MGO 304
b. once in a period.
In forecasting, the term "cycle" refers to repetition of data: a. once a year, if seasonal. b. once in a period. c. within a week. d. during a day.
b. the expected number in the queue plus the expected number in service.
In general, for infinite queues, the expected number of people in the system is equal to: a. the average arrival rate minus the average service rate. b. the expected number in the queue plus the expected number in service. c. the expected arrival rate times the expected waiting time. d. alternatives (a) and (b) above.
TRUE
In retailing, profit is a function of mark-up multiplied by turnover.
d. the number of no-shows based on past experience.
In using the critical fractile criterion P(d<x) = Cu/(Cu + Co) for overbooking the 'd' refers to: a. the cost of overestimating demand. b. the cost of underestimating demand. c. the number of rooms overbooked. d. the number of no-shows based on past experience.
TRUE
Information management has been the key in allowing services to meet customer demands without incurring the expense of excess inventory.
TRUE
Information moves in both directions in the service chain for mobile-workers.
FALSE
Knowledge management is a strategy to retain skilled workers.
FALSE
Lead-time inventories are stocks that have been ordered but not yet received.
b. customer contact.
"Develop foreign customers" is a consideration for the global service strategy of "following your customers". The relevant globalization factor is: a. cultural adoption. b. customer contact. c. complexity. d. Customization.
FALSE
A Poisson process describing the distribution of departures from a busy server with an average rate of 15 per hour is equivalent to the negative exponential distribution of service times with a mean of 5 minutes.
TRUE
A bank is an example of a service provider with a single-level bi-directional service supply relationship.
d. clustered service.
A community hospital is an example of a: a. diversified network. b. focused network. c. focused service. d. clustered service.
TRUE
A company that adopts the concept of importing customers usually is following a multiservice single-site strategy.
TRUE
ABC analysis is an application of the 80-20 rule.
b. SABRE
All but one of the following is an example of a yield management application: a. RyerFirst b. SABRE c. HIRO d. Restaurant Catering Software
b. objective.
All of the following are forecasting models, except: a. subjective. b. objective. c. causal. d. time series.
TRUE
American Express is an example of a firm that has a multisite, multiservice expansion strategy.
FALSE
An example of segmenting demand is movie theaters offering matinee prices before 6:00 p.m.
TRUE
Bidirectional optimization could be considered an example of a win-win outcome.
FALSE
Capacity usually is measured in terms of outputs (e.g. guest nights) rather than inputs (e.g. number of hotel rooms) in service firms.
TRUE
Consumers develop expectations for a low divergent set of products and services from franchises.
TRUE
Cross training of employees as a strategy to increase flexibility is feasible only when there exist tasks, the demands for which peak at different times.
a. single facility
Cross-median approach is used for _________ location. a. single facility b. multiple facility c. (a) and (b) d. none of the above
FALSE
Cross-median is an approach to the location of a single facility using the metropolitan metric to maximize the total distance traveled.
TRUE
Customer-supplier duality acknowledges the customer inputs in a service relationship.
c. time series and causal.
Demand for hotel services will require the use of which one of the following forecasting models: a. subjective and causal. b. subjective and time series. c. time series and causal. d. only time series.
FALSE
Differential pricing is an attempt to make peak usage periods unattractive by imposing a penalty on the consumer for using the service during peak periods.
TRUE
Econometric models are basically regression models that involve a system of equations.
b. Exponential
Empirical studies have suggested that the distribution of inter-arrival times is: a. Poisson b. Exponential c. Uniform d. FCFS
TRUE
Equating the annual holding and ordering costs can be used to derive the EOQ formula.
TRUE
Excess capacity is required in a service system because variability in customer arrivals and service times creates idle capacity.
TRUE
Expected loss for an overbooking reservation strategy would be calculated by, multiplying the loss for each no-show possibility by its probability of occurrence, and then adding the products.
TRUE
Exponential smoothing prevents overreaction to extremes in the actual observed values.
c. the calculation contains the forecast error.
Exponential smoothing uses a feedback control mechanism because: a. α is less than 1. b. calculations are based on modifying the previous smooth value. c. the calculation contains the forecast error. d. the weights given to past data are exponentially distributed.
FALSE
Fast-food restaurants use a causal model to forecast daily demand for menu items.
TRUE
For a standard service system to operate over the long run, the servers must be idle part of the time.
