Service & Production Ops Exam #2

Several approaches to demand management exist, but only ______ seeks to maximize revenue. - promoting off-peak demand - reservation systems - offering price incentives - yield management

yield management

Make-to-order production processes are well suited for high-volume production of a standardized product. True or False

False

The customer is (or should be) the second most important focal point of all decisions in a service organization. True or False

False

Work-center layouts allocate dissimilar machines into cells to work on products that have dissimilar processing requirements. False or True

False

A process flowchart uses which of the following symbols to represent tasks or operations in a flow diagram? - A dashed line - Rectangle - Inverted triangle - Diamond - Arrow

Rectangle

To reduce process throughput time, you might try which of the following actions? - Introduce incentive pay - Reduce management interference. - Improve teamwork. - Change the sequence of activities. - Outsource activities.

Change the sequence of activities.

Which of the following is not considered an input to the layout decision in facility layout analysis? - Space requirements for the elements in the layout - Cost per square foot of alternative facilities - Specification of objectives and corresponding criteria to be used to evaluate the design - Estimates of product or service demand on the system - Processing requirements in terms of the number of operations and the flow between elements in the layout

Cost per square foot of alternative facilities

Which of the following is not a strategy to manage demand? - Offering price incentives. - Developing reservation systems. - Partitioning demand. - Cross-training employees.

Cross-training employees.

Which of the following is not a strategy for managing capacity? - Forecasting demand. - Using part-time employees. - Developing complementary services. - Scheduling shifts.

Developing complementary services.

A service operation by its very nature is a make-to-stock type of production process. False or True

False

A service system with a high degree of customer contact is less difficult to control than a low degree of customer contact service system. False or True

False

An example of segmenting demand is seen when movie theaters offer matinee prices before 6:00 p.m. False or True

False

Implicit services are not part of the service package. False or True

False

Which of the following is not a characteristic of yield management? - Demand fluctuates yet is somewhat predictable. - There is one homogeneous customer class. - Capacity is relatively fixed. - The service is considered a perishable inventory.

There is one homogeneous customer class.

A drawback to increased consumer participation is the fact that service quality is no longer completely under the control of the provider of the service. True or False

True

A high-level map or diagram of a supply chain process can be useful to understand how material flows and where inventory is held. False or True

True

An explicit service is readily observable by the senses. True or False

True

An implicit service implies psychological benefits that the customer may sense only vaguely. True or False

True

Engineer-to-order firms will work with the customer to design the product and then make it from purchased materials, parts, and components. True or False

True

If the sum of the task times required to produce a product is 45 minutes and the cycle time for the same product is 10 minutes, the theoretical minimum number of workstations is 5 using the assembly-line balancing procedure. True or False

True

If you want to reduce process flow time, one solutions is to perform activities in the process in parallel. False or True

True

In designing a production layout a flexible line layout might have the shape of a "U". True or False

True

In designing a production line, a mixed-model line layout is used by JIT manufacturers. True or False

True

Job design is defined as the function of specifying the work activities of an individual or group in an organizational setting. False or True

True

One methodology used to evaluate equipment investment decisions where the investment entails an initial investment, fixed costs, and variable costs is break-even analysis. False or True

True

One trade-off illustrated by the product-process matrix is between flexibility and cost. False or True

True

Pacing in production processes refers to the fixed timing of the movement of items through the process. True or False

True

Setup time is the time required to prepare a process to produce a particular item. True or False

True

The essential issue in satisfying customers in the make-to-stock environment is to balance the level of finished inventory against the level of service to the customer. False or True

True

The focus in the make-to-stock environment is on providing finished goods where and when the customers want them. False or True

True

The objective of a mixed-model line layout is to meet the demand for a variety of products and avoid building high inventories. True or False

True

The objective of a retail service layout is to maximize net profit per square foot of store space. True or False

True

The term "assembly line" refers to progressive assembly linked by some material handling device. False or True

True

Which of the following basic types of process structures is one in which similar equipment or functions are grouped together? - Manufacturing cell - Project - Work center - Assembly line - Continuous process

