Finance and Manufacturing
Finance and Manufacturing

Finance and Manufacturing

Lead Author(s): Saylor Academy

Source: Saylor

Student Price: FREE

A question pack on design decisions in engineering.

This content is licensed under the Creative Commons Attribution 3.0 Unported License.

Engineering: Finance and Manufacturing Q15

Becoming “lean” is a process of ______________.

A

eliminating defects

B

eliminating waste

C

creating value

D

A and C

E

B and C

Engineering: Finance and Manufacturing Q14

Define Net Present Value.

A

Difference between the discounted Total Benefits and the discounted Total Costs

B

Difference between the nondiscounted Total Benefits and the nondiscounted Total Costs

C

Ratio between the discounted Total Benefits and the discounted Total Costs

D

Discounted cash flow

E

None of the above

Engineering: Finance and Manufacturing Q13

In a “pull” system, ______________.

A

manufacturing activities are based on market forecast

B

manufacturing activities are based on actual customer demand

C

management is very hands‑on

D

A and C

E

B and C

Engineering: Finance and Manufacturing Q11

In Lean/Six Sigma learning, what does “kaizen” mean?

A

Lean

B

High quality

C

Improvements

D

All of the above

E

None of the above

Engineering: Finance and Manufacturing Q12

In Lean/Six Sigma, what does “poka‑yoke” mean?

A

LeanB. High quality

B

Improvements

C

Mistake‑proofing

D

None of the above

Engineering: Finance and Manufacturing Q16

Which of the following are advantages of using Cost/Benefit ratio to evaluate options?

A

It allows comparisons of options on the same scale

B

It allows ranking of projects

C

It requires all benefits to be assigned a monetary value

D

A and B

E

A and C

Engineering: Finance and Manufacturing Q8

Which of the following statements about discount rate is not true?

A

Lower discount rates favor projects with short‑term benefits.

B

Relative rank of projects depends on the discount rate used.

C

Discount rate is used to evaluate the cash flows of a project over time.

D

Discount rate may vary under different conditions.

E

Higher discount rates favor projects with short‑term benefits.

Engineering: Finance and Manufacturing Q9

Which of the following statements is not true about Taguchi method?

A

Design must provide a robust product that is on target and simultaneously insensitive to variability arising from both the process and the environment.

B

Process parameters are constants and do not affect the variability in the product.

C

A defined loss function should be established to provide a financial measure of customer dissatisfaction with a product’s performance as it deviates from a target value.

D

Quality should be measured by the deviation from a specified target value.

E

The product user’s environment adds further variability challenges to quality performance.

Engineering: Finance and Manufacturing Q10

Why do we want to standardize work?

A

Establish process stability and enable effective employee involvement.

B

Support audit, poka‑yoke, and problem solving and maintain organizational knowledge.

C

Provide a basis for employee training; define clear stop and start points for each process.

D

A and B

E

A, B, and C

Engineering: Finance and Manufacturing Q7

A pharmaceutical company has resources to develop either drug X or drug Y or none at all. Drug X will cost $100 million to develop, and it can generate $1 billion if it succeeds. Drug Y will cost $10 million to develop, and it can generate $300 million if it succeeds. Drug X has a 50% chance of success and drug Y has an 80% chance of success. Use decision tree to help the pharmaceutical company select which drug to develop. What are the expected values for the three decision alternatives: (i) developing drug X, (ii) developing drug Y, and (iii) developing neither drug?

A

$400 million, $310 million, $0

B

$900 million, $200 million, $0

C

$200 million, $310 million, $100 million

D

$100 million, $390 million, $0_1

E

$100 million, $390 million, $0_2

Engineering: Finance and Manufacturing Q6

In real option analysis, a call‑like option ______________.

A

is exercised when expectation of positive return decreases

B

captures benefits from increases in project value

C

insures against losses from decreased project value

D

may involve short‑term costs to salvage the project

E

all of the above

Engineering: Finance and Manufacturing Q5

In real option analysis, a put‑like option ______________.

A

is exercised when expectations of positive return decrease

B

captures benefits from increases in project value

C

is exercised when expectations of positive return increase

D

may involve putting more money into project to maximize return.

E

all of the above

Engineering: Finance and Manufacturing Q4

In “Lean Enterprise,” the five S’s consist of “simplify,” “straighten,” “scrub,” “stabilize,” and “______________.”

A

sort

B

shine

C

standardize

D

sustain

E

none of the above

Engineering: Finance and Manufacturing Q3

The U.S. bank gives an interest rate of 3.25%, while the inflation rate is 2%. What is the real interest rate?

A

3.25%

B

2.25%

C

1.23%

D

5.25%

E

0%

Engineering: Finance and Manufacturing Q2

Which of the following is not part of a “lean enterprise” mindset?

A

Customer “pull”

B

Flexible response

C

Periodic adjustment

D

Prevention

E

Knowledge‑driven

Engineering: Finance and Manufacturing Q1

Which of the following is not true about options?

A

Option is a right but not an obligation to take some action.

B

Options have asymmetric returns.

C

Options are exercised only if advantageous.

D

Options are acquired at some cost.

E

Options can be only exercised in the future.

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