operations management multiple choice questions test 1

Economic theory suggests that a customer chooses a product or service to obtain the highest _________ utility demand satisfaction supply

utility

Which of the following is NOT a dimension or subdimension in a customer's utility function? Convenience Price Location Customer Satisfaction Performance

Customer Satisfaction

Which of the following inefficiencies in a bank's operations results from variability? Employees entering the same information twice Associates reading the terms and conditions of each account to the customer Customers incorrectly listing information on forms Employee work schedules set a week in advance

Customers incorrectly listing information on forms

True or False The efficient frontier is given by the cheapest company in the industry

False

True or False The primary purpose of a process analysis is to crowdsource new product ideas.

False

True or False There can be no more than two firms on the efficient frontier.

False

"Firm A Pareto dominates firm B" means that firm A's product or service is inferior to that of firm B on all dimensions of the customer utility function.

False; "Firm A Pareto dominates firm B" means that firm A's product or service is superior to that of firm B on all dimensions of the customer utility function.

True or False A computer server experiences large fluctuations in the amount of data requests it receives throughout the day. Because of this variation, Little's Law does not apply.

False; Little's Law applies even if there are fluctuations in inventory, flow rates, and flow times.

True or False The capacity of a resource is the average flow rate of that resource.

False; The capacity of a resource is the maximum number of flow units that can be processed by the resource per unit of time.

True or False Little's Law is very general, so it is not necessary that flow rate and flow time use the same time units.

False; The same time units must be used for the flow rate and the flow time

Which of the following is NOT one of the three system inhibitors? Waste Variability Fatigue Inflexibility

Fatigue

Custom-built windows are designed and produced for the unique needs of a particular building. Which dimension of the customer utility function is particularly emphasized with the concept of "custom built"? Performance Fit Price Location

Fit

We build lenses uniquely to the needs of your eyes Fit Timing Price Location Performance

Fit

Our dealership network provides service, wherever in the country you may be Fit Timing Price Location Performance

Location

What are the subcomponents of inconvenience in a customer utility function? Location and price Price and volume Location and time Time and performance

Location and time

From the perspective of process analysis, which of the following could be appropriate flow units for a hardware store? Number of workers Number of cash registers Number of customers Number of suppliers

Number of customers

For the purpose of process analysis, which of the following measures would be considered an appropriate flow unit for analyzing the operation of a coffee shop? Square footage of the store Number of employees Number of hours the store is open Number of customers served

Number of customers served

The fastest internet in the nation Fit Timing Price Location Performance

Performance

Which of the following characteristics is a subcomponent of the consumption utility in a customer utility function? Performance Location Timing Price

Performance

We match any price in town Fit Timing Price Location Performance

Price

Which of the following statements about process analysis is TRUE? Process analysis is the backbone of a company's accounting system. Process analysis tracks an organization's revenue and costs. Process analysis enables a business to create demand. Process analysis is a framework to understand an organization's detailed operations

Process analysis is a framework to understand an organization's detailed operations

Which of the following items would be considered a resource in the operations of a movie theater? Popcorn Projector Printer ink Soda

Projector

Over the course of a month, which of the following is most likely to describe an appropriate flow unit for a process analysis of a hospital? The number of physicians The number of beds The square footage of the building The number of patients

The number of patients

A national restaurant chain has just opened a sit-down location at Chicago's O'Hare International Airport. Next to the sit-down location, it has also established a "to-go" section where travelers can purchase premade sandwiches and salads, as well as drinks and snacks. Which dimension of the customer utility function is particularly emphasized with the "to-go" section? Performance Fit Price Timing

Timing

Get your burger in 1 minute or less—otherwise, you eat free Fit Timing Price Location Performance

Timing

True or False A bottleneck is the resource with the lowest capacity in a multistep process.

True; A bottleneck is the resource with the lowest capacity in a multistep process. It determines the rate of flow of units through a process.

True or False Reducing inefficiencies will increase a firm's profitability.

True; Reducing inefficiencies by increasing what the customer is willing to pay and/or decreasing costs will increase a firm's profitability

Which of the following is NOT a goal of operations management? Matching supply with demand Making a profit while providing customers what they want Understanding the drivers of customer utility Providing great products at low prices to customers

Understanding the drivers of customer utility; Understanding customer utility drivers is a goal of marketing, not operations management.

When will the utilization of a bottleneck resource be less than 100%? When the process is capacity-constrained When the process is demand-constrained When demand is higher than process capacity When demand is equal to process capacity

When the process is demand-constrained

Customers drive away after failing to find a place to park at a supermarket. The current process is _________ capacity -constrained demand -constrained supply exceeds demand capacity unconstrained

capacity-constrained

You observe a long line at the airport security. The process currently is capacity-constrained. demand-constrained. unconstrained. linearly constrained

capacity-constrained

Process utilization is the ratio between __________ and ________ flow time, flow rate flow rate, process capacity process capacity, flow time process time, process capacity

flow rate, process capacity

The __________ of a resource is how long that particular resource takes to complete one flow unit. flow time flow rate processing time processing rate

processing time

you observe a bank and notice that a customer leaves the bank about every five minutes. These five minutes between customers are the capacity of the process. the processing time of the last resource. the cycle time the lead time

the cycle time

Inventory tells us __________ the number of flow units within a process the rate at which flow units move through a process the time at which a flow unit starts a process the time a flow unit spends in a process

the number of flow units within a process

Price utility includes all of the following EXCEPT _________ financing costs cost of owning the product transaction costs shipping cost

transaction costs; Price utility includes the total cost of owning the product or receiving the service. Transaction costs refer to the inconvenience of obtaining the product or receiving the service

Which of the following is an example of a system inhibitor? A customer adds extra weatherproofing to a new truck purchase. An emergency room doctor has no patients at the moment. A financial advisor spends time with a client explaining retirement options. A vacation home is cleaned for the next guests

An emergency room doctor has no patients at the moment.