FALSE
For a system to reach steady state, the arrival rate must always be greater than the service rate, i.e., the traffic intensity ρ must always be greater than unity.
b. entertainment centers
For an electronic super store using the ABC inventory classification system, ________ would fall in class A. a. television sets b. entertainment centers c. stereos d. desk top computers
d. single-period model
For seasonal items a ______ system could be used to manage inventory. a. continuous review b. periodic review c. retail discounting d. single-period model
a. the mean equal to its standard deviation.
For the exponential distribution we have: a. the mean equal to its standard deviation. b. the variance equal to the standard deviation. c. no specific relationship between mean and variance. d. the mean equal to the reciprocal of the variance.
TRUE
Franchising usually is used when developing a focused network.
FALSE
Level demand and chase capacity are the two generic strategies for capacity management.
c. overtime or temporary labor requirements.
Long-term forecasts do not deal with predictions for: a. new services. b. changes in mix of services. c. overtime or temporary labor requirements. d. process technology.
TRUE
Shelf life can be a constraint on the amount of inventory held.
TRUE
Some restaurants use tables and chairs instead of booths to create more flexible capacity.
c. management of mobile workers.
Sources of value in service chain management include all but one of the following: a. bidirectional optimization. b. management of productive capacity. c. management of mobile workers. d. management of perishability.
TRUE
Subjective models are used to assess the future impact of changing demographics.
a. Self-serve followed by service in parallel
Supermarkets can be described by which of the following facility arrangement? a. Self-serve followed by service in parallel b. Many service centers in parallel and series c. Servers in parallel d. Self-service
d. Delphi method.
Survey results are used in: a. regression. b. cross-impact anlaysis. c. econometric models. d. Delphi method.
c. holding or carrying*
Taxes and insurance would fall under _____ costs. a. ordering b. receiving and inspection c. holding or carrying d. shortage
d. the assumption that the future is a projection of the past.
The accuracy of a time-series model is dependent upon: a. the nature of past data. b. the weight given to past data. c. the treatment of seasonality and trend. d. the assumption that the future is a projection of the past.
b. turnover of stock generates money for future investment.
The central idea in the retail-discounting model is that: a. money can be made selling below cost. b. turnover of stock generates money for future investment. c. the percent mark-up over cost is discretionary. d. discount pricing generates sales.
FALSE
The choice of location criterion has little effect on the site selected.
d. Competitive changes
The concept of focus in location decisions considers all but one of the following issues: a. Cannibalization b. Multisite locations c. Formula facility d. Competitive changes
TRUE
The cost of formulating, developing, and testing regression models, plus the expertise required to interpret results, often dictates the use of this model only for medium-term or long-term forecasting.
b. EDI.
The elimination of paper-based documents between organizatins is made possible by: a. ERP. b. EDI. c. MRP. d. POS.
TRUE
The flow of service is activated upon demand as a result of effective service chain management.
d. the customer has the option of selecting a particular server of preference.
The following are all advantages of the single queue system, except: a. the arrangement guarantees fairness by ensuring that the FCFS rule applies. b. the anxiety of "Am I in the fastest line?" is eliminated. c. the problem of line cutting is reduced. d. the customer has the option of selecting a particular server of preference.
d. fixed, variable
The impact of pricing on service chain management was _____ before and _____ after. a. high, low b. passive, active c. static, dynamic d. fixed, variable
b. inflexible, flexible*
The impact of the production element on physical goods supply chain management was _____ before and _____ after. a. push , pull b. inflexible, flexible c. vertical, virtual d. multinational, global
FALSE
The key feature of the historical analogy method is that it assumes some future event is related to the occurrence of an earlier event.
FALSE
The main advantage of analytical models is that they can be used almost anywhere regardless of the underlying assumptions. They still will provide good results.
TRUE
The selection of candidate independent variables for a regression model to forecast motel occupancy requires input from knowledgeable marketing personnel.
TRUE
The service inventory-hedging strategy benefits the firm by directing skill-enhancing activities into idle time slots.
TRUE
The start-up phase for a franchise business is shorter than that for an independent business, because of the existence of a well-known brand.
FALSE
The strategy of maintaining a speculative inventory is known as forward hedging.
c. cyclical
The total inventory for a retailer is comprised of in-transit inventory, safety stock, and __________ inventory. a. decoupling b. seasonal c. cyclical d. speculative
c. Employee
The two-way classification for the taxonomy for outsourcing business services contains six cells. Which one of the following is not a descriptive title for one of the cells? a. Facility support b. Professional c. Employee d. Facilitator
TRUE
The work shift-scheduling problem is important in service organizations that face a cyclic demand for their services.
