Exam 1

Managers should most often rely on quantitative techniques for important decisions since quantitative approaches result in more accurate decisions

FALSE

Measurement of productivity in service is more straightforward than in manufacturing since it is not necessary to take into account the cost of materials

FALSE

Mission statements should be as specific as possible regarding exactly how they will be accomplisehed

FALSE

Most people encounter operations only in profit-making organizations

FALSE

National productivity is determined by averaging the productivity measures of various companies or industries

FALSE

Operations management and marketing are the two functional areas that exist to support activities in other functions such as accounting, finance, IT, and human resources

FALSE

Operations managers are responsible for assessing consumer wants and needs and selling and promoting the organization's goods or services

FALSE

Operations managers, who usually use quantitative approaches, are not really concerned with ethical decision making

FALSE

Operations, marketing, and finance function independently of each other in most organizations

FALSE

Organizational strategy should be determined without considering the realities of functional area strengths and weaknesses since they can be changed to meet our strategy

FALSE

Outsourcing tends to improve quality but at the cost of lowered productivity

FALSE

Productivity is defined as the ratio of input to output

FALSE

Productivity tends to be only a very minor factor in an organization's ability to compete

FALSE

Service operations require additional inventory because of the unpredictability of consumer demand

FALSE

Special-purpose technology is a common way of offering increased customization in manufacturing or services without taking on additional labor costs

FALSE

The operations manager has primary responsibility for making operations system design decisions, such as system capacity and location of facilities

FALSE

The use of models will guarantee the best possible decisions

FALSE

The word "technology" is used only to refer to "information technology"

FALSE

Service often requires greater labor content, whereas manufacturing is more capital intensive

TRUE

Services often don't fit simple yield measurements

TRUE

Standardization has the advantage of reducing variability

TRUE

Strategy includes both organizational and functional strategies

TRUE

The Pareto phenomenon is one of the most important and pervasive concepts that can be applied at all levels of management

TRUE

The greater the degree of customer involvement, the more challenging the design and management of operations

TRUE

The hierarchy and sequence of planning and decision making is: mission, organizational strategy, tactics, and operational decisons

TRUE

The majority of our textbook deals with tactical operations that support established functional strategies

TRUE

The optimal solutions produced by quantitative techniques should always be evaluated in terms of the larger framework

TRUE

The value of outputs is measured by the price customers are willing to pay for goods or services

TRUE

Tracking productivity measures over time enables managers to judge organizational performance and decide where improvements are needed

TRUE

Traditional strategies of business organizations have tended to emphasize cost minimization or product differentiation

TRUE

Wage and salary increases that are not accompanies by productivity increases tend to exert inflationary pressures on a nation's economy

TRUE

Improving efficiency will guarantee a similar improvement in productivity

FALSE

The manager of a carpet store is trying to determine the best installation crew size. He has tried various crew sizes with the results shown below. Based on productivity, what crew size do you recommend? Crew Size Yards Installed 2 716 4 1298 3 1017 3 1002 4 1278 2 702 A. 2 B. 3 C. 4

A. 2

Gourmet Pretzels bakes soft pretzels on an assembly line. It currently bakes 800 pretzels each eight-hour shift. If the production is increased to 1,200 pretzels each shift, then productivity will have increased by: A. 50 percent. B. 33 percent. C. 25 percent. D. 67 percent.

A. 50 percent *Divide the difference in productivity by the original productivity

Suppose a country's productivity last year was 84. If this country's productivity growth rate of 5 percent is to be maintained, this means that this year's productivity will have to be: A. 88.2. B. 79.8. C. 82.8. D. 78.9. E. 4.2.

A. 88.2

Which of the following would be least important in the pursuit of a time-based strategy? A. cost minimization B. quick changeover times C. operational agility D. reduced complaint resolution times E. flexible technology

A. cost minimization

Which is not an area of significant difference between manufacturing and service operations? A. cost per unit B. uniformity of output C. labor content of jobs D. customer contact E. measurement of productivity

A. cost per unit

Two widely used metrics of variation are the __________ and the _________. A. mean; standard deviation B. productivity ratio; correlation C. standardized mean; assignable deviation D. randomized mean; standardized deviation E. normal distribution; random variation

A. mean; standard deviation

With regard to operations strategy, organization strategy should, ideally, take into account: A. operations' strengths and weaknesses. B. inventory levels. C. labor productivity. D. product mix. E. production processes.

