Jr 5th Canadian Edition Test Bank Answers

APPENDIX A

OPERATIONS AND SERVICES MANAGEMENT

Question type: True/False

1) Today’s managers are learning to operate in a world that places a premium on productivity, technology utilization, quality, customer services, and speed.

Learning Objective: Introduction

Section Reference: Quick Start

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

2) Managing productive systems that transform resources into finished products, goods, and services for customers is called operations management.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

3) Only product manufacturers need to concern themselves with the essentials of operations management.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Medium

AACSB: Analytic

4) Typical operations management decisions include resource acquisition, inventories, facilities, and product quality.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

5) Productivity is the quantitative measure of the efficiency with which inputs are transformed into outputs.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Comprehension

Difficulty: Easy

AACSB: Analytic

6) “Productivity” and “competitive advantage” are core issues in operations and services management.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

7) The productivity equation is Productivity = Output x Input.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

8) Productivity obstacles include unclear objectives and priorities, as well as procrastination and poor communication.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

9) Competitive advantage is the ability to outperform one’s competitors.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

10) Competitive advantage drivers include customer service, speed to market and quality.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

11) Operating efficiencies that increase productivity are a way to increase competitive advantage.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Medium

AACSB: Analytic

12) Competitive advantage is the ability to consistently do something of equal value to your competitor that cannot be changed quickly.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

13) Technology is the combination of knowledge, skills, equipment, and work methods used to transform resource inputs into organizational outputs and is at the core of any transformation process.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

14) A key element of productivity is the availability of appropriate technology.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

15) In small-batch production, a high level of worker skill is unnecessary.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Medium

AACSB: Analytic

16) Couture fashion, designer jeans and artisanal bake shops are examples of small-batch production.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

17) Workers are highly dependent upon one another in a mass production environment as the product passes from stage to stage until completion.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Medium

AACSB: Analytic

18) The manufacture of canned foods is an example of mass production.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

19) In continuous-process production, automation is a requirement as raw materials are continuously transformed by an automated system.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

20) Oil refineries use the continuous-process production method to create petroleum products.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

21) Continuous-process production environments are equipment intensive, and can be operated by a relatively small labour force.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

22) Robotics is one trend in manufacturing technology where computer-controlled machines perform physically repetitive work with consistency and efficiency.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

23) The growing trend of flexible manufacturing systems, with the goals of combining flexibility with efficiency allows automated operations to shift from one task or product type to another quickly.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

24) Mass customization, as a result of flexible manufacturing systems, provides efficient mass production of products meeting specific customer requirements.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

25) Cellular layouts place machines that do different work together so that movement of materials from one to another is as efficient as possible.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

26) Cellular layouts require a high level of coordination and management to operate at high efficiency.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Comprehension

Difficulty: Easy

AACSB: Analytic

27) Computer-integrated manufacturing drives product designs, process plans, and manufacturing from a common computer platform.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

28) Lean production is the process of continuously innovating and employing best practices to increase production efficiencies, however lean production is not possible in small-batch manufacturing settings.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

29) The goal of design for disassembly is to design and manufacture products in ways that consider how their component parts will be recycled at the end of their lives.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

30) Remanufacturing, as a trend in manufacturing technology, takes things apart and rebuilds them as products to be used again.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

31) Intensive technology focuses on the efforts and talents of many people to serve clients.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

32) Mediating technology links together people in a beneficial exchange of values.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

33) The real estate industry is an example of an industry which is based primarily on mediating technology.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

34) In long-linked technology, where technology processes must have interdependent tasks in order to be effective, a client moves from point to point during service delivery.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

35) The automobile industry is an example of the use of long-linked technology.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Application

Difficulty: Hard

AACSB: Analytic

36) Resources and materials flow in → materials received and organized for use → people and technology create products → finished products distributed → customers served is an illustration of a value chain.

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

37) Value chain management attempts to manage each step of the input-through-output process for maximum efficiency and effectiveness.

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

38) Primary activities in the value chain include procurement, technology development and infrastructure maintenance.

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

39) Value creation is the end result of a task or activity that is worth more in terms of eventually delivering a product or service with higher customer appeal than was the case in the beginning.

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

40) Restaurant owners use value chain analysis when checking the logistics involved with having all the required ingredients for their chefs.

