Management 201 EXAM #1
19. Which of the following skills is / are not fundamental to operations management? a. Advertising tactics b. Quantitative analysis c. Understanding of international business d. Knowledge of information systems e. a and d
a. Advertising tactics
9. Which of the following statements about vertical integration is true? a. As a firm performs more processes itself, from acquiring materials to final delivery to customers, the more vertically integrated it is. b. By owning its own distribution channels, a company exhibits backward integration. c. As a firm performs fewer processes itself, from acquiring materials to final delivery to customers, the more vertically integrated it is. d. By owning its own distribution channels, a company exhibits outsourcing. e. A key advantage of integration is the ability of the firm to easily merge organizations with little risk.
a. As a firm performs more processes itself, from acquiring materials to final delivery to customers, the more vertically integrated it is.
11. Which of the following statements concerning process management is true? a. Capital intensity depends on the mix of equipment and human skills in a production process: the greater the relevant cost of equipment to human labor, the greater the capital intensity. b. High resource flexibility is required when high volumes are to be produced at low costs. c. With a customized-services process, the workforce and the customer rarely interact. d. High customer involvement usually means more capital intensity and less resource flexibility e. A project process is utilized when multiple units of a standard product are to be made.
a. Capital intensity depends on the mix of equipment and human skills in a production process: the greater the relevant cost of equipment to human labor, the greater the capital intensity.
22. Firms that produce high volumes of relatively few standardized products, for which reasonably accurate forecasts are available, are most likely to use a a. Make-to-Stock strategy b. Assemble-to-Order strategy c. Make-to-Order strategy d. Flexible-Flow strategy e. Mass Customization strategy
a. Make-to-Stock strategy
19. Which of the following statements is True? a. No two products are exactly alike because the production process contains many sources of variation, even if the process is a machine. b. With due diligence, variation in a process can be completely eliminate. c. SPC and TQM are two competing techniques for quality control d. Common causes of variation are those factors that can be completely eliminated using SPC e. none of the above is true
a. No two products are exactly alike because the production process contains many sources of variation, even if the process is a machine.
Which of the following tools of Total Quality Management is used to organize & quantify problems? a. Pareto Analysis b. process charts c. cause and effect diagrams (fishbone diagrams) d. control charts e. none of the above
a. Pareto Analysis
1. In the Just-In-Time framework, waste is anything that does not add value. a. True b. False
a. True
2. Just-In-Time is a philosophy that works well with continuous improvement philosophies. a. True b. False
a. True
3. Frequent deliveries of small quantities are a characteristic of JIT partnerships. a. True b. False
a. True
5. Hidden problems are generally uncovered during the process of reducing inventory. a. True b. False
a. True
MotoX & Co. uses control charts to track tension in the process of installing chains on their racing motorcycles. If for the last twenty days they take a sample each day of size n = 4 and you are given that ∑ X = 98.4 and ∑ R = 25.6, what would be the corresponding upper and lower control limits for the X - Chart? a. X LCL = 3.987 X UCL = 5.853 b. X LCL = 19.935 X UCL = 29.265 c. X LCL = 4.181 X UCL = 5.6585 d. X LCL = 20.907 X UCL = 28.292 e. X LCL = 79.738 X UCL = 117.062
a. X LCL = 3.987 X UCL = 5.853
A national fast food restaurant will most likely compete on which of the following dimensions of quality? a. conformance b. features c. durability d. aesthetics
a. conformance
13. Which of the following is not a trend in operations management? a. increased presence of the manufacturing sector b. increased global competition in both manufacturing and services c. development of supply chain partners d. pressure to address social issues such as the environment and workplace diversity e. increased presence of the service economy
a. increased presence of the manufacturing sector
3. Products built in anticipation of demand and sold from inventory are classified as: a. make-to-stock b. make-to-order c. assemble-to-order d. mass customized e. flexible ordering
a. make-to-stock
According to the quality literature, which of the following is NOT included in the cost of quality: a. marketing costs b. appraisal costs c. prevention costs d. scrap costs e. all of the above are considered costs of quality
a. marketing costs
6. A job shop process requires a. organizing the resources around the process b. a line flow strategy c. perfectly predictable customer demands d. the same sequence of steps for each job e. high equipment utilization
a. organizing the resources around the process
In a sampling plan, if n, the sample size, is held constant while c, the acceptance number is decreased then: a. the consumers risk decreases b. the producers and the consumers risks both increase c. the producers risk decreases d. the producers and the consumers risk both decrease e. nothing happens
a. the consumers risk decreases
20. Which of the following statements on acceptance sampling and process control methods is TRUE? a. Complete inspection is preferred over sampling when destructive testing is required. b. Complete inspection is preferred over sampling for products that could be critical to human life. c. Control charts for attributes measurements are called X-Bar Charts. d. Control charts for variable data plot the proportion defective over time to detect when the process is out of control. e. none of the above is true.
