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Operation Management- Chapter 1

Some of the operations-related activities of Hard Rock Café include designing meals and analyzing
them for ingredient cost and labor requirements.
True
The production process at Hard Rock Café is limited to meal preparation and serving customers.
False
All organizations, including service firms such as banks and hospitals, have a production function.
True
Operations management is the set of activities that create value in the form of goods and services
by transforming inputs into outputs.
True
An example of a “hidden” production function is money transfers at banks.
True
One reason to study operations management is to learn how people organize themselves for
productive enterprise.
True
The operations manager performs the management activities of planning, organizing, staffing,
leading, and controlling of the OM function.
True
. “How much inventory of this item should we have?” is within the critical decision area of
managing quality.
False
In order to have a career in operations management, one must have a degree in statistics or
quantitative methods.
False
Henry Ford is known as the Father of Scientific Management.
False
Shewhart’s contributions to operations management came during the Scientific Management Era.
False
Students wanting to pursue a career in operations management will find multidisciplinary
knowledge beneficial.
True
Customer interaction is often high for manufacturing processes, but low for services.
False
Productivity is more difficult to improve in the service sector.
True
Manufacturing now constitutes the largest economic sector in postindustrial societies.
False
In the past half-century, the number of people employed in manufacturing has more or less held
steady, but each manufacturing employee is manufacturing about 20 times as much.
True
A knowledge society is one that has migrated from work based on knowledge to one based on
manual work.
False
Productivity is the total value of all inputs to the transformation process divided by the total value
of the outputs produced.
False
Measuring the impact of a capital acquisition on productivity is an example of multi-factor
productivity.
False
Ethical and social dilemmas arise because stakeholders of a business have conflicting perspectives.
True
At Hard Rock Café, tasks that reflect operations or operations management include
a. designing meals
b. testing meals (recipes)
c. analyzing meals for the cost of ingredients
d. preparing employee schedules
e. all of the above
e
An operations task performed at Hard Rock Café is
a. borrowing funds to build a new restaurant
b. advertising changes in the restaurant menu
c. calculating restaurant profit and loss
d. preparing employee schedules
e. all of the above
d
Operations management is applicable
a. mostly to the service sector
b. to services exclusively
c. mostly to the manufacturing sector
d. to all firms, whether manufacturing and service
e. to the manufacturing sector exclusively
d
Which of the following are the primary functions of all organizations?
a. operations, marketing, and human resources
b. marketing, human resources, and finance/accounting
c. sales, quality control, and operations
d. marketing, operations, and finance/accounting
e. research and development, finance/accounting, and purchasing
d
Budgeting, paying the bills, and collection of funds are activities associated with the
a. management function
b. control function
c. finance/accounting function
d. production/operations function
e. staffing function
c
Which of the following would not be an operations function in a fast-food restaurant?
a. advertising and promotion
b. designing the layout of the facility
c. maintaining equipment
d. making hamburgers and fries
e. purchasing ingredients
a
The marketing function’s main concern is with
a. producing goods or providing services
b. procuring materials, supplies, and equipment
c. building and maintaining a positive image
d. generating the demand for the organization’s products or services
e. securing monetary resources
d
Reasons to study Operations Management include
a. studying why people organize themselves for free enterprise
b. knowing how goods and services are consumed
c. understanding what human resource managers do
d. learning about a costly part of the enterprise
e. all of the above
d
The five elements in the management process are
a. plan, direct, update, lead, and supervise
b. accounting/finance, marketing, operations, and management
c. organize, plan, control, staff, and manage
d. plan, organize, staff, lead, and control
e. plan, lead, organize, manage, and control
d
Illiteracy and poor diets have been known to cost countries up to what percent of their
productivity?
a. 2%
b. 5%
c. 10%
d. 20%
e. 50%
d
Which of the following is not an element of the management process?
a. controlling
b. leading
c. planning
d. pricing
e. staffing
d
An operations manager is not likely to be involved in
a. the design of goods and services to satisfy customers’ wants and needs
b. the quality of goods and services to satisfy customers’ wants and needs
c. the identification of customers’ wants and needs
d. work scheduling to meet the due dates promised to customers
e. maintenance schedules
c
All of the following decisions fall within the scope of operations management except for
a. financial analysis
b. design of goods and processes
c. location of facilities
d. managing quality
e. All of the above fall within the scope of operations management.
a
The Ten Critical Decisions of Operations Management include
a. Layout strategy
b. Maintenance
c. Process and capacity design
d. Managing quality
e. all of the above
e
Which of the following is not one of The Ten Critical Decisions of Operations Management?
a. Layout strategy
b. Maintenance
c. Process and capacity design
d. Mass customization
e. Supply chain management
d
The Ten Critical Decisions of Operations Management include
a. Finance/accounting
b. Advertising
c. Process and capacity design
d. Pricing
e. all of the above
c
Walter Shewhart is listed among the important people of operations management because of his contributions to
a. assembly line production
b. measuring the productivity in the service sector
c. just-in-time inventory methods
d. statistical quality control
e. all of the above
d
Walter Shewhart, in the _____, provided the foundations for ______ in operations management.
