SCMA 331 Exam 2
A firm is considering two location alternatives. At location A, fixed costs would be $4,000,000 per year, and variable costs $0.30 per unit. At alternative B, fixed costs would be $3,600,000 per year, with variable costs of $0.35 per unit. If annual demand is expected to be 10 million units, which plant offers the lowest total cost? A) Plant A, because it is cheaper than Plant B for all volumes over 8,000,000 units. B) Plant B, because it is cheaper than Plant A for all volumes over 8,000,000 units. C) Plant A, because it is cheaper than Plant B for all volumes. D) Plant B, because it has the lower variable cost per unit. E) Neither Plant A nor Plant B, because the crossover point is at 10 million units.
A
A location decision for an appliance manufacturer would tend to have what type of focus? A) cost focus B) focus on finding very highly skilled technicians C) revenue focus D) environmental focus E) education focus
A
Align Technology uses a ________ approach to produce clear plastic removable aligners. A) mass customization B) product focus C) process focus D) repetitive focus E) crossover
A
Arnold Palmer Hospital uses which focus? A) process B) repetitive C) product D) mass customization E) A and D
A
Computer-integrated manufacturing (CIM) includes manufacturing systems that have: A) computer-aided design, a flexible manufacturing system, inventory control, warehousing and shipping integrated. B) transaction processing, management information systems, and decision support systems integrated. C) automated guided vehicles, robots, and process control integrated. D) robots, automated guided vehicles, and transfer equipment integrated. E) all of their computers integrated with the marketing department.
A
Evaluating location alternatives by comparing their composite (weighted-average) scores involves which of the following? A) factor-rating analysis B) cost-volume analysis C) transportation model analysis D) linear regression analysis E) crossover analysis
A
Goods made to order are typical of ________ and ________ approaches while goods made to forecast are typical of ________ and ________ approaches. A) process, mass customization; repetitive, product B) product, mass customization; repetitive, process C) product, process; repetitive, mass customization D) repetitive, product; mass customization, process E) repetitive, process; mass customization, product
A
Industrial location analysis typically attempts to: A) minimize costs. B) maximize sales. C) focus more on human resources. D) avoid countries with strict environmental regulations. E) ignore exchange rates and currency risks.
A
Process A has fixed costs of $1000 and variable costs of $5 per unit. Process B has fixed costs of $500 and variable costs of $15 per unit. What is the crossover point between process A and process B? A) 50 units B) 200 units C) $2,500 D) $5,000 E) $9,500
A
The use of information technology to monitor and control a physical process is known as: A) process control. B) computer-aided design. C) information numeric control. D) numeric control. E) IT oversight.
A
What is a drawing of the movement of material, product, or people? A) flowchart B) process chart C) service blueprint D) process map E) vision system
A
Which of the following are all strategies for improving productivity in services? A) separation, self-service, automation, and scheduling B) lean production, strategy-driven investments, automation, and process focus C) reduce inventory, reduce waste, reduce inspection, and reduce rework D) high interaction, mass customization, service factory, and just-in-time E) process focus, repetitive focus, product focus, and mass customization focus
A
Which of the following phrases best describes process focus? A) low volume, high variety B) Finished goods are usually made to a forecast and stored. C) Operators are less broadly skilled. D) high fixed costs, low variable costs E) low inventory
A
Which of the following products is likely to be assembled on a repetitive process line? A) automobiles B) custom personal computers C) custom cakes D) steel E) beer
A
Which of the following statements regarding the center-of-gravity method is FALSE? A) It is designed to minimize the maximum possible travel distance to any of the locations. B) The optimal x- and y-coordinates are calculated separately. C) The optimal solution is unconstrained, so it could suggest a location in the middle of a body of water. D) The weights used are the quantity of goods moved to or from each location. E) The origin of the coordinate system and the scale used are arbitrary, just as long as the relative distances are correctly represented.
A
Currency risk is based on what assumption? A) Firms that do not continuously innovate will lose market share. B) Values of foreign currencies continually rise and fall in most countries. C) Changing product lines by reacting to every current trend may alienate the customer base. D) The value of one dollar today is greater than the value of one dollar to be received one year from now. E) The U.S. stock market fluctuates daily.
B
Frito-Lay is to ________ focus as Harley Davidson is to ________ focus. A) process, repetitive B) product, repetitive C) repetitive, product D) process, product E) product, mass customization
B
Globalization of the location decision is the result of all EXCEPT which of the following? A) market economics B) higher quality of labor overseas C) ease of capital flow between countries D) high differences in labor costs E) more rapid, reliable travel and shipping
B
Governmental attitudes toward issues such as private property, intellectual property, zoning, pollution, and employment stability may change over time. What is the term associated with this phenomenon? A) bureaucratic risk B) political risk C) legislative risk D) judicial risk E) democratic risk
B
Production and transportation costs are always considered in which of the following location decision methods? A) traffic counts B) transportation model C) purchasing power D) proximity of markets E) clustering
B
The reason fast food restaurants often are found in close proximity to each other is: A) they enjoy competition. B) location clustering near high traffic flows. C) low cost. D) availability of skilled labor. E) all of the above.