FALSE
Time perishability of service capacity is a challenge for service managers because customers demand immediate service.
TRUE
Using part-time personnel at fast-food restaurants allows capacity to vary with demand.
d. Autonomy
Which of the following is not a benefit to the franchisee of a franchise? a. Brand name b. National advertising c. Economics of scale d. Autonomy
c. anticipative
Which one of the following is not a role that inventories play in a distribution system? a. decoupling b. speculative c. anticipative d. cyclical
d. None of the above.
Which one of the following is not an advantage of the Simple Exponential Smoothing model over the N-period Moving Average model? a. Old data are never dropped. b. Older data are given progressively less weight. c. Calculation is simple. d. None of the above.
d. departure process
Which one of the following is not part of the queuing system features? a. calling population b. queue configuration c. queue discipline d. departure process
a. Jockeying is eliminated.
Which one of the following is not true of multiple queue configurations? a. Jockeying is eliminated. b. Division of labor is possible. c. Service provided can be differentiated. d. The FCFS rule is not always followed.
a. multiple queue
Which queue configuration permits opportunities for division of labor and service differentiation? a. multiple queue b. single queue c. take a number d. self serve
c. an information based service in a downtown area with high real estate prices.
With respect to service facility location it is not prudent to open a. a new facility next to one's competitors. b. multiple facilities within the same area thus cannibalizing one's own business. c. an information based service in a downtown area with high real estate prices. d. all of the above.
TRUE
Yield management is a strategy that manages both demand and capacity.
TRUE
Yield management is the process of allocating a fixed perishable resource to several market segments in the most profitable manner.
b. Beta
____ is the smoothing constant for the trend adjustment in an exponential smoothing forecast. a. Alpha b. Beta c. Gamma d. Delta
c. Self-motivated creativity
________ is(are) the highest level of professional body of knowledge. a. Advanced skills b. System understanding c. Self-motivated creativity d. Cognitive knowledge
b. Requiring specialized skills
_________ is a characteristic of social media that is not useful to service firms. a. Easy access b. Requiring specialized skills c. Immediacy d. Flexibility
FALSE
A disadvantage of yield management is that it cannot be implemented in real time.
FALSE
Dependent demand is described by a probability distribution.
TRUE
For the planned shortage model, when the cost of backorders approaches zero, the order quantity becomes undefined.
a. the capacity to serve must be greater than the average demand.
For the system to operate satisfactorily over the long run, a. the capacity to serve must be greater than the average demand. b. the expected waiting time for each customer must not exceed average service time. c. the arrival rate must be less than the service rate. d. the number of servers must equal the average number of arrivals per unit time.
FALSE
Forward buying is used to avoid expensive interruptions of service, as a stock out at any stage of the physical goods distribution system would have far-reaching consequences for the other stages.
TRUE
Historical analogy involves comparative analysis of the introduction and growth patterns of new items with similar previously-introduced items.
TRUE
Penalties for late delivery or nondelivery are part of shortage costs.
TRUE
Point-of-sale scanning became feasible only when industry agreed upon a universal system of bar codes.
b. servers are utilized better.
Pooling of servers results in reduced waiting time because: a. the mean service time for the pool as a whole is now constant. b. servers are utilized better. c. multiple queues are replaced by a single queue. d. alternatives (a) and (b) above.
d. yield management
Several approaches to demand management exist, but only _______ seeks to maximize revenue. a. promoting off-peak demand b. reservation systems c. offering price incentives d. yield management
d. Weather
Site selection considerations include all but one of the following a. Access b. Environment c. Government d. Weather
TRUE
Social media blends technology and social interaction for the co-creation of value.
TRUE
The Huff model for retail outlet location postulates an inverse relationship between the attractiveness of a location and the travel time to that location for a particular customer.
TRUE
The Walmart and Procter & Gamble experience illustrates the unintended consequences of independent decision making in a goods supply chain.
a. econometric
The ___________ forecasting method requires the most computer power. a. econometric b. cross-impact c. regression d. historical analogy
FALSE
A continuous review system is generally used for Class C items in the ABC system of classification.
d. City served by major airport
A cruise line has the option of locating its dock in Miami or Pensacola because both cities have adequate port facilities. Which of the following considerations would seem to be the most germane? a. Adequate parking b. Location of competitors c. Freeway access to the port d. City served by major airport
c. Overbook the cabin.