a. 1920s; statistical sampling
b. United Kingdom; mass production
c. U.S. Army; logistics
d. nineteenth century; interchangeable parts
e. none of the above
a
Eli Whitney, in the _____, provided the foundations for ______ in operations management.
a. 1920s; statistical sampling
b. United Kingdom; mass production
c. U.S. Army; logistics
d. nineteenth century; interchangeable parts
e. none of the above
d
The person most responsible for popularizing interchangeable parts in manufacturing was
a. Frederick Winslow Taylor
b. Henry Ford
c. Eli Whitney
d. Whitney Houston
e. Lillian Gilbreth
c
The “Father of Scientific Management” is
a. Henry Ford
b. Frederick W. Taylor
c. W. Edwards Deming
d. Frank Gilbreth
e. just a figure of speech, not a reference to a person
b
Henry Ford is noted for his contributions to
a. standardization of parts
b. statistical quality control
c. assembly line operations
d. scientific management
e. time and motion studies
c
Who among the following is associated with contributions to quality control in operations
management?
a. Charles Babbage
b. Henry Ford
c. Frank Gilbreth
d. W. Edwards Deming
e. Henri Fayol
d
The field of operations management is shaped by advances in which of the following fields?
a. chemistry and physics
b. industrial engineering and management science
c. biology and anatomy
d. information technology
e. all of the above
e
Which of the following statements is true?
a. Almost all services and almost all goods are a mixture of a service and a tangible product.
b. A pure good has no tangible product component.
c. A pure service has only a tangible product component.
d. There is no such thing as a pure good.
e. None of the above is a true statement.
a
Which of the following statements is true?
a. The person most responsible for initiating use of interchangeable parts in manufacturing was
Eli Whitney.
b. The origins of management by exception are generally credited to Frederick W. Taylor.
c. The person most responsible for initiating use of interchangeable parts in manufacturing was
Walter Shewhart.
d. The origins of the scientific management movement are generally credited to Henry Ford.
e. The person most responsible for initiating use of interchangeable parts in manufacturing was
Henry Ford.
a
The service industry makes up approximately what percentage of all jobs in the United States?
a. 12%
b. 40%
c. 66%
d. 79%
e. 90%
d
Typical differences between goods and services do not include
a. cost per unit
b. ability to inventory items
c. timing of production and consumption
d. customer interaction
e. knowledge content
a
Which is not true regarding differences between goods and services?
a. Services are generally produced and consumed simultaneously; tangible goods are not.
b. Services tend to be more knowledge-based than products.
c. Services tend to have a more inconsistent product definition than goods.
d. Goods tend to have higher customer interaction than services.
e. None of the above is true.
d
Which of the following is not a typical attribute of goods?
a. output can be inventoried
b. often easy to automate
c. aspects of quality difficult to measure
d. output can be resold
e. production and consumption are separate
c
Which of the following services is least likely to be unique, i.e., customized to a particular
individual’s needs?
a. dental care
b. hairdressing
c. legal services
d. elementary education
e. computer consulting
d
Which of the following is not a typical service attribute?
a. intangible product
b. easy to store
c. customer interaction is high
d. simultaneous production and consumption
e. difficult to resell
b
Which of the following statements concerning growth of services is true?
a. Services now constitute the largest economic sector in postindustrial societies.
b. The number of people employed in manufacturing has more or less held steady since 1950.
c. Each manufacturing employee now produces about 20 times more than in 1950
d. All of the above are true.
e. None of the above is true.
d
Current trends in operations management include all of the following except
a. just-in-time performance
b. rapid product development
c. mass customization
d. empowered employees
e. All of the above are current trends.
e
Which of the following is not a current trend in operations management?
a. just-in-time performance
b. global focus
c. supply chain partnering
d. mass customization
e. All of the above are current trends.
e
One new trend in operations management is
a. global focus
b. mass customization
c. empowered employees
d. rapid product development
e. All of the above are new trends in operations management.
e
Which of the following statements about trends in operations management is false?
a. Job specialization is giving way to empowered employees.
b. Local or national focus is giving way to global focus.
c. Environmentally-sensitive production is giving way to low-cost focus.
d. Rapid product development is partly the result of shorter product cycles.
e. All of the above statements are true.
