QDM Exam 1

Operations management jobs comprise approximately % of all jobs.

40%

A law firm has a staff of four employees working 8 hours a day for a total payroll cost of $640. In addition, the law firm has overhead expenses of $800 per day. Due to a recent software change, the same employees are able to process 14 case files a day rather than 8 using the old software system. What is the multifactor productivity of this revised operation? A. .0097 case files per dollar B. .4375 case files per labor hour C. .0077 case files per dollar

A. .0097 case files 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? A. .75 claims per hour B. 1 claim per dollar C. 1.33 hours per claim

A. .75 claims per hour The formula for single factor productivity is: Productivity = Units Produced / Labor Hours Used

Which of the following is the best example of competing on low-cost leadership? A. A firm produces its product with less raw material waste than its competitor. B. A firm's products are introduced to the market faster than its competitors. C. A firm produces more reliable products than its competitors.

A. A firm produces its product with less raw material waste than its competitor. Achieving competitive advantage by competing on low-cost leadership requires that a business achieve maximum value for customers by driving down costs while still providing quality goods and services to customers. One way to drive down costs is to improve efficiency by creating less material waste or scrap during the production process.

What common bias is this used-car salesman exploiting in his negotiation's tactics? (Best guess) A. Anchoring B. Confirmation C. Sunk Cost D. Negativity

A. Anchoring

Which of the following is least likely to be a cost leadership competitive advantage? A. Broad product line B. Mass production C. Inventory management

A. Broad product line Cost leadership strategies focus on achieving maximum value for the customer by driving down costs and keeping a focus on quality and value for the customer. Having a broad (or expansive) product line increases costs due to storage costs, stocking fees, etc. Proper inventory management and mass production, on the other hand, can be effective ways to drive down costs.

Which of the following is the best example of a pure service? A. Counseling B. Heart Transplant C. Oil change

A. Counseling A pure service is an activity that produces an intangible product, such as attending a concert or receiving counseling. An intangible product is experienced (e.g., attend a concert) rather than consumed like a good (e.g., purchase a tube of toothpaste).

Which of the following is not a typical service attribute? A. Easy to store B. Customer interaction is high C. Intangible product

A. Easy to store

Which of the following is not part of value-chain analysis? A. Financial management B. Product research C. Human resources

A. Financial management Value-chain analysis is used to identify activities that represent existing (or potential) strengths for a business that may be used to develop a competitive advantage. These strengths represent areas where a business adds value for a customer and can focus on product research, design, human resources, supply-chain management, process innovation, or quality management.

Which is not true regarding differences between goods and services? A. Goods tend to have higher customer interaction than services. B. Services tend to be more knowledge based than goods. C. Services are generally produced and consumed simultaneously; tangible goods are not.

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

A firm producing a good is more likely to have which set of the following characteristics compared to a firm providing a service? A. Objective quality standards, tangible product, and located away from customers B. Objective quality standards, intangible product, and located near customers C. Subjective quality standards, intangible product, and located away from customers

A. Objective quality standards, tangible product, and located away from customers

Why would management at Starbucks characterize their quest to improve productivity as a "game of seconds"? A. Reducing the time it takes to serve the average customer by a few "seconds" results in significant company-wide productivity improvements B. Their productivity strategy is to encourage customers to come back for "seconds" on all of their food and drink orders C. If a Starbucks location is ranked as "second" most productive in a given market they will focus on improving it D. Every day they hold morning productivity meetings that are designed to only last a few seconds

A. Reducing the time it takes to serve the average customer by a few "seconds" results in significant company-wide productivity improvements

What iterative and incremental agile project framework is named after a rugby huddle. A. Scrum B. Kanban C. Sprint D. Agile

A. Scrum

Which of the following international operations strategies allows a firm to pursue all three operations strategies? A. Transnational strategy B. Global strategy C. Multidomestic strategy

A. Transnational strategy transnational describes the condition where raw materials, people, and ideas cross national boundaries to create economies of scale that allow the company to pursue all three operation strategies—differentiation, low cost, and response.

