Operations Management Chapter 16 Full Test Bank

Test Bank

Chapter 16: Operations Management

Multiple Choice

1. The processes and procedures of converting labor, materials, money, and other resources into finished products or services available for consumer consumption are referred to as ______.

a. the supply chain function

b. the operations function

c. the marketing function

d. the input function

KEY: Learning Objective: 16.1: Describe the elements of operations systems.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.1: Elements of Operating Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

2. UrbanSki Company manufactures skis and snowboards using polymers, plastics, and metals. The company employs trained workers to handle the production. All of these are examples of which operating system element?

a. controls

b. processes

c. outputs

d. inputs

KEY: Learning Objective: 16.1: Describe the elements of operations systems.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.1: Elements of Operating Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

3. ______ are tangible or intangible products that a business produces.

a. Controls

b. Processes

c. Outputs

d. Inputs

KEY: Learning Objective: 16.1: Describe the elements of operations systems.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.1: Elements of Operating Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

4. Inputs, transformation processes, outputs, control systems, and feedback are the five basic elements of ______.

a. human resource management

b. transformation management

c. operations management

d. time management

KEY: Learning Objective: 16.1: Describe the elements of operations systems.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.1: Elements of Operating Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

5. Inputs are important to the ______ of the finished product.

a. quantity produced

b. quality

c. location

d. timing

KEY: Learning Objective: 16.1: Describe the elements of operations systems.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.1: Elements of Operating Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

6. What a business does to add value to inputs when converting them to outputs is known as which of the following?

a. inputs

b. transformation processes

c. outputs

d. feedback

KEY: Learning Objective: 16.1: Describe the elements of operations systems.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.1: Elements of Operating Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

7. The active practices such as concepts, procedures, and technologies that are implemented to produce outputs are the basis for ______.

a. inputs

b. the transformation processes

c. outputs

d. feedback

KEY: Learning Objective: 16.1: Describe the elements of operations systems.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.1: Elements of Operating Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

8. Raw materials, skills, knowledge, money, information, and energy are all ______ for a business to use in the process of producing a product.

a. inputs

b. transformation processes

c. outputs

d. feedback

KEY: Learning Objective: 16.1: Describe the elements of operations systems.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.1: Elements of Operating Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

9. The process by which the input, transformation, and output phases are monitored in order to identify problems is known as ______.

a. a control system

b. the transformation process

c. output

d. feedback

KEY: Learning Objective: 16.1: Describe the elements of operations systems.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.1: Elements of Operating Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

10. Employee behavior in a service business would fall under which of the following?

a. inputs

b. the transformation processes

c. outputs

d. feedback

KEY: Learning Objective: 16.1: Describe the elements of operations systems.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.1: Elements of Operating Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

11. Social responsibility is a business’s obligation to ______.

a. the competitors

b. the employees

c. the community

d. the government

KEY: Learning Objective: 16.1: Describe the elements of operations systems.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.1: Elements of Operating Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

12. ______ is the measure of production, or output per worker.

a. Productivity

b. Quality control

c. Efficiency

d. Effectiveness

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

13. Communication tools that are used to connect control systems to the processes of business are known as ______.

a. inputs

b. the transformation processes

c. outputs

d. feedback

KEY: Learning Objective: 16.1: Describe the elements of operations systems.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.1: Elements of Operating Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

14. Reducing inputs into component parts to extract products is which of the following?

a. an analytic system

b. a synthetic system

c. a continuous process

d. an intermittent process

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

15. Restaurants that take food, music, lighting, and human resources and combine them into meals are using which of the following?

