Deck 14: Operations Management: Managing Vital Operations and

Question 1

Improving product quality increases the operating costs of the organization.

Answer 1

False
Explanation: Achieving high product quality lowers operating costs because of the effect of quality on employee productivity. Higher product quality means less employee time is wasted in making defective products that must be discarded or in providing substandard services, and thus less time has to be spent fixing mistakes.

Question 2

Blaze Blends, a metal alloy maker, wants to measure the efficiency of the energy inputs at its factory. It needs to use a formula to calculate ________ productivity.

A) employee
B) partial
C) total factor
D) labor

Answer 2

B
Explanation: Though sometimes a useful measure of efficiency overall, total factor productivity obscures the exact contribution of an individual input to the production of a given output. Consequently, most organizations focus on specific measures of efficiency, known as partial productivity, that measure the efficiency of an individual unit.

Question 3

Operations managers are managers who are responsible for managing an organization's production system.

Answer 3

True
Explanation: Operations managers are managers who are responsible for managing an organization's production system. They do whatever it takes to transform inputs into outputs.

Question 4

The concept of "quality" can be applied only to manufacturing organizations, but not to service organizations.

Question 5

The management of efficiency is an extremely important issue in most organizations, because increased efficiency generally helps ________.

A) decrease technology use
B) decrease production costs
C) increase product price
D) increase inventory size

Question 6

Attributes of an organization's outputs-their quality, cost, and features-are determined by the organization's production system.

Question 7

At a manufacturing unit for trousers, there are many stations located in a row. At the first station cloth is cut, at the second hems are stitched, at the third buttons are sewn, at the fourth seams are checked, and at the fifth the product is packed. This unit is an example of ________.

A) process layout
B) product layout
C) fixed-position layout
D) flexible layout

Question 8

Customers prefer products that are, as far as possible, customized to their unique needs.

Question 9

A production system is the system that an organization uses to acquire inputs, convert inputs into outputs, and dispose of the outputs.

Question 10

"Efficiency" refers to goods and services that are reliable, dependable, and satisfying and that do the job they were designed for.

Question 11

Profit-seeking organizations have customers, but not-for-profit organizations do not have customers.

Question 12

Customer relationship management (CRM) is a technique that uses IT to develop an ongoing relationship with customers to maximize the value an organization can deliver to them over time.

Question 13

Which of the following will typically lead to making the highest profits?

A) Higher prices and higher costs
B) Lower prices and lower costs
C) Higher prices and lower costs
D) Lower prices and higher costs

Question 14

"Quality" refers to the amount of inputs that are required to produce a given output.

Question 15

A CRM system can be used as a comprehensive method of gathering crucial information about the way customers respond to a company's products.

Question 16

Management experts recommend that an organization define its business in terms of the products it is producing, and not in terms of the customer needs that it is attempting to satisfy.

Question 17

CRM systems have two interconnected components: sales and selling, and after-sales service and support.

Question 18

Which of the following typically represents the impact of increased quality on organizational performance?

A) Increased reliability that leads to lower prices
B) Increased productivity that leads to lower costs
C) Higher prices that lead to lower profits
D) Higher costs that lead to higher profits

Question 19

"Responsiveness to customers" refers to actions taken to meet the demands and needs of customers.

Question 20

Managers should create an environment in which subordinates will not be afraid to report problems or recommend improvements.

Question 21

Management writers recommend that an organization should define its business in terms of its ________.

A) technology
B) number of employees
C) product mix
D) customer needs

Question 22

The total amount of raw materials and component parts that an organization has on hand is known as ________.

A) buffer
B) layout
C) inventory
D) facilities

Question 23

Operations managers are responsible for ________.

A) setting sales quotas and reaching them
B) designing a product distribution system
C) establishing the company mission and vision
D) designing saleable, low-cost products

Question 24

Much time is lost when a washer ring manufacturer changes the settings in the equipment from those for cars to those for trucks. Which of the following will help it save time?

A) Flexible manufacturing
B) Self-managed teams
C) Process layout
D) Product layout

Question 25

A maker of bottle caps gets orders from customers with different size, material, and thickness requirements, forcing the workers to frequently change the equipment. Flexible manufacturing will be ideal in this case because ________.

A) large numbers of the same type may be produced
B) cheaper raw material may now be used
C) the time required to set up equipment is reduced
D) customers will now agree to use caps of the same size

Question 26

Which of the following describes the product layout?

A) It is efficient only when products are created in large quantities.
B) Workers move from workstation to workstation.
C) A conveyor belt is usually not used.
D) Assembling a product is easily achieved in this layout.

Question 27

The managers who are responsible for managing the organization's production system are known as ________.

A) TQM managers
B) JIT managers
C) operations managers
D) inventory managers

Question 28

When setup times for complex production equipment is reduced, ________.

A) efficiency of the production unit goes down
B) time spent in producing something will increase
C) flexible manufacturing techniques become irrelevant
D) employees have to be paid for nonproductive time

Question 29

A system that an organization uses to obtain inputs, convert them into outputs, and then dispose of these outputs is known as a ________.

