Products & Operations Management

An example of an operational operations management decision is inventory level management. True or False

True

An idle percentage of zero means a line is perfectly balanced. True or False

True

Capacity planning requires an analysis of needs: what kind, how much, and when. True or False

True

Crosby's concept of "quality is free" means that it is less expensive to do it right initially than to do it over. True or False

True

Exponential smoothing is a form of weighted averaging. True or False

True

Forecasts help managers both to plan the system itself and to provide valuable information for using the system. True or False

True

Many U.S. manufacturers are now shifting their focus from products to both product and process improvements. True or False

True

People who work in the field of operations should have skills that include both knowledge and people skills. True or False

True

Quality of design refers to the degree to which goods and services achieve the intent of the designers based on marketing and other information. True or False

True

Serviceability, conformance, and reliability are dimensions of product quality. True or False

True

Services often don't fit simple yield measurements. True of False

True

Standardization refers to the extent to which there is absence of variety in a product, service, or process. True or Fasle

True

The degree to which a product or service satisfies its intended purpose is determined by service after delivery, ease of use, design, and conformance to design. True or False

True

The main issue in the design of process layouts concerns the relative positioning of the departments involved. True or False

True

As an abstraction of reality, a model is a simplified version of a real phenomenon. True or False

False

Concurrent engineering is another term for sequential development. True or False

False

Cost and competitive priorities reduce effective capacities. True or False

False

Exponential smoothing adds a percentage (called alpha) of the last period's forecast to estimate the next period's demand. True or False

False

For new products in a strong growth mode, a low alpha will minimize forecast errors when using exponential smoothing techniques. True or False

False

One of the main advantages of standardization is that it increases the potential variety of products. True or False

False

Operations management and marketing are the two functional areas that exist to support activities in other functions such as accounting, finance, IT, and human resources. True or False

False

Productivity tends to be only a very minor factor in an organization's ability to compete. True or False

False

Quality at the source means returning all defects to the source—our vendors. True or False

False

Robust design describes a product that will perform satisfactorily so long as it is used in a very narrow range of conditions. True or False

False

The T in the model TAF = S + T represents the time dimension (which is usually expressed in weeks or months). True or False

False

The degree to which a product or service satisfies its intended purpose is determined by design, conformance to design, cost, and reputation of the producer. True or False

False

A major benefit of computer-aided design (CAD) is the increased productivity of designers. True or False

True

The manager of a carpet store is trying to determine the best installation crew size. He has tried various crew sizes with the results shown below. Based on productivity, what crew size do you recommend? Crew Size / yards installed 2/716 4/1298 3/1017 3/1002 4/1278 2/702 a) 4 b) 3 c) 2

Answer is C

Knowledge about challenges specific to the operations function can help marketing personnel to judge how ________ new product designs will be. A) nameable B) Segmentable C)Manufacturable D) Measurable

C) Manufacturable

"Value added" by definition is always a positive number since "added" implies increases. True of False

False

A cafeteria line would be an example of a process-focused layout. True or False

False

A control chart is a visual representation of the various states in a process. True or False

False

A job-shop processing system generally requires less-skilled workers than a continuous processing system. True or False

False

A systems approach means that we concentrate on efficiency within a subsystem and thereby assure overall efficiency. True or False

False

Capacity decisions are usually one-time decisions; once they have been made, we know the limits of our operations. True or False

False

Juran describes quality management as a trilogy that consists of quality planning, control of quality costs, and quality improvement. True or False

False

Operations managers, who usually use quantitative approaches, are not really concerned with ethical decision making. True False

False

Outsourcing some production is a means of supporting a constraint. True or False

False

Poor quality has a positive effect on productivity because it usually takes longer to produce a good part. True or False

False

Service Operations require additional inventory because of the unpredictability of consumer demand: True or False

False

The current trend toward global operations has made capacity decisions much easier since we have the whole world in which to consider operations. True or False

False

The expression "quality at the source" refers primarily to the practice of requiring each of our vendors to provide quality parts and materials. True or False

False

The more current capacity exceeds desired capacity, the greater the opportunity for profit. True or False

False

The naive forecast is limited in its application to series that reflect no trend or seasonality. True or False

False

The term failure as applied to reliability means that a part or item does not function at all. True or False

False

A business that is rated highly by its customers for service quality will tend to be more profitable than a business that is rated poorly. True or False

True

Morale problems can be a reason for redesign of a facility layout. True or False

True

Prior to the Industrial Revolution, goods were produced primarily by craftsmen or their apprentices using custom-made parts. True or False

