BUS 384 all units

Ensuring consumer safety in using goods and services is an example of _____ sustainability. a. social b. economic c. political d. environmental

a. social

In a process design, a _____ is a specific unit of work required to create an output. a. task b. matrix c. value chain d. portfolio

a. task

_________ is the interval between successive outputs coming off the assembly line. a. Idle time b. Cycle time c. Lack-of-work delay d. Blocking delay

b. Cycle time

___ allows all parts of the value chain to immediately recognize and react to changes in demand and supply. a. Super-precision manufacturing b. Rapid prototyping c. Descriptive analytics d. Electronic transaction capability

d. Electronic transaction capability

An automobile emissions testing center has six inspectors and tests 50 vehicles per hour. Each inspector can inspect 12 vehicles per hour. How many inspectors would the center require to have a target utilization of 90 percent? Round your answer up to the next whole number. a. Two b. Three c. Seven d. Five

d. Five

___ layouts usually require a high level of planning and control compared with other types of facility layouts. a. Product b. Process c. Cellular d. Fixed-position

d. Fixed-position

__ consist of two or more computer-controlled machines or robots linked by automated handling devices such as transfer machines, conveyors, and transport systems. a. Computer-aided engineering (CAE) systems b. Computer-aided design (CAD) systems c. Enterprise planning systems (EPSs) d. Flexible manufacturing systems (FMSs)

d. Flexible manufacturing systems (FMSs)

___ refers to acquiring capabilities toward distribution, or even customers. a. Contract manufacturing b. Outsourcing c. Backward integration d. Forward integration

d. Forward integration

_______ in the GAP model is the discrepancy between actual manufacturing and service-delivery system performance and external communications to the customers. a. Gap 1 b. Gap 2 c. Gap 3 d. Gap 4

d. Gap 4

Which of the following is an example of a general management process in a business? a. Research and development b. Inventory management c. Technology acquisition d. Human resource management

d. Human resource management

The principles of customer focus, leadership, engagement, process approach, improvement, evidence-based decision making, and relationship management support the __________. a. Gap model b. Deming philosophy c. Crosby's Absolutes of Quality Management d. ISO

d. ISO

Performance measures should support customer requirements. a. True b. False

a. True

Brenda is planning a vacation to an exotic island. Though she has pre-planned her accommodation and itinerary, she is unsure of how the vacation will turn out. In this case, Brenda's vacation is high in _____ attributes. a. search b. experience c. credence d. variant

b. experience

______is the process of translating aggregate plans into short-term operational plans that provide the basis for weekly and daily schedules and detailed resource requirements. a. Aggregation b. Execution c. Disaggregation d. Enterprise resource planning

c. Disaggregation

A high average inventory value reduces the chances of inventory obsolescence. a. True b. False

b. False

The style and fit of a jacket can be classified as a(n) _____ attribute. a. search b. experience c. credence d. variant

a. search

In the context of service-delivery system design, which of the following establishments depends on good location decisions? a. A health club b. An ice-cream factory c. An insurance claim processing center d. A distribution center

a. A health club

Megan plans the facility layout of her new shop that would sell a variety of healthcare industry machines. She arranges the machines in a way that the machines are grouped according to their functions. Which of the following types of facility layouts has Megan used in her shop? a. A process layout b. A product layout c. A cellular layout d. A fixed-position layout

a. A process layout

Which of the following is true of customer relationship management (CRM)? a. A typical CRM system includes market segmentation and analysis. b. It helps firms gain competitive advantage by making counterfeit knock-offs of genuine products. c. It encourages the production of standardized goods for all customers to reduce manufacturing costs. d. A CRM system prohibits firms from bundling goods and services together.

a. A typical CRM system includes market segmentation and analysis

Which of the following is a core philosophy of Six Sigma? a. Achieving cycle time reduction b. Increasing non-value-added activities c. Avoiding errors per million opportunities as a standard metric d. Increasing variation in cash flow

a. Achieving cycle time reduction

A _____ layout is an arrangement based on the sequence of operations that is performed during the manufacturing of a good or delivery of a service. a. product b. process c. cellular d. fixed-position

a. product

__________is the process of determining the amount of labor and machine resources required to accomplish the tasks of production on a more detailed level, taking into account all component parts and end items in the materials plan. a. Capacity requirements planning b. Materials requirements planning explosion c. Disaggregation d. Execution

a. Capacity requirements planning

_ represent the strategic emphasis that a firm places on certain performance measures and operational capabilities within a value chain. a. Competitive priorities b. Order satisfiers c. Search attributes d. Order winners

a. Competitive priorities

A _____ is a characterization of product growth, maturity, and decline over time. a. product life cycle b. service blueprint c. value stream map d. product-process matrix

a. product life cycle

___ is concerned with improving productivity and safety by designing workplaces, equipment, instruments, computers, workstations, and so on that take into account the physical capabilities of people. a. Ergonomics b. Employee motivation c. Job design d. Job enrichment

a. Ergonomics

In the context of the triple bottom line (TBL), which of the following is a performance measure of economic sustainability? a. Fines for environmental violations b. Corporate ethics and governance c. Revenue from new goods and services d. Measures of perceived value

a. Fines for environmental violations

_____ refers to equipment and devices that perform a variety of tasks in the creation and delivery of goods and services. a. Hard technology b. Soft technology c. A database system d. A neural network

a. Hard technology

Which of the following statements is true of the Deming cycle? a. It institutes a top-down management style, in which the leadership comes from the executives, and all other levels of employees must follow their commands. b. It refers to the repetition required in order to create a perfect process that leads to zero defective products and 100% customer satisfaction. c. It involves a series of trials, after which the best process is selected. d. It guides teams to develop an improvement plan, try it out, examine the results, and institute changes, then repeat the cycle.

a. It institutes a top-down management style, in which the leadership comes from the executives, and all other levels of employees must follow their commands.

Identify a true statement about kaizen. a. It is based on the concept of continuous improvement. b. It focuses on short-term impact. c. It is performed on a part-time basis. d. It involves a huge financial investment.

a. It is based on the concept of continuous improvement.

According to Professor Terry Hill's generic strategy framework, which of the following statements is true of the first loop? a. It ties together an organization's corporate strategy and marketing strategy. b. It describes how operations evaluate the implications of competitive priorities in terms of process choice. c. It determines if process choice decisions are consistent with infrastructure decisions. d. It represents operations' input into the corporate and marketing strategy.

a. It ties together an organization's corporate strategy and marketing strategy.

is the ability to provide goods and services to customers with minimum waste and maximum utilization of resources. a. Operational efficiency b. Volume flexibility c. Reliability d. Sustainability

a. Operational efficiency

_____ are the decisions management must make as to what type of process structure is best suited to produce goods or create services. a. Operations design choices b. Competitive priorities c. Core competencies d. Credence attributes

a. Operations design choices

Which of the following is true of order amplification? a. Order amplification in the supply chain leads to the bullwhip effect. b. Large order sizes can help manage order amplification. c. Order amplification decreases as one moves back up the supply chain away from the retail customer. d. Increasing price fluctuations can help manage order amplification.

a. Order amplification in the supply chain leads to the bullwhip effect.

