Chapter 1 Operations and Supply Chain Management

Efficiency

Efficiency means doing something at the lowest possible cost.

Effectiveness

Effectiveness means doing the right things to create the most value for the company.

A doctor completes a surgical procedure on a patient without error. The patient dies anyway. In operations management terms, we could refer to this doctor as being efficient but not effective

True

A worker can be efficient without being effective.

True

A process can be effective without being efficient

True

Operations and supply chain management is defined as the design, operation, and improvement of the systems that create and deliver the firm’s primary products and services.

True

The term "value" refers to the relationship between quality and the price paid by the consumer

True The attractiveness of a product relative to its cost

Attempting to balance the desire to efficiently use resources while providing a highly effective service may create conflict between the two goals

True Often maximizing effectiveness and efficiency at the same time creates conflict between the two goals

Central to the concept of operations strategy are the notions of operations focus and trade-offs

True

OSCM is concerned with management of the trickiest parts of the system that produces a good or delivers a service.

False, OSCM is concerned with the management of the entire system that produces a good or delivers a service

OSCM is a functional field of business with clear line management responsibilities.

True

The supply network as can be thought of as a pipeline through which cash, material and information flows

False, Think of the supply network as a pipeline through which material and information flows

Supply networks cannot be constructed for every product or service.

False, Networks such as this can be constructed for any product or service

"Operations" refers to manufacturing and service processes used to transform resources employed by a firm into products desired by customers.

True, Operations refers to manufacturing, service, and health care processes that are used to transform the resources employed by a firm into products desired by customers.

Supply Chain" refers to processes that move information and material to and from the manufacturing and service processes of the firm.

True, Supply chain refers to processes that move information and material to and from the manufacturing and service processes of the firm.

Supply Chain" includes only inbound freight and inventory

False, Supply chain refers to processes that move information and material to and from the manufacturing and service processes of the firm

It is critical that a sustainable strategy meet the needs of shareholders and employees. It is also highly desirable that it preserves the environment.

False, A sustainable strategy that meets the needs of shareholders and employees while preserving the environment is critical.

Planning is where a firm must determine how anticipated demand will be met with available resources

True, Planning consists of the processes needed to operate an existing supply chain strategically. Here a firm must determine how anticipated demand will be met with available resources

Although planning involves determining how the various supply chain processes (sourcing, making, delivering, and returning) will be met, planning itself is not considered a supply chain process

False, Operations and supply chain processes can be conveniently categorized…as planning, sourcing, making, delivering, and returning

The supply chain processes mentioned in the textbook are: planning, sourcing, delivering, and returning

False, Operations and supply chain processes can be conveniently categorized…as planning, sourcing, making, delivering, and returning.

All managers should understand the basic principles that guide the design of transformation processes.

True

Operations and supply management changes constantly because of the dynamic nature of competing in global business and the constant evolution of information technology

True, The field of operations and supply management is ever changing due to the dynamic nature of competing in global business and the constant evolution of information technology.

Capturing information directly from the source through such systems as point-of-sale, radio-frequency identification tags, bar-code scanners, and automatic recognition has had little impact on Operations and Supply Chain Management.

False, Capturing information directly from the source through such systems as point-of-sale, radio-frequency identification tags, bar-code scanners, and automatic recognition has shifted the focus to understanding both what all the information is saying and also how good are the decisions that can be made using it.

Use of systems like point-of-sale, radio-frequency identification tags, bar-code scanners, and automatic recognition has made it more difficult to understand what all the information is saying.

False, Capturing information directly from the source through such systems as point-of-sale, radio-frequency identification tags, bar-code scanners, and automatic recognition has shifted the focus to understanding both what all the information is saying and also how good are the decisions that can be made using it

Operations and supply chain processes can be conveniently categorized as planning, sourcing, making, and delivering.

False, Operations and supply chain processes can be conveniently categorized as planning, sourcing, making, delivering, and returning.

"Product-service bundling" refers to a company building service activities into its product offerings for its customers.

True

In contrast to careers in finance and marketing, careers in OSCM involve hands-on involvement with people and processes.

True, OSCM jobs are hands-on, working with people and figuring out the best way to do things.

The "triple bottom line" relates to the economic, employee (s0cial), and environmental impact of a firm’s strategy.

True, Management must now consider the mandates related to the ongoing economic, employee, and environmental viability of the firm (the triple bottom line).

Sustainability is the ability to maintain profits in a system.

False, Sustainability is the ability to maintain balance in a system.

"Business Analytics" involves the analysis of data through a unique combination of linear programming, game theory and queuing theory to better solve business problems

False, Business analytics is the use of current business data to solve business problems using mathematical analysis.

The mathematical results of Business Analytics are used to automate decision-making and eliminate the decision maker

False, These mathematical results can either be used to support the decision maker or to automate decision-making.

Operations and supply chain strategy are not important issues to investors who tend to focus on growth, dividends and earnings per share.

False, Comparing firms from an operations view is important to investors since the relative cost of providing a good or service is essential to high earnings growth

Investors pay close attention to efficiency and productivity measures like net income per employee because they are interested in how well the firm manages its workforce relations.

False, Investors are most often interested in financial returns. Comparing firms from an operations and supply chain view is important to investors since the relative cost of providing a good or service is essential to high earnings growth. How well a firm manages its’ workforce is of less interest to investors.

During a recession, efficient firms often have an opportunity to increase market share while maintaining profitability

True

One reason for studying operations and supply chain management (OSCM) is which of the following?

A. OSCM is essential for understanding organizational behavior B. Most business graduates do OSCM work regardless of their job title **C. All managers should understand the basic principles that guide the design of transformation processes. D. OSCM is a required course in all business degree programs E. OSCM is the most rigorous business discipline

The Goods-Services Continuum consists of which set of the following categories?

A. No goods, some goods, even mix, some service, no service **B. Pure goods, core goods, core services, pure services C. No service, some service, good service, excellent service D. Self-service, help desk service, face-to-face service, service-with-a-simle E. None of the above

Current issues in OSCM do not include:

A. Coordinating relationships between organizations. B. Making senior management aware that OSCM can be a competitive weapon. C. The triple bottom line. D. Managing customer touch points. **E. Increasing global supply chain employment.

Which of the following are not listed in the text as jobs in OSCM?

A. Department store manager B. Project manager **C. Hospital administrator D. Data Center manager E. Call center manager

Which of the following is not a characteristic that distinguishes services from goods?

**A. Service jobs are unskilled. B. A service is intangible. C. Services are perishable D. Services are heterogeneous E. None of the above

Which of the following is not a way that operations and supply processes are categorized?

A. Planning B. Return C. Delivery **D. Selecting E. Making

One of the "package of features" that make up a service is:

A. Appearance **B. Facilitating goods C. Packaging D. Cost E. Implied use

Which of the following is not a measure of operations and supply chain management efficiency used by Wall Street?

A. Inventory turnover B. Revenue per employee C. Receivable turnover **D. Earnings per share E. Asset turnover

Which of the following is a measure of operations and supply management efficiency used by Wall Street?

A. Dividend payout ratio B. Current ratio **C. Receivable turnover D. Earnings per share growth E. Financial leverage

The ability to maintain balance in a system is referred to as _______________.

Sustainability

Processes that are used to transform resources into products are called ________________.

Operations

What are the five categories of supply chain processes?

Planning; sourcing; making; delivering; returning

Doing something at the lowest possible cost is called: ________________.

Efficiency

What is a total systems approach to managing the flow of information, materials, and services from raw material suppliers through factories and warehouses to the end customer called? ________________________________

Supply chain management