Work center

A good overbooking strategy should ______. - balance the expected opportunity cost of idle service capacity and expected cost of turning away customers who have reservations - minimize the expected cost of turning away reservations - minimize the expected opportunity cost of idle service capacity - none of the above; services should try to avoid overbooking

balance the expected opportunity cost of idle service capacity and expected cost of turning away customers who have reservations

The purpose of differential pricing is to ______. - adjust capacity to demand - make off-peak usage attractive - make peak period usage unattractive - charge customers according to their ability to pay

make off-peak usage attractive

A medical clinic has two doctors and each can treat 25 patients a day. The doctors see walk-in patients whose arrival times cannot be controlled, and also patients who have made appointments. Knowing the expected number of walk-ins per day, appointments are scheduled to utilize the doctors fully. The following table gives the expected number of walk-ins for a particular week: Day:Mon.Tue.Wed.Th.Fri.Expected Walk-ins:4535404540 What is the total number of appointments that can be scheduled during this week? - 45 - 40 - 35 - 30

45

Using the assembly-line balancing procedure, which of the following is the required cycle time in minutes per unit if the daily production time is 480 minutes and the required daily output is 50 units? - 50 - 0.104 - Cannot be determined from the information given - 480 - 9.6

9.6

A process flowchart uses which of the following symbols to represent flows of material or customers in a flow diagram? - Arrow - Diamond - Rectangle - A dashed line - Inverted triangle

Arrow

In the service-system design matrix, a face-to-face total customization service encounter is expected to have which of the following? - None of these - Low degree of customer/server contact - Low sales opportunity - Low production efficiency - High production efficiency

Low production efficiency

Which of the following production process terms best describes the situation when activities in a stage of production must stop because there is no work? - Starving - Blocking - Buffering - Buffer - Setup time

Starving

In the design of retail service layouts, the term "ambient conditions" could refer to which of the following? - How long the customer stays - Employee morale - How much money a customer spends - Temperature - Customers' perceptions of the service

Temperature

Bars that offer happy hours in the afternoon are using the strategy of ______. - increasing customer participation - creating adjustable capacity - promoting off-peak demand - developing complementary services

promoting off-peak demand

A process flowchart uses symbols to represent which of the following? - Workforce schedules - Factory location - Warehouse space available - Flows of material or customers - Data analysis

Flows of material or customers

______ is not a strategy for reduction of customer-induced variability. - Adapt to customer skill levels - Require reservations - Limit service breadth - Target customers based on capability

Adapt to customer skill levels

Which of the following is not part of "the service triangle"? - Service encounter - Service strategy - Support systems - Customers - Employees

Service encounter

Which of the following is a characteristic that can be used to guide the design of service systems? - Services businesses are inherently entrepreneurial. - Services are all similar. - Quality work means quality service. - Services cannot be inventoried. - Even service businesses have internal services.

Services cannot be inventoried.

Assume a fixed cost for a process of $15,000. The variable cost to produce each unit of product is $10, and the selling price for the finished product is $25. Which of the following is the number of units that has to be produced and sold to break even? - 667 units - 790 units - 900 units - 500 units - 1,000 units

1,000 units

Using the assembly-line balancing procedure, which of the following is the theoretical minimum number of workstations if the task times for the six tasks that make up the job are 4, 6, 7, 2, 6, and 5 minutes, and the cycle time is 10 minutes? - 6 - 3 - 8 - 5 - None of these

3

To reduce process flow time, you might try which of the following actions? - Reduce interruptions. - All of these - Perform activities in parallel. - Change the sequence of activities. - Acquire additional equipment.

All of these

Which of the following basic types of process structures is one in which equipment or work processes are arranged according to the progressive steps by which the product is made? - Assembly line - Work center - Continuous process - Manufacturing cell - Project

Assembly line

Which of the following basic types of production layout formats is one in which equipment or work processes are arranged according to the progressive steps by which the product is made? - Functional layout - Process layout - Job-shop layout - Assembly line layout - Group technology layout

Assembly line layout

Which of the following best describes the term "cycle time"? - Average time between completions of successive units - The labor content of the item being measured - The same as utilization - Can be no more that 60 minutes - Ratio of the time a resource is activated over its use

Average time between completions of successive units

Which of the following refers to the physical presence of the customer in a service system? - None of these - Customer contact - Continuous production - Creation of the service - Intermittent production

Customer contact

______ variability is not one of the five sources of customer-induced variability. - Effort - Demand - Capability - Arrival

Demand

A process flowchart uses which of the following symbols to represent a decision point in a flow diagram? - A dashed line - Diamond - Arrow - Inverted triangle - Rectangle

Diamond

Which of the following is not an example of the differential pricing policy? - Difference in hospital fees for walk-in and scheduled services. - None of the above. - Peak-load pricing by utility companies. - Weekend and night rates for long-distance telephone calls.