True

Productivity is directly related to the ability of an organization to compete. True or False

True

Service involves a much higher degree of customer contact than manufacturing. True or False

True

The majority of our textbook deals with tactical operations that support established functional strategies. True of False

True

Simple exponential smoothing is being used to forecast demand. The previous forecast of 66 turned out to be four units less than actual demand. The next forecast is 66.6, implying a smoothing constant, alpha, equal to: a) .15 b) .01 c) .60 d) .10 e) .20

a) .15

A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load meter moved. An analyst has prepared the following flow and distance matrices: What is the total flow (loads per week) between department Y and department Z? a) 280 b) 150 c) 180 d) 130 e) 230

a) 280

Given forecast errors of 5, 0, -4, and 3, what is the mean absolute deviation? a) 3 b) 2.5 c) 2 d) 4 e) 1

a) 3

The owner of a greenhouse and nursery is considering whether to spend $6,000 to acquire the licensing rights to grow a new variety of rosebush, which she could then sell for $6 each. Per-unit variable cost would be $3. If her available land has design and effective capacities of 3,000 and 2,000 rosebushes per year respectively, and she plans to grow 1,200 rosebushes each year on this land, what will be the utilization of this land? a)40% b) 100% c) 60% d) 0% e) 67%

a) 40%

A manager uses the following equation to predict monthly receipts: Yt = 40,000 + 150t. What is the forecast for July if t = 0 in April of this year? a) 40450 b) 42100 c) 40600 d) 42250 e) 42400

a) 40450

Unique attributes of firms that give them a competitive edge are called: a) core competencies b) functional strategies c) balanced scorecards d) supply chains e) sustainable initiatives

a) core competencies

Fixing a problem will often cost money; to minimize these costs it is best to find and fix the problem: a) during the design phase b) just before shipping our product to the customer c) regardless of when you fix the problem, costs are about the same d) immediately after we complete the last operation e) just before we begin the first production operation

a) during the design phase

For an organization to grow its market share, it must: a) exceed minimum standards of acceptability for its products or services. b) reduce prices c) broaden its mission statement d) advertise using multimedia e) establish an internet web site

a) exceed minimum standards of acceptability for its products or services

The term "standardization" is closely associated with: a) interchangeability b) variety c) longer lead times d) customization e) high cost

a) interchangeability

an organization mission statement as the basis for: a) organizational goals b) operating procedures c) environmental scanning d) core competencies e) distinctiveness

a) organizational goals

The fact that a few improvements in a few key areas of operations will have more impact than many improvements in many other areas is consistent with the: a) pareto phenomenon b) tellier phenomenon c) stevenson phenomenon d) adam smith phenomenon e) irwin phenomenon

a) pareto phenomenon

In which type of operation are you likely to see, at most, only minor variations in the product or service being produced using the same process and the same equipment? a) repetitive production b) batch processing c) intermittent production d) a job shop e) a project

a) repetitive production

Forecasts based on judgment and opinion do not include: a) second opinions b) Delphi methods c) salesperson opinion d) executive opinon e) customer surverys

a) second opinions

The impact that a significant change in capacity will have on a key vendor is a: a) supply chain factor b) internal factor c) process limiting factor d) human resource factor e) operational process factor

a) supply chain factor

The Baldrige award can only be won by manufacturing organizations. a) training b) systems c) remedial d) resource e) management

a) training

A company needs to rebalance a product layout for producing new plastic license plates. They plan to use the assembly line six hours in order to meet projected demand of 2,160 license plates each day. The following table describes the tasks involved in the production of this product: For output to equal projected demand, what should be the actual cycle time for this assembly line? a) 28 seconds b) 10 seconds c) 3 seconds d) 0 seconds e) 9 seconds

b) 10 seconds

The key questions in the process selection task are: (I) How will the product/service be priced? (II) How much variety will be imposed on the process? (III) What is the target market for the product/service? (IV) At what volume will the process need to operate? a) II and III b) II and IV c) I and IV d) I and III e) III and IV

b) II and IV

A market constraint can be overcome by: a) lobbying b) advertising or price changes c) outsourcing d) supplier development e) cash flow management

b) advertising or price changes

The quality control improvement tool that resembles a "fishbone" is: a) brainstorming b) cause-and-effect diagrams c) pareto analysis d) check sheets e) fail-safe methods

b) cause-and-effect diagrams

Which of the following would be least important in the pursuit of a time-based strategy? a) reduced complaint resolution times b) cost minimization c) flexible technology d) operational agility e) quick changeover times

