Process Strategy – Ch7 Test Bank | 10th Global Edition

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Operations Management, 10e, Global Edition (Heizer/Render)

Chapter 7 Process Strategy

1) A firm's process strategy is its approach to transforming resources into goods and services.

Diff: 1

Topic: Four process strategies

Objective: LO7-1

2) Intermittent processes are organized around processes.

Diff: 1

Topic: Four process strategies

Objective: LO7-1

3) In process-focused facilities, equipment utilization is low.

Diff: 2

Topic: Four process strategies

Objective: LO7-1

4) The typical full-service restaurant uses a product-focused process.

Diff: 2

Topic: Four process strategies

Objective: LO7-1

5) Harley-Davidson, because it has so many possible combinations of products, utilizes the process strategy of mass customization.

Diff: 2

Topic: Four process strategies

Objective: LO7-1

6) A value-stream map includes both (1) inventory quantities, and (2) symbols for customers and suppliers.

Diff: 2

Topic: Process analysis and design

Objective: LO7-3

7) The assembly line is a classic example of a repetitive process.

Diff: 1

Topic: Four process strategies

Objective: LO7-1

8) One essential ingredient of mass customization is modular design.

Diff: 2

Topic: Four process strategies

Objective: LO7-1

9) The tool that calculates which process has the lowest cost at any specified production volume is a crossover chart.

Diff: 2

Topic: Four process strategies

Objective: LO7-2

10) The term focused processes refers to the quest for increased efficiency, whether in goods or services, that results from specialization.

Diff: 2

Topic: Four process strategies

Objective: LO7-1

11) Service blueprinting is a process analysis technique that focuses on the customer and the provider's interaction with the customer.

Diff: 2

Topic: Process analysis and design

Objective: LO7-4

12) Activity times should not be included in a service blueprint.

Diff: 2

Topic: Process analysis and design

Objective: LO7-4

13) A process map with the addition of a time axis becomes a process chart.

Diff: 2

Topic: Process analysis and design

Objective: LO7-3

14) Time-function mapping is a flowchart with time added to the horizontal axis.

Diff: 2

Topic: Process analysis and design

Objective: LO7-3

15) Process maps use distance, but not time, to show the movement of material, product, or people through a process.

Diff: 2

Topic: Process analysis and design

Objective: LO7-3

16) Professional services typically require low levels of labor intensity.

Diff: 2

Topic: Service process design

Objective: LO7-4

17) An example of the postponement strategy for improving service productivity is having the customer wait until you have sufficient time to serve the customer.

Diff: 2

Topic: Service process design

Objective: LO7-4

18) Process control is the use of information technology to monitor and control a physical process.

Diff: 1

Topic: Production technology

AACSB: Use of IT

Objective: LO7-5

19) One use of camera-and-computer-based vision systems is to replace humans doing tedious and error-prone visual inspection activities.

Diff: 1

Topic: Production technology

AACSB: Use of IT

Objective: LO7-5

20) Automated storage and retrieval systems are commonly used in distribution facilities of retailers.

Diff: 2

Topic: Production technology

AACSB: Use of IT

Objective: LO7-5

21) Flexible manufacturing systems, because of easily changed control programs, are able to perform such tasks as manufacturing one-of-a-kind parts economically.

Diff: 2

Topic: Production technology

AACSB: Use of IT

Objective: LO7-5

22) Production technology has had a major impact on services, but as yet there has been little reduction in service labor requirements.

Diff: 2

Topic: Technology in services

AACSB: Use of IT

Objective: LO7-5

23) Optical checkout scanners and ATMs are examples of technology's impact on services.

Diff: 2

Topic: Technology in services

AACSB: Use of IT

Objective: LO7-5

24) Successful process redesign focuses on departmental areas where small, continuous improvements can be made.

Diff: 2

Topic: Process redesign

Objective: LO7-5

25) Processes can be environmentally friendly and socially responsible while still contributing to profitable strategies.

Diff: 1

Topic: Sustainability

AACSB: Ethical Reasoning

Objective: LO7-5

26) In selecting new equipment and technology, decision-makers look for flexibility–the ability to respond with little penalty in time, cost, or customer value.

Diff: 2

Topic: Selection of equipment and technology

Objective: LO7-5

27) An organization's process strategy

A) will have long-run impact on efficiency and flexibility of production

B) is the same as its transformation strategy

C) must meet various constraints, including cost

D) is concerned with how resources are transformed into goods and services

E) All of the above are true.