B
The transportation model, when applied to location analysis: A) minimizes total fixed costs. B) minimizes total production and transportation costs. C) minimizes total transportation costs. D) maximizes revenues. E) minimizes the movement of goods.
B
What is an approach to location analysis that includes both qualitative and quantitative considerations? A) locational cost-volume analysis B) factor-rating method C) transportation model D) center-of-gravity method E) make-or-buy analysis
B
Which of the following characteristics best describes repetitive focus? A) It uses sophisticated scheduling to accommodate custom orders. B) Its output is a standardized product produced from modules. C) Operators are broadly skilled. D) It is widely used for the manufacture of steel. E) low volume, high variety
B
Which of the following is FALSE regarding repetitive processes? A) They use modules. B) They allow easy switching from one product to the other. C) They are the classic assembly lines. D) They have more structure and less flexibility than a job shop layout. E) They include the assembly of basically all automobiles.
B
Which of the following is the best example of the proximity rule that, for service firms, proximity to market is the most important location factor? A) Soft drinks are bottled in many local plants, where carbonated water is added to proprietary syrups that may have been shipped long distances. B) Few people will travel out-of state for a haircut. C) Patients will travel very long distances to have their hernia surgeries performed at Shouldice Hospital. D) Furniture makers choose to locate near the source of good hardwoods, even though it means locating near other furniture manufacturers. E) Metal refiners (smelters) locate near mines to accomplish significant weight reduction near the metal's source.
B
Which one of the following products is most likely made in a job shop environment? A) rolls of newsprint B) paper forms C) television sets D) cigarettes E) canned vegetables
B
"Operators simply load new programs, as necessary, to produce different products" describes: A) CAD. B) automated guided vehicles. C) flexible manufacturing systems. D) vision systems. E) process control.
C
A employee produces 15 parts during a shift in which he made $90. What is the labor content of the product? A) $90 B) $5 C) $6 D) $0.167 E) $1,350
C
A location decision for a traditional department store (e.g., Macy's) would tend to have what type of focus? A) cost focus B) labor focus C) revenue focus D) environmental focus E) education focus
C
A product-focused process is commonly used to produce: A) high-volume, high-variety products. B) low-volume, high-variety products. C) high-volume, low-variety products. D) low-variety products at either high- or low-volume. E) high-volume products of either high- or low-variety.
C
A regional bookstore chain wants to build a distribution center that is centrally located for its eight retail outlets. It will most likely employ which of the following tools of analysis? A) assembly line balancing B) load-distance analysis C) center-of-gravity method D) linear programming E) locational cost-volume analysis
C
A system using an automated work cell controlled by electronic signals from a common centralized computer facility is called: A) an adaptive control system. B) robotics. C) a flexible manufacturing system. D) an automatic guided vehicle (AGV) system. E) a manufacturing cell.
C
Among the following choices, an operations manager might best evaluate political risk of a country by looking at which type of country ranking? A) based on competitiveness B) based on cost of doing business C) based on corruption D) based on magnitude of government social programs E) based on average duration between presidential/prime minister elections
C
An assembly line is an example of a: A) product-focused process. B) process-focused process. C) repetitive process. D) line process. E) specialized process.
C
In location planning, environmental regulations, cost and availability of utilities, and taxes are: A) global factors. B) country factors. C) regional/community factors. D) site-related factors. E) none of the above.
C
One fundamental difference between a process chart and a flowchart is that: A) the process chart adds a time dimension to the horizontal axis, while a flowchart is not time-oriented. B) the process chart includes the supply chain, while the flowchart stays within an organization. C) the process chart is more like a table, while the flowchart is more like a schematic diagram. D) the process chart focuses on the customer and on the provider's interaction with the customer, while the flowchart does not deal directly with the customer. E) None of these is true, because a process chart and a flowchart are the same thing.
C
Process X has fixed costs of $10,000 and variable costs of $2.40 per unit. Process Y has fixed costs of $9,000 and variable costs of $2.25 per unit. Which of the following statements is TRUE? A) The crossover point is approximately 6667 units. B) It is impossible for one process to have both of its costs lower than those of another process. C) Process Y is cheaper than process X at all volumes. D) Process X should be selected for very large production volumes. E) Process X is more profitable than process Y and should be selected.
C
Product focused processes: A) allow more customization, but are not very efficient. B) are desirable because resource needs increase slowly with the complexity of a process. C) are processes that are specialized for relatively few products or customer groups. D) apply only to service firms, not to manufacturers. E) are profitable because customers demand flexibility, not specialization.
