ManagementTrue / False Questions1. As a service business, the operations management activities of an airline companyanalysis have nothing in common with the operations management activities within a bicycle manufacturing company. FALSE Show
2. Operations managers are responsible for managing activities and resources that produce goods and/or provide services. TRUE 3. Effectiveness refers to achieving intended goals whereas efficiency refers to minimizing cost and time. TRUE 4. Operations, marketing, and finance function independently of each other in most organizations. FALSE 5. The operations function exists only in firms that are goods-oriented. FALSE 6. Operations management pertains almost exclusively to the management of manufacturing operations. FALSE 7. Value-added refers to the cost of the inputs required to produce goods and services. FALSE 8. As long as a product is ready in advance of when customers demand it, the timing of when a product is manufactured does not influence the value-added. FALSE 9. Storing an item earlier than the scheduled delivery date is an example of a value adding activity. FALSE 10. Management information systems (MIS) are concerned with providing management with the information it needs to effectively manage. TRUE 11. Operations management involves both system design and planning/control decisions. TRUE 12. System design decisions have very little impact on planning/control decisions. FALSE 13. An example of an operations control decision is the choice of location. FALSE 14. Scheduling jobs is a system design decision and not a planning decision. FALSE 15. Design decisions are usually strategic and long term, while planning decisions are tactical and medium term. TRUE 16. Managing inventory levels is considered a planning/control operations decision area. TRUE 17. A basic difference between manufacturing and service organizations is that services are action-oriented and manufacturing is goods-oriented. TRUE 18. Service involves a much higher degree of customer contact than the production of goods. TRUE 19. Service often requires a higher labour content, whereas the production of goods is more capital intensive. TRUE 20. Measurement of productivity in service is more straightforward than in goods production due to the high degree of uniformity of inputs. FALSE 21. Models are simplified representations of something and thus ignore important aspects of a situation. FALSE 22. Quantitative techniques are often quick and practical techniques for many decisions. FALSE 34. The impact of globalization for manufacturing companies has seen reduced reliance on long international supply chains because of the increasing cost to ship components and finished goods to foreign markets. FALSE 35. The transformation process and feedback is useful in the control of manufacturing operations but does not apply to service operations. FALSE 36. One responsibility of marketing is to identify customer wants and needs and communication them to operations. TRUE 37. One important piece of information sales needs from operations is the manufacturing lead time in order to give customers realistic estimates of how long it will take to fill their orders. TRUE 38. Quality assurance is less challenging in services, as services primarily produce intangibles. FALSE 39. The operations manager has the ultimate responsibility for the creation of goods or performance of services. TRUE 40. Business analytics uses software to build models which in turn support decision making. TRUE 41. North American management practices have had a significant impact on Japanese manufacturers. FALSE 42. Lean production systems operate with lower amounts of inventory, so emphasis is placed on anticipating when problems might occur before they arise. TRUE 43. Major trends that affect operations are only taken into account once strategies and tactics are in place. FALSE 44. Concerns about global warming and pollution have caused governments to impose stricter environmental regulations on businesses. TRUE 45. The difference between goods and services is that goods are mostly intangible and services are mostly tangible. FALSE Multiple Choice Questions46. Operations management encompasses all of the following EXCEPT: A. buying materials. B. capacity planning. C. scheduling. D. motivating employees and training. E. preparing financial statements. 47. All of the following are reasons for studying operations management EXCEPT: A. A large percentage of a company's expenses occur in the operations management activities that are at the core of all business organizations. B. Activities in all of the other areas of business organizations, such as accounting and marketing are interrelated with operations management activities. C. Many management jobs are in operations management-related areas, such as production planning, inventory management, and more. D. The study of operations management applies to manufacturing, however, it is of little use in service organizations. E. Operations innovations lead to marketplace and strategic benefits. 