Managing Service And Manufacturing Test Bank Docx Chapter 8 - Business Foundations Changing World 11e Complete Test Bank by O. C. Ferrell. DOCX document preview.

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Managing Service And Manufacturing Test Bank Docx Chapter 8

Chapter 08

Managing Service and Manufacturing Operations

 


True / False Questions
 

1.

Production refers to all the activities and processes used in making both tangible and intangible products.

 
 
True    False

 

2.

Service providers are generally more labor-intensive than manufacturers because of the high level of customization.

 
 
True    False

 

3.

Modular design, an operations process for manufacturing products, does not allow products to be repaired quickly, thus increasing the cost of labor.

 
 
True    False

 

4.

Material-requirements planning can be, and often is, used in conjunction with just-in-time inventory management.

 
 
True    False

 

5.

Service businesses cannot incorporate quality standards. 
 
True    False

 

 


Multiple Choice Questions
 

6.

If an employee's primary function in an organization is transforming resources into goods and services, then he or she is involved in 
 

A. 

staffing.

B. 

financing.

C. 

customer relationship management.

D. 

operations management.

E. 

crowdsourcing.

 

7.

Irene is a manager at a large car dealership and service shop. She is involved in administering activities associated with planning and designing the cars and managing the logistics, quality, and productivity of the service department. She takes her role in the service department very seriously because service is an important part of the total product for the dealership's customers. Thus, Irene is a(n)  
 

A. 

finance manager.

B. 

sales manager.

C. 

marketing manager.

D. 

human resource manager.

E. 

operations manager.

 

8.

Operations management has the primary responsibility of 
 

A. 

securing funds for the activities of an organization.

B. 

conducting research on consumer behavior.

C. 

creating goods and services that satisfy customers.

D. 

developing only intangible products.

E. 

replacing quality with productivity in the manufacturing of goods.

 

9.

Which of the following accurately describes the difference between the terms "operations" and "production"? 
 

A. 

Operations is the first step in manufacturing, whereas production is the last step.

B. 

Operations is simply an analysis of inputs and outputs, whereas production includes a wide range of organizational activities and situations.

C. 

Operations includes processes used in the making of both tangible and intangible products, whereas production is related only to tangible products.

D. 

Operations focuses solely on quality, whereas the primary focus of production is productivity.

E. 

Operations is restricted to small businesses, whereas production occurs in both small and large businesses.

 

10.

Marilyn is the operations manager of a new hair salon in an upscale urban neighborhood. Customers in this neighborhood expect high quality services and products, and Marilyn is struggling to use the salon's resources efficiently and effectively to provide the level of quality the area's customers demand. What will most likely happen if Marilyn can't find a way to meet customers' demands for quality? 
 

A. 

The hair salon will be forced to move to a less demanding neighborhood.

B. 

The hair salon will be taken over by competitors in the area.

C. 

The hair salon will stay in business, and customers will adapt to its services and products.

D. 

The hair salon will be converted into a different type of business that can succeed in this area.

E. 

The hair salon will go out of business.

 

11.

All of the following are true of the evolution of operations EXCEPT 
 

A. 

historically, operations management was called production or manufacturing because it was viewed as the manufacture of physical goods.

B. 

the operations function can be viewed as simply an analysis of inputs and outputs.

C. 

the operations function can be viewed as a whole rather than simply as an analysis of inputs and outputs.

D. 

the change from "production" to "operations" recognizes the importance of organizations that provide services and ideas.

E. 

historically, the focus of operations was on methods and techniques required to operate a factory efficiently.

 

12.

Which of the following can be described as production? 
 

A. 

the services provided by a financial advisor

B. 

the manufacturing of cars in an automobile company

C. 

the surgeries conducted by a doctor

D. 

the legal advice provided by a lawyer for a fee

E. 

the process involved in providing services at a spa

 

13.

Which of the following is true of the transformation process in operations management? 
 

A. 

It is a process of replacing quality with productivity when manufacturing products.

B. 

It is the conversion of resources such as labor, money, materials, and energy into goods, services, and ideas.

C. 

It is efficient only when inputs are used in large quantities to produce small quantities of output.

D. 

It is associated with the marketing and selling of both inputs and outputs to customers.

E. 

It is a process of initiating corrective action when the actual output is more than the desired output.

 

14.

Glen is a carpenter who performs home repairs and improvements for his customers. From the perspective of operations, the money he uses to purchase his tools and the electricity he uses to run his power saw are 
 

A. 

processes.

B. 

outputs.

C. 

stocks.

D. 

inputs.

E. 

inventories.

 

15.

Nancy and her father have been building rustic furniture for family and friends since she was a little girl. As an adult, Nancy decided to start her own rustic furniture company. From the perspective of operations, the beds, tables, chairs, and dressers she builds are 
 

A. 

intangible resources.

B. 

inputs.

C. 

equipment.

D. 

outputs.

E. 

processes.

 

16.

Darrell is the head chef at an Italian restaurant. He imports many of his ingredients from Italy and prepares them using family recipes that have been passed down for generations. From the perspective of operations, the food he sells to customers and the authentic Italian atmosphere he provides are 
 

A. 

component parts.

B. 

inputs.

C. 

outputs.

D. 

stocks.

E. 

inventories.

 

17.

Katie is a makeup artist who works in a salon and travels to provide her services to her clients at weddings and other events. As part of her services, she gives her clients lipstick, blotting sheets, and face powder, so they can touch up their makeup throughout the event. Her biggest expenses are the cost of the items she gives to clients, the cost of keeping her makeup kit stocked with a variety of colors, travel expenses to get to the events, and her time. Which of the following is considered an input? 
 

