Question 1

Service providers are generally more capital-intensive than manufacturers because of the high level of customization.

Accepted Answer

Service providers are generally more labor-intensive than manufacturers because of the high level of customer contact, perishability of the output (must be consumed immediately), and high degree of variation of inputs and outputs (customization). Manufacturing, on the other hand, is more capital-intensive.

Question 2

Modular design, an operations process for manufacturing products, allows products to be repaired quickly, thus reducing the cost of labor.

Accepted Answer

Modular design allows products to be repaired quickly, thus reducing the cost of labor, but the component itself is expensive, raising the cost of repair materials.

Question 3

Lora is a manager at a large car dealership and service shop. She oversees the transformation process and manages the logistics, quality, and productivity of the service department. Lora is a(n)
A) finance manager.
B) sales manager.
C) marketing manager.
D) human resource manager.
E) operations manager.

Accepted Answer

Lora is an operations manager. Operations include activities and processes used in making both tangible and intangible products. Operations managers oversee the transformation process and the planning and designing of operations systems, managing logistics, quality, and productivity.

Question 4

Catherine is the operations manager of a new day spa in an upscale urban neighborhood. Customers in this neighborhood expect high quality services and products, and Catherine is struggling to use the spa's resources efficiently and effectively to provide the level of quality the customers demand. What will most likely happen if Catherine can't find a way to meet customers' demands for quality?
A) The spa will be forced to move to a less demanding neighborhood.
B) The spa will be taken over by competitors in the area.
C) The spa will stay in business, and customers will adapt to its services and products.
D) The spa will be converted into a different type of business that can succeed in this area.
E) The spa will go out of business.

Accepted Answer

Quality and productivity have become fundamental aspects of operations management because a company that cannot make products of the quality desired by consumers, using resources efficiently and effectively, will not be able to remain in business.

Question 5

Gray is a carpenter who performs home repairs and improvements for his customers. From the perspective of operations, the money he uses to purchase his tools and the electricity he uses to run his power saw are
A) processes.
B) outputs.
C) stocks.
D) inputs.
E) inventories.

Accepted Answer

The money used to purchase his tools and the electricity used to run his power saw are inputs. At the heart of operations management is the transformation process through which inputs (resources such as labor, money, materials, and energy) are converted into outputs (goods, services, and ideas).

Question 6

Ophelia and her father have been building rustic furniture for family and friends since she was little. As an adult, Ophelia decides to start her own furniture company. From the perspective of operations, the beds, tables, chairs, and dressers she builds are
A) capital.
B) inputs.
C) equipment.
D) outputs.
E) processes.

Accepted Answer

The beds, tables, chairs, and dressers Ophelia builds are outputs. Outputs are the goods, services, and ideas that result from the conversion of inputs (resources such as labor, money, materials, and energy).

Question 7

Mario is the head chef at an Italian restaurant. He imports many of his ingredients from Italy and prepares them using family recipes that have been passed down for generations. From the perspective of operations, the food he sells to customers and the authentic Italian atmosphere he provides are
A) components.
B) inputs.
C) outputs.
D) stocks.
E) inventories.

Accepted Answer

The food Mario sells at his restaurant and the authentic Italian atmosphere he provides are outputs. Outputs are the goods, services, and ideas that result from the conversion of inputs (resources such as labor, money, materials, and energy).

Question 8

Marta is a makeup artist who works in a salon and travels to provide her services to clients at weddings and other events. As part of her services, she gives her clients lipstick, blotting sheets, and face powder, so they can touch up their makeup throughout the event. Her biggest expenses are the cost of the items she gives to clients, the cost of keeping her makeup kit stocked with a variety of colors, travel expenses to get to the events, and her time. Which is considered an input?
A) the lipstick, blotting sheets, and face powder she gives to clients
B) the makeup services she provides in the salon
C) the makeup services she provides at events
D) her time and money
E) her creative application of makeup to make her clients look perfect for any event

Accepted Answer

Marta's time and the money she spends on the items she gives to clients, the items she buys to stock her makeup kit, and travel expenses to get to events are her inputs. Her outputs are the lipstick, blotting sheets, and face powder she gives to clients; the makeup services she provides in the salon and at events; and her creative application of makeup to make her clients look perfect for any event.

Question 9

Krista is an operations manager at a hotel. Her hotel has a standard of 80 percent of rooms being ready when guests arrive to check-in. However, she recently collected feedback to check on the hotel's efficiency and found that only 70 percent were ready on time. What might Krista do to resolve this 10 percent negative deviation?
A) make adjustments to the cleaning schedule to ensure that rooms will be available by check-in time
B) make the check-in time later to match when rooms are ready
C) add a disclaimer that all check-in times are approximate and subject to change
D) move the check-out time later to satisfy guests who can't get into their rooms when expected
E) offer a complimentary meal to guests who can't get into their rooms when expected

Accepted Answer

To resolve this 10 percent negative deviation, Krista might take some sort of corrective action, such as adjusting the cleaning schedule to ensure that rooms will be available by check-in time.