A cruise ship has available a certain number of rooms in each of 10 categories of appointment ranging from a two-bunk inside cabin to a suite with an outside patio and indoor sitting area. If a passenger requests a sailing date in which the desired cabin is sold out, which of the following actions would be considered the least viable alternative for the cruise line? a. Offer an upgraded cabin at a reduced price. b. Attempt to steer the passenger to an available date. c. Overbook the cabin. d. Offer a downgraded cabin with special privileges such as a $100 certificate for use in the casino.
FALSE
A franchise is a low risk investment, because the franchiser ensures success.
FALSE
A good supply chain management strategy places a strong emphasis on promotional pricing.
c. saturation marketing.
A strategy defying the curse of cannibalization is called a. competitive clustering. b. customized marketing. c. saturation marketing. d. relationship marketing.
a. jockeying
After selecting a line in a multiple queue system, a customer is ________ when she or he switches to a different line perceive it to be moving faster. a. jockeying b. balking c. reneging d. weaving
d. retention of control.
All of the following are benefits of a multisite type of expansion except: a. ability to reach a mass market quickly. b. reduced financial risk from local economic downturn. c. preemption of competitors by capturing premium locations. d. retention of control.
d. increased ordering costs.
An inventory model with quantity discounts has all of the following features, except: a. savings in manufacture. b. savings in transportation. c. increased holding costs. d. increased ordering costs.
FALSE
Balking is the term used to describe the phenomenon of customers leaving a queue that they have joined before service is rendered.
FALSE
Because of the intangible nature of a service, forecasting does not play as important a role in service operations as in manufacturing operations.
b. economic conditions.
Characteristics of forecasting models include all but one of the following: a. data required. b. economic conditions. c. relative cost. d. forecast horizon.
FALSE
Communication is included in the five C' s of strategic planning.
b. lodging
Competitive clustering is common the ________ industry. a. healthcare b. lodging c. communications d. banking
TRUE
Costs for preparing time-series forecasts generally are lower than for other models.
d. using reservations and appointments.
Faced with variable demand and a perishable capacity, a service manager can smooth demand by a. using part-time help during peak hours. b. scheduling workshifts to vary workforce needs according to demand. c. increasing the customer self-service content of the service. d. using reservations and appointments.
b. Labor-skill level
For a chase demand strategy which of the following does not have a high trade-off? a. Employee utilization b. Labor-skill level c. Labor turnover d. Supervision required
TRUE
For a multiple channel queuing system with multiple queues, allowing customers to jockey will enhance service utilization.
TRUE
For a multisite location problem the services to provide at each site may vary.
a. Exporting services
Global service strategies include all but one of the following: a. Exporting services b. Following your customers c. Beating-the-clock d. Service offshoring
c. 15
If you are going to open four facilities and have identified six candidate locations, how many different combinations of site selections are there? a. 4 b. 6 c. 15 d. 24
FALSE
In analytical terms, the modern self-serve supermarket would be approximated best by the M/M/C model, where C is the number of servers.
FALSE
In the past, the flow of goods in a physical supply chain was described as a pull system.
TRUE
Outsourcing can expose a firm to data security and customer privacy issues.
TRUE
Patients waiting for heart transplants are an example of an inventory model that has a backorder cost of zero.
TRUE
Planning for service capacity involves prediction of consumer waiting associated with different levels of capacity.
TRUE
Product postponement is the strategy of stocking a product in a more generic form for later customization.
FALSE
SABRE is the name for American Airlines yield management system.
TRUE
Saturation clustering occurs when service firms locate their businesses densely in order to increase customer awareness, despite some cannibalization in sales.
TRUE
Service capacity is defined in terms of an achievable level of output per unit time.
c. honesty.
Social media "netiquettes" includes all but one of the following: a. disclosure. b. discrimination. c. honesty. d. reciprocation.
c. Focused network
The "cookie-cutter" concept best describes which expansion strategy? a. Focused service b. Clustered service c. Focused network d. Diversified network
TRUE
The Euclidian location model is used when vector travel is involved.
FALSE
The main advantage of the multiple queue configuration is that it guarantees fairness to all by ensuring that a first-come-first-served rule applies to all arrivals.
FALSE
The main advantage that simple moving-average models have over exponentially-smoothed models is that they can be made to give any desired weight to specific periods in the past.
FALSE
The net result of waiting, apart from the boredom and frustration experienced by the consumer and the associated loss of goodwill, is the reduced utilization of capacity of the service.
FALSE
The term interarrival time refers to the time elapsed between initiation of service and its completion.
b. There is one homogeneous customer class.
