ISDS 3115 Final Study

A product will always be in the same stage of its product life cycle regardless of the country

False

A push system means providing the next station with exactly what is needed when it is needed

False

ABC analysis classifies inventoried items into three groups, usually based on annual units or quantities used.

False

Because service firms do not inventory their output, pure chase strategy is not appropriate.

False

Customer interaction is often high for manufacturing processes, but low for services

False

Low-cost leadership is the ability to distinguish the offerings of the organization in any way that the customer perceives as adding value

False

Operations strategies are implemented in the same way in all types of organizations

False

Outsourcing is the practice of moving a business process to a foreign country but retaining control of it

False

Productivity is the total value of all inputs to the transformation process divided by the total value of the outputs produced

False

The master production schedule is a forecast of demand for families of products

False

The operations manager performs the management activities of planning, organizing, staffing, leading and controlling of the OM function.

True

The reorder point is the inventory level at which action is taken to replenish the stocked item.

True

The theory of comparative advantage states that you should allow another firm to perform work activities for your company if that company can do it more productively than you can

True

The use of part-time workers as an aggregate planning option may be less costly than using full-time workers, but may also reduce quality levels

True

To attract and retain global talent, and to expand a product's life cycle, are both reasons to globalize

True

Waste is anything that does not add value, such as storage or inspection of items; waste also includes any activity that does not add value from the consumer's perspective

True

Outsourcing has expanded to become a major strategy in business due to the continuing move toward specialization in an increasingly technological society

True

Outsourcing is the practice of procuring from external sources services or products that are normally part of an organization

True

Product storage is an example of waste, in the sense that no value is added

True

Productivity is more difficult to improve in the service sector.

True

Reducing distance is a common JIT goal

True

Research data suggest that foreigners outsource far more services to the US than American companies send abroad

True

Some organizations use outsourcing to replace entire purchasing, information systems, marketing, finance and operations departments

True

TPS stands for Toyota production system

True

The factor-rating method is an excellent tool for dealing with both country risk assessment and source provider selection problems

True

Which of the following is specifically characterized by continuous and forced problem solving through a focus on throughput and reduce inventory? a. material requirements planning (MRP) b. Toyota Production System (TPS) c. kanban d. Just-in-time (JIT) e. lean operations

Just-in-time (JIT)

Which of the following statements regarding aggregate planning in services is false? A) Labor is the primary aggregate planning vehicle. B) Perishability of inventory is an important consideration of planning. C) Aggregate planning in some service industries can be simpler than in manufacturing. D) Level scheduling is far more common than chase. E) When outputs are intangible, aggregate planning deals mainly with human resources requirements and managing demand.

Level scheduling is far more common than chase

A major challenge in inventory management is to maintain a balance between inventory investment and customer service.

True

All organizations, including service firms such as banks and hospitals, have a production function.

True

An organization's unique skills, talents and capabilities are referred to as its core competencies

True

For the greatest change of success, an organization's operations management strategy must support the company's strategy.

True

Gross material requirements do not take into account the amount of inventory on hand.

True

Hidden problems are generally uncovered during the process of reducing inventory

True

In aggregate planning, the amount of overtime and the size of the work force are both adjustable elements of capacity.

True

In general, the lot-for-lot approach should be used whenever economical

True

Nearly any business activity can be outsourced

True

One function of inventory is to take advantage of quantity discounts

True

One reason for global operations is to gain improvements in the supply chain

True

One reason to globalize is to learn to improve operations

True

Operations management is the set of activities that creates value in the form of goods and services by transforming inputs into outputs

True

Which of the following statements best characterizes delivery reliability? a. a company that delivers faster than its competitors b. a company that has a computerized delivery scheduling system c. a company that delivers more frequently than its competitors d. a company that always delivers on the same day of the week e. a company that always delivers at the promised time

a company that always delivers at the promised time

Which of the following is an example of competing on the basis of differentiation? a. a firm's products are introduced into the market faster than its competitors' products are b. a firm offers more reliable products than its competitors do c. a firm advertises more than its competitors do d. a firm manufacturers its product with less raw material waste than its competitors do e. a firm's distribution network routinely delivers its product on time

a firm offers more reliable products than its competitors do c. a firm advertises more than its competitors do

