OM Test 2

Which of the following workers is the most productive? A) $50 wages, 10 parts produced B) $10 wages, 1 part produced C) $30 wages, 5 parts produced D) $100 wages, 21 parts produced E) $500 wages, 100 parts produced

D) $100 wages, 21 parts produced

Companies with the highest levels of quality are how many times more productive than their competitors with the lowest quality levels? A) 2 B) 3 C) 4 D) 5 E) None of the above because quality has no impact on productivity (units/labor hr.).

D) 5

Which of the following is true regarding the concept of flexibility? A) It is the ability to respond with little penalty in time, cost, or customer value. B) It may be accomplished with digitally controlled equipment. C) It may involve modular or movable equipment. D) All of the above are true. E) None of the above is true.

D) All of the above are true.

Why is Northern Mexico used as a cluster for electronics firms? A) high traffic flows B) venture capitalists located nearby C) natural resources of land and climate D) NAFTA E) high per capita GDP

D) NAFTA

Which of the following is NOT one of the major categories of costs associated with quality? A) prevention costs B) appraisal costs C) internal failure costs D) external failure costs E) None of the above; they are all major categories of costs associated with quality.

E) None of the above; they are all major categories of costs associated with quality.

The net present value of $10,000 to be received in exactly three years is considerably greater than $10,000.

F

The theory of constraints is a body of knowledge that deals with anything that limits an organization's ability to achieve its goals.

F

PDCA, developed by Shewhart, stands for which of the following? A) Plan-Do-Check-Act B) Plan-Develop-Check-Accept C) Problem-Develop Solution-Check-Act D) Problem-Do-Continue-Act E) Prepare-Develop-Create-Assess

A) Plan-Do-Check-Act

A fishbone chart is also known as a: A) cause-and-effect diagram. B) poka-yoke diagram. C) Kaizen diagram. D) Kanban diagram. E) Taguchi diagram.

A) cause-and-effect diagram.

A recent consumer survey conducted for a car dealership indicates that, when buying a car, customers are primarily concerned with the salesperson's ability to explain the car's features, the salesperson's friendliness, and the dealer's honesty. The dealership should be ESPECIALLY concerned with which determinants of service quality? A) communication, courtesy, and credibility B) competence, courtesy, and security C) competence, responsiveness, and reliability D) communication, responsiveness, and reliability E) understanding/knowing customer, responsiveness, and reliability

A) communication, courtesy, and credibility

The goal of inspection is to: A) detect a bad process immediately. B) add value to a product or service. C) correct deficiencies in products. D) correct system deficiencies. E) all of the above

A) detect a bad process immediately.

Quality can improve profitability by reducing costs. Which of the following is not an aspect of reduced costs by quality improvements? A) flexible pricing B) increased productivity C) lower rework and scrap costs D) lower warranty costs E) All of the above are aspects of reduced costs by quality improvements.

A) flexible pricing

What is a drawing of the movement of material, product, or people? A) flowchart B) process chart C) service blueprint D) process map E) vision system

A) flowchart

If a sample of items is taken and the mean of the sample is outside the control limits, the process is: A) likely out of control and the cause should be investigated. B) in control, but not capable of producing within the established control limits. C) within the established control limits with only natural causes of variation. D) monitored closely to see if the next sample mean will also fall outside the control limits. E) producing high quality products.

A) likely out of control and the cause should be investigated.

Which of the following phrases best describes process focus? A) low volume, high variety B) Finished goods are usually made to a forecast and stored. C) Operators are less broadly skilled. D) high fixed costs, low variable costs E) low inventory

A) low volume, high variety

The "four Ms" of cause-and-effect diagrams are: A) material, machinery/equipment, manpower, and methods. B) material, methods, men, and mental attitude. C) named after four quality experts. D) material, management, manpower, and motivation. E) mentality, motivation, management, and manpower.

A) material, machinery/equipment, manpower, and methods.

Industrial location analysis typically attempts to: A) minimize costs. B) maximize sales. C) focus more on human resources. D) avoid countries with strict environmental regulations. E) ignore exchange rates and currency risks.

A) minimize costs.

The use of information technology to monitor and control a physical process is known as: A) process control. B) computer-aided design. C) information numeric control. D) numeric control. E) IT oversight.

A) process control.