A. operations' strengths and weaknesses

Modern firms increasingly rely on other firms to supply goods and services instead of doing these tasks themselves. This increased level of _____________ is leading to increased emphasis on ____________ management. A. outsourcing; supply chain B. offshoring; lean C. downsizing; total quality D. optimizing; inventory E. internationalization; intercultural

A. outsourcing; supply chain

Which of the following is least likely to affect the cost an organization incurs in producing its products or services? A. price B. productivity C. location D. quality E. inventory management

A. price

Product design and choice of location are examples of _______ decisions. A. strategic B. tactical C. operational D. customer-focused E. design

A. strategic

Business organizations consist of three major functions which, ideally: A. support one another. B. are mutually exclusive. C. exist independently of each other. D. function independently of each other. E. do not interface with each other.

A. support one another.

Which of the following refers to service and production processes that use resources in ways that do not harm ecological systems? A. sustainability B. supportability C. marketability D. perishability E. transportability

A. sustainability

A firm pursuing a strategy based on customization and variety will tend to structure and manage its supply chain to accommodate more _____________ than a firm pursuing a strategy based on low cost and high volume. A. variation B. streamlined flow C. quality D. capacity E. productivity

A. variation

A productivity increase in one operation that does not improve overall productivity of the business is not A. worthwhile. B. trivial. C. competence-destroying. D. an order winner. E. an order qualifier.

A. worthwhile

The weekly output of a fabrication process is shown below, together with data for labor and material inputs. Standard selling price is $125 per unit. Overhead is charged weekly at the rate of $1,500 plus .5 times direct labor cost. Assume a 40-hour week and an hourly wage of $16. Material cost is $10 per foot. What is the average multifactor productivity? Week Output # of Workers Material (ft) 1 392 5 2720 2 408 6 2790 A. 1.463 B. 1.457 C. 1.432

B. 1.457

The Balanced Scorecard is a useful tool for helping managers translate their strategy into action in the following areas: A. Sustainability; Flexibility; Efficiency; Technology B. Customers; Financial; Internal Business Processes; Learning and Growth C. Customization; Standardization; Efficiency; Effectiveness D. The Environment; The Community; Suppliers; Other Stakeholders E. Strategy; Tactics; Productivity; Profitability

B. Customers; Financial; Internal Business Processes; Learning and Growth

Which of the following is not typically considered a cure for poor competitiveness? A. Remove communications barriers within organizations. B. Minimize attention to the operations function. C. Put less emphasis on short-term financial results. D. Recognize labor as a valuable asset and act to develop it. E. Improve quality.

B. Minimize attention to the operations function

The fact that a few improvements in a few key areas of operations will have more impact than many improvements in many other areas is consistent with the: A. Irwin phenomenon. B. Pareto phenomenon. C. Stevenson phenomenon. D. Tellier phenomenon. E. Adam Smith phenomenon.

B. Pareto phenomenon

Which of the following is not among the chief reasons organizations fail? A. overemphasis on short-term financial performance B. emphasizing labor productivity in labor-intensive environments C. poor internal communications D. not investing in capital and human resources E. overemphasis on product (or service) design

B. emphasizing labor productivity in labor-intensive environments

For firms competing in worldwide markets, conducting __________________ is more complex, since what works in one country or region might not work in another. A. productivity analysis B. environmental analysis C. strategy implementation D. sustainability analysis E. growth forecasting

B. environmental analysis

Marketing depends on operations for information regarding: A. productivity. B. lead time. C. cash flow. D. budgeting. E. corporate intelligence.

B. lead time

Scheduling personnel is an example of an operations management: A. mission implementation. B. operational decision. C. organizational strategy. D. functional strategy. E. tactical decision.

B. operational decision

Managing the supply chain has become more important as a result of firms increasing their levels of: A. overtime. B. outsourcing C. marketing D. promotions E. shipping.

B. outsourcing

Manufacturing work sent to other countries is called: A. downsizing. B. outsourcing. C. internationalization. D. vertical integration. E. entrepreneurship.

B. outsourcing

The responsibilities of the operations manager are: A. planning, organizing, staffing, procuring, and reviewing. B. planning, organizing, staffing, directing, and controlling. C. forecasting, designing, planning, organizing, and controlling. D. forecasting, designing, operating, procuring, and reviewing. E. designing and operating.

B. planning, organizing, staffing, directing, and controlling

The ratio of good output to quantity of raw material input is called A. nondefective productivity. B. process yield. C. worker quality measurement. D. total quality productivity. E. quantity/quality ratio.

