World of Business Chapter 8

291. A firm that is certified as meeting both ISO 9000 and ISO 14000 standards has demonstrated: A. world-class management of both quality and environmental standards. B. sound financial and marketing practices. C. ethical treatment of both customers and employees. D. that its recruitment and training programs for employees protect and promote basic human rights.

A ISO 9000 refers to quality management and assurance standards and ISO 14000 refers to standards for managing a firm's environmental impact.

230. SitRite Furniture Company uses labor and machinery to transform wood, plastic, metal and cloth into comfortable chairs, sofas, and love seats. This process creates: A. form utility. B. place utility. C. use facility. D. intangible productivity.

A Production is the creation of finished goods and services from inputs such as land, labor, capital, entrepreneurship and knowledge. Production creates form utility, which is the value added by the creation of finished goods and services.

190. Production management is the traditional term used to describe all the activities managers do to help their firms create: A. resources. B. goods. C. services. D. equities.

B

226. A company becomes lean by _________ its capacity to produce high-quality goods, while ___________ its need for resources. A. investigating; planning B. increasing; decreasing C. decreasing; increasing D. planning; investigating

B

261. The operations planning practice of inputting sales forecasts into computer software that accurately predicts the amount and timing of materials needed to complete products and projects is ______________. A. enterprise resource planning B. materials requirement planning C. virtual accuracy tool D. computer-based materials model

B

273. The Six Sigma approach to quality control: A. relies on a special team of experts to examine every unit of output at the end of the production process. B. detects potential problems early to prevent their occurrence. C. views quality control as a function of the marketing department. D. allows only 600 defective units per one thousand units produced.

B

194. The U.S. economy is now dominated by the _________ sector. A. farm B. manufacturing C. service D. trade

C

192. __________ is the specialized area of management that converts or transforms resources into goods and services. A. Logistics management B. Resource engineering C. Intrapreneuring D. Operations management

D

276. The ___________ National Quality Award is given to firms that achieve an outstanding level of overall quality based on performance in seven key areas. A. Association of Operations Managers B. Excellence in Production Committee C. National Association of Manufacturers D. Malcolm Baldrige

D

185. In recent years, the service sector of the U.S. economy has: A. grown much more rapidly than the manufacturing sector. B. become the low-wage sector of the U.S. economy. C. achieved extremely high productivity gains according to government reports. D. focused less on quality and more on reducing costs of production.

A

207. In __________, materials are physically or chemically changed to produce a product. A. process manufacturing B. assembly processes C. utilitarian production D. diffusive manufacturing

A

255. Modular facilities layouts consist of: A. teams of workers who work together on a complex assembly. B. lines of workers who do a small series of tasks and then pass along the product through the line to the next worker. C. virtual companies and their supplier relationships. D. workers who have a model in front of them that they try to replicate several times.

A

258. In manufacturing, a(n) __________ is used to produce large quantities of a few types of products. A. assembly-line layout B. process layout C. modular layout D. fixed-position layout

A

268. Today manufacturers are relying more heavily on: A. one or two suppliers because firms share so much information. B. the bidding process to obtain the lowest price. C. many suppliers to keep their leverage. D. developing an MRP system for purchasing.

A

319. Sparky sees quality control in terms of detecting potential problems to prevent their occurrence and thus save Minimotors money. The quality control process that is most closely linked to Sparky's goal is known as: A. Six Sigma. B. Quality function deployment. C. ERP. D. PERT analysis.

A Quality control concepts such as Six Sigma tend to focus on detecting potential problems to prevent their occurrence.

303. The purpose of a PERT network is: A. to monitor the quality of a product for compliance with ISO 9000 standards. B. to monitor the progress of a multi-step project during its development. C. to connect all firms that are ISO 9000 certified so that they can partner with each other on future projects. D. to be used as a decision-making tool when evaluating the best facility locations and layouts.