C
Tangible costs include which of the following? A) climatic conditions B) availability of public transportation C) taxes D) quality and attitude of prospective employees E) zoning regulations
C
The center-of-gravity method is used primarily to determine what type of locations? A) service locations B) manufacturing locations C) distribution center locations D) supplier locations E) call center locations
C
Three of the four types of processes are: A) goods, services, and hybrids. B) manual, automated, and service. C) process focus, repetitive focus, and product focus. D) modular, continuous, and technological. E) input, transformation, and output.
C
When making a location decision at the region/community level, which of these would be considered? A) government rules, attitudes, stability, incentives B) cultural and economic issues C) cost and availability of utilities D) zoning restrictions E) air, rail, highway, waterway systems
C
Which of the following methods best considers intangible costs related to a location decision? A) crossover methods B) locational cost-volume analysis C) factor-rating method D) the transportation method E) center-of-gravity method
C
Which of the following statements regarding FedEx is TRUE? A) Its hub in Memphis, Tennessee, was selected because of its low cost. B) Memphis, Tennessee, is the only hub in the company's global flight network. C) FedEx believes the hub system helps reduce mishandling and delays due to better controls. D) FedEx uses a hub system in the United States, but a city-to-city network in other countries. E) Memphis is FedEx's only hub airport in the United States.
C
Which of these factors would be considered when making a location decision at the site level? A) government rules, attitudes, stability, incentives B) cultural and economic issues C) zoning regulations D) cost and availability of utilities E) proximity to raw materials and customers
C
________ and ________ are to key country success factors as ________ and ________ are to key region success factors. A) Cultural issues, location of markets; site size and cost, zoning restrictions B) Exchange rates, labor availability; site size and cost, environmental impact C) Labor cost, currency risk; land costs, proximity to customers D) Land costs, proximity to customers; labor cost, air and rail systems E) All of the above are accurate relationships.
C
A job shop is an example of a(n): A) repetitive process. B) continuous process. C) line process. D) intermittent process. E) specialized process.
D
Advances in technology: A) have impacted the manufacturing sector only. B) have had only a limited impact on services. C) have failed to change the level of customer interaction with an organization. D) have had a dramatic impact on customer interaction with services and with products. E) have dramatically changed health care, but have not changed retailing.
D
Harley Davidson: A) utilizes job shops to make each of its modules. B) uses product focused manufacturing. C) uses a large number of modules to build a small number of different bikes. D) uses work cells to feed its assembly line. E) All of the above are true.
D
In mass service and professional service, the operations manager should focus extensively on: A) automation. B) equipment maintenance. C) sophisticated scheduling. D) human resources. E) cost-cutting initiatives.
D
Intangible costs include which of the following? A) quality of prospective employees B) quality of education C) availability of public transportation D) all of the above E) none of the above
D
One of the similarities between process focus and mass-customization is: A) the volume of outputs. B) the use of modules. C) many departments and many routings. D) the variety of outputs. E) All of the above are similarities.
D
Service blueprinting: A) provides the basis to negotiate prices with suppliers. B) mimics the way people communicate. C) determines the best time for each step in the process. D) focuses on the provider's interaction with the customer. E) uses the schematic of a house to diagram a service process.
D
The crossover point is that production quantity where: A) variable costs of one process equal the variable costs of another process. B) fixed costs of a process are equal to its variable costs. C) total costs equal total revenues for a process. D) total costs for one process equal total costs for another process. E) the process no longer loses money.
D
Which of the following is true regarding the concept of flexibility? A) It is the ability to respond with little penalty in time, cost, or customer value. B) It may be accomplished with digitally controlled equipment. C) It may involve modular or movable equipment. D) All of the above are true. E) None of the above is true.
D
Which of the following is usually NOT one of the top considerations in choosing a country for a facility location? A) availability of labor and labor productivity B) exchange rates C) attitude of governmental units D) zoning regulations E) location of markets
D
Which of the following phrases best describes product focus? A) low volume, high variety B) Finished goods are usually made to order. C) Processes are designed to perform a wide variety of activities. D) high fixed costs, low variable costs E) high inventory
D
Which of the following provides automatic placement and withdrawal of parts and products into and from designated places in a warehouse? A) AGV B) CAD/CAM C) CIM D) ASRS E) FMS
D
Which of the following technologies could enable a cashier to scan the entire contents of a shopping cart in seconds? A) ASRS B) AGV C) CAD/CAM D) RFID E) FMS
D
Which of the following workers is the most productive? A) $50 wages, 10 parts produced B) $10 wages, 1 part produced C) $30 wages, 5 parts produced D) $100 wages, 21 parts produced E) $500 wages, 100 parts produced
D
Which one of the following technologies is used ONLY for material handling, NOT actual production or assembly? A) robots B) CNC C) CAD D) AGVs E) FMS
D
Why is Northern Mexico used as a cluster for electronics firms? A) high traffic flows B) venture capitalists located nearby C) natural resources of land and climate D) NAFTA E) high per capita GDP
D
A quasi-custom product: A) gets its apparent customization from the combinations available from a small number of modules. B) is often the output of repetitive focus facilities. C) is a valid description of a fast food sandwich. D) only applies in services. E) All but D are true.
