Operations Management Quiz Questions

A hotel tracks the number of complaints per month. Assume that a 2-sigma control limit is used. What is the lower control limit?

23.167 = C. more than 20 but less than or equal to 25 Explanation: 35 - 2*sqrt35

Which one of the following statements about inventory control systems is BEST?

A single-bin system is essentially a P system, with the target inventory and current inventory position established visually

What is generally TRUE about class A SKUs in ABC analysis? They represent about: A) 80% of the dollar usage B) 50% of all SKUs C) 80% of all SKUs D) 20% of the dollar usage

A) 80% of the dollar usage

Which of these statements about processes is NOT true? A) A process can exist without customers B) A process can require resources from several departments C) A process can have its own set of objectives D) A process can involve work flow that cuts across departmental boundaries

A) A process can exist without customers

Which of the following statements is TRUE? A) Appraisal costs increase as the variation of output increases B) Appraisal costs decrease as quality level decreases C) Appraisal costs increase as the variation of output decreases D) Appraisal costs increase as quality level increases

A) Appraisal costs increase as the variation of output increases

A time study analyst is attempting to determine the standard time for a work element. She observes a worker performing the work element at a higher-than-average pace. How will this fact be reflected in the time standard that is eventually created? A) The performance rating factor will be set greater than 1.0 B) The normal time for the work element will be increased C) The proportion of allowance time will be increased above 1.0 D) The frequency of the work element per cycle will be increased

A) The performance rating factor will be set greater than 1.0

Work sampling is most often used in situations in which: A) an estimate of the proportion of the time spent of a particular activity is needed B) special training is required for the observer, and stopwatches must be used C) it is important to keep the sample size down D) a time standard is needed for a repetitive job

A) an estimate of the proportion of the time spent of a particular activity is needed

The product-process matrix used to analyze manufacturing operations brings together the elements of: A) customization, volume, and process B) intensity, volume, and process C) volume, process, and intensity D) process, intensity, and product design

A) customization, volume, and process

The Baldrige Performance Excellence program: A) involves seven major criteria that are built on the base of customer satisfaction B) focuses on large manufacturing companies because of the impact they have on the economy C) is a set of standards governing the requirements for documentation of a quality program D) was devised by the International Organization for Standardization for companies doing business in Europe

A) involves seven major criteria that are built on the base of customer satisfaction

A manufacturer that produces standard products in large volumes is likely to be using a(n): A) make-to-stock strategy B) engineer-to-order strategy C) make-to-order strategy D) assemble-to-order strategy

A) make-to-stock strategy

A prime example of an internal failure cost is the: A) material cost of a piece of stock metal that has had too large a hole drilled in it B) material cost of the paint applied to the case of a finished unit C) labor cost associated with repairing an item returned under warranty D) labor cost associated with inspecting every item produced

A) material cost of a piece of stock metal that has had too large a hole drilled in it

Higher volume in a process is generally associated with: A) more capital intensity B) fewer opportunities for standardization C) more resource flexibility D) greater customer involvement

A) more capital intensity

Which of the following is an example of a nested process? A. A candidate's intent to graduate is checked for financial holds by the Bursar and for degree requirements by advising before the diploma mill prints their sheepskin B. At the start of the new semester, a student first pats tuition and then goes to the bookstore C. A customer service representative verifies a caller's account information D. A stockbroker calls a client and advises her to sell silver short

A. A candidates intent to graduate is checked for financial holds by the Bursar and for degree requirements by advising before the diploma mill prints their sheepskin

The Mickey and Mouse Cat Food Factory runs an aggressive marketing campaign and much to the​ delight, orders surge to twice their previous level. If their operations manager uses an EOQ​ policy, what is the impact on the order​ quantity? A. The order quantity will be​ 40% higher. B. The order quantity will double. C. The order quantity will be​ 50% lower. D. The order quantity will be​ 70% higher.

A. The order quantity will be​ 40% higher.

The Pareto concept refers to A. a large percent​ (say 80%) of the problems being caused by a small percent​ (say 20%) of the factors. B. quality at the source. C. competitive benchmarking. D. the probability that a product will be functional when used.

A. a large percent​ (say 80%) of the problems being caused by a small percent​ (say 20%) of the factors.

Which of the following is an example of a core competency? A. facilities B. low-cost operations C. top quality D. on-time delivery

A. facilities

Which of the following can put pressure on a company to carry small levels of​ inventory? A. high cost of capital B. high ordering cost C. the potential for stockouts and backorders D. the need to increase workforce productivity

A. high cost of capital

Specialization results in benefits such as A. less training time per employee. B. high employee morale. C. higher wages. D. a​ slower, deliberate work pace.

