Deck 21: Managing Small Business Operations

Question 1

For service firms, the customer has to arrive before production begins, resulting in employee scheduling issues.

Answer 1

True

Question 2

Flexible manufacturing systems use a combination of repetitive and continuous manufacturing to lower costs while satisfying customer needs.

Answer 2

False

Question 3

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

Answer 3

False

Question 4

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

Question 5

Companies that prepare income tax returns are a form of job shop.

Question 6

The terms repetitive manufacturing and mass production are synonymous.

Question 7

Work groups tend to be better at coordination than specialization.

Question 8

An example of a demand management strategy is a kids-eat-free offering on Tuesdays at a local restaurant.

Question 9

Only product firms have an operations process.

Question 10

Powerful companies, whether large or small, gain power when satisfying customer needs and wants better than their competitors.

Question 11

For a store, the key to maintaining high-quality service is to carry more stock.

Question 12

Obsolescence is a cost of inventory.

Question 13

Technology can adequately replace the human interaction when the needs of the customer involve large amounts of data.

Question 14

Because close interactions with customers allow employees to better understand them, management should be sent into the field periodically.

Question 15

Continuous manufacturing refers to assembly lines that run 24 hours a day, seven days a week.

Question 16

The ideal quantity of an item for a business to purchase is referred to as the economic order quantity (EOQ).

Question 17

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

Question 18

Manufacturers with seasonal demand schedules often hire temps during peak production and keep only skeleton crews the rest of the year.

Question 19

Job shops in manufacturing use specialized equipment.

Question 20

When Kentucky Chocolates mixes ingredients for its candies, this act is part of operations.

Question 21

The quality of a finished product depends on the quality of the raw materials used to make it.

Question 22

Measuring quality in a service business is easier than measuring quality in a production business. All you have to do is ask the customer.

Question 23

Outsourcing noncompetitive functions can free the entrepreneur to focus on his or her greatest strengths.

Question 24

The Supply Chain Operations Reference model is a list of five critical factors when assessing a supplier's performance.

Question 25

The simplest method of inventory record-keeping is called cycle counting.

Question 26

Unless a firm is planning to market products in Europe or supply components to U.S. automakers, getting ISO 9000 certification is not recommended.

Question 27

Quality is best defined as the totality of features and characteristics of a product or service that impacts the firm's ability to satisfy stated or implied needs.

Question 28

With acceptance sampling, having a smaller sample to work with reduces sampling error.

Question 29

An example of associative forecasting is when a concert promoter predicts attendance based on the trend of attendance of the same event in the same location in previous years.

Question 30

Because the small business owner must perform many functions that consume many hours each day, it is acceptable practice to decline a salesperson's request for an appointment.

Question 31

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

Question 32

The importance of purchasing rests on three areas: quality, service, and cost.

Question 33

A genuine concern for customer needs and customer satisfaction can assist the TQM efforts of a small business.

Question 34

Firms that pay attention to operating details are stronger than those that empower their customers for quality improvement.

Question 35

Kaoru Ishikawa contends that 95 percent of the typical company's quality problems can be solved by using "The Basic Six" quality tools.

Question 36

Weighing bags of mulch during a production process is an example of a variable inspection.

Question 37

The cost of getting quality right is often more than a small business can bear.

Question 38

Buying components is preferable to making them when it is necessary to protect a secret design for a seasonal item.

Question 39

While large corporations have access to data-mining techniques for insights into customer buying patterns, small companies typically cannot afford the software.

Question 40

Cooperative purchasing organizations are firms that specialize in the purchasing function and provide this service to small businesses.

Question 41

At CPL Manufacturing, the one-millionth product must be identical to the first. The work is automated and accomplished by machines designed expressly to make these products. This type of manufacturing is known as _____ manufacturing.

A) continuous
B) flexible
C) project
D) repetitive

Question 42

Which of the following is the inventory control method that uses a targeted service level allowing for the variability of supply and demand?

A) ABC method
B) Economic order quantity
C) Just-in-time inventory system
D) Statistical inventory control

Question 43

The goal of lean production is to use the minimum amount of resources necessary to achieve a total bundle of satisfaction for the customer.

Question 44

Linda creates websites for her customers. Each one is designed to meet the specific needs of the customer. This type of manufacturing is called _____ manufacturing.

A) continuous
B) flexible
C) project
D) repetitive

Question 45

The topic of discussion during the monthly senior managers' meeting is how best to manufacture the company's product with existing materials, manpower, and machinery. This discussion is about

A) inventory management.
B) inventory overhead.
C) operations management.
D) production management.

Question 46

Jasper operates a machine shop. Orders from his customers are small, but his machines can easily be set up to make other items for different customers. This type of manufacturing is known as

A) flexible manufacturing.
B) a job shop.
C) project manufacturing.
D) repetitive manufacturing.

Question 47

Duff's Buffet offers a discount for lunches on Tuesdays. Duff's is using

A) capacity planning.
B) a demand management strategy.
C) project marketing.
D) service inputs.

