s Managing Processes and Capacity Exam Questions Chapter 3

Chapter 03 Test Bank

Multiple Choice Questions

1. Process thinking causes managers to address critical process elements, including:

A. If you don’t like the outcome, focus on the people.

B. Processes are guidelines to thinking about to best staff activities.

C. Processes drive measurement.

D. If you don’t like the outcome, change the process.

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 03-01 Understand the importance of processes and process thinking to operations and supply chain management.
Topic: Processes and Process Thinking

2. Which of the following is NOT a basic activity type in processes?

A. Delay

B. Operation

C. Reporting

D. Storage

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 03-02 Define the various components that make up processes, including types of inputs and outputs.
Topic: Anatomy of a Process

3. You walk into a hair stylist shop. All stylists are busy and you sit in the waiting area. You are in which of the following basic activity types in a process?

A. Operation

B. Delay

C. Storage

D. You are not in a process activity.

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Apply
Difficulty: 2 Medium
Gradable: automatic
Learning Objective: 03-02 Define the various components that make up processes, including types of inputs and outputs.
Topic: Anatomy of a Process

4. Most processes involve two basic types of flows:

A. Information flows and material flows.

B. Product flows and decision flows.

C. Information flows and operator flows.

D. Physical flows and security flows.

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 03-02 Define the various components that make up processes, including types of inputs and outputs.
Topic: Anatomy of a Process

5. A manager is currently unhappy with the capabilities of a particular process and wants to improve its capabilities. To accomplish this, the manager needs to focus on the process:

A. Inputs, outputs, and flows.

B. Activities.

C. Management metrics.

D. Structure.

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Apply
Difficulty: 2 Medium
Gradable: automatic
Learning Objective: 03-02 Define the various components that make up processes, including types of inputs and outputs.
Topic: Anatomy of a Process

6. Joe Jones, plant manager at Waco Industries, told a friend that if it was necessary, his plant could produce 1,000 items a day if all conditions were just right. Joe is describing his plant's:

A. Effective capacity.

B. Yield rate.

C. Utilization.

D. Maximum capacity.

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Apply
Difficulty: 2 Medium
Gradable: automatic
Learning Objective: 03-03 Distinguish between operational, tactical, and strategic capacity planning.
Topic: Process Capacity and Utilization

7. Adam Smith described his company's process as follows: "Under ideal conditions we can produce 10,000 units a day. However, our normal production is 6,000 units a day. Today, we actually produced 8,000 units." Which of the following is true?

A. Utilization is 60 percent of maximum capacity.

B. Yield is 133 percent of effective capacity.

C. Utilization was 133 percent of effective capacity.

D. All of these are true.

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Understand
Difficulty: 2 Medium
Gradable: automatic
Learning Objective: 03-03 Distinguish between operational, tactical, and strategic capacity planning.
Topic: Process Capacity and Utilization

8. The following sequence shows four operations for a computer chip assembly process and the effective capacity of each. Which step is the bottleneck?

Step 1: 500 chips/hour

Step 2: 250 chips/hour

Step 3: 200 chips/hour

Step 4: 550 chips/hour

A. Step 1

B. Step 2

C. Step 3

D. Step 4

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 03-04 Estimate the capacity and utilization of a process.
Topic: Principles of Process Performance: The Theory of Constraints

9. The following sequence shows four operations for a computer chip assembly process and the effective capacity of each.

Step 1: 500 chips/hour

Step 2: 250 chips/hour

Step 3: 200 chips/hour

Step 4: 550 chips/hour

Suppose the utilization is 70 percent of effective capacity. What is the actual output of the process?

A. 140 chips/hour

B. 350 chips/hour

C. 175 chips/hour

D. 200 chips/hour

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Apply
Difficulty: 2 Medium
Gradable: automatic
Learning Objective: 03-04 Estimate the capacity and utilization of a process.
Topic: Principles of Process Performance: The Theory of Constraints

10. A bottleneck activity in a process is generally the activity with:

A. The smallest number of resources devoted to it.

B. The least capacity.

C. No delays in front of it.

D. The highest cost.

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 03-04 Estimate the capacity and utilization of a process.
Topic: Principles of Process Performance: The Theory of Constraints

11. Little's Law suggests that the key to increased throughput is:

A. Shorter flow times.

B. Fewer defects.

C. Eliminating waste.

D. Increased inspection.

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Understand
Difficulty: 2 Medium
Gradable: automatic
Learning Objective: 03-04 Estimate the capacity and utilization of a process.
Topic: Principles of Process Performance: The Theory of Constraints

12. Suppose you learn that a process has a very long waiting time. Which of the following would decrease the waiting time?