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

41) The goals of supply chain management are to achieve efficiency in all aspects of the supply chain while ensuring on-time availability of quality resources and products.

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

42) Some of the areas linked in supply chain management include purchasing, manufacturing, transportation, and distribution.

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

43) The coordination and centralization of purchasing within a company is done to achieve supply chain management efficiencies.

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Knowledge

Difficulty: Medium

AACSB: Analytic

44) The purpose of inventory management is to reduce all inventory related costs while also improving productivity.

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

45) The economic order quantity (EOQ) inventory model orders inventory whenever the inventory level falls to a predetermined point.

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

46) The just-in-time (JIT) inventory model minimizes inventory by dispensing materials to workstations “just in time” to be used.

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

47) The break-even point is where revenues equal total costs.

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

48) Break-even analysis calculates the point at which revenues cover costs under different “what-if” conditions.

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

49) The equation to find the break-even point is Fixed Costs ¸ (Price – Variable Costs).

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

50) Venture Ltd. has total fixed costs of $22,000. Each unit of their product sells for $410, with variable costs of $125. The break-even point for Venture Ltd. is 192 units.

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

51) According to the Harvard Business review, American business leaders rank customer service and product quality as the first and second most important goals for organizational success.

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

52) According to Bill Gates, you really can’t learn much from unhappy customers.

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

53) Customer Relationship Management (CRM) strategically tries to build lasting relationships with customers by establishing and maintaining high standards of customer service.

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

54) Customer Relationship Management (CRM) goes back to old technologies to enhance customer service since most customers have had enough of new technologies and the problems associated with them.

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Knowledge

Difficulty: Medium

AACSB: Analytic

55) Buying groceries for dinner is an example of an external customer purchase process.

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

56) Internal customers are those individuals or groups found within the organization who use or depend on one another’s work in order to do their own job well.

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

57) Getting the Facilities Department to fix the malfunctioning sink in the washroom is an example of an external customer process.

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

58) Total quality management is managing with an organization-wide commitment to continuous improvement, product quality, and customer needs.

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

59) Continuous improvement is always looking for new ways to improve on current performance, applies throughout the value chain and is a crucial component to maintaining a competitive advantage.

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

60) ISO certification requires conformance with a rigorous set of international quality standards and is more concerned with how consistently a process is performed, rather than how well the task is performed.

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

61) Quality control checks processes, materials, products, and services to ensure that they meet the standards the company wishes to achieve.

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Comprehension

Difficulty: Easy

AACSB: Analytic

62) Statistical quality control uses rigorous statistical analysis for checking processes, materials, products, and services to ensure they meet high standards.

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

63) A control chart is a graphical quality control representation that allows an organization to detect any trends or exceptions to quality standards.

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

64) Six Sigma is a quality standard of 3.4 defects less per million products or services delivered.

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

65) Social media has initiated significant changes to how companies approach service and product quality.

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Comprehension

Difficulty: Medium

AACSB: Analytic

66) Process reengineering analyzes work processes systematically to design new and better ones.

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

67) A work process is a related group of tasks that together create value for the customer.

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

68) Workflow is the movement of work from one point to another in a system that do not all need to be completed, nor do they need to be completed in any given order to achieve desired results.

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

69) The four key terms in Hammer’s definition of “work process” are “group,” “together,” “result,” and “customer.”

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

70) Process value analysis identifies and evaluates core processes for their performance contributions.

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

71) In a process value analysis, only those steps in the workflow found within the core processes are considered.

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Comprehension

Difficulty: Easy

AACSB: Analytic

72) The essence of process reengineering is to locate control for processes with an identifiable group of people, and to focus each person and the entire system on meeting customer needs.

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

73) Process reengineering tries to eliminate duplication of work and systems bottlenecks to reduce costs, increase efficiency, and build capacity for change.

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

74) Process driven organizations focus too much on process and not enough on the customer.

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Knowledge

Difficulty: Medium

AACSB: Analytic

Question type: Multiple Choice

75) Typical operations management decisions address all of the following except

a) resource acquisition.

b) inventories.

c) facilities.

d) workflows.

e) executive compensation.