Stakeholders who are affected by the production and marketing of poor quality products include: A) stockholders, employees, and customers. B) suppliers and creditors, but not distributors. C) only stockholders, creditors, and owners. D) suppliers and distributors, but not customers. E) only stockholders and organizational executives and managers

A) stockholders, employees, and customers.

Which of the following characteristics best describes repetitive focus? A) It uses sophisticated scheduling to accommodate custom orders. B) Its output is a standardized product produced from modules. C) Operators are broadly skilled. D) It is widely used for the manufacture of steel. E) low volume, high variety

B) Its output is a standardized product produced from modules.

Total quality management emphasizes: A) the responsibility of the quality control staff to identify and solve all quality-related problems. B) a commitment to quality that goes beyond internal company issues to suppliers and customers. C) a system where strong managers are the only decision makers. D) a process where mostly statisticians get involved. E) ISO 14000 certification.

B) a commitment to quality that goes beyond internal company issues to suppliers and customers.

Arnold Palmer Hospital uses which of the following quality management techniques? A) Pareto charts B) flowcharts C) benchmarking D) just-in-time E) The hospital uses all of the above techniques

E) The hospital uses all of the above techniques.

"Quality lies in the eyes of the beholder" is: A) an unrealistic definition of quality. B) a user-based definition of quality. C) a manufacturing-based definition of quality. D) a product-based definition of quality. E) the definition of quality proposed by the American Society for Quality

B) a user-based definition of quality.

Effective capacity is the: A) maximum output of a system in a given period. B) capacity a firm expects to achieve given the current operating constraints. C) average output that can be achieved under ideal conditions. D) minimum usable capacity of a particular facility. E) sum of all of the organization's inputs.

B) capacity a firm expects to achieve given the current operating constraints.

The objective of layout strategy is to: A) minimize cost. B) develop an effective and efficient layout that will meet the firm's competitive requirements. C) maximize flexibility. D) minimize space used. E) maximize worker satisfaction.

B) develop an effective and efficient layout that will meet the firm's competitive requirements

Among the tools of TQM, the tool ordinarily used to aid in understanding the sequence of events through which a product travels is a: A) Pareto chart. B) flowchart. C) check sheet. D) Taguchi map. E) poka-yoke.

B) flowchart.

Globalization of the location decision is the result of all EXCEPT which of the following? A) market economics B) higher quality of labor overseas C) ease of capital flow between countries D) high differences in labor costs E) more rapid, reliable travel and shipping

B) higher quality of labor overseas

The reason fast food restaurants often are found in close proximity to each other is: A) they enjoy competition. B) location clustering near high traffic flows. C) low cost. D) availability of skilled labor. E) all of the above.

B) location clustering near high traffic flows.

Governmental attitudes toward issues such as private property, intellectual property, zoning, pollution, and employment stability may change over time. What is the term associated with this phenomenon? A) bureaucratic risk B) political risk C) legislative risk D) judicial risk E) democratic risk

B) political risk

Which of the following is NOT among the eight determinants of revenue and volume for a service firm? A) quality of management B) shipment cost of finished goods C) purchasing power of the customer-drawing area D) uniqueness of the firm's and the competitors' locations E) competition in the area

B) shipment cost of finished goods

Production and transportation costs are always considered in which of the following location decision methods? A) traffic counts B) transportation model C) purchasing power D) proximity of markets E) clustering

B) transportation model

Three broad categories of definitions of quality are: A) product quality, service quality, and organizational quality. B) user based, manufacturing based, and product based. C) internal, external, and prevention. D) low-cost, response, and differentiation. E) Pareto, Shewhart, and Deming.

B) user based, manufacturing based, and product based.

Which of the following is most likely to affect the location strategy of a manufacturing firm? A) appearance/image of the area B) utility costs C) purchasing power of drawing area D) competition in the area E) parking availability

B) utility costs

Lag and straddle strategies for increasing capacity have what main advantage over a leading strategy? A) They are cheaper. B) They are more accurate. C) They delay capital expenditure. D) They increase demand. E) All of the above are advantages.

C) They delay capital expenditure.

What is the primary reason why retailers tend to locate high-draw items around the periphery of the store? A) More shelf space for those popular items is available around the periphery. B) There will be less congestion of customers than there would be in the middle. C) This arrangement will help to maximize customer exposure to other items in the store. D) It is easier to put large advertisement signs on the outside walls right next to the items. E) This arrangement allows customers to travel through the store as quickly as possible

C) This arrangement will help to maximize customer exposure to other items in the store.

