BSAT 382 Test 1

T/F: Customer contact is often high for manufacturing processes and is low for service processes.

FALSE Customer contact is often high for service processes since most services are provided when customers are present.

T/F: Operations managers are responsible for assessing consumer wants and needs and selling and promoting the organization's goods or services.

FALSE Marketing department is responsible for assessing customer wants and needs, not operations department.

T/F: Measurement of productivity in service is more straightforward than in manufacturing because it does not take the cost of materials into account.

FALSE Measurement of productivity in service is more difficult due to the issue of inconsistency.

Manufacturing organizations are not involved in any service activities.

FALSE Most systems involve a blend of goods and services

T/F: Operations and sales are the two functional lines that exist to support activities in other functions such as accounting, finance, IT, and human resources.

FALSE Operations and sales are the two core functions of a firm and other functions exist to provide their supportive activities.

T/F: Operations, marketing, and finance functions operate independently of each other in most organizations.

FALSE Operations, marketing, and finance are naturally dependent upon one another.

In an assembly operation at a bike manufacturing factory, 8 employees assembled an average of 480 bikes per five-day week. What is the labor productivity of this operation?

12 The formula for this question is 480 bikes divided by 8 employees and 5 days. 480/8/5

In an assembly operation at a bike manufacturing factory, 4 employees assembled an average of 480 bikes per five-day week. What is the labor productivity of this operation?

24 480/4 /5

The manager of a flooring store is trying to determine the best installation crew size. He has tried various crew sizes with the results shown below. Based on productivity, what crew size do you recommend? Crew Size Yards Installed 2 716 4 1298 3 1017 3 1002 4 1278 2 702

Size 2 is the most productive with the productivity of 353.5 yards per employee. Yards Installed/Crew Size

Based on tracking productivity measures over time managers are able to judge organizational performance and decide where improvements are needed.

TRUE

T/F: A business rated highly by its customers for service quality tends to be more profitable than a business not rated highly.

TRUE

T/F: All firms, including service firms such as banks and hospitals, must have a production function.

TRUE

T/F: Operations management covers the set of activities that creates value in the form of goods and services by transforming inputs into outputs.

TRUE

T/F: Productivity is defined as the ratio of output to input.

TRUE

T/F: Service operations often requires relatively greater labor content when compared to manufacturing operations.

TRUE

T/F: Service operations typically involves a much higher degree of customer contact than manufacturing operations does.

TRUE

T/F: The ability of an organization to compete is directly related to productivity.

TRUE

T/F: Wage and salary increases that are not accompanied by productivity increases tend to exert inflationary pressures on a nation's economy.

TRUE

T/F: The greater the degree of customer involvement, the more challenging the design and management of operations.

TRUE When a firm produces highly customized products it is more challenge for operations since operations is in charge of transforming inputs into outputs.

The weekly output of a fabrication process is shown below, together with data for labor and material inputs. Standard selling price is $125 per unit. Overhead is charged weekly at the rate of $1,500 plus .5 times direct labor cost. Assume a 40-hour week and an hourly wage of $16. Material cost is $10 per foot. What is the average multifactor productivity? Week OUTPUT #WORKERS MATERIAL(FT) 1 392 5 2720 2 408 6 2790 a. 1.457 b. 1.431 c. 1.463

a. 1.457 You need to find Week 1 and Week 2 productivity and then find the average of the two. Week 1 Productivity = Output * $125/$16*(5)*(40)+$10*(2720)+$1500+(.5)*($16)*(5)*(40)=1.4626. Week 2 Productivity= Output * $125/$16*(6)*(40)+$10*(2790)+$1500+(.5)*($16)*(6)*(40)=1.4505

Regarding differences between goods and services, which of the following statements is NOT true? a. Tangible goods are generally produced and consumed simultaneously; services are not. b. Most goods are common to many customers; services are often unique to the final customer. c. Services tend to have higher customer interaction than goods. d. Services tend to have a more inconsistent product definition than goods.

a. Tangible goods are generally produced and consumed simultaneously; services are not.

Which of the following is the best example of a pure service? a. consulting b. transplant c. oil change d. restaurant

a. consulting

Which of the following situations improves productivity : 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.

a. decreasing inputs while holding outputs steady.

Which of the following is NOT a characteristic of service operations? a. easy measurement of productivity b. high labor content c. high customer contact d. intangible output

a. easy measurement of productivity

The key to successfully competing is understanding what customers want and then __________ satisfy those wants. a. finding the best way to b. finding suppliers who can c. designing products and services that d. training production workers to

a. finding the best way to

Which of the following is NOT an area showing significant difference between manufacturing and service operations? a. forecasting demand b. labor content of jobs c. customer contact d.measurement of productivity

a. forecasting demand

The three major functions of business organizations a. interface with each other. b. do not interface with each other. c. are mutually exclusive. d. function independently of each other.

a. interface with each other.