The Beta distribution is used in project management to _______. A. calculate expected activity times B. calculate the probability that a project will be completed within its budget C. calculate slack for activities on the critical path

A. calculate expected activity times The beta distribution is used to calculate expected activity times by weighting three time estimates including the optimistic time of an activity, the pessimistic time of an activity, and the most likely time for an activity.

A measure of the strength of the relationship between two variables is referred to as the A. coefficient of correlation. B. standard error of the estimate. C. coefficient of determination. D. standard deviation of the estimate.

A. coefficient of correlation.

The ability of an organization to produce goods or services that have some uniqueness in their characteristics is __________. A. competing on differentiation B. competing on response C. competing on flexibility

A. competing on differentiation

Evaluating outsourcing providers by comparing their weighted average scores involves: A. factor-rating analysis. B. cost-volume analysis. C. transportation model analysis. D. linear regression analysis. E. crossover analysis.

A. factor-rating analysis.

The capital investment each year in the United States usually __________. A. increases B. remains constant C. decreases

A. increases Capital investment has increased at an average annual rate of 1.5% after allowing for depreciation. Inflation and taxes increase the cost of capital making capital investments increasingly expensive.

A mission statement is beneficial to an organization because it: A. is a statement of the organization's purpose. B. provides a basis for the organization's culture. C. identifies important constituencies. D. details specific income goals. E. ensures profitability.

A. is a statement of the organization's purpose.

Productivity increases each year in the U.S. are a result of three factors: A. labor, capital, management B. engineering, labor, capital C. engineering, capital, quality control D. engineering, labor, data processing E. engineering, capital, data processing

A. labor, capital, management

The critical path of a network is the A. longest time path through the network. B. shortest time path through the network. C. path with the most activities. D. path with the fewest activities.

A. longest time path through the network.

An international business is a firm that __________. A. participates in international trade or investment B. uses raw materials from outside the country C. hires non-U.S. citizens

A. participates in international trade or investment

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. process and capacity design B. design of goods and services C. human resources and job design D. managing quality

A. process and capacity design

The economic activities that typically produce an intangible product are referred to as A. services. B. goods. C. products. D. phantoms.

A. services.

SWOT analysis refers to __________. A. strengths, weaknesses, opportunities, and threats B. strengths, weaknesses, opponents, and threats C. support, weaknesses, opponents, and threats

A. strengths, weaknesses, opportunities, and threats

The service sector has lower productivity improvements than the manufacturing sector because __________. A. the service sector is usually more labor-intensive than the manufacturing sector B. the output quality is lower in the service sector than in the manufacturing sector C. the service sector uses less skilled labor than the manufacturing sector

A. the service sector is usually more labor-intensive than the manufacturing sector

Increases in productivity are difficult to achieve if __________. A. the task is more personal B. the task is more repetitive C. the task is more standardized

A. the task is more personal

Which of the following is NOT a technique that allows managers to​ plan, schedule, and control​ projects? A. ​Factor-rating method B. CPM C. Gantt charts D. PERT

A. ​Factor-rating method

The three phases involved in the management of large projects are A. ​planning, scheduling, and controlling. B. ​scheduling, operating, and evaluating. C. ​scheduling, designing, and operating. D. ​planning, scheduling, and evaluating.

A. ​planning, scheduling, and controlling.

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? A. 1.8 cars per dollar B. .667 cars per dollar C. 1.05 cars per dollar

B. .667 cars per dollar The formula for multifactor productivity is: Output / Total Inputs (e.g., labor costs + machine costs + material costs + overhead costs)

Which of the following statements regarding Gantt charts is true? A. Gantt charts give a timeline and precedence relationships for each activity of a project. B. Gantt charts are visual devices that show the duration of activities in a project. C. Gantt charts use the four standard spines of Methods, Materials, Manpower, and Machinery.

