C720 - Operations and Supply Chain Management (1-2)

A new, energy-efficient furnace is being installed in a steel factory. Because it would have added 10% to the cost of the furnace, management has decided not to install the optional safety override for the furnace. This decision is most likely to lead to which of the following?

An increase in legal costs

What question might be asked when looking for threats that exist in the external environment?

Are quality standards or specifications for products or services changing?

A family-owned law firm has decided to implement automatic deposit for employees' paychecks. The office manager, who also manages payroll, estimates she will save six hours of time each week by setting up automatic deposits.

Automation

Why are team-oriented operations essential today?

Because cooperation is necessary to solve quality and productivity problems to remain competitive increasingly global marketplace.

Which of the following can account for the shift from manual work to intellectual work for postal workers?

Capital productivity (Investments in equipment to speed up sorting of the mail have reduced the manual component in a postal worker's job.)

Which term refers to a capability valued by customers that enables a firm to improve its profitability?

Competitive advantage

What type of decision making can result in more cross-functional teams?

Decentralized

The Coca-Cola Company has published two versions of its Code of Business Conduct, its worldwide code of conduct, and a code of conduct specific to Coca-Cola France, Refreshment Services and Coca-Cola Midi. What is the most likely reason that Coca-Cola employees in France and in the United States have different codes of conduct?

Differences in ethical and legal requirements for doing business between France and the United States led to differences in the company's code of conduct.

Jean's Hair Salon wishes to offer a variety of services to its customers each day. How can Jean's Hair Salon accomplish its goal of offering multiple services to its customers without increasing costs?

Employees at Jean's Hair Salon can be trained to perform multiple job functions.

The execution of a successful order fulfillment system is not dependent on purchasing and material management.

False

True of False? Operations managers rarely become involved with worker safety or environmental pollution complaints because such ethical issues are only handled by an organization's legal department.

False

True or False High-quality outputs that add value to customers represent physical goods, not services.

False

True or False Operations in the service and manufacturing sectors operate independently from each other in creating a value chain that ultimately brings products to customers.

False

True or False Service providers do not produce products because they are not part of the manufacturing sector.

False

True or False The management of inventory is more important to producers of goods than producers of services.

False

True or False When making a decision whether to outsource manufacturing to another country, a company does not need to consider how its employees are affected.

False

True or false? Although consumers and organizations benefit from the improved efficiency and lower product costs that result from team-oriented operations, teamwork typically results in fewer job opportunities and lower wages for an organization's employees.

False

True or false? Any organization that adheres to the universal set of customer requirements will develop a competitive advantage and succeed in its industry.

False

True or false? Due to the pressure to compete globally, an increasing number of firms are changing their organizational structures. Instead of being organized by business processes, more firms are being organized by business functions.

False

True or false? When developing systems to produce goods and services, firms must assemble the necessary internal resources, such as employees and equipment. At this stage, organizations should avoid using external resources to ensure the protection of product ideas.

False

True or False The most critical input for a university is capital.

False (For many service businesses, labor is the most critical input, and for service organizations such as hospitals, universities, and banks, labor may be 70% or more of total costs.)

True or False Operations can only add value when producing a product for profit.

False (Not-for-profit organizations can add value. The value added to products represents improved wealth to society. The wealth created or preserved by value-added operations contributes to economic growth and makes more resources available for other wealth-creating activities. This ultimately improves the living standard because more wealth is created than consumed.)

Is the following statement true or false? Operations are important because operational plans help create a path toward the organization's objectives determined in the strategic planning process. This only happens when considering a company's strengths.

False (Operations are important because operational plans help create a path toward the organization's objectives determined in the strategic planning process that is based on the four elements of a SWOT analysis. These include not just strengths, but weaknesses, opportunities, and threats.)

True or False? SWOT analysis can only be used as a simple tool to begin strategy formulation.

False (SWOT Analysis can be used as a simple tool to begin strategy formulation but can also be used as a sophisticated strategy tool.)

True or False Team-oriented operations meet the demand for high-quality, low-cost products that provide advantages only to the organization.

False (Team-oriented operations benefit many stakeholders, including the organization, but also labor, consumers, and management.)