In the context of the types of performance measures, which of the following is a measure of innovation and learning? a. Patent applications b. Employee retention c. Product recalls d. Labor productivity

a. Patent applications

________is inventory that has been ordered but is in transit. a. Pipeline inventory b. Decoupling inventory c. Buffer inventory d. Anticipation inventory

a. Pipeline inventory

____ are costs expended to keep nonconforming goods and services from being made and reaching the customer. a. Prevention costs b. Appraisal costs c. Internal failure costs d. External failure costs

a. Prevention costs

___ are large-scale, customized initiatives that consist of many smaller tasks and activities that must be coordinated and completed to finish on time and within budget. a. Projects b. Flow shops c. Continuous flow processes d. Assembly line processes

a. Projects

_____is the willingness to help customers and provide prompt recovery to service upsets. a. Responsiveness b. Empathy c. Assurance d. Reliability

a. Responsiveness

_______refers to managing the flow of finished goods, materials, or components that may be unusable or discarded through the supply chain from customers toward either suppliers, distributors, or manufacturers for the purpose of reuse, resale, or disposal. a. Reverse logistics b. Response management c. Process design d. Scheduling

a. Reverse logistics

__ is a measure of the contribution margin required to deliver a good or service as the business grows and volumes increase. a. Scalability b. Soft c. Assistive d. Adaptive

a. Scalability

In the context of service-encounter design, giving discounts to employees is a form of _____. a. recognition b. guarantee c. assurance d. compensation

a. recognition

The _____ is based on a set of cause-and-effect linkages between internal and external performance, and in this fashion, defines the key performance measurements on which service-based firms should focus. a. Service-Profit Chain model b. value chain model c. balanced scorecard d. Malcolm Baldrige Performance Excellence program

a. Service-Profit Chain model

_________ is a business improvement approach that seeks to find and eliminate causes of defects and errors in manufacturing and service processes by focusing on outputs that are critical to customers, resulting in a clear financial return for the organization. a. Six Sigma b. The GAP model c. Poka-yoke d. A kaizen event

a. Six Sigma

____ refers to an organization's ability to strategically address current business needs and successfully develop a long-term strategy that embraces opportunities and manages risk for all products, systems, supply chains, and processes to preserve resources for future generations. a. Sustainability b. Scalability c. Scheduling d. Forecasting

a. Sustainability

Which of the following is a challenge of adopting technology? a. Technology leads to job shift and displacement. b. The use of technology reduces product quality. c. Technology deteriorates the standard of living of the world. d. The use of technology disintegrates supply and value chain players.

a. Technology leads to job shift and displacement.

Which of the following performance perspectives in the balanced scorecard model measures the ultimate value that a business provides to its shareholders? a. The financial perspective b. The internal perspective c. The learning perspective d. The customer perspective

a. The financial perspective

Which of the following lot sizing rules is best applied when setup or order costs are high? a. The fixed-order quantity rule b. The lot-for-lot rule c. The periodic-order quantity rule d. The gross requirements rule

a. The fixed-order quantity rule

Which of the following is true of radio-frequency identification (RFID) tags? a. They can bring visibility and enhanced security to the handling and transportation of products. b. They are used to segment markets based on demographic and behavioral characteristics. c. They are used to create customized goods and services and deliver them faster at lower prices. d. They can help small companies create counterfeit knock-offs of genuine products.

a. They can bring visibility and enhanced security to the handling and transportation of products.

In the context of the pre- and postproduction services perspective of a value chain, which of the following statements is true of preproduction services? a. They focus on gaining a customer. b. They include on-site installation and application services. c. They focus solely on keeping an existing customer. d. They include recycling and remanufacturing initiatives.

a. They focus on gaining a customer

Which of the following statements is true of service employees? a. They require good human interaction skills and strong cross-selling skills. b. They perform mechanized and rigid processes. c. They have little or no interaction with customers. d. They rely more on hard technology than soft technology to perform work.

a. They require good human interaction skills and strong cross-selling skills.

Actionable measures are not bound by time. a. True b. False

a. True

All processes and functional areas participate in the reengineering efforts of a firm. a. True b. False

a. True

Cash-to-cash conversion cycle is the average time to convert a dollar spent to acquire raw materials into a dollar collected for a finished good. a. True b. False

a. True

Enterprise resource planning (ERP) systems integrate all aspects of a business into a unified information system. a. True b. False

a. True

Import tariffs help in preventing the dumping of low-cost products in the domestic economy. a. True b. False

a. True

In industries where jobs have low skill requirements, changing workforce levels can be cost effective. a. True b. False

a. True

Supply chain optimization includes minimizing the total costs of manufacturing and transportation. a. True b. False

a. True

The cost of quality refers specifically to the costs associated with avoiding poor quality or those incurred as a result of poor quality. a. True b. False

a. True

Compared to product layouts, process layouts: a. require a lower investment in equipment. b. provide less flexibility. c. have high equipment utilization. d. have less materials-handling costs.

a. require a lower investment in equipment.

A tracking signal provides a method for monitoring a forecast by quantifying _____. a. bias b. throughput c. probability d. validity

a. bias

The Pharmaceutical Manufacturers Association defines a _____ as one that, after extensive investigation, is found to provide material of such quality that routine testing on each lot received is unnecessary. a. certified supplier b. contract manufacturer c. licensed franchisor d. return facilitator

a. certified supplier

A(n) _____ is an example of soft technology. a. database system b. bar-code scanner c. image sensor d. radio-frequency identification tag

a. database system

The critical differences between the designs of goods and services lie in the: a. detailed product and process design phases. b. research and analysis phases. c. customer benefit package design and configuration phases. d. market introduction and deployment phases.

a. detailed product and process design phases.

Building a high-performing organization with a capable leadership and workforce is an example of _____ sustainability. a. economic b. technological c. political d. environmental

a. economic

In the context of process design, _____ is defined as the ability to produce the right types and amounts of products as customer demand or preferences change. a. flexibility b. outsourcing c. throughput d. utilization

a. flexibility

A difference between efficient supply chains and responsive supply chains is that responsive supply chains _____. a. focus on flexibility and responsive service b. focus on maximizing efficiencies in process flow c. seek to balance capacity and demand, resulting in low levels of inventory d. seek to minimize cost of routing products from factory to customers

a. focus on flexibility and responsive service

In a cellular layout, the procedure of classifying parts with similar processing requirements into families is called _____. a. group technology b. traits analysis c. batch processing d. commonality identification

a. group technology

Basic customer expectations are generally considered the minimum performance level required to stay in business and are often called _____. a. order qualifiers b. credence attributes c. experience attributes d. order winners

a. order qualifiers

A _____ is a sequence of activities that is intended to create a certain result, such as a physical good, a service, or information. a. process b. matrix c. variant d. task

a. process

The traditional operations management definition of throughput is: a. the average number of goods or services completed per time period by a process. b. anything in an organization that limits it from moving toward its goal. c. associated with the capacity of a resource such as a machine, employee, or workstation. d. a physical activity in which idle capacity exists.

a. the average number of goods or services completed per time period by a process.

In the context of managing inventories in supply chains, _____ is the time between placement of an order and its receipt. a. the lead time b. a time series c. the changeover time d. a time horizon

a. the lead time

An operations strategy can be defined as: a. the set of decisions across the value chain that supports the implementation of higher-level business strategies. b. a strategy necessary to define the businesses in which a corporation will participate. c. a strategy necessary to develop plans for the acquisition and allocation of resources among businesses. d. the decisions management must make as to what type of process structure is best suited to produce goods or create services.

a. the set of decisions across the value chain that supports the implementation of higher-level business strategies.

A _____ is the underlying pattern of growth or decline in a time series. a. trend b. planning horizon c. forecast error d. bias

a. trend

Non-value-added activities in a process design can be eliminated by: a. using value stream mapping. b. limiting the throughput of all processes. c. adding multiple approval requirements for all transactions. d. increasing process boundaries.

a. using value stream mapping.

The table below shows the data for the number of pair of shoes produced and the cost incurred by Fancy Trends Inc. for the year 2020? Pair of Shoes Produced 150,000 Cost Incurred Direct Labor Cost $60,000 Energy Cost $5,800 Raw Material Cost $42,000 Based on the given data, the productivity of Fancy Trends Inc. for the year 2020 is _____. a. 1 pair/USD b. 1.39 pairs/USD c. 2 pairs/USD d. 2.46 pairs/USD

b. 1.39 pairs/USD

__ is a technique to group tasks among workstations so that each workstation has—in the ideal case—the same amount of work. a. Job enlargement b. Assembly-line balancing c. Cellular manufacturing d. Job enrichment

b. Assembly-line balancing

____ is a noneconomic factor in location decisions. a. Construction b. Availability of labor c. Depreciation and maintenance d. Insurance

b. Availability of labor

Utilization is the average time taken to complete one cycle of a process. a. True b. False

b. False

Which of the following statements is true of mass customization? a. It involves the commercialization of a device, method, or idea that differs from existing norms. b. Flexibility is manifested in mass-customization strategies that are becoming increasingly prevalent today. c. It requires companies to align their operations around quality. d. Goods and services produced by a firm through mass customization are available only in the country where the firm is located.

b. Flexibility is manifested in mass-customization strategies that are becoming increasingly prevalent today.

__ is an example of innovation in services. a. Optical fibers b. Internet banking c. Customer satisfaction surveys d. Smart tags

b. Internet banking

Which of the following is a limitation of a process layout? a. It affects the entire system if any equipment in the layout fails. b. It has higher worker skill requirements. c. It has highly specialized equipment requirements. d. It generally requires a low investment for the production of machines.

b. It has higher worker skill requirements.

