CAS Operations and Process Management 3

Question 1

In operations management, 'bottleneck analysis' is used to:

Accepted Answer

Find the step in a process that limits overall throughput

Answer

Bottleneck analysis identifies the constraint or limiting step in a process that determines the maximum output rate of the entire system.

Question 2

Which of the following best describes 'poka-yoke' in process design?

Accepted Answer

An error-proofing mechanism that prevents mistakes or makes them immediately obvious

Answer

Poka-yoke refers to mistake-proofing mechanisms designed into a process to prevent errors from occurring or to immediately detect them when they do.

Question 3

A P&C insurance company implements a statistical process control (SPC) chart to monitor loss ratios. What does a point outside the control limits indicate?

Accepted Answer

A process that may be experiencing special cause variation requiring investigation

Answer

A point outside control limits signals special cause variation — a non-random signal suggesting the process may have changed and warrants investigation.

Question 4

In the Theory of Constraints (TOC), once a bottleneck is identified, the next step is to:

Accepted Answer

Exploit the bottleneck by maximizing its utilization before adding resources

Answer

TOC prescribes exploiting the constraint first — getting maximum output from the existing bottleneck resource — before deciding to elevate or add capacity.

Question 5

What is 'demand variability' and why is it significant for insurance operations staffing?

Accepted Answer

Fluctuations in workload volume over time that make capacity planning challenging

Answer

Demand variability refers to fluctuations in workload volume (e.g., catastrophe-driven claim surges), which complicates staffing decisions and resource planning.

(CAS) Casualty Actuarial Society Practice Test

(CAS) Casualty Actuarial Society Practice Test

CAS Operations and Process Management 3