A. 

the lipstick, blotting sheets, and face powder she gives to clients

B. 

the makeup services she provides in the salon

C. 

the makeup services she provides at events

D. 

her time

E. 

her creative application of makeup to make her clients look perfect for any event

 

18.

How do operations managers ensure quality and efficiency during the transformation process of inputs into outputs? 
 

A. 

They ensure that their products never use the modular design of transforming because this process increases the cost of labor.

B. 

They always employ computer-assisted manufacturing (CAM) technologies to guide and control the transformation processes.

C. 

They shift from material-requirements planning (MRP) to just-in-time (JIT) inventory management.

D. 

They keep the work cycling between two different batches of labor in order to track any loopholes.

E. 

They take measurements at various points in the transformation process and compare them to established standards.

 

19.

Kelly is an operations manager at a hotel. Her hotel has a standard of 80 percent of rooms being ready when guests arrive to check-in. However, she recently collected feedback to check on the hotel's efficiency and found that only 70 percent were ready on time. What might Kelly do to resolve this 10 percent negative deviation? 
 

A. 

make adjustments to the cleaning schedule to ensure that rooms will be available by check-in time

B. 

make the check-in time later to match when rooms are ready

C. 

add a disclaimer that all check-in times are approximate and subject to change

D. 

move the check-out time later to satisfy guests who can't get into their rooms when expected

E. 

offer a complimentary meal to guests who can't get into their rooms when expected

 

20.

Travis works for a business that manufactures industrial metal clocks. All of the following are processes the clock maker must pass the inputs through before they are turned into the final outputs, clocks for his customers, EXCEPT 
 

A. 

cutting metal sheets into circles for the clock center, numbers, and clock hands.

B. 

welding the metal pieces together to form the clock's basic design.

C. 

selling the finished clocks to customers.

D. 

heating and shaping repurposed metal into the clock frame.

E. 

applying metal sealant to keep the metal from rusting or oxidizing.

 

21.

All of the following are processes through which an airline transforms inputs such as employees, time, money, and equipment EXCEPT 
 

A. 

maintaining equipment.

B. 

booking flights.

C. 

flying airplanes.

D. 

training crews.

E. 

eliminating food service.

 

22.

In the context of operations management, which of the following is true of the transformation process? 
 

A. 

It focuses on producing outputs that are worth less than the combined costs of the inputs.

B. 

It occurs in all organizations, regardless of what they produce or their objectives.

C. 

It occurs only in manufacturing companies because they use tangible inputs.

D. 

It involves replacing quality with productivity when manufacturing goods.

E. 

It includes the same methods and number of steps in all organizations.

 

23.

What is a similarity between goods and services? 
 

A. 

Both are equally labor-intensive.

B. 

Both produce uniform outputs.

C. 

Both undergo a transformation process.

D. 

Both are equally tangible.

E. 

Both have equal control over the variability of their inputs.

 

24.

For most organizations, the ultimate objective is 
 

A. 

to replace quality with productivity in the transformation process.

B. 

to create intangible outputs using tangible inputs.

C. 

for operations to be replaced by production and manufacturing.

D. 

for the produced outputs to be worth more than the cost of inputs.

E. 

to completely eliminate the transformation process in operations management.

 

25.

Food for Families, a nonprofit organization, uses inputs such as money, groceries, and volunteer time and labor to transform food into hot prepared meals for needy families. In this setting, which of the following is a transformation process? 
 

A. 

paying rent for a cooking facility

B. 

traveling abroad to find less expensive ingredients

C. 

tasting the meals to make sure they are satisfactory

D. 

giving families raw ingredients and expecting them to prepare meals themselves

E. 

fundraising and promoting the cause to gain new volunteers and food donations

 

26.

Unlike tangible goods, services are effectively 
 

A. 

the actions that produce tangible and intangible goods.

B. 

raw materials that can be transformed into goods.

C. 

produced outputs that are worth more than the combined costs of the inputs.

D. 

actions or performances that must be directed toward the consumers who use them.

E. 

an organization's activities that are not for profit.

 

27.

Which of the following is a characteristic feature of service businesses? 
 

A. 

They are not labor-intensive.

B. 

The service experience remains constant each time.

C. 

They cannot incorporate quality standards.

D. 

The resultant output is mostly tangible.

E. 

The degree of variation of inputs and outputs is high.

 

28.

At Renaissance Regalia Restaurant, diners expect an authentic Renaissance dining experience. The wait staff are expected to stay in character and dress in authentic Renaissance clothing, the walls of the restaurant are covered with Renaissance art, and as diners eat Renaissance-era foods, they are entertained by Renaissance musicians and performers. What type of service does this restaurant provide? 
 

A. 

low contact

B. 

high contact

C. 

high tech

D. 

nonperishable

E. 

tangible

 

29.

Service organizations must build their operations around good execution, which comes from all of the following EXCEPT 
 

A. 

providing services that can be saved, stored, resold, or returned.

B. 

hiring and training excellent employees.

C. 

customizing services.

D. 

developing flexible systems.

E. 

maintaining adjustable capacity to deal with fluctuating demand.

 

30.

Christopher runs an arena that hosts sporting and music events. When booking these events, he must consider how many people would be interested in buying tickets. Based on the demand, he must set his ticket prices at the appropriate level. Which of the following is a challenge associated with providing this type of service? 
 

A. 

It is difficult to determine the appropriate level of customer contact required when providing such a service.