a. an analytic system

b. a synthetic system

c. a continuous process

d. an intermittent process

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

16. A production process that operates for long periods of time without interruption is known as a/an ______.

a. analytical thinking system

b. synthetic system

c. continuous process

d. intermittent process

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

17. Microbreweries or winemakers use which of the following when producing goods?

a. an analytic system

b. a synthetic system

c. a continuous process

d. an intermittent process

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

18. Custom printing shops and custom jewelry makers use which of the following in order to produce their product?

a. an analytic system

b. a synthetic system

c. a continuous process

d. an intermittent process

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

19. The primary reason small businesses can now compete with larger businesses in the area of manufacturing is ______.

a. today’s lower costs

b. today’s more skilled worker

c. easy availability of financing

d. automation that makes flexible production possible

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

20. In an effort to increase productivity, some service businesses like Merry Maids house cleaning service and Jiffy Lube auto service are switching from the intermittent operations management process to the ______ process.

a. individual customization

b. mass customization

c. continuous

d. intermittent

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Reflective thinking

21. Many larger businesses are deciding that manufacturing is not their specialty, so they are doing which of the following?

a. changing the products they make

b. exporting the necessary parts

c. giving out production contracts to smaller businesses and letting them provide the parts

d. hiring manufacturing experts to help increase their skills in that area

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

22. A significant difference between service and manufacturing operations is ______.

a. the amount of customer contact involved

b. the expense of providing the product

c. the number of sales involved

d. the length of time required for production

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

23. The ratio of inputs used to produce outputs is called ______.

a. efficiency

b. effectiveness

c. productivity

d. quality

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

24. In the goal of keeping productivity high, a small business owner should look for ways to increase outputs while ______.

a. keeping inputs constant

b. increasing inputs

c. increasing expenses

d. decreasing sales

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

25. In the goal of keeping productivity high, a small business owner should look for ways to keep outputs constant while ______.

a. keeping inputs constant

b. increasing inputs

c. increasing expenses

d. decreasing inputs

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

26. In a factory setting, which of the following would be an example of an output?

a. painting process

b. manufacturing process

c. waste product

d. raw material

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

27. Total productivity can be determined by dividing total outputs by ______.

a. total expenses

b. total sales

c. total inputs

d. total assets

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

28. If a bagel company sold $400,000 worth of bagels and used $150,000 worth of resources, the productivity ratio would be ______.

a. 0.375

b. 2.67

c. 3.33

d. 37.5

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Reflective thinking

29. Small business owners can increase the productivity of their business by ______.

a. increasing outputs

b. decreasing inputs

c. increasing outputs and decreasing inputs

d. decreasing outputs and increasing inputs

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

30. In the chocolate factory segment of a business, 4,000 pounds of candy can be produced from 1,750 pounds of chocolate. What is the chocolate productivity ratio?

a. 0.4375

b. 2.29

c. 2.67

d. 43.75

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Reflective thinking

31. Productivity in service-related businesses has not grown as rapidly as in manufacturing businesses because service businesses are ______.

a. more capital intensive

b. more labor intensive

c. less labor intensive

d. more expensive to operate

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

32. Scheduling is the basic operations management activity for both manufacturing and service businesses that involves ______.

a. the quality of the production

b. the quantity of production

c. the timing of production

d. the productivity level of the workers

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

33. Scheduling is necessary to maximize levels of ______.

a. efficiency and customer service

b. customer service and expense

c. sales and expense

d. efficiency and effectiveness

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

34. When materials and resources are allocated for production when the job order comes in, which of the following types of scheduling is used?

a. forward scheduling

b. backward scheduling

c. horizontal scheduling

d. vertical scheduling

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

35. When production activities are arranged around the due date for product completion, which of the following types of scheduling is used?

a. forward scheduling

b. backward scheduling

c. horizontal scheduling

d. vertical scheduling

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

36. When building a house or constructing an airplane that must be completed by a certain date, which type of scheduling should be used?

a. forward scheduling

b. backward scheduling

c. horizontal scheduling

d. vertical scheduling

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Easy

TOP: AACSB Standard: Reflective thinking

37. What type of scheduling device enables a small business owner to see the time required for each step in the production process and to see the current status of a job?

