OMG 322: Midterm Chapter 1-2, 4-6

Service often requires greater labor content, whereas manufacturing is more capital intensive

True. (Service operations tend to be more labor-intensive than manufacturing.)

Which of the following questions is least appropriate during value analysis?

How can we incorporate more cultural values in design of our global system (In value analysis and attempt is made to reduce the cost and/or improve the performance of the product.)

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

True (A layout redesign can lead to improve morale.)

A possible disadvantage of a product layout is an inflexible system.

True (Product layouts are inherently inflexible)

The break-even quantity can be determined by dividing the fixed costs by the difference between the revenue per unit and the variable cost per unit.

True (The difference between the revenue per unit and the variable cost per unit goes toward covering fixed costs.)

Which of the following statements bout variation is false?

Any variation makes a production process less productive. (The choice to offer customers greater variety might increase variation but increase productivity even more.)

Reducing consumer choices makes service more efficient

False

In cellular manufacturing, machines and equipment are grouped by type (e.g., all grinders are grouped into a cell).

False (In cellular layouts, machines and equipment are grouped by the needs of the product family.)

Standardization can at times leads to serious difficulties and competitive struggles, particularly when system are running under different conditions

False (It is the lack of standardization that can at times lead to serious difficulties and competitive struggles.)

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

False (Job shops require greater skill on the part of their workers)

Which is not an area of significant different between manufacturing and service operations

Cost per unit. (Manufacturing operations aren't necessarily more or less efficient than service operations.)

The Balance Scorecard is a useful tool for helping managers translate their strategy into action in the following areas;

Customers Financial Internal Business Processes Learning & Growth (These are the 4 core areas addressed by the Balanced Scorecard.)

One possible disadvantage of modular design is that

the number of configurations of modules decreases (Modular designs do have the effect of reducing variety.)

One motivation for an organization to redesign its product or service is to avoid the alternative of downsizing the organization.

True (The threat of downsizing often spurs product or service redesign)

The goal of line balancing is to assign tasks to workstations in such a way that the workstations have approximately equal time requirements.

True (This is why it is called line balancing)

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

True (Type, quantity, and timing are essential to capacity decisions.)

Service often don't fit simple yield measurements

True. (Comparing one service output to another is difficult to do accurately.)

Tracking productivity measures over time enables managers to judge organizational performance and decide where improvement are needed

True. (Productivity trends direct attention toward problems and opportunities.)

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. (Service quality is a powerful tool for improving profitability.)

An example of a tactical operation management decision is determining employment level

True. (Staffing is an ongoing, tactical decision)

Environmental scanning is a search for events or trends that present either threats opportunities to the organization

True. (These events or trends should be taken into account when strategy is being formulated.)

Often, the collective success or failure of companies' operations functions will impact the ability of a nation to compete with other nations

True. (A nation is often only as competitive as its companies.)

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

True. (After the Industrial Revolution, more standardized approaches became common.)

The greater the degree of customer involvement, the more challenging the design and management of operations

True. (Greater customer involvement leads to more complexity in the design and management of operations.)

A system approach emphasizes interrelationships among subsystems, but its main theme is that the whole is greater than the sum of its individual parts.

True. (Optimizing the performance of individual subsystems does not guarantee optimal performance from the overall system)

Mission statements should be a specific as possible regarding exactly how they will be accomplished

False (Mission statements are very long-term and should provide enough room to accommodate major changes in direction.)

Product layouts can more easily adapt to variations in product requirements than process layouts can.

False (Process layouts are more adaptable.)

Quality function deployment (QFD) is based on a set of standards which relate customer requirements to company capabilities

False (QFD related customer requirements to product designs and the capabilities necessary to carry these designs out.)

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

False (Robust design perform satisfactorily across a wide range of conditions.)

Productivity is defined as the ratio of input to output

False. (Productivity is the ratio of outputs to inputs)

The decision to outsource opens the firm up to certain risks, among them _________ and ________.

Loss of direct control over operations; need to disclose proprietary information (loss of direct control over operations, knowledge sharing, and the possible need to disclose proprietary information are three risks that accompany outsourcing).

Which of these pairs of functions would tend to be affected most dramatically by a product or service redesign

Marketing and Operations (Product and service design involves or affects nearly every functional area of an organization. However, marketing and operations have major involvement.)

Productivity is directly related to the ability of an organization to compete

True (A more productive organization is a more competitve organization.)

One approach to extending a product's life cycle is to promote alternate uses of the product

True (Alternate uses extend product life cycles.)

The term capacity refers to the maximum quantity an operating unit can process over a given period of time.

True (An operation's capacity is defined as the the maximum rate of output possible.)

"Balance delay" is another name for the percentage of idle time in a product layout.

True (Greater utilization implies a smaller balance delay.)

Capacity increases are usually acquired in fairly large "chunks" rather than in smooth increments.

