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Operations Management-Test ONE

What is Production?
The creation of goods and services
What is Operations management?
The set of activities that creates value in the form of goods and services by transforming inputs into outputs
Why do we study operations management?
-One of the 3 major functions of any organization
-Want and need to know how goods and services are produced
-Understand what operations managers do
-OM is costly
What are the 10 critical decisions of an Operations Manager?
-Design of goods and services
-Managing quality
-Process and capacity design
-Location strategy
-Layout strategy
-Human resources and job design
-Supply Chain management
-Inventory, material requirements planning, JIT
– Intermediate and short-term scheduling
-Maintenance
Who came up with the concept of interchangeable parts?
Eli Whitney
Who is known as the ‘father of scientific management’?
Frederick W. Taylor
Who first used a moving assembly line?
Henry Ford
Who believed that management must do more to improve the work environment and processes so that quality can be improved?
W. Edwards Deming
What are some New Challenges/trends to OM?
-Global Focus
– Just-in-time
-Supply chain partnering
-Rapid product development
-Mass customization
-Empowered employees
-Environmentally sensitive production
-Ethics
Which of the following is NOT one of the factors that fosters specialization and worldwide supply chains:

-Instant Communication
-marketing
-cheaper transportation
-specialized expert knowledge

Marketing
Which of the following is NOT one of the reasons operations managers want to work with their supply chains to viciously cut inventories at every level:

-Inventory hides quality issues
-Inventory provides safety against higher-than executed demand
-Inventory requires financial resources
-Inventory constrains response to ever shorter product life cycles

Inventory provides safety against higher-than expected demand.
Reasons to globalize:
1. Reduce Costs
2. Improve Supply chain
3. Provide better goods and services
4. Understand markets
5. Learn to improve operations
6. Attract and retain global talent
The stated purpose of NAFTA is to:
Phase out all trade and tariff barriers among Canada, Mexico, and the US.
What will globalization strategies do to the operations manager’s job?
Make them more difficult.
What is a strategy?
It is an action plan to achieve a mission.
TRUE OR FALSE:
Each functional area within the firm may develop its own strategy, but not its own supporting mission.
False. Functional areas can develop a supporting mission as well.
What are the 3 strategic approaches to competitive advantage?
Response
Differentiation
Cost Leadership
What is an organization’s mission?
The purpose or rationale for an organizations existence.
Which of the following is NOT an OM strategy/issue during the introduction stage of the product life cycle?

-limited models
-frequent product and process design changes
-long production runs
-high production costs

long production runs
Which of the following is NOT an OM strategy/issue during the growth stage of the product life cycle?

-forecasting critical
-shift towards product focus
-enhance distribution
-reduce capacity

Reduce capacity
What is Value chain analysis?
A way to identify those elements in the product/service chain that uniquely add value.
What is the resources view?
A method managers use to evaluate the resources at their disposal and manage or alter them to achieve competitive advantage.
What does a SWOT analysis refer to?
Strengths, opportunities, weaknesses, and threats
What is an activity map?
A graphical link of competitive advantage, KSF/s and supporting activities.
What are core competencies?
Set of skills, talents, and capabilities in which a firm is particularly strong
What 3 phases are involve in the the management of large projects?
Planning, scheduling, and controlling
Which of the following does NOT belong to the planning phase of project management?

-goal setting
-team organization
-defining the project
-monitoring resources

monitoring resources
Name 3 techniques that allow managers to plan, schedule, and control projects:
Gantt charts, CPM, PERT
Which of the following does NOT belong to the controlling phase of project management?
-monitor resources, costs, quality, budgets
-revise plans
-shift resources
-define the project
The project organization may be LESS helpful when:

-the work contains complex interrelated tasks requiring specialized skills
-the job is familiar to the existing organization
-the project cuts across organizational lines
work tasks can be defined with a specific goal and deadline

-the job is familiar to the existing organization
What are Gantt charts used for?
to schedule resources and allocate time
Project planning includes:
Setting the goals
defining the project
develop work breakdown schedule
Identify team/resources

(Time/cost estimates, budgets, cash flow charts, material availability)

Project scheduling includes:
Identifying precedence relationships
Sequencing activities
Determining activity times and costs
Estimating material and worker requirements
Determining critical activities

(Budgets, delayed activities report, slack activities)

Project controlling includes:
Revise and change plans
Monitor resources, costs, quality
Shift resources

