PRODUCTION AND OPERATIONS MANAGEMENT FINAL

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1. Most services consist of a bundle of goods and services known as the service package which is the major output of the development process.

TRUE

2. Effective management of services requires a clear focus on understanding operations, so much so, that it may even require the exclusion of consideration of marketing or personnel.

FALSE

3. Services often take the form of repeated encounters involving face-to-face interactions.

TRUE

4. The term "encounter" is defined by Webster's Dictionary as "meeting in conflict or battle" and is used to also designate meetings between consumers and service systems.

TRUE

5. A service business is an organization whose primary business requires interaction with customers to produce the service.

TRUE

6. The customer is (or should be) the second most important focal point of all decisions in a service organization.

FALSE

7. A service system with a high degree of customer contact is less difficult to control than a low degree of customer contact service system.

FALSE

8. When recovering from a defective service encounter a botched task calls for an apology.

FALSE

9. The central problem in virtually every waiting line situation is a decision balancing the costs of adding services with the costs of waiting.

TRUE

10. Ideally in waiting line or queuing analysis we want to balance the cost of service capacity with the cost of waiting.

TRUE

11. The customer arrivals in a queuing system come almost exclusively from finite populations.

FALSE

12. The customer arrivals in a queuing system come almost exclusively from infinite populations.

FALSE

13. A finite population in waiting line management refers to a population that is large enough in relation to the service system so that the change in population size caused by subtraction or additions to the population does not significantly affect the system probabilities.

FALSE

14. TQM was defined in the textbook as managing the entire organization so that it excels on all dimensions of products and services that are important to the customer.

TRUE

15. TQM is an acronym meaning "total quality measurement."

FALSE

16. One SPC tool used in total quality management is the run chart.

TRUE

17. One SPC tool used in total quality management is the Pareto chart.

TRUE

18. An operational goal of total quality management is the careful design of the product or service.

TRUE

19. Variation in production systems that is caused by factors that can be clearly identified and possibly even managed is called assignable variation.

TRUE

20. An example of assignable variation in a production system may be that workers are not identically trained.

TRUE

21. An example of assignable variation in a production system may be that a machine is not adjusted properly.

TRUE

22. Variation that is inherent in a production process itself is called assignable variation.

FALSE

23. It is impossible to have zero variability in production processes.

TRUE

24. The local government's willingness to invest in upgrading infrastructure to the levels required by a company is an important issue in a company's decision of where to locate a new facility.

TRUE

25. Facility location analysis considers the competitive imperative to be close to customers as to timeliness of deliveries.

TRUE

26.Facility location analysis considers the competitive imperative of lowest total cost.

TRUE

27. Facility location analysis considers the competitive imperative of a favorable business climate as indicated by the presence of other companies in the same industry.

TRUE

28. Facility location analysis considers the competitive imperative of locating near the appropriate labor pool to take advantage of low wage costs and/or skill levels.

TRUE

29. An enterprise resource planning system, when implemented correctly, links most of the areas of a business together.

FALSE

30. Enterprise resource planning is a once-per-year activity usually involving a management retreat.

FALSE

31. Implementing ERP may require major changes in the way a company is run.

TRUE

32. SAP AG is a major vendor of ERP software

TRUE

33. SAP AG is a world leader in ERP software with its flagship product, R/2-D/2.

FALSE

34. Continual review and updating in light of new data is a forecasting technique called second-guessing.

FALSE

35. Independent demand is the demand for a product or service caused by the demand for other products or services.

FALSE

36. There is not much that a firm can do to influence independent demand.

FALSE

37. Cyclical influences on demand are often expressed graphically as a linear function that is either upward or downward sloping.

FALSE

38. Cyclical influences on demand may come from occurrences such as political elections, war or economic conditions

TRUE

39. Inventory is defined as the stock of any item or resource used in an organization.

TRUE

40. An inventory system is a set of policies and controls that monitors levels of inventory and determines what levels should be maintained, when stock should be replenished, and how large orders should be.

TRUE

41. One of the basic purposes of inventory analysis in manufacturing and stockkeeping services is to specify when items should be ordered.

TRUE

42. One of the basic purposes of inventory analysis in manufacturing and stockkeeping services is to determine the level of quality to specify.

FALSE

43. One of the basic purposes of inventory analysis in manufacturing and stockkeeping services is to determine how large the orders to vendors should be.