True (Hotels and hospitals are among many examples of circumstance in which capacity can't be added in very small increments.)

Product liability means that a manufacturer is liable for any injuries or damages caused by a faulty product because of poor workmanship or design

True (Product liability is a serious issue for manufacturers.)

The minimum number of workstations for a production line is determined in part by the desired output rate.

True (The desired output rate is used to find the required cycle time)

Which of the following is not a strategy to manage service capacity?

backordering (Backordering for services is simply shifting demand to a later period.)

One way to increase reliability is to

improve preventive maintenance procedures (preventive maintenance leads to longer intervals between breakdowns)

Computer-integrated manufacturing integrates ______________ with manufacturing

information from across the organization (A CIM system integrates information from other area of an organization with manufacturing)

Which of the following does not relate to system design

inventory management ; is a system operation decision area

Which of the following statements about CAD is not true?

it increases the productivity of designers (not all manufacturere use CAD)

Which of the following process types would be most likely to be used in the introductory phase of a product's life cycle?

job shop (Job shop processes are more appropriate for relatively new products)

Dealing with the fact that certain aspects of any management situation are important than others is called

recognition of priorities. (Solutions tend to be targeted toward higher priority aspects of a situation.)

Which of the following is not one of the 3 Rs

reposition (The 3 Rs are Reduce, Reuse and Recycle)

Scheduling personnel is an example of an operations management:

operation decision

Cellular layout is a term associated with:

part families (Part families are produced on cells)

Continuous processing is the best way to produce customized output.

False (Continuous processing is best for standardized output)

Increasing capacity just before a bottleneck operation will improve the output of the process.

False (If the bottleneck isn't increased, the capacity of the process remains unchanged.)

Utilization is defined as the ratio of effective capacity to design capacity.

False (utilization is the ratio of output to design capacity)

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

False (A number of factors can either increase or reduce a unit's capacity over time.)

If the unit cost to buy something is less than the variable cost to make it, the decision to make or buy is based solely on the fixed costs.

False (Cost is not the only consideration that enters into the make-or-buy decision)

The process of dismantling and inspecting a competitor's product to discover product improvement is called benchmarking

False (Dismantling and inspecting a competitor's product to discover product improvement is called reverse engineering)

Global competition really only applies to multinational organizations

False (Domestic-only organizations experience competition from organization in other countries.)

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

False (Failure means that the part or item does not function as it should.)

Excitement characteristic are categories in the _______ model.

Kano (The Kano model is an alternative to "more is better" design approaches.)

Incorporating design for disassembly principles in product design helps firms with ____ design issues

Reuse (Refurbished products must first be disassembled)

Intermittent processing can take the form of batch processing or a job shop.

True

A "product package" consists of

a combination of goods and services. (Most firms are not pure service or manufacturing firms; they produce combinations of goods and services.)

If the output rate is increased but the average unit costs also increase, we are experiencing:

diseconomies of scale. (Diseconomies of scale involve producing above optimal production rate.)

Which of the following is not a characteristic of service operations

easy measurement of productivity. (The productivity of service operations is often hard to measure.)

The maximum possible output given a product mix, scheduling difficulties, quality factors, and so on is:

effective capacity (Effective capacity reflects the realities of the productive environment.)

In cost-volume analysis, costs that vary directly with volume of output are referred to as fixed costs because they are a fixed percentage of output levels.

False

A group of machines including supervisory computer control, automatic material handling, and possibly robots is called:

A flexible manufacturing system (FMS involve all these things)

Which of the following is not true about the systems approach

A systems approach is essential whenever something is being redesigned or improved. A systems approach concentrates on efficiency within subsystems A systems approach emphasizes interrelationships among subsystems A systems viewpoint is almost always beneficial in decision-making *(subsystem efficiency doesn't necessarily translate into overall system efficiency)

To save money, it is essential that designers revise the production capabilities to meet the requirements of the new products

False. (Saving money requires designers to ensure that new products can be produced using existing production capabilities)

Government statistics are a good source of data about productivity trends in the service sector

False. (The service sector is often omitted in government statistics.)

The use of models will guarantee the best possible decisions

False. (Models are useful, but their use does not guarantee the best decisions.)

Companies are either producing goods or delivering services. This means that only one of the two types of operations management strategies are used.

False. (Most systems involve a blend of goods and services.)

Most people encounter operations only in profit-making organizations.

False. (Operations are also relevant to not-for-profit organization such as the Red Cross.)

Operations, marketing, and finance function independently of each other in most organizations.

False. (Operations, marketing, and finance are naturally dependent upon one another.)

service operations require additional inventory because of the unpredictability of consumer demand

False. (Service operations can't use inventory as a hedge against unpredictable demand.)

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?

II and IV (the two key questions in process selection are: (1) how much variety will the process need to be able to handle? and (2) How much volume will the process need to be able to handle?

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

Pareto phenomenon. (Pareto phenomena direct our attention to the difference between the "important few" and the "trivial many".)