Which of the following is a benefit of using technology? a. It increases the number of human service providers in firms. b. It increases quality and productivity of firms. c. It increases opportunities for employee empowerment. d. It makes it easy for customers to change decisions and return goods.

b. It increases quality and productivity of firms.

Which of the following statements is true of a responsive supply chain? a. It works best when demand is stable and predictable. b. It works best when product life cycles are short and change often because of innovation. c. It works best when customers require standardization rather than customization. d. It works best when contribution margins are low.

b. It works best when product life cycles are short and change often because of innovation.

___ are generally produced and delivered as one of a kind or in small quantities, and are designed to meet specific customers' specifications. a. Fixed goods b. Make-to-order goods c. Make-to-stock goods d. Standard goods

b. Make-to-order goods

machine tools enable the machinist's skills to be duplicated by a programmable device that controls the movements of a tool used to make complex shapes. a. Virtual control (VC) b. Numerical control (NC) c. Revision control (RC) d. Movement control (MC)

b. Numerical control (NC)

Which of the following statements is true of operations management (OM)? a. The application of the concepts and methods of OM is limited to the technology industry. b. OM is the only function by which managers can directly affect the value provided to all stakeholders. c. The activities involved in OM focus on creating value solely for external customers. d. OM and its principles are exclusively applicable to firms that produce tangible products.

b. OM is the only function by which managers can directly affect the value provided to all stakeholders.

_____ is the process of having suppliers provide goods and services that were previously provided internally. a. Insourcing b. Outsourcing c. Backward integration d. Forward integration

b. Outsourcing

Which of the following definitions of quality is proposed by Joseph M. Juran? a. Quality means conformance to requirements. b. Quality is fitness for use. c. A product or a service possesses quality if it helps somebody and enjoys a good and sustainable market. d. A product or a service possesses quality if it consistently exceeds customer expectations.

b. Quality is fitness for use.

____ are tiny computer chips that can be placed on shipping containers, individual products, credit cards, prescription medicines, passports, livestock, and even people. a. Bar codes b. Radio-frequency identification tags c. Thermocouples d. Voice-recognition modules

b. Radio-frequency identification tags

In the context of the pre- and postproduction services perspective of a value chain, which of the following are postproduction services of a value chain? a. Purchasing services b. Recycling and remanufacturing initiatives c. Contract negotiations d. Product and service guarantees

b. Recycling and remanufacturing initiatives

_____ sustainability is driven by ethics and human ideals of protecting the planet and its people for the well-being of future generations. a. Environmental b. Social c. Economic d. Political

b. Social

___ technology refers to the application of the Internet, computer programs, and information systems to provide data, information, and analysis to facilitate the creation and delivery of goods and services. a. Hard b. Soft c. Assistive d. Adaptive

b. Soft

____ is an example of a nondurable good. a. An airplane b. Software c. Furniture d. A dishwasher

b. Software

Which of the following is true of fixed-position layouts? a. The changeover requirements are low. b. The automation potential is moderate. c. The volume of product demand is high. d. The equipment utilization is high.

b. The automation potential is moderate.

At which of the following stages are the perceptions of a firm and its goods and services created? a. The process design stage b. The service-encounter design stage c. The customer benefit package configuration stage d. The market introduction and evaluation stage

b. The service-encounter design stage

Which of the following is true of Energy Star-certified products? a. They cannot be salvaged for reuse. b. They exert less demand on electrical power plants. c. They have a higher carbon footprint in the environment. d. They cannot be repaired easily since they use advanced technology.

b. They exert less demand on electrical power plants.

Which of the following is an advantage of pull systems? a. They are efficient even when schedules are missed. b. They minimize inventory and production costs. c. They forecast changes in customer demand. d. They reduce transportation costs.

b. They minimize inventory and production costs.

_ often drive simultaneous improvements in quality, cost, and productivity. a. Credence attributes b. Time reductions c. Corporate strategies d. Mass standardization

b. Time reductions

Competitive advantage can be defined as: a. the ability of customers to properly perform and co-produce their part of a service. b. a firm's ability to achieve market and financial superiority over its competitors. c. a pattern or plan that integrates an organization's major goals, policies, and action sequences into a cohesive whole. d. a firm's ability to commercialize a device, method, or idea that differs from existing norms.

b. a firm's ability to achieve market and financial superiority over its competitors.

A firm that specializes in certain types of goods-producing activities, such as customized design, manufacturing, assembly, and packaging, and works under contract for end users is called a _____. a. third-party logistics provider b. contract manufacturer c. distribution center d. vendor-managed inventory supplier

b. contract manufacturer

When business analytics is used to understand past and current performance, it is called _____ analytics. a. decision b. descriptive c. predictive d. prescriptive

b. descriptive

Dextron, a privately owned computer technology company, provides a wide range of customized laptops to suit the needs of students, corporate professionals, and small business owners. In this case, Dextron's ability to provide a wide range of customized laptops to suit its customers' needs best describes _____. a. volume flexibility b. design flexibility c. budget variance d. manufacturing yield

b. design flexibility

Rues and West Inc. manufactures various electronic goods. It uses mass-customization strategies to make its products available to all consumers at any place in the world. It also manufactures various electronic goods in the same assembly line. Given this information, Rues and West Inc.'s operations are aligned around _____. a. sustainability b. flexibility c. reliability d. durability

b. flexibility

One of the advantages of a product layout is that it: a. can easily accommodate a change in product design. b. has low work-in-process inventories. c. does not usually require highly specialized equipment. d. can easily accommodate new products.

b. has low work-in-process inventories.

A _____ is a basic statistical tool that graphically shows the frequency or number of observations of a particular value or within a specified group. a. flowchart b. histogram c. cause-and-effect diagram d. scatter diagram

b. histogram

The management of Breedlove Communications, a wireless headphone manufacturing company, wants all employees in the organization to contribute to the quality of the firm by setting a long-term goal to make small, gradual, and frequent improvements without a large financial investment. a. the Gap model b. kaizen c. Six Sigma d. the 5-Why Technique

b. kaizen

At Ritufa Food Corp., flexibility is the key competitive priority. Food products are manufactured according to customers' requirements, at any volume and globally delivered at any time. Given this information, Ritufa Food Corp.'s operations strategy is based on _____. a. compensation b. mass customization c. mass standardization d. cost reduction

b. mass customization

Applying Professor Terry Hill's generic strategy framework to McDonald's, the operating design choices of resource scheduling, inventory placement and control, and standardized operational and job procedures best relate to the corporate objective of _____. a. profitable growth b. operational excellence c. operational sustainability d. operational diversity

b. operational excellence

Organizations that need the ability to provide a wide variety of services to customers with differing requirements usually use a _____. a. cellular layout b. process layout c. fixed-position layout d. product layout

b. process layout

One of the differences between product layouts and process layouts is that unlike product layouts, process layouts: a. require highly specialized equipment. b. provide more flexibility. c. have higher automation potential. d. have less materials-handling costs

b. provide more flexibility.

Greyon Suits, a company that specializes in making hand-made suits, moved its sourcing and operations from Lumeria back to its home country. This led to easier management and decreased carbon footprint. In this case, Greyon Suits is involved in _____. a. offshoring b. reshoring c. insourcing d. outsourcing

b. reshoring

Huran Co., a food manufacturer, encountered a blown fuse during manufacturing. Although they were able to fix it and resume operations, they used the 5-Why Technique to determine the _____ of the problem. a. poka-yoke b. root cause c. long-term effect d. symptom

b. root cause

In the context of data patterns in a time series, _____ are characterized by repeatable periods of ups and downs over short periods of time. a. random variations b. seasonal patterns c. cyclical patterns d. irregular variations

b. seasonal patterns

In the context of inventory costs, _____ costs can reflect backorders or service interruptions for external customers. a. holding b. stockout c. ordering d. setup

b. stockout

A capacity _____ strategy matches capacity additions with demand as closely as possible. a. lag b. straddle c. lead d. reduction

b. straddle

The time required to ramp up to an increased production output level in response to a surge in the sales of a product is a measure of _____. a. budget variance b. volume flexibility c. product recalls d. service upset

b. volume flexibility

Rues and West Inc. is an automobile manufacturing firm. It produces and assembles all the parts of automobiles in its factory and, later, ships the finished products to its storehouses. The managers at the storehouses distribute the goods to wholesalers. Customers then buy the products from the wholesalers. In this scenario, the push-pull boundary for Rues and West Inc. is at the _____. a. factory b. wholesalers c. storehouses d. assembly section

