Test Bank Chapter 2 Operations and Supply Chain Strategy

Chapter 02 Test Bank

Multiple Choice Questions

1. Corporate strategic planning involves decisions related to:

A. What businesses should we be in?

B. What specific product- and market-based initiatives and goals should we establish?

C. What measures should we use to control strategic initiatives?

D. All of these.

AACSB: Reflective Thinking

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Accessibility: Screen Reader Compatible

Blooms: Remember

Difficulty: 1 Easy

Gradable: automatic

Learning Objective: 02-01 Describe how operations strategy fits within a firm s overall strategic planning process.

Topic: Levels of Strategic Planning

2. Functional strategic planning involves decisions related to:

A. What businesses should we be in?

B. Specific product- and market-based initiatives and goals.

C. What metrics should be used to ensure progress in operations management?

D All of these.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Remember

Difficulty: 1 Easy

Gradable: automatic

Learning Objective: 02-01 Describe how operations strategy fits within a firm s overall strategic planning process.

Topic: Levels of Strategic Planning

3. A well-designed value proposition possesses four characteristics. Which of the following is NOT one of those characteristics?

A. It offers the highest product quality in each quality dimension.

B. It differentiates the firm from its competition in a way that is difficult to imitate.

C. It satisfies the financial and strategic objectives of the firm.

D. It can be reliably delivered given the operational capabilities of the firm and its supporting supply chain.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Remember

Difficulty: 1 Easy

Gradable: automatic

Learning Objective: 02-02 Describe the need for fit between the key customers, value propositions, and operations capabilities-the essential

elements that define an operations strategy.

Topic: Developing Operations Strategy: Creating Value through Strategic Choices

4. Which of the following is the most appropriate definition of an "order winner"?

A. A product characteristic that causes customers to choose the product over that of a competitor.

B. A product characteristic that permits the product to compete in a market.

C. A product that has the highest profit margin.

D. A product that generates the highest dollar sales volume.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Remember

Difficulty: 1 Easy

Gradable: automatic

Learning Objective: 02-03 Describe customer-desired outcomes in terms of order winners, order qualifiers, and order losers.

Topic: Developing Operations Strategy: Creating Value through Strategic Choices

5. Which of the following is NOT true about "order qualifiers"?

A. These are product traits that must meet a certain level in order for the product to even be considered by customers.

B. The firm must perform acceptably on these traits, usually at least as well as competitors' offerings.

C. Order qualifier traits may include availability, price, and conformance quality.

D. All of the items are true.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Understand

Difficulty: 2 Medium

Gradable: automatic

Learning Objective: 02-03 Describe customer-desired outcomes in terms of order winners, order qualifiers, and order losers.

Topic: Developing Operations Strategy: Creating Value through Strategic Choices

6. Xanadu makes HD televisions. It claims that its HD televisions have the clearest picture clarity in the industry. Xanadu is emphasizing which dimension of quality?

A. Reliability

B. Performance

C. Features

D. Conformance

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Apply

Difficulty: 2 Medium

Gradable: automatic

Learning Objective: 02-04 Explain what product-related and process-related operational competitive priorities are and

how they are related to competitive advantage.

Topic: Developing Operations Strategy: Creating Value through Strategic Choices

7. Scantron Inc. claims that its competitors have to recall 10 percent of their products to fix defects, while it only has to recall 5 percent. Scantron is emphasizing which dimension of quality?

A. Durability

B. Reliability

C. Performance

D. Conformance

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Apply

Difficulty: 2 Medium

Gradable: automatic

Learning Objective: 02-04 Explain what product-related and process-related operational competitive priorities are and

how they are related to competitive advantage.

Topic: Developing Operations Strategy: Creating Value through Strategic Choices

8. Which of the following is considered a "process-related" competitive priority?

A. Flexibility

B. Quality

C. Cost

D. All of these

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Remember

Difficulty: 1 Easy

Gradable: automatic

Learning Objective: 02-04 Explain what product-related and process-related operational competitive priorities are and

how they are related to competitive advantage.

Topic: Developing Operations Strategy: Creating Value through Strategic Choices

9. Xanadu Inc. claims that its manufacturing processes result in fewer greenhouse gases than those of its primary competitors. This suggests that Xanadu has a focus on:

A. Risk management.

B. Sustainability.

C. Flexibility.

D. Profitability.

AACSB: Ethics

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Remember

Difficulty: 1 Easy

Gradable: automatic

Learning Objective: 02-04 Explain what product-related and process-related operational competitive priorities are and

how they are related to competitive advantage.

