Operations Management Test #1 (Summerfield)

True or False? An assembly drawing lists the operations necessary to produce the component.

False (correct answer Route Sheet)

True or False? An assembly chart shows an exploded view of the product, usually a three-dimensional or isometric drawing.

False (correct answer is Assembly Drawing)

Process A has fixed costs of $1000 and variable costs of $5 per unit. Process B has fixed costs of $500 and variable costs of $15 per unit. What is the crossover point between process A and process B? A) 50 units B) 200 units C) $2,500 D) $5,000 E) $9,500

1000 + 5x = 500 + 15x >>> 10x = 500 >>> x = 50 units >>> A

The service sector makes up approximately what percentage of all jobs in the United States? A) 12% B) 40% C) 66% D) 85%

85%

A strategy is a(n): A) set of opportunities in the marketplace. B) broad statement of purpose. C) simulation used to test various product line options. D) plan for cost reduction. E) action plan to achieve the mission.

Action plan to achieve the mission.

Which of the following typically shows the hierarchy of components, their description, and the quantity of each required to make one unit of a product? A) an engineering drawing B) an assembly drawing C) a bill of material D) an assembly chart E) a route sheet

A bill of material

Which of the following is NOT a potential cause of the bullwhip effect? A) shortage gaming B) channel coordination C) order batching D) demand forecast errors E) price fluctuations

Channel coordination

Computer-integrated manufacturing (CIM) includes manufacturing systems that have: A) computer-aided design, a flexible manufacturing system, inventory control, warehousing and shipping integrated. B) transaction processing, management information systems, and decision support systems integrated. C) automated guided vehicles, robots, and process control integrated. D) robots, automated guided vehicles, and transfer equipment integrated. E) all of their computers integrated with the marketing department.

Computer-aided design, a flexible manufacturing system, inventory control, warehousing and shipping integrated

Suppose that a product's value is $1000. The manufacturer experiences a holding cost of 2.5% per month. The firm ships the product across country by truck, and it arrives six days later. The shipping cost is $80 per unit. What is the holding cost on each unit shipped? (Assume 30 days per month.) A) $0.83 B) $5.00 C) $0.07 D) $0.40 E) $150.00

(0.025 * 1000) / 30 = holding cost per day * 6 = 0.83 * 6 = B

With cross-sourcing, how many suppliers provide each component on a regular basis (i.e., excluding backup suppliers)? A) 1 B) 2 C) 3 D) equal to the total number of components E) equal to the number of countries to which the final product is sold

1

Collins Title Insurance Ltd. wants to evaluate its labor and multifactor productivity with a new computerized title-search system. The company has a staff of four, each working 8 hours per day (for a payroll cost of $640/day) and overhead expenses of $400 per day. Collins processes and closes on 8 titles each day. The new computerized title-search system will allow the processing of 14 titles per day. Although the staff, their work hours, and pay are the same, the overhead expenses are now $800 per day. Calculate: 1. Labor productivity with the old system (in titles per labor-hour) 2. Labor productivity with the new system 3. Multifactor productivity with the old system (in titles per dollar) 4. Multifactor productivity with the new system

1. 8 / 8 * 4 = 1 / 4 = 0.25 titles per labor-hour 2. 14 / 8 * 4 = 0.4375 titles per labor-hour 3. 8 / 400 + 640 = 0.0077 4. 14 / 640 + 800 = 0.0097

A foundry produces circular utility access hatches (manhole covers). If 120 covers are produced in a 10-hour shift, the productivity of the line is_________covers/hr.

12

Which one of the following technologies is used ONLY for material handling, NOT actual production or assembly? A) robots B) CNC C) CAD D) AGVs E) FMS

AGVs (automated guided vehicle)

Which of the following provides automatic placement and withdrawal of parts and products into and from designated places in a warehouse? A) AGV B) CAD/CAM C) CIM D) ASRS E) FMS

ASRS (automated storage and retrieval systems)

Additive manufacturing can use which of the following materials? A) plastics B) ceramics C) living cells D) chocolate E) all of the above

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

All of the above

Which of the following represents an opportunity for generating a new product? A) understanding the customer B) demographic change, such as decreasing family size C) changes in professional standards D) economic change, such as rising household incomes E) All of the above are such opportunities.

All of the above are such opportunities.

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.

All of the above are true

Value-stream mapping: A) is a variation of time-function mapping. B) examines the supply chain to determine where value is added. C) extends time function mapping back to the supplier. D) starts with the customer and works backwards. E) All of the above are true.