B. 

With services like this, it is difficult to ensure that the produced outputs will be worth more than the combined costs of the inputs.

C. 

It is difficult to accurately estimate the demand to match the right supply of a service.

D. 

When providing this type of service, it is difficult to balance in-person and online ticket sales.

E. 

It is difficult to convince customers to spend money on tangible services like this.

 

31.

Actual performance of a service provider's product typically occurs 
 

A. 

several days after the purchase.

B. 

outside the service provider's facility.

C. 

at the point of consumption.

D. 

in the buyer's home.

E. 

before the point of consumption.

 

32.

All Better Hospital has studied the manufacturing processes and quality control mechanisms applied in the automotive industry in an effort to improve its service quality. By analyzing work processes to find unnecessary steps to eliminate and using teams to identify and address problems as soon as they occur, this hospital could do all of the following EXCEPT 
 

A. 

increase inventories of wheelchairs.

B. 

slash patient waiting times.

C. 

ready operating rooms sooner.

D. 

move patients through their hospital visit more quickly.

E. 

move patients through their hospital visit with fewer errors.

 

33.

Service experience tends to vary each time because 
 

A. 

services are not labor-intensive.

B. 

of the tangible element inherent in delivering services.

C. 

services can be easily separated from the point of consumption.

D. 

services are less customized than tangible products.

E. 

of the human element inherent in providing services.

 

34.

The products of service providers tend to be more customized than those of manufacturers because 
 

A. 

different customers have different needs.

B. 

the requirements of all customers are more or less the same.

C. 

technological innovations have reduced variability.

D. 

there is more capital required in service provision.

E. 

service providers have limited contact with customers.

 

35.

Stephen is a hairdresser who gives haircuts to two customers in the same day. The haircut he gives to the first customer is not exactly the same as the haircut he gives to the second customer. This relates to the difference between service providers and manufacturers in terms of 
 

A. 

consumption of output.

B. 

tangibility of inputs.

C. 

labor required.

D. 

measurement of productivity.

E. 

uniformity of output.

 

36.

When compared to service providers, the products of manufacturers are typically 
 

A. 

more labor-intensive.

B. 

less standardized.

C. 

more difficult to store.

D. 

more uniform.

E. 

less tangible.

 

37.

When customers go to Style and Trim Salon, they ask for specific hair styles or cuts that incorporate their specific desires. In comparison, the manufacturer that produces Headstrong Shampoo has more control over the amount of variability of the resources it uses to create its shampoos. Which of the following differences between manufacturers and service providers does this scenario relate to? 
 

A. 

consumption of output

B. 

labor required

C. 

measurement of productivity

D. 

uniformity of output

E. 

uniformity of inputs

 

38.

Compared to service providers, manufacturers are generally more 
 

A. 

labor-intensive.

B. 

capital-intensive.

C. 

capable of customizing their products.

D. 

variable in their inputs and outputs.

E. 

vulnerable to the perishability of their output.

 

39.

Tree Moon Hospitality Inc. has a chain of reputed hotels and resorts across the globe. First Care Inc. is a pharmaceutical company known for its breakthrough life-saving drugs. How will the two businesses differ from each other? 
 

A. 

Tree Moon Hospitality Inc. will be more capable of customizing its products when compared to First Care Inc.

B. 

Tree Moon Hospitality Inc. will be able to keep its output standardized, whereas First Care Inc. will not.

C. 

Tree Moon Hospitality Inc. will have less contact with its customers when compared to First Care Inc.

D. 

Tree Moon Hospitality Inc. will be able to incorporate quality standards, whereas First Care Inc. will not.

E. 

Tree Moon Hospitality Inc., unlike First Care Inc., will not produce its output at the point of consumption.

 

40.

Lloyd is a computer technician who his company sends to customers' homes to fix their broken computers. He usually fixes between 10 and 20 computers per day, so he interacts with a lot of customers with a variety of computer issues. Lloyd's job is 
 

A. 

capital-intensive.

B. 

standardized.

C. 

labor-intensive.

D. 

uniform in terms of inputs.

E. 

uniform in terms of output.

 

41.

Service providers are often more limited than manufacturers in selecting work methods, assigning jobs, scheduling work, and exercising control over operations because 
 

A. 

services are not labor-intensive.

B. 

services are highly standardized.

C. 

services cannot be customized.

D. 

of their tangibility.

E. 

of their need for customer contact.

 

42.

Which of the following is an accurate description of a difference between manufacturers and service providers? 
 

A. 

Service providers have more control over the amount of variability of the resources they use than manufacturers do.

B. 

For service providers, measuring productivity is fairly straightforward, whereas for manufacturers measuring productivity is more complicated.

C. 

Manufacturers can separate the production of a product from its actual use, whereas the service dimension requires closer contact with the consumer.

D. 

The products of manufacturers tend to be more customized than those of service providers.

E. 

Manufacturers make more contact with their customers when compared to service providers.

 

43.

Which of the following is true of services and their providers? 
 

A. 

Service providers are more capital-intensive than labor-intensive.

B. 

The quality of the service experience is controlled by a service contact employee.

C. 

Service experience is usually constant irrespective of the person delivering or receiving it.

D. 

Services can be provided in an isolated environment, away from customers.

E. 

The degree of variation of inputs and outputs is negligible for services.

 

44.

Which of the following scenarios reflects the capital-intensive nature of a manufacturer? 
 

A. 

A lawyer provides varying services that include consulting clients on legal documents, preparing legal documents for clients, and representing clients in court.

B. 

