operation management:

Question 1:

A company is considering outsourcing its manufacturing operations to a third-party provider. Which of the following factors is NOT a consideration in this decision?

• A. The cost of labor and materials at the outsourcing location
• B. The quality of the products or services provided by the outsourcing provider
• C. The company's ability to control the outsourcing provider's operations
• D. The impact of outsourcing on the company's employees

Question 2:

A company is experiencing a shortage of a critical component that is used in its manufacturing process. Which of the following strategies would be MOST effective in addressing this problem?

• A. Increase the lead time for orders from suppliers
• B. Develop a new supplier relationship
• C. Redesign the product to use a different component
• D. Reduce the demand for the component through product substitution

Question 3:

A company is trying to reduce its inventory costs. Which of the following strategies would be MOST effective in achieving this goal?

• A. Increase the order size for each supplier
• B. Reduce the safety stock level for each item
• C. Negotiate lower prices with suppliers
• D. Implement a just-in-time inventory system

Question 4:

A company is trying to improve the quality of its products. Which of the following tools would be MOST useful in achieving this goal?

• A. Pareto charts
• B. Control charts
• C. Fishbone diagrams
• D. Failure mode and effects analysis (FMEA)

Question 5:

A company is trying to improve the efficiency of its production process. Which of the following techniques would be MOST effective in achieving this goal?

• A. Process mapping
• B. Work measurement
• C. Line balancing
• D. Lean manufacturing

Question 6:

tibbs owns the Homeowners (HO-2) and the Personal Auto Policy found in your texts appendices. The following limits apply.

HOMEOWNERS LIMITS:

A = $65,000

B = $6,500

C = $32,500

D = $13,000

E = $100,000

F = $500

$100 flat deductible Section I

Replacement cost of the dwelling is $72,000.

Replacement cost of the other structure is $10,000

If a loss occurs to real or personal property, 1/3 depreciation applies, therefore, Actual Cash Value = 2/3

replacement cost.

PERSONAL AUTO POLICY LIMITS:

A = $100,000 / $300,000 / $50,000

B = $1,000

C = $100,000 / $300,000

D = Actual Cash Value $200 Deductible Collision

$0 Deductible Other Than Collision

One vehicle listed on the policy

Your assignment is to determine if the following situations are covered by the above policies. If there is coverage how much should be paid? The two policies above are the only ones in existence. No other contracts are to be considered. Each event is a separate occurrence.

1. Mr. Tibbs rents out a room to two students. One of the students falls down the stairs. Hospital costs equal $4,500. In addition, all tuition was lost due to the inability to complete the semester. The student sued Mr. Tibbs for $5,500.

2. Mr. Tibbs wakes up one morning and discovers a large tree leaning on the house. Mr. Tibbs knew that the tree was dead and should have removed it two years ago. The cost to repair the dwelling is $3,000; to remove the tree $450; and the cost to plant a new tree $300.

3. The insured is found to be legally obligated to pay $170,000 because of bodily injury to a neighbor (a fishing partner) caused by an accident involving Mr. Tibbss 35 horsepower outboard motor boat.

4. In question 3, the boat was rented to Mr. Tibbs, and the owner of the boat sues Mr. Tibbs for $3,000 in property damage because the boat sank due to Mr. Tibbss negligence.

5. Mrs. Tibbs leaves a suitcase filled with clothing in a motel room. Twenty miles down the road, she remembers, and returns to collect it. Upon entry, she discovers that the suitcase is missing. Replacement cost of goods and suitcase is $2,300.

6. Mr. Tibbss house is 55 percent destroyed by fire. Local building codes have changed since it was originally built, and the codes state that the remaining portion of the structure must be torn down because the 45 percent is deemed unsafe. The mere change in building codes will increase the cost of replacement by 10 percent.

7. In question 6 above, when Mr. Tibbs inventories his damaged property, he discovers that a $6,000 (ACV) gun collection is missing. The adjusters conclude that in the confusion during the fire, someone stole the property.

8. Mr. Tibbs fails to trim his bushes near the street. The bushes obstruct the view of traffic turning the corner. A motorist, when inching out to see around the bushes, is struck by a car. Both cars are totaled, and each driver sues Mr. Tibbs for $135,000 in bodily injury and $5,000 in property damage.

9. Dr. Tibbs is a medical doctor who operates out of an office in his house. A patient comes to see Dr. Tibbs. While sitting in a chair in the waiting room, the chair breaks causing back injuries to the patient. The patient sues for medical expenses of $7,000, loss of wages of $16,000, and pain and suffering of $20,000.

10. Mr. Tibbs takes his car to a repair shop. While the mechanic is test driving the car, he negligently rear ends a car stopped at a red light. The mechanic and Mr. Tibbs are both sued separately for $18,000 each.

11. A tornado causes an unattached garage to collapse on the owned car. The shed and the automobile are total losses. How much is covered under the two contracts?

12. Mr. Tibbs has an argument with his wife and goes bar hopping. On the way home, he loses control of the car and injures three people. The police find that Mr. Tibbs is legally intoxicated. Each claim $150,000 in bodily injury. Their car is totaled. Mr. Tibbs car requires $1,200 in repairs.

13. In question 12, Mrs. Tibbs is also in the car. She is injured and sues Mr. Tibbs for $350,000.

14. Mr. Tibbs decides to sell cars. One day, while he is demonstrating a new car, an accident occurs and the prospective buyer is injured. Mr. Tibbs and the auto company are each named in the suit claiming $150,000 of bodily injury.

15. Mr. Tibbs decides to move to Nevada, so he rents a large (18-wheel) moving truck. During the trip, he flips the truck on an icy road. The rental company sues Mr. Tibbs for $175,000 of property damage liability.

16. In question 15, instead of moving his own property, Mr. Tibbs decides to move property of others for a business. The damage to the truck equals $175,000.

17.Mrs. Tibbss fur coat (worth $700 ACV) is stolen out of the car after it is parked by an attendant at a restaurant.

18.Mr. Tibbss car is at a repair shop. For transportation, he uses his son-in-laws motorcycle. While using it, he runs down a pedestrian in a crosswalk. The pedestrian sues Mr. Tibbs for $7,600.

19.Mr. Tibbs buys a second car. Five days after the car is purchased, he collides into a telephone pole. Damage to the car is $2,000. He had not told his agent about the car.

20. While driving his car under a bridge being spray painted by the Department of Transportation, the car is coated with paint. Because of the chemicals being used in the paint, the autos glass is permanently pitted. Cost to repaint the car is $3,200, and the cost to replace the glass is $1,200.