TRUE

44. MRP stands for Manufacturing Requirements Planning.

FALSE

45. MRP stands for Material Requirements Planning.

TRUE

46. Manufacturing firms maintain bill of materials (BOM) files, which are simply a sequencing of everything that goes into a final product

TRUE

47. MRP is based on dependent demand.

TRUE

48. MRP is most valuable in industries where a number of products are made in batches using the same productive equipment.

TRUE

49. Which of the following is a characteristic that can be used to guide the design of service systems?

A. Services cannot be inventoried
B. Services are all similar
C. Quality work means quality service
D. Services businesses are inherently entrepreneurial
E. Even service businesses have internal services
ANSWER IS
A. Services cannot be inventoried

50. Which of the following is not part of "the service triangle"?

A. Employees
B. Support systems
C. Customers
D. Service strategy
E. Service encounter
ANSWER IS
E. Service encounter

51Which of the following refers to the physical presence of the customer in a service system?

A. Creation of the service
B. Customer contact
C. Intermittent production
D. Continuous production
E. None of the above
ANSWER IS
B. Customer contact

52. Which of the following is a major factor that distinguishes service design and development from manufacturing design and development?

A. The service process and service product can be developed independently
B. The service package has the same legal protection available to manufactured goods
C. The service package is the major output of the development process
D. Manufacturing is far more capital intensive than services
E. Capacity decisions are much more critical in manufacturing operations
ANSWER IS
C. The service package is the major output of the development process

53. Which one of the following is not a major factor distinguishing service design and development from manufacturing design and development?

A. The process and product must be developed at the same time.
B. Many service organizations can change their service offerings virtually overnight.
C. Many parts of the service package are often defined by the training that individuals receive before they become part of the service organization.
D. The service package, rather than a definable good, is the output of the development process.
E. Service operations can be protected by patents, manufacturing operations cannot.
ANSWER IS
E. Service operations can be protected by patents, manufacturing operations cannot.

54. Which of the following is a suggestion for managing queues that is mentioned in the textbook?

A. Put up a serpentine lane to keep people from jumping ahead in line
B. Use humor to defuse a potentially irritating situation
C. Segment the customers
D. Assure customers that the wait is fair and inform them of the queue discipline
E. Tell people in the queue that each will be served as soon as possible
ANSWER IS
C. Segment the customers

55. Which of the following is not a suggestion for managing queues presented in the textbook?

A. Try to divert your customer's attention when waiting
B. Segment the customers
C. Encourage customers to come during the slack periods
D. Train your people to be friendly
E. Periodically close the service channel to temporarily disperse the line
ANSWER IS
E. Periodically close the service channel to temporarily disperse the line

56. Which of the following is a suggestion for managing queues presented in the textbook?

A. Train your servers to be friendly
B. Tell customers that the line should encourage them to come during slack periods
C. Give each customer a number
D. Periodically close the service channel to temporarily disperse the line
E. Use humor to defuse a potentially irritating situation
ANSWER IS
A. Train your servers to be friendly

57. Which of the following are the three major components of a queuing system?

A. The source population, how customers exit the system and the queuing discipline.
B. The number of servers, the service speed and the waiting line.
C. The source population, how the customer exits the system and the servicing system.
D. The source population and the way customers arrive at the system, the serving systems, and how customers exit the system.
E. The service speed, the queue discipline and the waiting line.
ANSWER IS
C. The source population, how the customer exits the system and the servicing system.

58. Which of the following is a suggestion for managing queues that is mentioned in the textbook?

A. Put up a serpentine lane to keep people from jumping ahead in line
B. Use humor to defuse a potentially irritating situation
C. Train your servers to be friendly
D. Assure customers that the wait is fair and inform them of the queue discipline
E. Tell people in the queue that each will be served as soon as possible
ANSWER IS
C. Train your servers to be friendly

59. The philosophical leaders of the quality movement, Philip Crosby, W. Edwards Deming, and Joseph M. Juran had the same general message about what it took to achieve outstanding quality. Which of the following was not part of that message?

A. Quality is free
B. Leadership from senior management
C. Customer focus
D. Total involvement of the workforce
E. Continuous improvement
ANSWER IS
A. Quality is free

60. The philosophical leaders of the quality movement, Philip Crosby, W. Edwards Deming, and Joseph M. Juran had the same general message about what it took to achieve outstanding quality. Which of the following was part of that message?