B. process yield

In an assembly operation at a furniture factory, six employees assembled an average of 450 standard dining chairs per five-day week. What is the labor productivity of this operation? A. 90 chairs/worker/day B. 20 chairs/worker/day C. 15 chairs/worker/day D. 75 chairs/worker/day E. 60 chairs/worker/day

C. 15 chairs/worker/day *divide output of 450 chairs by the inputs of 30 worker-days

Which of the following is true? A. Corporate strategy is shaped by functional strategies. B. Corporate mission is shaped by corporate strategy. C. Functional strategies are shaped by corporate strategy. D. External conditions are shaped by corporate mission. E. Corporate mission is shaped by functional strategies.

C. Functional strategies are shaped by corporate strategy

A "product package" consists of: A. the exterior wrapping. B. the shipping container. C. a combination of goods and services. D. goods if a manufacturing organization. E. customer relations if a service organization.

C. a combination of goods and services.

Knowledge skills usually don't include: A. process knowledge. B. accounting skills. C. communication skills. D. global knowledge. E. financial skills.

C. communication skills.

The process of comparing outputs to previously established standards to determine if corrective action is needed is called: A. planning. B. directing. C. controlling. D. budgeting. E. disciplining.

C. controlling.

For an organization to grow its market share, it must: A. advertise using multimedia. B. reduce prices. C. exceed minimum standards of acceptability for its products or services. D. establish an Internet Web site. E. broaden its mission statement.

C. exceed minimum standards of acceptability for its products or services

The key to successfully competing is understanding what customers want and then __________ satisfy those wants. A. training production workers to B. finding suppliers who can C. finding the best way to D. designing products and services that E. hiring enough workers to

C. finding the best way to

Operations management involves continuous decision making; hopefully most decisions made will be: A. redundant. B. minor in nature. C. informed. D. quantitative. E. qualitative.

C. informed.

Which of the following does not relate to system design? A. altering the system capacity B. location of facilities C. inventory management D. selection and acquisition of equipment E. physical arrangement of departments

C. inventory management

Knowledge about challenges specific to the operations function can help marketing personnel to judge how _____________ new product designs will be. A. marketable B. segmentable C. manufacturable D. measurable E. nameable

C. manufacturable

In the 1970s and early 1980s in the United States, organizations concentrated on: A. operations strategies. B. improving quality. C. marketing and financial strategies. D. revising mission statements. E. environmental issues.

C. marketing and financial strategies

Which of the following factors would tend to reduce productivity? A. improvements in workplace safety B. reductions in labor turnover C. more inexperienced workers D. reductions in the scrap rate E. less variety in the product mix

C. more inexperienced workers

Farming is an example of: A. an obsolete activity. B. a virtual organization. C. nonmanufactured goods. D. a growth industry. E. customized manufacturing.

C. nonmanufactured goods

The external elements of SWOT analysis are: A. strengths and weaknesses. B. strengths and threats. C. opportunities and threats. D. weaknesses and opportunities. E. strengths and opportunities.

C. opportunities and threats

Years ago in the overnight delivery business, providing package tracking capability gave some firms a competitive advantage. Now, all firms must offer this capability simply to be in this line of business. This is an example of ______________ becoming ____________ over time. A. tactical implications; strategic B. strategic implications; tactical C. order winners; order qualifiers D. profitability factors; productivity factors E. order qualifiers; order winners

C. order winners; order qualifiers

Competitiveness doesn't include: A. productivity. B. effectiveness. C. profitability. D. operations strategy. E. operations management.

C. profitability

Dealing with the fact that certain aspects of any management situation are more important than others is called: A. analysis of trade-offs. B. sensitivity analysis. C. recognition of priorities. D. analysis of variance. E. decision table analysis.

C. recognition of priorities

Which one of the following would not generally be classified under the heading of transformation? A. assembling B. teaching C. staffing D. farming E. consulting

C. staffing

Which of the following most involves coordinating the activities among all the elements of the business? A. pollution control B. quality management C. supply chain management D. competition from foreign manufacturers E. technological change

C. supply chain management

Taking a systems viewpoint with regard to operations in today's environment increasingly leads decision makers to consider ______________ in response to the ___________. A. flexibility; pressure to be more efficient B. offshoring; need to promote domestic production C. sustainability; threat of global warming D. technology; impact of random variation E. forecasting; stabilization of demand

C. sustainability; threat of global warming

Product design and process selection are examples of _______ decisions. A. financial B. tactical C. system design D. system operation E. forecasting

C. system design

Technology choices seldom affect: A. costs. B. productivity. C. union activity. D. quality. E. flexibility.