What are the three most important factors that can potentially improve productivity: a. labor, capital, and management. b. quality, external elements, and precise units of measure. c. technology, raw materials, and labor. d. education, diet, and social overhead.

a. labor, capital, and management.

A pizza store can handle 800 pizzas an hour. If the production is increased to 1,200 pizzas each hour, then productivity will have increased by: a. 33% b. 50% c. 25% d. 67%

b. 50% The calculation is (1,200 - 800)* 100/800 = 50%.

Which of the following is NOT true regarding service and manufacturing operations? a. Both can be viewed as transformation processes. b. Both employ roughly 50% of the U.S. workforce. c. Both are managed by operations managers. d. Both convert raw materials, energy, labor, and capital into valued outputs.

b. Both employ roughly 50% of the U.S. workforce.

Which of the following is NOT a new challenge facing operations? a. Responding to the voice of the customer b. Quality teams c. Environmental concerns d. Globalization of operations

b. Quality teams

Which of the following tasks performed by an airline company are related to operations? a. international monetary exchange b. crew scheduling c. advertising d. sales

b. crew scheduling Scheduling is one of the tasks performed by operations managers.

The essence of operations management can be described by a. planning, control, and organization. b. decisions, function, and process. c. process, capacity, and people. d. integrated planning and control.

b. decisions, function, and process.

Marketing depends on operations for information regarding: a. cash flow b. lead time c. productivity d. budgeting

b. lead time Lead time refers to the time operations transformation process needs in order to complete a product so marketing department can determine the delivery date to customers.

Regarding differences between goods and services, which of the following statements is NOT true? a. Services tend to have a more inconsistent product definition than goods. b.Goods tend to have higher customer interaction than services. c. Services are generally produced and consumed simultaneously; tangible goods are not. d. Services tend to be more knowledge-based than goods.

b.Goods tend to have higher customer interaction than services.

The percentage of productivity change can be calculated by: a. outputs divided by the inputs. b. inputs divided by the outputs. c. (current productivity - previous productivity) x 100 / (previous productivity) d. outputs minus inputs.

c. (current productivity - previous productivity) x 100 / (previous productivity)

Which of the following represents a similarity between goods and services? a. automation b. mass production c. Both have quality standards. d. consistency

c. Both have quality standards.

Which of the following factors would be least likely to affect productivity? a. standardizing processes b. design of the workspace c. Product price d. use of the Internet

c. Product price

Which of the following is NOT a typical characteristic of a service business? a. simultaneous production and consumption b. customer interaction s high c. easy to be kept in inventory d. intangible product

c. easy to be kept in inventory

Which of the following factors has the greatest potential to improve productivity? a. globalization b. capital c. management d. labor

c. management

Productivity improvement has relatively been lower in the service sector than the manufacturing sector because: a. service sector productivity is hard to measure. b. the quality of output is lower in services than manufacturing. c. services usually are labor-intensive. d. the service sector uses less skilled labor than manufacturing.

c. services usually are labor-intensive.

Competitiveness doesn't include: a. productivity. b. effectiveness. c.profitability. d. operations strategy. e. operations management.

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

A job shop produces circular utility access hatches (manhole covers). Currently, 120 covers are produced in a 10-hour shift. If labor productivity can be increased by 20%, it would then be: a. 24 covers/hr b. 1200 covers/hr c. 240 covers/hr d. 14.4 covers/hr

d. 14.4 covers/hr The calculation is [120 + 120 * (0.20)]/10

A manufacturing firm produces cast bronze valves on an assembly line, currently producing 1600 valves each 8-hour shift. If the productivity is increased by 10%, it would then be: a. 200 valves/hr. b. 180 valves/hr. c. 880 valves/hr. d. 220 valves/hr.

d. 220 valves/hr. The calculation is [1600 + 1600 * (0.10)]/8.

Which of these following factors would NOT affect productivity? a. management b. product mix c. methods and technology d. advertising

d. advertising

Common inputs to the operations transformation process include all of the following EXCEPT a. energy b. raw materials c. labor d. competitor

d. competitor

Which of the following steps is least likely to contribute to improving productivity? a. improving the bottleneck operations b. developing productivity measures for all operations c. considering incentives to reward workers d. developing pricing strategies

d. developing pricing strategies

Which of the following functions is responsible for the actual movement of goods and/or services across organizations? a. accounting b. operations c. purchasing d. logistics

d. logistics

Which of the following factors would be least likely to improve productivity? a. improvements in workplace safety b. reductions in the scrap rate c. reductions in labor turnover d. more inexperienced workers

d. more inexperienced workers