Diff: 2

Topic: Four process strategies

Objective: LO7-1

28) A job shop is an example of a(n)

A) repetitive process

B) continuous process

C) line process

D) intermittent process

E) specialized process

Diff: 2

Topic: Four process strategies

Objective: LO7-1

29) Three types of processes are

A) goods, services, and hybrids

B) manual, automated, and service

C) process focus, repetitive focus, and product focus

D) modular, continuous, and technological

E) input, transformation, and output

Diff: 2

Topic: Four process strategies

Objective: LO7-1

30) Which of the following industries is most likely to have low equipment utilization?

A) auto manufacturing

B) commercial baking

C) television manufacturing

D) chemical processing

E) restaurants

Diff: 2

Topic: Four process strategies

Objective: LO7-1

31) A product-focused process is commonly used to produce

A) high-volume, high-variety products

B) low-volume, high-variety products

C) high-volume, low-variety products

D) low-variety products at either high- or low-volume

E) high-volume products of either high- or low-variety

Diff: 2

Topic: Four process strategies

Objective: LO7-1

32) Which one of the following products is most likely made in a job shop environment?

A) a daily newspaper

B) paper forms

C) television sets

D) cigarettes

E) canned vegetables

Diff: 2

Topic: Four process strategies

Objective: LO7-1

33) Which of the following products is likely to be assembled on a repetitive process line?

A) automobiles

B) personal computers

C) dishwashers

D) television sets

E) all of the above

Diff: 2

Topic: Four process strategies

Objective: LO7-1

34) An assembly line is an example of a

A) product-focused process

B) process-focused process

C) repetitive process

D) line process

E) specialized process

Diff: 2

Topic: Four process strategies

Objective: LO7-1

35) Arnold Palmer Hospital uses which focus?

A) process

B) repetitive

C) product

D) mass customization

E) A and D

Diff: 2

Topic: Four process strategies

Objective: LO7-1

36) One of the similarities between process focus and mass-customization is

A) the volume of outputs

B) the process layout

C) the standard cost

D) the variety of inputs

E) All of the above are similarities

Diff: 2

Topic: Four process strategies

Objective: LO7-1

37) Frito-Lay is to __________ focus as Harley Davidson is to __________ focus.

A) pocess, repetitive

B) product, repetitive

C) repetitive, product

D) process, product

E) product, mass customization

Diff: 2

Topic: Four process strategies

Objective: LO7-1

38) One of the similarities between repetitive focus and mass customization is

A) the wide variety of outputs

B) module inputs

C) the process layout

D) the standard cost

E) component inputs

Diff: 2

Topic: Four process strategies

Objective: LO7-1

39) Flexible equipment is most closely associated with which approach?

A) product

B) process

C) mass customization

D) repetitive

E) A and C

Diff: 2

Topic: Four process strategies

Objective: LO7-1

40) Swift movement through the facility is typical of goods in which approach?

A) product

B) process

C) mass customization

D) repetitive

E) A and C

Diff: 2

Topic: Four process strategies

Objective: LO7-1

41) High fixed costs and low variable costs are typical of which approach?

A) product

B) process

C) mass customization

D) repetitive

E) A and C

Diff: 2

Topic: Four process strategies

Objective: LO7-1

42) Goods made to order are typical of __________ and __________ approaches while goods made to forecast are typical of __________ and __________ approaches.

A) process, mass customization; repetitive, product

B) product, mass customization; repetitive, process

C) product, process; repetitive, mass customization

D) repetitive, product; mass customization, process

E) repetitive, process; mass customization, product

Diff: 2

Topic: Four process strategies

Objective: LO7-1

43) Smooth FM Radio uses a __________ approach when it mixes pre-recorded local segments with its national music blocks.

A) mass customization

B) product focus

C) process focus

D) repetitive focus

E) both D and A

Diff: 2

Topic: Four process strategies

Objective: LO7-1

44) Which of the following companies use a mass customization approach?

A) Dell

B) Align Technology

C) Frito-Lay

D) Arnold Palmer hospital

E) A and B

Diff: 2

Topic: Four process strategies

Objective: LO7-1

45) Which of the following transformations generally has the highest equipment utilization?