b. wholesalers

TekSupply Inc., an automobile parts supplier, held an average automobile parts inventory of $4 million last year. Its cost of goods sold was $25 million. Therefore, the automobile parts experienced an inventory turnover of _____ turns last year. a. 2.5 b. 4.25 c. 6.25 d. 9.5

c. 6.25

A _____ is a symbol used in process maps to denote an input or arrival into a process. a. diamond b. bold-dashed line c. double-headed arrow d. rectangle

c. double-headed arrow

Isa is head of housekeeping services at the Ashworth Hotel, a luxury hotel and resort. Last week, she received 29 customer complaints. A total of 428 guests had stayed in the hotel that week. Given this information, find out the errors per million opportunities. a. 400 errors per million opportunities b. 23,456 errors per million opportunities c. 67,757 errors per million opportunities d. 14,758,620 errors per million opportunities

c. 67,757 errors per million opportunities

FancyTrends Inc., a handbag manufacturing company, assembles handbags in an assembly line using 10 workstations. The target output for an 8 hour workday is 120 bags. The sum of the task times is 30 minutes/bag. The cycle time is 4 minutes/bag. The assembly-line efficiency is _____. a. 65% b. 70% c. 75% d. 80%

c. 75%

doctor's office charges no-show patients $30 if they do not cancel their appointment 24 hours prior to the appointment. In this scenario, which of the following can be used by the doctor's office to handle the risk of idle service capacity? a. A capacity straddle strategy b. A capacity lag strategy c. A revenue management system d. A pull system

c. A revenue management system

___ is a common approach to gather data for judgmental forecasts. a. A moving average model b. Regression analysis c. A survey questionnaire d. Single exponential smoothing

c. A survey questionnaire

Which of the following companies is most likely to have a true understanding of customer wants and needs? a. Harlose Suits, where customer benefit packages include more order qualifiers than order winners b. Magnira Jewelry, where all customers are provided with the same type of jewelry c. Blyrie Apparels, where customers are segmented into groups based on buying behavior and demographics d. Scorla Automobiles, where customers are provided with low quality products at prices slightly lower than the standard prices

c. Blyrie Apparels, where customers are segmented into groups based on buying behavior and demographics

_____ inventory is inventory that results from purchasing or producing in larger lots than are needed for immediate consumption or sale. a. Finished-goods b. Stockout c. Cycle d. Work-in-process

c. Cycle

_____ refers to using the Internet and technology to provide facilities that create and deliver time, place, information, entertainment, and exchange value to customers and support the sale of goods. a. External distribution b. Complex c. E-service d. Multinational

c. E-service

According to research, which of the following is a key dimension that customers use to assess service quality? a. Operational efficiency b. Flexibility c. Empathy d. Queue time

c. Empathy

Identify a true statement about the GAP model. a. It defines quality system standards based on the premise that certain generic characteristics of management practices can be standardized. b. Minimizing gaps 4 and 5 will result in low customer satisfaction. c. Failure to understand and minimize gaps presents the risk of losing customer loyalty. d. It eliminates causes of defects and errors in manufacturing and service processes by focusing on outputs that are critical to customers

c. Failure to understand and minimize gaps presents the risk of losing customer loyalty.

Which of the following is a difference between firms that have high scalability and firms that have low scalability? a. Firms with high scalability incur extremely low fixed costs, whereas firms with low scalability incur extremely high fixed costs. b. Firms with high scalability have variable costs as 80 to 85 percent of total costs, whereas firms with low scalability have variable costs as zero to five percent of total costs. c. Firms with high scalability serve additional customers at extremely low incremental costs, whereas firms with low scalability serve additional customers at high incremental variable costs. d. Firms with high scalability have a low contribution margin, whereas firms with low scalability have a high contribution margin.

c. Firms with high scalability serve additional customers at extremely low incremental costs, whereas firms with low scalability serve additional customers at high incremental variable costs.

_ is the discovery and practical application or commercialization of a device, method, or idea that differs from existing norms. a. Measurement b. Learning c. Innovation d. Diversity

c. Innovation

_______ are costs incurred as a result of unsatisfactory quality that is found before the delivery of a good or service to the customer. a. Prevention costs b. Appraisal costs c. Internal failure costs d. External failure costs

c. Internal failure costs

Which of the following is true of the House of Quality? a. It contains supplier estimations. b. It fails to incorporate customer requirements. c. It contains key selling points and features. d. It does not incorporate competitive evaluations.

c. It contains key selling points and features.

Which of the following statements is true of a process map? a. It distorts the boundaries of a process. b. Including non-value-added activities in a process map is one of the important responsibilities of operations managers. c. It documents how work either is or should be accomplished. d. Adding multiple approval requirements for all transactions in a process map is a crucial part in the creation of the process map.

c. It documents how work either is or should be accomplished.

____ is a key activity performed by operations managers that involves deciding the best way to assign people to work tasks and responsibilities. a. Forecasting b. Process design c. Job design d. Reengineering

c. Job design

____ are configurations of standard parts, subassemblies, or services that can be selected by customers from a limited set. a. Fixed goods b. Custom goods c. Option goods d. Standard goods

c. Option goods

___ should begin immediately after a service upset occurs and when the customer is visibly upset. a. Service guarantee b. Servicescape design c. Service recovery d. Service process design

c. Service recovery

Which of the following is a quality performance measure at an operational level? a. Customer ratings of goods and services b. Customer retention c. Service representative courtesy d. Product recalls

c. Service representative courtesy

___ are used by operations managers to plan production schedules and assign workers to jobs. a. Balanced scorecards b. Intermediate-range forecasts c. Short-range forecasts d. Credit scorecards

c. Short-range forecasts

In the context of the triple bottom line (TBL), which of the following measures includes the number of ethical violations? a. Responsiveness b. Service quality c. Social sustainability d. Customer retention rate

c. Social sustainability

Jones and Johnson, a law firm, is expanding to incorporate three conference rooms and two executive waiting lounges in its office. Which of the following dimensions of servicescape is the firm addressing? a. Ambient conditions b. Market deployment and evaluation c. Spatial layout and functionality d. Signs, symbols, and artifacts

c. Spatial layout and functionality

In location decision process, which of the following factors are considered in local site location decision? a. International monetary policy b. Time zones c. Sustainability issues d. Foreign languages

c. Sustainability issues

Which of the following statements is true of the service-positioning matrix (SPM)? a. The horizontal axis of the SPM reflects the number of pathways built into a service system design by management. b. The SPM mainly focuses on the alignment of process choice with the characteristics of the manufactured good. c. The SPM helps management design a service system that best meets the technical and behavioral needs of customers. d. The vertical axis of the SPM denotes the repeatability of a customer's service-encounter activity sequence.

c. The SPM helps management design a service system that best meets the technical and behavioral needs of customers.

Which of the following is true of reengineering? a. Reengineering increases the number of non-value-added activities in a process design. b. Reengineering decreases throughput by adding process bottlenecks. c. The goal of reengineering is to achieve quantum leaps in performance. d. The aim of reengineering is to focus on quality by adding multiple approval requirements for all transactions.

c. The goal of reengineering is to achieve quantum leaps in performance.

Which of the following is a difference between flow shops and job shops? a. Unlike flow shops, job shops require little or no setup time. b. Unlike flow shops, job shops are organized around a fixed sequence of process steps. c. Unlike flow shops, job shops require frequent machine changeovers and delays. d. Unlike flow shops, job shops produce many large-volume goods and services.

c. Unlike flow shops, job shops require frequent machine changeovers and delays.

Valuetronics, an electronics company, is currently in the preproduction stage of launching one of its new stereo systems. In order to analyze the feasibility of the product, Valuetronics adopts an integrated system that allows it to manufacture the product before it physically exists, that is, the system allows Valuetronics to finalize the design of the stereo, analyze it, and do a test-run. In this context, Valuetronics is using a(n) _____. a. enterprise resource planning (ERP) system b. flexible manufacturing system (FMS) c. computer-aided engineering (CAE) system d. computer-aided manufacturing (CAM) system

c. computer-aided engineering (CAE) system

Eric is admitted to a hospital to undergo a surgery for hernia. He is unable to discern the expertise of his surgeon before the surgery nor evaluate the quality of the service after the surgery. In this case, the expertise of Eric's surgeon is an example of a(n) _____ attribute. a. search b. experience c. credence d. variant

c. credence

Unlike the customer benefit package design and configuration stage of designing goods and services, the detailed goods, services, and process design: a. is more conceptual in nature. b. is more strategic in nature. c. focuses on implementation. d. focuses on the evaluation of quality.

c. focuses on implementation.