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

76) ___ refers to the quantity and quality of work performance, with resource utilization considered.

a) Effectiveness

b) Efficiency

c) Profitability

d) Productivity

e) Asset management

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

77) Which of the following is the correct equation for Productivity measurement?

a) Productivity = Output - Input

b) Productivity = Output x Input

c) Productivity = Output + Input

d) Productivity = Output ¸ Input

e) Productivity - Output = Input

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

78) Acme Manufacturing produces 1,250 units in an 8-hour shift. Each shift is made up of 4 employees. What is the productivity for an 8-hour shift?

a) 39.06

b) 156.25

c) 1,250

d) 1,282

e) 10,000

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

79) An organization establishes a ___ when it has a core competency that sets it apart from its competitors and gives it an advantage over them in the marketplace.

a) core advantage

b) market advantage

c) competitive advantage

d) competency advantage

e) management advantage

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

80) Organizations can create a ___ by utilizing a ___ that clearly sets it apart from its competitors and gives it an advantage over them in the marketplace.

a) competitive advantage; core competency

b) core competency; competitive advantage

c) competitive advantage; specific environment

d) general environment; specific environment

e) core advantage; competitive competency

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

81) ___ is especially important in the demanding global economy because nowhere in the world can managers rest on past successes and ignore what others are doing, either at home or abroad.

a) Core advantage

b) Market advantage

c) Strategic advantage

d) Competitive advantage

e) Management advantage

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

82) The cornerstone of achieving competitive advantage is the ability to _______.

a) sidestep government regulations

b) consistently do something of high value which one’s competitors cannot replicate quickly or do as well

c) drive the competition out of business and to make extraordinarily high profits

d) establish a monopolistic market position

e) dictate consumer needs and preferences

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

83) Artisanal Breads is a local operation that has succeeded over the years because it is consistent, reasonably priced, fast, and the product tastes great, which has allowed the company to consistently outshine its competitors. This is an example of _____________.

a) high production

b) major operation technologies

c) excellent service technology

d) competitive advantage

e) excellent customer service

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

84) Technology is the combination of ___ used to transform resource inputs into organizational outputs.

a) strategy and environment

b) tools and human resources

c) knowledge, skills, equipment, computers, and work methods

d) communication and decision-making methods

e) people, strategy, and culture

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

85) Sequel Lifestyle Hotels doesn’t use a customer call centre, resulting in an annual savings of $150,000. Instead the company encourages guests to make their own bookings online or to directly email employees. Sequel Lifestyle Hotels accomplishes the above activity by embracing ___.

a) work processes

b) workflow

c) technology

d) production

e) customer satisfaction

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

86) An organization that manufactures a variety of products crafted to fit customer specifications is using ___ technology.

a) continuous-process production

b) mediating

c) intensive

d) craft shop

e) small-batch

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

87) Martha’s Custom Muffins would which type of technology in their bakery?

a) continuous-process production

b) mediating

c) intensive

d) craft shop

e) small batch

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

88) Schleese Saddlery Service makes customized saddles designed to fit a particular rider and horse. What type of manufacturing technology does Schleese Saddler Service adapt?

a) mass production

b) small-batch production

c) cellular layouts

d) robotics

e) flexible manufacturing

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

89) An organization that produces large numbers of uniform products with an assembly-line system is using ___ technology.

a) continuous-process production

b) mass production

c) intensive

d) industrial linkage

e) long-linked

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

90) An organization that produces a few products by continuously feeding raw materials through a highly-automated production system with largely computerized controls is using ___ technology.

a) continuous-process production

b) mass production

c) intensive

d) supplier-linked

e) long-linked

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

91) A cement production plant, operating 24/7, with three shifts is an example of which technology?

a) continuous-process production

b) mass production

c) intensive

d) supplier-linked

e) long-linked

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

92) Chemical plants and oil refineries are both examples of ___. There are no starting and stopping points. Automated machines control the process and outcomes are predictable.

a) small-batch production

b) robotics

c) cellular layouts

d) continuous-process production

e) mass production

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

93) Which of the following provides a correct match of a work activity and the underlying technology?

a) Automobile assembly at General Motors – small-batch production

b) Automated chemical plants – continuous-process production

c) Custom furniture restoration – mass production

d) Oil refineries – mass production

e) Steel mills – small-batch production

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

94) Which of the following is not a current trend in manufacturing technology?