An electrician goes into customers' homes and fixes a variety of expensive electrical issues.

C. 

EduPub provides temporary support personnel to help new customers use its products.

D. 

Floors For Less offers customers many flooring options and their prices include installation.

E. 

Coffee At Home mass produces coffee makers with multiple settings, so customers can choose whether they want to brew a cup, two cups, or an entire pot using the same machine.

 

45.

The output of service providers must be consumed immediately, and only a few services can be saved, stored, resold, or returned. Which characteristic feature of services does this best illustrate? 
 

A. 

low degree of customer contact

B. 

high degree of standardization of outputs

C. 

tangibility of outputs

D. 

perishability of outputs

E. 

uniformity of inputs

 

46.

ProCar Inc. is a reputed automobile manufacturing company, and Coral Holidays Inc. is an established chain of travel agencies. How will the two businesses differ from each other?

 
 

A. 

While Coral Holidays Inc. will be able to incorporate quality standards in its business, ProCar Inc. will not.

B. 

Measuring productivity will be fairly straightforward for ProCar Inc. when compared to Coral Holidays Inc.

C. 

Standardizing output will be easier for Coral Holidays Inc. when compared to ProCar Inc.

D. 

ProCar Inc. will face a higher degree of variation of inputs and outputs when compared to Coral Holidays Inc.

E. 

ProCar Inc. will make more customer contact than Coral Holidays Inc.

 

47.

For manufacturers, measuring productivity is fairly straightforward because 
 

A. 

of the tangibility of their output.

B. 

they are labor-intensive.

C. 

their output lacks uniformity.

D. 

of the variability of their inputs.

E. 

of their high-contact with customers.

 

48.

Maple Health Care, a chain of private hospitals and laboratories, finds it difficult to measure the productivity of its staff. Which of the following reasons can be attributed to this problem of service providers? 
 

A. 

Services cannot be delivered at the point of consumption.

B. 

Services have a high degree of uniformity.

C. 

Service requirements vary from job to job.

D. 

Service experience remains constant each time.

E. 

Services require minimal customer contact.

 

49.

Ultimately, what classifies a company as either a manufacturer or a service provider? 
 

A. 

the way the company combines tangible and intangible qualities

B. 

the level of tangibility of its principal product

C. 

the amount of labor required to produce the company's products

D. 

the ability of the company to satisfy its customers

E. 

the perishability of the company's products

 

50.

A consumer electronics company is involved in the process of deciding what new products to manufacture and for what group of customers. Once this has been decided, it will need to determine what processes it will use to make these products as well as the facilities it needs to produce them. These decisions comprise _____ planning. 
 

A. 

enterprise resource

B. 

human resource

C. 

succession

D. 

material-requirements

E. 

operations

 

51.

Zedpro Computer Company is determining the demand for a new product and how much consumers are willing to pay for it. For this, Zedpro should best rely on 
 

A. 

case studies.

B. 

marketing research.

C. 

trial and error.

D. 

successful past experiences.

E. 

intuition.

 

52.

Go Mobile and Apps for All partnered together to develop improved applications to help people use their mobile devices to complete more of their daily functions, including scheduling, budgeting, and networking. By joining together, these companies can 
 

A. 

reduce the time it takes to develop new networks.

B. 

dedicate more time to developing new networks.

C. 

afford to spend more money to develop new networks.

D. 

dedicate more people, working more hours, to develop new networks.

E. 

develop new networks with almost no planning.

 

53.

All of the following are true regarding the product design process EXCEPT 
 

A. 

the engineering or research and development department turns a product idea into a workable design that can be produced economically.

B. 

operations managers must plan for the types and quantities of materials needed to produce the product.

C. 

even in small companies, the product design process is always completed by a team.

D. 

operations managers must plan for the skills and quantity of people needed to make the product.

E. 

operations managers must plan for the actual processes through which the inputs must pass in their transformation to outputs.

 

54.

From the perspective of manufacturers, standardization means 
 

A. 

ensuring that each product is sold at the same price.

B. 

ensuring that one's product has the exact same features as that of a competitor.

C. 

making identical, interchangeable components or complete products.

D. 

making the exact product a particular customer needs or wants.

E. 

meeting the benchmark set by a market leader.

 

55.

Carbon Devices Inc. is a contract manufacturer of 32GB USB flash drives. All USB devices sold under the brand name Carbon are identical to each other and are of the same quality. This is an example of 
 

A. 

flexible manufacturing.

B. 

customization.

C. 

standardization.

D. 

benchmarking.

E. 

lean manufacturing.

 

56.

A primary reason for using standardization is to 
 

A. 

reduce production costs.

B. 

increase the choices available for customers.

C. 

reduce product quality.

D. 

support variability of the resources used.

E. 

foster creativity.

 

57.

Kenneth is a mechanic who fixes Honda cars. He orders parts directly from Honda because its parts are created specifically to fit and function properly in its vehicles. Which advantage of standardization does this scenario illustrate? 
 

A. 

The customer gets exactly what he or she wants.

B. 

Kenneth can charge more for a standardized product than a custom-designed product.

C. 

Standardized products function uniformly all the time, so customers get a product that meets their expectations.

D. 

Customers have more choices available to them.

E. 

Customers can mix and match components for a customized design.

 

58.

Standardization becomes complex on a global scale because 
 

A. 

different countries have different standards for quality.

B. 

customer needs are same across the globe.

C. 

standardization slows down production.

D. 

standardization does not support mass manufacturing.

E. 

standardization increases production costs.

 

59.