A) production system
B) quality control management system
C) reengineering system
D) line management system

Question 30

Creek Redwood, a furniture maker, shrank its ordering and delivery team by taking most of its operations online and increased its fleet of trucks to decrease delivery time. These actions can be described as ______.

A) a JIT system
B) process reengineering
C) flexible manufacturing
D) total factor productivity

Question 31

A fixed-position production layout would be particularly recommended if ________.

A) there are no self-managed teams
B) the product is easily moved on a conveyor belt
C) you are making jet airlines or gas turbines
D) products have simple, lightweight parts

Question 32

Goods and services that are dependable, reliable, able to do what they were designed for and satisfying characterize ________.

A) efficiency
B) conditioning
C) warranties
D) quality

Question 33

The management of any aspect of production that transforms inputs into finished outputs is known as ________.

A) total quality management
B) supply chain management
C) operations management
D) reengineering management

Question 34

What is the advantage of maintaining buffer stocks of inventory?

A) It brings down storage costs.
B) It supports a JIT inventory system.
C) It helps deal with unpredictable supplies.
D) It helps quickly identify defective stocks.

Question 35

Which of the following describes self-managing work teams?

A) Members are too specialized to fill in for absent coworkers.
B) Each member reports to two first-line managers.
C) Cost savings arise from eliminating supervisors.
D) Members misuse the greater autonomy given to them.

Question 36

Generally, other things being equal, most customers prefer products with ________.

A) good after-sales service
B) fewer and simpler features
C) no customized features
D) preferred attributes at any price

Question 37

In a fixed-position production layout, ________.

A) different teams assemble different component parts
B) the product is moved from one workstation to the next
C) component parts are made in the assembling area
D) products that are heavy are more difficult to make

Question 38

"The actions taken to meet the needs of customers" refers to ________.

A) efficiency
B) quality
C) quality control
D) responsiveness

Question 39

Jet Perks is an organization that has chosen to use a JIT system. Their productivity will improve because the company can now ________.

A) give quick feedback to suppliers of defective goods
B) respond quickly to increased customer demand
C) have a buffer stock of inventory available
D) store more raw material in less space

Question 40

The main responsibility of operations managers is to manage the three stages of production ranging from ________.

A) acquisition of inputs to control of conversion processes
B) acquisition of inputs to disposal of goods and services
C) control of conversion processes to disposal of goods and services
D) disposal of goods and services to customer relationship management

Question 41

Total factor productivity equals ________.

A) raw materials divided by labor costs
B) all inputs divided by outputs
C) outputs divided by all inputs
D) outputs times all inputs

Question 42

Organizing machines in the production process so that each operation is performed at workstations in a fixed sequence is known as a ________.

A) fixed-position layout
B) hybrid layout
C) product layout
D) process layout

Question 43

Shawn, an executive with the Connoisseur's Brewery, wants to compare his firm's efficiency against its competitors. To do so, he should ________.

A) assess the financial ratios of the firm versus the competition
B) compare the firm's labor productivity to that of the competition
C) compare the amount of materials used to that of the competition
D) conduct a survey of customers' opinions about the firm's efficiency

Question 44

A technique that uses IT to develop an ongoing relationship with buyers to maximize the value an organization can deliver to them over time is ________.

A) customer relationship management
B) total quantity management
C) customer experience management
D) customer perception measurement

Question 45

In measuring the total factor productivity of an organization, which of the following is an example of the contribution of the raw materials to output production?

A) Number of tons of iron ore required to make one ton of steel
B) Total number of units of energy consumed
C) Number of man hours required to process raw materials
D) Total number of employees required to operate the machinery

Question 46

The attributes of an organization's outputs are determined by its ________.

A) production system
B) quality management program
C) efficiency system
D) distribution system

Question 47

In measuring the total factor productivity of an organization, an example of a measure of the amount of energy consumed in output production is the number of ________.

A) units produced
B) hours worked
C) kilowatt-hours consumed
D) employees required

Question 48

A production process where the workers are stationary and a moving conveyor belt takes the product on to the next workstation (so that it is assembled in a fixed sequence) is known as ________.

A) pull production
B) mass production
C) batch production
D) lean manufacturing

Question 49

The efficiency of an organization with reference to the contribution of an individual input is known as the ________.

A) total factor productivity
B) cumulative productivity
C) partial productivity
D) unit productivity

Question 50

The outputs of an organization divided by all of its inputs is called its ________.

A) total factor productivity
B) total labor productivity
C) partial productivity
D) total capital productivity

Question 51

The way in which machines, robots, and people are grouped together in the production process is known as ________.

A) kanban
B) facilities layout
C) kaizen
D) TQM

Question 52

The measure of the efficiency of a specific input in the production of a given output is called _______.

A) efficiency ratio
B) partial productivity
C) total factor productivity
D) labor productivity

Question 53

A production process in which the product goes to whichever workstation is needed to perform the next operation is known as a ________ layout.