What on of the following is not a characteristic of yield management? a. Capacity is relatively fixed. b. There is one homogeneous customer class. c. The service is considered a perishable inventory. d. Demand fluctuates yet is somewhat predictable.
TRUE
When a firm offers multiple services at a single location, it is using a clustered service strategy.
a. Establishing a brand
When franchising, which of the following is not an issue for the franchisee? a. Establishing a brand b. Franchise contract c. Degree of discretion d. Conflict resolution
d. small safety stocks.
Which feature below is not associated with the periodic review system? a. order consolidation. b. fixed order quantity. c. C items. d. small safety stocks.
TRUE
The average time a customer should expect to wait can be calculated using just the mean arrival rate and the mean service rate.
FALSE
The forecast horizon for a cross-impact analysis method is medium-term.
b. medium term.
The forecast horizon for regression methods is _________. a. short term. b. medium term. c. long term. d. medium to long term.
a. demand is not from a homogeneous source.
The strategy of segmenting demand is feasible only when a. demand is not from a homogeneous source. b. demand is cyclic and predictable. c. arrivals for service are random. d. making appointments is impossible.
TRUE
The strategy of segmenting demand to reduce variation makes use of the fact that demand for a service is seldom from a homogeneous source.
a. 0.1-0.5
The usual range of the smoothing constant for a simple exponential smoothing forecast is: a. 0.1-0.5 b. 0.3-0.7 c. 0.5-0.7 d. 0.5-1.0
FALSE
Transfer enhances productive capacity by enabling customer self-service.
FALSE
When peaks of activity are persistent and predictable such as meal times for restaurants, off duty personnel can be placed on standby to supplement regular employees.
a. breakeven analysis.
Which one of the following concepts is not associated with the news-vendor problem? a. breakeven analysis. b. incremental analysis. c. expected value analysis. d. trade-off analysis.
a. EDLP
Which one of the following depicts the impact of goods supply chain management? a. EDLP b. Functional silos c. Reactive forecasting d. Push system
b. following your customers
"Hiring local personnel" addresses the labor intensity factor in the ________ global service strategy. a. multicountry expansion b. following your customers c. service offshoring d. beating the clock
FALSE
A diversified network is a situation where many services are offered at a single location.
FALSE
A diversified network is not feasible with complex services.
TRUE
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
A queue is said to be finite if there is an upper limit on the number of consumers who are allowed to be in it. Consumers who come after the queue is full, either balk or are refused entrance.
a. balking behavior
A queuing system is described by all but one of the following: a. balking behavior b. calling population c. arrival process d. queue configuration
c. it is still under the influence of the initial state.
A queuing system is said to be in a transient condition when: a. its parameters change with time. b. its parameters remain constant. c. it is still under the influence of the initial state. d. it grows beyond bound.
b. economies of scope.
A relatively recent concept that refers to the movement of new products through existing distribution channels is called: a. economies of scale. b. economies of scope. c. diversification. d. micromarketing.
a. Promotes off-peak demand
A restaurant that features special lunchtime combo meals is providing all but one of the following benefits? a. Promotes off-peak demand b. Increases customer satisfaction c. Decreases service times d. Segment demand
b. flexibility.
A strategy of locating sites in a number of states (or countries) can reduce the overall risk of financial crisis from a regional economic downturn. This strategic approach to facility location is known as a. competitive positioning. b. flexibility. c. demand management d. focus
c. uses all past data in forecast.
All but one of the following are characteristics of the moving-average model: a. very low relative cost. b. short term forecast horizon. c. uses all past data in forecast. d. used for demand forecastsing.
d. displaying time with a large analog clock.
All but one of the following are techniques to lessen the boredom of waiting customers: a. placement of mirrors in elevators. b. telling customers how long the wait is at different points in the queue. c. installing a television tuned to CNN. d. displaying time with a large analog clock.
c. Costs might increase.
All but one of the following is a caution when considering outsourcing services: a. Loss of direct control over quality. b. Jeopardize employee loyalty because of job-loss fears. c. Costs might increase. d. In-house capability to perform service will atrophy.
a. Vendor selection based on reputation
All but one of the following is a managerial implication of bi-directional relationships: a. Vendor selection based on reputation b. Service supply relationships are hubs c. Service capacity analogous to inventory d. Quality variation of customer inputs
a. Avoids coordination expenses and delays
All but one of the following is a reason for outsourcing services. a. Avoids coordination expenses and delays b. Allows the firm to focus on its core competence. c. Provides access to latest technology. d. Leverages benefits from supplier economies of scale.
