Complete Test Bank Ch.1 Operations Management

Chapter 1:
Operations Management

True/False

1. Operations management is only concerned with the day-to-day operations of a firm’s productive systems.
2. A warehouse operation is an example of a physical transformation process.
3. A supply chain is a series of activities from supplier to customer that adds value to a product or service.
4. Human resources management provides product demand estimates that are used in production decisions.
5. A retail operation is an example of an exchange transformation process.
6. Which of the following is a functional areas of operations management?
7. information technology
8. legal
9. compliance
10. human resources
11. Operations management designs, operates, and improves marketing systems.
12. An operations manager benefits from an integrated view of business organizations.
13. The systematic analysis of work methods is known as operations research.
14. Which of the following best fits the definition of lean production?
15. a system that prizes efficiency and quantity
16. a system that prizes efficiency and quality
17. a system that prizes flexibility and quantity
18. a system that prizes flexibility and quality
19. The adaptation of mass production to emphasize quality and flexibility, rather than efficiency, is known as lean production.
20. Because of a global recession in the late 2000s ,companies started focusing on the most critical factors to sustain their business during the downturn.
21. Sustainability is concerned with the following
22. profits
23. global supply chains
24. sustain the health of people in the long term
25. increasing market share
26. An effective strategic positioning strategy considers all of the following expect
27. strengths and weaknesses of the organization
28. needs of the marketplace
29. the strategic management team
30. positions of competitors
31. Globalization requires that firms compete only on cost and not quality, speed or flexibility.
32. Companies pursue globalization for all of the following reasons except
33. gain access to global markets
34. increase shipping costs
35. be more responsive to changes in demand
36. build reliable sources of supply
37. The European Union requires that strict quality and environmental standards be met before companies can do business with member countries.
38. A major challenge and opportunity for many firms is the globalization of the supply chain.
39. Globalization has affected manufacturing but not service operations.
40. Two-thirds of today’s businesses operate globally.
41. In 2010, the US surpassed China as the world’s largest manufacturer.
42. China has reshaped the way firms compete globally.
43. Increases in productivity enable a nation to raise its standard of living.
44. What is the most common measure of competitiveness?
45. GDP
46. wage rates
47. productivity
48. manufacturing output
49. Multifactor productivity is best defined as
50. a single output and a single input
51. multiple outputs and a single input
52. a single output and multiple inputs
53. multiple outputs and multiple inputs
54. Deployment is a step in strategy formulation that evaluates the alignment between core competencies and order winners.
55. Positioning is a step in strategy formulation that defines how firms will compete in the marketplace.
56. Which of the following best describes order qualifier?
57. the lowest cost product
58. the product with the most features
59. the features that make an item considered for purchase
60. the features that wins orders in the marketplace
61. An order qualifier is the characteristic of a product that wins orders in the marketplace.
62. Core competencies tend to be processes and not products or technologies.
63. Which of the following is the first step in strategy formulation?
64. defining a primary task
65. assessing core competencies
66. determining order winners and order qualifiers
67. positioning the firm
68. Identify the option below that is associated with strategy deployment
69. unveiling strategies with fanfare
70. creating plans that are more than 5 years in the future
71. converting the firm’s order winners and qualifiers int specific performance requirements
72. developing plans that have a variety of meanings to different departments and functional areas
73. Companies that compete on innovation establish a corporate culture that does the following except
74. discourages risk taking
75. challenges the status quo
76. accepts failure as part of the learning process
77. celebrates success
78. Firms compete in the marketplace based on cost, speed, quality and flexibility.

Multiple Choice

1. Operations management is concerned with the _________ of a firm’s productive systems.
2. design
3. operation
4. improvement
5. All of these answer choices are correct.
6. The transformation process associated with health care is best described as
7. locational
8. exchange
9. physiological
10. informational
11. Which of the following is not one of the four primary functional areas of a firm?
12. human resources
13. legal
14. marketing
15. operations
16. All of the following are responsibilities of operations managers except
17. acquiring financial resources
18. managing inventories
19. planning production
20. scheduling production
21. Which of the following is not an event or concept associated with the quality revolution?
22. TQM (total quality management)
23. Internet
24. Six Sigma
25. JIT
26. Linear programming, waiting line, simulation, and PERT/CPM are all elements of which era of operations and supply chain management?
27. Quality Research
28. Operations Research
29. Internet Revolution
30. Globalization
31. Dividing a job into a series of small tasks, each performed by a different worker, is known as
32. craft production
33. scientific management
34. division of labor
35. interchangeable parts
36. The most recent era in the evolution of operations and supply chain management is
    a. Internet Revolution
    b. Sustainability
    c. Globalization
    d. Quality Revolution
37. Sustainability, in its broadest sense, include(s)
    a. using resources wisely.
    b. treating workers with respect.
    c. establishing a business model of shared values.
    d. All of these answer choices are correct.
38. Mass production is well suited to all of the following except
39. producing large volumes of goods quickly.
40. adapting quickly to changes in market demand.
41. producing standardized products for a large market.
42. All of these answer choices are correct.
    
