Service Systems Final

17. 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

a. 0.1-0.5

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

a. Adapt to customer skill levels

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.

a. Avoids coordination expenses and delays

5. 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. Developing complementary service

14. When franchising which one of the following is not a benefit to the franchiser? a. Proven business b. Rapid expansion c. Right to dictate conditions d. Fees from the franchisee

a. Proven business

20. 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

a. Self-serve followed by service in parallel

5. 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.

a. analytical models depend upon its use.

7. A queuing system is described by all but one of the following: a. balking behavior b. calling population c. arrival process d. queue configuration

a. balking behavior

The physical goods supply chain contains all but one of the following elements: a. competitor. b. distributor. c. retailer. d. customer.

a. competitor.

11. Which one of the following is not a strategy to manage demand? a. cross-training employees b. offering price incentives c. developing reservation systems d. partitioning demand

a. cross-training employees

20. 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.

a. cultural transferability.

1. 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.

a. demand is not from a homogeneous source

6. Little's Law states that a relationship exists between a. line length and waiting time. b. multiple and single queues. c. waiting in queue and waiting in system. d. exponential time between arrivals and Poisson arrival rate.

a. line length and waiting time.

11. 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

a. multiple queue

2. Multinational expansion by a service firm is: a. often driven by customer demand. b. vital for growth. c. not recommended for labor intensive operations. d. primarily a defense strategy.

a. often driven by customer demand.

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

a. promoting off-peak demand.

9. 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. the decision to invest in capacity will attract competitors.

2. 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.

a. the mean equal to its standard deviation.

4. 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. Creativity

17. Empirical studies have suggested that the distribution of inter-arrival times is: a. Poisson b. Exponential c. Uniform d. FCFS

b. Exponential

7. What is the principal reason that service trade receives low priority at WTO meetings? a. Controlling service trade is difficult. b. Governments are more concerned with trade in manufactured products. c. Service trade is an insignificant factor in international trade. d. Tariffs cannot be applied to services.

b. Governments are more concerned with trade in manufactured products.

8. What one 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.

b. There is one homogeneous customer class

8. 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.

b. among the most numerous.

3. A good overbooking strategy should: a. minimize the expected opportunity cost of idle service capacity. b. balance the expected opportunity cost of idle service capacity and expected cost of turning away customers who have reservations. c. minimize the expected cost of turning away reservations. d. none of the above; services should try to avoid overbooking.

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

15. Which one 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. difference in hospital fees for walk-in and scheduled services

6. Characteristics of forecasting models include all but one of the following: a. data required. b. economic conditions. c. relative cost. d. forecast horizon.

b. economic conditions.

6. 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.

b. economies of scope.

9. According to Maister's Second Law of Service: a. perceptions minus expectations equal the level of customer satisfaction. b. first impressions can influence the remainder of the service experience. c. quality in the service industry is essentially free. d. a waiting customer cannot be satisfied.

b. first impressions can influence the remainder of the service experience.

2. 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.

b. make off-peak usage attractive.

11. All of the following are forecasting models, except: a. subjective. b. objective. c. causal. d. time series.

b. objective.

4. 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. once in a 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.

b. only a limited number of people may use the facility in any given period.

3. Inventory management costs include all but one of the following: a. ordering. b. purchase. c. receiving. d. shortage.

b. purchase.

8. Regression models require all but one of the following: a. numerical data. b. subjective data. c. independent variables. d. dependent variable.

b. subjective data.

7. The Delphi method is best used when forecasting: a. customer demand. b. technological change. c. correlations between events. d. future economic conditions.

b. technological change.

5. 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.

b. the expected number in the queue plus the expected number in service.

3. 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.

b. the time between arrivals is exponentially distributed.

2. 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.

b. the use of opinion as a basis for a forecast.

Making knowledge available to customers at low cost is called: a. embellishment. b. transfer. c. replacement. d. co-production.

b. transfer.

18. Spatial distribution of demand is important to consider in which of the following services? a. Restaurants b. Banking c. Emergency ambulance services d. Motels

c. Emergency ambulance services

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.

c. Experience with particular industry is important.

20. 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. cyclical

17. Travel booking is a service that falls in the _________ category of outsourcing business service. a. facility support b. employee development c. facilitator d. professional

c. facilitator

13. Taxes and insurance would fall under _____ costs. a. ordering b. receiving and inspection c. holding or carrying d. shortage

c. holding or carrying

1. 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.

c. it is still under the influence of the initial state.

9. 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.

c. traffic intensity.

19. 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.

c. uses all past data in forecast.

3. 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

d. Autonomy

16. Which of the following is not an essential feature of a queuing system? a. Calling population b. Queue configuration c. Service process d. Customer

d. Customer

18. Survey results are used in: a. regression. b. cross-impact analysis. c. econometric models. d. Delphi method.

d. Delphi method.

20. _________ variability is not one of the five sources of customer-induced variability. a. Arrival b. Capability c. Effort d. Demand

d. Demand

12. Removing the kitchen from Taco Bell outlets to a central location resulted in all of the following benefits, except: a. Reduction in waste b. Consolidation of demand c. Shorter customer wait times d. Make-to-order customization

d. Make-to-order customization

21. _________ 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. None of the above

15. 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. Calculation is simple. d. None of the above.

d. None of the above.