a. the scheduling chart

b. a Gantt chart

c. a timing chart

d. the Herzberg chart

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

38. Information that shows the steps required to produce a product is called which of the following?

a. routing

b. sequencing

c. dispatching

d. controlling

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

39. Routing sheets are ______ while routing files are ______.

a. current information; past-due information

b. expense information; sales information

c. the paper copy; the electronic version of the same information

d. management information; supervisory information

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

40. The detailed breakdown of information explaining how the product or service is produced is called ______.

a. routing

b. sequencing

c. dispatching

d. controlling

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

41. Which of the following is the critical step in scheduling because a holdup in one department could cause a shutdown in the rest of the plant?

a. routing

b. sequencing

c. dispatching

d. controlling

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

42. The act of releasing work to employees according to previously established priorities is known as ______.

a. routing

b. sequencing

c. dispatching

d. controlling

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

43. Which of the following types of dispatching would a taxi company use?

a. first-come, first-served rule

b. earliest due date rule

c. longest processing time rule

d. shortest processing time rule

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Easy

TOP: AACSB Standard: Reflective thinking

44. A company that assumes that orders that take the longest will be the largest and the most profitable would use the ______.

a. first-come, first-served rule

b. earliest due date rule

c. longest processing time rule

d. shortest processing time rule

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

45. How well a good or service meets or exceeds customers’ expectations or the degree to which a product conforms to established tolerance standards is known as ______.

a. quantity produced

b. quality

c. surpassing customer expectations

d. total quality management

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

46. The boundaries that a manager sets in determining the acceptable quality of a product are known as the ______.

a. defect rates

b. tolerance ranges

c. zero defects

d. defect ranges

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

47. The number of goods produced that were out of the company’s accepted tolerance range is known as the ______.

a. defect rate

b. unacceptable quality rate

c. zero defects rate

d. defect range rate

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

48. Companies that make a significant profit from completing more orders will use which dispatching rule?

a. shortest processing time

b. first-come, first served

c. earliest due date

d. longest processing time

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

49. In statistical terminology, sigma denotes the ______ of a set of data.

a. variance

b. mean

c. standard deviation

d. sum

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

50. Perfection is not possible, but companies are striving for which of the following?

a. zero defects

b. minimum defects

c. one defect

d. two defects

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

51. Six sigma is the tolerance range in which only ______ defects per ______ are allowed.

a. 2.5; thousand

b. 3.4; million

c. 3.4; thousand

d. 2.5; million

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

52. ______ statistics summarizes data through the use of measures of central tendency, variance, and standard deviation.

a. Inferential

b. Qualitative

c. Descriptive

d. Quantitative

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

53. ______ statistics is the process of looking at a sample and then using statistical analysis to interpret results.

a. Inferential

b. Applied

c. Descriptive

d. Quantitative

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

54. ______ is used to determine the magnitude of an effect and to identify potential causes of variation.

a. Analysis of variance

b. Applied analysis

c. Descriptive analysis

d. Regression analysis

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

55. Which form of control depends most strongly on total quality management principles?

a. feedforward control

b. concurrent control

c. feedback control

d. loop control

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

56. Inspecting outputs is which of the following types of quality control?

a. feedforward quality control

b. concurrent quality control

c. feedback quality control

d. intermittent quality control

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

57. The set of standards that certify that a business is using processes and principles in order to assure the production of quality products is known as which of the following?

a. ISO 6000

b. ISO 9000

c. GATT 3000

d. GATT 9000

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

58. To monitor the quality of work in progress, many businesses are realizing the value of the international quality standards known as ______.

a. ISO 6000

b. ISO 9000

c. GATT 3000

d. GATT 9000

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

59. The process of comparing key points within one’s own business with comparable points in another external entity is referred to as ______.

a. six sigma

b. feedback control

c. benchmarking

d. statistical process control

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

60. The use of statistical analysis to determine the probability of a variation in a product being a random mishap or a continuous problem is known as which of the following?