B

304. A bar graph that shows what projects or tasks are in process and how much of each is completed is called a(n): A. Grid chart. B. Gantt chart. C. Priority chart. D. Stem chart.

B

220. The goal of lean manufacturing is to: A. keep inventories of finished goods as high as possible. B. produce goods and services with less of everything that goes into the process. C. produce a very limited variety of goods. D. become more self-sufficient by producing major components rather than buying them.

B A company becomes lean by continuously increasing its capacity to produce high-quality goods while decreasing its need for resources.

308. Both PERT diagrams and Gantt charts are useful to managers concerned with: A. calculating the rate of profit earned in a particular market. B. making sure that projects are completed on time. C. estimating the cost of completing a project. D. establishing formal lines of authority and responsibility within an organization.

B PERT diagrams and Gantt charts are tools used by managers to help ensure that projects are carried out in a timely manner. PERT diagrams help managers sequence the various tasks needed to complete a project, and identify the critical path, which is the sequence of tasks that takes the longest to complete. This information helps the manager focus on completing the tasks that have the greatest potential for delaying the overall project. A Gantt chart is simpler, but this bar graph provides a visual way for managers to track progress on a project and identify which tasks are on time and which are behind schedule.

187. One strategy U.S. manufacturers have employed in order to become more competitive is: A. focusing on providing the lowest-priced products. B. relying on advanced technology and the Internet to unite companies. C. maintaining a distance relationship with suppliers in an effort to guard trade secrets. D. increasing advertising budgets.

B U.S. manufacturers have emphasized a number of actions including relying on technology and the Internet to unite companies who have a stake in each other's success.

186. Manufacturing output in the U.S. continues to increase. The high unemployment of skilled workers who previously worked in the manufacturing sector _______________________. A. is the result of untrained laborers. B. is strictly a factor of U.S. manufacturing companies outsourcing the majority of their work. C. can be reconciled by the fact that manufacturing is very efficient and requires fewer workers to produce the same amount, or even more output. D. can be attributed to manufacturing going green.

C

196. Experts in operations management for service industry businesses stress: A. using records from accounting to determine what business to go after. B. relying on one's individual operation as opposed to developing partnerships. C. training employees on quality management. D. training employees to always adhere to only one way of doing things.

C

205. Production creates: A. time utility. B. possession utility. C. form utility. D. marginal utility.

C

212. In the past, the idea behind mass production was to: A. produce goods of the highest possible quality. B. give producers the maximum flexibility to respond to customer preferences. C. make large quantities of a limited variety of products at very low cost. D. give workers more control over their work environment.

C

215. CAD/CAM makes it possible to custom-design products to meet the needs of __________ with ________. A. small markets; a decrease in cost B. very large markets; no increase in cost C. small markets; very little increase in cost D. international markets; products that are complex

C

217. Sophisticated software that enables computer-aided design machines to communicate with computer-aided manufacturing machines is called: A. a flexible system. B. a computer-based feedback control system. C. computer-integrated manufacturing. D. heuristic manufacturing integration.

C

247. Which of the following is a likely reason that a company would move its facility from one location to another? A. Availability of expensive labor B. Higher quotas on competing goods C. Access to various modes of transportation D. Availability of a retired workforce

C

253. Operations management becomes a(n) ____________ when companies outsource several processes and create a network of firms that cooperatively produce products and services. A. open operation B. closed operation C. interfirm process D. conjoined process

C

269. With the __________ inventory control system, producers hold only the amount of materials and parts that they need for a short period of time, sometimes just a few hours. A. ABC B. first-in, first-out C. just-in-time (JIT) D. maximum

C

275. The Deming Cycle is: A. a checklist that enables managers to evaluate employee performance more systematically. B. a systematic method of evaluating potential facility locations. C. a process for finding potential quality errors before they occur. D. a process for using identical production steps in the creation of different types of products.