43. The major factors impacting globalization of the supply chain include all the following except
44. falling trade barriers.
45. the Internet.
46. declining union membership.
47. All these answer choices are correct.
48. Companies go global to
49. take advantage of favorable costs.
50. keep abreast of trends and access new technologies.
51. build reliable sources of supply.
52. All of these answer choices are correct.
53. A manager of a global supply chain is concerned with all the following except
54. timeliness.
55. quality.
56. social issues.
57. All of these answer choices are correct.
58. The ratio of a firm’s monthly output to the number of labor hours used in the same month would be a measure of
59. labor productivity.
60. capital productivity.
61. machine productivity.
62. multifactor productivity.
63. The production system that prizes flexibility and quality over efficiency and quantity is known as
64. mass production.
65. craft production.
66. lean production.
67. electronic commerce.
68. Telco Inc., a manufacturing firm, is calculating its monthly productivity report. From the following data calculate the labor productivity.

Labor rate $20

Machine rate $15

Units produced 50,000

Labor hours 4,000

Machine hours 2,000

Cost of materials $20,000

Cost of energy $5,000

1. 0.370
2. 0.625
3. 1.500
4. 1.667

Solution: Labor productivity=50,000/80,000=0.625

1. Telco Inc., a manufacturing firm, is calculating its monthly productivity report. From the following data calculate the machine productivity.

Labor rate $20

Machine rate $15

Units produced 50,000

Labor hours 4,000

Machine hours 2,000

Cost of materials $20,000

Cost of energy $5,000

1. 0..370
2. 0.625
3. 1.500
4. 1.667

Solution: Machine productivity=50,000/30000=1.667

1. Telco Inc., a manufacturing firm, is calculating its monthly productivity report. From the following raw data calculate the multifactor productivity.

Labor rate $20

Machine rate $15

Units produced 50,000

Labor hours 4,000

Machine hours 2,000

Cost of materials $20,000

Cost of energy $5,000

1. 0.370
2. 0.625
3. 1.500
4. 1.667

Multi-factor productivity=50,000/135,000=0.370

1. Snacknow, a food service firm, is calculating its monthly productivity report. From the following raw data calculate the labor productivity.

Labor rate $10

Units produced 10,000

Labor hours 1,000

Cost of materials $2000

Cost of energy $500

1. 0.220
2. 0.476
3. 0.800
4. 1.000

Solution: Labor productivity=10,000/10,000=1.000

1. Snacknow, a food service firm, is calculating its monthly productivity report. From the following data calculate the energy productivity.

Labor rate $10

Units produced 10,000

Labor hours 1,000

Cost of materials $2000

Cost of energy $500

1. 0.220
2. 2
3. 10
4. 20

Energy productivity=10,000/500=20

1. Snacknow, a food service firm, is calculating its monthly productivity report. From the following data calculate the multifactor productivity.

Labor rate $20

Units produced 10,000

Labor hours 1,000

Cost of materials $2000

Cost of energy $500

1. 0.220
2. 0.476
3. 0.800
4. 1.000

Multi-factor productivity=10,000/12,500=0.800

1. _____________ is how the mission of a firm is accomplished.
   1. Strategy
   2. Design
   3. An operational decision
   4. None of these answer choices is correct.
2. _____________ represents what the firm is in the business of doing.
   1. Primary task
   2. Core competency
   3. Positioning
   4. Deploying
3. _____________ is what the firm does better than anyone else.
   1. Primary task
   2. Core competency
   3. Positioning
   4. Deploying
4. _____________ are the characteristics of a product that qualify it to be considered for purchase by a customer.
   1. Order winners
   2. Order qualifiers
   3. Core competency
   4. Positioning
5. _____________ is the characteristic of a product that wins the order in the marketplace.
   1. Order winners
   2. Order qualifiers
   3. Core competency
   4. Positioning
6. ______________ focus(es) the organization on common goals that can be translated into measurable objectives.
   1. Order winners
   2. Core competency
   3. Positioning
   4. Deploying the strategy
7. Companies that compete on ______________ are able to produce a wide variety of products in response to customer needs.
   1. cost
   2. speed
   3. flexibility
   4. quality
8. Companies that compete on ______________ pursue the elimination of all waste.
   1. cost
   2. speed
   3. flexibility
   4. quality
9. Companies that compete on ______________ recognize the advantages of time-based competition.
   1. cost
   2. speed
   3. flexibility
   4. quality
10. Companies that compete on ______________ focus on pleasing customers and satisfying their expectations.
    1. cost
    2. speed
    3. flexibility
    4. quality
11. The balanced scorecard examines a firm’s performance in all the following critical areas except
    1. finances
    2. customers
    3. processes
    4. All of these answer choices are correct.
12. The ____________ function helps strategy evolve by creating new ways of delivering a firm’s competitive priorities.
    1. finance
    2. marketing
    3. operations
    4. None of the answer choices is correct.
13. Companies that compete on _________________ establish a corporate culture that encourages risk.
    a. Innovation
    b. Quality
    c. Flexibility
    d. Cost
    