b) cost minimization

If the output rate is increased but the average unit costs also increase, we are experiencing: a) step-function scaleup b) diseconomies of scale c) value-added accounting d) market share erosion e) economies of scale

b) diseconomies of scale

Supplying operations with parts and materials, performing work on products, and/or performing services are part of the firm's: a) division of labor b) internal supply chain c) external process orientation d) outsourcing e) market development

b) internal supply chain

Which of the following might be used to indicate the cyclical component of a forecast? a) mean squared error b) leading variable c) mean absolute deviation d) exponential smoothing e) Delphi Technique

b) leading variable

Which of the following is not a factor that affects productivity? a) use of the internet b) product price c) standardizing processes d) computer viruses e) design of the workspace

b) product price

Competitiveness doesn't include: a) operations management b) profitability c) effectiveness d) operations strategy e) productivity

b) profitability

Which of the following is not one of the 3 Rs? a) reduce b) reposition c) reuse d) recycle

b) reposition

Which is not a characteristic of simple moving averages applied to time series data? a) weights each historical equally b) requires only last periods forecast and actual data c) smoothes random variation in the data d) smooths real variations in the data e) legs change in the data

b) requires only last period's forecast and actual data

One possible disadvantage of modular design is that: a) replacement and repair are more difficult b) the number of configurations of modules decreases c) individual parts lose their identities d) failure diagnosis is more complex e) inventory problems arise

b) the number of configurations of modules decreases

Layout design has many objectives, one of which is: a) reduce bottlenecks b) use workers and space efficiently c) install computer terminals every 500 feet d) hold material handling costs to 27 percent or less e) move materials and workers simultaneously

b) use workers and space efficiently

Given the following information, what would utilization be? Effective capacity = 20 units per day Design capacity = 60 units per day Actual output = 15 units per day a) 1/3 b) 1/2 c) 1/4 d) 3/4 e) none of these

c) 1/4

A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load meter moved. An analyst has prepared the following flow and distance matrices: What is the distance (in meters) from area III to area I of this new facility? a) 0 b) 10 c) 20 d) 30 e) 40

c) 20

Suppose operation X feeds directly into operation Y. All of X's output goes to Y, and Y has no other operations feeding into it. X has a design capacity of 80 units per hour and an effective capacity of 72 units per hour. Y has a design capacity of 100 units per hour. What is Y's maximum possible utilization? a) 90% b) 70% c) 72% d) 60% e) 80%

c) 72%

A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load per meter moved. An analyst has prepared the following distances and flow matrices: If departments X, Y, and Z were to be located in areas I, II, and III, respectively, what would be the total distance (in meters) loads would be moved each week? a) 7000 b) 9000 c) 8000 d) 4500 e) 4000

c) 8000

In which type of processing system would gasoline be produced from crude oil? a) assembly b) project c) continuous d) batch e) job shop

c) continuous

The ratio of actual output to effective capacity is: a) actual capacity b) effective capacity c) efficiency d) utilization e) design capacity

c) efficiency

Improving cash flow would be a reasonable thing to focus on when trying to overcome a ________ constraint. a) demand b) market c) financial d) material e) supplier

c) financial

Which of the following questions is least appropriate during value analysis? a) could a given component in our product be simplified or combined with another b) how can we reduce the cost of parts c) how can we incorporate more cultural values in the design of our global system d) how can we improve the performance of the product e) can we find a way to use less energy in the production of our product

c) how can we incorporate more cultural values in the design of our global system

which of the following is not a key factor of competitiveness? a) price b) after-sale service c) size of organization d) product differentiation e) flexibility

c) size of organization

Which of the following is not a reason for redesigning a product or service? a) to increase the level of customer satisfaction b) to increase quality c) to increase the level of employee satisfaction d) to reduce labor or material cost e) to attract and increase customer demand

c) to increase the level of employee satisfaction

One of these is not a characteristic of a well-designed service system: a) cost effective b) easy to sustain c) user friendly d) robust e) distributed computer networks

c) use computerized design techniques

The owner of a greenhouse and nursery is considering whether to spend $6,000 to acquire the licensing rights to grow a new variety of rosebush, which she could then sell for $6 each. Per-unit variable cost would be $3. If her available land has design and effective capacities of 3,000 and 2,000 rosebushes per year, respectively, and she expects to be 80 percent efficient in her use of this land, how many rosebushes does Rose plan to grow each year on this land? a) 3000 b) 2000 c) 2400 d) 1600 e) 1000