A. less training time per employee.

Which of the following inventory classifications is one of the four forms that represent how the inventory was​ created? A. pipeline inventory B. service support inventory C. independent demand inventory D. raw material inventory

A. pipeline inventory

Which of the Baldrige criteria is given the most weight in selecting​ winners? A. results B. leadership C. workforce focus D. customer focus

A. results

A major supplier to an auto manufacturer would most likely adopt which production and inventory​ strategy? A.Make-to-stock strategy B. Make-to-order strategy C. Assemble-to-order strategy D. Postponement strategy

A.Make-to-stock strategy

Which statement about economies of scope is NOT true? A) Economies of scope are often attained through programmable automation B) Economies of scope reflect the low capital intensity and high resource flexibility C) Economies of scope bring together two competitive priorities-customization and low price D) Economies of scope reflect the ability to produce multiple products more cheaply in combination than separately

B) Economies of scope reflect low capital intensity and high resource flexibility

The Gap, Inc. has targeted teenagers and young adults in need of casual clothes, and through its GapKids stores, the parents or guardians of infants through 12-year-olds. This is an example of: A) a needs assessment B) market segmentation C) a mission statement D) a collaborative effort between the company and its customers

B) market segmentation

Regarding control charts, a type I error refers to concluding that the process is: A) capable when it is not capable B) out of control when it is in control C) in control when it is not in control D) incapable when it is capable

B) out of control when it is in control

Budgeting, recruiting, and scheduling are examples of a(n): A) development B) support process C) system D) core process

B) support process

In ABC​ analysis, class A items typically represent​ ____ of the SKUs but account for​ ____ of the dollar usage. A. ​20%; 60% B. 20%; 80% C. 80%; 20% D. 40%; 60%

B. 20%; 80%

Which of the following statements about acceptance sampling is​ true? A. Acceptance sampling limits the​ seller's risk of producing​ poor-quality materials. B. Acceptance sampling is the application of statistical techniques to determine if a quantity of material from a supplier should be accepted or rejected. C. Acceptance sampling eliminates the chance of accepting​ bad-quality materials. D. All of the above are true.

B. Acceptance sampling is the application of statistical techniques to determine if a quantity of material from a supplier should be accepted or rejected.

Which of the following statements about a high customer contact​ front-office service process is​ true? A. The service created for each customer is standardized. B. The customer​ (internal or​ external) is​ present, actively​ involved, and receives personal attention. C. When volume is​ higher, capital intensity is less likely. D. All of the above statements are true.

B. The customer​ (internal or​ external) is​ present, actively​ involved, and receives personal attention.

A back office service structure is most similar to A. a small batch process. B. a line process. C. a large batch process. D. a job process in manufacturing.

B. a line process.

The application of statistical techniques to determine whether a quantity of material should be accepted or rejected based on the inspection or test of a sample is known as A. benchmarking. B. acceptance sampling. C. specification review. D. the Deming Wheel.

B. acceptance sampling.

A P system has an advantage over the Q system A. because fixed lot​ sizes, if large​ enough, can result in quantity discounts. B. because orders from multiple items from one supplier can be combined into a single purchase order. C. because lower safety stocks result in savings. D. because the review frequency of each item may be individualized.

B. because orders from multiple items from one supplier can be combined into a single purchase order.

A process failure that results in the​ process's inability to meet advertised performance standards violates which of the five definitions of​ quality? A. psychological impressions B. conformance to specifications C. value D. fitness for use

B. conformance to specifications

The​ plan-do-study-act cycle illustrates A. the improvement in costs associated with implementation of ISO 9000. B. continuous improvement. C. the rise and fall of points in a process that is exhibiting only common cause variation. D. the type of chart to make for each process control situation.

B. continuous improvement.

When plotting values on a control​ chart, the first point that falls outside of the lower control limit​ (LCL) means A. a type I error has occurred. B. the cause should be investigated. C. a run has been encountered. D. the process owner should take samples more frequently.

B. the cause should be investigated.

Which of the following is NOT considered a pressure to hold large​ inventories? A. the cost of placing an order B. the cost of insurance C. the potential to reduce stockouts D. the need to increase machine utilization

B. the cost of insurance

A reorder point will fall if A. the setup cost rises. B. the lead time falls. C. the variance of demand rises. D. the chance of a stockout falls.