TRUE
An arrangement of servers in parallel is an insurance against breakdown of the service in case of absenteeism or equipment failure. It, thus, adds to flexibility at the expense of capacity utilization.
c. Forecasting demand
ArcView, a GIS for business applications, finds applications in all but one of the following: a. Mapping customer databases b. Determining site locations c. Forecasting demand d. Improving delivery service
TRUE
For a public service center, locating in an area that contains a large number of individuals for whom distance is a strong barrier would maximize facility utilization.
TRUE
For a single channel queuing system with finite queue, the value of λ may exceed μ because some potential customers are forced to balk.
FALSE
From the standpoint of the franchiser, decision-making autonomy is not a benefit of franchising.
TRUE
Geographic information systems also provide for a user-friendly visual method of displaying data.
TRUE
Hedging is a strategy adopted by multinational corporations to neutralize their exposure to fluctuating currency exchange rates.
FALSE
If the number of arrivals in an interval of time follows an exponential distribution, the interarrival time is known to follow a Poisson distribution.
d. dependent variable.
In regression models, the variable of interest (being forecast) is called a(an): a. defining variable. b. independent variable. c. basic variable. d. dependent variable.
c. is just lower than
In the "Newsvendor Problem", the underlying concept is that the newsvendor should continue increasing the stock until the expected loss on the last sale ______ the expected revenue on the last unit stocked. a. equals b. just exceeds c. is just lower than d. greatly exceeds
b. among the most numerous.
In the ABC inventory classification, C items can best be described as: a. expensive. b. among the most numerous. c. having a high stockout cost. d. requiring close attention.
FALSE
In the Delphi method, the opinions of experts are collected, then the analyst resolves differences of opinion to arrive at a consensus.
c. the importance of travel time in attracting customers.
In the Huff retail location model, the value of estimates a. amount of travel time to reach a service facility. b. the importance of convenience in attracting customers. c. the importance of travel time in attracting customers. d. the cost of transportation for a customer.
FALSE
In the M/M/1 model the calling population is finite.
d. decreases negative exponentially
In the annual cost curve for the EOQ model, the ordering cost _________ with the order quantity a. increases linearly b. decreases linearly c. increases negative exponentially d. decreases negative exponentially
FALSE
In the critical fractile ratio, the numerator refers to the cost of overestimating demand.
d. Minimize cost
In the decision to locate a public health clinic, which one of the following criteria is not appropriate? a. Maximize utilization b. Minimize distance per capita c. Minimize distance per visit d. Minimize cost
d. safety stocks.
In the design of an inventory system all but one of the following is considered: a. type of customer demand. b. relevant inventory costs. c. constraints. d. safety stocks.
b. purchase.
Inventory management costs include all but one of the following: a. ordering. b. purchase. c. receiving. d. shortage.
FALSE
Inventory management is concerned with two basic questions: how much to order and when to place an order.
TRUE
Outsourcing can provide access to the latest technology without investment.
FALSE
Overbooking is a strategy that can be used to smooth demand.
FALSE
POS scanning is used to initiate a purchase order to a pre-approved vendor automatically when the stock levels are depleted (or reach a reorder point).
d. mean arrival rate.
Queuing models can help explain all but one of the following: a. predicting results of adding servers to a multiple server system. b. effect of reducing service time variation on waiting time. c. determining the size of a parking lot. d. mean arrival rate.
FALSE
Rapid growth with investment capital from franchisers is the main objective of franchising.
FALSE
Reducing the variability either in service time or arrival time can reduce most of the waiting involved for the consumers.
b. subjective data.
Regression models require all but one of the following: a. numerical data. b. subjective data. c. independent variables. d. dependent variable.
FALSE
Seasonal adjustment involves the deseasonalization of data in a given cycle after smoothing.
a. the decision to invest in capacity will attract competitors.
Service capacity decisions have all but one of the following strategic characteristics: a. the decision to invest in capacity will attract competitors. b. financial investment in capacity must be balanced against the costs of lost sales. c. inadequate short-term capacity needs can generate customers for the competition. d. hostile customers can result from inadequate capacity following a marketing campaign.
a. reorder point, safety stock
Service level influences _______ and ________. a. reorder point, safety stock b. reorder point, backorder quantity c. safety stock, backorder quantity d. backorder quantity, lead-time demand
d. bidirectional optimization.
Strategies to improve productive capacity include all but one of the following: a. embellishment. b. transfer. c. replacement. d. bidirectional optimization.
b. the use of opinion as a basis for a forecast.