"Making it right the first time" is: A) an unrealistic definition of quality. B) a user-based definition of quality. C) a manufacturing-based definition of quality. D) a product-based definition of quality. E) the definition of quality proposed by the American Society for Quality

C) a manufacturing-based definition of quality.

A jewelry store is more likely than a jewelry manufacturer to consider ________ in making a location decision. A) transportation costs B) cost of raw materials C) appearance/image of the location D) quality of life E) taxes

C) appearance/image of the location

Among the following choices, an operations manager might best evaluate political risk of a country by looking at which type of country ranking? A) based on competitiveness B) based on cost of doing business C) based on corruption D) based on magnitude of government social programs E) based on average duration between presidential/prime minister elections

C) based on corruption

The process of identifying other organizations that are best at some facet of your operations and then modeling your organization after them is known as: A) continuous improvement. B) employee empowerment. C) benchmarking. D) copycatting. E) patent infringement.

C) benchmarking.

The purpose of an x-bar chart is to determine whether there has been a: A) change in the dispersion of the process output. B) change in the percent defective in a sample. C) change in the central tendency of the process output. D) change in the number of defects in a sample. E) change in the AOQ

C) change in the central tendency of the process output.

When making a location decision at the region/community level, which of these would be considered? A) government rules, attitudes, stability, incentives B) cultural and economic issues C) cost and availability of utilities D) zoning restrictions E) air, rail, highway, waterway systems

C) cost and availability of utilities

Which of the determinants of service quality involves having the customer's best interests at heart? A) access B) courtesy C) credibility D) responsiveness E) tangibles

C) credibility

The center-of-gravity method is used primarily to determine what type of locations? A) service locations B) manufacturing locations C) distribution center locations D) supplier locations E) call center locations

C) distribution center locations

A product-focused process is commonly used to produce: A) high-volume, high-variety products. B) low-volume, high-variety products. C) high-volume, low-variety products. D) low-variety products at either high- or low-volume. E) high-volume products of either high- or low-variety.

C) high-volume, low-variety products.

A hospital's layout most closely resembles which of the following? A) product oriented B) work cell C) job shop D) project E) retail

C) job shop

Which of the following is most likely to affect the location decision of a service firm rather than a manufacturing firm? A) energy and utility costs B) attitude toward unions C) parking and access D) cost of shipping finished goods E) labor costs

C) parking and access

Three of the four types of processes are: A) goods, services, and hybrids. B) manual, automated, and service. C) process focus, repetitive focus, and product focus. D) modular, continuous, and technological. E) input, transformation, and output

C) process focus, repetitive focus, and product focus.

Workspace can inspire informal and productive encounters if it balances what three physical and social aspects? A) proximity, privacy, and persuasion B) privacy, persuasion, and permission C) proximity, privacy, and permission D) proximity, persuasion, and permission E) proximity, persuasion, and passion

C) proximity, privacy, and permission

An assembly line is an example of a: A) product-focused process. B) process-focused process. C) repetitive process. D) line process. E) specialized process.

C) repetitive process

A location decision for a traditional department store (e.g., Macy's) would tend to have what type of focus? A) cost focus B) labor focus C) revenue focus D) environmental focus E) education focus

C) revenue focus

One fundamental difference between a process chart and a flowchart is that: A) the process chart adds a time dimension to the horizontal axis, while a flowchart is not time-oriented. B) the process chart includes the supply chain, while the flowchart stays within an organization. C) the process chart is more like a table, while the flowchart is more like a schematic diagram. D) the process chart focuses on the customer and on the provider's interaction with the customer, while the flowchart does not deal directly with the customer. E) None of these is true, because a process chart and a flowchart are the same thing.

C) the process chart is more like a table, while the flowchart is more like a schematic diagram.

Which of these factors would be considered when making a location decision at the site level? A) government rules, attitudes, stability, incentives B) cultural and economic issues C) zoning regulations D) cost and availability of utilities E) proximity to raw materials and customers

C) zoning regulations

Which of the following statements regarding Arnold Palmer Hospital is FALSE? A) The hospital uses a wide range of quality management techniques. B) The culture of quality at the hospital includes employees at all levels. C) The hospital scores very highly in national studies of patient satisfaction. D) The hospital's high quality is measured by low readmission rates, not patient satisfaction. E) The design of patient rooms, even wall colors, reflects the hospital's culture of quality.