A) process
B) fixed-position
C) product
D) cellular

Question 54

In the typical organization, increased efficiency leads to ________.

A) higher operating costs
B) lower production costs
C) lower partial productivity
D) higher maintenance costs

Question 55

One of the reasons to increase product quality is that higher product quality can increase efficiency, ________ operating costs, and ________ profits.

A) increase; increase
B) decrease; decrease
C) decrease; increase
D) increase; decrease

Question 56

The operations management technique that has a goal of designing the machine-worker interface to increase production efficiency is _______.

A) the facilities layout
B) quality circles
C) flexible manufacturing
D) production system improvement

Question 57

A problem associated with total factor productivity is that ________.

A) some inputs cannot be factored in
B) the calculation is too cumbersome
C) it focuses on specific inputs
D) each input is measured in different units

Question 58

Total factor productivity is a measure of an organization's ________.

A) responsiveness
B) process design standard
C) efficiency
D) raw material usage

Question 59

Labor productivity is most commonly used to ________.

A) calculate the total cost of production
B) set wage standards per unit of production
C) draw efficiency comparisons between different organizations
D) define recruiting parameters for new candidates

Question 60

Which of the following calculates labor productivity?

A) Outputs divided by direct labor
B) Inputs divided by direct labor
C) Direct labor divided by inputs
D) Direct labor divided by outputs

Question 61

A disadvantage of a JIT system is that it ________.

A) increases inventory turnover
B) reduces inventory holding costs
C) ties up much capital in inventory
D) leaves no buffer stock in inventory

Question 62

In a self-managed work team, ________.

A) the typical team consists of 5 to 10 members
B) each member specializes in any one area of work
C) team members delegate responsibility to supervisors
D) a tall organizational hierarchy is created

Question 63

A manufacturing organization using a JIT system can achieve major cost savings as a result of ________ inventory turnover and ________ inventory holding costs.

A) decreasing; decreasing
B) increasing; increasing
C) increasing; decreasing
D) decreasing; increasing

Question 64

Parts arrive at the stage of the production process just when they are needed with a ________ inventory system.

A) raw materials
B) work-in-process
C) finished goods
D) JIT

Question 65

A fixed-position layout is most likely to be used in production of ________.

A) aircraft carriers
B) custom furniture
C) beer bottling
D) clothing

Question 66

Linda takes a job with a manufacturing firm, and she is appointed to a self-managed work team. As a member of a self-managed work team, she should expect to be involved in ________.

A) learning all team tasks
B) setting the company vision
C) closely supervising the team
D) reducing job-to-job movement

Question 67

A process layout often ________ efficiency and is well suited for ________ products.

A) reduces; custom-made
B) increases; custom-made
C) reduces; mass-produced
D) increases; mass-produced

Question 68

One of the major advantages of a JIT system is that it ________.

A) helps identify sources of defects in outputs
B) ensures production lines have required inputs
C) lets organizations spot defective inputs quickly
D) eliminates inventory holding costs

Question 69

Reduced setup times lead to reduced ________ and increased ________.

A) setup costs; efficiency
B) efficiency; labor costs
C) inventory costs; setup costs
D) efficiency; inventory costs

Question 70

The idea of flexible manufacturing systems is chiefly based on reducing ________.

A) inventory costs
B) setup time
C) employee fatigue
D) machine-worker interface

Question 71

In production process, a mainframe computer assembly line is an example of a ________ facilities layout.

A) product
B) process
C) fixed-position
D) flexible manufacturing

Question 72

A JIT system ________.

A) reduces inventory turnover
B) reduces inventory holding costs
C) increases warehousing costs
D) increases buffer stock of inventory

Question 73

The operations management technique that attempts to reduce machine setup costs in the production system is called ________.

A) a facilities layout
B) inventory management
C) quality circles
D) flexible manufacturing

Question 74

In production process, a jet airplane assembly line would be an example of a ________ layout.

A) product
B) process
C) fixed-position
D) hybrid

Question 75

The stock of materials, inputs, and parts an organization has on hand at a particular time is called its ________.

A) fixed assets
B) intangible assets
C) inventory
D) surplus

Question 76

A production process where component parts are produced throughout the factory and then brought to the production area for final assembly is known as a ________ layout.

A) process
B) product
C) fixed-position
D) kanban

Question 77

A JIT inventory system is likely to result in ______.

A) a buffer stock of inventory
B) additional inventory holding costs
C) increased inventory turnover
D) decreased service levels

Question 78

A product layout is most likely to be used in a ________ assembly line.

A) jet aircraft
B) car
C) gas turbine
D) custom furniture

Question 79

Under a JIT inventory system, parts and supplies arrive at the organization ________.

A) prior to work-scheduling
B) two weeks prior to being needed
C) when needed
D) twice a week

Question 80

A process layout provides the flexibility needed to change the product. Such flexibility, however, often reduces efficiency because ________.

A) changes are disruptive
B) it is expensive
C) standardization is impossible
D) it is time-consuming to install