Subjective forecasting models are best characterized by: a. the use of experts. b. the use of opinion as a basis for a forecast. c. the absence of data manipulation. d. the use of simultaneous equations.
d. low, people
The "employment support" category in the taxonomy for outsourcing business services falls under _________ importance of service and __________ focus of service. a. high, people b. low, process c. high, process d. low, people
d. arrival rates, service rates, and number of servers.
The A/B/C notation classifies queuing systems on the basis of: a. arrival rates and queue discipline. b. queue discipline alone. c. arrival rates and service rates. d. arrival rates, service rates, and number of servers.
b. technological change.
The Delphi method is best used when forecasting: a. customer demand. b. technological change. c. correlations between events. d. future economic conditions.
FALSE
The Euclidian metric is often used for locating a facility in an urban area.
a. analytical models depend upon its use.
The FCFS rule is most often used because: a. analytical models depend upon its use. b. it represents social justice. c. it is viewed as fair. d. most other rules are not as easily applied.
c. maximal covering algorithm
The ___________ is a variation on the location set-covering problem. a. Huff model b. Greedy algorithm c. maximal covering algorithm d. shortest path tree
FALSE
The absence of quantifiable criteria considerably diminishes the importance of facility location methods in the public sector.
TRUE
The advantages of substituting communication for transportation become possible when face-to-face interaction between server and customer is not necessary.
FALSE
The bullwhip effect is a phenomenon in the physical supply chain that describes the inventory stocking levels at various stages.
b. only a limited number of people may use the facility in any given period.
The calling population is termed finite when: a. there is restriction on the maximum number in the queue. b. only a limited number of people may use the facility in any given period. c. the interarrival time is not very large. d. there is no queue discipline specified.
d. the number of servers on duty.
The cost of service capacity is determined by a. the number of customers waiting. b. the total number of customers. c. waiting time. d. the number of servers on duty.
TRUE
The critical fractile is a cumulative probability of demand.
d. distance traveled
The following are important in estimating spatial demand except a. defining the target population b. selecting a unit of area c. developing a visual representation or map d. distance traveled
FALSE
The greatest advantage of subjective techniques like Delphi and cross-impact analyses, is that the methods are fairly standardized and do not require much expertise in actual use.
a. ownership of the service, i.e., public or private.
The optimization criteria governing the location of a service facility is determined mainly by the a. ownership of the service, i.e., public or private. b. kind of service, e.g. food, banking, or postal. c. number of facilities to be located. d. average size of the facilities to be located.
a. competitor.
The physical goods supply chain contains all but one of the following elements: a. competitor. b. distributor. c. retailer. d. customer.
b. make off-peak usage attractive.
The purpose of differential pricing is to a. make peak period usage unattractive. b. make off-peak usage attractive. c. charge customers according to their ability to pay. d. adjust capacity to demand.
c. traffic intensity.
The symbol ρ is used to denote which one of the following parameters: a. number of customers in the system. b. number of servers. c. traffic intensity. d. finite size of queue.
TRUE
The time a consumer will spend waiting is directly related to the amount of money he is paying for the service. The less the service costs him, the longer he is willing to wait.
FALSE
The use of a ski-resort hotel for business conventions during the summer is an example of using the complementary service strategy.
c. facilitator*
Travel booking is a service that falls in the _________ category of outsourcing business service. a. facility support b. employee development c. facilitator d. professional
b. EOQ for the lowest price per unit.
When a quantity discount is offered, the first step should be to compute: a. EOQ for the highest price per unit. b. EOQ for the lowest price per unit. c. the total annual cost for the highest quantity discount. d. the total annual cost for the lowest quantity discount.
c. Experience with particular industry is important.
When outsourcing facilitator services, which one of the following is not a consideration? a. Knowledge of alternate vendors is important. b. Involvement of end user in vendor identification. c. Experience with particular industry is important. d. Detailed specification written by user.
b. the time between arrivals is exponentially distributed.
When the number of arrivals per unit time follows a Poisson distribution, the most important implication is that: a. the arrivals are dependent and non-random. b. the time between arrivals is exponentially distributed. c. eventually the queue length will stabilize. d. the rate of completion of service is also Poisson distributed.
c. variable capacity
Which of the following is not a characteristic of firms using yield management? a. ability to segment their market b. perishable inventory c. variable capacity d. product sold in advance
c. the rate of departure
Which of the following is not a criterion for capacity planning? a. average customer waiting time b. probability of excessive waiting c. the rate of departure d. probability of sales lost because of inadequate waiting area
a. Developing complementary services
Which of the following is not a strategy for managing capacity? a. Developing complementary services b. Using part-time employees c. Forecasting demand d. Scheduling shifts
a. FCFS rule is guaranteed.