B. the lead time falls.

Which one of the following statements about flexible automation is BEST? A) Chemical processing plants and oil refineries mainly utilize programmable automation B) It achieves top efficiency; accommodating new products is difficult and costly C) It is an automatic process that can be reprogrammable to handle various products D) Investment cost is lower when a transfer machine handles many operations

C) It is an automatic process that can be reprogrammable to handle various products

A job process should be preferred when: A) customization is low and volume is high B) workforce and equipment are specialized C) customization is high and volume is low D) products are made to stock type

C) customization is high and volume is low

A yacht maker produces customized yachts for a clientele that wants a one-of-a-kind watercraft. This process can be described as: A) specialized B) hybrid C) divergent D) complex

C) divergent

Field service representatives are classified as a A) mid office B) back office C) front office D) hybrid office

C) front office

The first three cars I bought all fell apart at 50,000 miles. It was called planned obsolescence and no one seemed to care until companies entered the market that promised 70,000, then 80,000, and finally 100,000 warranties. What sets a great car apart from a good one now is not the quality, which is assumed, but performance, safety, and fuel economy. A car that can achieve all three is highly sought after. In the automotive market, these three are a sterling examples of: A) a mission statement B) a needs assessment C) order winners D) order qualifiers

C) order winners

Front offices typically emphasize: A) low cost operations and on-time delivery B) on-time delivery and standardization C) top quality and customization D) top quality and low cost operations

C) top quality and customization

Continuous improvement is a philosophy that: A) waits until a big problem occurs, then systematically solves it B) encourages the hiring of statistical process control specialists to reduce the need for current employees to learn statical methods C) uses problem-solving techniques within work teams D) ensures there are plenty of quality inspectors to find areas for improvement

C) uses problem-solving techniques within work teams

A good brainstorming session has the following​ characteristic: A. Good judgment skills B. Skill in identifying the best payoffs C. Ability to think of creative​ ideas, no matter how far fetched D. Ability to analyze a process analytically

C. Ability to think of creative​ ideas, no matter how far fetched

A systematic approach to process analysis would include the following​ step: A. Order fulfillment B. Integration C. Define scope D. Reengineering

C. Define scope

The ISO​ 14001:2004 standards require documentation of a​ firm's environmental program. Which component requires a plan to improve performance in resource use and pollutant​ output? A. Life-Cycle Assessment B. Environmental Labeling C. Environmental Management System D. Environmental Performance Evaluation

C. Environmental Management System

The six step blueprint for process analysis begins​ with: A. Redesign process B. Document process C. Identify opportunity D. Define scope

C. Identify opportunity

An example of a plant within a plant​ (PWP) is A. the French fry operation at a fast-food franchise. B. the marketing department at your business school. C. an emergency department at a large municipal hospital. D. the metropolitan library as part of city government.

C. an emergency department at a large municipal hospital.

Matching the demand rate with the production rate is a primary lever to reduce A. cycle inventory. B. work-in-process inventory. C. anticipation inventory. D. pipeline inventory.

C. anticipation inventory.

Which of the following is NOT one of seven mistakes to avoid when managing​ processes? A. not connecting with strategic issues B. not involving the right people in the right way C. being satisfied even when fundamental​ "reengineering" changes are not made D. not creating an infrastructure for continuous process improvement

C. being satisfied even when fundamental​ "reengineering" changes are not made

The common denominator for decisions on service processes is​ _______, but for manufacturing processes it is​ _______ A. customer​ contact; product variety B. customer​ variety; output volume C. customer​ contact; output volume D. customer​ variety; product variety

C. customer​ contact; output volume

A high​ customer-contact service process typically indicates all of the following​ EXCEPT: A. a​ front-office process structure. B. more resource flexibility. C. low complexity. D. diverse work flows.

C. low complexity.

A​ high-volume manufacturing process typically means all of the following​ EXCEPT: A. less resource flexibility. B. a​ line, or​ continuous, process. C. more customer involvement. D. greater capital intensity.

C. more customer involvement.

Training workers to do their jobs properly and working with suppliers to improve the quality of the material they supply to you are examples of A. appraisal costs. B. internal failure costs. C. prevention costs. D. external failure costs.

