CME CME Operations Management & Process Improvement 2 — Questions and Answers
Question 1: In supply chain management, what does 'bullwhip effect' refer to?
- Rapid cost increases along the supply chain
- Amplification of demand fluctuations as orders move upstream (Correct answer)
- Delays caused by customs and regulations
- Over-reliance on a single supplier
Correct answer: Amplification of demand fluctuations as orders move upstream
The bullwhip effect describes how small demand variations at the retail level get increasingly amplified as orders travel upstream through the supply chain.
Question 2: Which quality management framework uses Plan-Do-Check-Act (PDCA) as its core improvement cycle?
- Six Sigma
- ISO 9001
- Deming Cycle / Kaizen (Correct answer)
- Business Process Reengineering
Correct answer: Deming Cycle / Kaizen
The PDCA cycle, also called the Deming Wheel, is central to Kaizen and continuous improvement philosophies in quality management.
Question 3: A company tracks the ratio of actual output to effective capacity. What operations metric is this?
- Efficiency (Correct answer)
- Productivity
- Utilization
- Throughput
Correct answer: Efficiency
Efficiency is the ratio of actual output to effective capacity, measuring how well a process performs relative to its realistic maximum.
Question 4: What is 'poka-yoke' in the context of quality management?
- A Japanese term for visual workplace organization
- An error-proofing technique that prevents defects at the source (Correct answer)
- A method for employee cross-training
- A demand forecasting technique
Correct answer: An error-proofing technique that prevents defects at the source
Poka-yoke is a Lean quality technique that uses design features or mechanisms to prevent errors before they occur or to make defects immediately obvious.
Question 5: Which forecasting method calculates demand estimates based on the average of several past periods, with equal weight given to each?
- Exponential Smoothing
- Regression Analysis
- Simple Moving Average (Correct answer)
- Delphi Method
Correct answer: Simple Moving Average
Simple Moving Average calculates the arithmetic mean of demand over a fixed number of past periods, treating each period with equal weight.
Question 6: In Lean management, the Japanese term '5S' refers to a workplace organization method. Which of the following is NOT one of the 5S elements?
- Sort (Seiri)
- Standardize (Seiketsu)
- Sustain (Shitsuke)
- Solve (Kaihatsu) (Correct answer)
Correct answer: Solve (Kaihatsu)
The 5S elements are Sort, Set in order, Shine, Standardize, and Sustain — 'Solve' is not one of them.
CME CME Operations Management & Process Improvement 2
In supply chain management, what does 'bullwhip effect' refer to?