Difference in hospital fees for walk-in and scheduled services.

Which of the following is not a step in developing a manufacturing cell layout? - None of these - Grouping parts into families that follow a common sequence of steps - Physically grouping machines and processes into cells - Identifying dominant flow patterns of parts families as a basis for location of processes - Disposing of leftover machinery and outsourcing ungrouped processes

Disposing of leftover machinery and outsourcing ungrouped processes

Which of the following is not a step in developing a manufacturing cell layout? - None of these - Grouping parts into families that follow a common sequence of steps - Identifying dominant flow patterns of parts families as a basis for location of processes - Disposing of leftover machinery and outsourcing ungrouped processes - Physically grouping machines and processes into cells

Disposing of leftover machinery and outsourcing ungrouped processes

The placement of which of the following is not determined by production process organization decisions? - Emergency exits - Machines - Workstations - Work groups - Departments

Emergency exits

Which of the following is not considered a major workflow structure? - Project - Assembly line - Continuous flow - Fabrication - Work center

Fabrication

A make-to-order firm will work with the customer to design the product and then make it from purchased materials, parts, and components. False or True

False

A manufacturing cell groups identical machines together to work on products having similar shapes and processing requirements. False or True

False

As a general rule, manufacturing workstations should not be very close together. False or True

False

Blocking in production processes is when activities in a stage must continue because there is no place to deposit completed items. True or False

False

Having a lot of interstage storage of materials is considered a good layout design for a manufacturing plant. False or True

False

The time needed to respond to a customer's order is called the customer response time. True or False

False

When a make-to-order production process is used, production is based on forecasts. True or False

False

Which of the following terms describes the time a unit spends actually being worked on together with the time spent waiting in a queue? - Flow time - Efficiency - Cycle time - Run time - Setup time

Flow time

In the service-system design matrix, an Internet and on-site technology service encounter is expected to have which of the following? - None of these - High sales opportunity - High production efficiency - High degree of customer/server contact - Low production efficiency

High production efficiency

A process flowchart uses which of the following symbols to represent storage areas or queues in a flow diagram? - Rectangle - Arrow - Diamond - A dashed line - Inverted triangle

Inverted triangle

An advantage of a make-to-stock process is which of the following? - It features rapid delivery of a standard product. - All units of output are unique. - It combines the best features of other processes. - It allows the firm to avoid inventory costs. - It responds directly to customer orders.

It features rapid delivery of a standard product

For a chase demand strategy which of the following does not have a high trade-off? - Labor-skill level. - Employee utilization. - Supervision required. - Labor turnover.

Labor-skill level

The long-term relationship among the inventory, throughput, and flow time of a production system in steady state is called which of the following? - Robert's rule - Peterson's rule - None of these - Murphy's law - Little's law

Little's law

In the service-system design matrix, a mail contact service encounter is expected to have which of the following? - None of these - High degree of customer/server contact - High sales opportunity - Low sales opportunity - High production efficiency

Low sales opportunity

Which of the following is not a basic type of production layout format? - Workcenter - Project layout - Process layout - Manufacturing cell layout - Assembly line

Process layout

Which of the following is not a basic type of process structure? - Continuous process - Assembly line - Manufacturing cell - Product-process matrix - Work center

Product-process matrix

Which one of the following is not a major factor distinguishing service design and development from manufacturing design and development? - The service package, rather than a definable good, is the output of the development process. - The process and product must be developed at the same time. - Many parts of the service package are often defined by the training that individuals receive before they become part of the service organization. - Service operations can be protected by patents; manufacturing operations cannot. - Many service organizations can change their service offerings virtually overnight.

Service operations can be protected by patents; manufacturing operations cannot.