Which of the following is the best example of competing on low-cost leadership? a. a firm's products are introduced into the market faster than its competitors' products b. a firm's research and development department generates many ideas for new products c. a firm produces its product with less raw material waste than its competitors d. a firm offers more reliable products than its competitors e. a firm advertises more than its competitors

a firm produces its product with less raw material waste than its competitors

Which of the following will more likely locate near their customers? a. an automobile manufacturer b. an aluminum manufacturer c. a medical clinic d. an insurance company headquarters e. all of the above will tend to locate near their customers

a medical clinic

Which of the following best describes a gross material requirements plan? A) a table that corrects scheduled quantities for inventory on hand B) a chart illustrating whether capacity has been exceeded C) a schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started D) a schedule showing which products are to be manufactured and in what quantities E) an intermediate range plan for the scheduling of families of products

a schedule that shows total demand for an item and when it must be ordered from a supplier or when production must be started

If demand is not uniform and constant, then stockout risks can be controlled by A) reducing the reorder point B) adding safety stock C) increasing the EOQ D) placing an extra order E) raising the selling price to reduce demand

adding safety stock

Which of the following statements about aggregate planning is true? A) Aggregate planning uses the adjustable part of capacity to meet production requirements. B) Work station loading and job assignments are examples of aggregate planning. C) Overtime/idle time is a way of manipulating product or service demand. D) Advertising/promotion is a way of manipulating product or service supply. E) All of the above are true.

aggregate planning uses the adjustable part of capacity to meet production requirements

Which of the following statements regarding JIT in services is true? a. scheduling is not relevant to effective use of JIT in services b. restaurants do not use JIT layouts because they interfere with creation of good servicescape c. excess customer demand in services such as air travel is met by dipping into safety stocks d. all of the JIT techniques for dealing with suppliers, layouts, inventory, and scheduling are used in services e. all of the above are false

all of the JIT techniques for dealing with suppliers, layouts, inventory, and scheduling are used in services

Reasons to study Operations Management include learning about a. how goods and services are produced b. a costly part of the enterprise c. how people organize themselves for productive enterprise d. what operations manager do e. all of the above

all of the above

Which of the following is a function of inventory? A) to take advantage of quantity discounts B) to decouple or separate parts of the production process C) to decouple the firm from fluctuations in demand and provide a stock of goods that will provide a selection for customers D) to hedge against inflation E) All of the above are functions of inventory.

all of the above are functions of inventory

Productivity tends to be more difficult to improve in the service sector because the work is a. often more difficult to automate b. typically labor-intensive c. often an intellectual task performed by professionals d. frequently processed individually e. all of the above make service productivity more difficult

all of the above make service productivity more difficult

A strategy is a. a plan for cost reduction b. an action plan to achieve the mission c. a broad statement of purpose d. a simulation used to test various product line options e. a set of opportunities in the marketplace

an action plan to achieve the mission

Which of these organizations is likely to have the most important inventory decisions? a. a management consulting firm b. a lobbying agency c. a law firm d. an aluminum manufacturer e. a marketing research firm

an aluminum manufacturer

Which of the following is a similarity between goods and services? a. automation b. mass production c. consistency d. application of operations management e. all of the above

application of operations management

A company that had previously sent its call center business to India has now brought that business back to small towns in the US such as Dubuque, Iowa. This is an example of a. backsourcing b. inshoring c. offshoring d. return outsourcing e. outsourcing

backsourcing

The ________ is the input to material requirements planning which lists the assemblies, subassemblies, parts, and raw materials needed to produce one unit of finished product. A) bill of material B) net requirements chart C) master production schedule D) assembly time chart E) inventory records

bill of material

Disaggregation A) transforms the master production schedule into an aggregate plan B) is an assumption required for the use of the transportation model in aggregate planning C) breaks the aggregate plan into greater detail D) calculates the optimal price points for yield management E) converts product schedules and labor assignments to a facility-wide plan

breaks the aggregate plan into greater detail

Concerning the relationships with suppliers, which of the following combinations is critical to the success of JIT? a. distant relationships with trust b. close relationships with skepticism c. distant relationships with skepticism d. close relationships with trust e. none of the above

close relationships with trust

All of the following decisions fall within the same scope of operations management except for a. managing quality b. creating the company income statement c. design of goods and processes d. location of facilities e. all of the above fall within the scope of operations management

creating the company income statement

Cost minimization is an appropriate strategy in which stage of the product life cycle? a. growth b. adolescence c. retirement d. introduction e. decline

decline

Productivity can be improved by a. decreasing inputs while holding outputs steady b. increasing inputs while holding outputs steady c. increasing inputs and outputs in the same proportion d. decreasing outputs while holding inputs steady e. none of the above