(CPM/PERT, Gantt charts, Milestone charts, Cash flow schedules0

Project organization works best when:
1. Work can be defined with a specific goal and deadline
2. The job is unique or somewhat unfamiliar to the existing organization
3. The work contains complex interrelated tasks requiring specialized skills
4. The project is temporary but critical to the organization
5. The project cuts across organizational lines
Responsibilities of the Project Manager is:
1. All necessary activities are finished in order and on time
2. The project comes in within budget
3. The project meets quality goals
4. The people assigned to the project receive motivation, direction, and information.
What is Bid rigging?
divulging confidential information to give some bidders an unfair advantage
What is low balling?
contractors try to buy the project by bidding low and hope to renegotiate or cut corners
What are the SIX steps to PERT and CPM?
1. Define the project and prepare the work breakdown structure
2. Develop relationships among the activities- decide which activities must precede and which must follow others
3. Draw the network connecting all of the activities
4. Assign time and/or cost estimates to each activity
5. Compute the critical path(longest time path through the network)
Use the network to help plan, schedule, monitor, and control the project
What is project crashing?
shortening the duration of the the project
Which of the following is NOT considered to be a stakeholder?

-community members
-customers
-competitors
-distributors

competitors
Which appears to provide the best opportunity for increases in productivity?

-labor
-capital
-management
-raw materials

management
The supply chain generally starts with what?
the provider of the basic raw materials
Which of the following activities at a commercial bank is NOT an operations activity?

-security
-maintenance
-check clearing
-auditing

auditing
Which of the following is an example of a hidden production function?

-assembling a motorcycle
-transplanting a liver
– manufacturing a television
-producing a computer

transplanting a liver
Which of these is not a disadvantage of outsourcing?

-negative impact on employees
-loss of control
-decreased logistics and inventory costs
-risks may not manifest themselves for years

-decreased logistics and inventory costs
Which of the following are OM strategy/issue during the introduction stage of the product life cycle?

-frequent product and process design changes
-long production runs
-high production costs
-limited models

all but long production runs
What is competitive advantage?
the creation of a unique advantage over competitors
What international operations strategy involves a high degree of centralization?
global
An operations task performed at Hard Rock Cafe is:

-preparing employee schedules
-borrowing funds to build a new restaurant
-advertising changes in the restaurant menu
-calculating restaurant profit and loss
-All of the above.

preparing employee schedules
Which of the following activities is NOT part of project scheduling?

-Make sure all necessary activities are finished in proper sequence and on time.
-Compute resources needed at each stage of production
-Make sure all necessary activities are finished in proper sequence and on time.
-Chart separate schedules for personnel needs by type of skill and material needs

Make sure all necessary activities are finished in proper sequence and on time
Computerized PERT/CPM reports and charts do NOT include:

-detailed cost breakdowns for each task
-probability estimates for on-time completion
-variance reports
-cost distribution tables

probability estimates for on-time completion
Which of the following is NOT true about Gantt charts?

-are planning charts used to schedule resources and allocate time
-adequately illustrate the interrelationships between activities and the resources
-can be used for scheduling repetitive operations
-low cost means of helping managers make sure that activities are planned

adequately illustrate the interrelationships between activities and the resources
Which of the following is an advantage of PERT and CPM?

-useful in monitoring only schedules
-precedence relationships must be specified and networked together
-straightforward concept and not mathematically complex
-project activities have to be clearly defined, independent, and stable in their relationships.

Straightforward concept and not mathematically complex
Which of the following is used for computations in CPM?

-normal time
-most likely game
-optimistic time
-pessimistic time

normal time
When using exponential smoothing, the smoothing constant:

-can be determined using MAD
-indicates the accuracy of the previous forecast
-should be chosen to maximize positive bias
-is typically between .75 and .95 for most business applications

can be determined using MAD
What are the five quantitative approaches?
which of the five are Time series and which are associative?
Naive approach
Moving averages
exponential smoothing
trend projection
(Linear Regression)-associative
Which are true of Forecasting?

-Is exclusively an objective prediction
-may involve taking historical data and projecting them into the future with a mathematical model
-is the art and science of predicting future events
-usually classified by the future time horizon that it covers

all but “exclusively an objective prediction”
What is an example of a qualitative forecasting method?
Delphi method
What does a process and capacity design decision determine?
It determines how a good or service is produced and commits management to specific technology, quality, human resources, and capital investment.
What strategy has a decentralized authority with substantial autonomy at each business?
Multidomestic
The three phases involved in the management of large projects are:
Planning
Scheduling
Controlling
Which of the following does NOT belong to the planning phase of project management?