a. ISO 9000

b. GATT 3000

c. statistical process control

d. random process control

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

61. What is the small business manager’s priority when purchasing?

a. best value

b. lowest price

c. highest quality

d. highest price

KEY: Learning Objective: 16.5: Explain the importance of purchasing and describe its procedures.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.5: Purchasing For Small Business

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

62. To standardize the purchasing process, the small business manager may want to use which of these tools?

a. invoice

b. receiving report form

c. purchase requisition

d. purchase order

KEY: Learning Objective: 16.5: Explain the importance of purchasing and describe its procedures.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.5: Purchasing For Small Business

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

63. The purchase order represents a legal offer to buy, no purchase contract exists until the seller ______.

a. accepts the buyer’s offer

b. sends a purchase contract

c. sends an invoice

d. receives payment

KEY: Learning Objective: 16.5: Explain the importance of purchasing and describe its procedures.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.5: Purchasing For Small Business

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

64. An important factor in considering the inventory needs of many small retail businesses is ______.

a. the time needed to manufacture parts

b. bulk ordering to maintain high stock of items

c. to fill backorders

d. the time needed to get new inventory and the cost of reordering

KEY: Learning Objective: 16.6: Calculate how much inventory you need and when.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.6: Managing Inventory

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

65. What is the most apparent cost of inventory?

a. financing

b. shelf life

c. storage

d. shipping

KEY: Learning Objective: 16.6: Calculate how much inventory you need and when.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.6: Managing Inventory

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

66. The expenses incurred in producing inventory are called ______.

a. holding costs

b. stocking costs

c. ordering costs

d. shipping costs

KEY: Learning Objective: 16.6: Calculate how much inventory you need and when.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.6: Managing Inventory

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

67. What term is used to describe when you need to restock?

a. inventory cycle

b. reorder point

c. reorder quantity

d. lead time

KEY: Learning Objective: 16.6: Calculate how much inventory you need and when.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.6: Managing Inventory

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

NARRBEGIN: 16-1

Scenario 16-1. Ron’s Rifle Manufacturers is facing tough competition. Recently, their rifles have received bad publicity due to a faulty safety mechanism. Management is determined to increase the quality of the rifles and have the emphasis on quality become Ron’s competitive advantage.

NARREND

68. In Scenario 16-1, there is no factor more important to businesses than that of ______.

a. price

b. consumer demand

c. quality

d. variety

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Medium

TOP: AACSB Standard: Reflective thinking

NAR: 16-1

69. In Scenario 16-1, the customers view the quality of Ron’s rifles based on ______.

a. how well the rifle satisfies their needs

b. how closely the rifle conforms to the standards Ron has set

c. how closely price mirrors performance

d. how expensive the rifle is compared to competitors’ rifles

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Medium

TOP: AACSB Standard: Reflective thinking

NAR: 16-1

70. In Scenario 16-1, Ron’s Rifles decides to use the tolerance range of six sigma. This means there will be ______ defects per ______.

a. 2.5; 1,000

b. 6; 1,000

c. 3.4; 1,000,000

d. 4.5; 1,000,000

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Medium

TOP: AACSB Standard: Reflective thinking

NAR: 16-1

71. In Scenario 16-1, management feels very strongly that the concept of six sigma also needs to be applied to customer service. Many customers have expressed their dissatisfaction with the current level of customer service. The difference between three sigma and four sigma levels in customer service in a company with 1,000 employees and 10 stages would be which of the following?

a. 100 dissatisfied customers

b. 200 dissatisfied customers

c. 375 dissatisfied customers

d. 439 dissatisfied customers

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Medium

TOP: AACSB Standard: Analytical thinking

NAR: 16-1

NARRBEGIN: 16-2

Scenario 16-2. Shana’s Chocolate Factory is currently making a profit. Shana, however, wishes to evaluate her scheduling methods and increase her efficiency. She feels that the process can be improved, which means more chocolates could be produced and sold. Christmas is nearing and she knows if she cannot keep up with demand, her customers may choose another chocolate factory. Chocolate and sugar are the major ingredients in her candies. She uses 2,000 pounds of sugar and chocolate combined to produce 10,000 pieces of candy.