decreasing inputs while holding outputs steady

The fundamental purpose of an organization's mission statement is to a. define the operational structure of the organization b. generate good public relations for the organization c. create a good human relations climate in the organization d. define the organization's purpose in society e. define the functional areas required by the organization

define the organization's purpose in society

Which of the following is not a typical service attribute? a. intangible product b. simultaneous production and consumption c. easy to store d. customer interaction is high e. difficult to resell

easy to store

If a casual dining restaurant is attempting to practice JIT and lean operations, which of the following would not be present? a. food preparation in large batches b. close relationship with the restaurant's suppliers of food, utensils, and equipment c. a kitchen set up to minimize wasteful movements d. lean inventories of food e. all of the above should be present

food preparation in large batches

Which of the following is true? a. functional area missions are merged to become the organizational mission b. external conditions are shaped by corporate mission c. functional strategies are shaped by corporate strategy d. corporation mission is shaped by functional strategies e. corporate strategy is shaped by functional strategies

functional strategies are shaped by corporate strategy

A characteristic of JIT Partnerships with respect to quality is to a. maintain a steady output rate b. help suppliers meet quality requirement c. draw up strict contracts ensuring that all defectives will be immediately replaced d. inspect all incoming parts e. impose maximum product specifications on the supplier

help suppliers meet quality requirement

The EOQ model with quantity discounts attempts to determine A) how many units should be ordered B) what is the lowest amount of inventory necessary to satisfy a certain service level C) what is the shortest lead time D) what is the lowest purchasing price E) whether to use fixed-quantity or fixed-period order policy

how many units should be ordered

Which of the following statements about the basic EOQ model is false? A) If annual demand were to double, the EOQ would also double. B) If the setup cost were to decrease, the EOQ would fall. C) If the ordering cost were to increase, the EOQ would rise. D) If annual demand were to increase, the EOQ would increase. E) All of the above statements are true.

if annual demand were to double, the EOQ would also double

Porter's Five Forces Model is used to evaluate competition based on which 5 aspects? a. immediate rivals, potential entrants, customers, suppliers, and substitute products b. potential entrants, customers, suppliers, legal regulations, and cost c. research and development, cost, legal regulations, suppliers, customers d. immediate rivals, potential entrants, cost, substitute products, and legal regulations e. none of the above

immediate rivals, potential entrants, customers, suppliers, and substitute products

Excess bags of basic commodities such as flour and sugar that are stored in a restaurant's kitchen represent which of the following wastes? a. queues b. defective product c. inventory d. transportation e. overproduction

inventory

Which of the following statements is true regarding JIT inventory? a. it is the minimum inventory necessary to keep a perfect system running b. it is minimized with large lot production c. it hides variability d. it increases if setup costs decrease e. it exists just in case something goes wrong

it is the minimum inventory necessary to keep a perfect system running

A manufacturer took the following actions to reduce inventory. Which of these is generally not accepted as a JIT action? a. It used a pull system to move inventory b. it picked the supplier that offered the lowest price based on quantity discounts c. it required deliveries directly to the point of use d. it produced in ever smaller lots e. it worked to reduce the company's in-transit inventory

it picked the supplier that offered the lowest price based on quantity discounts

What lot-sizing technique is generally preferred when inventory holding costs are extremely high? A) EOQ B) part-period balancing C) the Wagner-Whitin algorithm D) lot-for-lot E) All of the above are appropriate for the situation.

lot-for-lot

Which of the following is characteristic of lean operations? a. long lead times b. easy, mindless jobs c. no supplier partnerships d. low space requirements e. specialty workers with no cross-training

low space requirements

Which productivity variable has the greatest potential to increase productivity? a. labor b. management c. globalization d. capital e. none of the above

management

Which of the following are the primary functions of all organizations? a. marketing, human resources, and finance/accounting b. sales, quality control, and production/operations c. research and development, finance/accounting, and purchasing d. production/operations, marketing, and human resources e. marketing, production/operations, and finance/accounting

marketing, production/operations, and finance/accounting

The total of all outputs produced by the transformation process divided by the total of the inputs is a. multifactor productivity b. defined only for manufacturing firms c. utilization d. greater in manufacturing than in services e. none of the above

multifactor productivity

What is the practice of moving a business process to a foreign country but retaining control of it? a. exporting b. farshoring c. backsourcing d. offshoring e. outsourcing