C. prevention costs.

Which of the following statements is more of a general characteristic of a manufacturing organization, as compared to a service organization? A) Short-term demand tends to be highly variable B) Outputs are more intangible C) Quality is more difficult to measure D) Operations are more capital intensive

D) Operations are more capital intensive

A company is interested in monitoring the variability in the weight of the fertilizer bags it produces. An appropriate control chart would be: A) an xbar chart B) a p-chart C) a c-chart D) an R-chart

D) an R-chart

A business focusing on increasing the efficiency of its operations is more directly addressing: A) consistent quality B) volume-flexibility C) variety D) low-cost

D) low-cost

Competitive priorities: A) are the cost, quality, time, and flexibility dimensions that a process or supply chain actually possesses and is able to deliver B) are developed by a review of internal operations capabilities C) are used to distinguish between a service that is considered and one that is actually purchased D) may change over time

D) may change over time

One of the secondary levers for reducing pipeline inventory is to: A) increase capacity cushions B) offer seasonal pricing plans C) accept only large orders D) select more responsive suppliers

D) select more responsive suppliers

Core competencies are: A) Product or service attributes that represent the needs of a particular market segment B) various flow strategies C) another name for competitive priorities D) the unique resources and strengths that management considers when formulating strategy

D) the unique resources and strengths that management considers when formulating strategy

Cross-functional coordination is at particular risk where: A) it is not possible to create a flowchart B) functional silos exist C) there is low process divergence D) there are handoffs in the process

D) there are handoffs in the process

Which of the following is an element of a deceptive business practice that presents a major concern for service or product​ quality? A. The transaction is intended to generate a disproportionate economic benefit to the provider at the expense of the customer. B. The conduct of the provider is intentional and motivated by a desire to exploit the customer. C. The provider conceals the truth based upon what is actually known to the provider. D. All of the above.

D. All of the above.

A process that is in statistical control​ ________ be producing services or products according to their design specifications. A. will not B. can not C. will always D. may not

D. may not

The international standard that is applied to determine a company's environmental friendliness

ISO 14000:2004

Widespread participation in process analysis is essential not only because of the work involved but also because:

It builds commitment

Which step of the Six Sigma DMAIC procedure involves identifying data sources and preparing a data collection plan?

Measure

Which one of the following statements represents an advantage of the P system over the Q system?

Orders can be more easily combined to the same supplier

What statement on the concept of gaining focus is BEST

Plants within plants are different operations within a facility that can have individualized competitive priorities and processes

An inventory system answers two important questions: when to order and how much to order. Which of the following statements correctly explains how a Q system (continuous review system) or a P system (periodic review system) answers these questions?

Under a P system, an order is placed to replenish the inventory position up to the target level T every P time periods

What is true about process management?

When customization must be high, equipment should be general purpose, and employees need to perform a broader range of duties

Which one of the following statements about safety stock is BEST?

When no safety stock is maintained, stockouts will occur during approximately 50% of the cycles

The ISO 9001:2008 standard:

addresses quality system documentation

The principle of postponement is employed by a producer using a(n):

assemble-to-order strategy

when managing processes, it is vital that:

attention is paid to competitive priorities and strategic fit

Which of these statements about pipeline inventory is BEST?

changing an item's lot size does not directly affect the average level of the pipeline inventory

Which business process typically lies within the realm of operations?

customer relationship

Xerox benchmarked its distribution system against that of L. L. Bean's. This is an example of:

functional benchmarking

More fixed automation typically means:

higher demand volumes

Regarding control charts, changing from two-sigma limits to three-sigma limits:

increases the probability of concluding nothing has changed, when in fact it has

The baldrige performance excellence program:

involves a rigorous review process that often helps the companies define what quality means to them, regardless of the outcome

Service processes usually have:

low levels of capital intensity

Performance measures such as average response times, repair times, and percent defective are referred to as:

metrics

Which one of the following groups of activities is likely to be shown on a process chart?

operation, inspection, delay

The process that includes the activities required to produce and delivers the service or product to the external customer is called the:

order fulfillment process

You are invested in buying a laptop computer. List of considerations for purchasing are weight, screen size, and price. You finally select a model to but based on weight and price. In this decision, weight and price are examples of:

order winners

Which of the following generates pressure to increase inventories?

ordering costs

Which of the following is NOT a lever for reducing cycle inventories?

place purchased item orders at fixed intervals

Which statement relating to quality is TRUE?

the distribution of sample means can be approximated by the normal distribution

An example of a type I error would be:

throwing away a perfectly good banana