Engineering Management - true/false type questions from AMIE exams

True/False type questions

1. In exponential smoothing, L is the weight assigned to the last period’s forecast.
2. The service level refers to the number of customers that will be unsatisfied.
3. Scheduling n jobs on m machines is easier than scheduling n jobs on a single machine.
4. Dummy activities are used in project networks to show precedence relationships only.
5. The main advantage of the Gantt chart is its simplicity.
6. In ABC analysis, the A items are the largest percentage quantity of items in inventory.
7. In the EOQ model, at the optimum point, the holding costs are half of the ordering costs.
8. There is no correlation between the two variables when the value of r is -1.
9. The amount of safety stock usually increases in direct proportion to the level of customer service desired.
10. A product structure tree helps to illustrate how the bill of materials is arrived at for the quantities of each of the ingredients needed to obtain a desired quantity of the end product.

Answers

1. False. L is the lead time. Exponential smoothing is a technique for projecting past demand data into the future as a basis for forecasting future demand. 
2. False. Service level is the probability of not losing sales.
3. False
4. True. An activity that only shows the dependency, logic or relationship of one activity over another is known as dummy activity. It doesn’t consume any time or resources for its completion. So it can be said that it is an imaginary activity that doesn’t exist but is only used on the network diagrams for precedence relationships. When two or more activities have the same head and tail events Dummy activity is used.
5. True. The Gantt chart also called the scheduled bar chart, is a tool used to plan a set of activities that, generally, are part of a single, more complex project. On the horizontal axis, there is the time span, whose unit of measurement depends on the project calendar – days, weeks, months, etc. – while on the vertical axis we find the list of the various activities. The main reason for the success of the Gantt charts is their simplicity and the focus on the quick visualization of the activities.
6. False. Class A - item: 10 % of the item accounts 75% costs. Class B - item: 20% of the item accounts for 15% of costs. Class C - item: 70% of the item accounts for 10% of costs.
7. False. Economic order quantity is the size of the order which helps in minimizing the total annual cost of inventory in the organization. When the size of the order increases, the ordering costs (cost of purchasing, inspection, etc.) will decrease whereas the inventory carrying costs (costs of storage, insurance, etc.) will increase. Economic Order Quantity (EOQ) is the size of an order which minimizes total annual costs of carrying and cost of ordering.  At EOQ: Ordering cost = Holding cost 
   
8. False
9. False
10. True. In manufacturing the product structure tree provides a hierarchical classification of the items which form a product. With the product structure, the understanding of the components which compose a product as well as their attributes can be represented. The product structure shows the material, component parts subassemblies and other items in a hierarchical structure that represents the grouping of items on an assembly drawing or the grouping of items that come together at a stage in the manufacturing process.

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