48. The three primary functions that exist in most business organizations are: A. manufacturing, production, and operations. B. operations, marketing, and finance. C. operations, accounting, and marketing. D. operations, production, and finance. E. operations, sales and accounting 49. The three major functions of business organizations: A. perform different but related activities. B. are related indirectly only. C. must work together, but not very closely. D. function independently of each other. E. perform similar and related activities. 50. Which of the following is not a type of service operations? A. Retail trade B. Transportation and warehousing C. Fabrication of metals D. Banking E. Hotels and restaurants 57. Which of the following does not relate to system design? A. Long term capacity B. Location of facilities C. Inventory management D. Process design E. Departmental layout 58. Tactical planning and control activities involve making decisions about all of the following EXCEPT: A. location of facilities. B. scheduling. C. material requirements planning. D. project management. E. inventory management. 59. System capacity and location of facilities are examples of: A. financial decisions. B. tactical decisions. C. systems design decisions. D. operational planning decisions. E. forecasting decisions. 60. The responsibilities of operations managers classified as planning activities include: A. inventory, production pace, quality, and costs. B. organizing departments, subcontracting, supplier contracts, and staffing. C. forecasting, planning, organizing, and directing. D. scheduling, job assignments, purchasing, and logistics. E. capacity, location, layout, and mix of products. 61. Which of the following responsibilities of operations managers is considered a directing activity rather than a planning or control activity? A. selecting production equipment B. product mix decisions C. scheduling workers D. inventory management E. layout of production facilities 62. Of the following, which aspect of the evolution of operations management is affiliated with Japanese manufacturing companies? A. total quality management B. scientific management C. the human relations movement. D. the industrial revolution. E. craft production 63. Which is not a significant difference between manufacturing and service operations? A. Cost per unit B. Uniformity of output. C. Labour content of jobs. D. Amount of customer contact. E. Measurement of productivity. 64. Which of the following is not a characteristic of service operations? A. Intangible output. B. High customer contact. C. High labour content. D. Easy measurement of productivity. E. Low uniformity of output. 65. The responsibilities of operations managers classified as controlling activities are: A. inventory, production pace, quality, and costs. B. organizing departments, subcontracting, supplier contracts, and staffing. C. forecasting, planning, organizing, and directing. D. scheduling, job assignments, purchasing, and logistics. E. capacity, location, layout, and mix of products. 66. Which of the following is not a general approach to decision-making? A. Establishing priorities B. Subjective approach C. Analysis of trade-offs D. Systems approach E. Quantitative approaches 67. Which of the following is not a characteristic of models used to support decision making? A. They provide a simplified representation of a design problem. B. They ignore unimportant details, concentrating on the most important aspects of a situation. C. They may be based on mathematical representations or graphical schematics. D. They provide abstract representations of a design problem. E. They are limited to representations of objective quantitative factors. 68. Which of the following is not true about the systems approach? A. It recognizes the importance of taking into account the impact on all parts of the system. B. It emphasizes interrelationships among subsystems. C. It concentrates on efficiency within subsystems. D. It becomes essential whenever something is being redesigned or improved. E. The objectives of the whole take precedence over those of any one part. 75. Operating at minimum cost and time is referred to as ___________. A. Value added B. Efficiency C. Effectiveness D. Trade-offs E. Economies of scale 76. Which of the following functions is mostly service based, as identified in the "goods- service" continuum? A. Automotive assembly B. Automotive repair C. Restaurant meal D. Software development E. Teaching 77. The service industry in Canada has been growing. According to Statistics Canada, what percent of jobs are in services? A. More than 29% B. More than 48% C. More than 58% D. More than 79% E. More than 84% 78. A balance achieved between two incompatible features is referred to as (a) ___________. A. Break even B. Quantitative technique C. Heuristic D. Trade-off E. Systems approach 79. In the Historical Evolution of Operations Management. Which of the following was emphasized during the Human Relations Movement era? A. Division of labour B. The importance of workers in work design. C. The use of economic incentives D. The transfer of control from workers to management E. The development of time and motion studies. 