All of the above are true.

Which of the following is an example of an external product development strategy? A) new internally developed products B) enhancements to existing products C) alliances D) migrations of existing products E) All of the above are examples of internal product development strategy.

Alliances

A restaurant kitchen contains a wall poster that shows, for each sandwich on the menu, a sketch of the ingredients and how they are arranged to make the sandwich. This is an example of a(n): A) assembly drawing. B) route sheet. C) bill of material. D) work order. E) assembly chart.

Assembly drawing.

Which of the following products is likely to be assembled on a repetitive process line (as oppose to process-focused and product-focused processes)? A) automobiles B) custom personal computers C) custom cakes D) steel E) beer

Automobiles

Which of the following is LEAST likely to be a low-cost leadership competitive advantage? A) low overhead B) effective capacity use C) inventory management D) broad product line E) mass production

Broad product line

Given the position of the 3D printer in the growth stage of its life cycle, which of the following OM Strategy/Issues should the makers of 3D printers be least concerned with at the current time? A) forecasting B) cost cutting C) increasing capacity D) product and process reliability E) enhancing distribution

Cost cutting

Which one of the following products is most likely made in a job shop environment? A) rolls of newsprint B) custom furniture C) television sets D) cigarettes E) canned vegetables

Custom furniture (job shop: process focus)

An engineering drawing shows the: A) dimensions, tolerances, materials, and finishes of a component. B) dimensions, tolerances, cost, and sales or use volume of a component. C) materials, finishes, machining operations, and dimensions of a component. D) cost, materials, tolerances, and lead-time for a component.

Dimensions, tolerances, materials, and finishes of a component.

Value analysis takes place: A) when the product is selected and designed. B) during the initial stages of production when something needs to be done to assure product success. C) when the product is first conceived. D) during the production process when it is clear that the new product is a success.

During the production process when it is clear that the new product is a success

True or False? A bullwhip measure value greater than zero indicates that the bullwhip effect exists.

False

True or False? An example of the postponement strategy for improving service productivity is having the customer wait until you have sufficient time to serve the customer.

False

True or False? Computer-aided design (CAD) refers to the use of specialized computer programs to direct and control manufacturing equipment.

False

True or False? Cross-sourcing describes the practice of having two suppliers provide every component.

False

True or False? Key success factors and core competencies are synonyms.

False

True or False? Low-cost leadership is the ability to distinguish the offerings of the organization in a way that the customer perceives as adding value.

False

True or False? Manufacturing now constitutes the largest economic sector in postindustrial societies.

False

True or False? Modular design exists only in tangible products; it makes no sense in services.

False

True or False? NAFTA seeks to phase out all trade and tariff barriers between the United States and Asia.

False

True or False? Professional services typically require low levels of labor intensity.

False

True or False? SWOT analysis is a method of determining external strengths and weaknesses and internal opportunities and threats.

False

True or False? Supply chain decisions are not generally strategic in nature, because purchasing is not a large expense for most firms.

False

True or False? A work order is a list of the hierarchy of components, their description, and the quantity of each required to make one unit of the product.

False (correct answer is Bill of Materials)

True or False? The typical full-service restaurant uses a product-focused process.

False (correct answer is process focus)

True or False? With the "many suppliers" sourcing strategy, the order usually goes to the supplier that offers the highest quality.

False (cost/price)

True or False? Productivity is the total value of all inputs to the transformation process divided by the total value of the outputs produced.

False (productivity is total value of the outputs produced/total value of inputs to the transformation process)

Service blueprinting: A) provides the basis to negotiate prices with suppliers. B) mimics the way people communicate. C) determines the best time for each step in the process. D) focuses on the provider's interaction with the customer. E) uses the schematic of a house to diagram a service process.

Focuses on the provider's interaction with the customer

What value of the bullwhip measure would indicate that the bullwhip effect exists? A) greater than 1 B) greater than 0 C) less than 0 D) less than 1 E) 1

Greater than 1

What identifies components by a coding scheme that specifies size, shape, and the type of processing (such as size)? A) engineering drawing B) group technology C) bill of material D) assembly drawing E) assembly chart

Group technology

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.

Have had a dramatic impact on customer interaction with services and with products.

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.

High-volume, low-variety products.