A. Fourteen steps for quality management
B. Quality is free
C. Customer focus
D. Zero defects
E. Six-sigma
ANSWER IS
C. Customer focus

61. An analytical tool used in six-sigma quality improvement programs is which of the following?

A. Leadership
B. Continuous improvement
C. Quick response
D. Partnership diagrams
E. Checksheets
ANSWER IS
E. Checksheets

62. Which of the following is not an analytical tool used in six-sigma quality improvement programs?

A. Run charts
B. Pass charts
C. Cause-and-effect diagrams
D. Flowcharts
E. Pareto charts
ANSWER IS
B. Pass charts

63. A flow chart as part of a six-sigma quality improvement process might be found in which DMAIC category?

A. Define
B. Measure
C. Analyze
D. Improve
E. Control
ANSWER IS
A. Define

64. In monitoring process quality we might use which of the following statistics?

A. Absolute values
B. Percentage deviation from tolerance centers
C. "k" values for the sample mean
D. Logarithmic control intervals
E. Difference between the highest and lowest value in a sample
ANSWER IS
E. Difference between the highest and lowest value in a sample

65. You have just used the capability index (Cpk) formulas to compute the two values "min [2, 2.5]." Which of the following is the proper interpretation of these numbers?

A. The true capability index value is 2.5
B. The mean of the production process has shifted to the left of the design limits
C. The mean of the production process has shifted to the right of the design limits
D. The mean has not shifted at all
E. The true capability index value is between 2 and 2.5
ANSWER IS
B. The mean of the production process has shifted to the left of the design limits

66. You have just used the capability index (Cpk) formulas to compute the two values "min [1, 1]." Which of the following is the proper interpretation of these numbers?

A. The true capability index value is exactly 1
B. The mean of the production process has shifted to the left of the design limits
C. The mean of the production process has shifted to the right of the design limits
D. The mean has not shifted at all
E. None of the above
ANSWER IS
D. The mean has not shifted at all

67. You have just used the capability index (Cpk) formulas to compute the two values "min [1.5, 1]." Which of the following is the interpretation of these numbers?

A. The true capability index value is 1
B. The mean of the production process has shifted to the left of the design limits
C. The mean of the production process has shifted to the right of the design limits
D. The mean has not shifted at all
E. The true capability index value is between 1.5 and 1
ANSWER IS
C. The mean of the production process has shifted to the right of the design limits

68. Quality control charts usually have a central line and upper and lower control limit lines. Which of the following is not a reason that the process being monitored with the chart should be investigated?

A. A large number of plots are close to the upper or lower control lines
B. Erratic behavior of the plots
C. A single plot falls above or below the control limits
D. A change in raw materials or operators
E. A run of five above the central line
ANSWER IS
D. A change in raw materials or operators

69. Which of the following is not a criterion that influences manufacturing plant or warehouse facility location decisions?

A. Proximity to customers
B. Historical cost
C. Infrastructure of a country
D. Quality of labor
E. Business climate
ANSWER IS
B. Historical cost

70. Which of the following is a not criterion that influences manufacturing plant or warehouse facility location decisions?

A. Suppliers
B. Free trade zones
C. Political risk
D. Gross national product
E. Tariffs and customs duties
ANSWER IS
D. Gross national product

71. Which of the following is not a criterion that influences manufacturing plant or warehouse facility location decisions?

A. Government barriers
B. Trading blocs
C. Environmental regulation
D. Immigration rules
E. Local labor costs
ANSWER IS
D. Immigration rules

72. Which of the following is a criterion that influences manufacturing plant or warehouse facility location decisions?

A. Proximity to customers
B. Corporate policy
C. Competitor's locations
D. Competitive advantage
E. Host community politics
ANSWER IS
A. Proximity to customers

73. An important issue in facility location analysis is business climate. An unfavorable business climate could be indicated by which of the following?

A. Similar-sized businesses nearby
B. The willingness of local politicians to provide favorable treatment for a consideration
C. The presence of other foreign companies in the case of international locations
D. The local presence of companies in the same industry
E. An established educational institution nearby
ANSWER IS
B. The willingness of local politicians to provide favorable treatment for a consideration

74. Which two of the following are not characteristics that differentiate cloud computing from traditional hosting?

A. It is sold on demand
B. It is elastic
C. It can significantly reduce cost of ERP to small and medium-sized businesses.
D. It is fully managed by the provider
E. It requires a special computer and Internet access
ANSWER IS
C. It can significantly reduce cost of ERP to small and medium-sized businesses.

