Operations Management- Exam 1

What are the three steps in the risk management process?

1) Identify sources of potential disruption. 2) Asses the potential impact of the risk. 3) Develop plans to mitigate risk.

The 5 Operations and Supply Chain Processes.

1) Planning 2) Sourcing 3) Making 4) Delivering 5) Returning

Last year, Ace Electronics had credit sales of $1,500,000. The average accounts receivable balance last year was $250,000. What was the receivables turnover ratio for Ace Electronics last year?

6

Processes

Actually produce and deliver the goods and services to market.

Straddling is defined as

Adding new features, services, or technologies to existing products to match a competitor.

Simulation Forecasting

Allows the forecaster to run through a range of assumptions.

Receivables Turnover Ratio

Annual Credit Sales/Average Accounts Receivable

What is the second step in the risk management process?

Assess the potential impact of the risk.

Causal Forecasting

Assumes that demand is related to some underlying factor in the environment.

Inventory Turnover Ratio

COGS / Avg Inv

Modern companies need to focus on which aspect of the triple bottom line?

Companies should focus on all aspects: social, economic, and environmental.

Cost

Competitive dimension that can attract buyers who are solely attracted to low cost.

Delivery Speed

Competitive dimension that can attract buyers who need products to arrive quickly.

Flexibility

Competitive dimension used to attract buyers who want a new product innovation.

OSCM is concerned with the design and management of the entire system that has what function?

Creates and delivers a firm's products and services.

Competitive Dimensions

Delivery Speed, Cost, Flexibility

What is the third step in the risk management process?

Develop plans to mitigate risk.

Which is not an efficiency measure used on Wall Street?

Employee Turnover

Which of the following is NOT a type of process in the supply chain? a) Sourcing b) Planning c) Evaluating d) Making

Evaluating

True or False: A firm can excel simultaneously on all competitive dimensions.

False

True or False: Stakeholders are individuals or companies that legally own a portion of the company and are not influenced by the actions of that company.

False (Stakeholders are influenced, either directly or indirectly, by the actions of the firm.)

True or False: Stakeholders are individuals or companies that legally own a portion of the company and are not influenced by the actions of that company.

False. (They are influenced, either directly or indirectly, by the actions of a firm.)

True or False: An order qualifier today will be an order winner in the future.

False. If you switch the words qualifier and winner, it becomes true.

True or False: An operations and supply chain strategy is independent of the corporate strategy.

False. they must be integrated with corporate strategy.

Which of the following in NOT a strategy associated with operational effectiveness? a) Technology investments b) Process redesign c) Hiring more employees d) Quality assurance

Hiring more employees

What is the first step in the risk management process?

Identify potential sources of disruption.

Activity-system maps are used for?

Identifying Strategic Themes. Understanding the fit between system activities and company strategy.

Activity-system maps are NOT used for

Identifying weak links in the supply chain. (It's not used at all to analyze the supply chain Assign strategic projects to employees.

A manufacturing company has entered into a new contract with a major supplier of raw materials used in the manufacturing process. Under the new arrangement, called vendor managed inventory, the supplier manages their raw material inventory inside the manufacturer's plant, and only bills the manufacturer when the manufacturer consumes the raw material. How is this likely to affect the manufacturer's inventory turnover ratio?

It is going to increase because the amount of inventory will decrease. Therefore, the avg inv in the denominator is going to be smaller, giving you a bigger Inventory Turnover Ratio.

What is Inventory Turnover Ratio?

It's how many times a company has sold and replaced inventory during a given period.

Delivering

Logistics processes used to move products and information.

Strategy

Long-range planning to guide the firm through future operations.

When calculating productivity, if you compare the output to a group of inputs (but not all inputs), you are conducting which type of productivity measure?

Multifactor

Performing activities in a manner that best implements strategic priorities at minimum cost is known as

Operations Effectiveness

The feature that actually differentiates one product from the other candidates and is purchased is known as the?

Order winner

Productivity Formula

Outputs/Inputs

Productivity is a relative measure, and must be compared to something else meaningful to be effective. What are three ways of measuring productivity.

Partial productivity measure, multifactor productivity measure, and total factor measure of productivity.

Three ways to measure productivity:

Partial productivity measure, multifactor productivity measure, and total factor measure of productivity.

The operations and supply chain strategy is a part of the

Planning Process. (OSCM is a part of the planning process, coordinating goals with those of the larger organization.)

Making

Producing of the firm's major product or service.

Categories the following items as "Pure Goods," "Pure Services," or "Goods/Services Combinations." -automobiles -chemicals -medical -university -food products -airlines

Pure Goods: chemicals and food products Goods/Services Combinations: Automobiles and Airplanes Pure Services: University and Medical

Returning

Receiving worn-out, defective, and excess products back from customers.

Asset Turnover Ratio

Revenue/Total Assets

What tool involves assessing the probability or relative frequency of an event against the aggregate severity of the loss?

Risk Mapping

Sourcing

Selection of suppliers.

Which dimension of the triple bottom line seeks to benefit its employees, the local community, and other entities that are impacted by the firm's existence?