D) The hospital's high quality is measured by low readmission rates, not patient satisfaction.

"The employee cannot produce products that on average exceed the quality of what the process is capable of producing" expresses a basic philosophy in the writings of: A) Vilfredo Pareto. B) Armand Feigenbaum. C) Joseph M. Juran. D) W. Edwards Deming. E) Philip B. Crosby.

D) W. Edwards Deming.

Intangible costs include which of the following? A) quality of prospective employees B) quality of education C) availability of public transportation D) all of the above E) none of the above

D) all of the above

To become ISO 9000 certified, organizations must: A) document quality procedures. B) have an onsite assessment. C) have an ongoing series of audits of their products or service. D) all of the above E) none of the above

D) all of the above

Ambient conditions; spatial layout and functionality; and signs, symbols, and artifacts are all: A) indicators of imbalance on an assembly line. B) indicators that cross-docking has been successful. C) elements of customization in a warehouse layout. D) elements of servicescapes. E) elements of successful office layouts.

D) elements of servicescapes.

Advances in technology: A) have impacted the manufacturing sector only. B) have had only a limited impact on services. C) have failed to change the level of customer interaction with an organization. D) have had a dramatic impact on customer interaction with services and with products. E) have dramatically changed health care, but have not changed retailing.

D) have had a dramatic impact on customer interaction with services and with products.

Which of the following phrases best describes product focus? A) low volume, high variety B) Finished goods are usually made to order. C) Processes are designed to perform a wide variety of activities. D) high fixed costs, low variable costs E) high inventory

D) high fixed costs, low variable costs

Which of the following constitutes a major trend influencing office layouts? A) downsizing B) globalization C) environmental issues D) off-site employees E) health issues

D) off-site employees

Which of the determinants of service quality involves performing the service right the first time? A) access B) courtesy C) credibility D) reliability E) responsiveness

D) reliability

"A special arrangement of machinery and equipment to focus on production of a single product or group of related products" describes what layout type? A) fixed-position layout B) intermittent production C) job shop D) work cell E) warehouse layout

D) work cell

What is a common method used to increase capacity with a lag strategy? A) overtime B) subcontracting C) new facilities D) new machinery E) A and B

E) A and B

A successful quality strategy features which of the following elements? A) an organizational culture that fosters quality B) an understanding of the principles of quality C) engaging employees in the necessary activities to implement quality D) A and C E) A, B, and C

E) A, B, and C

Which of the following techniques is NOT a technique for dealing with a bottleneck? A) Schedule throughput to match the capacity of the bottleneck. B) Increase the capacity of the constraint. C) Have cross-trained employees available to keep the constraint at full operation. D) Develop alternate routings. E) All are techniques for dealing with bottlenecks.

E) All are techniques for dealing with bottlenecks.

Which of the following is NOT a retail layout practice? A) Locate the high-draw items around the periphery of the store. B) Distribute power items throughout the store. C) Use end-aisle locations to maximize product exposure. D) Use prominent locations for high-impulse and high-margin items. E) All of the above are retail layout practices.

E) All of the above are retail layout practices.

Techniques for building employee empowerment include: A) building communication networks that include employees. B) developing open, supportive supervisors. C) moving responsibility from both managers and staff to production employees. D) building high-morale organizations. E) All of the above are techniques for employee empowerment

E) All of the above are techniques for employee empowerment

FedEx chose Memphis, Tennessee, as its U.S. hub because: A) the city is in the center of the United States, geographically. B) the airport has relatively few hours of bad weather closures. C) it needed a means to reach cities to which it did not have direct flights. D) the firm believed that a hub system was superior to traditional city-to-city flight scheduling. E) All of the above are true.

E) All of the above are true.

An x-bar control chart was examined and no data points fell outside of the limits. Can this process be considered in control? A) Not yet, there could be a pattern to the points. B) Not yet, the R-chart must be checked. C) Not yet, the number of samples must be known. D) Yes. E) Both A and B

E) Both A and B

What describes a system that stores and displays information that can be linked to a geographic location? A) AIS B) LOC C) GLOC D) LIS E) GIS

E) GIS

Quality is mostly the business of the quality control staff, not ordinary employees.

