Chapter 1 - Operations and Productivity

Which of the following OM decisions determines how a good or service is produced and commits management to specific​ technology, quality, human​ resources, and capital​ investment? A.design of goods and services B.human resources and job design C.managing quality D.process and capacity design

.process and capacity design

Two car wash employees are paid $7.50 an hour each and are capable of washing 12 cars per hour, using $1 of water and $2 of soap and other cleaning supplies. What is the multifactor productivity of this operation? There are two employees working.

0.66 cars per dollar

An insurance adjuster processes the claims of six policy holders in an eight hour work day. The adjuster uses $5 in gasoline and $3 in forms and office supplies to complete the work. What is her labor productivity? Divide output by input.

0.75 claims per hour

10 Strategic OM Decisions

1. Design of goods and services 2. Managing quality 3. Process strategy 4. Location strategies 5. layout strategies 6. human resources 7. supply-chain management 8. Inventory management 9. scheduling 10. maintenance

Productivity increases are dependent on three productivity variables

1. Labor 2. Capital 3. Management

Three functions to create goods and services

1. Marketing 2. Production / Operations 3. Finance / Accounting

We study OM for four reasons:

1. to learn how people organize themselves for productive enterprise. 2. to learn how goods and services are produced. 3. to understand what operations managers do 4. because OM is a costly part of an organization

What percentage of Hard​ Rock's profit is derived from retail shop​ sales?

50%

Two bricklayers work together to build a 320 brick wall in an 8 hour work day. If they are paid $10 per hour, their productivity is $2/brick

False Output divided by input is 320 bricks over 16 hours of labor, 20 bricks per hour or 2 bricks per dollar of wages.

Eli Whitney is known as the father of scientific management.

False Eli Whitney is credited with popularizing interchangeable parts.

The production function is clearly visible to the customer in the operations of both goods and services producers.

False In organizations that do not create physical products, the production function may be hidden from the public and even from the customer.

Labor contributes over 50% of the increase in productivity.

False Management contributes over 50% of the increase in productivity.

Some service providers have no operations function.

False Since all organizations have three functions, all must have a production/operations function. A service-producing production function is very different from a goods-producing production function.

Operations managers now devote more energy to price negotiation with their suppliers as a means of staying competitive.

False Suppliers supply over half the value of products and long-term relationships cannot be based on zero-sum negotiations.

Which of the following organizations does NOT belong to the service​ sector? A. Southwest Airlines B. Ford Motor Company C. San Diego Zoo D. Costco

Ford Motor Company

Which of the following is NOT one of the reasons operations managers want to work with their supply chains to viciously cut inventories at every​ level? A. Inventory provides safety against​ higher-than expected demand. B. Inventory constrains response to​ ever-shorter product life cycles. C. Inventory hides quality issues. D. Inventory requires financial resources.

Inventory provides safety against​ higher-than expected demand.

A country's standard of living can improve only through increases in productivity.

True

A large percentage of the revenue of most firms is spent in the OM function.

True

In the U.S., the service sector provides almost 80% of all jobs

True

One difference between a good and a service is that services are often produced and consumed simultaneously

True

Operations managers are increasingly concerned with designing products and processes that are environmentally friendly.

True

Productivity in the service sector has proven difficult to improve because it is typically labor-intensive.

True

The sale of most goods includes a service.

True

The person who believed that management must do more to improve the work environment and processes so that quality can be improved was

W. Edwards Deming.

Which of the following is NOT one of the four reasons that we study​ OM? A. It is such a costly part of an organization. B. It is one of the three major functions of any organization. C. We want to understand what marketing managers do. D. We want to know how goods and services are produced.

We want to understand what marketing managers do.

Supply Chain

a global network of organizations and activities that supplies a firm with goods and services

When a tangible product is NOT included in the service, it is called

a pure service.

A global network of organizations and activities that supply a firm with goods and services is referred to as

a supply chain

Operations Management (OM)

activities that relate to the creation of goods and services through the transformation of inputs to outputs

Which of the following activities at a commercial bank is NOT an operations​ activity?

auditing

The service sector constitutes what percentage of employment in the United States?

between​ 80% to​ 90%

Which of the following is NOT considered to be a​ stakeholder? A. competitors B. distributors C. community members D. customers

competitors

Services

economic activities that typically produce an intangible product such as education, entertainment, lodging, government, financial and health services.