Speed is essential Uniformity is stressed Service is geared toward the individual Little advance food preparation Large selection on menu

Fast Food Restaurant Fast Food Restaurant Four-Star Restaurant Four-Star Restaurant Four-Star Restaurant

At the end of each month, the Ajax City Hospital Billing Department creates invoices for all patients who owe the hospital money. Most of the billing work is done by Hannah, a long-time employee. Hannah extracts patient information from the hospital's database then uses a template in a word processor to create each invoice. Hannah typically spends two days, or 16 hours, to create about 200 invoices each month. Hannah's manager has decided to send Hannah to a training course to help her learn how to output invoices directly from the database. Which of the following best explains why this training would increase Hannah's productivity?

Input will decrease while output will stay the same. (Productivity = output/input. Hannah will be able to create invoices more quickly, so the denominator will decrease. The training will not affect how many invoices Hannah has to process, so the numerator will stay the same.)

A business process has which of the following unique characteristics that make it key in any organization?

It is cross-functional.

Job markets have shifted between countries for manufacturing, technology, engineering, and management jobs over the past decades. Which of the following has been a driving force in the global job market?

Labor costs

When McDonald's started offering specialty coffee drinks, it was hoping to increase its market share in its industry. What is the definition of market share?

Market share is a company's sales divided by the sales of all companies in its industry.

An order fulfillment system manages customers orders in several steps. Select the one that is NOT part of the process. Delivering the order to satisfy customers. Marketing to the customer. Obtaining customer orders. Entering orders into the organization's information system.

Marketing to the customer.

Which key process within an organization obtains customers' orders, enters them into the organization's information system, and finally delivers the order to satisfy customers?

Order fulfillment

In the scenario, "Ford Motor Company's Rebound," which of the following sentences from the scenario best highlights how an industry, such as the U.S. automotive industry, may develop a relative advantage? (Select the best answer.)

Organizations that are successful in the twenty-first century will develop an understanding of global marketing, distribution systems, financial and capital markets, accounting, and operations, rather than national strategies.

In an effort to obtain its ISO standard certification, XYZ Consulting has arranged its structure so that its consultants specialize in specific areas of activity such as strategic planning, product development and supply chain management. XYZ's organizational structure would be classified as which of the following?

Process

The international programs office (IPO) of a large university wants to better prepare students for their study abroad experiences. The office always conducts orientation sessions for outbound students, but the students who attend these sessions do not ask very many questions. The director decides to put together a question-and-answer panel at the next round of orientation meetings, inviting the student interns who recently returned from studying abroad to be on the panel. The director hopes that outbound students will be more likely to ask questions to other students.

Process Redesign

Jane Smith is expecting her first child and is understandably concerned about the child's safety as they travel. Jane is shopping for a car seat for her new arrival. Given her stated concerns, all else being equal, which of the following customer requirements do you think Jane will most likely consider?

Product Quality as revealed in consumer safety tests

Which of the following is calculated by determining the ratio of outputs achieved divided by the inputs consumed to achieve those outputs?

Productivity

Earlier in this module, you learned that there have been three economic shifts in the United States due to significant increases in productivity. Which of the following explains the shift in the nature of work, from manufacturing to service-based work?

Second Revolution (Historians have labeled the years from 1870-1914 as the period of the Second Industrial Revolution. While the First Industrial Revolution caused the growth of industries, such as coal, iron, railroads, and textiles, the Second Industrial Revolution witnessed the expansion of electricity, petroleum, and steel.)

In the late 1800's, Frank Woolworth and several family members opened a series of five- and ten-cent stores. By 1912, F. W. Woolworths & Company had 596 stores in the United States. Products were sold for five cents and ten cents, and the stores generally stocked mass-produced household goods such as apple corers, can openers, and shovels. The growth of F. W. Woolworths & Company's five- and ten-cent stores occurred as a result of productivity changes attributed to the __________.

Second Revolution (Starting in the late 1800's, increases in manufacturing productivity reduced the labor content while increasing the volume of output for household goods. The Second Revolution meant that goods could be mass-produced at lower costs, and retail stores such as five- and ten-cent stores grew.)

Choose the product below that best represents an example of a service or intangible product provided by an organization.

Security protection

Choose the product below that best represents an example of a physical good or tangible product manufactured by an organization.

Smartphone

Organizations such as Apple must execute on their competitive capabilities in order to achieve customer satisfaction, which in turn drives the organization's success. Apple famously focuses on style, creates innovative and unique products, and delivers them through retail channel partners including its own online and physical stores. Which combination of key process or processes does and organization such as Apple leverage to impact its operations?

Strategy development, product development, development of systems, and order fulfillment.

When conducting a SWOT analysis, what element considers the characteristics, of a business or project, that lend an advantage within the scope of the study?

Strengths

Which list below represents the four elements of a SWOT analysis?