F

96) Slotting fees: A) are charged by retailers to stock a product. B) can amount to as much as $25,000. C) are not a part of Walmart's business practices. D) can reduce the ability of small businesses to introduce new products. E) all of the above

E) all of the above

A good layout requires determining: A) material handling equipment. B) capacity and space requirements. C) environment and aesthetics. D) cost of moving between various work areas. E) all of the above

E) all of the above

Process redesign: A) is the fundamental rethinking of business processes. B) is sometimes called process reengineering. C) tries to bring about dramatic improvements in performance. D) often focuses on activities that cross functional lines. E) all of the above

E) all of the above

Which of the following is among the eight determinants of revenue and volume for a service firm? A) uniqueness of the firm's and the competitors' locations B) quality of the competition C) quality of management D) purchasing power of the customer-drawing area E) all of the above

E) all of the above

What is the statistical process chart used to control the number of defects per unit of output? A) x-bar chart B) R-chart C) p-chart D) AOQ chart E) c-chart

E) c-chart

The philosophy of zero defects is: A) the result of Deming's research. B) unrealistic. C) prohibitively costly. D) an ultimate goal; in practice, 1 to 2% defects is acceptable. E) consistent with the commitment to continuous improvement.

E) consistent with the commitment to continuous improvement.

All of the following costs are likely to decrease as a result of better quality EXCEPT: A) customer dissatisfaction costs. B) inspection costs. C) scrap costs. D) warranty and service costs. E) maintenance costs.

E) maintenance costs.

Retail layouts are based on the notion that: A) handling costs should be minimized. B) storage costs should be minimized. C) average customer visit duration should be maximized. D) space used should be minimized. E) maximizing customer exposure rate maximizes sales and profit.

E) maximizing customer exposure rate maximizes sales and profit.

The main goal of retail layout is: A) minimizing material handling cost. B) minimizing customer confusion regarding location of items. C) minimizing storage costs. D) minimizing space required. E) maximizing profitability per square foot of floor space.

E) maximizing profitability per square foot of floor space.

A good description of source inspection is inspecting: A) materials upon delivery by the supplier. B) the goods at the production facility before they reach the customer. C) the design specifications. D) goods at the supplier's plant. E) one's own work.

E) one's own work.

What layout strategy deals with low-volume, high-variety production? A) fixed-position layout B) retail layout C) warehouse layout D) office layout E) process-oriented layout

E) process-oriented layout

Which of the following industries is most likely to have low equipment utilization? A) auto manufacturing B) commercial baking C) television manufacturing D) steel manufacturing E) restaurants

E) restaurants

Break-even is the number of units at which: A) total revenue equals price times quantity. B) total revenue equals total variable cost. C) total revenue equals total fixed cost. D) total profit equals total cost. E) total revenue equals total cost.

E) total revenue equals total cost.

Balancing low-cost storage with low-cost material handling is important in which of the following? A) fixed-position layout B) process-oriented layout C) office layout D) repetitive and product-oriented layout E) warehouse layout

E) warehouse layout

Professional services typically require low levels of labor intensity.

F

35) A firm's process strategy is its approach to transforming resources into goods and services.

T

36) The assembly line is a classic example of a repetitive process.

T

An example of an intangible cost, as it relates to location decisions, is the quality of education.

T

Design capacity is the theoretical maximum output of a system in a given period under ideal conditions.

T

Fixed costs are those costs that continue even if no units are produced.

T

Lists have been developed that rank countries on issues such as "competitiveness" and "corruption."

T

Pareto charts are a graphical way of identifying the few critical items from the many less important ones.

T

Service blueprinting is a process analysis technique that focuses on the customer and the provider's interaction with the customer.

T

Service firms choose locations based, in part, on the revenue potential of a site.

T

TQM is important because each of the ten decisions made by operations managers deals with some aspect of identifying and meeting customer expectations.

T

The factor-rating method can consider both tangible and intangible costs.

T

The graphic approach to locational cost-volume analysis displays the range of volume over which each location is preferable.

T

The objective of layout strategy is to develop an effective and efficient layout that will meet the firm's competitive requirements.

T

The phrase Six Sigma has two meanings. One is statistical, referring to an extremely high process, product, or service capability; the other is a comprehensive system for achieving and sustaining business success.

T