Custom Computers builds their computers so that the components can be installed in different configurations to meet certain needs of a customer. This is an example of 
 

A. 

flexible manufacturing.

B. 

modular design.

C. 

lean manufacturing.

D. 

standardization.

E. 

reverse engineering.

 

60.

Which of the following is true of modular design as an operations process? 
 

A. 

The failure of any portion of a modular component does not require replacing the entire component.

B. 

Automobile manufacturers avoid the use modular design in the production process.

C. 

It increases the time to repair products, thus raising the cost of labor.

D. 

It raises the cost of repair materials because the component itself is expensive.

E. 

It is the highest form of customization that can be provided to customers.

 

61.

Danielle and Greg want to buy their first home together. Since they travel a lot, and they want to be able to take their home with them, they are looking for a mobile tiny home. In their search, they find a manufacturer who builds tiny homes using modular design. All of the following are benefits of building their home this way EXCEPT 
 

A. 

they can mix and match components to get exactly the home they want.

B. 

their home will cost about one-fourth the cost of a conventionally build house.

C. 

their future home repairs can be done quickly, reducing the cost of labor.

D. 

if any portion of a modular component of their home fails, they can repair the component instead of needing to replace it.

E. 

if they decide to change their home in the future, they can add new modules.

 

62.

_____ is making products to meet a particular customer's needs or wants. 
 

A. 

Customization

B. 

Standardization

C. 

Mass production

D. 

Crowdsourcing

E. 

Benchmarking

 

63.

Dera Diamonds Inc. is a premium jeweler. Its clientele includes movie stars, politicians, businessmen, and popular socialites. It has a team of jewelry experts that designs jewelry for each of its clients from scratch. Everything is made to meet the specific requirements of the clients, and no two jewelry pieces produced by this company has ever been identical. This is an example of  
 

A. 

customization.

B. 

standardization.

C. 

mass production.

D. 

crowdsourcing.

E. 

benchmarking.

 

64.

Axel Automobile Company allows buyers to select the color, interiors, and features of their cars based on their individual preferences. Though most parts of the cars can be altered to meet the buyers' specifications, their structural body remains the same. This is an example of  
 

A. 

lean manufacturing.

B. 

standardization.

C. 

mass customization.

D. 

crowdsourcing.

E. 

benchmarking.

 

65.

All of the following are examples of customized products EXCEPT 
 

A. 

television sets.

B. 

repair services.

C. 

computer software.

D. 

bridges.

E. 

furniture.

 

66.

Katelyn has just joined a gym. As part of her membership, she gets a free personal training session to determine her current fitness level and use that to develop a fitness plan that will help her meet her goals. She can choose between several personal training programs, small group programs, and fitness classes. This is an example of 
 

A. 

standardization.

B. 

modular design.

C. 

component planning.

D. 

consistent service.

E. 

mass customization.

 

67.

A manufacturing unit of Baxter Brothers Brewery, a commercial brewery, can produce a maximum of 20,000 cans of beer per day. This refers to the _____ of the manufacturing unit. 
 

A. 

agility

B. 

variability

C. 

utility

D. 

perishability

E. 

capacity

 

68.

A hospital can effectively handle a maximum number of 300 patients at any one particular time. This is referred to as its  
 

A. 

agility.

B. 

variability.

C. 

capacity.

D. 

perishability.

E. 

utility.

 

69.

The capacity of a restaurant would be the 
 

A. 

average number of customers that visit the restaurant on weekends.

B. 

total number of customers who have visited the restaurant since its establishment.

C. 

average number of employees who work in the restaurant on a normal day.

D. 

maximum number of customers who can be effectively served at any one particular time.

E. 

minimum operating cost of the restaurant during a workweek.

 

70.

Maggie is an operations manager of a chain of amusement parks. Before she determines a new location for a park, she must forecast what the customer demand will be, so she can determine the appropriate capacity. Why is it important for Maggie to efficiently plan the park's capacity needs? 
 

A. 

Capacity levels that fall short can drive operation costs up due to unused and expensive resources.

B. 

Once a capacity decision has been implemented, changing the decision can incur substantial costs.

C. 

When there is more capacity available than needed, the organization may lose customers.

D. 

Too much capacity can result in unmet demand.

E. 

Capacity should reflect future demand and stakeholder desires from the beginning because adjusting for these things later is impossible.

 

71.

Facility location decisions are significant for an organization because 
 

A. 

of the customers' preference to have production facilities located nearby.

B. 

most customer contacts occur in manufacturing facilities.

C. 

speed of delivery is not very important.

D. 

proximity to market or community characteristics are not important factors.

E. 

of the high costs involved with the decisions.

 

72.

Trent owns a chain of seafood restaurants, and he wants to open a new location. All of the following are factors he should consider EXCEPT 
 

A. 

exactly how many sales he will get in the new location.

B. 

proximity to market.

C. 

climatic influences.

D. 

taxes and inducements.

E. 

community characteristics.

 

73.

Happy Homes, a manufacturer that builds luxury houses, brings all the construction resources to a central location during production. This type of a facility layout is called a(n) _____ layout. 
 

A. 

fixed-position

B. 

product

C. 

line

D. 

web

E. 

assembly line

 

74.

Striking Oil, an oil drilling plant, uses a fixed-position layout because it is involved in large, complex projects, exploring the ground for oil deposits. As a result, this company may be called a(n) _____ organization. 
 

A. 

continuous manufacturing

B. 

intermittent

C. 

project

D. 

contract manufacturing

E. 

lean manufacturing

 

75.

Which of the following is true of project organizations? 
 