d) 1600

A concert promoter is forecasting this year's attendance for one of his concerts based on the following historical data: year/attendance 4 years ago/ 10000 3 years ago/ 12000 2 years ago/ 18000 last year/ 20000 what is this year's forecast using exponential smoothing with alpha -.2, if last year's smoothed forecast was 15,000? a) 17500 b) 19000 c) 20000 d) 16000 e) 15000

d) 16000

A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load per meter moved. An analyst has prepared the following distances and flow matrices: What is the total flow (loads per week) between department Y and department Z? a) 200 b) 160 c) 250 d) 300 e) 140

d) 300

For fixed costs of $2,000, revenue per unit of $2, and variable cost per unit of $1.60, the break-even quantity is: a) 1250 b) 1000 c) 2250 d) 5000 e) 3000

d) 5000

The business analyst for Video Sales, Inc. wants to forecast this year's demand for DVD decoders based on the following historical data: year/Demand 5 years ago/ 900 4 years ago/ 700 3 years ago/ 600 2 years ago/ 500 last year / 300 What is the forecast for this year using exponential smoothing with alpha = .4, if the forecast for two years ago was 750? a) 300 b) 163 c) 420 d) 510 e) 180

d) 510

Given the following information, what would efficiency be? Effective capacity = 50 units per day Design capacity = 100 units per day Actual output = 30 units per day a) 90% b) 40% c) 80% d) 60% e) 50%

d) 60%

The quality certification that deals primarily with conformance to customer requirements is ISO ________; ISO ________ is concerned primarily with the organization's effect on the environment. a) 14000; 24700 b) 14000; 9000 c) 9000; 24700 d) 9000; 14000 e) 24700; 9000

d) 9000; 14000

Which closeness rating reflects the highest importance for two departments being close to each other? a) X b) E c) U d) A e) I

d) A

Putting forecast errors into perspective is best done using a) MAD b) hindsight c) linear decision rules d) MAPE e) exponential smoothing

d) MAPE

Which of the following is not typically considered a cure for poor competitiveness? a) Recognize labor as a valuable asset and act to develop it. b) Improve quality. c)Put less emphasis on short-term financial results. d)Minimize attention to the operations function. e)Remove communications barriers within organizations.

d) Minimize attention to the operations function.

Which one of the following is not common to product layouts? a) a high rate of output b) specialization of labor c) low unit costs d) ability to adjust to changes in demand e) special-purpose technology

d) ability to adjust to changes in demand

If one organization is better able than most to respond to changes in demands or opportunities, we say that organization exhibits higher: a) productivity b) efficiency c) marketability d) agility e) sustainability

d) agility

Which of the following statements about variation is false? a) variation can either be assignable of random b) variation prevents a production from being as efficient as it can be c) some variation can be prevented d) any variation makes a production process less productive e) random variation generally cannot be influence by managers

d) any variation makes a production process less productive

Designing for recycling helps facilitate: a) reduced legal liability b) increased product reliability c) reduced standardization costs d) compliance with regulatory environments e) better customer service

d) compliance with regulatory environments

Forecasting techniques generally assume: a) the absence of randomness b) a linear relationship between time and demand c) accuracy that increases the farther out in time the forecast projects d) continuity of some underlying causal system e) accuracy that is better when individual items, rather than groups of items, are being considered

d) continuity of some underlying causal system

Mobile phones have evolved from devices intended to place and receive phone calls into handheld multimedia communications devices, but in the eyes of some customers these new features make the phones less desirable. This is an example of: a) quality function deployment b) robust design c) sustainable design d) creeping featurism e) component commonality

d) creeping featurism

Which of the following is not a criterion for developing capacity alternatives? a) prepare to deal with capacity in "chunks" b) attempt to smooth out capacity requirements c) take a big-picture approach to capacity changes d) design structured, rigid systems e) identify the optimal operating level

d) design structured, rigid systems

Which of the following is not a characteristic of service operations? a) high labor content b) high customer contact c) low uniformity of output d) easy measurement of productivity e) intangible output

d) easy measurement of productivity

Which of the following is true? a) corporate mission is shaped by corporate strategy b) corporate strategy is shaped by functional strategies c) corporate mission is shaped by functional strategies d) functional strategies are shaped by corporate strategy e) external conditions are shaped by corporate mission

d) functional strategies are shaped by corporate strategy

An advantage of a U-shaped production line is that: a) work assignments are more rigid b) workers are specialists c) it is less compact d) it is more efficient than a traditional product layout e) communication is reduced among employees

