Schm 331 Test 1

"Considers inventory ordering and holding decisions" is within the strategic operations management decision area of managing quality.

False

A knowledge society is one that has migrated from work based on knowledge to one based on manual work.

False

Because Hard Rock Cafés are themed restaurants, operations managers focus their layout design efforts on attractiveness while paying little attention to efficiency.

False

Customer interaction is often high for manufacturing processes, but low for services.

False

Henry Ford is known as the Father of Scientific Management.

False

In order to have a career in operations management, one must have a degree in statistics or quantitative methods.

False

Manufacturing now constitutes the largest economic sector in postindustrial societies.

False

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

False

Shewhart's contributions to operations management came during the Scientific Management Era.

False

Define operations management. Will your definition accommodate both manufacturing and service operations?

Operations management can be defined as the management of all activities directly related to the creation of goods and/or services through the transformation of inputs into outputs. Yes.

Productivity is generally more difficult to improve in the service sector than in the manufacturing sector.

True

Some of the operations-related activities of Hard Rock Café include designing meals and analyzing them for ingredient cost and labor requirements.

True

The operations manager performs the management activities of planning, organizing, staffing, leading, and controlling of the OM function.

True

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

A cleaning company uses $10 of chemicals, $40 of labor, and $5 of misc. expenses for each house it cleans. After some quality complaints, the company has decided to increase its use of chemicals by 50%. By what percentage has multifactor productivity fallen? A) 0% B) 8.3% C) 25% D) 50% E) 16.7%

B

Identify up to four phenomena that foster specialization and worldwide supply chains.

(1) a more technologically oriented society, (2) specialized expert knowledge, (3) instant communication, and (4) cheaper transportation

A foundry produces circular utility access hatches (manhole covers). Currently, 120 covers are produced in a 10-hour shift. If labor productivity can be increased by 20%, it would then be: A) 14.4 covers/hr. B) 24 covers/hr. C) 240 covers/hr. D) 1200 covers/hr. E) 10 covers/hr.

A

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 services. C) location strategy. D) managing quality. E) human resources and job design.

A

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

The Dulac Box plant produces 500 cypress packing boxes in two 10-hour shifts. Due to higher demand, they have decided to operate three 8-hour shifts instead. They are now able to produce 600 boxes per day. What has happened to productivity? A) It has not changed. B) It has increased by 37.5 boxes/hr. C) It has increased by 20%. D) It has decreased by 8.3%. E) It has decreased by 9.1%.

A

The Dulac Box plant produces 500 cypress packing boxes in two 10-hour shifts. What is the productivity of the plant? A) 25 boxes/hr. B) 50 boxes/hr. C) 5000 boxes/hr. D) 0.04 boxes/hr. E) 250 boxes/hr.

A

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

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) 1900s; queuing theory

A

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.

A

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

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) restaurant

A

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

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.

B

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

The Dulac Box plant works two 8-hour shifts each day. In the past, 500 cypress packing boxes were produced by the end of each day. The use of new technology has enabled them to increase productivity by 30%. Productivity is now approximately: A) 32.5 boxes/hr. B) 40.6 boxes/hr. C) 62.5 boxes/hr. D) 81.25 boxes/hr. E) 300 boxes/hr.

B

The factor responsible for the largest portion of productivity increase in the United States 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

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

Which of the following fosters specialization and worldwide supply chains? A) more expensive transportation B) instant communication C) economies of scope D) managers with a broad knowledge of many things E) high trade tariffs

B

Which of the following is NOT a strategic operations management decision? A) maintenance B) price C) layout design D) quality E) inventory

B

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

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

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

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: A) 1.2 covers/hr. B) 2 covers/hr. C) 12 covers/hr. D) 1200 covers/hr. E) 120 covers/hr.

C

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

Gibson Valves produces cast bronze valves on an assembly line, currently producing 1600 valves each 8-hour shift. If the productivity is increased by 10%, it would then be: A) 180 valves/hr. B) 200 valves/hr. C) 220 valves/hr. D) 880 valves/hr. E) 1760 valves/hr.

C

Gibson Valves produces cast bronze valves on an assembly line, currently producing 1600 valves per shift. If the production is increased to 2000 valves per shift, labor productivity will increase by: A) 10%. B) 20%. C) 25%. D) 40%. E) 50%.

C

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

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) the service sector is often easy to mechanize and automate.

C

What is a global network of organizations and activities that supply a firm with goods and services? A) supply tree B) provider network C) supply chain D) vendor network E) vendor tree

C

Which of the following is one of the 10 strategic operations management decisions? A) depreciation policy for tax returns B) advertising C) process and capacity design D) pricing E) debt/equity ratio

C

Gibson Valves produces cast bronze valves on an assembly line. If 1600 valves are produced in an 8-hour shift, the productivity of the line is: A) 2 valves/hr. B) 40 valves/hr. C) 80 valves/hr. D) 200 valves/hr. E) 1600 valves/hr.

D

Which productivity variable has the greatest potential to increase productivity? A) labor B) globalization C) management D) capital E) energy

C

Who was the person most responsible for popularizing interchangeable parts in manufacturing? A) Frederick Winslow Taylor B) Henry Ford C) Eli Whitney D) Whitney Houston E) Lillian Gilbreth

C

Henry Ford and ________ are credited with the development of the moving assembly line.

Charles Sorensen

A cleaning company uses 10 lbs each of chemicals A, B and C for each house it cleans. After some quality complaints, the company has decided to increase its use of chemical A by an additional 10 lbs for each house. By what % has productivity (houses per pound of chemical) fallen? A) 0% B) 10% C) 15% D) 25% E) 33%

D

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

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) 1890s; queuing theory

D

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

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

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

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

The service sector makes up approximately what percentage of all jobs in the United States? A) 12% B) 40% C) 66% D) 86% E) 94%

D

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) single-factor productivity.