B. Gantt charts are visual devices that show the duration of activities in a project. graphically specify all of the tasks involved in a project and how much time should be spent doing each activity. The four standard spines of Methods, Materials, Manpower, and Machinery are part of cause and effect diagrams and are typically used in the quality control process.

Which of the following international operations strategies involves a high degree of centralization? A. Transnational strategy B. Global strategy C. Multidomestic strategy

B. Global strategy

Which of the following is not one of the basic functions of the management process? A. Leading B. Inspecting C. Controlling

B. Inspecting The management process consists of planning, organizing, staffing, leading, and controlling. Planning involves determining organizational goals and a means to achieve them, organizing is deciding where decisions will be made and who will be responsible for certain tasks, staffing is focused on determining who to hire and where to place each employee, leading involves inspiring and motivating workers, and controlling is monitoring progress towards goal achievement.

Slack time equals: A. ES + t B. LS-ES C. zero D. EF-ES

B. LS-ES

Which of the following OM strategic decisions pertains to the sensible location of processes and materials in relation to each other? A. Supply-chain management B. Layout design C. Goods and services design

B. Layout design layout design decisions focus on understanding material flows and inventory requirements so that the delivery of inputs aligns with the manufacturing or transformation process so that outputs are created without waste. Supply-chain management decisions are focused on what is to be made and what is to be purchased and primarily focuses on the relationship between the buyer (company) and supplier. Goods and services design deals with the transformation process.

Standardization is an appropriate strategy in which stage of the product life cycle? A. Growth B. Maturity C. Introduction

B. Maturity During the maturity stage of a product life cycle, businesses need to defend market position and focus on competitive costs. Standardization helps maintain market position and it also provides an opportunity to reduce manufacturing costs. These savings can be passed on to the consumer in an attempt to maintain or build market share.

Which of the following activities takes place most immediately once the organization's 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 supporting missions. C. Operational tactics are developed.

B. The functional areas develop their supporting missions.

The person who is most noted for his contributions to quality control in operations management was __________. A. Henry Ford B. W. Edwards Deming C. Eli Whitney

B. W. Edwards Deming

Competing on differentiation is A. based upon​ low-cost leadership. B. concerned with uniqueness. C. concerned with reliability of scheduling. D. based upon flexibility.

B. concerned with uniqueness.

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

B. filing a tax return

Productivity increases when: A. inputs increase while outputs remain the same. B. inputs decrease while outputs remain the same. C. outputs decrease while inputs remain the same. D. inputs and outputs increase proportionately. E. inputs increase at the same rate as outputs.

B. inputs decrease while outputs remain the same.

Which of the following is a direct responsibility of the project​ manager? A. performing all of the activities in the project B. making sure that the people assigned to the project receive the​ motivation, direction, and information needed to do their jobs C. drawing the network diagram D. calculating completion probabilities for all tasks in the project

B. making sure that the people assigned to the project receive the​ motivation, direction, and information needed to do their jobs

The total of all outputs produced by the transformation process divided by the total of the inputs is __________. A. full factor productivity B. multifactor productivity C. single-factor productivity

B. multifactor productivity

Which forecasting model is based upon​ salespersons' estimates of expected​ sales? A. jury of executive opinion B. sales force composite C. Delphi method D. market survey

B. sales force composite

A firm can effectively use its operations functions to yield competitive advantage through all of the following except __________. A. maintaining a variety of product options B. setting equipment utilization goals C. customization of product

B. setting equipment utilization goals

PERT analysis computes the variance of the total project completion time as A. the sum of the variances of all activities not on the critical path. B. the sum of the variances of all activities on the critical path. C. the sum of the variances of all activities in the project. D. the variance of the final activity of the project.

B. the sum of the variances of all activities on the critical path.

PERT analysis computes the variance of the total project completion time as: A. the sum of the variances of all activities in the project. B. the sum of the variances of all activities on the critical path. C. the sum of the variances of all activities not on the critical path. D. the variance of the final activity of the project.