In the context of service-encounter design, high-contact systems would most commonly be found in: a. distribution systems. b. process designs. c. front office operations. d. construction services.

c. front office operations.

In the context of quality function deployment, one of the first steps to build the House of Quality is to: a. advertise, market, and offer the product to customers. b. evaluate the marketplace. c. identify the technical features of the design of the product. d. conduct prototype testing.

c. identify the technical features of the design of the product.

Management strategies to improve process designs of services focus on: a. decreasing process costs by adding multiple approval requirements for all transactions. b. decreasing process bottlenecks by adding non-value-added activities to a process. c. increasing product and service quality by reducing defects and service upsets. d. increasing agility by making service processes mechanistic and controlled.

c. increasing product and service quality by reducing defects and service upsets.

Bueller Tractors, a few machines in the assembly section were faulty and had to be shut down till they were repaired. This reduced the output of tractors for the quarter. In this case, the costs incurred by Bueller Tractors for repairing the machines are an example of _____. a. prevention costs b. appraisal costs c. internal failure costs d. external failure costs

c. internal failure costs

One of the disadvantages of a product layout is that it has: a. high materials handling. b. high work-in-progress inventory. c. low flexibility. d. low labor utilization.

c. low flexibility.

Unlike firms that outsource, firms engaged in offshoring: a. manage to reduce travel expenses. b. are able to enforce intellectual property rights easily. c. maintain ownership of the facility in another country. d. have better control on quality.

c. maintain ownership of the facility in another country.

Jane is planning to go on a camping trip. She purchases a bottle of mineral water, a pack of biscuits, a small tube of toothpaste, and a toothbrush from the supermarket near her house. The items that Jane has purchased from the supermarket are _____ goods. a. hard b. durable c. nondurable d. intangible

c. nondurable

Sustainability is best described as a(n) _____. a. idea that differs from existing norms b. pattern that integrates an organization's major goals c. organizational strategy d. competitive priority

c. organizational strategy

In the context of customer benefit packages, _____ services are those that are not essential to the primary service, but enhance it. a. core b. tertiary c. peripheral d. central

c. peripheral

Jason and his friend went to a coffee shop. They ordered two cappuccinos and received a complimentary chocolate waffle and cookie along with their order. In the context of a customer benefit package (CBP), the chocolate waffle and the cookie are _____. a. intangible products b. core offerings c. peripheral goods d. primary goods

c. peripheral goods

A _____ is the beginning or end of a process. a. process design b. process map c. process boundary d. process bottleneck

c. process boundary

In an assembly line of a factory that makes gears, it takes fifteen minutes to complete a drilling operation using a lathe. The duration of this operation is called _____ time. a. delay b. queue c. processing d. standard

c. processing

A _____ consists of dynamic methods to forecast demand, allocate perishable assets across market segments, decide when to overbook and by how much, and determine what price to charge different customer classes. a. focused factory b. work order c. revenue management system d. nonbottleneck work activity

c. revenue management system

The _____ provides the behavioral setting where service encounters take place. a. facility location b. service process and job design c. servicescape d. value chain model

c. servicescape

In the context of the servicescape, in the service-delivery system design, building footprints are examples of: a. ambient conditions. b. artifacts. c. spatial layout and functionality. d. signs and symbols.

c. spatial layout and functionality.

Prior to designing and configuring a customer benefit package, a firm should understand and develop its: a. goods, services, and process design in detail. b. processes and service encounter design. c. strategic mission and competitive priorities. d. marketplace deployment techniques.

c. strategic mission and competitive priorities.

Customer relationship management (CRM) helps firms gain and maintain competitive advantage by: a. encouraging them to produce standardized goods. b. merging all demographic-based and behavior-based segments of markets. c. studying which goods and services are purchased together. d. prohibiting them from bundling goods and services together.

c. studying which goods and services are purchased together.

For manufactured goods, design blueprints specify a target dimension, along with a range of permissible variation called the _____. a. nominal b. buffer c. tolerance d. leeway

c. tolerance

The innovation and learning perspective in the balanced scorecard model includes measures such as: a. return on investment, economic value added, and shareholder value. b. number of cooperative customer-company design initiatives and percent of sale from new services. c. training hours per employee, hiring process effectiveness, and revenue per employee. d. service-quality levels, design and demand flexibility, and asset utilization.

c. training hours per employee, hiring process effectiveness, and revenue per employee.

____ is a network of facilities and processes that describes the flow of materials, finished goods, services, information, and financial transactions from suppliers, through the facilities and processes that create goods and services, and those that deliver them to the customer. a. product-process matrix b. product life cycle c. value chain d. business cycle

c. value chain

The "Wi" typically used in the numerator and denominator of the center-of-gravity equations represents the__________. a. quality of goods or services moved to or from location i b. x coordinate of location i c. volume of goods or services moved to or from location i d. y coordinate of location i

c. volume of goods or services moved to or from location i

Which of the following is considered an order winner in an automobile? a. A comfortable seating arrangement that is similar to other automobiles b. A driver-side air bag that most high-end automobiles have c. A good-quality radio particular to that brand of automobile d. A collision avoidance system particular to that design of automobile

d. A collision avoidance system particular to that design of automobile

Which of the following types of facility layouts is best suited for a heavy machine tools factory? a. A product layout b. A process layout c. A cellular layout d. A fixed-position layout

d. A fixed-position layout

Identify the most suitable layout for a facility that handles a wide variety of customized orders. a. A fixed-position layout b. A cellular layout c. A product layout d. A process layout

d. A process layout

________ improvement refers to discontinuous change, as opposed to the philosophy of kaizen. a. Dynamic b. Procedural c. Benchmarking d. Breakthrough

d. Breakthrough

___ is the explicit consideration of ecological concerns during the design of goods, services, and processes, and includes such practices as designing for recycling and disassembly. a. Quality function deployment b. Service-encounter design c. Environmental intervention d. Design for Environment

d. Design for Environment

____ refers to raw materials, work-in-process, or finished goods that are maintained to support production or satisfy customer demand. a. Throughput b. A variant c. A subsidy d. Inventory

d. Inventory

Identify a true statement about International Organization for Standardization (ISO) 9000. a. It states that generic management practices can never be standardized. b. Its standards do not apply to services such as health care, banking, and transportation. c. It is the first version of the ISO family of standards. d. Its standards apply to all types of businesses, including electronics and chemicals

d. Its standards apply to all types of businesses, including electronics and chemicals

___ is vertical expansion of job duties to give the worker more responsibility. a. Employee empowerment b. Job enlargement c. Employee recognition d. Job enrichment

d. Job enrichment

___ are organized around particular types of general-purpose equipment that are flexible and capable of customizing work for individual customers. a. Assembly line processes b. Flow shop processes c. Continuous flow processes d. Job shop processes

d. Job shop processes

Which of the following is a financial performance measure at an organizational level? a. Cost of quality b. Revenue and profit c. Budget variance d. Labor and material costs

d. Labor and material costs

____ is the process by which a model (real or simulated) is constructed to assess a product's performance under actual operating conditions, as well as consumer reactions to the model. a. Quality function deployment b. Value engineering c. Detailed product design d. Prototype testing

d. Prototype testing

_ measures the degree to which the output of a process meets customer requirements. a. Learning b. Innovation c. Variability d. Quality

d. Quality

_____ can be attached to objects and used to track and manage inventory and assets. a. Proximity cards b. Nanofountain probes c. Resistance-temperature detectors d. Radio-frequency identification tags

d. Radio-frequency identification tags

______specialize in handling all aspects of customers giving back a manufactured good or delivered service and requesting their money back, repairing the manufactured good and giving it to the customer, and/or invoking the service guarantee. a. Certified suppliers b. Process designers c. Demand forecasters d. Return facilitators

d. Return facilitators

Which of the following performance perspectives in the balanced scorecard model includes measures such as productivity, flow time, and asset utilization? a. The financial perspective b. The customer perspective c. The innovation and learning perspective d. The internal perspective

d. The internal perspective

Which of the following is true of flow shop processes? a. They produce low volumes of custom goods and services. b. They are large-scale, customized initiatives with wide variations in tasks. c. They have high setup or changeover time. d. They are organized around a fixed sequence of activities and process steps.

d. They are organized around a fixed sequence of activities and process steps.