D

Walter Shewhart is listed among the important people of operations management because of his contributions to: A) assembly line production. B) measuring productivity in the service sector. C) just-in-time inventory methods. D) statistical quality control. E) information technology.

D

What are the five elements in the management process? 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

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) Reselling is unusual in services; goods often have some residual value.

D

Which of the following are among the 10 strategic operations management decisions? 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

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

Which of the following is NOT an element of the management process? A) controlling B) leading C) planning D) pricing E) staffing

D

Which of the following is NOT one of the 10 strategic operations management decisions? A) layout strategy B) maintenance C) process and capacity design D) mass customization E) supply chain management

D

Which of the following is a similarity between goods and services? A) mass production B) consistency C) automation D) Both have quality standards. E) Both can usually be kept in inventory.

D

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

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

Identify the 10 strategic OM decisions.

Design of goods and services, managing quality, process strategy, location strategies, layout strategies, human resources, supply chain management, inventory management, scheduling, and maintenance.

A small metal shop operates 10 hours each day, producing 100 parts/hour. If productivity were increased 20%, how many hours would the plant have to work to produce 1000 parts? A) less than 2 hours B) between 9 and 10 hours C) between 2 and 6 hours D) between 6 and 8 hours E) between 8 and 9 hours

E

At Hard Rock Café, tasks that reflect operations or operations management include: A) designing efficient layouts. B) providing meals. C) receiving ingredients. D) preparing effective employee schedules. E) all of the above.

E

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

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

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

The 10 strategic operations management decisions include: A) layout strategy. B) maintenance. C) process and capacity design. D) managing quality. E) all of the above.

E

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

Which of the following influences layout design? A) inventory requirements B) capacity needs C) personnel levels D) technology E) All of the above influence layout decisions

E

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

Identify the items that Fredrick W. Taylor believed management should be more responsible for.

He believed that management should be more responsible for matching employees to the right job, providing the proper training, providing proper work methods and tools, and establishing legitimate incentives for work to be accomplished.

Operations managers should be well versed in what disciplines in order to make good decisions?

Management science, information technology, and often one of the biological or physical sciences.

Brandon Production is a small firm focused on the assembly and sale of custom computers. The firm is facing stiff competition from low-priced alternatives, and is looking at various solutions to remain competitive and profitable. Current financials for the firm are shown in the table below. In the first option, marketing will increase sales by 50%. The next option is Vendor (Supplier) changes, which would result in a decrease of 10% in the cost of inputs. Finally there is an OM option, which would reduce production costs by 25%. Which of the options would you recommend to the firm if it can only pursue one option? In addition, comment on the feasibility of each option. Business Function Current Value Cost of Inputs $50,000 Production Costs $25,000 Revenue $80,000

Marketing would increase sales to $120,000 ($80,000 ∗ 1.5) but increase cost of inputs and production costs to $112,500 (($50,000 + $25,000) ∗ 1.5). This would net an additional $2500 of profit ($120,000 - $112,500 - current profit of $5000). Vendor (Supplier) Changes would decrease cost of inputs to $45,000 ($50,000 ∗ .9), resulting in $5,000 of additional profit (savings) ($50,000 - $45,000). Finally, the OM option would save $6250 ($25,000 - $25,000 ∗ .75), resulting in an additional $6250 of profit. Thus the OM option is the most profitable. Comments on feasibility should center on the near impossibility of increasing revenue by 50%, while noting the other two options are difficult but not impossible.

________ is the total of all outputs produced by the transformation process divided by the total of the inputs.

Multifactor productivity

________ is the set of activities that creates value in the form of goods and services by transforming inputs into outputs.

Operations Management

How do services differ from goods? Identify five ways.

Pick from the following: a service is usually intangible; it is often produced and consumed simultaneously; it is often unique; it involves high customer interaction; product definition is inconsistent; it is often knowledge-based; it is frequently dispersed; quality may be hard to evaluate; and reselling is unusual.

Identify two operations-related tasks carried out by Hard Rock Café. Match each to its related area of the 10 strategic operations management decisions.

Providing custom meals: design of goods and services; designing, testing, and costing meals: design of goods and services; acquiring, receiving, and storing supplies: supply chain management; recruiting and training employees: human resources and job design; preparing employee schedules: scheduling; designing efficient restaurant layouts: layout strategy.

Identify three or more operations-related tasks carried out by Hard Rock Café.

Providing custom meals; designing, testing, and costing meals; acquiring, receiving , and storing supplies; recruiting and training employees; preparing employee schedules; designing efficient restaurant layouts.

When a tangible component is not included in a service, such as with counseling, it is called a(n) ________.

Pure service

Identify the three productivity variables used in the text.

The three common variables are labor, capital, and management.

Starbucks stopped requiring signatures on credit-card purchases under $25 in an attempt to reduce ________.

Transaction time (or service time)

All organizations, including service firms such as banks and hospitals, have a production function.

True

Although the number of people employed in manufacturing in the United States has decreased since 1950, each person is now producing almost 20 times more than in 1950.

True

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

True

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

True

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

True

One reason to study operations management is to learn how people organize themselves for productive enterprise.

True

Operations management is the set of activities that creates value in the form of goods and services by transforming inputs into outputs.

True

Marketing, production/operations, and ________ are the three functions that all organizations must perform to create goods and services.

finance/accounting

Productivity is the ratio of ________ to ________. Using this relationship, productivity can be improved by ________ or ________.

outputs; inputs; reducing inputs while holding outputs constant; increasing outputs while holding inputs constant.

A(n) ________ is a global network of organizations and activities that supply a firm with goods and services.

supply chain

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

supply chains