Question 10

Terrence works for a business that manufactures industrial metal clocks. All of the following are processes the clock maker must pass the inputs through before they are turned into the final outputs-clocks for his customers-EXCEPT
A) cutting metal sheets into circles for the clock center, numbers, and clock hands.
B) welding the metal pieces together to form the clock's basic design.
C) selling the finished clocks to customers.
D) heating and shaping repurposed metal into the clock frame.
E) applying metal sealant to keep the metal from rusting or oxidizing.

Accepted Answer

Transformation may take place in one or more processes. In this business that manufactures industrial metal clocks, inputs pass through several processes before being turned into the final outputs, clocks for customers. These processes include cutting metal sheets into circles for the clock center, numbers, and clock hands; heating and shaping repurposed metal into the clock frame, welding the metal pieces together to form the clock's basic design, and applying metal sealant to keep the metal from rusting or oxidizing. Selling the finished clocks to customers is not part of the transformation process.

Question 11

All of the following are processes through which an airline transforms inputs such as employees, time, money, and equipment EXCEPT
A) maintaining equipment.
B) booking flights.
C) flying airplanes.
D) training crews.
E) eliminating food service.

Accepted Answer

An airline transforms inputs such as employees, time, money, and equipment through processes such as booking flights, flying airplanes, maintaining equipment, and training crews. Eliminating food service is not an example of a process that is transformed while converting inputs to outputs.

Question 12

Helping Hands, a nonprofit organization, uses money, groceries, and volunteer time and labor to transform food into hot prepared meals for needy families. In this setting, which is a transformation process?
A) paying rent for a cooking facility
B) traveling abroad to find less expensive ingredients
C) tasting the meals to make sure they are satisfactory
D) giving families raw ingredients and expecting them to prepare meals themselves
E) fundraising and promoting the cause to gain new volunteers and food donations

Accepted Answer

The transformation processes Helping Hands would use to provide needy families with hot prepared meals are fundraising and promoting the cause to gain new volunteers and food donations, as well as preparing the ingredients and cooking or baking the food.

Question 13

Health care, real estate, and tax preparation are all examples of ________ services.
A) low-contact
B) impersonal
C) low-level
D) high-contact
E) tangible

Accepted Answer

Unlike tangible goods, services are effectively actions or performances that must be directed toward the consumers who use them. Thus, there is a significant customer-contact component to most services. Examples of high-contact services include health care, real estate, tax preparation, and food service.

Question 14

At the Medieval Mansion Restaurant, diners expect an authentic medieval dining experience. The wait staff are in character and dress in authentic medieval clothing, the walls of the restaurant are covered with art from the Middle Ages, and as diners eat Medieval-era foods, they are entertained by troubadours and performers. What type of service does this restaurant provide?
A) low-contact
B) high-contact
C) high-tech
D) low-level
E) tangible

Accepted Answer

This restaurant provides high-contact services because the food servers are critical to delivering the perfect dining experience expected by the most discriminating diners.

Question 15

Service organizations must build their operations around good execution, which comes from all of the following EXCEPT
A) providing services that can be saved, stored, resold, or returned.
B) hiring and training excellent employees.
C) customizing services.
D) developing flexible systems.
E) maintaining adjustable capacity to deal with fluctuating demand.

Accepted Answer

Service organizations must build their operations around good execution, which comes from hiring and training excellent employees, developing flexible systems, customizing services, and maintaining adjustable capacity to deal with fluctuating demand.

Question 16

Amir runs an arena that hosts sporting and music events. When booking these events, he must consider how many people would be interested in buying tickets. Based on the demand, he must set his ticket prices at the appropriate level. Which challenge is associated with providing this type of service?
A) It is difficult to determine the appropriate level of customer contact required when providing such a service.
B) With services like this, it is difficult to ensure that the produced outputs will be worth more than the combined costs of the inputs.
C) It is difficult to accurately estimate the demand to match the right supply of a service.
D) When providing this type of service, it is difficult to balance in-person and online ticket sales.
E) It is difficult to convince customers to spend money on tangible services like this.

Accepted Answer

A challenge related to service operations is that the output is generally intangible and perishable. Because of this, it can be extremely difficult for service providers to accurately estimate the demand in order to match the right supply of a service. If this event arena overestimates demand, it will still have to hold the event even with empty seats. The event costs the same regardless of how many people attend, but having less attendees will result in much higher costs per attendee. If the event arena underestimates demand, the result can be long lines of annoyed customers.

