Deck 18: Managing Service and Manufacturing Operations

Question 1

Since the Baldrige Award is directly based on ISO 9000 standards, it is essentially a U.S. version of recognition for excellence in meeting the ISO 9000 standards.

Answer 1

False
The Baldrige Award is not directly based on ISO 9000 standards. ISO 9000 certification covers less than 10 percent of the requirements for the Baldrige Award. An emphasis on demonstrated results in achieving world-class quality is what differentiates the Baldrige Award from the ISO 9000 standards, which simply indicate that a company is following its own internal quality management system.

Question 2

Durability is a quality characteristic that applies to products that are can't be repaired, only replaced.

Answer 2

True

Question 3

Generally speaking, it costs ten times as much to find a new customer as it does to keep an existing customer.

Answer 3

True

Question 4

The first step in the service-profit chain is external service quality or the quality of treatment that employees receive from a company's internal service providers.

Question 5

The purpose of the Baldrige National Quality Award is to recognize U.S. companies for their achievements in quality and business performance and to raise awareness about the importance of quality and performance excellence as a competitive edge.

Question 6

The five characteristics that typically distinguish a quality service are reliability, tangibles, responsiveness, assurance, and empathy.

Question 7

At their core, companies are production systems that combine inputs such as labor, raw materials, capital, and knowledge to produce outputs such as finished goods or services.

Question 8

Labor productivity is a frequently used example of extrinsic productivity.

Question 9

Make-to-stock operations are highly dependent on the accuracy of sales forecasts.

Question 10

Manufacturing operations are classified according to the depth of their inventory stock.

Question 11

All manufacturing operations produce physical goods.

Question 12

Total quality management (TQM) is an integrated organization-wide strategy for improving product and service quality.

Question 13

The easier it is to maintain a working product or fix a broken product, the more reliable that product is.

Question 14

Extrinsic productivity indicates how much labor, capital, materials, and energy it takes to produce an output.

Question 15

The companies that have won the Baldrige Award have achieved superior financial returns.

Question 16

ISO 9000 is a series of five international standards for achieving consistency in quality management and quality assurance because they ensure that companies carefully document the steps they take to create and improve product quality.

Question 17

Higher productivity is good not only for individual companies that achieve it but also for the countries in which they do business.

Question 18

The purpose of service recovery is to restore customer satisfaction to strongly dissatisfied customers

Question 19

In TQM, customer focus and satisfaction, continuous improvement, and teamwork mutually reinforce each other to improve quality throughout a company.

Question 20

Two common measures of productivity are extrinsic productivity and intrinsic productivity.

Question 21

Why is productivity important to countries?

A) Productivity matters because it produces a higher standard of living.
B) Greater productivity results in lower wages.
C) Productivity increases supply and reduces demand for products.
D) Productivity reduces taxation.
E) None of these statements explains why productivity is important to countries.

Question 22

If the manager of a company that manufactures signs was interested in how much glass tubing was needed to produce a Las Vegas casino neon sign, the manager would be interested in ____ productivity.

A) composite
B) multifactor
C) partial
D) breakdown
E) fractional

Question 23

To effectively manage inventory, a manager should use EOQ formulas when inventory levels are independent, and JIT and MRP when inventory levels are dependent on the number of products to be produced.

Question 24

Which of the following is an important characteristic of a quality product?

A) reliability
B) validity
C) responsiveness
D) homogeneity
E) tangibility

Question 25

In general, the lower the number of inventory turns, the more efficiently the marketing department is operating.

Question 26

Stockout costs are incurred when a company runs out of finished products.

Question 27

The product quality characteristic of ____ is defined as the mean time before product failure.

A) reliability
B) assurance
C) durability
D) responsiveness
E) effectiveness

Question 28

____ is a measure of performance that indicates how many inputs it takes to produce or create an output.

A) Reliability
B) Performance accountability
C) Productivity
D) TQM
E) Effectiveness

Question 29

The CEO of a company that manufactures maple wooden cutting boards has determined that it takes wood, labor, and electricity to make one maple cutting board. The CEO has determined the ____ productivity of his company so he can compare its operation with that of its competition.

A) integrated
B) multifactor
C) segregated
D) functional
E) breakdown

Question 30

Which of the following statements about productivity is true?

A) Productivity is a ratio of benefits to costs (i.e., benefits divided by costs).
B) For companies, higher productivity can lead to lower costs.
C) For countries, higher productivity produces a lower standard of living.
D) Productivity decreases make products more affordable.
E) All of the statements about productivity are true.