a) Robotics

b) Cellular layouts

c) Computer-integrated manufacturing

d) Design for assembly

e) Remanufacturing

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

95) Which one of the following trends does not play a role in the quality aspects of operations?

a) lean production

b) flexible manufacturing

c) robotics manufacturing

d) boutique engineering

e) mass customization

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Medium

AACSB: Analytic

96) ___ continuously innovates and employs best practices to keep increasing production efficiencies.

a) Flexible manufacturing

b) Mass customization

c) Lean production

d) Computer-integrated manufacturing

e) Customized design

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

97) ___ allows automated operations to quickly shift from one task or product type to another.

a) Flexible manufacturing

b) Mass customization

c) Lean production

d) Agile manufacturing

e) Customized design

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

98) Technology that focuses the efforts of many people with special expertise on the needs of clients is defined as ___ technology.

a) mediating

b) long-linked

c) intensive

d) continuous-process

e) service

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

99) The tire-changing team in the pits at a car racing event is exhibiting ___ technology.

a) mediating

b) long-linked

c) intensive

d) continuous-process

e) service

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

100) Technology that links together parties seeking a mutually beneficial exchange of values is defined as ___ technology.

a) mediating

b) long-linked

c) intensive

d) continuous-process

e) service

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

101) eBay is an example of which type of technology?

a) mediating

b) long-linked

c) intensive

d) continuous-process

e) service

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

102) Technology that can function like mass production where a client is passed from point to point for various aspects of service delivery is defined as ___ technology.

a) mediating

b) long-linked

c) intensive

d) continuous-process

e) service

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

103) A passenger travelling via airplane to a holiday destination is using which type of technology?

a) mediating

b) long-linked

c) intensive

d) continuous-process

e) service

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

104) A(n) ___ is a specific sequence of activities that transforms raw materials into a finished good or service.

a) service chain

b) value chain

c) activities system

d) procurement plan

e) distribution plan

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

105) Primary activities of a value chain include

a) marketing and sales.

b) procurement.

c) human resource management.

d) infrastructure management.

e) market research.

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Knowledge

Difficulty: Medium

AACSB: Analytic

106) Improving the paint quality on your product to make it last longer for your customer is an example of

a) value chain management.

b) value creation.

c) supply chain management.

d) PERT.

e) problem solving.

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

107) A well-functioning value chain should involve

a) a series of consecutive steps that add value to inputs right up to the point that finished goods or services are delivered to the customer.

b) a series of steps done all at once and delivered as cheaply as possible.

c) a production manager to keep watch over the human resources people.

d) many levels of management.

e) many levels of performance measurement.

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

108) ___ involves strategic management of all operations involving the suppliers of an organization’s resources.

a) Value chain management

b) Internal customer management

c) Customer relationship management

d) Total quality management

e) Supply chain management

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

109) Achieving efficiency in all aspects of the ___ while ensuring on-time availability of quality resources for customer-driven organizations is the fundamental goal of ___.

a) value chain; value chain management

b) quality chain; quality chain management

c) supply chain; supply chain management

d) customer chain; customer chain management

e) production chain; production chain management

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

110) Ordering a fixed quantity of items each time an order is placed, whenever inventory on hand reaches a predetermined minimum point is the ___ model of inventory management.

a) inventory control number

b) quality control paradox

c) economic order quantity

d) break-even quantity

e) fixed quantity inventory

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

111) Scheduling materials to arrive on a timely basis at a workstation or facility in order to reduce costs and improve workflow is known as ___.

a) management by objectives (MBO)

b) just-in-time (JIT) scheduling

c) economic order Quantity (EOQ)

d) efficient production planning (EPP)

e) jump-on-board (JOB)

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

112) The ___ is calculated by dividing total fixed costs by price minus variable costs.

a) current ratio

b) break-even point

c) economic order quantity

d) net margin

e) inventory turnover ratio

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

113) Break-even analysis can be used to ___.

a) improve control

b) examine the impact of cost control measures

c) experiment with different “what-if” scenarios

d) a and c

e) a, b, and c

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

114) Researching the impact on profits that a 10% shift in the exchange rate would have on your raw materials imports is an example of

a) current ratio analysis.

b) break-even analysis.

c) just-in-time scheduling.

d) value chain management.

e) management by objectives.