Which of the following tasks would NOT typically represent an operations management activity at Hard Rock​ Cafe? A. designing an efficient layout B. filing a tax return C. preparing an employee schedule D. receiving a shipment of incoming food ingredients

filing a tax return

The capital investment each year in the United States usually

increases

Which operations function at a manufacturing facility strives for the efficient use of​ machines, space, and​ personnel?

industrial engineering

Productivity increases when

inputs decrease while outputs remain the same.

Which of these is NOT one of the basic functions of the management​ process? leading staffing controlling inspecting

inspecting

Which of the 10 OM decisions applied at Hard Rock​ Café focuses on maximizing the customer experience and driving customers toward​ revenue-generating activities?

layout design

Which of the following trends is NOT part of the exciting OM challenges currently facing operations​ managers? A. rapid product development B. supply chain partnering C. local focus D. sustainability

local focus

Which appears to provide the best opportunity for increases in productivity?

management

Which of the following is NOT one of the factors that fosters specialization and worldwide supply​ chains? A.specialized expert knowledge B.instant communication C.marketing D.cheaper transportation

marketing

The three major business functions necessary to all organizations are

marketing, finance/accounting, production/operations.

The ratio of all resources to the goods and services produced is referred as

multifactor productivity.

Which of the following is NOT considered to be one of the three primary functions that all organizations​ perform? A. research and development B. ​production/operations C. ​finance/accounting D. marketing

research and developmen

Which of the following activities at an airline is NOT an operations​ activity? A. sales B. flying C. crew scheduling D. catering

sales

The economic activities that typically produce an intangible product are referred to as

services

Which of the following is NOT a characteristic of​ services? A. intangible B. standardized product C. unique D. produced and consumed simultaneously

standardized product

Competition in the 21st century is no longer between​ companies; it is between

supply chains.

Production

the creation of goods and services

In​ general, the supply chain starts with A.the provider of basic raw materials. B.a distributor. C.research and development. D.final customers at the retail store.

the provider of basic raw materials

Productivity

the ratio of outputs (goods and services) divided by one or more inputs (such as labor, capital or management)

Service sector

the segment of the economy that includes trade, financial, lodging, education, legal, medical, and other professional occupations

Increases in productivity are difficult to achieve if

the task is more intellectual and personal.

Knowledge societies

those in which much of the labor force has migrated from manual work to technical and information-processing tasks requiring ongoing education.

Stakeholders

those with a vested interest in an organization, including customers, distributors, suppliers, owners, lenders, employees, and community members.

Which of the following is an example of a​ "hidden" production​ function? manufacturing a television assembling a motorcycle producing a computer transplanting a liver

transplanting a liver

In the early part of the 21st century, annual productivity growth in the U.S. has been _______ .

2.5%

The production process at Hard Rock Cafe does NOT include which of the following​ activities? A.advertising .B cooking C. receiving D. placing raw materials in cold storage

Adverstising

Which of the following best defines​ scheduling?

Determines and implements​ intermediate- and​ short-term schedules that effectively and efficiently utilize both personnel and facilities while meeting customer demands.

Which of these statements accurately captures a current trend in operations? (a) Cost competition is more important than any other basis for competition (b) There is increased focus on local markets and local competition. (c) Products and services are designed more quickly and by teams. (d) Jobs are increasingly specialized as workers focus on basic assembly tasks.

Products and services are designed more quickly and by teams.

Frederick W. Taylor

The "father" of scientific management is

What is the goal for mass​ customization? A. The goal is to produce customized​ products, whenever and wherever needed. B. The goal is to let operations managers work with their supply chain to viciously cut inventories at every level. C. The goal is to seek creative​ designs, efficient​ production, and​ high-quality goods via international collaboration. D. The goal is to enrich jobs and move more decision making to the individual contributor.

The goal is to produce customized​ products, whenever and wherever needed.

W. Edwards Deming

The person who developed plant-wide quality control systems

Eli Whitney

The person who introduced standardized, interchangeable parts

A large percentage of the revenue of most firms is spent on which​ function?

operations

productivity =

units produced divided by input used

Which of the following does NOT contribute to​ OM? A.innovations from physical sciences B.unsystematic processing of data C information technology D. other disciplines including industrial​ engineering, statistics,​ management, and economics

unsystematic processing of data