b. Complete inspection is preferred over sampling for products that could be critical to human life.
7. Which of the following statements about process choice is best? a. A batch process typically has a standard sequence of operations through the facility. b. Continuous processes are very capital intensive. c. Automobiles are an example of a product created using a continuous process. d. Items made in a job shop require a higher level of quality than those items made from a continuous process. e. Custom cakes made in a bakery are an example of a product created using a batch process.
b. Continuous processes are very capital intensive.
16. When using statistical process control, a process is said to be in control if none of the sample points falls outside the control limits a. True b. False
b. False
4. Just-In-Time inventory is a zero inventory system. a. True b. False
b. False
6. Reducing lot size is of little help in reducing inventory costs. a. True b. False
b. False
16. Which of the following statements concerning flow diagrams is not true? a. Flow diagrams can take many forms. b. Flow diagrams are useful in business process reengineering, but not in continuous improvement. c. It is helpful on flow diagrams to label each step with process measurements such as cost, capacity or elapsed time. d. Flow diagrams trace the flow of information, customers, equipment, employees or materials through a process. e. A line of visibility is used to separate different functional areas in the process.
b. Flow diagrams are useful in business process reengineering, but not in continuous improvement.
21. Which of the following is not a service or manufacturing strategy? a. Make-to-Stock b. Make-to-Assemble c. Make-to-Order d. Assemble-to-Order e. Mass Customization
b. Make-to-Assemble
11. Which of the following is not an element of JIT? a. Flexible resources b. Push production c. Small lot sizes d. Quick set-ups e. Pull production
b. Push production
17. MotoX & Co. uses X-Bar and Range charts to track the thickness of their brake pads in millimeters. Below are the observations for 5 test days where samples of size n = 3 were taken each day. What are the UCLR, LCLR, and X : Carry your calculations to 3 decimal places. Samples Test Day: 1, 2, 3, 4, 5 Obs. 1: 10, 19, 24, 22, 16 Obs. 2: 10, 20, 18, 14, 14 Obs. 3: 13, 21, 18, 12, 15 a. UCLR = 7.722 LCLR = 0 X = 82.0 b. UCLR = 11.84 LCLR = 0 X = 16.4 c. UCLR = 10.666 LCLR = 0 X = 16.4 d. UCLR = 7.722 LCLR = 0 X = 82.0 e. UCLR = 9.575 LCLR = 0 X = 82.0
b. UCLR = 11.84 LCLR = 0 X = 16.4
12. Which of the following statements about process management is best? a. The traditional relationship between capital intensity and resource flexibility if that if one is high, so is the other. b. When customization must be high, equipment should be general purpose, and employees need to perform a broader range of duties. c. Creating a more capital intensive process tends to reduce the fixed cost and raise the variable unit cost. d. Economies of scope mean that a process should be devoted to a single product or service to achieve high volumes. e. Economies of scale mean that a process should be devoted to a variety of products or services to achieve customization.
b. When customization must be high, equipment should be general purpose, and employees need to perform a broader range of duties.
