Chapter 1 Operations Management (OPSY 5315)
14) Manufacturing now constitutes the largest economic sector in postindustrial societies.
FALSE
16) A knowledge society is one that has migrated from work based on knowledge to one based on manual work.
FALSE
__________ is the set of activities that transforms inputs into goods and services.
Answer: Operations management
Marketing, Production, and __________ are the three functions that all organizations must perform to create goods and services.
Answer: finance/accounting
Which of the following is the best example of a pure service? A) counseling B) oil Change C) heart transplant D) electric Co-Op E) all of the above
A) counseling
All of the following decisions fall within the scope of operations management except for A) creating the company income statement B) design of goods and processes C) location of facilities D) managing quality E) All of the above fall within the scope of operations management
A) creating the company income statement
__________ is the ability of the organization to be flexible enough to cater to the individual whims of consumers.
Answer: Mass customization
Henry Ford and __________ are credited with the development of the moving assembly line.
Answer: Charles Sorensen
Walter Shewhart, in the __________, provided the foundations for __________ in operations management. A) 1920s; statistical sampling B) United Kingdom; mass production C) U.S. Army; logistics D) nineteenth century; interchangeable parts E) none of the above
A) 1920s; statistical sampling
Which of the following tasks within an Airline Company are related to Operations? A) Crew Scheduling B) International Monetary Exchange C) Sales D) Advertising E) Accounts Payable
A) Crew Scheduling
Productivity can be improved by A) DECREASING input while HOLDING output steady B) DECREASING output while HOLDING input steady C) INCREASING inputs and outputs in the same proportion D) INCREASING inputs while HOLDING outputs steady E) None of the above
A) DECREASING input while HOLDING output steady
Which is not true regarding differences between goods and services? 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 a more inconsistent product definition than goods. D) Services tend to have higher customer interaction than goods. E) All of the above are true.
A) Tangible goods are generally produced and consumed simultaneously; services are not.
Which of the following statements is true? A) The person most responsible for initiating the use of interchangeable parts in manufacturing was Eli Whitney. B) The origins of management by exception are generally credited to Frederick W. Taylor. C) The person most responsible for initiating the use of interchangeable parts in manufacturing was Walter Shewhart. D) The origins of the scientific management movement are generally credited to Henry Ford. E) The person most responsible for initiating the use of interchangeable parts in manufacturing was Henry Ford.
A) The person most responsible for initiating the use of interchangeable parts in manufacturing was Eli Whitney.
Which of the following would not be an operations function in a commercial bank? A) auditing B) teller scheduling C) maintenance D) collection E) check clearing
A) auditing
The largest contributor to productivity increases is __________, estimated to be responsible for __________ of the annual increase. A) management; over one-half B) Mr. Deming; one-half C) labor; two-thirds D) capital; 90% E) technology; over one-half
A) management; over one-half
Which of the following attributes is most typical of a service? A) production and consumption occur simultaneously B) tangible C) mass production D) consistency E) easy to automate
A) production and consumption occur simultaneously
__________ is the operations management trend that moves more decision making to the individual worker.
Answer: Empowered employees
__________ is the total of all outputs produced by the transformation process divided by the total of the inputs.
Answer: Multifactor productivity
Identify three or more operations-related tasks carried out by Hard Rock Café.
Answer: Providing custom meals; designing, testing, and costing meals; acquiring, receiving , and storing supplies; recruiting and training employees; preparing employee schedules; designing efficient restaurant layouts.
Productivity is the ratio of __________ to __________. Using this relationship, productivity can be improved by __________ or __________.
Answer: outputs, intputs; reducing inputs while holding outputs constant; increasing outputs while holding inputs constant.
When a tangible product is not included in a service, such as with counseling, it is called a __________.
Answer: pure service
"Should we make or buy this component?" is an issue in the __________ critical decision area.