Strengths, weaknesses, opportunities, and threats.

-------- refers to the organizational issue of balancing financial profitability with environmental responsibility.

Sustainability

How does teamwork in operations benefit or add value to customers?

Teamwork in operations benefit the customer when coordinated decisions within an organization produce high-quality products that customer value.

Customers have many different requirements when purchasing products. Which of the following is not a possible customer requirement in a consumer good purchasing decision?

The accounting firm the company uses.

Business owners in the apparel industry must attract customers to be successful. Why is it difficult for apparel businesses to attract customers?

There is no universal set of customer requirements for the apparel industry.

Why have IBM, Ford, and Bank of America recently cut hundreds of thousands of white-collar workers?

To be able to respond quicker to opportunities

Functional silos that do not allow for sharing of information exist in what type of organization?

Traditional

Is the following statement true or false? The development of a system to produce the goods and services is essential to meeting the strategic goals of an organization.

True

True or False NAFTA should promote trade in products for which the signatory countries have relative advantages.

True

True or False Process redesign facilitates working toward a common goal in organizations.

True

True or False Producers of goods and producers of services both acquire and manage inputs throughout a transformation process that produces a final output.

True

True or False Product design is just as important with respect to producers of products (tangible goods) and producers of service (intangible goods).

True

True or False? An order fulfillment system needs to be designed and implemented to satisfy a customer's order.

True

True or false? Organizations with flexible operations respond quickly and inexpensively to the changing needs of customers.

True

True or False One reason to increase productivity is because resources are limited.

True (Resources such as time, materials, labor, knowledge, and machine capacity are often limited in an organization. Finding a way to do more with less, the essence of productivity, means that limited resources can go further.)

True or False Many blue-collar workers in manufacturing have seen the nature of their work shift from manual to intellectual work.

True (While the term "blue-collar workers" has been traditionally associated with manual labor, manufacturing has become increasingly automated, and those workers still working on a production line manage and oversee the production equipment rather than building products by hand.)

Many automotive manufacturers have factories in multiple countries. Vehicle designs and safety specifications are different from country to country. In which country would we expect to see stronger safety regulations for automobiles?

United States

What question might be asked when analyzing a company's internal weaknesses?

What factors result in lost sales?

What question might be asked when looking at opportunities that exist in the external environment?

What interesting trends might influence an organization's products or services?

What question might be asked when analyzing a company's internal strengths?

What unique or lowest-cost resources are controlled?

In addition to his regular duties, the receptionist in a busy medical practice has been managing the organization's website and social media accounts. However, starting next week, an information systems major from the local university will work part-time to manage the website, Twitter, Facebook, and LinkedIn accounts.

Work Specialization

Historically, the working conditions were vastly different than those of today. What was the average work week like at the beginning of the 20th century?

Workers toiled for 50-60 hours a week and worked weekends.

The management of inventory is important to producers of goods and producers of services but ______________.

a service is intangible and thus involves no finished products

Delicious Donuts manages employees, orders materials, produces output, and advertises its products. An overall strategic plan is needed in organizations because companies must efficiently ----------.

allocate resources

A combination of improvements in managerial practices, increased productivity by American workers, and the expansion of U.S. natural gas production may reduce the cost to make steel in the United States. The U.S. steel industry may soon become more competitive in global trade due to ----------.

becoming a more efficient producer

A small civil engineering firm has decided to invest in a Bobcat tractor to assist in clearing land and preparing the ground for its projects. The effect on society of the new tractor is that it will ----------.

benefit because more work is completed with less resources

Select the one that best completes the sentence. Advances in technology can help the operations of an organization to design and build better products and relates to___________.

both tangible goods and intangible services.

Producers of goods exist in the manufacturing sector and manage the operations for products such as ----------- constructed by the Federal Highway Administration that customers value.

bridges constructed by the Federal Highway Administration (Bridges are tangible and many are constructed by some level of government, which is part of the public sector.)

Most organizations develop common goals during the ---------- process, which is done annually.

budgeting and planning

In order to develop a competitive advantage, satisfy customers, and achieve organizational success, a firm should focus on ----------.

business processes

Operations managers use technology to solve problems that can make life better for consumers. Value for the customer can be enhanced _________.

by using advances in technology that make it possible to design and build better products and processes using fewer resources.