offshoring

What is the practice of procuring form external source services or products that are normally part of an organization? a. backsourcing b. nearshoring c. outsourcing d. farshoring e. offshoring

outsourcing

Which of the following is not an operations strategic decision? a. price b. layout design c. maintenance d. inventory e. quality

price

Which of the following is not an element of the management process? a. staffing b. planning c. pricing d. controlling e. leading

pricing

The Ten Critical Decisions of Operations Management include a. process and capacity design b. finance/accounting c. advertising d. pricing e. all of the above

process and capacity design

Which of the following attributes is most typical of a service? a. mass production b. tangible c. consistency d. easy to automate e. production and consumption occur simultaneously

production and consumption occur simultaneously

23) In level scheduling, what is kept uniform from month to month? A) product mix B) production/workforce levels C) sub-contracting levels D) inventory levels E) demand levels

production/workforce levels

The decline in customer satisfaction for outsourced call centers highlights which aspect of outsourcing risk? a. technological b. quality c. cost d. core competency e. erratic utility functionality

quality

Which of the following does not represent a reason for globalizing operations? a. improve the supply chain b. reduce responsiveness c. reduce costs d. attract and retain global talent e. none of the above are valid reasons for globalizing operations

reduce responsiveness

Which of the following is a characteristic of a JIT partnership? a. active pursuit of vertical integration b. frequent deliveries in large lot quantities c. removal of income inspection d. maximal product specifications imposed on supplier e. larger number of suppliers

removal of income inspection

Which of the following is not characteristic of a TPS employee? a. know more about their job than anyone else b. strict job classifications c. knowledgeable d. empowered e. all of the above characterize a TPS employee

strict job classifications

Outsourcing is simply an extension of the long-standing practice of a. exporting b. postponement c. importing d. e-procurement e. subcontracting

subcontracting

Reduction of in transit inventory can be encouraged through use of a. supplier location near plants b. low-cost, global suppliers c. use of trains, not trucks d. low carrying costs e. low setup costs

supplier location near plants

When developing the operations strategy for a new manufacturing organization, one of the most important considerations is that it a. utilizes as much automation as possible b. utilizes an equal balance of labor and automation c. supports the overall competitive strategy of the company d. requires minimal capital investment e. none of the above

supports the overall competitive strategy of the company

Which is not true regarding differences between goods and services? a. services tend to have a more inconsistent product definition than goods b. tangible goods are generally produced and consumed simultaneously; services are not c. most goods are common to many customers; services are often unique to the final customer d. services tend to have high customer interaction than goods e. all of the above are true

tangible goods are generally produced and consumed simultaneously; services are not

ABC analysis is based upon the principle that A) an item is critical if its usage is high B) there are usually a few critical items, and many items which are less critical C) more time should be spent on class "C" items because there are more of them D) all items in inventory must be monitored very closely E) an item is critical if its unit price is high

there are usually a few critical items, and many items which are less critical

Demand for a given item is said to be dependent if A) the finished products are mostly services (rather than goods) B) there is a deep bill of material C) the item has several children D) it originates from the external customer E) there is a clearly identifiable parent

there is a clear identifiable parent

Which of the following is not true regarding core competencies? a. they may represent a small portion of an organization's business activities b. they may include specialized knowledge c. they may include proprietary technology or information d. they may be good candidates for outsourcing e. they may include unique production methods

they may be good candidates for outsourcing

What is the time required to move orders through the production process, from receipt to delivery? a. throughput b. manufacturing cycle time c. push time d. pull time e. queuing time

throughput

Operations management is applicable a. to all firms, whether manufacturing or service b. mostly to the manufacturing sector c. to the manufacturing sector exclusively d. mostly to the service sector e. to services exclusively

to all firms, whether manufacturing or service

Which of the following is specifically characterized by a focus on continuous improvement, respect for people, and standard work practices? a. just in time (JIT) b. toyota production system (TPS) c. kanban d. material requirements planning (MRP) e. lean operations

toyota production system (TPS)

Which of the following actions is consistent with the use of pure level strategy? A) vary the amount of subcontracting to meet demand requirements B) use inventory to meet demand requirements C) vary production levels to meet demand requirements D) vary work force to meet demand requirements E) none of the above

use inventory to meet demand requirements

A master production schedule specifies A) the raw materials required to complete the product B) the labor hours required for production C) what component is to be made, and when D) the financial resources required for production E) what product is to be made, and when

what product is to be made, and when