Which of the following is not an advantage of a multiple-queue configuration? a. FCFS rule is guaranteed. b. Differentiation of service can be provided. c. Division of labor is possible. d. Customers have choice of server.
a. Prominently display time with a large analog clock.
Which of the following is not an effective way to manage the psychology of waiting? a. Prominently display time with a large analog clock. b. Inform customers when long waits are anticipated. c. Use diversions to occupy customer waiting times. d. Employ a take-a-number system to ensure fairness.
b. difference in hospital fees for walk-in and scheduled services
Which of the following is not an example of the differential pricing policy? a. weekend and night rates for long-distance telephone calls b. difference in hospital fees for walk-in and scheduled services c. peak-load pricing by utility companies d. none of the above
b. Creativity
Which of the following is not one of Kenichi Ohmae's five "Cs" of strategic planning in a borderless world economy? a. Competitors b. Creativity c. Company d. Country
b. Technological compatibility
Which of the following is not one of the major considerations in planning multinational operations? a. Cultural transferability b. Technological compatibility c. Network development d. Host government policy
b. Professor
Which of the following service providers likely would be involved in a single-level bi-directional service supply relationship? a. Pharmacy b. Professor c. Garage d. Mortgage company
c. Decrease customer participation in the service process.
Which of the following strategies is inappropriate for managing capacity and demand? a. Smooth customer demand by offering price incentives. b. Scheduling staff to meet variations in forecasted customer demand. c. Decrease customer participation in the service process. d. Promoting off-peak use of facilities.
c. Assign operators to shifts.
Which one of the following four steps in "daily workshift scheduling" is out of order? a. Forecast demand. b. Convert to operator requirements. c. Assign operators to shifts. d. Schedule shifts.
d. Regression
Which one of the following is an example of a causal model? a. Delphi method b. Moving average c. Cross-impact analysis d. Regression
d. wholesaler.
Which one of the following is most affected by the bullwhip effect? a. customer. b. retailer. c. distributor. d. wholesaler.
c. POS scanning.
Which one of the following is most important for a continuous review system? a. constant lead time. b. fixed order quantity. c. POS scanning. d. normal demand distribution.
FALSE
Work shift scheduling attempts to deal with the service utilization problem by controlling the demand for the service and partitioning it so that utilization is uniform.
TRUE
Yield management is a pricing and capacity allocation system that was developed by American Airlines.
d. None of the above
_________ is not a reason for outsourcing services. a. Leveraging benefits from a supplier b. Allowing the firm to focus on core competence c. Providing access to latest technology d. None of the above
d. Demand
_________ variability is not one of the five sources of customer-induced variability. a. Arrival b. Capability c. Effort d. Demand
FALSE
Profit-per-partner is the multiplication of "margin" and "productivity."
TRUE
Radio Frequency Identification (RFID) is replacing bar coding.
b. transfer.
Making knowledge available to customers at low cost is called: a. embellishment. b. transfer. c. replacement. d. co-production.
TRUE
Marketing intermediaries are business entities in the channel of distribution between the final customer and the service provider.
a. cultural transferability.
McDonald's includes beer on its menu for German franchises. This is an example of _______ a. cultural transferability. b. network development. c. host government policy. d. labor norms.
TRUE
Most forecasting models assume that the underlying pattern of behavior of their data will remain the same. The only component of error is attributable to random fluctuations that are not under the control of anyone.
TRUE
Multiple-queue configuration may deter balking behavior.
TRUE
Need identification is the first step in the outsourcing process model. (
FALSE
Obsolescence is part of shortage costs.
d. lead to a perceived shorter wait time.
One advantage of the multiple queue compared to a single queue is that multiple queues a. minimize wait times. b. reduce the average service time. c. lead to a perceived shorter service time. d. lead to a perceived shorter wait time.
TRUE
One of the advantages of franchising is that a firm can grow without the cost of developing key managers.
TRUE
One reason exponential smoothing is so popular is the ease with which it can be made to accommodate trend and seasonality in its forecasts.
TRUE
One role of holding inventory is to hedge against anticipated increases in the cost of the inventoried items.
FALSE
Both measures of forecast accuracy, MAD and MSD, give equal weight to all forecasting errors.
TRUE
Both trend and seasonal adjustments can augment a single exponential-smoothing model.