E
As described in the book Aerotropolis, nowadays location decisions worldwide are often being based on what? A) rivers B) rail hubs C) interstate highways D) ports E) airports
E
Community attitudes, zoning restrictions, and quality of labor force are likely to be considered in which of the following location decision methods? A) transportation method B) locational cost-volume analysis C) center-of-gravity method D) simulation E) factor-rating method
E
High fixed costs and low variable costs are typical of which approach? A) product B) process C) mass customization D) repetitive E) A and C
E
In the mass service and service factory quadrants of the service process matrix, the operations manager could focus on all of the following except: A) automation. B) standardization. C) tight quality control. D) removing some services. E) customization.
E
On the crossover chart where the costs of two or more location alternatives have been plotted, the quantity at which two cost curves cross is the quantity at which: A) fixed costs are equal for two alternative locations. B) variable costs are equal for two alternative locations. C) total costs are equal for all alternative locations. D) fixed costs equal variable costs for one location. E) total costs are equal for two alternative locations.
E
What have restaurants such as Steakhouses and Stacked Restaurants replaced their traditional paper menus with? A) spoken descriptions B) singing descriptions C) menus painted on the walls D) index cards containing a picture of each item E) iPad menus
E
When making a location decision at the country level, which of these would be considered? A) corporate desires B) land/construction costs C) air, rail, highway, waterway systems D) zoning restrictions E) location of markets
E
Which of the following companies use a mass customization approach? A) Dell B) Align Technology C) Frito-Lay D) Arnold Palmer hospital E) A and B
E
Which of the following industries is most likely to have low equipment utilization? A) auto manufacturing B) commercial baking C) television manufacturing D) steel manufacturing E) restaurants
E
Which of the following is not one of the strategies for improving service productivity? A) self-service B) automation C) scheduling D) separation E) mass customization
E
Which of the following statements regarding "proximity" in the location decision is FALSE? A) Service organizations find that proximity to market is the most critical primary location factor. B) Manufacturers want to be near customers when their product is bulky, heavy, or fragile. C) Perishability of raw materials is a good reason for manufacturers to locate near the supplier, not the customer. D) Reduction in bulk is a good reason for a manufacturer to locate near the supplier. E) Clustering among fast food chains occurs because they need to be near their labor supply.
E
Which of these factors would be considered when making a location decision at the region/community level? A) government rules, attitudes, stability, incentives B) cultural and economic issues C) zoning restrictions D) environmental impact issues E) proximity to raw materials and customers
E
A firm's process strategy is its approach to transforming resources into goods and services.
T
A value-stream map includes both (1) inventory quantities, and (2) symbols for customers and suppliers.
T
An example of an intangible cost, as it relates to location decisions, is the quality of education.
T
Automated storage and retrieval systems are commonly used in distribution facilities of retailers.
T
Flexible manufacturing systems, because of easily changed control programs, are able to perform such tasks as manufacturing one-of-a-kind parts economically.
T
In process-focused facilities, utilization of facilities is low.
T
Intermittent processes are organized around processes.
T
Lists have been developed that rank countries on issues such as "competitiveness" and "corruption."
T
Manufacturers may want to locate close to their customers if the transportation of finished goods is expensive or difficult.
T
One reason for a firm locating near its competitors is the presence of a major resource it needs.
T
One use of camera-and-computer-based vision systems is to replace humans doing tedious and error-prone visual inspection activities.
T
Optical checkout scanners and ATMs are examples of technology's impact on services.
T
Process control is the use of information technology to monitor and control a physical process.
T
Service blueprinting is a process analysis technique that focuses on the customer and the provider's interaction with the customer.
T
Service firms choose locations based, in part, on the revenue potential of a site.
T
The assembly line is a classic example of a repetitive process.
T
The factor-rating method can consider both tangible and intangible costs.
T
The graphic approach to locational cost-volume analysis displays the range of volume over which each location is preferable.
T
The ratio of labor cost per day to productivity, in units per day, is the labor cost per unit.
T
The term focused processes refers to the quest for increased efficiency, whether in goods or services, that results from specialization.
T
The tool that calculates which process has the lowest cost at any specified production volume is a crossover chart.
T
Time-function mapping is a flowchart with time added to the horizontal axis.
T
Unfavorable exchange rates can offset other savings in a location decision.
T
When selecting new equipment and technology, decision makers look for flexibility—the ability to respond with little penalty in time, cost, or customer value.
T