NARREND

72. In Scenario 16-2, to measure the productivity of her business, Shana would ______.

a. divide output by sales

b. divide input by sales

c. divide input by expenses

d. divide total outputs by total inputs

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Medium

TOP: AACSB Standard: Reflective thinking

NAR: 16-2

73. In Scenario 16-2, to determine the materials productivity for the sugar and chocolate, Shana would use the formula and find that the ratio was ______.

a. 3

b. 5

c. 2

d. 4

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Medium

TOP: AACSB Standard: Reflective thinking

NAR: 16-2

74. In Scenario 16-2, with Christmas approaching, Shana can be relatively assured she will need 50,000 pounds of chocolates based on sales from the last three years. She also knows she needs this amount produced by December 15 in order to take advantage of Christmas shopping. Which of the following types of scheduling should Shana use?

a. forward scheduling

b. backward scheduling

c. routing

d. sequencing

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Medium

TOP: AACSB Standard: Reflective thinking

NAR: 16-2

75. In Scenario 16-2, the detailed breakdown of information explaining exactly how each chocolate will be produced and the steps to be taken at each point in production is called which of the following?

a. routing

b. sequencing

c. dispatching

d. forward scheduling

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Medium

TOP: AACSB Standard: Reflective thinking

NAR: 16-2

76. In Scenario 16-2, the processes used in making various candies differ. Some candies are dipped, some are rolled in nuts, and some are layered. In determining the order with which various chocolates will go through the production system, Shana is considering which stage of the scheduling process?

a. routing

b. sequencing

c. dispatching

d. forward scheduling

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Medium

TOP: AACSB Standard: Reflective thinking

NAR: 16-2

True/False

1. The outputs in an operations management system include all physical and intangible resources that come into a business.

KEY: Learning Objective: 16.1: Describe the elements of operations systems.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.1: Elements of Operating Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

2. The operations management system starts with inputs that are transformed into outputs using transformation processes.

KEY: Learning Objective: 16.1: Describe the elements of operations systems.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.1: Elements of Operating Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

3. All the outputs a business produces, including the unintentional outputs, must be considered in the output phase of operations management.

KEY: Learning Objective: 16.1: Describe the elements of operations systems.

REF: Cognitive Domain: Comprehension

Answer Location: Concept Module 16.1: Elements of Operating Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

4. Feedback is the necessary written communication that links a control system to the other phases of operations management.

KEY: Learning Objective: 16.1: Describe the elements of operations systems.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.1: Elements of Operating Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

5. Auto salvage businesses use synthetic systems in order to produce parts and scrap iron.

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Comprehension

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

6. Restaurants use the analytic system since they use food, painting, and human resources to produce their good/service.

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Comprehension

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

7. Microbreweries or winemakers use the continuous process in producing their product.

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Comprehension

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

8. Custom printing shops and custom jewelry makers use the continuous process in the production of their good/service.

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Comprehension

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

9. The primary reason small businesses can compete with larger manufacturing companies is increases in productivity.

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

10. Service providers need and use operations management just as much as product manufacturers do.

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

11. The higher the output per labor hour ratio, the less efficient the operating system.

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

12. It has been found that older technology does not significantly decrease a company’s productivity.

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

13. Productivity in service-related businesses has not grown as rapidly as in manufacturing businesses because service businesses are more capital intensive.

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

14. Productivity in the service sector of the U.S. economy has decreased over the last decade.

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

15. Scheduling is necessary to maximize levels of efficiency and customer service.

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

16. Any type of custom production in which the product changes or where demand is unknown in advance would use forward scheduling.

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

17. A chart that can be used to track the progress of work as a product makes its way through various departments is known as a scheduling chart.