Identify a true statement about responsive supply chains. a. They use only a few, large distribution centers to generate economies of scale. b. They use optimization models that minimize costs of routing products from factory through distribution centers to retail stores and customers. c. They are designed for efficiency and low cost by minimizing inventory and maximizing efficiencies in process flow. d. They are supported by information technology that provides real-time information to managers across the supply chain.

d. They are supported by information technology that provides real-time information to managers across the supply chain.

Which of the following is a disadvantage of push systems? a. They are not effective when sales patterns are consistent. b. They are not effective when there are few distribution centers and products. c. They increase transportation costs in a supply chain. d. They result in higher costs when forecasting sales is difficult.

d. They result in higher costs when forecasting sales is difficult.

A gracious welcome by an employee at the hotel check-in counter is an example of: a. social sustainability. b. predictive analytics. c. a service blueprint. d. a moment of truth.

d. a moment of truth.

At Blyrie Apparels, the apparel stocks in the firm's outlets are changed every week. This is based on the changing fashion preferences of its customers. Its managers also coordinate in real-time among its other stores and satisfy its customers' requirements. In this case, Blyrie Apparels most likely uses _____. a. the center-of-gravity method b. the push-pull boundary c. an efficient supply chain d. a responsive supply chain

d. a responsive supply chain

Service encounter design is a key activity performed by operations managers that involves: a. managing the flow of materials, information, people, and money from suppliers to customers. b. ensuring that the right amount of resources is available when needed. c. predicting the future demand for raw materials, finished goods, and services. d. determining how to recover from service upsets.

d. determining how to recover from service upsets.

Unlike a focused factory, an unfocused factory is characterized by: a. a few key products. b. particular market segments. c. identical people skills. d. dissimilar product lines.

d. dissimilar product lines.

A _____ produces only what is needed at upstream stages in the supply chain in response to customer demand signals from downstream stages. a. third-party logistics provider b. push system c. pull system d. distribution center

d. distribution center

David runs a bed and breakfast in the outskirts of a big city. His employees are allowed to spend up to $200 to resolve any customer complaints, with no questions asked. This is an example of: a. service guarantee. b. assurance. c. flexibility. d. empowerment

d. empowerment

In the Delphi method of judgmental forecasting, _____. a. predictions are based on the assumption that the future will be an extrapolation of the past b. predictions are based on one or more independent variables, all of which are numerical c. people from outside an organization are not eligible to make predictions d. experts are not consulted as a group to make predictions

d. experts are not consulted as a group to make predictions

In the context of technology in value chains, customer relationship management (CRM): a. enables small firms to make counterfeit knock-offs of genuine products. b. prohibits firms from bundling goods and services together. c. encourages firms to produce standardized goods for all consumers to reduce manufacturing costs. d. exploits the vast amount of data that can be collected from consumers.

d. exploits the vast amount of data that can be collected from consumers.

Josephine's T-Shirts faced a lot of complaints from customers when its recent batch of long-sleeved shirts was dispatched. The employees at Josephine's T-Shirts, hence, had to rework on the returned items, and in some cases, the company had to even replace the faulty goods. In this case, the costs incurred by Josephine's T-Shirts are an example of _____. a. prevention costs b. appraisal costs c. internal failure costs d. external failure costs

d. external failure costs

The production of large goods such as ships is best accomplished using a _____ layout. a. product b. process c. cellular d. fixed-position

d. fixed-position

We Create Inc. is an electronics company. It designs, produces, and assembles desktop gadgets. The entire process is controlled by programmable robots, which are in turn linked to computers. These computers direct the robots to the appropriate task. In this context, We Create Inc. uses a(n) _____ system to produce its goods. a. partner relationship management b. enterprise resource planning c. employee experience management d. flexible manufacturing

d. flexible manufacturing

The bottom of a House of Quality identifies the technical features that: a. are interrelated to each other. b. have the highest competitive performance. c. are the weakest selling points. d. have the strongest relationships to customer requirements.

d. have the strongest relationships to customer requirements.

The fixed costs of WeBuy&Sell.com, an e-commerce website, make up about 90 percent of the total costs incurred by the company. However, since its primary means of communication is web advertising, WeBuy&Sell.com has variable costs as low as 10 percent of its total costs. This allows WeBuy&Sell.com to earn high profits at a very low cost. According to the given scenario, WeBuy&Sell.com has _____ scalability. a. zero b. low c. infinite d. high

d. high

Measures of _____ focus on an organization's people and infrastructure. a. goods and service design flexibility b. customer and market c. service quality d. innovation and learning

d. innovation and learning

The _____ of the House of Quality shows the interrelationships between any pair of technical features. a. bottom b. left c. center d. roof

d. roof

In location decision process, community location decision involves: a. evaluating international monetary policies and cultural practices. b. coping with issues such as tariffs, customs, and trade restrictions. c. choosing a general region of a country. d. selecting a specific city in which to locate.

d. selecting a specific city in which to locate.

The center-of-gravity method is often used to locate _____. a. availability of raw materials b. demand markets c. site locations d. service facilities

d. service facilities

____ is a customer benefit package (CBP) feature that departs from the standard CBP and is normally location specific or firm specific. a. bottleneck b. peripheral product c. core product d. variant

d. variant

Luca, the operations manager a company that produces ground coffee beans, wants to know the sequence of the production process in the company to determine if any process can be combined or eliminated. In this case, a _____ will suit Luca's requirement. a. run chart b. flow chart c. checksheet d. histogram

flow chart

In the context of forecasting, the term _____ refers to the tendency of forecasts to consistently be larger or smaller than the actual values of the time series. a. trend b. bias c. fad d. variability

b. bias

In the Theory of Constraints, a _____ activity is one that effectively limits the capacity of the entire process. a. nonbottleneck b. bottleneck work c. nonphysical d. core process

b. bottleneck work

Which of the following is a way to manage capacity by shifting and stimulating demand? a. Adding peripheral goods and/or services b. Adding or sharing equipment c. Changing labor schedules d. Changing labor skill mix

a. Adding peripheral goods and/or services

Which of the following is true of purchasing? a. It can have a significant impact on total supply chain costs. b. It is critical to satisfy employees' needs and expectations. c. The delivery of goods and services is the responsibility of the purchasing function of a supply chain. d. The principal goal of purchasing is to source products from a single supplier to avoid capacity risks.

a. It can have a significant impact on total supply chain costs.

Which of the following statements is true of setup time? a. It is independent of order size for manufacturing work orders. b. It varies with the volume of work orders. c. It is the most insignificant part of total system capacity. d. It is usually the same for manufacturing and service-providing applications.

a. It is independent of order size for manufacturing work orders.

Which of the following is a disadvantage of vendor-managed inventory (VMI)? a. It often results in higher customer inventories than necessary. b. It does not allow vendors to view inventory needs from the customer's perspective. c. It prohibits the use of customer information, which leads to poor control of inventory and capacity. d. It prevents vendors from making production decisions using downstream customer demand data.

a. It often results in higher customer inventories than necessary.

_________is the discipline of managing the flow of materials and transportation activities to ensure adequate customer service at reasonable cost. a. Logistics b. Scheduling c. Procurement d. Integration

a. Logistics

___ are necessary to plan for facility expansion. a. Long-range forecasts b. Intermediate-range forecasts c. Make-to-order operations d. Make-to-stock operations

a. Long-range forecasts

Technology upgrades and backup systems and sites can help mitigate security risks. a. True b. False

a. True

In the context of a fairly stable time series with relatively little random variability, which of the following statements is true of single exponential smoothing (SES)? a. Values of the smoothing constant larger than 0.5 place more emphasis on recent data. b. Exponential smoothing models completely forget past data if the smoothing constant is strictly between 0 and 1. c. Typical values for the smoothing constant are in the range of 1 to 1.5. d. Values of the smoothing constant smaller than 0.1 allow a forecast to react faster to changing conditions.

a. Values of the smoothing constant larger than 0.5 place more emphasis on recent data.