B. the sum of the variances of all activities on the critical path.

A foundry produces manhole covers. If 120 covers are produced in a 10-hour shift, the productivity of the line is __________. A. 1200 covers/hr B. 2 covers/hr C. 12 covers/hr

C. 12 covers/hr

The service sector makes up approximately what percentage of all jobs in the United States? A. 60% B. 70% C. 80%

C. 80%

The "father" of scientific management is __________. A. Henry Ford B. Eli Whitney C. Frederick W. Taylor

C. Frederick W. Taylor

Which of the following statements regarding Gantt charts is true? A. Gantt charts give a timeline and precedence relationships for each activity of a project. B. Gantt charts use the four standard spines: Methods, Materials, Manpower, and Machinery. C. Gantt charts are visual devices that show the duration of activities in a project. D. Gantt charts are expensive. E. All of the above are true.

C. Gantt charts are visual devices that show the duration of activities in a project.

Porter's Five Forces Model is used to evaluate competition based on which 5 aspects? A. Immediate rivals, potential entrants, cost, substitute products, and legal regulations B. Potential entrants, customers, suppliers, legal regulation, and cost C. Immediate rivals, potential entrants, customers, suppliers, and substitute products

C. Immediate rivals, potential entrants, customers, suppliers, and substitute products

Which of the following is correct? A. KSFs are often important, but not necessary for competitive advantage. B. KSFs are both necessary and sufficient for competitive advantage. C. KSFs are often necessary, but not sufficient for competitive advantage.

C. KSFs are often necessary, but not sufficient for competitive advantage. Key success factors are those activities that are necessary for a firm to achieve its goals and mission. Key success factors can be so significant that a firm must get them right to survive in the marketplace. However, by themselves, the key success factors are not enough to ensure a competitive advantage in the market.

Which of the following statements concerning the operations management decision is relevant to services? A. There are many objective quality standards. B. The customer is not involved in most of the process. C. Labor standards vary depending on customer requirements.

C. Labor standards vary depending on customer requirements.

Which of the following functions would an operations department manage in a typical organization? A. Generate sales of goods or services B. Raise capital and manage an organization's cash flow C. Manage resources and processes to produce goods or deliver services D. Design and launch marketing campaigns

C. Manage resources and processes to produce goods or deliver services

Which of the following appears to provide the best opportunity for increases in productivity? A. Labor B. Capital C. Management

C. Management

Which of the following is not one of the 10 strategic OM decisions listed in the text? A. Location selection B. Quality C. Marketing

C. Marketing The 10 strategic decisions that influence the OM process are goods and services design, quality, process and capacity design, location selection, layout design, human resources and job design, supply-chain management, inventory, scheduling, and maintenance.

Which of the international operations strategies involves a focus on cost reductions and high local responsiveness? A. Global B. Transnational C. Multidomestic

C. Multidomestic

Which of the following is a reality each company faces regarding its forecasting​ system? A. Most forecasting techniques assume there is no underlying stability in the system. B. Product family forecast are less accurate than individual product forecasts. C. Outside factors that we cannot predict or control often impact the forecast. D. After automating their predictions using computerized forecasting​ software, firms closely monitor only the product items whose demand is stable.

C. Outside factors that we cannot predict or control often impact the forecast.

Which of the following do you think helps your profit picture the most . . . A. Increasing your SALES REVENUE by 50% B. Cutting your FINANCE costs in half C. Reducing OPERATING costs by 20%

C. Reducing OPERATING costs by 20%

Which one of the following categories is NOT usually used in Balanced Scorecards to organize goals and metrics? A. Financial Performance B. Innovation (Learning & Growth) C. Strategic Agility D. Internal Process E. Customer Satisfaction

C. Strategic Agility

Which of the following is a limitation of PERT and​ CPM? A. The graphical nature of a network delays comprehension of the activity​ list's interrelationships. B. They can be used only to monitor schedules. C. There is the inherent danger of placing too much emphasis on the critical path. D. They are applicable to only a narrow variety of projects and industries.