Answer: supply chain management
The "Father of Scientific Management" is A) Henry Ford B) Frederick W. Taylor C) W. Edwards Deming D) Frank Gilbreth E) just a figure of speech, not a reference to a person
B) Frederick W. Taylor
Which of the following pioneers was not making a professional impact during the Scientific Management Era? A) Frank Gilbreth B) W. Edwards Deming C) Henry L. Gantt D) Lillian Gilbreth E) Frederick W. Taylor
B) W. Edwards Deming
Which of the following nets the largest productivity improvement? A) increase output 15% B) decrease input 15% C) increase both output and input by 5% D) increase output 10%, decrease input 3% E) decrease input 10%, increase output 3%
B) decrease input 15%
Which of the following is not a typical service attribute? A) intangible product B) easy to store C) customer interaction is high D) simultaneous production and consumption E) difficult to resell
B) easy to store
Three commonly used productivity variables are A) quality, external elements, and precise units of measure B) labor, capital, and management C) technology, raw materials, and labor D) education, diet, and social overhead E) quality, efficiency, and low cost
B) labor, capital, and management
Among the ethical and social challenges facing operations managers are A) honoring financial commitments B) maintaining a sustainable environment C) developing low-cost products D) providing an efficient workplace E) all of the above
B) maintaining a sustainable environment
The factor responsible for the largest portion of productivity increase in the U.S. is A) labor B) management C) capital D) All three combined; it is impossible to determine the contribution of individual factors. E) None of these
B) management
Which of the following statements is true? A) Manufacturing now constitutes the largest economic sector in postindustrial societies B) The number of people employed in manufacturing has increased since 1950 C) Each manufacturing employee now produces about 20 times more than in 1950 D) All of the above are true. E) None of the above is true
C) Each manufacturing C) Each manufacturing employee now produces about 20 times more than in 1950
The person most responsible for popularizing interchangeable parts in manufacturing was A) Frederick Winslow Taylor B) Henry Ford C) Eli Whitney D) Whitney Houston E) Lillian Gilbreth
C) Eli Whitney
Which of the following statements about trends in operations management is false? A) Job specialization is giving way to empowered employees. B) Local or national focus is giving way to global focus. C) Environmentally-sensitive production is giving way to low-cost focus. D) Rapid product development is partly the result of shorter product cycles. E) All of the above statements are false
C) Environmentally-sensitive production is giving way to low-cost focus.
Henry Ford is noted for his contributions to A) material requirements planning B) statistical quality control C) assembly line operations D) scientific management E) time and motion studies
C) assembly line operations
Which productivity variable has the greatest potential to increase productivity? A) labor B) globalization C) management D) capital E) none of the above
C) management
The service sector has lower productivity improvements than the manufacturing sector because A) the service sector uses less skilled labor than manufacturing B) the quality of output is lower in services than manufacturing C) services usually are labor-intensive D) service sector productivity is hard to measure E) none of the above
C) services usually are labor-intensive
Productivity measurement is Productivity measurement is complicated by A) the competition's output B) the fact that precise units of measure are often unavailable C) stable quality D) the workforce size E) the type of equipment used
C) stable quality
An operations manager is not likely to be involved in A) the design of goods and services to satisfy customers' wants and needs B) the quality of goods and services to satisfy customers' wants and needs C) the identification of customers' wants and needs D) work scheduling to meet the due dates promised to customers E) maintenance schedules
C) the identification of customers' wants and needs
Franz Colruyt has achieved low-cost leadership through A. plastic, not paper, shopping bags B. exclusive use of the Euro C. converting factories, garages and theaters into retail outlets D. background music that subtly encourages shoppers to buy more E. effective use of voice mail
C. converting factories, garages and theaters into retail outlets
Illiteracy and poor diets have been known to cost countries up to what percent of their productivity? A) 2% B) 5% C) 10% D) 20% E) 50%
D) 20%
The service sector makes up approximately what percentage of all jobs in the United States? A) 12% B) 40% C) 66% D) 79% E) 90%
D) 79%
Which is not true regarding differences between goods and services? A) Services are generally produced and consumed simultaneously; tangible goods are not. B) Services tend to be more knowledge-based than goods. C) Services tend to have a more inconsistent product definition than goods. D) Goods tend to have higher customer interaction than services. E) None of the above is true.
D) Goods tend to have higher customer interaction than services.