Social

When a firm seeks to match the benefits of a successful position while maintaining its existing position (for example, an automobile manufacturer wants to occupy both the luxury-car segment and the performance-car segment at the same time). This is an example of...

Straddling

Planning

Strategic operation of a supply chain.

What are the three elements that require integration to be successful in operations and supply chain management?

Strategy, Process, and Analytics

Three elements that require integration for successful OSCM?

Strategy, Processes, and Analystics.

Analytics

Support good decision making and allow the firm to judge how well the processes are working.

Partial Productivity Measure

The ratio of some output to a single input

When you want to express the ratio of all outputs to all inputs, you should use a _____ productivity measure.

Total Factor

True or False: A process is made up of one or more activities that transform inputs into outputs.

True

True or False: A strategic position is not sustainable unless there are compromises with other positions, this requires a management decision and leads to a trade-off.

True

True or False: An operations strategy must consider the risk throughout the supply chain.

True

True or False: Operations and Supply Chain Management is focused on the systems that create and deliver an organization's products and services.

True

True or False: Operations and supply chain management is focused on the systems that create and deliver an organization's products and services.

True

True or False: Operations effectiveness is related directly to the costs of doing business.

True

True or False: Product-Service bundling occurs when a firm adds a service activity to a product.

True

Tactical Forecasts

Used to estimate near-term demand, guides day-to-day decisions, short term

Time Series Analysis

Uses past data to predict future demand.

Qualitative Forecasting

Uses subjective or judgmental approach.

Straddling

When a firm seeks to match the benefits of a successful position while maintaining its existing position.

Receivables Turnover

a measure of the number of times receivables are collected, on average, during the fiscal year.

Which component of demand reflects the effects of chance events? a) random variation b) seasonal elements c) trend d) cyclical elements

a) random variation

All of the following are competitive dimensions that help to form a firm's competitive position except: a) retail store b) delivery speed c) cost d) flexibility

a) retail store

What type of forecast is used for day-to-day decision making? a) tactical b) strategic c) dependent d) operational

a) tactical

A tool that shows how a company's strategy is delivered through a set of tailored activities is called a(n)

activity-system maps

The ratio of revenue to total assets is known as:

asset turnover

Which of the following are common measures of efficiency used by Wall Street? a) effective tax rate b) asset turnover c) days inventory d) receivables turnover

b) asset turnover c) days inventory d) receivables turnover

Forecasts which use subjective or judgmental techniques are known as? a) Time series forecasts b) qualitative forecasts c) quantitative forecasts d) causal forecasts

b) qualitative forecasts

A process in which one company studies the processes of another company for best practices is known as:

benchmarking

An Operations and Supply Chain Manager's job consists of all of the following activities EXCEPT? a) Hiring manufacturing workers. b) Improving delivery of the firm's products. c)Selling products to customers. d) Identifying sources of raw materials.

c) Selling products to customers.

Which type of forecast should be used for strategy, sourcing, and location decisions? a)Independent b)Operational c)Tactical d)Strategic

c) Strategic

Which of the following competitive dimensions relates to environmental impact? a) cost b) delivery reliability c) other product-specific criteria d) new-product introduction speed

c) other product-specific criteria

Which of the following is an example of a service business? a) A computer manufacturer. b) A perfume maker. c) An automobile manufacturer. d) A call center.

d) A call center.

Which of the following is an example of a goods producing business? a) A call center. b) A hospital. c) A college of university. d) An automobile manufacturer.

d) An automobile manufacturer.

Which of the following is NOT a step in the risk management process? a) Develop plans to mitigate risk. b) Identify sources of potential disruptions. c) Asses the potential impact of the risk. d) Create an activity-system map.

d) Create an activity system map.

Which of the following processes involves the selection of suppliers? a) Delivering b) Making c) Returning d) Sourcing

d) Sourcing

What time horizon(s) are used for strategic forecasts? a) short and medium term b) medium term c) long-term d) medium and long-term

d) medium and long-term

What are the competitive dimensions?

delivery (speed and reliability), cost, and flexibility

The competitive dimension that deals with getting the product to the customer WHEN PROMISED is called

delivery reliability

Doing the right things to create the most value for the customer is known as:

effectiveness

Doing something at the lowest possible cost is known as

efficiency

Doing something at the lowest possible cost is known as:

efficiency

The difference between the actual demand and the forecast is referred to as

forecast error.

A process that cannot be weighed or measured is known as:

intangible

Order winners and qualifiers represent a link between operations and what other business function?

marketing

Strategic Forecasts

medium and long-term forecasts used for decisions related to strategy and aggregate demand.

Productivity is defined as the ratio of:

outputs to inputs

Shareholders are individuals or organizations that

own one or more shares of stock in the company

In time series analysis, _________. demand is used to predict ________ demand

past; future

Building service activities into a firm's product offering is known as:

product-service bundling

Individuals or companies that own one or more shares of stock in a company are known as

shareholders

If you want to express the ratio of all outputs to all inputs, you should use a _____ productivity measure.

total factor

Which term defines when activities are incompatible so that more of one thing necessitates less of another activity?

trade-off

Operations and supply chain processes are the activities that:

transform inputs into outputs

In the context of efficiency and effectiveness, _____ is abstractly defined as quality divided by price.

value