Topic: Developing Operations Strategy: Creating Value through Strategic Choices

10. Which of the following is NOT considered a key characteristic of a core capability:

A. It is based on factors that are rare or unique to the firm.

B. It is hard to imitate.

C. It does not need to be extendable to many market opportunities.

D. There are few substitutes for it.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Remember

Difficulty: 1 Easy

Gradable: automatic

Learning Objective: 02-05 Explain how strategic performance can be assessed both operationally and financially by using the strategic profit model.

Topic: Developing Operations Strategy: Creating Value through Strategic Choices

11. "When operational capabilities are consistent with and supportive of the value proposition and the outcomes desired by key customers" - this statement best describes the concept of:

A. Execution.

B. Flexibility.

C. Strategic planning.

D. Fit.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Remember

Difficulty: 1 Easy

Gradable: automatic

Learning Objective: 02-05 Explain how strategic performance can be assessed both operationally and financially by using the strategic profit model.

Topic: Developing Operations Strategy: Creating Value through Strategic Choices

12. A vice president of operations wants to evaluate the impact of reducing manufacturing expenses on the firm's return on assets. Which measurement should be examined?

A. Cost of goods sold

B. Asset turnover

C. Net profit margin

D. None of these

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Remember

Difficulty: 1 Easy

Gradable: automatic

Learning Objective: 02-05 Explain how strategic performance can be assessed both operationally and financially by using the strategic profit model.

Topic: Deploying Operations Strategy: Creating Value through Execution

13. You are an upper-level manager in a firm. You believe that corporate objectives are not effectively disseminated throughout the organization and that line-level managers do not take them into account in their decision making. Which of the following would best help you to try to correct this problem?

A. Hold a series of supervisory manager meetings.

B. Establish metric-based performance measures.

C. Evaluate personality indicators to ensure inter-departmental worker compatibility.

D. Evaluate and increase manager salaries and benefits.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Understand

Difficulty: 2 Medium

Gradable: automatic

Learning Objective: 02-05 Explain how strategic performance can be assessed both operationally and financially by using the strategic profit model.

Topic: Deploying Operations Strategy: Creating Value through Execution

14. Which of the following is the most appropriate definition of a core capability?

A. A set of products unique to a firm.

B. Technical capabilities of a firm.

C. Reputation.

D. Production/design processes unique to the firm.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Understand

Difficulty: 1 Easy

Gradable: automatic

Learning Objective: 02-04 Explain what product-related and process-related operational competitive priorities are and

how they are related to competitive advantage.

Topic: Developing Operations Strategy: Creating Value through Strategic Choices

15. Which of the following is NOT a component of the business model?

A. Key customer

B. Value proposition

C. Desired outcome statement

D. System capabilities

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Remember

Difficulty: 1 Easy

Gradable: automatic

Learning Objective: 02-02 Describe the need for fit between the key customers, value propositions, and operations capabilities-the essential

elements that define an operations strategy.

Topic: Developing Operations Strategy: Creating Value through Strategic Choices

16. A company with a number of physically separate plants has a centralized tool room. This tool room in the past has been responsible for emergency repairs. Whenever equipment (e.g., a spindle, boring machine, transfer line) in one of these separate plants breaks down, the affected items are brought to the tool room, where they are repaired. In some cases, the breakdowns affect production schedules. In other cases, the breakdowns are more annoying but do not adversely affect schedules. Complicating the operations in the tool room is the fact that many of the plans for the equipment are incomplete or out-of-date, thus resulting in "make from sample"; requests (the broken part is provided and the tool room is asked to make the replacement piece just like the broken part). It is difficult to predict what equipment will break down and when. Furthermore, the company owns a wide variety of equipment. What are the order winners and order qualifiers in this scenario?

A. Option A

B. Option B

C. Option C

D. Option D

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Blooms: Understand

Difficulty: 2 Medium

Gradable: automatic

Learning Objective: 02-03 Describe customer-desired outcomes in terms of order winners, order qualifiers, and order losers.

Topic: Developing Operations Strategy: Creating Value through Strategic Choices

17. Currently, our system is characterized by a lack of fit between what the customer wants and what the SCM system is best able to provide. As a result, which of the following would apply?