Total Quality Management emphasizes a. the responsibility of the quality control staff to identify and solve all quality related problems b. a commitment to quality that goes beyond internal company issues to suppliers and customers c. ISO 9000 certification d. a system where strong managers are the only decision makers e. a process where mostly statisticians get involved
b. a commitment to quality that goes beyond internal company issues to suppliers and customers
4. Which of the following statements best characterizes on-time delivery? a. a company that always delivers on the same day of the week b. a company that always delivers at the promised time c. a company that delivers more frequently than its competitors d. a company that delivers faster than its competitors e. a company that has a computerized delivery system
b. a company that always delivers at the promised time
14. Operations management can be viewed in several different ways. Which of the below best characterizes operations management? a. the corporate function in which the best way to finance corporate assets, such as plant and equipment, is determined. b. a system where inputs (raw materials, components, people, ...) pass through one or more operations and are transformed into outputs (products or services). c. a set of decisions relating to budgeting the annual resources between different functional areas d. the set of decisions related to product pricing and marketing. e. the selection of information technology and systems deployment to support the business functions.
b. a system where inputs (raw materials, components, people, ...) pass through one or more operations and are transformed into outputs (products or services).
8. A firm can effectively use its operations function to yield competitive advantage via all of the following except: a. customization of the product b. maximization of equipment utilization, even if it means increasing inventory levels c. speed of delivery d. constant innovation of new products e. maintain a variety of product options
b. maximization of equipment utilization, even if it means increasing inventory levels
A quick change oil service franchise operation would most likely compete on which of the following dimensions of quality? a. performance b. responsiveness c. reliability d. durability e. aesthetics
b. responsiveness
16. Which of the following is not a major difference between goods and services? a. services are intangible - you cannot hold it or see it directly b. services are always consistent due to the heterogeneity factor c. services are produced and consumed simultaneously d. services often involve high customer interaction e. many services are knowledge based
b. services are always consistent due to the heterogeneity factor
Studying a company that is considered a world leader in distribution logistics in order to improve your company's distribution process is an example of: a. Pareto analysis b. Business Process Re-Engineering c. Benchmarking d. Empowerment e. none of the above
c. Benchmarking
17. Which of the following statements regarding operations management is true? a. Inputs to a production system include capital and materials, but not human resources. b. Operations management deals only with manufacturing organizations because service organizations do not have tangible outputs. c. Customer participation and information on performance are two special types of inputs to a production system. d. Typical inputs to a production system are processes and consumer goods. e. Outputs from a process are either a service or a product.
c. Customer participation and information on performance are two special types of inputs to a production system.
13. Which of the following statements about customer involvement is best? a. In service industries, customer contact is of minor importance. b. A firm that products standardized products often seeks customer specifications. c. For services that directly involve the customer, the customer often dictates the time of the service. d. When customer involvement is highly customized, a process is more likely to use a standardized-services process rather than a customized-services process. e. Empowered employees are not necessary when there is high customer involvement
c. For services that directly involve the customer, the customer often dictates the time of the service.
Precision Instrument uses a P-Chart to monitor the quality of their microscope lenses. Each day they inspect a sample of 30 lenses (n=30). Below are the number of defective lenses found over the last 10 days. With this information compute the control limits of a P-Chart with Z=3. Carry all values to four decimal places. Day 1, 2, 3, 4, 5 # Defects 4, 1, 3, 5, 1 Day 6, 7, 8, 9, 10 # Defects 5, 2, 2, 4, 3 a. LCLP = 0.765 UCLP = 0.9845 b. LCLP = 0.0643 UCLP = 0.2644 c. LCLP = 0.0 UCLP = 0.2644 d. LCLP = 0.0 UCLP = 0.3233 e. LCLP = 0.765 UCLP = 0.3233
c. LCLP = 0.0 UCLP = 0.2644
14. Which of the following statements on continuous improvement and reengineering is best? a. Only continuous improvement processes make use of cross-functional teams. b. Reengineering focuses on business processes while continuous improvement focuses on people processes. c. Reengineering starts with a "clean slate" whereas continuous improvement looks for ways to incrementally improve. d. Continuous improvement only focuses on critical or core processes. e. Continuous improvement programs and reengineering efforts are universally embraced by both managers and workers.
c. Reengineering starts with a "clean slate" whereas continuous improvement looks for ways to incrementally improve.