Forecast _____ is the difference between the observed value of the time series and the forecast. a. error b. consumption c. precision d. density

a. error

In the context of a fixed-order-quantity system, stockouts occur whenever the lead-time demand _____. a. exceeds the reorder point b. exceeds the work-in-process inventory c. becomes equal to the finished-goods inventory d. becomes equal to the break-even point

a. exceeds the reorder point

Nonbottleneck management principles differ from bottleneck management principles because according to nonbottleneck management principles, _____. a. idle time is acceptable if there is no work to do b. an hour lost at a nonbottleneck resource is an hour lost for the entire process or factory output c. large order sizes should be used to minimize setup time and maximize resource utilization d. the input should always exceed the capacity

a. idle time is acceptable if there is no work to do

In the context of fixed-quantity systems, _____ is defined as the on-hand quantity (OH) plus any orders placed but which have not arrived minus any backorders (BO). a. inventory position b. the reorder point c. a stock-keeping unit d. work-in-process inventory

a. inventory position

The lot-for-lot (LFL) rule is best applied when: a. inventory-carrying costs are high. b. space constraints are low. c. costs associated with purchase orders are high. d. setup costs are moderate.

a. inventory-carrying costs are high.

At Rues and West Bros., a spare parts manufacturing company, the most important competitive priority is quality. Only a few key spare parts are produced using similar process designs. In this scenario, Rues and West Bros. _____. a. is a focused factory b. has no throughput c. is an unfocused factory d. uses a mass customization strategy

a. is a focused factory

A capacity _____ strategy is a strategy for expanding capacity that waits until demand has increased to a point where additional capacity is necessary. a. lag b. lead c. reduction d. match

a. lag

In manufacturing, a _____ is a statement of how many finished items are to be produced and when they are to be produced. a. master production schedule b. capacity requirements plan c. materials requirements plan d. planned order receipt

a. master production schedule

Using the data regarding the inventory management of a stock-keeping unit shown in the following table, it can be concluded that the optimal replenishment level with safety stock for a fixed-period system (FPS) under the model assumptions is: Demand - 140 units per week Order Cost - $30 per order Inventory-Holding Cost -$0.4 per unit per year Lead Time - 3 weeks Economic Time Interval - 7 weeks Standard Deviation in Weekly Demand - 8 Acceptable Service Level - 95 percent Standard Deviations to Achieve the Acceptable Service Level - 1.645 a. more than 1,350 but less than 1,550 units. b. more than 1,550 but less than 1,650 units. c. more than 1,650 but less than 1,750 units. d. more than 1,750 but less than 1,850 units.

a. more than 1,350 but less than 1,550 units.

Stable demand is usually called_____ demand. a. static b. overfull c. unwholesome d. dynamic

a. static

The demand for bread in Ahoma City ranges from 100 to 120 tons per day, every day of the year. The demand is easily satisfied on a daily basis. This demand for bread can be categorized as _____. a. static b. overfull c. unwholesome d. dynamic

a. static

In the context of inventory management, a(n) _____ is a single item or asset stored at a particular location. a. stock-keeping unit b. make-to-stock product c. average lead stock d. buffer stock

a. stock-keeping unit

Capacity requirements are computed by multiplying the number of units scheduled for production at a work center by the: a. the unit resource requirements and then adding in the setup time. b. the setup time and then subtracting the unit resource requirements. c. the setup time and then adding in the unit resource requirements. d. the unit resource requirements and then subtracting the setup time.

a. the unit resource requirements and then adding in the setup time.

CraftWare Inc., a furniture manufacturer, uses ABC analysis to define its inventory value. The inventory contains wood, cast iron, adhesive, and carbon fiber. If wood accounts for 50 percent of the items and 5 percent of the total dollar value; carbon fiber accounts for 10 percent of the items and 60 percent of the total dollar value; cast iron accounts for 25 percent of the items and 18 percent of the total dollar value; and adhesive accounts for 15 percent of the items and 17 percent of the total dollar value, _____ can be classified as a class C item. a. wood b. carbon fiber c. cast iron d. adhesive

a. wood

Speedex, an automobile company, has an annual sales volume of $3 million, cost of goods sold equal to $2 million, total average on-hand inventory of $600,000, and 150 operating days in a year. What is the daily revenue earned by the company? a. $10,000 b. $20,000 c. $30,000 d. $40,000

b. $20,000

Magnira Hotels is a leading chain of hotels. Its managers reserve 30% of the rooms available only to the members of its club. They also provide the rooms at subsidized prices to these members. In this scenario, which of the following components of revenue management system is most likely used by Magnira Hotels? a. Investment b. Allocation c. Capacity expansion d. Capacity sharing

b. Allocation

The periodic-order quantity (POQ) can be determined using an economic time interval, which is the economic order quantity (EOQ) divided by _____. a. on-hand inventory b. annual demand c. gross requirements d. total required inventory

b. annual demand

In the context of strategies for expanding capacity, which of the following statements is true of one large capacity increase? a. This strategy aims to match capacity additions with demand as closely as possible. b. An advantage of using this strategy is that the fixed costs of construction and operating system setup need to be incurred only once. c. This strategy waits until demand has increased to a point where additional capacity is necessary. d. When this strategy is used, there is always excess capacity and safety capacity to meet unexpected demand from large orders is provided.

b. An advantage of using this strategy is that the fixed costs of construction and operating system setup need to be incurred only once.

For goods-producing firms, at which of the following levels of resource planning does scheduling for individual subassemblies and resources by week and day take place? a. Aggregate planning b. Disaggregation c. Execution d. Demand forecasting

b. Disaggregation

_____ occur when the average unit cost of a good or service begins to increase as the capacity and/or volume of throughput increases. a. Economies of scale b. Diseconomies of scale c. Demand lags d. Nonphysical constraints

b. Diseconomies of scale

Which of the following is true of a level production strategy? a. Labor schedules are dynamic. b. Equipment schedules are stable. c. There are no capacity restrictions. d. The production rate keeps changing

b. Equipment schedules are stable

Air shipments have the lowest transportation cost and can carry unlimited weight. a. True b. False

b. False

Electronic data interchange and Internet links decrease the velocity of supply chains. a. True b. False

b. False

____ are needed to plan workforce levels, allocate budgets among divisions, and schedule jobs and resources. a. Make-to-order operations b. Intermediate-range forecasts c. Short-range forecasts d. Make-to-stock operations

b. Intermediate-range forecasts

Which of the following is true of the lot-for-lot (LFL) rule? a. It minimizes the costs associated with production setups. b. It ignores the costs associated with purchase orders. c. It maximizes the amount of inventory that needs to be carried. d. It masks the true nature of dependent demand.

b. It ignores the costs associated with purchase orders.

Which of the following statements is true of a work order? a. It is also called the capacity cushion. b. It includes processing requirements for a type of work. c. It cannot be defined for services. d. It does not include resources needed for a type of work

b. It includes processing requirements for a type of work

Which of the following statements is true of a fixed-period system (FPS)? a. It orders a fixed quantity of items when the inventory position reaches or drops below the reorder point (r). b. It orders sufficient stock at the time of review to bring the inventory position up to the replenishment level (M). c. It maintains a constant order quantity every review period. d. It checks the inventory position on a continuous basis.

b. It orders sufficient stock at the time of review to bring the inventory position up to the replenishment level (M).

Whiich of the following is true of a master production schedule (MPS)? a. Its primary output is a time-phased report for scheduling raw materials purchase. b. It provides a means for evaluating alternative schedules in terms of capacity requirements. c. Its input is obtained from the materials requirements planning. d. It projects the requirements for the individual parts based on the demand for the finished goods.

b. It provides a means for evaluating alternative schedules in terms of capacity requirements.