A. Decrease utilization.

B. Increase the coefficient of variation of job arrival times.

C. Increase the coefficient of variation of job processing times.

D. None of these would decrease waiting time.

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Evaluate
Difficulty: 3 Hard
Gradable: automatic
Learning Objective: 03-05 Explain the impacts of bottlenecks, variance, and other factors on process performance.
Topic: Principles of Process Performance: The Theory of Constraints

13. One implication of increased utilization in a process is that:

A. Process cost typically will go up.

B. Waiting time typically will go up.

C. Variance typically will be reduced.

D. All of these.

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Analyze
Difficulty: 3 Hard
Gradable: automatic
Learning Objective: 03-05 Explain the impacts of bottlenecks, variance, and other factors on process performance.
Topic: Principles of Process Performance: The Theory of Constraints

14. If a company can eliminate all sources of variance in a process:

A. It will be able to operate at maximum capacity at all times.

B. There will be no constraints in the process.

C. Continuous improvement will not be necessary.

D. None of these are true.

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 03-05 Explain the impacts of bottlenecks, variance, and other factors on process performance.
Topic: Principles of Process Performance: The Theory of Constraints

15. An example of a short-term capacity increase decision is:

A. Adding specialized labor.

B. Installing new equipment.

C. Adding new facilities.

D. Adding low-skilled labor.

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 03-03 Distinguish between operational, tactical, and strategic capacity planning.
Topic: Process Capacity and Utilization

16. Which of the following statements about economies of scale is NOT true?

A. One reason economies of scale occur is because fixed costs can be spread over more units of production as output increases.

B. One reason economies of scale occur is because employees become more efficient as volume increases.

C. Economies of scale refers to the fact that as volume increases, total cost of production decreases.

D. Economies of scale may not exist at all levels of production.

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 03-03 Distinguish between operational, tactical, and strategic capacity planning.
Topic: Process Capacity and Utilization

17. Floor space used to store items to be inspected belongs to which of the following elements of a process?

A. Activities

B. Inputs/outputs/flows

C. Process structure

D. Management policies

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 03-02 Define the various components that make up processes, including types of inputs and outputs.
Topic: Anatomy of a Process

18. Under Juran's Law, whenever a problem occurs, what percentage of the time is the problem the result of a system/process error?

A. 15 percent

B. 50 percent

C. 85 percent

D. 100 percent

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 03-01 Understand the importance of processes and process thinking to operations and supply chain management.
Topic: Processes and Process Thinking

19. Subcontracting is typically considered at what time horizon when doing capacity planning?

A. Short-term

B. Medium-term

C. Long-term

D. It is not part of the capacity planning process.

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 03-05 Explain the impacts of bottlenecks, variance, and other factors on process performance.
Topic: Process Capacity and Utilization

20. Which of the following actions will NOT increase output?

A. Increasing capacity through physical additions.

B. Outsourcing.

C. Managing the flow of work into the system.

D. Changing the processes to eliminate unnecessary steps.

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 2 Medium
Gradable: automatic
Learning Objective: 03-05 Explain the impacts of bottlenecks, variance, and other factors on process performance.
Topic: Process Capacity and Utilization

21. Which of the following statements best differentiates a delay from storage?

A. There is no difference – they both refer to the same concept.

B. Delays are planned activities; storages are not.

C. Delays are uncontrolled; storage is a planned part of a process.

D. Delays require control; storages does not.

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 03-02 Define the various components that make up processes, including types of inputs and outputs.
Topic: Processes and Process Thinking

22. Which of the following elements of a process most directly impacts or affects process capabilities?

A. Activities

B. Inputs/Outputs/Flows

C. Process Structure

D. Management Policies.

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 03-02 Define the various components that make up processes, including types of inputs and outputs.
Topic: Processes and Process Thinking

23. Space on the shop floor, bins, carts, or racks are capacity-limiting resources most frequently associated with which of the following process activities?

A. Delays

B. Transportation

C. Inspections

D. Operations.

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 03-02 Define the various components that make up processes, including types of inputs and outputs.
Topic: Processes and Process Thinking

24. Which two of the following effects directly result from bottlenecks?

A. Increase in costs and increase in defects.

B. Increase in output and increase in lead-times.

C. Decrease in inspections and increase in costs.

D. Decrease in output and increase in lead-times.

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 03-05 Explain the impacts of bottlenecks, variance, and other factors on process performance.
Topic: Principles of Process Performance: The Theory of Constraints

25. A process having the same activity being performed by two or more resources simultaneously is said to have what kind of structure?

A. Serial

B. Parallel

C. Helping

D. Flexible

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 03-05 Explain the impacts of bottlenecks, variance, and other factors on process performance.
Topic: Principles of Process Performance: The Theory of Constraints

26. The total time that it takes to get one unit through a process is called:

A. Flow time

B. Cycle time

C. Throughput time

D. Wait time

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Understand
Difficulty: 2 Medium
Gradable: automatic
Learning Objective: 03-05 Explain the impacts of bottlenecks, variance, and other factors on process performance.
Topic: Principles of Process Performance: The Theory of Constraints

27. Inventory held due to bottlenecks in a process causes:

A. Increased storage requirements

B. Quality issues

C. Increased labor costs

D. All of these

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 03-05 Explain the impacts of bottlenecks, variance, and other factors on process performance.
Topic: Principles of Process Performance: The Theory of Constraints

28. Continual improvement of processes is important because:

A. Competitors are improving their processes.

B. Customer preferences change over time.

C. Technology is constantly changing.

D. All of these.

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 03-06 Describe process improvement methodologies such as business process reengineering.
Topic: Principles of Process Performance: The Theory of Constraints

29. In process improvement projects, why should we focus our efforts on those processes that consume the most resources (e.g., labor, space, capital, etc.)?

A. Because those are the processes most visible to the customer

B. Because those are the processes that use our firm’s core capabilities

C. Because that is where we get “the most bang for our buck.”

D. All of these

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Accessibility: Screen Reader Compatible
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 03-06 Describe process improvement methodologies such as business process reengineering.
Topic: Principles of Process Performance: The Theory of Constraints

Chapter 03 Test Bank - Static Summary