Which of the following is not an advantage of standardization?

The opportunity to freeze design at a very early stage. (Standardization doesn't necessarily help in freezing designs early.)

Which of the following is not a benefit of using models in decision making

They force the decision maker to take into account qualitative issues such as personalities and emotions. (While models are useful tools for making decisions without confronting the actual situation with all of its complexity, there is the risk that important qualitative information may be overlooked.)

Production units have an optimal rate of output where

average unit costs are minimum. (average unit costs reflect both fixed and variable costs.)

Which of the following is least likely to result in product innovations that have near-term commercial applications?

basic research (Basic research has the objective of advancing the state of knowledge about a subject, without any near-term expectation of commercial application)

Unbalanced systems are evidenced by:

bottleneck operations (have capacities that are substantially smaller than non-bottleneck operations)

Capacity in excess of expected demand that is intended to offset uncertainty is a:

capacity cushion (A capacity cushion reduces short-term imbalances.)

Key aspects of the process selection challenge include _________ and __________.

capital intensity; process flexibility (Key aspects of the process select challenge include capital intensity and process flexibility )

The process of comparing outputs to previously established standards to determine if corrective action is needed is called

controlling. (Controls are used to maintain performance.)

Unique attributes of firms that give them a competitive edge are called

core competencies (can be translated into competitive advantage)

Which of the following would be least important in the pursuit of a time-based strategy

cost minimization. (Many means for minimizing cost would have the effect of making a time-based strategy less feasible.)

The term "degrees of newness" is associated with

degree of design change

Which of the following is an example of postponement tactic?

delayed differentiation (is a postponement tactic: the process of producing, but not quite completing, a product of service, postponing completion until customer preference or specifications are known.)

The research and development activity which starts after positive research results are available and attempts to turn these results into useful commercial applications is

development (is the conversion of applied research into useful commercial applications)

Which of the following is not among the chief reasons organization fail?

emphasizing labor productivity in labor-intensive environments. (In labor-intensive environments, emphasizing labor productivity is a good idea.)

For an organization to grow its market share, it must:

exceed minimum standards of acceptability for its products or services

Measurement taken at various points in the transformation process for control purpose are called:

feedback. (Feedback is used to monitor and improve processes.)

Improving cash flow would be a reasonable thing to focus on when trying to overcome a _________ constraint.

financial (If additional funds are needed, working to improve cash flow, borrowing, and issuing stocks or bonds may be options to overcome such a financial constraint.)

In an environment in which demand is both substantial and stable, __________ technology tends to be the best choice.

fixed automation (Fixed automation is the least flexible, but low cost and high volume are its primary advantages.)

When the output is less than the optimal rate of output, the average unit cost will be:

higher (At too low a volume, fixed costs are too burdensome.)

Which of the following would not be a potential upside in a decision to outsource?

knowledge sharing (Loss of direct control over operations, knowledge sharing, and the possible need to disclose proprietary information are three risks of outsourcing.)

The assessment of the environmental impact of a product or service throughout its useful life is called

life cycle analysis ( is also known as cradle-to-grave assessment.)

Value added can be calculated by:

outputs minus input (value added represents the change in value of the original inputs)

Managing the supply chain has become more important as a result of firms increasing their levels:

outsourcing. (Firms are increasing their levels of outsourcing, increasing the need to manage the supply chain.)

The ratio of good output to quantity of raw material input is called

process yield. (The is sometimes a useful productivity measure in service industries.)

Which of the following is not a factor that affects productivity?

product price (These don't lead to fundamental changes in operations)

Competitiveness doesn't include:

profitability (A company can be competitive relative to similar companies and still be unprofitable if the competitive environment is inherently unprofitable.)

The structural approach for integrating customer requirements into every aspect of product development is known as:

quality function deployment (brings the voice of the customer into the product development process.)

Which of these factors would not be subtracted from design capacity when calculating effective capacity?

scheduling problems personal time equipment maintenance changing the mix of products (Effective capacity reflects all of the above issues, including required personal time, maintenance issues, scrap, and the length of given workday)

Job shops tend to be __________ while continuous processes tend to be __________.

small scale and flexible; large-scale and inflexible (Job shops tend to be much smaller and more flexible than continuous processes)

Product design and choice of location are examples of_______ decisions

strategic. (These decisions are made high in the hierarchy.)

Where a firm located would typically not affect that firm's

strategy. (Typically, strategy dictates where firms will locate, rather than location dictating strategy.)

Which of the following most involves coordinating the activities among all the elements of business

supply chain management (involves a broader systemic view of operations)

Taking a systems viewpoint with regard to operations in today's environment increasingly leads decision markers to consider____________ in response to the _______

sustainability; threat of global warming (is a relatively recent operations management consideration)

Product design and process selection are examples of ______ decisions

system design. (These major decisions affect decisions made at lower levels.)