A) process-focused process

B) repetitive process

C) product-focused process

D) specialized process

E) modular process

Diff: 2

Topic: Four process strategies

Objective: LO7-1

46) Harley Davidson

A) utilizes job shops to make each of its modules

B) uses product focused manufacturing

C) uses a large number of modules to build a small number of different bikes

D) uses work cells to feed its assembly line

E) All of the above are true.

Diff: 2

Topic: Four process strategies

Objective: LO7-1

47) Which of the following is false regarding repetitive processes?

A) They use modules.

B) They allow easy switching from one product to the other.

C) They are the classic assembly lines.

D) They have more structure and less flexibility than a job shop layout.

E) They include the assembly of basically all automobiles.

Diff: 2

Topic: Four process strategies

Objective: LO7-1

48) When done correctly, mass customization

A) increases pressure on supply-chain performance

B) helps eliminate the guesswork that comes with sales forecasting

C) drives down inventories

D) increases pressure on scheduling

E) all of the above

Diff: 2

Topic: Four process strategies

Objective: LO7-1

49) Which of the following phrases best describes product focus?

A) low volume, high variety

B) finished goods are usually made to order

C) processes are designed to perform a wide variety of activities

D) high fixed costs, low variable costs

E) raw material inventories are low relative to the value of the product

Diff: 3

Topic: Four process strategies

Objective: LO7-1

50) Which of the following phrases best describes process focus?

A) low volume, high variety

B) finished goods are usually made to a forecast and stored

C) operators are modestly skilled

D) high fixed costs, low variable costs

E) raw material inventories are high relative to the value of the product

Diff: 3

Topic: Four process strategies

Objective: LO7-1

51) Which of the following characteristics best describes repetitive focus?

A) It uses sophisticated scheduling to accommodate custom orders.

B) Its output is a standardized product produced from modules.

C) It is too expensive when volumes are low or flexibility is required.

D) It is widely used for the manufacture of steel.

E) Its costs are often known only after a job is done.

Diff: 3

Topic: Four process strategies

Objective: LO7-1

52) Utilization in process-oriented facilities is frequently low because

A) the postponement strategy for improving service productivity is being used

B) scheduling in process-oriented facilities is not very complex

C) with high fixed costs, utilization is not very important

D) excess capacity for peak demands is desirable

E) low raw material inventories cause machines to be idled

Diff: 2

Topic: Four process strategies

Objective: LO7-1

53) A quasi-custom product

A) gets its apparent customization from the combinations available from a small number of modules

B) is often the output of repetitive focus facilities

C) is a valid description of a fast food sandwich

D) is only possible when the focus strategy of service productivity improvement is in use

E) All but D are true.

Diff: 2

Topic: Four process strategies

Objective: LO7-1

54) Process A has fixed costs of $1000 and variable costs of $5 per unit. Process B has fixed costs of $500 and variable costs of $15 per unit. The crossover point between process A and process B is

A) 50 units

B) 200 units

C) $2,500

D) $5,000

E) $9,500

Diff: 2

Topic: Four process strategies

AACSB: Analytic Skills

Objective: LO7-2

55) Process X has fixed costs of $10,000 and variable costs of $2.40 per unit. Process Y has fixed costs of $9,000 and variable costs of $2.25 per unit. Which of the following statements is true?

A) The crossover point is approximately 6667 units.

B) It is impossible for one process to have both of its costs lower than those of another process.

C) Process Y is cheaper than process X at all volumes; there is no crossover point.

D) Process X should be selected for very large production volumes.

E) Process X is more profitable than process Y and should be selected.

Diff: 2

Topic: Four process strategies

AACSB: Analytic Skills

Objective: LO7-2

56) The crossover point is that production quantity where

A) variable costs of one process equal the variable costs of another process

B) fixed costs of a process are equal to its variable costs

C) total costs equal total revenues for a process

D) total costs for one process equal total costs for another process

E) the process no longer loses money

Diff: 2

Topic: Four process strategies

Objective: LO7-2

57) Product Focused processes

A) allow more customization, but are not very efficient

B) are desirable because resource needs increase slowly with the complexity of a process

C) are processes that are specialized for relatively few products or customer groups

D) apply only to service firms, not to manufacturers

E) are profitable because customers demand flexibility, not specialization

Diff: 2

Topic: Process analysis and design

Objective: LO7-1

58) Value Stream Mapping

A) is a variation on time function mapping

B) examines the supply chain to determine where value is added

C) extends time function mapping back to the supplier

D) starts with the customer and works backwards

E) All of the above are true.