A. 

They produce a standardized product.

B. 

They produce a large number of units.

C. 

They have low production costs per unit.

D. 

They rely on highly skilled labor.

E. 

They generally use product layouts.

 

76.

A metal fabrication plant with a cutting department, a drilling department, and a polishing department is using a _____ layout to organize its facility. 
 

A. 

fixed-position

B. 

project

C. 

process

D. 

geographical

E. 

customer-based

 

77.

Ocean-Side Furnishings, a company that produces furniture inspired by the beach, uses a process layout with several departments that group related processes. All of the following could be process departments in this company EXCEPT a(n) _____ department. 
 

A. 

logging

B. 

painting

C. 

assembling

D. 

cutting

E. 

marketing

 

78.

A hospital that has an X-ray unit, an obstetrics unit, a few emergency rooms, and other units would best be classified as a(n) _____ organization.

 
 

A. 

intermittent

B. 

project

C. 

continuous manufacturing

D. 

fixed

E. 

assembly line

 

79.

How are project organizations different from intermittent organizations? 
 

A. 

Project organizations deal with products of a lesser magnitude than do intermittent organizations.

B. 

Project organizations use product layouts, whereas intermittent organizations use fixed-position layouts.

C. 

Project organizations are mainly found in service industries, whereas intermittent organizations focus on manufacturing.

D. 

Project organizations are effective for mass production, whereas intermittent organizations produce very few units of a product.

E. 

Project organizations generally make a unique product, but the products of intermittent organizations are not necessarily unique.

 

80.

Creative Advertising Solutions creates flyers, newspaper ads, and television ads to meet customers' specifications. Also, if a customer wants items to hand out to potential clients, Creative Advertising Solutions creates business cards and small products, such as matchbooks, letter openers, and key chains, featuring the customer's company name and contact information. It produces relatively few units of each product. Because of the low level of output it produces, this company charges a higher price per unit of the product. What type of organization is Creative Advertising Solutions? 
 

A. 

a fixed organization

B. 

a project organization

C. 

an intermittent organization

D. 

a process organization

E. 

a service organization

 

81.

An organization that creates many products with similar characteristics, using assembly lines would most likely be categorized as a(n) _____ organization. 
 

A. 

continuous manufacturing

B. 

intermittent

C. 

project

D. 

contract manufacturing

E. 

fixed-position

 

82.

NF Goods Inc. is a contract manufacturer of laptops for a reputed consumer electronics company. It uses a facility layout in which the workers remain in one location, and the laptops move from one worker to another. Each person in turn performs his or her required tasks. Thus, NF Goods Inc. is using a _____ layout. 
 

A. 

product

B. 

process

C. 

project

D. 

web

E. 

fixed-position

 

83.

Which of the following is a defining characteristic of continuous manufacturing organizations using a product layout? 
 

A. 

They make a unique product.

B. 

They have an extremely high unit cost of production.

C. 

They deploy all resources in a central location.

D. 

They produce a large number of units.

E. 

They do not use assembly lines.

 

84.

_____ employs specialized computer systems to actually guide and control the transformation process of inputs into outputs. 
 

A. 

Computer-assisted design (CAD)

B. 

A transaction processing system

C. 

Computer-assisted manufacturing (CAM)

D. 

The in-basket technique

E. 

A turnkey project

 

85.

_____ is a complete system that designs products, manages machines and materials, and controls the operations function in the transformation process. 
 

A. 

Computer-assisted design (CAD)

B. 

Computer-integrated manufacturing (CIM)

C. 

Computer-assisted manufacturing (CAM)

D. 

Flexible manufacturing

E. 

Crowdsourcing

 

86.

Randall owns a house construction company, called Stylish Model Homes. To help his customers visualize the types of houses he can build for them, he has designed five different house models on the computer, using 3D printing to develop 3D paper models. What type of technology would Randall use to develop these 3D models? 
 

A. 

computer-assisted manufacturing

B. 

flexible manufacturing

C. 

computer-integrated manufacturing

D. 

computer-assisted design

E. 

drones

 

87.

A large nuclear power plant uses _____ in the transformation process because having humans perform these tasks would put them at risk. 
 

A. 

computers

B. 

computer software

C. 

3D models

D. 

drones

E. 

robots

 

88.

Which of the following best illustrates an organization's efforts toward sustainability through its manufacturing and operations systems? 
 

A. 

creating genetically modified foods

B. 

adopting 100 percent wind-powered electricity

C. 

increasing the use of fossil fuels for manufacturing processes

D. 

clearing forests to set up a manufacturing unit

E. 

discharging industrial effluents directly into water bodies

 

89.

Green Plumbing is dedicated to green technology and sustainability. As a result, it produces toilets and sinks that are designed to conserve water. Doing so not only protects the environment, but can also 
 

A. 

decrease customer loyalty.

B. 

hurt the firm's reputation.

C. 

cause stakeholders to protest.

D. 

lead to improved profits.

E. 

hurt the company's profits.

 

90.

All activities involved in obtaining and managing raw materials and component parts, managing finished products, packaging them, and getting them to customers are part of 
 

A. 

value chain management.

B. 

supply chain management.

C. 

reverse engineering.

D. 

crowdsourcing.

E. 

benchmarking.

 

91.

When a furniture manufacturer buys the lumber and other raw materials, machines and equipment, manufacturing supplies, and office supplies needed to build its furniture pieces, this is called 
 

A. 

consumption.

B. 

leveraged buyout.

C. 

acquisition.

D. 

procurement.