1. The only way to restore fit is for the firm to change the market segment it is going after.

2. Unless something is done, our firm will not be the most effective and efficient long-term supplier.

3. Any firm can successfully counter such inconsistencies through the use of patents and aggressive advertising.

A. 1 only.

B. 2 only.

C. 3 only.

D. 1 and 2 only.

E. 1, 2, and 3.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Understand

Difficulty: 2 Medium

Gradable: automatic

Learning Objective: 02-02 Describe the need for fit between the key customers, value propositions, and operations capabilities-the essential

elements that define an operations strategy.

Topic: Developing Operations Strategy: Creating Value through Strategic Choices

18. Which three elements make up the triple bottom line?

A. Planet, Pollution, Profit.

B. Pollution, Equality, People.

C. Profit, Equality, Pollution.

D. People, Profit, Planet.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Remember

Difficulty: 1 Easy

Gradable: automatic

Learning Objective: 02-05 Explain how strategic performance can be assessed both operationally and financially by using the strategic profit model.

Topic: Deploying Operations Strategy: Creating Value through Execution

19. Which of the following attributes is directly related to fitness for consumption by a customer?

A. Transaction Price

B. Timeliness

C. Performance

D. Availability

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Remember

Difficulty: 1 Easy

Gradable: automatic

Learning Objective: 02-04 Explain what product-related and process-related operational competitive priorities are and

how they are related to competitive advantage.

Topic: Developing Operations Strategy: Creating Value through Strategic Choices

20. Under which component of the business model would people and culture fall?

A. Key customer

B. Value proposition

C. Environment

D. System capabilities

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Remember

Difficulty: 1 Easy

Gradable: automatic

Learning Objective: 02-04 Explain what product-related and process-related operational competitive priorities are and

how they are related to competitive advantage.

Topic: Developing Operations Strategy: Creating Value through Strategic Choices

21. Within the supply chain and operations management system, the value proposition is most effectively communicated to the rest of the organization through which of the following mechanisms?

A. Performance measures

B. Mission statements

C. Management mandates

D. Corporate slogans and promotional materials.

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Understand

Difficulty: 2 Medium

Gradable: automatic

Learning Objective: 02-05 Explain how strategic performance can be assessed both operationally and financially by using the strategic profit model.

Topic: Deploying Operations Strategy: Creating Value through Execution

22. An electronics firm produces smart phones for sale to the worldwide market. One of the most crucial process-related competitive operational priorities for this firm is:

A. Aesthetics

B. Cyber security

C. Flexibility

D. Durability

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Understand

Difficulty: 2 Medium

Gradable: automatic

Learning Objective: 02-03 Describe customer-desired outcomes in terms of order winners, order qualifiers, and order losers.

Topic: Developing Operations Strategy: Creating Value through Strategic Choices

23. A manufacturer of generic prescription drugs must excel at delivering which of the following product traits?

A. Product performance

B. Features (unique attributes)

C. Durability

D. Low cost

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Understand

Difficulty: 2 Medium

Gradable: automatic

Learning Objective: 02-03 Describe customer-desired outcomes in terms of order winners, order qualifiers, and order losers.

Topic: Developing Operations Strategy: Creating Value through Strategic Choices

24. Decision making regarding customers and products is often led by the:

A. CEO

B. Board of Directors

C. Marketing Management

D. Financial Managers

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Understand

Difficulty: 2 Medium

Gradable: automatic

Learning Objective: 02-03 Describe customer-desired outcomes in terms of order winners, order qualifiers, and order losers.

Topic: Developing Operations Strategy: Creating Value through Strategic Choices

25. Internal questions that may be addressed in a SWOT analysis include:

A. What obstacles do we face?

B. What trends are we well positioned to take advantage of?

C. What do we do better than anyone else?

D. What changes in technology will affect us?

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Remember

Difficulty: 1 Easy

Gradable: automatic

Learning Objective: 02-01 Describe how operations strategy fits within a firm s overall strategic planning process.

Topic: Levels of Strategic Planning

26. The three elements of Value Proposition, Key Customers, and Capabilities operate within an environment. Which of the following is NOT part of that environment?

A. Competition

B. Regulation

C. Technology

D. Founder’s ideology

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

Accessibility: Screen Reader Compatible

Blooms: Understand

Difficulty: 2 Medium

Gradable: automatic

Learning Objective: 02-01 Describe how operations strategy fits within a firm s overall strategic planning process.

Topic: Levels of Strategic Planning

Chapter 02 Test Bank Static Summary