Deck 21: Managing Operations

Question 1

Because manufacturing firms are so closely tied to their customers, they are limited in their ability to hold over their product in the form of inventory.

Answer 1

False

Question 2

Poka-Yoke is a proactive approach that seeks to mistake-proof a firm's operations.

Answer 2

True

Question 3

Raw materials represent one input into the operations process.

Answer 3

True

Question 4

A genuine concern for customer needs and customer satisfaction is a powerful force that energizes the total quality management effort of a small business.

Question 5

Large corporations such as Wal-Mart use data mining techniques to gain powerful insights into customer buying patterns. Unfortunately, this is too expensive for small businesses.

Question 6

Statistical analysis makes it possible to determine tolerance limits that allow for inherent variation due to chance.

Question 7

Job shops in manufacturing use specialized equipment.

Question 8

Kaoru Ishikawa contends that 95% of the typical company's quality problems can be solved by using tools he calls the basic six.

Question 9

Total quality management refers specifically to management of the process of manufacturing.

Question 10

Composing music or painting portraits are examples of project manufacturing.

Question 11

Service establishments are exempt from setting quality standards, since their product is intangible and thus cannot be measured.

Question 12

The terms repetetive manufacturing and mass production are synonymous.

Question 13

Because some foreign markets are not accustomed to high quality goods and services, small firms in the U.S. are finding that an emphasis on quality is much more important to being competitive in the American market than in overseas markets.

Question 14

The operations process is concerned with the conversion of inputs into products or services.

Question 15

Operations refers to the processes used to create and deliver a good or service.

Question 16

Measuring the weight of boxes of candy during a production process is an example of attribute inspection.

Question 17

According to the text, experts recommend that firms work hard to involve and empower quality control experts in efforts to control quality

Question 18

Even a service firm has an operations process.

Question 19

In order to achieve market success, a firm merely needs to concentrate on either providing an excellent product/service or devising an insightful marketing strategy.

Question 20

The term quality may be defined as the manufacture of products that are free of defects.

Question 21

Purchasing activities are used to obtain materials, merchandise, equipment, and services to meet production and marketing goals.

Question 22

A manager of a small plumbing company is thinking about installing a total quality management (TQM) program. If TQM is installed, the manager should be aware that

A) costs cannot be allowed to limit quality goals.
B) quality must become a very important goal of the business.
C) ISO 9000 will be the controlling criterion.
D) reengineering is the most direct route to effective TQM.

Question 23

After attending a total quality management (TQM) seminar, a small business owner decides that her firm has a good customer focus and adequate tools and techniques. To be assured of a really strong quality program, however, she knows that she must now establish the proper

A) statistical quality control.
B) benchmarking.
C) marketing research.
D) organizational culture.

Question 24

Making components is preferable to buying them from an outside vendor when using idle plant capacity would boost production efficiency, in-house production would protect a secret design, or the firm can reduce the cost of investment by purchasing equipment that will soon be obsolete.

Question 25

To be successful a company's operations must involve all of the activities required to create _____ for customers and earn their dollars.

A) products
B) services
C) value
D) premiums

Question 26

The ultimate judge of product quality is

A) the customer.
B) W. Edwards Deming.
C) the owner of the business.
D) the American Society for Quality Control.

Question 27

The ideal quantity of an item to purchase is referred to as the Economic Order Quantity (EOQ).

Question 28

A firm engages in outsourcing only when it procures components from outside the home country.

Question 29

The simplest method of inventory record-keeping is called the perpetual inventory system.

Question 30

The type of manufacturing that is used to create unique but similar products is

A) project manufacturing
B) job shops
C) repetetive manufacturing
D) flexible manufacturing

Question 31

One of the most obvious ways that operations providing services differ from those producing products is that the nature of services is

A) tangible
B) esoteric
C) intangible
D) ethereal

Question 32

The most significant factors to consider when selecting a supplier are price and quality.

Question 33

One example of demand management strategy is Six Flags' Flash Pass.

Question 34

The typical machine shop represents the repetetive manufacturing type of operation.