A teamwork approach in managing operations_______.

can help solve quality and productivity problems

Choose the two phrases that correctly complete the sentence. Advances in technology can be used to help the operations of an organization to ___________

create a process that helps an organization accomplish a task. develop new ideas and successfully implement them.

he fast food industry is very competitive. A manager in a fast food industry can create a competitive advantage by creating --------.

cross functional teams

Making operational decisions often involves creating an _____ that ensures both short-term profits and long-term sustainability for the organization.

ethical balance (Organizations need to focus on how a decision affects not just profitability, but also employees, the community, and the environment, in the long and the short term.)

When people work together in organizations instead of working alone or in isolated groups, overall productivity tends to increase, which leads to _________.

improved standards of living

Customers tend to value those aspects of a company's business model that indicate its focus on serving their needs to its highest capabilities. Customers bond with brands and organizations they perceive to be going "above and beyond" mere compliance with expected performance. The XYZ Truck Stop on I-815 is more likely to generate a competitive advantage if it:

keeps its facility open 24 hours a day

Ajax, a computer manufacturer headquartered in Delaware, has decided to outsource the manufacturing of its computers for the Asian market to a contract manufacturer in China in order to take advantage of lower labor costs. This will enable Ajax to price its computers competitively in the Asian market. The contract manufacturer does not have the specialized testing equipment needed to test the Ajax computers, so Ajax agrees to purchase the equipment at a cost of $200,000 and install it for the contract manufacturer. All of the components used to build the computers are available from multiple sources worldwide. Which of the following inputs would Ajax be most likely to use in calculating the contract manufacturer's productivity

labor and capital

Organizational structure will most likely define the ----------.

lines of communication

A pharmaceutical sales company needs to replace its company cars. One car company quoted a price 15% lower than its competitor. The pharmaceutical company took into account total expected costs of ownership, including purchase price, fuel efficiency, ergonomic comfort, end-of-life resale value, and warranty costs, and went with the higher-priced competitor to achieve ----------

long term-benefits

The operations within an organization produce the goods and services that meet the demands of society and create value for the consumers who benefit from the ----------- which are worth more to the consumer than the total cost of the ----------

output inputs

Double-sided printing will have this result......which takes into account this aspect of the triple bottom line. studies that indicate the company's paper usage requires the harvest of 47% fewer trees, year-over year. a better working environment for employees due to fewer complaints about printers running out of paper. a reduction in the annual cost of purchasing, shipping, and storing paper.

planet people profit

Businesses are shifting from organizing by function to organizing by ----------.

process

Procter & Gamble worked with Walmart to improve the replenishment process for disposable diapers. he scenario "Procter & Gamble Work with Walmart" provides an example of ----------.

process redesign

Technologies applied in the operations of both producers of goods and services include both ---------- and ----------- design.

product process

In the 1950s, Coca-Cola replaced glass bottles with lighter, less costly aluminum cans without changing the taste of the soda. This operations change best illustrates how technology altered Coca-Cola's --------.

product design

Many companies that generate monthly bills to customers, such as credit card, cable, and utility companies, now offer customers the option for online billing, instead of sending the bill by postal mail. Online billing allows companies to reduce paper usage and shipping costs. These companies can ---------- and ----------.

reduce environmental impact increase profits

The United States' steel industry has faced tough competition from India and China, which have been able to produce low-cost steel, partly due to lower labor costs, since the 1980s. India and China developed a(n) ---------- over the United States.

relative advantage

The difference between the lowest cost producer of a good and the next-lowest cost producer of the same good is known as a(n) --------.

relative advantage

SWOT analysis is used as a -------- tool when used to uncover exploitable opportunities within the competitive landscape.

simple

Service providers and provider of goods have many similarities because_________.

some of their final products can be considered both.

SWOT analysis is used as a -------- tool when a firm crafts a strategy that helps distinguish itself among competitors, develops competitive advantages, and avoids barriers within the business environment.

strategic

In most cases, companies that sell products and companies that sell services both maintain inventories of -Select-supporting goodsfinished goodssupporting goods --------.

supporting goods

Operations exists along with other functional areas that operate as a ---------- within an organization that develops a ----------- that first begins with a SWOT analysis. This includes evaluating a company's internal -------- and threats and looks at the ---------- and threats that exist in the external environment.

team strategy strengths and weaknesses opportunities and threats

When Apple introduces flexibility into its operations, it can gain a competitive advantage. Flexibility in operations is best described as:

the ability to modify production from one product to another in response to customer demands with minimal costs and delays.

Companies that can improve productivity become more efficient. When productivity improves, ----------.

unit costs decline

In a SWOT analysis, ---------- refer to internal characteristics of a company that could create a disadvantage for the company.

weaknesses