Chapter 1 Questions — Operations

38. Operations management involves continuous decision-making; hopefully most decisions made will be:
A. redundant
B. minor in nature
C. informed
D. quantitative
E. none of the above

C. informed

39. 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 service

40. 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

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

E. all the above involve operations

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

C. union activity.

43. 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

44. 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

45. 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

46. Manufacturing work sent to other countries is called:
A. downsized
B. outsourced
C. internationalization
D. vertical integration
E. entrepreneurial ship

B. outsourced

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

C. system design

48. 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

49. Knowledge skills usually don’t include:
A. process knowledge
B. accounting skills
C. communication skills
D. global knowledge
E. all of the above

C. communication skills

50. Which of the following is not true about 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 above are true

C. A systems approach concentrates on efficiency within subsystems.

51. 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. assembly lines
E. multi-level marketing

D. assembly lines

52. 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

53. Which is not a 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

54. 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

55. Which of the following is a recent trend in business?
A. pollution control
B. total quality management
C. supply chain management
D. competition from foreign manufacturers
E. technological change

C. supply chain management

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

C. non-manufactured goods

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

C. recognition of priorities

58. 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

59. 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

60. 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

61. 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

62. 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

63. 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

64. 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. All of the above are benefits.
E. None of the above is a benefit.

D. All of the above are benefits.

65. 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

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

False

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

True

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

False

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

False

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

True

Goods producing organizations are not involved in service activities

False

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

False

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

True

. The use of models will guarantee the best possible decisions.

False

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

True

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

False

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

False

The word "technology" is used only to refer to ‘information technology’.

False

Value added’ by definition is always a positive number since ‘added’ implies increases.

False

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

True

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

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

False

One method of classifying production systems is the degree of standardization.

True

Most people encounter operations only in profit-making organizations.

False

Service involves a much higher degree of customer contact than manufacturing.

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

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

True

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

False

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

True

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

False

Many operations management decisions can be described as tradeoffs.

True

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

False

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

True

Elton Mayo’s "Hawthorne Experiment" was the focal point of the Human Relations Movement, which emphasized the importance of the human element in job design.

True

Among Ford’s many contributions was the introduction of mass production, using the concept of interchangeable parts and division of labor.

True

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

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

True

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

True

Lean production systems use a highly skilled work force and flexible equipment.

True

The lean production philosophy has been slow to be adopted in service industries.

False

Operations Management activities will be less important in the future because many firms are becoming service-oriented operations rather than goods producing operations.

False

A modern firm has two supply chain considerations – external links with suppliers and customers, and an internal network of flows to and between the operations function itself.

True