d) it is more efficient than a traditional product layout

Which of the following statements about CAD is not true? a) some systems permit engineering or cost analysis of proposed designs b) it increases the productivity of designers c) it requires a good database d) it is used successfully by all manufacturing companies e) it uses computer graphics

d) it is used successfully by all manufacturing companies

________ is generally used to facilitate an organization strategy that emphasizes low cost. a) customization b) sustainability c) speed to market d) standardization e) flexibility

d) standardization

Product design and choice of location are examples of ________ decisions. a) customer-focused b) operational c) design d) strategic e) tactical

d) strategic

Which of the following is not an advantage of standardization? a) fewer parts to deal with in inventory b) inventory management is less complex c) reduced training cost and time d) the opportunity to freeze design at a very early stage e) purchasing is more routine

d) the opportunity to freeze design at a very early stage

Which of the following is not a benefit of using models in decision making? A) They provide a standardized format for analyzing a problem. B) They are easy to use and less expensive than dealing with the actual situation. C) They offer insights into fundamental issues at play in a decision-making setting. Correct Response D) They force the decision maker to take into account qualitative issues such as personalities and emotions. E) They serve as a consistent tool for evaluation.

d) they enforce the decision maker to take into account qualitative issues such as personalities emotions

A concert promoter is forecasting this year's attendance for one of his concerts based on the following historical data: year / attendance 4 years ago/ 10000 3 years ago/ 12000 2 years ago/ 18000 last year/ 20000 What is this year's forecast using a two-year weighted moving average with weights of .7 and .3? a) 11400 b) 19000 c) 18600 d) 10600 e) 19400

e) 19400

The president of State University wants to forecast student enrollments for this academic year based on the following historical data: year/ enrollments 5 years ago/ 15000 4 years ago/ 16000 3 years ago/ 18000 2 years ago/ 20000 last year/ 21000 What is the forecast for this year using trend-adjusted (double) smoothing with alpha = .05 and beta = .3, if the forecast for last year was 21,000, the forecast for two years ago was 19,000, and the trend estimate for last year's forecast was 1,500? a) 22800 b) 21000 c) 19500 d) 18750 e) 22650

e) 22650

Elements of the service process in which there is little to no contact with the customer are referred to as: a) robust b) user-friendly c) mission-consistent d) delayed differentiators e) back-of-the-house

e) back-of-the-house

A quality improvement technique that involves the sharing of thoughts and ideas in a way that encourages unrestrained collective thinking is: a) a control chart b) pareto analysis c) benchmarking d) a check sheet e) brainstorming

e) brainstorming

A product-focused, single-piece flow, pull production system would be called a: a) nonrepetitive process b) continuous flow c) job shop d) assembly line e) cellular layout

e) cellular layout

Cause-and-effect diagrams are sometimes called: a) run charts b) responsibility charts c) control charts d) pareto diagrams e) fishbone (ishikawa) diagram

e) fishbone (ishikawa) diagram

What is credited with gains in industrial productivity, increased standards of living, and affordable products? a) the internet b) multilevel marketing c) personal computers d) mass transportation e) mass production

e) mass production

The fundamental purpose for the existence of any organization is described by its: a) bylaws b) procedures c) corporate charter d) policies e) mission statements

e) mission statements

With regard to operations strategy, organization strategy should, ideally, take into account: a) labor productivity b) inventory levels c) production processes d) product mix e) operations' strengths and weaknesses

e) operations' strengths and weaknesses

A chart showing the number of occurrences by category would be used in: a) case-and-effect diagrams b) quality function deployment c) interviewing d) benchmarking e) pareto analysis

e) pareto analysis

The responsibilities of the operations manager are: A) forecasting, designing, operating, procuring, and reviewing. B) forecasting, designing, planning, organizing, and controlling. C) planning, organizing, staffing, procuring, and reviewing. D) designing and operating. Correct Answer E) planning, organizing, staffing, directing, and controlling.

e) planning, organizing, staffing, directing and controlling

A formal way to document customer requirements is: a) consumer surveys b) a sales/marketing matrix c) focus groups d) the Delphi techniques e) quality function deployment

e) quality function deployment

In addition to correcting substandard work, employees have an ethical obligation to ________ whatever led to the quality problem as well. a) redesign b) prevent c) standardize d) offset e) report

e) report

In addition to operations, which of the following is considered a "line" function? a) IT b) accounting c) finance d) procurement e) sales

e) sales

Which of the following most involves coordinating the activities among all the elements of the business? a) pollution control b) quality management c) technological change d) competition from foreign manufacturers e) supply chain management

e) supply chain management