Which of the following is NOT a service design technique used to increase service efficiency? A) increase customer interaction B) delay customization C) automation D) modularization E) limit the options

Increase customer interaction

Which of the following is NOT among the ethical and social challenges facing operations managers? A) honoring stakeholder commitments B) training, retaining, and motivating employees C) efficiently developing and producing safe high-quality green products D) increasing executive pay E) providing a safe workplace

Increasing executive pay

In which stage of the product life cycle should product strategy focus on process modifications as the product is being "fine-tuned" for the market? A) introduction B) growth C) maturity D) decline E) incubation

Introduction

Experience differentiation: A) isolates the consumer from the delivery of a service. B) is an extension of product differentiation in the service sector. C) uses only the consumer's senses of vision and sound. D) keeps consumers from becoming active participants in the service.

Is an extension of product differentiation in the service sector.

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

Its output is a standardized product produced from modules. (repetitive focus: modular design)

When Daimler and BMW pooled resources to develop standardized auto components, the sourcing strategy could best be described by which of the following? A) keiretsu B) virtual companies C) joint venture D) vertical integration E) few suppliers

Joint venture

Japanese manufacturers often pursue a strategy that is part collaboration, part purchasing from a few suppliers, and part vertical integration. What is this approach called? A) kanban B) keiretsu C) samurai D) poka-yoke E) kaizen

Keiretsu

Under the disaster risk decision tree model, which of the following conditions would create the HIGHEST incentive to use MORE suppliers? A) lower S, lower U B) lower S, higher U C) higher S, lower U D) higher S, higher U

Lower S, higher U (I don't understand what these stand for)

Which sourcing strategy is particularly common when the products being sourced are commodities? A) few suppliers B) many suppliers C) keiretsu D) vertical integration E) virtual companies

Many suppliers

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

Marketing, production/operations, and finance/accounting

Which of the following is not one of the strategies for improving service productivity? A) self-service B) automation C) scheduling D) separation E) mass customization

Mass customization

Bridget's Hamburger Stand uses only 7 ingredients but offers 15 different burgers. This process is known as: A) Robust design. B) QFD. C) Modular design. D) CAD. E) Value analysis.

Modular design.

Which of the following is NOT a remedy for the bullwhip effect? A) share demand information B) channel coordination C) order batching D) price stabilization E) allocate orders based on past demand

Order batching

Suppose that the manager of a company has estimated the probability of a super-event sometime during the next five years that will disrupt all suppliers as 0.23%. In addition, the firm currently uses three suppliers for its main component, and the manager estimates the probability of a unique-event that would disrupt one of them sometime during the next five years to be 1.4%. What is the probability that all three suppliers will be disrupted at the same time at some point during the next five years? A) 4.4203% B) 1.2300% C) 4.4300% D) 2.2297% E) 0.2303%

P(3) = 0.0023 + (1 - 0.0023) 0.014^3 >>> E (I don't understand this- I'm not sure if it is E)

Process X has fixed costs of $10,000 and variable costs of $2.40 per unit. Process Y has fixed costs of $9,000 and variable costs of $2.25 per unit. Which of the following statements is TRUE? A) The crossover point is approximately 6667 units. B) It is impossible for one process to have both of its costs lower than those of another process. C) Process Y is cheaper than process X at all volumes. D) Process X should be selected for very large production volumes. E) Process X is more profitable than process Y and should be selected.

Process Y is cheaper than process X at all volumes.

Goods made to order are typical of ________ and ________ approaches while goods made to forecast are typical of ________ and ________ approaches. A) process, mass customization; repetitive, product B) product, mass customization; repetitive, process C) product, process; repetitive, mass customization D) repetitive, product; mass customization, process E) repetitive, process; mass customization, product

Process, mass customization; repetitive, product

________ is used to rank a company's products to determine which products represent the best use of the firm's resources, or, perhaps, to determine which products are to be eliminated. A) Value analysis B) Value engineering C) Financial analysis D) Product-by-value analysis E) Product cost justification

Product-by-value analysis

Which of the following is NOT one of the risk mitigation tactics for the supply chain risk category of suppliers failing to deliver? A) use multiple suppliers B) effective contracts with penalties C) subcontractors on retainer D) require overnight delivery E) pre-planning

Require overnight delivery

Which one of the following is NOT one of the six sourcing strategies? A) negotiation with many suppliers B) vertical integration C) keiretsu D) short-term relationships with few suppliers E) virtual companies

Short-term relationships with few suppliers

A result of concurrent engineering in product design is: A) speedier product development. B) lower quality. C) less customer demand. D) higher costs.