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

115) A company has total fixed costs of $150,000, a selling price of $400 per unit and variable costs equal to 35% of the selling price. The break-even point is (answers have been rounded up) ______ units.

a) 273

b) 375

c) 577

d) 1,072

e) none of the above

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

116) A Harvard Business Review survey ranked which of the following as first and second among the most important goals in the success of organizations?

a) technological advancements and recruiting quality employees

b) financial returns to stockholders and market share

c) productivity and profitability

d) satisfying internal and external customers

e) customer service and product quality

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

117) ___ uses the latest information technology that allows organizations to maintain intense communication with customers as well as to gather and utilize data regarding the customers’ needs and preferences.

a) Customer relationship management

b) Internal customer management

c) Value chain management

d) Total quality management

e) Supply chain management

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

118) Marriott International uses special customer software to track information on customer preferences. Requests for things like a king-size bed, a non-smoking room, etc. are kept on file. Marriott’s ___ management strategically tries to build a long-lasting relationship and add value for the customers.

a) critical response

b) customer relationship

c) external

d) internal

e) product

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

119) To establish a customer relationship management (CRM) program it is important to know that all customers want

a) a deal

b) a rebate if the delivery is late

c) high quality, low price and on-time delivery

d) anything they can get cheap

e) the very best regardless of the price

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

120) You purchase a variety of food, toys and supplies at your local pet store. You are a(n) ___.

a) merchants

b) internal customers

c) external customers

d) satisfied customers

e) producers

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

121) You call the campus print shop to order more copy paper for the office copier at the Business School. You are a(n). ___.

a) jobbers

b) internal customers

c) external customers

d) quality experts

e) dependent employees

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

122) Charlie assembles circuit boards in a computer manufacturing plant, who gets the chips for the boards from Taylor, assembles the boards, and then forward them to Morgan, who puts them into the finished components. This example illustrates the concept of ___.

a) integrated manufacturing processes

b) efficient task assignments

c) internal customers, who use the results of others’ work to do their job

d) total quality management and shared responsibility

e) Deming’s path to quality

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

123) The term total quality management is used to describe the process of ___.

a) training managers to monitor quality and then making them responsible for overall quality in their areas of responsibility

b) managing with an organization-wide commitment to continuous improvement, product quality, and customer needs

c) reducing the need for quality inspections by training employees to be quality conscious

d) producing holistic work environments

e) designing and manufacturing quality products

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

124) Which of the following characteristics does not accurately describe the process of total quality management?

a) making quality principles a part of the organization’s strategic objectives

b) applying quality principles to all aspects of operations

c) committing the organization to continuous quality improvement

d) striving to meet customers’ needs by doing things right the first time

e) committing the organization to the use of self-managing work teams

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

125) Companies that have a(n) ___ mindset use customer feedback to fix or address any problems there might be with the product/service.

a) statistical quality

b) ISO certification

c) Six Sigma

d) total quality management

e) outgrowth

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

126) Total quality management is a result of the work originally done by

a) Harry Truman.

b) Peter Drucker.

c) Herman Franks.

d) W. Edwards Deming.

e) Stephen Covey.

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

127) The basic philosophy of ___ is that organization members should never be satisfied with current performance.

a) performance management

b) continuous improvement

c) performance appraisal

d) supply chain analysis

e) human resources management

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Knowledge

Difficulty: Medium

AACSB: Analytic

128) An important aspect of ___ is the belief that that any and all processes within the organization, including customer service can and should be improved upon.

a) performance management

b) performance appraisal

c) supply chain analysis

d) human resources management

e) continuous improvement

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

129) In the context of control systems, ___ involves checking processes, materials, products, and services to ensure that they meet high standards.

a) purchasing control

b) quality control

c) inventory control

d) management process control

e) progressive control

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

130) Organizations that want to compete in the world marketplace as “world-class companies” can gain a competitive advantage by having their operations achieve ___.

a) consumer protection certification

b) international Q certification

c) ISO certification

d) AAA certification

e) manufacturing supply certification

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

131) To receive ISO certification, companies must ___ and ___.

a) undergo extensive managerial training; be approved by the Management Development Institute

b) receive governmental approval to apply for the certification exam; have at least 90% of the employees pass the certification exam

c) refine and upgrade quality in all operations; undergo a rigorous assessment by outside auditors to determine if quality standards are met

d) apply for membership in the International Society for Operations (ISO); receive approval from the ISO membership committee

e) increase sales for three years in a row; decrease customer complaints in each year