80. Many major trends affect operations. Disaster preparation and response falls under which major trend? A. Technology B. Globalization C. Supply chains D. Internet and ecommerce E. Sustainability Chapter 02 - Competitiveness, Strategic Planning,and ProductivityTrue / False Questions1. The variety of models and options available to customers is an example of key purchasing criteria that establishes the basis of competition. TRUE 2. A characteristic that was once an order winner may become an order qualifier, and vice versa. TRUE 3. Order qualifiers are those characteristics of an organization's goods or services that cause them to be perceived as better than the competition. FALSE 4. The purchasing criteria of quality and timeliness of delivery are order winners for all companies. FALSE 5. It is important that an organization has a clear and simple mission/vision/values statement. TRUE 6. A mission statement should provide a guide for the formulation of strategies for the organization. TRUE 7. If you think of goals as destinations, then tactics are the roadmaps for reaching the destinations. FALSE 8. Strategic planning includes both determining long-term plans and implementing them through allocation of resources and action plans. TRUE 9. Organizational strategy must be determined without considering the realities of functional area strengths and weaknesses. FALSE 13. Formulating an operations strategy requires focusing solely on the operations function, leaving the concerns of other functions and the status of external markets to broader organizational strategic planning. FALSE 14. In large manufacturing organizations, the operations function tends to adopt a passive role in strategic planning, relying on the functional areas of marketing and finance to establish the strategic direction of the organization. FALSE 15. Vertical integration refers to the ownership of a major part or the whole of the supply chain. TRUE 16. Matching a competitor on quality or price is usually sufficient to gain market share. FALSE 17. Time-based strategies focus on reducing the time required to accomplish certain activities, such as new product development or delivery to the customer. TRUE 18. Typically a manufacturing firm would not consider Enterprise Resource Planning (ERP) software as part of the organizations operations strategy. FALSE 19. In the 1990's Japanese manufacturing companies tended to shift their strategic orientation away from continuous improvement towards strategies based on low labour costs. FALSE 20. Productivity is defined as the ratio of output to input. TRUE 21. Labour costs are included as one of the inputs in all productivity measures. FALSE 22. Labour productivity is one example of a multifactor productivity measurement. FALSE 23. Tracking productivity measures over time enables managers to judge organizational performance and to decide where improvements are needed. TRUE 24. Productivity is directly related to competitiveness. TRUE 25. Even though labour cost as a proportion of total cost has been decreasing in manufacturing companies, labour productivity is still the main measure being used to gauge the performance of individuals and plants. TRUE 26. Labour productivity is an example of a total productivity measure. FALSE 27. Service productivity is easier to measure than manufacturing productivity because it is more labour intensive. FALSE 28. Workers are the main determinant of productivity. FALSE 29. Computer automation will always result in increased productivity. FALSE 30. Variability of the output of services makes it more difficult to measure service productivity. TRUE 31. Vision and strategy are at the centre of the Balanced Scorecard framework. TRUE Multiple Choice Questions 32. Product variety is an example of: A. a generic operations strategy. B. operations infrastructure. C. a process type. D. a dimension of flexibility. E. a key purchasing criteria. 39. Which of the following is not a major decision-making category for operations policies and action plans? A. Facility B. Capacity C. Process types and technology D. Human Resources E. Productivity 40. Which of the following is not a step for formulating an operations strategy? A. Link the organizational goals to the operations strategy. B. Conduct an audit to determine the strengths/weaknesses of the current operations strategy. C. Define the mission and values of the organization. D. Assess the degree of focus at each plant. E. Segment the customers into types. 41. The generic operations strategy that emphasizes capital-intensive methods to achieve higher labour productivity and lower unit costs is referred to as _____________. A. low labour cost strategy B. scale-based strategy C. focused factories strategy D. outsourcing E. flexible factories strategy 42. Radical process redesign based on process re-orientation, breaking down functional silos and integrating operations into customer-focused processes are tactics associated with what generic operations strategy? A. Low labour cost strategy B. Scale-based strategy C. Focused factories strategy D. Business process reengineering E. Flexible factories strategy 43. Time-Based strategies do not focus on: A. the time to deliver a product. B. maintaining quality. C. planning time. D. production design time. E. changeover time. 44. 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. 