E. 

crowdsourcing.

 

92.

Which of the following is true regarding how companies get the materials needed to create their products? 
 

A. 

It is always more economical and efficient for firms to purchase all materials than to make some components themselves.

B. 

Once the purchasing department has chosen a supplier for the materials it needs, it never needs to look for new suppliers.

C. 

Firms sometimes find that it is more economical to lease an item than to purchase or make it themselves.

D. 

Technological advances make the purchasing function more difficult and less efficient.

E. 

It is always more economical and efficient for firms to make their own components than to buy or lease components from other companies.

 

93.

The term _____ refers to all raw materials, components, completed or partially completed products, and pieces of equipment a firm uses. 
 

A. 

inventory

B. 

capital reserve

C. 

input

D. 

share

E. 

intangible

 

94.

Materials that have been purchased to be used as inputs in making other products are included in _____ inventory. 
 

A. 

finished products

B. 

partial

C. 

raw materials

D. 

supplier

E. 

work-in-process

 

95.

Marson Structures Inc. purchases cement, steel rods, and wooden panels to use in the construction of buildings, houses, and bridges. These inputs are considered as _____ inventory for a construction business. 
 

A. 

finished

B. 

partial

C. 

work-in-process

D. 

supplier

E. 

raw materials

 

96.

Which of the following is an example of finished-goods inventory for an apparel company? 
 

A. 

the clothes for sale in the company's retail store

B. 

the buttons to be used on pants

C. 

a batch of pants that are in the stitching process

D. 

a bottle of fabric dye in the company's factory

E. 

the thread used for stitching

 

97.

Which of the following is an example of work-in-process inventory for an automobile company? 
 

A. 

cars for sale in one of the company's outlets

B. 

cars that are in the initial stages of the assembly line

C. 

tires in the company's warehouse

D. 

nuts and bolts used in the cars

E. 

windshields used in the cars

 

98.

The process of determining how many supplies and goods are needed and keeping track of quantities on hand, each item's location, and who is responsible for it within an organization is called 
 

A. 

facility planning.

B. 

benchmarking.

C. 

succession planning.

D. 

inventory control.

E. 

affirmative action.

 

99.

Carol is an inventory manager for a shoe store. She must determine how many pairs of each style of shoes, boots, and sandals to hold in inventory. All of the following are variables she should consider EXCEPT 
 

A. 

her shoe style preferences.

B. 

the usage rate of the shoes, boots, and sandals.

C. 

the cost of maintaining the shoes, boots, and sandals in inventory.

D. 

future costs of inventory.

E. 

the cost of the shoes, boots, and sandals themselves.

 

100.

A model of inventory management that identifies the optimum number of items to order to minimize the costs of managing them is called the _____ model. 
 

A. 

just-in-time management

B. 

flexible scheduling

C. 

cost-plus

D. 

economic order quantity

E. 

value chain

 

101.

Minimizing inventory by providing an almost continuous flow of items from suppliers to the production facility is referred to as 
 

A. 

just-in-time inventory management.

B. 

flexible scheduling.

C. 

a continuous manufacturing system.

D. 

contract manufacturing.

E. 

crowdsourcing.

 

102.

Zoro Inc., a consumer electronics company, does not store any of its materials in the warehouse. Instead, the company's procurement department orders small quantities of materials as and when they are required. The vendors supply the ordered material directly to the company's manufacturing unit a day or two before the production starts. This arrangement helps Zoro Inc. to reduce costs and boost efficiency. This scenario best illustrates  
 

A. 

continuous manufacturing systems.

B. 

contract manufacturing.

C. 

just-in-time inventory management.

D. 

crowdsourcing.

E. 

mass customization.

 

103.

An inventory planning system that schedules the precise quantity of materials needed to make a product is called 
 

A. 

succession planning.

B. 

material-requirements planning.

C. 

benchmarking.

D. 

flexible scheduling.

E. 

capacity-requirements planning.

 

104.

At Rustic Rooms Furniture, the inventory-control manager uses material-requirements planning and schedules the precise quantity of materials needed to make all the rustic furniture pieces the company plans to make each month. Which of the following is a basic component the inventory-control manager would need to create as part of material-requirements planning? 
 

A. 

an executive summary

B. 

a master production schedule

C. 

a promissory bill

D. 

a balance sheet

E. 

a balanced scorecard

 

105.

True Diva Inc., a reputed brand for women's apparel and accessories, uses contract manufacturers in different countries. The company benefits because of the lower cost of labor and minimal government regulations in other countries compared to its home country. This is an example of  
 

A. 

bartering.

B. 

benchmarking.

C. 

outsourcing.

D. 

reverse engineering.

E. 

franchising.

 

106.

All of the following are advantages of outsourcing EXCEPT it 
 

A. 

improves product quality.

B. 

speeds up the time it takes products to get to the customer.

C. 

allows companies to focus less on customer satisfaction.

D. 

makes the supply chain more efficient.

E. 

gives companies a competitive advantage.

 

107.

Which of the following is a popular method of scheduling materials that identifies all the major activities or events required to complete a project, arranges them in a sequence or path, determines the critical path, and estimates the time required for each event? 
 

A. 

the Ansoff matrix

B. 

the Program Evaluation and Review Technique (PERT)

C. 

the continuous manufacturing system

D. 

the economic order quantity (EOQ) model

E. 

the in-basket technique

 

108.

Which of the following is true about quality? 
 

A. 

It is extremely easy to measure quality characteristics when the product is a service.

B. 

It is a concern only for service providers.

C. 