Diff: 2

Topic: Process analysis and design

Objective: LO7-3

59) One fundamental difference between a process chart and a process map is that

A) the process chart uses a time dimension, while a process map is not time-oriented

B) the process chart includes the supply chain, while the process map stays within an organization

C) the process chart is more like a table, while the process map is more like a schematic diagram

D) the process chart focuses on the customer and on the provider's interaction with the customer, while the process map does not deal directly with the customer

E) None of these is true, because a process chart and a process map are the same thing.

Diff: 2

Topic: Process analysis and design

Objective: LO7-3

60) Service blueprinting

A) provides the basis to negotiate prices with suppliers

B) mimics the way people communicate

C) determines the best time for each step in the process

D) focuses on the provider's interaction with the customer

E) can only be successful with two-dimensional processes

Diff: 2

Topic: Service process design

AACSB: Communication

Objective: LO7-3

61) A drawing of the movement of material, product, or people is a

A) flow chart

B) process chart

C) service blueprint

D) process map

E) none of the above

Diff: 2

Topic: Process analysis and design

Objective: LO7-3

62) Strategies for improving productivity in services are

A) separation, self-service, automation, and scheduling

B) lean production, strategy-driven investments, automation, and process focus

C) reduce inventory, reduce waste, reduce inspection, and reduce rework

D) high interaction, mass customization, service factory, and just-in-time

E) none of the above

Diff: 2

Topic: Service process design

Objective: LO7-4

63) Which of the following is not a strategy for improving service productivity?

A) self-service

B) automation

C) scheduling

D) separation

E) mass customization

Diff: 2

Topic: Service process design

Objective: LO7-4

64) In mass service and professional service, the operations manager should focus on

A) automation

B) equipment maintenance

C) sophisticated scheduling

D) human resources

E) all of the above

Diff: 2

Topic: Service process design

Objective: LO7-4

65) In mass service and service factory quadrants of the service process matrix, the operations manager could focus on all of the following except

A) automation

B) standardization

C) tight quality control

D) removing some services

E) customization

Diff: 2

Topic: Service process design

Objective: LO7-4

66) Which of the following is true regarding opportunities to improve service processes?

A) Automation can do little to improve service processes, because services are so personal.

B) Layout is of little consequence, since services seldom use an assembly line.

C) If a work force is strongly committed, it need not be cross-trained and flexible.

D) All of the above are true.

E) None of the above is true.

Diff: 2

Topic: Service process design

Objective: LO7-4

67) Which of the following are typical of process control systems?

A) They have sensors.

B) The digitized data are analyzed by computer, which generates feedback.

C) Their sensors take measurements on a periodic basis.

D) The sensors' measurements are digitized.

E) all of the above

Diff: 2

Topic: Production technology

AACSB: Use of IT

Objective: LO7-5

68) Which of the following is true regarding vision systems?

A) They are consistently accurate.

B) They are modest in cost.

C) They do not become bored.

D) All of the above are true.

E) None of the above is true.

Diff: 2

Topic: Production technology

AACSB: Use of IT

Objective: LO7-5

69) The use of information technology to monitor and control a physical process is known as

A) process control

B) computer-aided design

C) information numeric control

D) numeric control

E) none of the above

Diff: 2

Topic: Production technology

AACSB: Use of IT

Objective: LO7-5

70) Which of the following technologies would enable a cashier to scan the entire contents of a shopping cart in seconds?

A) ASRS

B) AGV

C) CAD/CAM

D) RFID

E) FMS

Diff: 2

Topic: Production technology

AACSB: Use of IT

Objective: LO7-5

71) "Automatic placement and withdrawal of parts and products into and from designated places in a warehouse" describes

A) AGV

B) CAD/CAM

C) CIM

D) ASRS

E) FMS

Diff: 2

Topic: Production technology

AACSB: Use of IT

Objective: LO7-5

72) Computer-integrated manufacturing (CIM) includes manufacturing systems that have

A) computer-aided design, a flexible manufacturing system, inventory control, warehousing and shipping integrated

B) transaction processing, management information systems, and decision support systems integrated

C) automated guided vehicles, robots, and process control

D) robots, automated guided vehicles, and transfer equipment

E) all of the above

Diff: 2

Topic: Production technology

AACSB: Use of IT

Objective: LO7-5

73) Which one of the following technologies is used only for material handling, not actual production or assembly?