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

18. Sequencing is the critical step in determining the order in which a job will go through a production system.

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

19. A tailor making custom-tailored suits would use the longest processing time rule for dispatching tailoring jobs.

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Easy

TOP: AACSB Standard: Reflective thinking

20. There is no concept more important to business today than quality.

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

21. Six sigma means striving for 99 percent accuracy in production.

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

22. From a customer’s perspective, quality means how closely a product conforms to the standards that are set by the business.

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

23. Achieving a sigma level of 4.0 would result in 6,750 defects per million.

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

24. The two types of statistical analysis used in six sigma include descriptive statistics and inferential statistics.

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

25. Inspecting and testing products after they are produced is called feedback quality control.

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

26. As a small business manager, you should strive to purchase the highest quality goods at a low price.

KEY: Learning Objective: 16.5: Explain the importance of purchasing and describe its procedures.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.5: Purchasing For Small Business

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

27. A purchase requisition is a legal contract between you and the supplier.

KEY: Learning Objective: 16.5: Explain the importance of purchasing and describe its procedures.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.5: Purchasing For Small Business

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

28. It is better to make your own parts rather than buy standardized parts.

KEY: Learning Objective: 16.5: Explain the importance of purchasing and describe its procedures.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.5: Purchasing For Small Business

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

29. Inventory represents money sitting idly on a shelf.

KEY: Learning Objective: 16.6: Calculate how much inventory you need and when.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.6: Managing Inventory

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

30. About 20 percent of the firm’s revenue will come from about 80 percent of the inventory.

KEY: Learning Objective: 16.6: Calculate how much inventory you need and when.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.6: Managing Inventory

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

31. Holding costs are the expenses you incur in either ordering or producing inventory.

KEY: Learning Objective: 16.6: Calculate how much inventory you need and when.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.6: Managing Inventory

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

32. The time period that begins when an item is at its highest desired stocking level, continues as the item is used or sold, and ends when it is replenished is called an inventory cycle.

KEY: Learning Objective: 16.6: Calculate how much inventory you need and when.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.6: Managing Inventory

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

33. An inventory system that helps to allocate more appropriate time and attention to items is Economic Order Quantity.

KEY: Learning Objective: 16.6: Calculate how much inventory you need and when.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.6: Managing Inventory

Difficulty Level: Easy

TOP: AACSB Standard: Analytical thinking

Short Answer

1. Describe three of the five elements of the operations management system.

KEY: Learning Objective: 16.1: Describe the elements of operations systems.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.1: Elements of Operating Management

Difficulty Level: Medium

TOP: AACSB Standard: Analytical thinking

2. Compare and contrast analytic manufacturing systems and synthetic manufacturing systems, giving an example of each.

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Medium

TOP: AACSB Standard: Analytical thinking

3. Define productivity and explain its importance to a small business owner. Describe two ways productivity can be improved.

KEY: Learning Objective: 16.2: Explain how to measure productivity.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.2: Operations Management

Difficulty Level: Medium

TOP: AACSB Standard: Analytical thinking

4. Describe the importance of scheduling and the process of scheduling operations.

KEY: Learning Objective: 16.3: Recount the methods of scheduling operations.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.3: What About Scheduling Operations?

Difficulty Level: Medium

TOP: AACSB Standard: Analytical thinking

5. Define quality and explain the importance of six sigma in small business.

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Medium

TOP: AACSB Standard: Analytical thinking

6. Describe at least three basic components of a six-sigma program.

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Medium

TOP: AACSB Standard: Analytical thinking

7. Describe how benchmarking can be used to improve business functions in both production processes and customer service.

KEY: Learning Objective: 16.4: Discuss the role of quality in operations management.

REF: Cognitive Domain: Knowledge

Answer Location: Concept Module 16.4: Quality-Centered Management

Difficulty Level: Medium

TOP: AACSB Standard: Analytical thinking