13. 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. Regression

17. A community hospital is an example of a: a. diversified network. b. focused network. c. focused service. d. clustered service.

d. clustered service.

18. 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

d. decreases negative exponentially

15. 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.

d. displaying time with a large analog clock.

The impact of pricing on service chain management was _____ before and _____ after. a. high, low b. passive, active c. static, dynamic d. fixed, variable

d. fixed, variable

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.

d. the number of servers on duty.

19. 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

a. Establishing a brand

14. _____________ is used best to forecast demand. a. Exponential smoothing b. Historical analogy c. Dephi method d. Econometrics

a. Exponential smoothing

11. Global service strategies include all but one of the following: a. Exporting services b. Following your customers c. Beating-the-clock d. Service offshoring

a. Exporting services

7. 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.

a. Prominently display time with a large analog clock.

18. 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

a. Promotes off-peak demand

25. When yield management is implemented which one of the following does not result: a. consumer surplus increases b. multiple prices are offered c. capacity is more fully utilized d. market for the service is segmented

a. consumer surplus increases

9. In the A/B/C analytical queuing model classification, M is used to denote: a. exponential inter-arrival time distribution. b. deterministic inter-arrival time distribution. c. general distribution with mean and variance. d. Erland distribution.

a. exponential inter-arrival time distribution.

13. 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

a. jockeying

12. 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

a. reorder point, safety stock

24. A ________ project is not project category for a professional firm. a. routine b. brains c. grey hair d. procedure

a. routine

3. 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.

a. the capacity to serve must be greater than the average demand.

14. 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

b. Professor

1. 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. Technological compatibility

10. 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.

b. turnover of stock generates money for future investment.

18. 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.

c. Costs might increase.

6. 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. Decrease customer participation in the service process.

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

c. Employee

6. According to Maister, one of the following statements is not true of waits. a. Unoccupied time feels longer than occupied time. b. Anxiety makes waits feel longer. c. In-process waits feel longer than preprocess waits. d. Unfair waits feel longer than fair waits.

c. In-process waits feel longer than preprocess waits.

13. _______ is not part of the service chain concept. a. Conversion b. Distribution c. Inventory management d. Knowledge management

c. Inventory management

7. A cruise ship has available a certain number of rooms in each of 10 categories of appointments 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.

c. Overbook the cabin.

22. ________ is not a strategy for accommodating of customer-induced variability. a. Provide generous staffing b. Cross-train employees c. Reward increased effort d. Do work for customers

c. Reward increased effort

In the equation LS = LQ + ρ, ρ refers to: a. number of servers. b. traffic density. c. mean number of customers being served. d. number of customer that have been served.

c. mean number of customers being served.

8. In the long run, if service capacity is inadequate for the arrival rate, one of the following will likely occur: a. servers will slow down. b. customers will demand less. c. reneging will occur. d. prices will be increased.

c. reneging will occur.

9. Exponential smoothing uses a feedback control mechanism because: a. 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.

c. the calculation contains the forecast error.

14. Which one 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. variable capacity

23. 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: 45 35 40 45 40 What is the total number of appointments that can be scheduled during this week? a. 30 b. 35 c. 40 d. 45

d. 45

19. All but one of the following depicts the impact of service chain management: a. Proactive demand management. b. Variable pricing. c. Real-time tracking. d. Pull system for flow of information.

d. Pull system for flow of information.

11. Which of the following is not a source of uncertainty in managing a supply chain? a. Supplier delivery performance b. Manufacturing reliability c. Customer demand d. Quality control

d. Quality control

2. 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.

d. arrival rates, service rates, and number of servers.

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

d. departure process

5. 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.

d. dependent variable.

9. American Express, which offers financial and travel services on a global basis, is an example of a: a. focused service. b. focused network. c. clustered service. d. diversified network.

d. diversified network.

14. 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.

d. increased ordering costs.

12. 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.

d. lead to a perceived shorter wait time.

9. 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.

d. mean arrival rate.

16. In using the critical fractile criterion P(d<x) = Cu/(Cu + Co) for overbooking, the 'd' refers to: a. cost of overestimating demand. b. cost of underestimating demand. c. number of rooms overbooked. d. number of no-shows based on past experience.

d. number of no-shows based on past experience.

4. Bars that offer happy hours in the afternoon are using the strategy of: a. creating adjustable capacity. b. developing complementary services. c. increasing customer participation. d. promoting off-peak demand.

d. promoting off-peak demand.

8. 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. retention of control.

9. All but one of the following are advantages of using one large computer system to serve an entire university community: a. short turnaround time. b. large memory. c. economics of scale in services. d. short wait in queue.

d. short wait in queue.

17. For seasonal items a ______ system could be used to manage inventory. a. continuous review b. periodic review c. retail discounting d. single-period model

d. single-period model

3. 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.

d. the assumption that the future is a projection of the past.

8. 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. the customer has the option of selecting a particular server of preference.

10. 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.

d. using reservations and appointments.

19. Which one of the following is most affected by the bullwhip effect? a. customer. b. retailer. c. distributor. d. wholesaler.

d. wholesaler.

13. 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. yield management