Question 35

Quality is defined by the American Society for Quality Control as

A) the characteristics of a product or service that affect its ability to satisfy the needs of customers.
B) a series of activities designed to create excellence in a product or service.
C) a special rank designated for manufactured products that have less than one defect per hundred.
D) any output that meets the specific standards of a society.

Question 36

Inventory costs equal total ordering costs and total carrying costs.

Question 37

The type of manufacturing that best utilizes highly specialized equipment is

A) job shops
B) project manufacturing
C) repetetive manufacturing
D) flexible manufacturing

Question 38

One of the essential elements of successful quality management is

A) customer focus.
B) a supportive organizational structure.
C) appropriate expectations.
D) a stable management team.

Question 39

Both purchasing and inventory management share the same objective.

Question 40

The just-in-time inventory system classifies inventory into three categories based on value.

Question 41

An inspection plan that judges products as acceptable or unacceptable, good or bad, is known as

A) a 100 percent inspection plan.
B) an attribute inspection.
C) a variable inspection.
D) an inspection sampling plan.

Question 42

The operations process is found in

A) manufacturing but not service businesses.
B) service but not manufacturing businesses.
C) neither service nor manufacturing businesses.
D) both service and manufacturing businesses.

Question 43

The basic quality tool that Kaoru Ishikawa recognized that identifies potential causes of a problem while sorting them into categories is the

A) check sheet
B) cause-and effect diagram
C) control chart
D) pareto chart

Question 44

The type of manufacturing that involves computer-controlled equipment that can turn out a variety of products in smaller quantities is

A) flexible manufacturing
B) project manufacturing
C) repetetive manufacturing
D) continuous manufacturing

Question 45

Repetitive operations in manufacturing use

A) general-purpose machines.
B) job-order schedules.
C) highly specialized equipment.
D) short production runs.

Question 46

The owner of a hair-styling salon is studying quality management materials that refer to outputs. He should understand that one example of an output in this business is the

A) process of washing and styling hair.
B) combs and scissors.
C) customer's trimmed and styled hair.
D) labor of an employee in serving a customer.

Question 47

In a printing plant's production process, ink constitutes

A) an input.
B) a throughput.
C) an output.
D) a process.

Question 48

A powerful workstation computer for 3-D graphical product design is an example of a

A) general-purpose machine.
B) operationally-induced machine.
C) highly specialized equipment.
D) short-lived asset.

Question 49

In a printing plant's production process, a printed book constitutes

A) an input.
B) a throughput.
C) an output.
D) a process.

Question 50

Job shops are most closely related to

A) short production runs.
B) long production runs.
C) special-purpose equipment.
D) standardized products.

Question 51

The type of inventory system that provides an ongoing, current record of inventory items is a(n) _____ inventory system.

A) physical
B) two-bin
C) perpetual
D) bulk

Question 52

Manufacturing and service operations differ in which one of the following ways?

A) Productivity is harder to measure in manufacturing.
B) It is harder to build inventory in manufacturing.
C) It is harder to establish quality standards in services.
D) Service operations involve less contact with customers.

Question 53

The type of manufacturing that is designed for short runs is

A) job shops
B) project manufacturing
C) repetetive manufacturing
D) flexible manufacturing

Question 54

Quality management is applicable to

A) manufacturing but not service businesses.
B) service but not manufacturing businesses.
C) both service and manufacturing businesses.
D) neither service nor manufacturing businesses.

Question 55

The owner of a small manufacturing plant wants inspectors to check the width and length of a product (within specified tolerances) during the production process. This calls for

A) an attribute inspection.
B) a work sampling inspection.
C) a 100 percent inspection plan.
D) a variable inspection.

Question 56

Capacity for a lawnmower manufacturer is determined by the following except

A) location
B) factory space
C) machinery
D) workers

Question 57

One factor that differentiates the operations of a service firm from manufacturing is its

A) operating space
B) ability to maintain high quality standards
C) inability to produce services and hold them in inventory
D) working hours

Question 58

By conforming to ISO 9000, a small manufacturing firm should achieve improvements in

A) sales to Wal-Mart.
B) export sales.
C) product design.
D) quality of incoming raw materials.

Question 59

A control chart is used as part of a

A) statistical process control plan.
B) 100 percent inspection plan.
C) traditional inspection plan.
D) reengineering plan.