Question 31

The American Society for Quality defines quality as ____.

A) a product free of deficiencies, or the characteristics of a product or service that satisfy customers' needs
B) a product that customers perceive as free of deficiencies
C) any product made from error-free components
D) a product produced according to a sacrificing design plan
E) none of these

Question 32

The four kinds of costs incurred with inventory maintenance are ordering costs, setup costs, transaction costs, and stockout costs.

Question 33

Inventory is defined as the number of finished products that a company has in its possession either in the factory, in warehouses, or on delivery vehicles.

Question 34

Which of the following shows the correct relationship for productivity, outputs, and inputs?

A) productivity = (inputs/outputs)
B) productivity = [(inputs ´ outputs)/100]
C) outputs = (productivity/inputs)
D) productivity = (outputs/inputs)
E) inputs = (productivity/outputs)

Question 35

At their core, companies are ____ systems that combine inputs such as labor, raw materials, capital, and knowledge to produce finished products and other types of output.

A) organizational
B) production
C) social
D) predictable
E) socio-cultural

Question 36

In general, managers should use ____ to directly compare their overall level of productivity to that of their competitors, and ____ to analyze the contributions of individual components to that overall productivity.

A) efficiency measures; a productivity analysis
B) partial productivity; multifactor productivity
C) integrated productivity; segregated productivity
D) fragmented productivity; complete productivity
E) multifactor productivity; partial productivity

Question 37

Economic order quantity is intended for use with independent demand systems.

Question 38

____ productivity is a measure of performance that indicates how much of a particular kind of input it takes to produce an output.

A) Breakdown
B) Segregated
C) Unifactor
D) Partial
E) Fractional

Question 39

The three basic measures of inventory are average aggregate inventory, weeks of supply, and inventory turnover.

Question 40

____ productivity shows how much labor, capital, materials, and energy it takes to create an output.

A) Temporal
B) Multifactor
C) Functional
D) Continuous
E) Quantitative

Question 41

Which of the following statements about ISO 9000 is true?

A) ISO 9000 is a single international standard for achieving consistency in quality management and quality assurance in companies throughout the world.
B) The ISO 9000 standard is applicable only to the manufacturing of goods and not to the delivery of services.
C) ISO 9000 certification may be suspended or canceled if companies fail a periodic audit following their initial certification.
D) Ninety-eight percent of companies that already have achieved ISO 9000 certification said they did so because it increases profitability.
E) Service providers can achieve ISO 14000 certification.

Question 42

A company expressing its ongoing commitment to continuous product improvement and premium quality products is committed to ____.

A) a bureaucratic structure
B) total quality management
C) winning ISO 8000 certification
D) implementing an MRP program
E) autonomous work stations

Question 43

Which of the following quality characteristics can be applied to both goods and services?

A) reliability
B) serviceability
C) durability
D) homogeneity
E) tangibility

Question 44

Which of the following statements about ISO 9000 is true?

A) ISO 9000 is a series of three standards for achieving consistency in quality management and quality assurance in U.S.-based organizations only.
B) The ISO 9000 standards are specific and require companies who seek this certification to completely reorganize.
C) To become ISO 9000 certified, companies must show that they are following their own procedures.
D) The ISO standards were created by the Industrial Service Organizations.
E) All of these statements about ISO 9000 are true.

Question 45

The purpose of ____ is to recognize U.S. companies for their achievements in quality and business performance and to raise awareness of how quality and performance excellence can be used to create a competitive edge.

A) ISO 9000 certification
B) the Baldrige Award
C) the Herzberg Award for Excellence
D) Kanban certification
E) the Gantt Award

Question 46

ISO 14000 ____.

A) provides ISO certification for service providers
B) is a series of five international standards for achieving consistency in quality management and quality assurance in companies throughout the world
C) is a series of international standards for managing, monitoring, and minimizing an organization's harmful effect on the environment
D) is the interim ISO certification that is granted in the event that ISO 9000 certification is temporarily withdrawn
E) is only given to manufacturers who have achieved the highest possible level of product quality and assurance

Question 47

Which of the following statements about total quality management (TQM) is true?