A) robots

B) CNC

C) CAD

D) AGVs

E) FMS

Diff: 2

Topic: Production technology

AACSB: Use of IT

Objective: LO7-5

74) A system using an automated work cell controlled by electronic signals from a common centralized computer facility is called a(n)

A) adaptive control system

B) robotics

C) flexible manufacturing system

D) automatic guided vehicle (AGV) system

E) manufacturing cell

Diff: 2

Topic: Production technology

AACSB: Use of IT

Objective: LO7-5

75) "Operators simply load new programs, as necessary, to produce different products" describes

A) CAD

B) automated guided vehicles

C) flexible manufacturing systems

D) vision systems

E) process control

Diff: 2

Topic: Production technology

AACSB: Use of IT

Objective: LO7-5

76) Which of the following is not one of the essential ingredients for mass customization?

A) high machine utilization

B) personnel and facility flexibility

C) reliance on modular design

D) rapid throughput

E) very effective scheduling

Diff: 2

Topic: Four process strategies

Objective: LO7-1

77) Advances in technology

A) have impacted the manufacturing sector only

B) have had only limited impact on services

C) have failed to change the level of customer interaction with an organization

D) have had dramatic impact on customer interaction with services and with products

E) have dramatically changed health care, but have not changed retailing

Diff: 2

Topic: Technology in services

Objective: LO7-5

78) Process redesign

A) is the fundamental rethinking of business processes

B) can focus on any process

C) tries to bring about dramatic improvements in performance

D) focuses on activities that cross functional lines

E) all of the above

Diff: 2

Topic: Process reengineering

Objective: LO7-3

79) Ethical and environmentally friendly processes include which of the following?

A) emission controls

B) recycling

C) efficient use of resources

D) reduction of waste by-products

E) all of the above

Diff: 2

Topic: Technology in services

AACSB: Ethical Reasoning

Objective: LO7-5

80) Making environmentally sound products through efficient processes

A) is unprofitable, as long as recyclable materials prices are soft

B) is known as lean manufacturing

C) can still be profitable

D) is easier for repetitive processes than for product-focused processes

E) none of the above

Diff: 2

Topic: Sustainability

AACSB: Ethical Reasoning

Objective: LO7-5

81) Flexibility can be achieved with

A) movable equipment

B) inexpensive equipment

C) sophisticated electronic equipment

D) modular equipment

E) all of the above

Diff: 2

Topic: Selection of equipment and technology

Objective: LO7-5

82) Which of the following statements regarding ethical and environmentally friendly processes is true?

A) Operations managers can be environmentally sensitive, but they must avoid following a low cost strategy.

B) Processes can be environmentally friendly or socially responsible, but not both.

C) Operations managers can be environmentally sensitive and still follow a low cost strategy.

D) Using energy-efficient lighting saves so little that it should not be labeled environmentally friendly.

E) The only business strategy consistent with ethical and environmentally sensitive management is the differentiation strategy.

Diff: 2

Topic: Sustainability

AACSB: Ethical Reasoning

Objective: LO7-5

83) The four R's of sustainability do not include

A) recycling

B) resources

C) regulations

D) reputation

E) responsibility

Diff: 2

Topic: Sustainability

Objective: LO7-5

84) Which of the following is true regarding the concept of flexibility?

A) It is the ability to change production rates with little penalty in time, cost, or customer value.

B) It can be accomplished with sophisticated electronic equipment.

C) It may involve modular, movable, even cheap equipment.

D) All of the above are true.

E) None of the above is true.

Diff: 2

Topic: Selection of equipment and technology

Objective: LO7-5

85) An organization's approach to transforming resources into goods and services is called its __________.

Diff: 2

Topic: Four process strategies

Objective: LO7-1

86) The process strategy that is organized around processes to facilitate low-volume, high-variety processes is called a(n) __________.

Diff: 2

Topic: Four process strategies

Objective: LO7-1

87) __________ is a process strategy that uses a product-oriented production process that uses modules.

Diff: 2

Topic: Four process strategies

Objective: LO7-1

88) __________ is a rapid, low-cost production process that caters to constantly changing unique customer desires.