15. Analysis of a process is most likely to be economically beneficial if the process is a. the first operation on an assembly line b. a very fast operation c. a bottleneck operation d. the last operation on an assembly line e. an operation that is rarely performed
c. a bottleneck operation
1. Among the characteristics of an intermittent production process is: a. high and even machine utilization b. low work-in-process inventories c. ability to produce a variety of products d. quality leadership
c. ability to produce a variety of products
Costs associated with inspection, testing, and data gathering to determine the actual quality of products throughout all phases of the production process is what type of quality cost? a. prevention costs b. external failure costs c. appraisal costs d. internal failure costs e. none of the above
c. appraisal costs
11. Which of the following are of special importance to the managing of global service operations? a. demographic factors b. economic factors c. culture, ethics and educational level of workforce d. capacity planning e. none of the above
c. culture, ethics and educational level of workforce
2. Which of the following is true? a. corporate strategy is shaped by functional strategies b. corporate mission is shaped by corporate strategy c. functional strategies are shaped by corporate strategy d. external conditions are shaped by corporate missions e. corporate mission is shaped by functional strategies
c. functional strategies are shaped by corporate strategy
10. When production volumes are high, process decisions are more likely to favor a. more customer involvement b. less capital intensity c. less resource flexibility d. less vertical integration e. less automation
c. less resource flexibility
6. Optimizing capacity would be most appropriate for which stage in the product life cycle? a. introduction b. growth c. maturity d. decline e. incubation
c. maturity
5. Which of the following is not an operations decision? a. job scheduling b. facility layout design c. product price d. product quality e. inventory levels
c. product price
10. Reduction of in-transit inventory can be encouraged through the use of: a. low set-up costs b. low carrying costs c. supplier location near plants d. use of trains, not trucks e. low-cost, global suppliers
c. supplier location near plants
20. Which of the following is not one of the eight competitive priorities? a. cost b. high-performance design c. volume delivery d. development speed e. customization
c. volume delivery
8. Which of the following statements concerning vertical integration is true? a. A high level of vertical integration is likely to be attractive when volumes are low. b. Make-or-buy decisions relate primarily to forward integration. c. A company owning its own distribution channels is an example of backward integration. d. Opting for a higher level of vertical integration implies less outsourcing. e. Forward integration represents movement towards the sources of raw materials and parts.
d. Opting for a higher level of vertical integration implies less outsourcing.