A) TQM is an integrated organization-wide strategy for improving product and service quality.
B) TQM is a specific technique used to reposition a company's product so as to justify higher prices.
C) TQM is based on four mutually reinforcing principles: customer focus, customer satisfaction, participative management, and delegation.
D) TQM was developed and is monitored by the International Organization of Standards.
E) All of these statements about TQM are true.

Question 48

The average time between breakdowns (for machinery) is referred to as ___?

A) reliability
B) serviceability
C) responsiveness
D) consistency
E) effectiveness

Question 49

Which of the following statements about the Baldrige National Quality Award is true?

A) The purpose of the Baldrige Award is to recognize all companies that operate in the business-to-business market for their achievements in quality and business performance and to raise awareness about the importance of quality and performance excellence as a competitive edge.
B) The Baldrige Award is primarily concerned with improving customer satisfaction.
C) Companies that apply for the Baldrige Award are judged on a 1,000-point scale based on three criteria: leadership, customer and market focus, and business results.
D) An emphasis on results is what differentiates the Baldrige Award from the ISO 9000 standards.
E) All of these statements about the Baldrige National Quality Award are true.

Question 50

Which of the following statements about ISO 9000 is true?

A) ISO 9000 is a series of five international standards for achieving consistency in quality management and quality assurance in companies throughout the world.
B) The ISO 9000 standards are applicable to the manufacturing of goods and to the delivery of services.
C) Studies show that customers prefer to buy from companies with ISO 9000 certification.
D) ISO 9000 certification may be suspended or canceled if companies fail an audit following their initial certification.
E) All of these statements about ISO 9000 are true.

Question 51

An article addressed to nurses who work in intensive care emphasize practices affirming the patient's intrinsic value and individual personality One method to affirm the patient's intrinsic value is to demonstrate ____.

A) empathy
B) serviceability
C) durability
D) homogeneity
E) tangibility

Question 52

The three principles that characterize TQM are continuous improvement, teamwork, and ____.

A) third party certification
B) delegation
C) participative management
D) customer focus and satisfaction
E) distinctive competence

Question 53

A product's quality is determined by its ____.

A) reliability, homogeneity, and durability
B) reliability, validity, and effectiveness
C) serviceability, tangibility, and homogeneity
D) durability, reliability, and serviceability
E) consistency, tangibility, and durability

Question 54

The three principles that characterize TQM are continuous improvement, customer focus and satisfaction, and ____.

A) teamwork
B) organizational dialogue
C) the equity theory
D) autonomy
E) competitive advantage

Question 55

The ability to consistently perform a service well is referred to as service ____.

A) reliability
B) assurance
C) responsiveness
D) tangibility
E) durability

Question 56

Which of the following is NOT a criterion on which companies are judged when applying for the Baldrige National Quality Award?

A) leadership
B) business results
C) customer and market focus
D) competitive advantage
E) process management

Question 57

In terms of the characteristics of service quality, a major newspaper is said to be ____ if it provides news of interest to its readers consistently at the same time and place daily.

A) proactive
B) responsive
C) durable
D) accessible
E) reliable

Question 58

Most companies define product ____ in terms of how easy or difficult it is to fix a product.

A) reliability
B) serviceability
C) responsiveness
D) consistency
E) effectiveness

Question 59

In TQM terms, ____ is an organizational goal to provide products or deliver services that meet or exceed customers' expectations.

A) market response
B) customer satisfaction
C) market focus
D) positive framing
E) added value

Question 60

The easier it is to maintain a working product or fix a broken product, the more ____ that product appears.

A) reliable
B) serviceable
C) durable
D) tangible
E) effective

Question 61

The term ____ refers to restoring customer satisfaction to strongly dissatisfied customers.

A) service recovery
B) service enhancement
C) customer focus
D) customer reengineering
E) relationship marketing

Question 62

A company has purchased new software which will allow its employees to extend the electronic support capabilities and parts-ordering efficiencies the company offers its customers. The company's improved ____ should lead to improved employee satisfaction.

A) service capability
B) lean manufacturing
C) service benchmarking
D) service empowerment
E) customer empathy

Question 63

One of the key assumptions in the service business is that success depends on how well employees deliver their services to customers. However, according to the service-profit chain, success depends on ____.

A) the availability of factors of production
B) autocratic management
C) a high degree of centralization
D) how well employees are treated
E) market size

Question 64

Which of the following is a specific component of internal service quality?

A) MBO
B) high value service
C) delegation
D) autonomy
E) span of management

Question 65

The lowest degree of processing occurs in ____ operations, where a company orders parts and assembles standardized products before receiving customer orders.