Which of the following are part of the Ten Critical Decisions of Operations Management? I. Design of goods and services II. Managing Quality III. Layout Strategy IV. Marketing V. Pricing of Goods and Services A) I,II,V B) I,II,IV C) II,III,V D) I,II,III E) All of the above
D) I,II,III - design of goods & services; managing quality & layout strategy;
Who among the following is associated with contributions to quality control in operations management? A) Charles Babbage B) Henry Ford C) Frank Gilbreth D) W. Edwards Deming E) Henri Fayol
D) W. Edwards Deming
Which of the following is a similarity between goods and services? A) mass production B) consistency C) automation D) application of operations management E) all of the above
D) application of operations management
Productivity can be improved by A) increasing inputs while holding outputs steady B) decreasing outputs while holding inputs steady C) increasing inputs and outputs in the same proportion D) decreasing inputs while holding outputs steady E) none of the above
D) decreasing inputs while holding outputs steady
Which of the following services is least likely to be unique, i.e., customized to a particular individual's needs? A) dental care B) hairdressing C) legal services D) elementary education E) computer consulting
D) elementary education
The marketing function's main concern is with A) producing goods or providing services B) procuring materials, supplies, and equipment C) building and maintaining a positive image D) generating the demand for the organization's products or services E) securing monetary resources
D) generating the demand for the organization's products or services
Which of the following is not among the ethical and social challenges facing operations managers? A) honoring stakeholder commitments B) maintaining a sustainable environment C) efficiently developing and producing safe, quality products D) increasing executive pay E) providing a safe workplace
D) increasing executive pay
Which of the following are the primary functions of all organizations? A) production/operations, marketing, and human resources B) marketing, human resources, and finance/accounting C) sales, quality control, and production/operations, D) marketing, production/operations, and finance/accounting E) research and development, finance/accounting, and purchasing
D) marketing, production/operations, and finance/accounting
Which of the following is not one of The Ten Critical Decisions of Operations Management? A) layout strategy B) maintenance C) process and capacity design D) mass customization E) supply-chain management
D) mass customization
The total of all outputs produced by the transformation process divided by the total of the inputs is A) utilization B) greater in manufacturing than in services C) defined only for manufacturing firms D) multifactor productivity E) none of the above
D) multifactor productivity
Eli Whitney, in the __________, provided the foundations for __________ in operations management. A) 1920s; statistical sampling B) United Kingdom; mass production C) U.S. Army; logistics D) nineteenth century; interchangeable parts E) none of the above
D) nineteenth century; interchangeable parts
The five elements in the management process are A) plan, direct, update, lead, and supervise B) accounting, finance, marketing, operations, and management C) organize, plan, control, staff, and manage D) plan, organize, staff, lead, and control E) plan, lead, organize, manage, and control
D) plan, organize, staff, lead, and control
2) An operations task performed at Hard Rock Café is A) borrowing funds to build a new restaurant B) advertising changes in the restaurant menu C) calculating restaurant profit and loss D) preparing employee schedules E) all of the above
D) preparing employee schedules
The Ten Critical Decisions of Operations Management include A) finance/accounting B) advertising C) process and capacity design D) pricing E) all of the above
D) pricing
Which of the following is not an element of the management process? A) controlling B) leading C) planning D) pricing E) staffing
D) pricing
Walter Shewhart is listed among the important people of operations management because of his contributions to A) assembly line production B) measuring the productivity in the service sector C) just-in-time inventory methods D) statistical quality control E) all of the above
D) statistical quality control
Operations management is applicable A) mostly to the service sector B) to services exclusively C) mostly to the manufacturing sector D) to all firms, whether manufacturing or service E) to the manufacturing sector exclusively
D) to all firms, whether manufacturing or service
Reasons to study Operations Management include A) studying how people organize themselves for productive enterprise B) knowing how goods and services are consumed C) understanding what human resource managers do D) learning about a costly part of the enterprise E) A and D
E) A and D
Which of the following is not a current trend in operations management? A) just-in-time performance B) global focus C) supply-chain partnering D) mass customization E) All of the above are current trends.
E) All of the above are current trends
Current trends in operations management include all of the following except A) just-in-time performance B) rapid product development C) mass customization D) empowered employees E) All of the above are current trends.
E) All of the above are current trends.