45. A measure of productivity which reflects a combination of some or all of the resources used to obtain a certain output is: A. labour productivity. B. machine productivity. C. multifactor productivity. D. materials productivity. E. overhead productivity. 46. Canvalves Company produces cast bronze valves on an assembly line. It currently produces 800 valves each 8-hour shift. If the production is increased to 1,200 valves each shift, the productivity increases by: A. 50% B. 33% C. 25% D. 67% E. 75% 47. In an assembly operation at a furniture factory, six employees assembled an average of 450 standard dining chairs per 5-day week. What is the labour 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. 50 chairs/worker/day 48. The weekly output of a fabrication process is shown below together with data for labour and material inputs. Standard selling price is $125 per unit. Overhead is charged weekly at the rate of $1,500 plus .5 times direct labour cost. Assume a 40-hour week and an hourly wage of $16. Material cost is $10 per linear foot. What is the average multifactor productivity? Week Output # Workers Material (feet) 1 392 5 2720 2 408 6 2790 4. Which of the following determines where the organization desires to be in the future? A. Mission statement B. Values statement C. Goals statement D. Vision statement E. Action plans 55. Which of the following is a set of well coordinated policies, objectives, and action plans, directly affecting the operations function, which is aimed at securing a long-term sustainable advantage over the competition. A. Generic strategy B. Operations strategy C. Action plans D. Strategic planning E. Functional strategy 56. What is the major difference between vertical integration and outsourcing? A. Vertical integration is ownership of a part of the supply chain, outsourcing has no ownership. B. Outsourcing is ownership of a part of the supply chain, vertical integration has no ownership. C. Outsourcing uses external suppliers to perform some production/service functions while production/service functions through vertical integration are strictly in-house. D. Outsourcing is a long term operations strategy where vertical integration is short term. E. Vertical integration is usually limited to services, where as outsourcing usually deals with production of goods. 57. Segmenting customers into types is part of formulating an Operations Strategy. Which of the following is not one of the four competitive priorities used in segmentation? A. Cost B. Quality C. Delivery D. Location E. Flexibility 58. The generic operations strategy that reduces the time needed to add new product and process designs and allows volume and design changes and product variety is referred to as _____________. A. low labour cost strategy B. scale-based strategy C. focused factories strategy D. outsourcing E. flexible factories strategy 59. Which of the following is not a measure of labour productivity? A. Units of output per labour hour B. Value-added per labour hour C. Units of output per shift D. Units of output per machine hour E. Dollar value of output per labour hour 60. Service productivity measurement is more problematic than manufacturing due to which of the following issues? A. Output is tangible B. Low degree of variability C. Involves intellectual activities D. Inputs are consistent E. Output has a low degree of variability Short Answer Questions 61. A company has introduced a process improvement that reduces processing time for each unit, so that output is increased by 25% with less material, but one additional worker required. Under the old process, five workers could produce 60 units per hour. Labour costs are $12/hour, and material input was previously $16/unit. For the new process, material is now $10/unit. Overhead is charged at 1 times direct labour cost. Finished units sell for $31 each. What increase in productivity is associated with the process improvement? Before : 60(31) 5(12) + 60(16) + 1(5)(12) = 1,860/hr 1,116/hr = 1.After : 60(1)(31) 6(12) + 75(10) + 1(6)(12) = 2,325/hr 937/hr = 2.Productivity increase = (2 – 1) × 1. = 48%62. The manager of a carpet store is trying to determine optimal installation crew size. He has tried various crew sizes with the results shown below. Compute the average labour productivity for each crew size. Which crew size do you recommend? Crew Size Yards Installed 2 706 Why are service typically more difficult to standardize automate and make efficient?Why are services typically more difficult to standardize, automate, and make efficient? Services typically require customer interaction, which makes it difficult to standardize, automate, and make efficient.
Why productivity tends to be lower in the service sector than in the manufacturing sector?Productivity is lower in services because they tend to be less standardised than goods and some of them have to be delivered in person.
Which is usually true regarding the difference between goods and services?Services are generally produced and consumed simultaneously; tangible goods are not. One reason to globalize is to learn to improve operations.
Which of the following is NOT a manufacturing strategy?Design-to-order is a quality service strategy, not a manufacturing strategy.
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