C. union activity

Government statistics are a good source of data about productivity trends in the service sector

FALSE

Which of the following statements about variation is false? A. Variation prevents a production process from being as efficient as it can be. B. Some variation can be prevented. C. Variation can either be assignable or random. D. Any variation makes a production process less productive. E. Random variation generally cannot be influenced by managers.

D. Any variation makes a production process less productive

Which of the following principles emphasizes that actions should make the community as a whole better off? A. The Rights Principle B. The Fairness Principle C. The Virtue Principle D. The Common Good Principle E. The Utilitarian Principle

D. The Common Good Principle

Which of the following is not a benefit of using models in decision making? A. They provide a standardized format for analyzing a problem. B. They serve as a consistent tool for evaluation. C. They are easy to use and less expensive than dealing with the actual situation. D. They force the decision maker to take into account qualitative issues such as personalities and emotions. E. They offer insights into fundamental issues at play in a decision-making setting.

D. They force the decision maker to take into account qualitative issues such as personalities and emotions

If one organization is better able than most to respond to changes in demands or opportunities, we say that organization exhibits higher: A. sustainability. B. efficiency. C. productivity. D. agility. E. marketability.

D. agility

Unique attributes of firms that give them a competitive edge are called: A. functional strategies. B. Balanced Scorecards. C. supply chains. D. core competencies. E. sustainable initiatives.

D. core competencies

Which of the following is not a characteristic of service operations? A. intangible output B. high customer contact C. high labor content D. easy measurement of productivity E. low uniformity of output

D. easy measurement of productivity

Measurements taken at various points in the transformation process for control purposes are called: A. plans. B. directions. C. controls. D. feedback. E. budgets.

D. feedback

Budgeting, analysis of investment proposals, and provision of funds are activities associated with the _______ function. A. operation B. marketing C. purchasing D. finance E. internal audit

D. finance

Which of the following would tend to increase the importance of supply chain management? A. increased supply chain stability B. lower levels of outsourcing C. reduced competitive pressures D. increased globalization E. greater emphasis on local markets

D. increased globalization

What is credited with gains in industrial productivity, increased standards of living, and affordable products? A. personal computers B. the Internet C. mass transportation D. mass production E. multilevel marketing

D. mass production

Which of the following is not an ongoing trend in manufacturing? A. globalization B. quality improvement C. flexibility and agility D. mass production for greater economies of scale E. technological advances

D. mass production for greater economies of scale

The fundamental purpose for the existence of any organization is described by its: A. policies. B. procedures. C. corporate charter. D. mission statement. E. bylaws.

D. mission statement.

Productivity is expressed as: A. output plus input. B. output minus input. C. output times input. D. output divided by input. E. input divided by output.

D. output divided by input

Increasing the service offered to the customer makes it more difficult to compete on the basis of: A. order qualifiers. B. customization. C. quality. D. price. E. flexibility.

D. price.

Some companies attempt to maximize the revenue they receive from fixed operating capacity by influencing demands through price manipulation. This is an example of: A. illegal price discrimination. B. collusion. C. volume analysis. D. revenue management. E. outsourcing.

D. revenue management

Where a firm locates would typically not affect that firm's: A. costs. B. convenience for customers. C. delivery times. D. strategy. E. transportation costs.

D. strategy.

Which of the following is not a reason for poor performance of our organization in the marketplace? A. placing too much emphasis on product/service design and too little on process design B. failing to take into account customer wants and needs C. putting too much emphasis on short-term financial performance D. taking advantage of strengths/opportunities, and recognizing competitive threats E. failing to monitor the external environment

D. taking advantage of strengths/opportunities, and recognizing competitive threats

If people would only work harder, productivity would increase

FALSE

Which of the following is not true about the systems approach? A. A systems viewpoint is almost always beneficial in decision making. B. A systems approach emphasizes interrelationships among subsystems. C. A systems approach concentrates on efficiency within subsystems. D. A systems approach is essential whenever something is being redesigned or improved. E. All of the choices are true.