    
14. A(n) ____________ strategy involves a series of integrated decisions on processes, facilities, technology, quality, capacity, etc.
    1. finance
    2. marketing
    3. operations
    4. None of these answer choices is correct.

Short Answer

1. Briefly describe how operations can be viewed as a transformation process.

Operations is often defined as a transformation process. Inputs such as raw materials, labor, equipment, and capital are transformed into outputs (goods and services). Customer feedback is used to adjust the transformation process. An objective of the operations manager is to ensure that the transformation process operates efficiently and the outputs of the process have greater value than the sum of the inputs. In this way the transformation process creates value, making it possible to view the transformation process as a value chain extending from supplier to customer.

1. Briefly describe the four primary functional areas of a firm. How is operations related to them?

The four primary functional areas of a firm are marketing, finance, operations, and human resources. For most firms, operations is the technical core or “hub” of the organization, interacting with the other functional areas and suppliers to produce goods and services for customers. For example, marketing provides sales forecasts to operations and operations provides marketing with product availability information, lead time estimates and delivery schedules. Operations provides finance with inventory and production data, capital budgeting and equipment requests, and technology plans. Finance provides the capital resources for financing inventory and securing more capital equipment. Operations relies on human resources to meet its personnel needs—hiring, training, and evaluating workers.

What is productivity and how is it measured?

Productivity is the ratio of output to input. Output can be expressed in units or dollars. Single factor productivity compares output to individual inputs, such as labor hours, investment in equipment, or material usage. Multifactor productivity relates output to a combination of inputs, such as labor and capital. Total factor productivity compares the quantity of goods and services produced with all the inputs used to produce them.

1. What can lead to increases in productivity?

Productivity increases when firms become more efficient, expand, achieve breakthroughs that enable output increases to occur with reduced inputs, downsize while maintaining output with fewer inputs, and retrench with output and inputs decreasing, but inputs decreasing at a faster rate than output.

Additional M/C questions:

1. Scientific management is __________.
   1. the management of scientists working in a company
   2. the management of scientific experiments so that they will align with the company’s strategy
   3. the use of observation, measurement, and analysis to identify the best method to perform a job
   4. another name for the division of labor
2. Henry Ford famously applied __________.
   1. interchangeable parts
   2. linear programing
   3. theories of motivation
   4. mass production
3. Supply chain management is aimed at managing the flow of __________.
   1. information
   2. products
   3. services
   4. All of these answer choices are correct
4. Globalization has__________ the risk of disruptions in operations and supply chain activities; it has also provided __________ flexibility in responding to disruptions.
   1. decreased; less
   2. increased; less
   3. decreased; more
   4. increased; more
5. Today, approximately ____% of businesses operate globally through global markets, global operations, global financing
   1. 67
   2. 75
   3. 85
   4. 90
6. If the units produced by a factory increased by 10% and the labor hours decreased by 10%, then the labor productivity __________.
   1. decreased by 20%
   2. increased by 20%
   3. increased by 21%
   4. increased by 22%
7. If the units produced by a factory increased by 10% and the labor productivity increased by 25%, then the labor hours __________.
   1. decreased by 15%
   2. decreased by 13%
   3. decreased by 12%
   4. decreased by 11%
8. If the units produced by a factory decreased by 10% and the labor productivity increased by 25%, then the labor hours __________.
   1. decreased by 15%
   2. decreased by 26%
   3. decreased by 28%
   4. decreased by 35%
9. If the units produced by a factory decreased by 10% and the labor productivity decreased by 25%, then the labor hours __________.
   1. decreased by 15%
   2. increased by 15%
   3. increased by 17%
   4. increased by 20%
10. The labor productivity of a factory fell by 5% during each of three consecutive quarters. The labor hours didn’t show any significant change during this period. A new COO is committed to recover the existing level before the loss of productivity, and her goal is to achieve this by the end of next quarter, even though the labor hours will be 5% less. The COO’s goal is to increase the number of units produced by ____%.
    1. 15.0
    2. 14.3
    3. 10.0
    4. 9.75