A) assemble-to-stock
B) buy-to-sell
C) make-to-order
D) make-to-stock
E) assemble-to-order

Question 66

____ refers to a manufacturing operation that divides manufacturing processes into separate parts or modules that are combined to create semi-customized products.

A) Assemble-to-stock
B) Assemble-to-order
C) Make-to-order
D) Make-to-stock
E) Batch processing

Question 67

Many organizations rely on teaming as a key to their productivity and credit their use of teams with performance improvements in such areas as efficiency and quality. This statement is another way to illustrate ____.

A) the importance of benchmarking
B) the prevalence of ISO certification
C) how restructuring leads to stakeholder satisfaction
D) the importance of morale in the creation of a positive bureaucracy
E) how teamwork can result in total quality management

Question 68

Which of the following types of operations are most dependent on the accuracy of sales forecasts?

A) project manufacturing
B) assemble-to-order operations
C) make-to-order operations
D) buy-to-sell operations
E) make-to-stock operations

Question 69

The first step in the service-profit chain is the establishment of ____.

A) employee satisfaction
B) service capability
C) internal service quality
D) high value service
E) nonmonetary rewards

Question 70

Classifying manufacturing operations in terms of the amount of assembly that occurs after an order is received from customers is the same as classifying those operations in terms of ____.

A) processing
B) flexibility
C) production
D) operations
E) technical skills

Question 71

This is a description of what happened to a patron at Royal Mail (the United Kingdom's equivalent of the USPS). "In the 15 minutes I waited in line, during which I shuffled forward one yard and two places, I had ample opportunity to watch what the other three staff were doing. They were busy all right, but the main task was counting each stamp in their folders. In this vital work, two of the three were overseen by another member of staff. There was no eye contact with the waiting customers." Assuming this experience is typical, the Royal Mail needs to engage in ____.

A) service recovery
B) process integration
C) manufacturing flexibility
D) just-in-time manufacturing
E) process changeover

Question 72

____ is a deviation in the form, condition, or appearance of a product from the quality standard for that product.

A) Performance breakdown
B) Quality underperformance
C) Aberration
D) Divergence
E) Variation

Question 73

Which of the following statements about service recovery is true?

A) Service recovery refers to restoring customer satisfaction to strongly dissatisfied customers.
B) Service recovery sometimes requires not only that mistakes be fixed but also that heroic service be performed that far surpasses the expectations dissatisfied customers have regarding fair treatment.
C) The purpose of empowering service employees is zero customer defections.
D) Service recovery increases the cost of selecting and hiring service workers who are capable of solving problems and dealing with irate customers.
E) All of these statements about service recovery are true.

Question 74

Pamela Katian makes cloth dolls, which she sells to friends and relatives. Her total inventory includes over 200 yards of fabric, 100 yards of ribbon, a box of 500 eyes, stuffing, 20 dolls in various stages of completion, and 15 completed dolls. How many items are in Katian's work-in-process inventory?

A) 100
B) 200
C) 15
D) 20
E) cannot tell from information given

Question 75

The highest degree of processing occurs in ____ operations.

A) assemble-to-order
B) make-to-order
C) make-to-stock
D) batch
E) real-time

Question 76

When a CEO of a company says that TQM 's payoff comes when everyone shares solutions with others, the CEO is promoting which characteristic of TQM?

A) continuous improvement
B) variation elimination
C) teamwork
D) market focus
E) a customer orientation

Question 77

According to the TQM strategy, what should be a company's primary goal?

A) customer focus and satisfaction
B) continuous improvement
C) teamwork
D) participative management
E) reciprocity

Question 78

Continuous improvement is typically associated with ____.

A) low morale and reduced customer satisfaction
B) a reduction in variation and higher customer satisfaction
C) batch processing and a broad chain of command
D) a flat organizational structure and a broad chain of command
E) higher customer satisfaction and a narrower chain of command

Question 79

The ____ of a maker of cloth dolls would include over 200 yards of fabric, 100 yards of ribbon, a box of 500 wiggle eyes, stuffing, 20 dolls in various stages of completion, and 15 completed dolls.

A) raw materials
B) component materials
C) finished products
D) inventory
E) SKUs

Question 80

____ inventories include the basic inputs in a manufacturing process.

A) Finished goods
B) Work-in-process
C) Component parts
D) Raw materials
E) Recyclable