Diff: 2

Topic: Four process strategies

Objective: LO7-1

89) __________ represent an organization's attempt to gain increased efficiency through specialization, which can include, for example, concentrating on certain classes of customers.

Diff: 2

Topic: Four process strategies

Objective: LO7-1

90) A(n) __________ uses symbols to analyze the movement of people or material.

Diff: 1

Topic: Process analysis and design

Objective: LO7-3

91) A special form of time-function mapping, which goes beyond the organization into its supply chain, is __________.

Diff: 2

Topic: Process analysis and design

Objective: LO7-3

92) __________ is a process analysis technique that focuses on the customer and the producer's interaction with the customer.

Diff: 1

Topic: Process analysis and design

Objective: LO7-4

93) The strategy for improving service productivity that customizes at delivery, rather than at production, is __________.

Diff: 2

Topic: Service process design

Objective: LO7-4

94) __________ involves the ability to respond with little penalty in time, cost, or customer value.

Diff: 2

Topic: Selection of equipment and technology

Objective: LO7-5

95) __________ is the use of information technology to control a physical process.

Diff: 2

Topic: Production technology

AACSB: Use of IT

Objective: LO7-5

96) __________ is a computer-controlled warehouse that provides for the automatic placement of parts into and from designated places within the warehouse.

Diff: 2

Topic: Production technology

AACSB: Use of IT

Objective: LO7-5

97) A(n) __________ uses an automated work cell controlled by electronic signals from a common centralized computer facility.

Diff: 2

Topic: Production technology

AACSB: Use of IT

Objective: LO7-5

98) __________ is the fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in performance.

Diff: 2

Topic: Process redesign

Objective: LO7-5

99) Why is Harley-Davidson identified as a repetitive manufacturer, not a mass customizer?

Diff: 2

Topic: Four process strategies

Objective: LO7-1

100) What is the link between focused processes and specialization? What kinds of focus are possible?

Diff: 2

Topic: Four process strategies

Objective: LO7-1

101) Describe Value-Stream Mapping. Explain how it is different from process mapping.

Diff: 2

Topic: Process analysis and design

Objective: LO7-3

102) How are modules useful in manufacturing processes?

Diff: 2

Topic: Four process strategies

Objective: LO7-1

103) What is mass customization?

Diff: 2

Topic: Four process strategies

Objective: LO7-1

104) Name the four basic process strategies; describe them in a complete sentence or two each.

Diff: 2

Topic: Four process strategies

Objective: LO7-1

105) Why is equipment utilization in process-focused service industries often low?

Diff: 2

Topic: Four process strategies

Objective: LO7-1

106) Compare an intermittent process to a continuous process on the basis of variety, volume, equipment utilization, and inventory.

Diff: 2

Topic: Four process strategies

Objective: LO7-1

107) The textbook described four basic process models, and hinted that there are others. Construct an example of a hybrid process. Can this process be applied in any well-known organization? How common do you think hybrid processes are?

Four process strategies

Diff: 2

Topic: Four process strategies

AACSB: Reflective Thinking

Objective: LO7-1

108) In an affluent society, how do we produce a wide number of options for products at low cost?

Diff: 2

Topic: Four process strategies

Objective: LO7-1

109) Name the tools of process analysis and design. Describe them in a sentence or two each.

Diff: 2

Topic: Process analysis and design

Objective: LO7-1

110) Provide an example of the focus strategy for improving service productivity.

Diff: 2

Topic: Service process design

Objective: LO7-4

111) Provide an example of the postponement strategy for improving service productivity.

Diff: 2

Topic: Service process design

Objective: LO7-4

112) Identify the typical elements in a process control system.

Diff: 2

Topic: Production technology

AACSB: Use of IT

Objective: LO7-5

113) Identify the advances being made in technology to enhance production.

Technology used to enhance production include numerical control, process control, vision systems, robots, automated storage and retrieval systems, automated guided vehicles, flexible manufacturing systems, and computer integrated manufacturing.

Diff: 2

Topic: Production technology

AACSB: Use of IT

Objective: LO7-5

114) Identify the techniques for improving service productivity. For any two techniques, describe in a short paragraph, and include an example.