C

229. A benefit of CAD is: A. it basically eliminates the need for human intervention. B. it saves on materials costs. C. it permits customization without a significant increase in price. D. it produces a higher quality product which allows the manufacturer to charge more.

C Computer-aided design permits customization due to the ease of changing a design to satisfy individual tastes.

285. Contemporary operations management planning is an interfirm process. This means: A. the process must integrate all of the functional units of a firm's operation, including production, marketing, finance, and logistics. B. the process is a confidential plan that is not shared with suppliers or customers. It stays within the firm. C. it is a process where several firms work closely together to produce goods and services, and anticipate a changing environment. D. it is a process that seeks stability by adhering to top-down management.

C Interfirm means that several firms will work together via the Internet and through the use of other sophisticated technology to produce products and services that customers need and want. The interfirm process recognizes that today's successful businesses must operate in dynamic environments.

242. You can now put your own photo on a credit card. You can design your own jeans online and have them sent to you in a few days. Dr. Scholl's now features kiosks where you can create your own orthotics to fit inside your shoes. These are examples of the trend toward ______. A. continuous processes. B. intermittent processes. C. mass customization. D. lean manufacturing.

C Mass customization is the tailoring of products to meet the needs of a large number of individual customers. More and more manufacturers and retailers are learning to customize their products.

294. Millennium, Inc., a leading producer of environmentally friendly cleaning agents, is looking for a site for a new production facility. The company is mainly focusing on sites that are close to major highways and rail hubs and are not too far from some major population centers. This suggests that an important location consideration for Millennium is: A. quality of life. B. access to cheap land. C. reducing time-to-market. D. access to low-cost labor.

C Firms that want to get their goods to the market quickly want to have access to good transportation. Thus they frequently locate near highways, rail lines or airports.

316. The arrangements Minimotors has worked out with its suppliers to reduce the amount of inventory the company holds at any one time shows that it is committed to a(n) ___________. A. priority inventory scheduling system. B. first in, first out inventory processing system. C. just-in-time inventory control system. D. ABC inventory system.

C In a just-in-time inventory control system, suppliers deliver just enough supplies just in time for their use in a production process. While this requires frequent deliveries, it also allows the producer to greatly reduce the amount of parts and materials held in inventory.

313. Review the PERT Network below: If it takes 1, 2, or 3 weeks for each activity (represented by a box) to be completed, the critical path is represented by: SEE QUESTION ON DOCUMENT A. the path that begins with "Start" and continues with all boxes labeled with No. 1. B. the path that begins with "Start," continues with all boxes labeled with No. 2, and concludes with "Finish." C. the path that begins with "Start," continues with one box labeled with No. 2, proceeds with all boxes labeled with No. 3, and concludes with "Finish." D. the path that begins with "Start," continues with all boxes labeled with No. 1, and concludes with "Finish."

C The critical path in a PERT Network is the project activity path that takes the longest time to complete. In this diagram, the path of boxes labeled [Start, 2, 3, 3, 3, 3, Finish] make up the critical path.

210. A production process characterized by a short production run and frequent adjustments to machines so that different products can be produced is known as a(n): A. just-in-time process. B. lean manufacturing system. C. analytic process. D. intermittent process.

D

213. ____________ uses computers to help design products. A. PERT B. QPC C. DPA D. CAD

D

252. A major trend in business is _________, where employees work at least part time at home using a computer and modem. A. outsourcing B. riveting C. outbounding D. telecommuting

D

262. MRP is a technique that helps managers: A. develop a reliable sales forecast. B. schedule the sequence of tasks workers must perform in order to complete a project. C. determine how many workers are needed to staff various departments. D. make sure that the right parts and materials are available at the right time.

D

265. ___________ is a computer application that enables a firm to combine computerized functions of all divisions and subsidiaries of the firm into a single, integrated software program that uses a single database. A. Materials requirement planning (MRP) B. PERT analysis C. Manufacturing resource planning (MRP II) D. Enterprise resource planning (ERP)

D