c
A foundry produces circular utility access hatches (manhole covers). If 120 covers are produced in
a 10-hour shift, the productivity of the line is
a. 1.2 covers/hr
b. 2 covers/hr
c. 12 covers/hr
d. 1200 covers/hr
e. none of the above
c
A foundry produces circular utility access hatches (manhole covers). Currently, 120 covers are
produced in a 10-hour shift. If labor productivity can be increased by 20%, it would then be
a. 14.4 covers/hr
b. 24 covers/hr
c. 240 valves/hr
d. 1200 covers/hr
e. none of the above
a
Gibson Valves produces cast bronze valves on an assembly line. If 1600 valves are produced in an
8-hour shift, the productivity of the line is
a. 2 valves/hr
b. 40 valves/hr
c. 80 valves/hr
d. 200 valves/hr
e. 1600 valves/hr
d
Gibson Valves produces cast bronze valves on an assembly line, currently producing 1600 valves
each 8-hour shift. If the productivity is increased by 10%, it would then be
a. 180 valves/hr
b. 200 valves/hr
c. 220 valves/hr
d. 880 valves/hr
e. 1760 valves/hr
c
Gibson Valves produces cast bronze valves on an assembly line, currently producing 1600 valves
per shift. If the production is increased to 2000 valves per shift, labor productivity will increase by
a. 10%
b. 20%
c. 25%
d. 40%
e. 50%
c
The Dulac Box plant produces 500 cypress packing boxes in two 10-hour shifts. What is the
productivity of the plant?
a. 25 boxes/hr
b. 50 boxes/hr
c. 5000 boxes/hr
d. none of the above
e. not enough data to determine productivity
a
The Dulac Box plant works two 8-hour shifts each day. In the past, 500 cypress packing boxes
were produced by the end of each day. The use of new technology has enabled them to increase
productivity by 30%. Productivity is now approximately
a. 32.5 boxes/hr
b. 40.6 boxes/hr
c. 62.5 boxes/hr
d. 81.25 boxes/hr
e. 300 boxes/hr
b
The Dulac Box plant produces 500 cypress packing boxes in two 10-hour shifts. Due to higher
demand, they have decided to operate three 8-hour shifts instead. They are now able to produce
600 boxes per day. What has happened to production?
a. It has increased by 50 sets/shift.
b. It has increased by 37.5 sets/hr.
c. It has increased by 20%.
d. It has decreased by 8.3%.
e. It has decreased by 9.1%.
c
Productivity measurement is complicated by
a. the competition’s output
b. the fact that precise units of measure are often unavailable
c. stable quality
d. the workforce size
e. the type of equipment used
b
The total of all outputs produced by the transformation process divided by the total of the inputs is
a. utilization
b. greater in manufacturing than in services
c. defined only for manufacturing firms
d. multifactor productivity
e. none of the above
d
Which of the following inputs has the greatest potential to increase productivity?
a. labor
b. globalization
c. management
d. capital
e. none of the above
c
Productivity can be improved by
a. increasing inputs while holding outputs steady
b. decreasing outputs while holding inputs steady
c. increasing inputs and outputs in the same proportion
d. decreasing inputs while holding outputs steady
e. none of the above
d
The largest contributor to productivity increases is ________, estimated to be responsible for
_____ of the annual increase.
a. management; over one-half
b. Mr. Deming; one-half
c. labor; two-thirds
d. capital; 90%
e. technology; over one-half
a
The factor responsible for the largest portion of productivity increase in the U.S. is
a. labor
b. management
c. capital
d. all three combined; it is impossible to determine the contribution of individual factors
e. none of these; most productivity increases come from investment spending
b
Which of the following is not true when explaining why productivity tends to be lower in the
service sector than in the manufacturing sector?
a. Services are typically labor-intensive.
b. Services are often difficult to evaluate for quality.
c. Services are often an intellectual task performed by professionals.
d. Services are difficult to automate.
e. Service operations are typically capital intensive.
e
Three commonly used productivity variables are
a. quality, external elements, and precise units of measure
b. labor, capital, and management
c. technology, raw materials, and labor
d. education, diet, and social overhead
e. quality, efficiency, and low cost
b
The service sector has lower productivity improvements than the manufacturing sector because
a. the service sector uses less skilled labor than manufacturing
b. the quality of output is lower in services than manufacturing
c. services usually are labor-intensive
d. service sector productivity is hard to measure
e. none of the above
c
Productivity tends to be more difficult to improve in the service sector because the work is
a. often difficult to automate
b. typically labor-intensive
c. frequently processed individually
d. often an intellectual task performed by professionals
e. all of the above
e
Among the ethical and social challenges facing operations managers are
a. honoring community commitments
b. maintaining a clean environment
c. efficiently developing and producing safe quality products
d. providing a safe workplace
e. all of the above
e
Among the ethical and social challenges facing operations managers are
a. honoring financial commitments
b. maintaining a clean environment
c. developing low-cost products
d. providing an efficient workplace
e. all of the above
b
Which of the following is not among the ethical and social challenges facing operations managers?
a. honoring community commitments
b. maintaining a clean environment
c. efficiently developing and producing safe quality products
d. increasing executive pay
e. providing a safe workplace
d
A business’s stakeholders, whose conflicting perspectives cause ethical and social dilemmas,
include
a. lenders
b. suppliers
c. owners
d. employees
e. all of the above
e

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