C. There is the inherent danger of placing too much emphasis on the critical path.

Services often: A. are tangible. B. are standardized. C. are knowledge based. D. are low in customer interaction. E. have consistent product definition.

C. are knowledge based.

The creation of a unique advantage over competitors is referred as A. response. B. differentiation. C. competitive advantage. D. experience differentiation.

C. competitive advantage.

The fundamental purpose of an organization's mission statement is to __________. A. define the functional areas of the organization B. define the operational structure of the organization C. define the purpose of the organization

C. define the purpose of the organization

Productivity increases when __________. A. inputs increase while outputs remain the same B. inputs and outputs increase proportionately C. inputs decrease while outputs remain the same

C. inputs decrease while outputs remain the same

With respect to PERT and​ CPM, slack A. marks the start or completion of a task. B. is the latest time an activity can be started without delaying the entire project. C. is the amount of time a task may be delayed without changing the overall project completion time. D. is a task or subproject that must be completed.

C. is the amount of time a task may be delayed without changing the overall project completion time.

Three critical productivity variables are __________. A. inputs, technology, and outputs B. technology, raw materials, and labor C. labor, capital, and management

C. labor, capital, and management

An activity map __________. A. links competitive advantage, key performance indicators, and supporting activities B. links competitive advantage, key performance indicators, and operations C. links competitive advantage, key success factors, and supporting activities

C. links competitive advantage, key success factors, and supporting activities Activity maps are used to link the three critical components of an operations strategy—the core competencies that create the firm's competitive advantage, the key success factors (i.e., those activities or factors that are considered instrumental to achieving competitive advantage), and support activities (i.e., specific behaviors and strategies that lead to achieving the identified success factors). Creating an activity map allows firms to create a graphic illustration of the key behaviors that build a firm's strategy.

Among the ethical and social challenges facing operations managers are __________. A. providing an efficient workplace B. honoring financial commitments C. maintaining a sustainable environment

C. maintaining a sustainable environment

The three major business functions necessary to all organizations are __________. A. marketing, research/development and finance/accounting B. finance/accounting, personnel and production/operations C. marketing, finance/accounting and production/operations

C. marketing, finance/accounting and production/operations Marketing is designed to generate demand and take orders for products and services. Finance and accounting is focused on understanding how organizations are performing, paying bills and collecting money. Production and operations is focused on the process organizations use to turn raw materials into a final product or service. Every organization, regardless of size and industry, is designed to carry out these three primary functions of business.

Gantt charts are A. not widely used. B. not easy to understand. C. planning charts used to schedule resources and allocate time. D. widely used network techniques.

C. planning charts used to schedule resources and allocate time.

An operations task performed at Hard Rock Café is __________. A. calculating restaurant profit and loss B. advertising changes in the restaurant menu C. preparing employee schedules

C. preparing employee schedules

The forecasting time horizon that would typically be easiest to predict for would be the A. medium range. B. long range. C. short range. D. intermediate range.

C. short range.

Productivity measurement is complicated by __________. A. the competition's output B. the type of equipment used C. the lack of precise units of measurement

C. the lack of precise units of measurement

The difference between a multinational corporation (MNC) and an international business is that __________. A. the international firm owns or operates facilities in a variety of countries B. the international business has been in existence longer C. the multinational firm owns or operates facilities in a variety of countries

C. the multinational firm owns or operates facilities in a variety of countries

Single-factor productivity: A. remains constant. B. is never constant. C. usually uses labor as a factor. D. seldom uses labor as a factor. E. uses management as a factor.

C. usually uses labor as a factor.

Multifactor productivity: A. remains constant. B. is never constant. C. usually uses substitutes as common variables for the factors of production. D. seldom uses labor as a factor. E. always uses management as a factor.

C. usually uses substitutes as common variables for the factors of production.

Average demand for iPods in the Apple store in Rome, Italy, is 800 units per month. The May monthly index is 1.25. What is the seasonally adjusted sales forecast for May? A. 640 units B. 798.75 units C. 800 units D. 1,000 units E. cannot be calculated with the information given

D. 1,000 units

Which of the following is a qualitative forecasting​ method? A. naive approach B. trend projection C. linear regression D. Delphi method

D. Delphi method

A forecast that projects a​ company's sales is A. a technological forecast. B. an economic forecast. C. an environmental forecast. D. a demand forecast.