Speedier product development

According to PCN analysis, which process region includes process steps in which one participant is acting on another participant's resources, such as their information, materials, or technologies? A) independent processing B) surrogate interaction C) direct interaction D) resource processing E) process domain interaction

Surrogate interaction

Which of the following statements about challenges 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) Sustainable production is giving way to a low-cost focus. D) Rapid product development is partly the result of shorter product cycles. E) The goal of mass customization is to produce customized products, whenever and wherever needed.

Sustainable production is giving way to a low-cost focus.

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) None, i.e., all of the above are true.

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

Which of the following is NOT an element of the disaster risk decision tree model? A) the buyer's financial loss incurred in a supply cycle if supplier i were disrupted B) the marginal cost of managing a supplier C) the buyer's financial loss incurred in a supply cycle if all suppliers were disrupted D) the probability of a "super-event" that would disrupt all suppliers simultaneously E) the probability of a "unique-event" that would disrupt only one supplier

The buyer's financial loss incurred in a supply cycle if supplier i were disrupted

Which of the following activities takes place most immediately once the mission has been developed? A) The firm develops alternative or back-up missions in case the original mission fails. B) The functional areas develop their functional area strategies. C) The functional areas develop their supporting missions. D) The ten OM decision areas are prioritized. E) Operational tactics are developed.

The functional areas develop their supporting missions.

One of the similarities between process focus and mass-customization is: A) the volume of outputs. B) the use of modules. C) many departments and many routings. D) the variety of outputs. E) All of the above are similarities.

The variety of outputs.

Which of the following is true of maquiladoras? A) They discourage foreign businesses from outsourcing. B) They assess tariffs only on the value-added work done. C) They originated in China. D) None of the above

They assess tariffs only on the value-added work done

Operations management is applicable: A) mostly to the service sector. B) mostly to the manufacturing sector. C) to all firms, whether manufacturing or service. D) to the manufacturing sector exclusively.

To all firms, whether manufacturing or service.

1. True or False? All organizations, including service firms such as banks and hospitals, have a production function.

True

True or False? A fast-food retailer that acquired a spice manufacturer would be practicing backward integration.

True

True or False? A value-stream map includes both (1) inventory quantities, and (2) symbols for customers and suppliers.

True

True or False? An accounting firm that provides tax services for a company would be considered to be part of that company's supply chain.

True

True or False? An example of a "hidden" production function is the transfer of funds between accounts at a bank.

True

True or False? Competition in the 21st century is no longer between companies; it is between supply chains.

True

True or False? Experience differentiation is an extension of product differentiation, accomplished by using people's five senses to create an experience rather than simply providing a service.

True

True or False? One reason for global operations is to gain improvements in the supply chain.

True

True or False? One use of camera-and-computer-based vision systems is to replace humans doing tedious and error-prone visual inspection activities.

True

True or False? Optical checkout scanners and ATMs are examples of technology's impact on services.

True

True or False? Production is a measure of output only and not a measure of efficiency.

True

True or False? Production processes are being dispersed to take advantage of national differences in labor costs.

True

True or False? Productivity is generally more difficult to improve in the service sector than in the manufacturing sector.

True

True or False? Rapidly developing products and moving them to the market is part of time-based competition.

True

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

True

True or False? The World Trade Organization has helped to significantly reduce tariffs around the world.

True

True or False? The bullwhip effect can occur when orders decrease as well as when they increase.

True

True or False? The objective of the make-or-buy decision is to help identify the products and services that can be obtained externally.

True

True or False? The objective of the product decision is to develop and implement a product strategy that meets the demands of the marketplace with a competitive advantage.

True

True or False? The primary trade-off in transportation mode analysis involves evaluating holding cost against the cost of shipping.

True

True or False? The tool that calculates which process has the lowest cost at any specified production volume is a crossover chart.

True

Which of the following is true regarding value engineering? A) Value engineering occurs only after the product is selected and designed. B) Value engineering creates fragile design. C) Value engineering is oriented toward improvement of design. D) Value engineering can save substantial amounts of product cost, but quality suffers.

Value engineering is oriented toward improvement of design.

What is the value of the bullwhip measure for a company with a standard deviation of demand equal to 20, and a variance of orders equal to 450? A) 0.889 B) 22.5 C) 1.125 D) 0.044 E) 50

Variance of orders / variance of demand = 450 / (20*20= 400) = 1.125 >>> C