• Separation: structuring the service such that the customer must go where the service is offered (a medical facility)

• Self-service: let customers perform their own comparisons (supermarket shopping)

• Postponement: customizing at time of delivery or in the final stages of the process (dealer installed versus factory installed options on automobiles, boats, etc.; Wendy's Hamburgers)

• Focus: restricting the product offerings, options, or degree of customization allowed (limited number of factory installed options on a new automobile)

• Modules: services selected from modular choices (health insurance programs)

• Automation: identifying services that may lend themselves to automation (automatic teller machines)

• Scheduling: precise personnel scheduling (keep close watch on how many checkout lanes are needed)

• Training: clarifying options, teaching problem avoidance (maintenance personnel, counselors)

Diff: 3

Topic: Service process design

Objective: LO7-4

115) Explain, in your own words, what a flexible manufacturing system is. List the benefits of flexible manufacturing systems.

Diff: 2

Topic: Production technology

AACSB: Use of IT

Objective: LO7-5

116) Describe some major challenges to implementing a successful build-to-order system?

Product design must be imaginative and fast. Process design must be rapid, flexible, and able to accommodate changes in design and technology. Inventory management requires tight control. Tight schedules that track orders and material from design through delivery can be effectively implemented only with dedicated personnel. Responsive partners in the supply chain yield effective collaboration.

Diff: 2

Topic: Four process strategies

Objective: LO7-1

117) Identify five examples of technology's impact on services. Specifically, identify one of these that has led to labor cost reductions. Discuss briefly. Can you add an item, not identified in the textbook, to this list?

Diff: 2

Topic: Technology in services

AACSB: Use of IT

Objective: LO7-5

118) Why do modern operations managers look for flexibility in their equipment?

Diff: 2

Topic: Selection of equipment and technology

Objective: LO7-5

119) How are environmental issues linked to the process choice? Won't being an environmentally conscious firm drive up costs and take away any competitive advantage? Discuss, with examples to support your position.

Diff: 2

Topic: Sustainability

AACSB: Ethical Reasoning

Objective: LO7-5

120) A product is currently made in a process-focused shop, where fixed costs are $9,000 per year and variable cost is $50 per unit. The firm is considering a fundamental shift in process, to repetitive manufacture. The new process would have fixed costs of $90,000, and variable costs of $5. What is the crossover point for these processes? For what range of outputs is each process appropriate?

Diff: 2

Topic: Four process strategies

AACSB: Analytic Skills

Objective: LO7-2

121) Big John's Manufacturing currently produces its lead product on a machine that has a variable cost of $0.32 per unit, and fixed costs of $75,000. Big John is considering purchasing a new machine that will drop the variable cost to $.28 per unit, but has a fixed cost of $150,000. What is the cross-over point between the two machines?

Diff: 2

Topic: Four process strategies

AACSB: Analytic Skills

Objective: LO7-2

122) The local convenience store makes personal pan pizzas. Currently, their process makes complete pizzas, fully cooked, for the customer. This process has a fixed cost of $20,000, and a variable cost of $1.75 per pizza. The owner is considering a different process that can make pizzas in two ways: completely cooked (as before), or partially cooked and then flash frozen, for the customer to finish at home. This alternate process has a fixed cost of $24,000, but a lower variable cost (because much less energy is used in baking) of $1.25 per pizza.

a. What is the crossover point between the existing process and the proposed process?

b. If the owner expects to sell 9,000 pizzas, should he get the new oven?

Diff: 2

Topic: Four process strategies

AACSB: Analytic Skills

Objective: LO7-2

123) A firm is about to undertake the manufacture of a product, and is weighing the process configuration options. There are two intermittent processes under consideration, as well as a repetitive focus. The smaller intermittent process has fixed costs of $3,000 per month, and variable costs of $10 per unit. The larger intermittent process has fixed costs of $12,000 and variable costs of $2 per unit. A repetitive focus plant has fixed costs of $50,000 and variable costs of $1 per unit.

a. At what output does the large intermittent process become cheaper than the small one?

b. At what output does the repetitive process become cheaper than the larger intermittent process?

Diff: 2

Topic: Four process strategies

AACSB: Analytic Skills

Objective: LO7-2

124) An organization is considering three process configuration options. There are two different intermittent processes, as well as a repetitive focus. The smaller intermittent process has fixed costs of $3,000 per month, and variable costs of $10 per unit. The larger intermittent process has fixed costs of $12,000 per month and variable costs of $2 per unit. A repetitive focus plant has fixed costs of $50,000 and variable costs of $1 per unit.

a. If the company produced 20,000 units, what would be its cost under each of the three choices?

b. Which process offers the lowest cost to produce 40,000 units? What is that cost?