Question 48

Martha knows that to be successful, everything her company does must create customer

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

Question 49

Ralph operates a computer-controlled machine. His jobs can be either large or small. To change the setup from one product to another usually requires only a change in programming. This type of manufacturing is known as _____ manufacturing.

A) continuous
B) flexible
C) project
D) repetitive

Question 50

Bottlenecks in a process are responsible for slower throughput times for the entire process.

Question 51

Which of the following aspects is the most descriptive of a product operation as opposed to a service operation?

A) Customer interaction
B) Created and delivered on demand
C) Intangible aspects
D) Repetitive operations

Question 52

Which item is a tangible output for a guest at a bed and breakfast?

A) Questions answered about local attractions
B) Full breakfast in the morning
C) Use of a room
D) Camaraderie with fellow guests

Question 53

It has been determined that using an accounts payable automation service can reduce costs to less than $1 per invoice.

Question 54

Which operations factor is centered around satisfying customers over time?

A) Flexibility
B) Facilities and equipment
C) Choice of a joint venture
D) Customer demand

Question 55

At the weekly managers' meeting, Marcel is discussing how the company's product is made and delivered to its customers. Marcel is talking about

A) distribution.
B) human resources.
C) operations.
D) planning.

Question 56

Which of the following puts a ceiling on the firm's ability to meet demand and match competitors and may also determine startup costs?

A) Planning
B) Quality standards
C) Capacity
D) Working hours

Question 57

Purchasing and inventory management share the same objective by contributing to profitable operations.

Question 58

Job shops are best suited for

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

Question 59

Repetitive operations in manufacturing use

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

Question 60

When a company expands resources in response to a constraint, they are using the option of increasing efficiency.

Question 61

A category "C" item in the ABC method of inventory management for a college bookstore would be

A) pens.
B) magazines.
C) shirts.
D) textbooks.

Question 62

If a small fencing company wants to check the length of fence posts to determine if they are acceptable, a(n) _____ should be used.

A) poka-yoke
B) attribute inspection
C) acceptance sampling
D) variable inspection

Question 63

In his retail store, Jose's point-of-sale software relieves inventory for each item purchased. At any time, Jose can look at the inventory records on his computer and know exactly how many of each item are in stock. This type of inventory system is called

A) cycle counting.
B) perpetual.
C) physical.
D) two-bin.

Question 64

A small business owner decides that her firm has a good customer focus and adequate tools and techniques needed for a TQM program. To be assured of a strong quality program, she must also have the proper

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

Question 65

Bobbi Jo pulls one part from the production line every 15 minutes and measures its dimensions against the specifications. Bobbi Jo is using

A) acceptance sampling.
B) a control chart.
C) statistical process control.
D) TQM.

Question 66

A method that judges products as acceptable or unacceptable is known as

A) poka-yoke.
B) attribute inspection.
C) acceptance sampling.
D) variable inspection.

Question 67

Service businesses are typically more concerned with _____ costs than with the cost of materials for operations.

A) equipment
B) fixed asset
C) labor
D) leasing

Question 68

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

A) some inputs are more valuable or critical to a 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 69

Rather than rely on the bartender to use the correct proportions of ingredients in mixed drinks, a bar owner installed a drink-mixing machine that automatically selects and measures the ingredients into the glass. This method is a type of

A) idiot-proofing.
B) poka-yoke.
C) Kanban.
D) robotics.

Question 70

The traditional method of maintaining product quality has been

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

Question 71

Which of the following is an example of "quality"?

A) The taste of a restaurant's food
B) Turn time at an auto repair shop
C) Product fail rate for a manufacturer
D) All of these are examples of quality.

Question 72

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 73

If a small plumbing company is installing a TQM program, management should be aware that

A) quality must become a very important goal of the entire business.
B) ISO 9000 will be the controlling criterion.
C) costs cannot be allowed to limit quality goals.
D) acceptance sampling may be necessary.

Question 74

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

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

Question 75

Which of the following of Kaoru Ishikawa's seven tools is most commonly used to see how often different values in a set of data occur?

A) Check sheet
B) Histogram
C) Control chart
D) Pareto chart

Question 76

In March, chassis prep counts its inventory. In June, the cabinet shop does the same thing. In September, appliances counts its inventory. This inventory system is known as

A) cycle counting.
B) perpetual.
C) physical.
D) two-bin.

Question 77

Bettina would like to improve the quality of the dining experience in her cafe. To achieve this, Bettina's efforts should begin with a focus on

A) customers.
B) employees.
C) management.
D) operations.

Question 78

Twice a year a firm's entire production line shuts down and a complete count is taken of every inventory item. This inventory system is called

A) cycle counting.
B) perpetual inventory.
C) physical inventory.
D) two-bin inventory.

Question 79

A reason to buy component parts is

A) closer coordination between scheduling and production.
B) a secret design may be protected.
C) improved plant utilization.
D) the parts are a specialty of the supplier.

Question 80

ISO 9000

A) is more important for large global firms than small firms with domestic markets.
B) measures how companies have improved their environmental footprint.
C) is challenging to earn but is rewarding from a marketing viewpoint.
D) reflects international excellence in quality management standards.