In the context of aggregate planning options, which of the following costs are an implication of allowing stockouts? a. Inventory-carrying costs b. Lost sales and customer loyalty costs c. High labor costs and premiums d. Separation costs

b. Lost sales and customer loyalty costs

______is the process of using the logic of dependent demand to calculate the quantity and timing of orders for all subassemblies and components that go into and support the production of the end item(s). a. Final assembly schedule b. Materials requirements planning explosion c. Disaggregation d. Capacity requirements planning

b. Materials requirements planning explosion

A buyer for a department store orders sweaters about 6 months before the winter season. The store plans to hold a March clearance sale to sell any surplus goods by February 29. Each piece costs $100 per pair and sells for $120 per pair. At the sale price of $60 per pair, it is expected that any remaining stock can be sold during the March sale. Assume that a uniform probability distribution ranging from 250 to 450 items describes the demand. The expected demand is 300. In the context of the single period inventory system, the optimal order size Q must satisfy the condition _____. a. P(demand ≤ Q*) = 1/2 b. P(demand ≤ Q*) = 1/3 c. P(demand ≤ Q*) = 1/4 d. P(demand ≤ Q*) = 1/5

b. P(demand ≤ Q*) = 1/3

____ is a method for building a statistical model that defines a relationship between a single dependent variable and one or more independent variables, all of which are numerical. a. The Delphi method b. Regression analysis c. Judgmental forecasting d. The Cooke method

b. Regression analysis

__ is a forecasting technique that uses a weighted average of past time-series values to forecast the value of the time series in the next period. a. A moving average forecast b. Single exponential smoothing c. A grassroots forecast d. Regression analysis

b. Single exponential smoothing

__ is based on the assumption that the future will be an extrapolation of the past. a. Judgmental forecasting b. Statistical forecasting c. The Delphi method d. The Cooke method

b. Statistical forecasting

Which of the following lot sizing rules bases the order quantity on a standard-size container or pallet load? a. The lot-for-lot rule b. The fixed-order quantity rule c. The periodic-order quantity rule d. The gross requirements rule

b. The fixed-order quantity rule

___ inventory consists of partially completed products in various stages of completion that are awaiting further processing. a. Raw materials b. Work-in-process c. Finished-goods d. Safety stock

b. Work-in-process

Harlose Suits owns more equipment than required for manufacturing goods during periods of regular demand in order to tackle sudden demand surges. It also has a certain reserve of produced goods to tackle material shortages. In this case, the reserve of equipment and produced goods are examples of _____. a. a physical constraint b. the capacity cushion c. overbooking d. capacity straddle

b. the capacity cushion

In service industries, capacity is often viewed as the _____. a. minimum rate of output per unit time b. units of resource availability c. amount of setup time d. amount of overtime scheduled

b. units of resource availability

Which of the following best defines inventory turnover? a. It is the cost associated with repairs of goods that have been returned. b. It is the time taken to fill a customer's order. c. It is a measure of how quickly goods are moving through the supply chain. d. It is a measure of the number of perfect orders.

c. It is a measure of how quickly goods are moving through the supply chain.

In the context of data patterns in a time series, regular patterns in a data series that take place over long periods of time are called _____ patterns. a. orthographic b. seasonal c. cyclical d. parallel

c. cyclical

Moving average (MA) methods work best when: a. a long planning horizon is involved. b. a cyclical pattern is observed in a time series. c. demand is relatively stable and consistent. d. there is a major trend in a time series.

c. demand is relatively stable and consistent.

If the time series in an exponential smoothing model exhibits a negative trend, the _____. a. mean square error will be negative b. value of smoothing constant will either be less than zero or greater than one c. forecast will overshoot the actual values d. future forecasts will rely solely upon expertise of people in developing forecasts

c. forecast will overshoot the actual values

Based on the constant demand assumption in the economic order quantity (EOQ) model, the average cycle inventory is: a. the order quantity divided by the number of inventory cycles per year. b. the annual demand divided by the number of inventory cycles per year. c. half of the order quantity. d. half of the annual usage.

c. half of the order quantity.

Aggregate planning: a. is not driven by demand forecasts. b. includes detailed staff schedules. c. helps in defining budget allocations and associated resource requirements. d. does not translate forecast into production plans.

c. helps in defining budget allocations and associated resource requirements.

In the context of data patterns in a time series, a(n) _____ variation is a one-time variation that is explainable. a. cyclical b. random c. irregular d. seasonal

c. irregular

When no historical data are available, _____ is the sole basis for predicting future demands. a. statistical forecasting b. regression analysis c. judgmental forecasting d. exponential smoothing

c. judgmental forecasting

The _____ function of a supply chain is responsible for selecting transportation carriers and managing company-owned fleets of vehicles. a. integration b. procurement c. logistics d. scheduling

c. logistics

Net Steels is a steel manufacturing company. It orders 180 metric tons of raw material per order. It was observed that the company often faces stockout. To tackle this issue, the company incorporated a fixed-quantity system (FQS) and collected the following data. Demand - 11,000 metric tons per year Order Cost - $18,000 per order Item Cost - $36,000 per metric ton Inventory-Holding Cost -20 percent per year Using the data, Net Steels determined that the economic order quantity (EOQ) should be 235 metric tons. In this scenario, the annual amount that Net Steels can save by ordering as per the EOQ instead of its conventional order is: a. less than $45,000. b. more than $45,000 but less than or equal to $55,000. c. more than $55,000 but less than or equal to $65,000. d. more than $65,000.

c. more than $55,000 but less than or equal to $65,000.

Vision Toys uses a fixed-quantity system to manage its inventories. The inventory includes plastic and LED bulbs. It was observed that the company often faces stockout of plastic. The average weekly demand for plastic is 100 pounds, and historical data show that the standard deviation of weekly demand is about 7. The lead time from the plastic supplier is 2 weeks. If the company's acceptable service level is 95 percent and the number of standard deviations necessary to achieve the acceptable service level is 1.645, the reorder point for plastic with safety stock is: a. less than or equal to 125 pounds. b. more than 125 pounds but less than or equal to 175 pounds. c. more than 175 pounds but less than or equal to 225 pounds. d. more than 225 pounds.

c. more than 175 pounds but less than or equal to 225 pounds.

If an online retail store has cost of goods sold equal to $2 million, has 200 operating days in a year, and has a total average on-hand inventory of $500,000, the cost of goods sold per day is _____. a. $2,500 b. $15,000 c. $7,500 d. $10,000

d. $10,000

ProShopper, a sportswear store, held an average sportswear inventory of $10 million last year and reported an inventory turnover of 5 times per year. What was its cost of goods sold? a. $10 million b. $20 million c. $40 million d. $50 million

d. $50 million

______refers to moving work from one workstation to another, assigning people to tasks, setting priorities for jobs, scheduling equipment, and controlling processes. a. Aggregate planning b. Disaggregation c. Capacity planning d. Execution

d. Execution

___ are the quantity of a component needed to support production at the next-higher level of assembly. a. Planned order receipts b. Scheduled receipts c. Explosions d. Gross requirements

d. Gross requirements

Which of the following statements is true of the independent demand for a stock-keeping unit (SKU)? a. It needs to be calculated using the forecast of dependent demand. b. It is affected by the demand of other SKUs. c. It is directly related to the demand of raw materials. d. It needs to be forecasted.

d. It needs to be forecasted.

Which of the following is a way to manage capacity by adjusting short-term capacity levels? a. Varying the price of goods or services b. Adding peripheral goods and/or services c. Providing reservations d. Shifting work to slack periods

d. Shifting work to slack periods

Blyrie Inc., a sports goods manufacturing company, follows a policy that involves manufacturing only when the demand exceeds the amount of goods already manufactured. Given this information, Blyrie Inc. most likely uses a capacity _____ strategy to expand its capacity. a. lead b. reduction c. straddle d. lag

d. lag

In a revenue management system, forecasting, allocation, overbooking, and pricing must work in unison if the objective is to: a. manage a nonperishable asset. b. meet the future demand of goods and services. c. determine the single price that needs to be charged to all customers. d. maximize the revenue generated by a perishable asset.

d. maximize the revenue generated by a perishable asset.

In the context of forecasting errors, _____ eliminates the measurement scale factor. a. normalized mean signed deviation b. mean absolute deviation c. normalized root mean square error d. mean absolute percentage error

d. mean absolute percentage error

Brenda is the owner of a spa store that operates 50 weeks per year. Spair Shampoo is a high margin stock keeping unit (SKU), but the product goes out of stock frequently. She decides to use a fixed-quantity system (FQS) and orders boxes of Spair Shampoo containing 10 bottles per box from a vendor 160 miles away. She collects the following data with respect to the sales of Spair Shampoo. Demand - 10 boxes per week Order Cost - $40 per order Item Cost - $80 per box Inventory-Holding Cost - 15 percent per year Lead Time -3 weeks Standard Deviation in Weekly Demand -6 Service Level - 96 percent Using the given data, it can be concluded that the economic order quantity (EOQ) of the Spair Shampoo boxes is: a. less than 25 boxes. b. more than 25 but less than or equal to 35 boxes. c. more than 35 but less than or equal to 45 boxes. d. more than 55 boxes.

d. more than 55 boxes.