(a) at 20,000 units, the costs are small intermittent = $203,000; large intermittent = $52,000; and repetitive = $70,000 (b) at 40,000 units, repetitive process is cheapest, at $90,000 (small intermittent = $403,000, and large intermittent = $92,000).

Diff: 2

Topic: Four process strategies

AACSB: Analytic Skills

Objective: LO7-2

125) A product is currently made in a process-focused shop, where fixed costs are $8,000 per year and variable cost is $40 per unit. The firm currently sells 200 units of the product at $200 per unit. A manager is considering a repetitive focus to lower costs (and lower prices, thus raising demand). The costs of this proposed shop are fixed costs = $24,000 per year and variable costs = $10 per unit. If a price of $80 will allow 400 units to be sold, what profit (or loss) can this proposed new process expect? Do you anticipate that the manager will want to change the process? Explain.

Old: TR = $40,000, TC = $16,000, therefore Profit = $24,000.

New: TR = $80 x 400 = $32,000, TC = $24,000 + $10 x 400 = $28,000, for a profit of $4,000.

Most will say NO; the larger repetitive process is less profitable than the smaller process-focused shop.

Diff: 2

Topic: Four process strategies

AACSB: Analytic Skills

Objective: LO7-2

126) Brandon's computer shop is considering two different configuration options. The first one is to have each computer built by the sales associates when they have free time. The second option is to hire a dedicated assembly technician. Option A has variable costs of $50 per computer and no fixed costs. Option B has a fixed cost of $1,000 but variable costs of only $5 per computer. What is the cross-over point?

Diff: 2

Topic: Four process strategies

AACSB: Analytic Skills

Objective: LO7-2

127) A non-profit organization is planning a raffle to raise money. It has two options for tickets. The first option is to do the tickets by hand, with fixed costs of $50 and variable costs of $.05 per ticket. The second option is to outsource production. This would result in fixed costs of $500 and variable costs of $.01. If the organization plans to sell 10,000 tickets which option should it choose?

Diff: 2

Topic: Four process strategies

AACSB: Analytic Skills

Objective: LO7-2

128) Kirstin is thinking about opening a Chinese restaurant and needs to buy a rice cooker. Machine A has fixed costs of $100 and variable costs of $1/pound. Machine B has fixed costs of $500 and variable costs of $.1/pound. If Kirstin plans to sell 100 pounds of rice which machine should she choose? What is the cross-over point?

Machine A costs 100+1(100) = $200

Machine B costs $500 + .1(100) = $510

Thus she should buy machine A.

Cross over is when 100+X=500+.1X, X=444.4 pounds of rice

Diff: 2

Topic: Four process strategies

AACSB: Analytic Skills

Objective: LO7-2

129) Bridget is considering how to get to work over the summer. She has two options. Option A is to buy a seasonal bus pass for $100. Option B is to pay $.25 for each ride. Identify the fixed and variable costs for each option. If she has to ride both to and from work, how many days of work would it take for the seasonal pass to cost the same amount as Option B?

Option A: VC=0 FC=100

Option B: VC=.25 FC=0

100=.25X, X=400 rides, since she has to take 2 rides each time she works, she would need to work 200 days for the two options to cost the same amount.

Diff: 2

Topic: Four process strategies

AACSB: Analytic Skills

Objective: LO7-2

130) Karla's candle factory is considering two different machines. Machine A is highly automated with FC of $25,000 and VC of $.1/candle. Machine B is actually no machine but rather hand labor with FC of $10,000 and VC of $.5/candle. If demand for Karla's candles is 25,000, which machine should she pick?

Machine A: $25,000+.1(25000)= $27,500

Machine B: $10,000 + .5(25000) = $22,500

Karla should pick Machine B

Diff: 2

Topic: Four process strategies

AACSB: Analytic Skills

Objective: LO7-2

131) Mary is considering purchasing a machine from two suppliers. Supplier A's machine has an annual fixed cost of $10,000 and a unit variable cost of $2.10. Supplier B's machine has an annual fixed cost of $16,000 and a unit variable cost of $3.00. How large should Mary's annual demand be in order to make Supplier B's machine the better choice?

Diff: 2

Topic: Four process strategies

AACSB: Analytic Skills

Objective: LO7-2