Which of the following is true? a. quality is related to profitability on the market side b. ISO 9000 certification guarantees the quality of a company's products c. poor quality that results in scrap, rework, and equipment downtime is an internal failure cost d. a and c e. all of the above
d. a and c
3. Which of the following is an example of competing on the basis of customization? a. a firm manufactures its product with less raw material than its competitors b. a firm's products are introduced into the market faster than its competitors c. a firm's distribution network routinely delivers its product on time d. a firm offers more variations of its products than its competitors e. a firm advertises more than its competitors
d. a firm offers more variations of its products than its competitors
1. Productivity can be improved by: a. increasing inputs while holding outputs steady b. decreasing outputs while holding inputs steady c. increasing inputs and outputs in the same proportion d. decreasing inputs while holding outputs steady e. none of the above
d. decreasing inputs while holding outputs steady
15. Attribute inspection is appropriate for measuring a. the weight of a bag of cement b. the tension in a brake line c. the air pressure in a tire d. if a product is conforming or non-conforming e. all of the above
d. if a product is conforming or non-conforming
Which of the following in NOT necessarily an essential element of a TQM program? a. benchmarking b. continuous improvement c. managing quality d. obtaining the Malcolm Bald ridge National Quality Award e. defining quality as a strategic issue
d. obtaining the Malcolm Bald ridge National Quality Award
15. Operations Management techniques that can be used to reduce the cost of goods include all of the following except: a. using technology to monitor real-time production, financial and sales information b. redesigning the layout to improve the flow of materials, employees and customers c. improving quality d. purchasing at quantity discounts, even if not all the materials are needed since excess inventory is an asset e. training employees so they develop new skills and be able to work a variety of tasks
d. purchasing at quantity discounts, even if not all the materials are needed since excess inventory is an asset
7. The two internal elements of SWOT analysis are: a. opportunities and threats b. strengths and opportunities c. weaknesses and threats d. strengths and weaknesses e. strengths and threats
d. strengths and weaknesses
In a sampling plan specified by n and c, the value of α indicates: a. the probability the number of defects is < c b. the risk of accepting a bad lot c. the probability the number of defects is > LTPD d. the risk of rejecting a good lot e. the percent defective of an incoming lot
d. the risk of rejecting a good lot
8. A manufacturer took the following steps to reduce inventory. Which one is NOT a JIT action? a. they used a pull system to move inventory b. they produced in ever smaller lots c. they required deliveries directly to the point of use d. they picked the supplier that offered the lowest price based on quantity discounts e. they worked to reduce their in-transit inventory
d. they picked the supplier that offered the lowest price based on quantity discounts
18. Which of the following is not a trend in operations management? a. Increased global focus b. Just-in-Time shipments c. Supply chain partners d. Mass customization e. Job specialization
e. Job specialization
18. A sampling plan with the following parameters has been proposed: N = 1700, n = 60, c = 4, AQL = 0.3, LTPD = 0.09, d = number of defects found in the sample Which of the following is the correct conclusion about the sample? a. Accept the lot if d <= AQL b. Accept the lot if d < 2 c. Reject the lot if 1 <= d <= 3 d. Reject the lot if d >= LTPD e. Reject the lot if d > 4
e. Reject the lot if d > 4
4. Low-volume and high variety production is best undertaken by: a. process focused manufacturing b. product focused manufacturing c. job shop type operations d. a, b, & c e. a & c
e. a & c
5. The difference between process focus and product focus is in: a. the degree of flexibility of the production system b. the extent of product customization c. the volume of production per product d. product variety e. all of the above
e. all of the above
In which of the following phases of a product should quality be considered? a. design b. procurement c. production d. distribution e. all of the above
e. all of the above
7. In the quest for competitive advantage, which of the following is a JIT requirement? a. reduced number of vendors b. reduced space for inventory c. quality by suppliers d. small number of job classifications e. all of the above are JIT requirements
e. all of the above are JIT requirements
12. Which of the following represent issues of culture and ethics in International Operations? a. bribery b. employee punctuality c. employee theft d. protection of intellectual property rights e. all of the above are cultural and ethics issues
e. all of the above are cultural and ethics issues
9. Which of the following is NOT a goal of JIT partnerships? a. elimination of unnecessary activities b. elimination of in-plant inventories c. elimination of in-transit inventories d. elimination of engineering changes e. all of the above are goals of JIT partnerships
e. all of the above are goals of JIT partnerships
10. Which of the following represent reasons for globalizing operations? a. reduce costs b. improve the supply chain c. attract new markets d. attract and retain global talent e. all of the above are reasons to globalize
e. all of the above are reasons to globalize
9. The "standards of global competition" include all of the following except: a. quality of product and services b. variety of products and options to choose from c. customization to customer requirements d. timeliness of delivery e. all of the above are standards of global competition
e. all of the above are standards of global competition
2. A product-oriented layout is characterized by: a. high product variety b. grouping of similar machines in work centers c. low and uneven machine utilization d. a high level of materials handling e. equipment arrangement based on the sequence of operations
e. equipment arrangement based on the sequence of operations