In the design of retail service layouts, the term "ambient conditions" does not refer to which of the following? - Music - Lighting - Scent - Noise level - Staffing

Staffing

Which of the following is a major factor that distinguishes service design and development from manufacturing design and development? - The service package has the same legal protection available to manufactured goods. - Capacity decisions are much more critical in manufacturing operations. - Manufacturing is far more capital intensive than services. - The service package is the major output of the development process. - The service process and service product can be developed independently.

The service package is the major output of the development process.

A "process" is any part of an organization that takes inputs and transforms them into outputs that, hopefully, are of greater value to the organization than the original inputs. True or False

True

A project layout is characterized by a relatively low number of production units in comparison with workcenter and assembly-line formats. False or True

True

A workcenter is a basic production layout format in which similar equipment or functions are grouped together. False or True

True

An important aspect of service products is that they cannot be inventoried. False or True

True

Assemble-to-order means moving the customer order decoupling point from finished goods to components. True or False

True

Assembly-line balancing means assigning all necessary tasks to a series of workstations so that each workstation has no more than can be done in the workstation cycle time and so that idle time across all workstations is minimized. True or False

True

Benchmarking refers to the practice of comparing the production metrics of one firm with the production metrics of another. True or False

True

Buffering in a production process refers to a storage area between stages of production activity where output of a stage is placed prior to being used in a "downstream" stage. True or False

True

For the purposes of assembly-line balancing, cycle time is found by dividing production time per day by the required units of output per day. False or True

True

In assembly-line balancing, the theoretical minimum number of workstations is found by a ratio of the sum of all task times divided by the cycle time. False or True

True

Poka-yokes are procedures that block the inevitable mistake from becoming a service defect. False or True

True

Service capacity is defined in terms of an achievable level of output per unit time. False or True

True

The term "assembly line" refers to progressive assembly linked by some material handling device. True or False

True

Using part-time personnel at fast-food restaurants allows capacity to vary with demand. False or True

True

Yield management is a strategy that manages both demand and capacity. True or False

True

Which of the following is a basic type of process structure? - Work center - Process flow diagram - Manual assembly - Process matrix - Product matrix

Work center

Which of the following basic types of production layout formats is one that has similar equipment or functions are grouped together? - Workcenter layout - Group technology layout - Assembly line layout - Manufacturing cell layout - Production line layout

Workcenter layout

Suppose that you have two processes A and B for producing a widget. Process A has a fixed cost of $10,000 and per unit variable cost of $80.00. Process B has a fixed cost of $30,000 and the per unitvariable cost is $40.00. The widget sells for $100 regardless of production process used. During the next three years (your planning horizon for the widgets) you expect the economy to be pretty good with sales of widgets to be at least 700 units per year. You will - choose Process A since it has a low fixed cost. - be indifferent between choosing Process A and B, because they both have the same break-even point. - choose either Process A or B, since both will result in same profit for the next three years. - choose Process B, since it will have higher net profit than process A in the next three years. - choose Process B, since it has low variable cost.

choose Process B, since it will have higher net profit than process A in the next three years.

Consider a three sequentially stepped process named as Process A, Process B and Process C. Input comes into Process A. Output form A goes into Process B. Output from B goes into Process C. Output of C is the final output. Suppose that it takes 2 minutes per unit in Process A, 3 minutes per unit in Process B and 1 minute per unit in Process C. Suppose further that Process A receives input at the rate of 30 per hour. Where would you place a buffer? - in front of both Process B and Process C - None - in front of Process C - in front of Process A - in front of Process B

in front of Process B

A restaurant that features special lunchtime combo meals is providing all of the following benefits, except: ______. - segment demand - decreases service times - increases customer satisfaction - promotes off-peak demand

promotes off-peak demand

A health club's offering a reduced rate membership for students to workout before 4:00 p.m. on weekdays is ______. - promoting off-peak demand - partitioning demand - using yield management - offering price incentives

promoting off-peak demand

Faced with variable demand and a perishable capacity, a service manager can smooth demand by ______. - scheduling workshifts to vary workforce needs according to demand - increasing the customer self-service content of the service - using reservations and appointments - using part-time help during peak hours

using reservations and appointments