New trends in operations management include A) global focus B) mass customization C) empowered employees D) rapid product development E) All of the above are new trends in operations management
E) All of the above are new trends in operations management
Productivity tends to be more difficult to improve in the service sector because the work is A) often difficult to automate B) typically labor-intensive C) frequently processed individually D) often an intellectual task performed by professionals E) All of the above make service productivity more difficult
E) All of the above make service productivity more difficult
Which of the following is not true when explaining why productivity tends to be lower in the service sector than in the manufacturing sector? A) Services are typically labor-intensive. B) Services are often difficult to evaluate for quality. C) Services are often an intellectual task performed by professionals. D) Services are difficult to automate. E) Service operations are typically capital intensive.
E) Service operations are typically capital intensive.
A business's stakeholders, whose conflicting perspectives cause ethical and social dilemmas, include A) lenders B) suppliers C) owners D) employees E) all of the above
E) all of the above
ASQ, ISM, APICS, and PMI are important professional organizations to operations management because* A) they provide certification for professionals B) they allow professionals to keep up with industry developments C) they facilitate professional networking D) none of the above E) all of the above
E) all of the above
Among the ethical and social challenges facing operations managers are A) honoring stakeholder commitments B) maintaining a sustainable environment C) efficiently developing and producing safe, quality products D) providing a safe workplace E) all of the above
E) all of the above
Reasons to study Operations Management include learning about A) how people organize themselves for productive enterprise B) how goods and services are produced C) what operations managers do D) a costly part of the enterprise E) all of the above
E) all of the above
The Ten Critical Decisions of Operations Management include A) layout strategy B) maintenance C) process and capacity design D) managing quality E) all of the above
E) all of the above
The field of operations management is shaped by advances in which of the following fields? A) chemistry and physics B) industrial engineering and management science C) biology and anatomy D) information technology E) all of the above
E) all of the above
Which of the following is not one of the Ten Critical Decisions of Operations Management? A) location strategy B) human resources and job design C) managing quality D) design of goods and services E) determining the financial leverage position
E) determining the financial leverage position
Which of the following best describes "experience differentiation?" A. Immerses consumers in the delivery of a service B. Complements physical elements with visual and sound elements C. Consumers may become active participants in the product or service D. Uses people's five senses to enhance the service E. All the above are elements of experience differentiation
E. All the above are elements of experience differentiation
10) Henry Ford is known as the Father of Scientific Management.
FALSE
11) Shewhart's contributions to operations management came during the Scientific Management Era.
FALSE
12) Customer interaction is often high for manufacturing processes, but low for services.
FALSE
17) Productivity is the total value of all inputs to the transformation process divided by the total value of the outputs produced.
FALSE
18) Measuring the impact of a capital acquisition on productivity is an example of multifactor productivity.
FALSE
2) Because Hard Rock Cafes are themed restaurants, operations managers focus their layout design efforts on attractiveness while paying little attention to efficiency.
FALSE
20) The critical path can be determined by use of either the "forward pass" or the "backward pass"
FALSE
21) The fundamental difference between PERT and CPM is that PERT uses beta distribution for crashing projects while CPM uses cost estimates.
FALSE
8) "How much inventory of this item should we have?" is within the critical decision area of managing quality.
FALSE
9) In order to have a career in operations management, one must have a degree in statistics or quantitative methods.
FALSE
1) Some of the operations-related activities of Hard Rock Café include designing meals and analyzing them for ingredient cost and labor requirements.
TRUE
13) Productivity is more difficult to improve in the service sector.
TRUE
15) In the past half-century, while the number of people employed in manufacturing in the United States has decreased slightly, the output per worker has increased significantly.
TRUE
19) Ethical and social dilemmas arise because stakeholders of a business have conflicting perspectives.
TRUE
3) All organizations, including service firms such as banks and hospitals, have a production function.
TRUE
4) Operations management is the set of activities that creates value in the form of goods and services by transforming inputs into outputs.
TRUE
5) An example of a "hidden" production function is money transfers at banks.
TRUE
6) One reason to study operations management is to learn how people organize themselves for productive enterprise.
TRUE
7) The operations manager performs the management activities of planning, organizing, staffing, leading, and controlling of the OM function.
TRUE
Starbucks stopped requiring signatures on credit-card purchases under $25 in an attempt to reduce __________ .
transaction time (or service time)