-Defining the project
-monitoring resources
-goal setting
-team organization

monitoring resources
Which of the following is the THIRD level in work breakdown structure?

-subtasks in major tasks
-major tasks
-the project
-activities to be completed

subtasks in major tasks
How is the EF computed?
ES + Activity TIme
What is the shortest duration required to complete an activity?
Crash time
What is an example of a limitation of PERT and CPM?
There is inherent danger of placing too much emphasis on the critical path.
Among the the following, critical path and slack time analysis MOST help

-point out who is responsible for various activities
-mangers define the project activities
-pinpoint activities that need to be closely watched
-highlight relationships among project activites

pinpoint activities that need to be closely watched
Which forecasting time horizon would be easiest to predict for?

-long range
-short range
-intermediate range
-medium range

short range
What forecast projects the company’s sales?
a demand forecast
CPFR is what:
Collaborative, planning, forecasting, replenishment
What is the FIRST step in forecasting system?

-Determine the time horizon of the forecast.
-Select the forecast model.
-Determine the use of the forecast.
Select the items to be forecasted.

Determine the use of the forecast
Exponential smoothing is an example of (quantitative,qualitative) smoothing.
quantitative
What forecasting model uses a group process to allow experts to make forecast?
Delphi Method
What forecasting model is based upon a salespersons’ estimates of expected sales?
Sales force composite
What is a data pattern that repeats itself after a period of days, weeks, months, or quarters?
Seasonality
Which of the following is a characteristics of the maturity phase of the product life cycle?

-Products are “fine-tuned”
-Competitors are well established.
-Products are considered for termination.
-Product designs begin to stabilize.

Competitors are well established.
The term “products” refers to tangible goods only.

True or false.

False
Robust design means:
small variations in production do not adversely affect the product.
When ordering a new zagflatz, customers must choose the style of three major components, each of which has about ten variations. This is an example of:
Modular design
What technology is particularly useful for prototype development and small lot production?
3-D printing
Which of the following is an external product development strategy?

-migrations of existing products
-joint ventures
-new internally developed products
-enhancements to existing products

joint ventures
What does defining a product mean:
to define the new good’s or service’s function
Group technology identifies components by what?
a coding scheme
Most manufacturing items and their components are defined by what?
an engineering drawing
What is a route sheet?
it lists the operations necessary to produce the component
What is created when a “make-to-order” system, when a customer places a request for a product or service with a producer?
a work order is created
What kind of analysis focuses on the ways in which processes can be designed to optimize interaction between firms and their customers?
process-chain-network analysis
Operation of a hair salon is an example of what?
delayed customization
Moving a product from development to production is referred to as what?
transition to production
What appears to provide the best opportunity for increases in productivity?
management
What operations function at a manufacturing facility strives for the efficient use of machines, space, and personnel?
industrial engineering
What is an advantage of PERT and CPM?
Straightforward concept and not mathematically complex.
Computerized PERT/CPM reports and charts include what?
cost distribution tables,
variance reports,
and detailed const breakdown for each task
What is used for computations in CPM?
normal time
Which of the following is NOT a technique that allows managers to plan, schedule, and control projects:

-Gantt Charts
-PERT
-Factor rating method
-CPM

Factor rating method
Listing products in descending order of their individual dollar contribution to the firm is called:
product-by-value-analysis
What is a review of successful products that takes place during the production process?
Value analysis
What kind of design can be produced to requirements even with unfavorable conditions in the production process?
robust design
What is an assembly chart?
a schematic showing how the product is assembled
What cooperaerative agreement allows a firm to stay independent, but pursue strategies consistent with their individual missions?
alliances
What is the first step to build a house of quality?
identifiy customer wants
Which of the following represents an internal product development strategy?

-joint ventures
-alliances
-migration to existing products
-purchase technology or expertise by acquiring the developer

migration of existing products
Self checkout at a grocery store is an example of what?
customer participation in service delivery
Which of the following regions of a process chain includes the process steps that involve interaction between participants?
direct interaction region
Which of the following are false regarding the construction of a decision tree for product design:

-to determine the expected value of each course of action, we need to start at the beginning of the tree and work toward the end of the tree
-the possible alternatives include an alternative of “doing nothing”
-payoffs are entered at the beginning of the appropriate branch
-be sure that all possible alternatives and states of nature are included in the true

all but “doing nothing”

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