E. All of the choices are true.

In addition to operations, which of the following is considered a "line" function? A. accounting B. finance C. IT D. procurement E. sales

E. Sales

___________ is generally used to facilitate an organization strategy that emphasizes low cost. A. Speed to market B. Flexibility C. Customization D. Sustainability E. Standardization

E. Standardization

Which of these factors would be least likely to affect productivity? A. methods and technology B. workers C. management D. product mix E. advertising

E. advertising

Which of the following is not a type of operations? A. goods production B. storage/transportation C. entertainment D. communication E. advertising

E. advertising.

Which of the following is essential to consider with respect to managing a process to meet demand? A. advertising B. trends in fashion C. global economic trends D. financial reporting standards E. capacity

E. capacity

Which of the following is not a key step toward improving productivity? A. developing productivity measures for all operations B. improving the bottleneck operations C. establishing reasonable goals for improvement D. considering incentives to reward workers E. converting bond debt to stock ownership

E. converting bond debt to stock ownership

Time-based approaches of business organizations focus on reducing the time to accomplish certain necessary activities. Time reductions seldom apply to: A. product/service design time. B. processing time. C. delivery time. D. response time for complaints. E. internal audits.

E. internal audits.

Supplying operations with parts and materials, performing work on products, and/or performing services are part of the firm's: A. division of labor. B. market development. C. outsourcing. D. external process orientation. E. internal supply chain.

E. internal supply chain

Operations and sales are the two ________ functions in businesses. A. strategic B. tactical C. support D. value-adding E. line

E. line

An organization's mission statement serves as the basis for: A. environmental scanning. B. core competencies. C. operating procedures. D. distinctiveness. E. organizational goals.

E. organizational goals

Value added can be calculated by: A. average productivity gains over time. B. inputs divided by the outputs. C. outputs divided by the inputs. D. input plus output divided by two. E. outputs minus inputs.

E. outputs minus inputs

Which of the following is not a factor that affects productivity? A. computer viruses B. design of the workspace C. use of the Internet D. standardizing processes E. product price

E. product price

Core competencies in organizations generally do not relate to: A. cost. B. quality. C. time. D. flexibility. E. sales price.

E. sales price.

Which of the following is not a key factor of competitiveness? A. price B. product differentiation C. flexibility D. after-sale service E. size of organization

E. size of organization

Production systems with customized outputs typically have relatively: A. high volumes of output. B. low unit costs. C. high amount of specialized equipment. D. fast work movement. E. skilled workers.

E. skilled workers.

"Value added" by definition is always a positive number since "added" implies increases

FALSE

A system approach means that we concentrate on efficiency within a subsystem and thereby assure overall efficiency

FALSE

An organization that is twice as productive as its competitor will be twice as profitable

FALSE

As long as we match a competitor on quality and price we will gain market share

FALSE

Assembly lines achieved productivity but at the expense of standard of living

FALSE

Companies are either producing goods or delivering services. This means that only one of the two types of operations management strategies are used.

FALSE

Competitiveness relates to the profitability of an organization in the marketplace

FALSE

Global competition really only applies to multinational organizations

FALSE

Goods-producing organizations are not involved in service activities

FALSE

A business that is rated highly by its customers for service quality will tend to be more profitable than a business that is rated poorly

TRUE

A characteristic that was once an order winner may become an order qualifier, and vice versa

TRUE

A mission statement should provide a guide for the formulation of strategies for the organization

TRUE

A systems approach emphasizes interrelationships among subsystems, but its main theme is that the whole is greater than the sum of its individual parts

TRUE

Among Ford's many contributions was the introduction of mass production, using the concepts of interchangeable parts and division of labor

TRUE

An example of a strategic operations management decision is the choice of where to locate

TRUE

An example of a tactical operations management decision is determining employment levels

TRUE

An example of an operations management decision is inventory level management

TRUE

As an abstraction of reality, a model is a simplified version of a real phenomenon

TRUE

Elton Mayo's Hawthorne experiments were the focal point of the human relations movement, which emphasized the importance of human element in job design

TRUE

Environmental scanning is a search for events or trends that present either threats or opportunities to the organization

TRUE

Lean production systems incorporate the advantages of both mass production and craft production

TRUE

Many operations management decisions can be described as trade-offs

TRUE

Often, the collective success or failure of companies' operations functions will impact the ability of a nation to compete with other naitons

TRUE

One concern in the design of production systems is the degree of standardization

TRUE

People who work in the field of operations should have skills that include both knowledge and people skills

TRUE

Prior to the Industrial Revolution, goods were produced primarily by craftsmen or their apprentices using custom-made parts

TRUE

Productivity is defined as the ratio of output to input

TRUE

Productivity is directly related to the ability of an organization to compete

TRUE

Service involves a much higher degree of customer contact than manufacturing

TRUE