Question 17

What is a defining characteristic of a service?
A) The outcome of a service is tangible.
B) The delivery of a service requires little customer contact.
C) The performance of a service occurs at the point of consumption.
D) Demand for a service is easy to calculate.
E) Services do not undergo a transformation process.

Accepted Answer

The actual performance of a service typically occurs at the point of consumption. Because of their need for customer contact, service providers are more limited than manufacturers in selecting work methods, assigning jobs, scheduling work, and exercising control over operations.

Question 18

A local hospital studies the manufacturing processes and quality control mechanisms applied in the automotive industry in an effort to improve its own service quality. By analyzing work processes to find unnecessary steps to eliminate and using teams to identify and address problems as soon as they occur, this hospital could do all of the following EXCEPT
A) increase inventories of wheelchairs.
B) slash patient waiting times.
C) ready operating rooms sooner.
D) move patients through their hospital visit more quickly.
E) move patients through their hospital visit with fewer errors.

Accepted Answer

Some hospitals, such as this one, are studying the manufacturing processes and quality control mechanisms applied in the automotive industry in an effort to improve their service quality. By analyzing work processes to find unnecessary steps to eliminate and using teams to identify and address problems as soon as they occur, these hospitals are slashing patient waiting times, decreasing inventories of wheelchairs, readying operating rooms sooner, and generally moving patients through their hospital visit more quickly, with fewer errors, and at a lower cost.

Question 19

When customers go to Cut and Go Salon, they must rely on the different talents of the stylists to achieve the cut they desire. In comparison, the manufacturer that produces Vibrancy Shampoo has more control over the amount of variability of the resources it uses to create its shampoos. Which difference between manufacturers and service providers does this scenario relate to?
A) consumption of output
B) labor required
C) measurement of productivity
D) uniformity of output
E) uniformity of inputs

Accepted Answer

This scenario relates to uniformity of inputs. Manufacturers typically have more control over the amount of variability of the resources they use than do service providers. The products of service organizations tend to be more "customized"
than those of their manufacturing counterparts. For example, a haircut is much more likely to incorporate your specific desires than is a bottle of shampoo.

Question 20

Star Treatment has a chain of luxury hotels and resorts across the globe. Life Vision is a pharmaceutical company known for its breakthrough life-saving drugs. How do the two businesses differ from each other?
A) Star Treatment is more capable of customizing its products when compared to Life Vision.
B) Star Treatment is able to keep its output standardized, whereas Life Vision cannot.
C) Star Treatment has less contact with its customers when compared to Life Vision.
D) Star Treatment is able to incorporate quality standards, whereas Life Vision cannot.
E) Star Treatment, unlike Life Vision, does not produce its output at the point of consumption.

Accepted Answer

Star Treatment is more capable of customizing its products when compared to Life Vision. The products of service organizations tend to be more "customized"
than those of their manufacturing counterparts.

Quiz 8: Managing Operations and Supply Chains

Service providers are generally more capital-intensive than manufacturers because of the high level of customization.

Modular design, an operations process for manufacturing products, allows products to be repaired quickly, thus reducing the cost of labor.

Lora is a manager at a large car dealership and service shop. She oversees the transformation process and manages the logistics, quality, and productivity of the service department. Lora is a(n)

Gray is a carpenter who performs home repairs and improvements for his customers. From the perspective of operations, the money he uses to purchase his tools and the electricity he uses to run his power saw are

Ophelia and her father have been building rustic furniture for family and friends since she was little. As an adult, Ophelia decides to start her own furniture company. From the perspective of operations, the beds, tables, chairs, and dressers she builds are

Mario is the head chef at an Italian restaurant. He imports many of his ingredients from Italy and prepares them using family recipes that have been passed down for generations. From the perspective of operations, the food he sells to customers and the authentic Italian atmosphere he provides are

Terrence works for a business that manufactures industrial metal clocks. All of the following are processes the clock maker must pass the inputs through before they are turned into the final outputs-clocks for his customers-EXCEPT

All of the following are processes through which an airline transforms inputs such as employees, time, money, and equipment EXCEPT

Helping Hands, a nonprofit organization, uses money, groceries, and volunteer time and labor to transform food into hot prepared meals for needy families. In this setting, which is a transformation process?

Health care, real estate, and tax preparation are all examples of ________ services.

Service organizations must build their operations around good execution, which comes from all of the following EXCEPT

Amir runs an arena that hosts sporting and music events. When booking these events, he must consider how many people would be interested in buying tickets. Based on the demand, he must set his ticket prices at the appropriate level. Which challenge is associated with providing this type of service?

What is a defining characteristic of a service?

Star Treatment has a chain of luxury hotels and resorts across the globe. Life Vision is a pharmaceutical company known for its breakthrough life-saving drugs. How do the two businesses differ from each other?