D. a demand forecast.

A company that is organized across international boundaries, with decentralized authority and substantial autonomy at each business via subsidiaries, franchises, or joint ventures, has: A. a global strategy. B. a transnational strategy. C. an international strategy. D. a multidomestic strategy.

D. a multidomestic strategy.

The crash cost per period: A. is the difference in costs divided by the difference in times (crash and normal). B. is considered to be linear in the range between normal and crash. C. needs to be determined so that the smallest cost values on the critical path can be considered for time reduction first. D. all of the above.

D. all of the above.

Forecasting time horizons include: A. long range. B. medium range. C. short range. D. all of the choices.

D. all of the choices.

A strategy is A. a functional area of the firm. B. the purpose for which an organization is established. C. established prior to establishing a mission. D. an action plan to achieve a mission.

D. an action plan to achieve a mission.

Which of the following is a quantitative forecasting​ method? A. jury of executive opinion B. market survey C. sales force composite D. exponential smoothing

D. exponential smoothing

Productivity: A. can use many factors as the numerator. B. is the same thing as production. C. increases at about 0.5% per year. D. is dependent upon labor, management, and capital. E. is the same thing as effectiveness.

D. is dependent upon labor, management, and capital.

The critical path of a network is the: A. shortest-time path through the network. B. path with the fewest activities. C. path with the most activities. D. longest-time path through the network.

D. longest-time path through the network.

Three popular measures of forecast accuracy are: A. total error, average error, and mean error. B. average error, median error, and maximum error. C. median error, minimum error, and maximum absolute error. D. mean absolute deviation, mean squared error, and mean absolute percent error.

D. mean absolute deviation, mean squared error, and mean absolute percent error.

Which of the following is NOT a​ time-series model? A. exponential smoothing B. naive approach C. moving averages D. multiple regression

D. multiple regression

Among the​ following, critical path and slack time analysis MOST help A. managers define the project activities. B. highlight relationships among project activities. C. point out who is responsible for various activities. D. pinpoint activities that need to be closely watched.

D. pinpoint activities that need to be closely watched.

Which of these is NOT an advantage of​ outsourcing? A. cost savings B. accessing outside technology C. gaining outside expertise D. potential creation of future competition

D. potential creation of future competition

The tracking signal is the: A. standard error of the estimate. B. cumulative error. C. mean absolute deviation (MAD). D. ratio of the cumulative error to MAD. E. mean absolute percent error (MAPE).

D. ratio of the cumulative error to MAD.

Competition in the 21st century is no longer between​ companies; it is between A. countries. B. technologies. C. individuals. D. supply chains.

D. supply chains.

Which of the following is true about AOA and AON networks? A. In AOA, arrows represent activities. B. In AON, nodes represent activities. C. Activities consume time and resources. D. Nodes are also called events in AOA. E. All of the above.

E. All of the above.

A strategy that is not one of the 10 strategic operations management decisions is: A. maintenance. B. human resources, job design and work measurement. C. location strategies. D. design of goods and services. E. advertising strategies.

E. advertising strategies.

Qualitative methods of forecasting include: A. sales force composite. B. jury of executive opinion. C. consumer market survey. D. exponential smoothing. E. all except (d).

E. all except (d).

Core competencies are those strengths in a firm that include: A. specialized skills. B. unique production methods. C. proprietary information/knowledge. D. things a company does better than others. E. all of the above.

E. all of the above.

The three strategic approaches to competitive advantage are , , and .

differentiation, cost leadership, response

The difference between a moving-average model and an exponential smoothing model is that .

exponential smoothing is a weighted moving-average model in which all prior values are weighted with a set of exponentially declining weights

The main difference between simple and multiple regression is .

simple regression has only one independent variable