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SCM 146 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
Because Hard Rock Cafés are themed restaurants, operations managers focus their layout design efforts on attractiveness while paying little attention to efficiency.
False
All organizations, including service firms such as banks and hospitals, have a production function.
True
Operations management is the set of activities that creates value in the form of goods and services by transforming inputs into outputs.
True
An example of a “hidden” production function is the transfer of funds between accounts at a bank.
True
At Hard Rock Café, tasks that reflect operations or operations management include:
A) designing efficient layouts.
B) providing meals.
C) receiving ingredients.
D) preparing effective 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 or service.
E) to the manufacturing sector exclusively.
D
Which of the following are the primary functions of all organizations?
A) production/operations, marketing, and human resources
B) marketing, human resources, and finance/accounting
C) sales, quality control, and production/operations
D) marketing, production/operations, and finance/accounting
E) research and development, finance/accounting, and purchasing
D
Which of the following pioneers was NOT making a professional impact during the Scientific Management Era?
A) Frank Gilbreth
B) W. Edwards Deming
C) Henry L. Gantt
D) Lillian Gilbreth
E) Frederick W. Taylor
B
Which of the following would NOT be an operations function in a commercial bank?
A) auditing
B) teller scheduling
C) maintenance
D) collection
E) check clearing
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
Which of the following tasks within an airline company are related to operations?
A) crew scheduling
B) international monetary exchange
C) sales
D) advertising
E) accounts payable
A
Competition in the 21st century is no longer between companies; it is between supply chains.
True
An accounting firm that provides tax services for a company would be considered to be part of that company’s supply chain.
True
What is a global network of organizations and activities that supply a firm with goods and services?
A) supply tree
B) provider network
C) supply chain
D) vendor network
E) vendor tree
C
Which of the following fosters specialization and worldwide supply chains?
A) more expensive transportation
B) instant communication
C) economies of scope
D) managers with a broad knowledge of many things
E) high trade tariffs
B
The operations manager performs the management activities of planning, organizing, staffing, leading, and controlling of the OM function.
True
“Considers inventory ordering and holding decisions” is within the strategic operations management decision area of managing quality.
False
What are the five elements in the management process?
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
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) creating the company income statement.
B) design of goods and services.
C) location strategy.
D) managing quality.
E) human resources and job design.
A
The 10 strategic operations management decisions 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 10 strategic operations management decisions?
A) layout strategy
B) maintenance
C) process and capacity design
D) mass customization
E) supply chain management
D
Which of the following is one of the 10 strategic operations management decisions?
A) depreciation policy for tax returns
B) advertising
C) process and capacity design
D) pricing
E) debt/equity ratio
C
Which of the following are among the 10 strategic operations management decisions?
I. design of goods and services
II. managing quality
III. layout strategy
IV. marketing
V. pricing of goods and services
A) I, II, V
B) I, II, IV
C) II, III, V
D) I, II, III
E) All of the above
D
Which of the following influences layout design?
A) inventory requirements
B) capacity needs
C) personnel levels
D) technology
E) All of the above influence layout decisions.
E
Which of the following is NOT a strategic operations management decision?
A) maintenance
B) price
C) layout design
D) quality
E) inventory
B
Identify the 10 strategic OM decisions.
Design of goods and services, managing quality, process strategy, location strategies, layout strategies, human resources, supply chain management, inventory management, scheduling, and maintenance.
Henry Ford is known as the Father of Scientific Management.
False
Shewhart’s contributions to operations management came during the Scientific Management Era.
False
Walter Shewhart is listed among the important people of operations management because of his contributions to:
A) assembly line production.
B) measuring productivity in the service sector.
C) just-in-time inventory methods.
D) statistical quality control.
E) information technology.
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) 1900s; queuing theory
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) 1890s; queuing theory
D
Who was the person most responsible for popularizing interchangeable parts in manufacturing?
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) material requirements planning.
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) The person most responsible for initiating the 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 the 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 the use of interchangeable parts in manufacturing was Henry Ford.
A
Customer interaction is often high for manufacturing processes, but low for services.
False
Manufacturing now constitutes the largest economic sector in postindustrial societies.
False
Although the number of people employed in manufacturing in the United States has decreased since 1950, each person is now producing almost 20 times more than in 1950.
True
Which of the following is the best example of a pure service?
A) counseling
B) oil change
C) heart transplant
D) electric Co-Op
E) restaurant
A
The service sector makes up approximately what percentage of all jobs in the United States?
A) 12%
B) 40%
C) 66%
D) 86%
E) 94%
D
Which is NOT true regarding differences between goods and services?
A) Tangible goods are generally produced and consumed simultaneously; services are not.
B) Most goods are common to many customers; services are often unique to the final customer.
C) Services tend to have a more inconsistent product definition than goods.
D) Services tend to have higher customer interaction than goods.
E) None, i.e., all of the above are true.
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 goods.
C) Services tend to have a more inconsistent product definition than goods.
D) Goods tend to have higher customer interaction than services.
E) Reselling is unusual in services; goods often have some residual value.
D
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
10) Which of the following attributes is most typical of a service?
A) production and consumption occur simultaneously
B) tangible
C) mass production
D) consistency
E) easy to automate
A
Which of the following is a similarity between goods and services?
A) mass production
B) consistency
C) automation
D) Both have quality standards.
E) Both can usually be kept in inventory.
D
Productivity is generally more difficult to improve in the service sector than in the manufacturing sector.
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
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
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) 120 covers/hr.
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) single-factor productivity.
D
Which productivity variable has the greatest potential to increase productivity?
A) labor
B) globalization
C) management
D) capital
E) energy
C
Which of the following nets the largest productivity improvement?
A) increase output 15%
B) decrease input 15%
C) increase both output and input by 5%
D) increase output 10%, decrease input 3%
E) decrease input 10%, increase output 3%
B
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 United States 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.
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) the service sector is often easy to mechanize and automate.
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 make service productivity more difficult.
E
A small metal shop operates 10 hours each day, producing 100 parts/hour. If productivity were increased 20%, how many hours would the plant have to work to produce 1000 parts?
A) less than 2 hours
B) between 9 and 10 hours
C) between 2 and 6 hours
D) between 6 and 8 hours
E) between 8 and 9 hours
E
A cleaning company uses 10 lbs each of chemicals A, B and C for each house it cleans. After some quality complaints, the company has decided to increase its use of chemical A by an additional 10 lbs for each house. By what % has productivity (houses per pound of chemical) fallen?
A) 0%
B) 10%
C) 15%
D) 25%
E) 33%
D
A cleaning company uses $10 of chemicals, $40 of labor, and $5 of misc. expenses for each house it cleans. After some quality complaints, the company has decided to increase its use of chemicals by 50%. By what percentage has multifactor productivity fallen?
A) 0%
B) 8.3%
C) 25%
D) 50%
E) 16.7%
B
Current challenges 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) None of the above are exceptions, i.e., all are current challenges.
E
Which of the following statements about challenges 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) Sustainable production is giving way to a low-cost focus.
D) Rapid product development is partly the result of shorter product cycles.
E) The goal of mass customization is to produce customized products, whenever and wherever needed.
C
Ethical and social dilemmas arise because stakeholders of a business have conflicting perspectives.
True
Which of the following is NOT among the ethical and social challenges facing operations managers?
A) honoring stakeholder commitments
B) training, retaining, and motivating employees
C) efficiently developing and producing safe high-quality green 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
What term is given to those individuals with a vested interest in an organization, including customers, distributors, suppliers, owners, lenders, employees, and community members?
A) alumni
B) investors
C) vestors
D) stockholders
E) stakeholders
E

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