It primarily indicates the price charged for a product.

D. 

It depends on customers' perceptions.

E. 

Its definition should vary from employee to employee when a firm adopts total quality management.

 

109.

The Proactive Learning Charter School wants to achieve a high level of quality in the education it provides. As a result, it sets a goal of winning the Malcolm Baldrige National Quality Award. Which of the following is one of the criteria the school must meet to receive this award? 
 

A. 

inseparability of production and consumption

B. 

product management

C. 

business results

D. 

capacity

E. 

agility

 

110.

It is especially difficult to measure quality characteristics when 
 

A. 

a firm uses ISO 9000.

B. 

a firm has a total quality management program.

C. 

the output is highly tangible.

D. 

the product is a service.

E. 

a firm applies quality control.

 

111.

Quality control refers to the 
 

A. 

processes an organization uses to maintain its established quality standards.

B. 

efforts of an organization to replace quality with productivity.

C. 

efforts of an organization to reduce the quality standards set by the best-performing companies.

D. 

inspections conducted by the government when a product's quality is above the required standard.

E. 

techniques an organization uses to minimize the quality of its products and services.

 

112.

EduPub, a large educational publishing company, has adopted a(n) _____ approach to gain a competitive edge in light of intense foreign competition and increasingly demanding customers. The company believes that uniform commitment to quality in all areas of its organization will promote a culture that meets customers' perceptions of quality. 
 

A. 

just-in-time inventory

B. 

service quality

C. 

economies of scale

D. 

economic order quantity

E. 

total quality management

 

113.

Which of the following is true of companies employing total quality management (TQM) programs? 
 

A. 

They know that quality control should be incorporated only in the final stage of the transformation process.

B. 

They believe that TQM prohibits benchmarking quality standards as it reduces their competitive advantage.

C. 

They agree that reworking defective products is the best way to ensure high standards of quality.

D. 

They know that TQM requires constant improvements in all areas of the company as well as employee empowerment.

E. 

They view quality control as a function of the operations process and not as an element of the product itself.

 

114.

Which of the following is an advantage of making a product correctly from the outset? 
 

A. 

It allows employees to make better use of their time and materials.

B. 

It gives the company more time to rework defective products.

C. 

It makes the transformation process slower and more deliberate.

D. 

It allows the company to pinpoint quality problems in the production system.

E. 

It eliminates the need to make other products.

 

115.

Continuous improvement of an organization's goods and services is built around the notion that quality is 
 

A. 

simply a function of the operations process.

B. 

free.

C. 

extremely easy to determine.

D. 

a concern of the production department only.

E. 

expensive.

 

116.

Marino Autos Inc. measures and evaluates the quality of its cars and services against the market leaders in the automobile industry. Wherever there is a gap, Marino Autos Inc. tries to cover that gap by imitating the best practices of these market leaders. This is known as  
 

A. 

crowdsourcing.

B. 

benchmarking.

C. 

sampling.

D. 

nearshoring.

E. 

licensing.

 

117.

Benchmarking lets an organization 
 

A. 

replace quality with productivity.

B. 

know where it stands competitively in its industry.

C. 

protect its processes and trade secrets from rival firms.

D. 

eliminate quality control.

E. 

limit employee participation in total quality management.

 

118.

The first step in quality control for any organization is 
 

A. 

undertaking quality inspections.

B. 

establishing quality standards.

C. 

sampling products.

D. 

measuring productivity levels.

E. 

initiating corrections.

 

119.

Auto Mart, a large automobile dealership and parts manufacturer, is trying to improve the quality of its products. To do so, its management collects and analyzes information about the production process to pinpoint quality problems in the production system. What system is management using in this scenario? 
 

A. 

total quality management

B. 

statistical process control

C. 

the Program Evaluation and Review Technique

D. 

the in-basket exercise

E. 

just-in-time inventory management

 

120.

Sampling as a method to determine whether a product meets quality standards is most likely to be used when 
 

A. 

inspection tests are destructive.

B. 

every product must be tested because of human life and safety.

C. 

each product is highly customized.

D. 

an elaborate testing technique is required.

E. 

a firm has allotted a significant amount of time and money for testing.

 

121.

Which of the following is an example of an elaborate inspection technique? 
 

A. 

weighing the contents of a box of crackers

B. 

using chemical tests to determine the quality of a migraine medication

C. 

measuring the time it takes for a customer to receive his or her pizza

D. 

inspecting chocolate bars to make sure they are wrapped properly

E. 

checking chip bags to make sure they are sealed properly

 

122.

The goal of the ISO 14000 standards is to 
 

A. 

penalize companies that do not adopt total quality management programs.

B. 

limit benchmarking within companies.

C. 

prevent companies from outsourcing to other countries.

D. 

promote a uniform approach to environmental management among companies.

E. 

help companies focus on productivity as opposed to quality.

 

 


Essay Questions
 

123.

What is operations management?

 
 


 


 


 


 

 

124.

Discuss the challenges faced by a service organization during the management of its operations.

 
 


 


 


 


 

 

125.

Richard and his friend Jason intend to establish their own ventures. While Richard intends to establish a manufacturing company, Jason intends to establish a multi-specialty hospital. In the context of planning the facilities for their ventures, discuss the types of facility layout that should be implemented by both, prior to the establishment of their ventures.

 
 


 


 


 


 

 

Document Information

Document Type:
DOCX
Chapter Number:
8
Created Date:
Aug 21, 2025
Chapter Name:
Chapter 8 Managing Service And Manufacturing Operations
Author:
O. C. Ferrell

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