a processing time of 5 minutes per unit.

2. The second resource has a processing time of 6 minutes per unit.
3. The third resource has a processing time of 3 minutes per unit. With a 30% probability,
the flow unit coming out of the third resource has to be reworked. In that case, the
operations at the first, second, and third resources are repeated. You can assume that (a)
rework always succeeds (i.e., a unit going through the rework loop will always work after
the third resource) and (b) the processing times for units in rework are the same as for
regular units.
4. The fourth resource has a processing time of 4 minutes per unit. What is the capacity of
the process (in units per hour)?

What is the capacity of the process (in units per hour)?

A. 6.00
B. 7.70
C. 8.90
D. 20.10

Good Rework Total per unit IU per minute

Resource 1 0.7×5 0.3×[5 + 5] 3.5+ 3=6.5 6.5/1 = 6.5
WL = Resource 2 0.7×6 0.3×[6 + 6] 4.2+3.6=7.8 7.8/1 = 7.8
Resource 3 0.7×3 0.3×[3 + 3] 2.1+2.7=4.8 4.8/1 = 4.8
Resource 41.00×4 4 4/1 = 4

The second resource is the bottleneck since it has the highest implied utilization.

The capacity is 1/7.8 = 0.1282 unit per minute, × 60 = 7.7 units per hour.

AACSB: Reflective Thinking

Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-05 Analyze a process flow with rework.
Topic: Rework

5-27
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of McGraw-Hill Education.
62. Consider a process that has multiple flow units with different demand rates and different
paths through the process flow diagram. Consider the following statements:

I. The resource with the largest total demand rate is the bottleneck.
II. The implied utilization can never be bigger than 100%.
III. The resource that has the highest implied utilization is the bottleneck.

Which of the following choices identifies the correct statement(s)?

A. III only
B. I and II
C. I and III
D. None of these are correct
Implied utilization can be higher than 100%. Total demand and capacity at the resource must be taken
into account in determining where the bottleneck is located. The resource with the highest implied
utilization is the bottleneck.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.
Topic: How to Find the Bottleneck in a General Process Flow

63. GV is a small accounting firm supporting wealthy individuals in their preparation of annual
income tax statements. Every December, GV sends out a short survey to its customers, asking for
the information required for preparing tax statements. Based on 50 years of experience, GV
categorizes its cases into the following two groups:

• Group 1 (new customers): 20 percent of cases

• Group 2 (repeat customers): 80 percent of cases

This year, there are 35 income tax statements arriving each week.

In order to prepare the income tax statement, GV has three resources, or employees. The
following activities are carried out by employees:

• An administrative support person processes every tax statement.

5-28
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of McGraw-Hill Education.
 • A senior accountant (the owner of GV) processes only tax statements for new customers.
• A junior accountant processes tax statements for repeat customers.

The administrative support person can process 40 statements per week. The senior accountant
can process 10 statements per week. The junior accountant can process 30 statements per week;
these statements can be completed more quickly given past information on file about the clients.

What is the implied utilization for the junior accountant?

A. 33.3%
B. 66.7%
C. 83.3%
D. 93.3%
Implied utilization is Total demand at the resource/Capacity at the resource. Demand for the junior
accountant is 80% of the 35 statements arriving weekly, or 28 statements. The capacity is 30 statements
per week. IU = 28/30 = 93.3%.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.
Topic: How to Find the Bottleneck in a General Process Flow

64. GV is a small accounting firm supporting wealthy individuals in their preparation of annual
income tax statements. Every December, GV sends out a short survey to its customers, asking for
the information required for preparing tax statements. Based on 50 years of experience, GV
categorizes its cases into the following two groups:

• Group 1 (new customers): 20 percent of cases

• Group 2 (repeat customers): 80 percent of cases

This year, there are 35 income tax statements arriving each week.

In order to prepare the income tax statement, GV has three resources, or employees. The
following activities are carried out by employees:

• An administrative support person processes every tax statement.

• A senior accountant (the owner of GV) processes only tax statements for new customers.
• A junior accountant processes tax statements for repeat customers.

The administrative support person can process 40 statements per week. The senior accountant
can process 10 statements per week. The junior accountant can process 30 statements per week;
these statements can be completed more quickly given past information on file about the clients.

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Which resource is the bottleneck?

A. The administrative support person

B. The senior accountant
C. The junior accountant
D. There is no bottleneck
The bottleneck is the resource with the highest implied utilization. Administrative support person IU =
35/40 = 87.5%. Senior accountant IU = 7/10 = 70%. Junior accountant IU = 35/40 = 93.3%. Therefore,
the junior accountant is the bottleneck resource.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.
Topic: How to Find the Bottleneck in a General Process Flow

65. Which of the following statements about the concepts of "labor utilization" and "implied
utilization" is correct?
A. Labor utilization is above 100% if the process is capacity constrained.
B. Labor utilization is above 100% if the process is demand constrained.
C. Labor utilization is always the same as implied utilization.
D. If the process is capacity constrained, then implied utilization is bigger than the labor
utilization.
E. If the process is demand constrained, then implied utilization is bigger than the labor
utilization.
F. None of these are correct.
Labor utilization cannot be above 100%. Implied utilization can exceed 100%, as it includes additional
information about how much demand exceeds capacity of the resource. In a capacity-constrained process,
implied utilization will be bigger than utilization.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Find the bottleneck in a general process flow by computing implied utilization levels.
Topic: How to Find the Bottleneck in a General Process Flow

Chapter 05 Test Bank Summary

Category # of Questions
AACSB: Analytical Thinking 57
AACSB: Reflective Thinking 8
Accessibility: Keyboard Navigation 44
Blooms: Analyze 3
Blooms: Apply 3
Blooms: Remember 52
Blooms: Understand 7
Difficulty: 1 Easy 53
Difficulty: 2 Medium 6

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of McGraw-Hill Education.
 Difficulty: 3 Hard 6
Gradable: automatic 57
Learning Objective: 05-01 Compute the demand for a resource in the 12
presence of a product mix.
Learning Objective: 05-02 Find the bottleneck in a general process flow by 16
computing implied utilization levels.
Learning Objective: 05-03 Compute the yield of a process and be able to 13
analyze a process flow with yield loss.
Learning Objective: 05-04 Analyze a process flow with flow 12
unit–dependent processing times.
Learning Objective: 05-05 Analyze a process flow with rework. 12
Topic: Attrition Losses, Yields, and Scrap Rates 14
Topic: Flow Unit–Dependent Processing Times 12
Topic: Generalized Process Flow Patterns 12
Topic: How to Find the Bottleneck in a General Process Flow 15
Topic: Rework 12

5-31
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of McGraw-Hill Education.