Question 60

A forklift is an example of a

A) general-purpose machine.
B) operationally-induced machine.
C) highly specialized equipment.
D) short-lived asset.

Question 61

The basic quality tool that Kaoru Ishikawa recognized that can be used to determine if a process errs in some predictable and correctable way is the

A) cause-and-effect diagram
B) check sheet
C) control chart
D) scatter diagram

Question 62

Some small firms find that they can increase their buying power if they join

A) trade associations
B) purchasing coops
C) diversification buying groups
D) associative forecasting groups

Question 63

A firms should decide to make components (as opposed to buying them) when

A) it is considering adding plant capacity.
B) this decision would allow the firm to protect a secret design.
C) transportation costs are not a concern.
D) the quality demands of the firm's customers are low.

Question 64

The ABC method of inventory management is founded on the notion that

A) some inputs are more valuable or more critical to the firm's operations than others.
B) inventory costs should be cut to an absolute minimum by reducing inventory on hand.
C) a firm should know its economic order quantity at all times.
D) the cost of placing an order is a fixed cost.

Question 65

A "C" class item in a system that uses the ABC method of inventory management is

A) critical.
B) noncritical.
C) most valuable.
D) least valuable.

Question 66

Service businesses such as accounting firms are more concerned with _____ costs than with the cost of supplies.

A) labor
B) equipment
C) office rent
D) fixed asset

Question 67

The basic quality tool that Kaoru Ishikawa recognized that separates the vital few from the useful many is the

A) histogram
B) scatter diagram
C) flow chart
D) pareto chart

Question 68

Adoption of the just-in-time inventory system requires

A) the elimination of raw materials wherever possible.
B) an emphasis on work in progress.
C) a reduction in the firm's finished goods.
D) close cooperation with suppliers.

Question 69

The traditional method of maintaining product quality has been the

A) check sheet
B) control chart
C) inspection
D) histogram

Question 70

A business buying products or services from other business firms is known as

A) importing
B) diversification of supplies
C) asset efficiency
D) outsourcing

Question 71

The following are among the attributes listed in the Supply Chain Operations Reference (SCOR) model for assessing a supplier's performance except

A) reliability
B) responsiveness
C) cost
D) supplier's location

Question 72

Reasons for buying products rather than making them include the following except

A) suppliers' parts may be less expensive
B) additional space,equipment and personnel skill are not needed
C) risk of equipment obsolescence is transferred to outsiders
D) more complete utilization of plant capacity permits more economical production

Question 73

Activities easily outsourced by small businesses include

A) payroll administration.
B) research and development.
C) quality control.
D) top-level decision making.

Question 74

An "A" class item in the ABC method of inventory management is a ____ item.

A) critical
B) noncritical
C) most valuable
D) least valuable

Question 75

A small company might prefer to concentrate purchases with one supplier for which the following reasons?

A) insurance against interruptions caused by strikes
B) a particular supplier 's superiority in product quality
C) knowing the customer's loyalty, the supplier may provide better prices and service
D) to locate the best source in terms of price, quality and service with each purchase

Question 76

Any point in an operations system where limited capacity reduces the production capacity of an entire chain of activities is called a

A) vortex
B) stopgap
C) production defect
D) bottleneck

Question 77

A firm should decide to buy components from a supplier (as opposed to making them)

A) when it has excess plant capacity.
B) when it will require greater flexibility on the firm's part to accommodate the supplier.
C) if product quality would be the same (regardless of the firm's decision.)
D) if the risk of equipment obsolescence can be transferred to the supplier.

Question 78

Good relationships with suppliers is important, but they are especially important for

A) large businesses.
B) small businesses.
C) medium-sized business.
D) labor-intensive businesses.

Question 79

Reasons for making component parts rather than buying them include the following reasons except

A) more complete utilization of plant capacity
B) a secret design may be protected
C) limit working capital requirements
D) products may be of higher quality than those available from outside suppliers

Question 80

Forrester Research has shown that accounts payable electronic invoice presentment and processing can cut the cost of an invoice process from

A) $20 to $5
B) $30 to $10
C) $15 to $6
D) $25 to $7