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

132) ___ involves taking samples of work, measuring quality in the samples, and determining the acceptability of results.

a) Just-in-time scheduling

b) Work variation management

c) Work sampling acceptability analysis

d) Statistical quality control

e) Break-even analysis

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

133) According to Michael Hammer, ___ is the systematic and complete analysis of work processes and the design of new and better ones.

a) process redesigning

b) process reengineering

c) process resurfacing

d) process restructuring

e) systems process analysis and design

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

134) The goal of process reengineering is to focus attention on all of the following except

a) improving customer satisfaction.

b) improving work performance.

c) breaking people and mindsets away from habits.

d) eliminating preoccupation with past accomplishments.

e) continuing the existing ways of doing things.

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Comprehension

Difficulty: Medium

AACSB: Analytic

135) ___ refer(s) to a group of related tasks that together create value for the customer.

a) A job description

b) Job responsibilities

c) A work process

d) Job relationships

e) A task group

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

136) According to Michael Hammer, which of the following is not a key characteristic of a work process?

a) Tasks are viewed as a group rather than in isolation.

b) Everyone must share a common goal.

c) The focus is on accomplishments, not activities.

d) Everyone is rewarded equally.

e) Customers are the ones who really count.

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Knowledge

Difficulty: Medium

AACSB: Analytic

137) ___ refers to the way work moves from one point to another in the manufacturing or service delivery processes.

a) Work process.

b) Workflow.

c) Technical flow.

d) Operations management.

e) Work delivery plan.

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

138) Which of the following is not a correct description of a workflow feature?

a) Workflow refers to the movement of work from one point to another in a system.

b) The various steps of a work process must be completed to achieve desired results, and they typically must be completed in a given order.

c) An important starting point for reengineering is to diagram workflows.

d) Each step in the workflow should be analyzed to determine whether or not it is adding value.

e) Special attention should be given to eliminating the role of technology in the work process.

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

139) In ___, each step in the workflow is examined to determine if it is important, useful, and contributing to the value added.

a) value chain analysis

b) process value systems

c) alternative analysis control

d) process value analysis

e) systems design

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

140) In reengineering core processes, managers should do all of the following except

a) identify the core processes.

b) map the core processes with respect to workflows.

c) evaluate all tasks for the core processes.

d) identify the organization’s key strategic objectives.

e) search for ways to eliminate unnecessary tasks or work.

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

141) An important goal of ___ is redesigning core processes to establish control for them with an identifiable group of people.

a) process reengineering

b) cultural management

c) corporate social responsibility

d) mechanistic organization design

e) bureaucracy

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

142) A machine has been operating at 70% efficiency. In order to improve the machine’s efficiency, which of the following should be considered?

a) Cultural management seminars

b) Corporate social responsibility planning

c) Process reengineering

d) Mechanistic organization design

e) Statistical quality control

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

143) Reducing costs and increasing efficiency while creating the ever-present capacity for change is a key objective of ___.

a) cultural management

b) corporate social responsibility

c) process reengineering

d) mechanistic organization design

e) bureaucracy

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

Question type: Essay

144) Why are value chain analysis and management and supply chain management important in operations management?

Supplier relationships on the input side must be well managed. SCM involves strategic management of all operations linking an organization and its suppliers, including such areas as purchasing, manufacturing, transportation, and distribution. The goals of supply chain management are to achieve efficiency in all aspects of the supply chain while ensuring on-time availability of quality resources and products

Learning Objective A.1: Identify the essentials of operations and services management.

Section Reference A.1: Operations Management Essentials

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

145) Briefly define and explain the following terms:
Productivity
Value Chain
Customer Relationship Management
Economic Order Quantity
Total Quality Management
Process Reengineering