75. Which of the following areas is not addressed by an SAP module?

A. Financial accounting
B. Marketing
C. Human resources
D. Manufacturing and logistics
E. Sales and distribution
ANSWER IS
B. Marketing

76. SAP Business One is a special version of SAP software designed for small and medium-sized firms. According to the text, SAP Business One modules do not include which of the following?

A. Procurement monitoring
B. Inventory and warehouse management
C. Financial reporting
D. Manufacturing reporting
E. Order fulfillment analysis
ANSWER IS
C. Financial reporting

77. The SAP human capital management segment does not include which of the following?

A. Retirement plan funds administration
B. Travel expense accounting
C. Workforce planning
D. Payroll
E. Time management
ANSWER IS
A. Retirement plan funds administration

78. The SAP sales and distribution component of the operations segment does not include which of the following?

A. Export controls
B. Sales order management
C. Transportation management
D. Advertising placement
E. Configuration management
ANSWER IS
D. Advertising placement

79. In time series data depicting demand which of the following is not considered a component of demand variation?

A. Trend
B. Seasonal
C. Cyclical
D. Variance
E. Autocorrelation
ANSWER IS
D. Variance

80. Which of the following is not one of the basic types of forecasting?

A. Qualitative
B. Time series analysis
C. Causal relationships
D. Simulation
E. Force field analysis
ANSWER IS
E. Force field analysis

81. In most cases, demand for products or services can be broken down into several components. Which of the following is not considered a component of demand?

A. Average demand for a period
B. A trend
C. Seasonal elements
D. Past data
E. Autocorrelation
ANSWER IS
D. Past data

82. In most cases, demand for products or services can be broken into several components. Which of the following is considered a component of demand?

A. Cyclical elements
B. Future demand
C. Past demand
D. Inconsistent demand
E. Level demand
ANSWER IS
A. Cyclical elements

83. In most cases, demand for products or services can be broken into several components. Which of the following is considered a component of demand?

A. Forecast error
B. Autocorrelation
C. Previous demand
D. Consistent demand
E. Repeat demand
ANSWER IS
B. Autocorrelation

84. Which of the following is not one of the categories of manufacturing inventory?

A. Raw materials
B. Finished products
C. Component parts
D. Just-in-time
E. Supplies
ANSWER IS
D. Just-in-time

85. Which of the following is one of the categories of manufacturing inventory?

A. Economic Order Inventory
B. Work-in-process
C. Quality units
D. JIT Inventory
E. Re-order point
ANSWER IS
B. Work-in-process

86. Firms keep supplies of inventory for which of the following reasons?

A. To maintain dependence of operations
B. To provide a feeling of security for the workforce
C. To meet variation in product demand
D. To hedge against wage increases
E. In case the supplier changes the design
ANSWER IS
C. To meet variation in product demand

87. Which of the following is not a reason to carry inventory?

A. To provide a safeguard for variation in raw material delivery time
B. To take advantage of economic purchase-order size
C. To maintain independence of operations
D. To meet variation in product demand
E. To keep the stock out of the hands of competitors
ANSWER IS
E. To keep the stock out of the hands of competitors

88. When developing inventory cost models, which of the following is not included as costs to place an order?

A. Phone calls
B. Taxes
C. Clerical
D. Calculating quantity to order
E. Postage
ANSWER IS
B. Taxes

89. A BOM file is also called which of the following?

A. Product structure tree
B. Stocking plan
C. Inventory usage record
D. Production parts plan
E. Time bucket schedule
ANSWER IS
A. Product structure tree

90. Which of the following industry types has high expected benefits from the application of MRP?

A. Fabricate-to-stock
B. Fabricate-to-order
C. Assemble-to-stock
D. Continuous process
E. Service and repair parts
ANSWER IS
C. Assemble-to-stock

91. Which of the following industry types has high expected benefits from the application of MRP?

A. Fabricate-to-order
B. Hospitals
C. Assemble-to-order
D. Aircraft manufacturers
E. Oil refineries
ANSWER IS
C. Assemble-to-order

92. Which of the following industry types will not benefit greatly from the application of MRP?

A. Fabricate-to-order
B. Assemble-to-stock
C. Assemble-to-order
D. Manufacture-to-order
E. None of the above
ANSWER IS
A. Fabricate-to-order

92. A product structure tree can do which of the following?

A. Help to compute component usage
B. Reduce product scrap
C. Reduce labor overtime
D. Reduce regular time labor
E. Locate raw material supplies
ANSWER IS
A. Help to compute component usage

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