Value Chain is the specific sequence of activities that results in the creation of products or services with value for customers. The value chain includes all primary activities—such as inbound logistics, operations, outbound logistics, marketing, sales, and after-sales service, as well as support activities—such as procurement, human resource management, technology development and support.
Customer Relationship Management is the use of technology, primarily databases, email, texts and social media, to maintain strong communication with customers and gather data on their preferences, needs and desires. Its aim is to provide a competitive advantage by zeroing in on what the customer wants, even before the customer voices their needs, wants or desires.
The economic order quantity method of inventory control involves ordering a fixed number of items every time an inventory level falls to a predetermined point. When this point is reached, a decision is automatically made (typically by computer) to place a standard order to replenish the stock. The order sizes are mathematically calculated to minimize costs of inventory.
Total Quality Management is a process that makes quality principles part of the organization’s strategic objectives, applying them to all aspects of operations and striving to meet customers’ needs by doing things right the first time. Total quality management is managing with an organization-wide commitment to continuous improvement, product quality, and customer needs.
Process Reengineering uses process value analysis to examine all the steps of the core processes, evaluate them for efficiency, effectiveness etc., and discard those steps which do not add value to the end result. Its purpose it to make the company’s processes more lean, less wasteful, more productive and efficient to gain a competitive advantage for the end products created via those processes.

Learning Objective A.1: Identify the essentials of operations and services management.

Learning Objective 2: Explain what value chain management encompasses.

Learning Objective 3: Describe how organizations manage customer service and product quality.

Section Reference A.1: Operations Management Essentials

Section Reference 2: A.2 Value Chain Management

Section Reference 3: A.3 Service and Product Quality

Bloom’s: Knowledge

Difficulty: Easy

AACSB: Analytic

146) Imagine you sell handcrafted decorations at the local flea market. The cost to rent a booth at the market is $150. The variable cost to makes these decorations is $20 each and you sell them for $50. How many of these must you sell to break even?

Fixed cost = 150
Selling price per unit = 50
Variable cost per unit = 20
Break Even point = 150 / (50-20) = 150/30
Break Even point = 5 units must be sold for a break-even point.

Learning Objective A.2: Explain what value chain management encompasses.

Section Reference A.2: Value Chain Management

Bloom’s: Application

Difficulty: Medium

AACSB: Analytic

147) Today, billions of dollars are wasted through the lack of focus on quality. This waste can stem from something as insignificant as an improperly scheduled meeting that results in a loss of productive time to a defective product or undelivered service that results in the loss of a customer. This absence of focus on quality results in product and processing systems which lack flexibility, innovativeness, and timeliness to market. How can the total quality management approach help to eliminate this unnecessary waste?

Total quality management is basically a customer-oriented paradigm that occurs through processes. The emphasis on customer focus requires a company to be process based. A process organization is simply one that is conceived as a flow of interdependent processes, which must be understood and improved.
When people are able to perceive commonality in goals, then it becomes easier to communicate over departmental or functional walls. Teams, by working towards a common collaborative goal, help in breaking down barriers and act as agents for change.
The continuous cycle of establishing customer requirements, meeting the requirements, measuring success and continuing to improve can be used internally to fuel the engine of external and continuous improvement. By continually checking customers’ requirements, a company can find areas in which improvements can be made.
There are many success stories of how TQM has helped transform companies. One of them is Ericsson Inc. of Lynchburg, Virginia, that implemented a successful TQM program. The TQM program, named Winshare, saved the company approximately US $60 million over 10 years. Employees were divided into 63 teams, and each team elected a co-worker as a leader. Teams were used to develop improvement ideas and received US $6000 to implement them.

Learning Objective A.3: Describe how organizations manage customer service and product quality.

Section Reference A.3: Service and Product Quality

Bloom’s: Synthesis

Difficulty: Hard

AACSB: Reflective Thinking

148) Why would an organization want to engage in process reengineering? How can business processes be reengineered?

 Identify the core processes.
 Map the core processes with respect to workflows.
 Evaluate all tasks for the core processes.
 Search for ways to eliminate unnecessary tasks or work.
 Search for ways to eliminate delays, errors, and misunderstandings.
 Search for efficiencies in how work is shared and transferred among people and departments.

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic

149) Define work process according to Michael Hammer and explain what value process reengineering adds to both the organization as a whole and to the customer.

Since customer service processes often include many unnecessary or redundant tasks, process reengineering reduces those tasks through elimination or combination in order to shorten the response time and therefore meeting customer needs and expectations more efficiently.

Learning Objective A.4: Explain how work processes can be designed for productivity.

Section Reference A.4: Work Processes

Bloom’s: Analysis

Difficulty: Medium

AACSB: Analytic