Question 1

As businesses strive for market expansion,companies add to their sales force,but opt to eliminate sales offices across the nation and internationally.How are these firms able to remotely operate a sales force that contributes toward increasing the bottom line?
A)A sensible strategy is to transport sales professionals to the world headquarters on a bi-weekly basis
B)The business strategically moves manufacturing facilities to low cost areas and allocates more funds toward the sales professionals to meet face to face with management
C)The operation is maintained with an advanced MRP system
D)The operation is managed with teleconferencing information technology,and telecommuting

Accepted Answer

With the advancements in teleconferencing and information technology, companies are able to manage their remote sales force through virtual meetings, telecommuting, and other tools, reducing the need for physical sales offices. In addition, an advanced MRP system can also help in managing the supply chain and production processes efficiently. However, options A and B are not as efficient and cost-effective as option D.

Question 2

Which of the following statements about facility location is most accurate?
A)Very few firms are still influenced by labor costs when making decisions about where to locate
B)Recent changes in information technology have led firms to favor locations near major urban areas
C)Manufacturers often seek to reduce time-to-market by locating facilities in areas with access to key modes of transportation
D)No matter how large they become,most companies ultimately choose to locate major facilities within a few miles of the area in which they started business

Accepted Answer

Manufacturers often seek to reduce time-to-market by locating facilities in areas with access to key modes of transportation. This allows for faster delivery of goods and raw materials, reducing lead times and overall costs. Labor costs may also be a consideration, but transportation access is often a more important factor for manufacturers. Information technology has made it easier for firms to work remotely, but physical proximity to major urban areas remains a valuable advantage for some businesses. While some companies may choose to expand their operations beyond their original location, many still choose to keep major facilities close to where they started to maintain existing relationships and networks.

Question 3

Enterprise resource planning ERP)goes beyond the capabilities of MRP because it:
A)gives much more precise cost estimates.
B)finds the critical path and computes its length.
C)monitors the computerized functions of all the divisions and subsidiaries of the firm in a single software program.
D)handles research data about more than one product at the same time.

Accepted Answer

ERP monitors the computerized functions of all the divisions and subsidiaries of the firm in a single software program, providing a comprehensive view of the organization's operations. MRP, on the other hand, is a computer-based system that aids in the management of inventory and production schedules. Therefore, option C is the most appropriate answer. The other choices are not directly related to the capabilities of ERP.

Question 4

Millennium,Inc,a leading producer of environmentally friendly cleaning agents is looking for a site for a new production facility.The company is mainly focusing on sites that are close to major highways and rail hubs and are not too far from some major population centers.This suggests that an important location consideration for Millennium is:
A)quality of life.
B)access to cheap land.
C)reducing time to market.
D)access to low cost labor.

Accepted Answer

Millennium's focus on proximity to highways and rail hubs, as well as major population centers, indicates that reducing the time to market is an important location consideration for the company. This would allow for faster and more efficient transportation of their products to market, which can ultimately lead to increased profits. The other options, such as access to cheap land, low cost labor, or quality of life, do not seem to be as relevant to Millennium's specific needs in choosing a production facility location.

Question 5

Which of the following statements best reflects the approach state and local governments take to influence the location decisions of businesses? State and local governments:
A)often engage in fierce competition to attract businesses,including the offer of tax breaks,zoning changes,and financial aid
B)try to avoid competition with other areas,because such competition usually backfires and creates ill-will
C)no longer pursue new businesses,because they have found that attempts to attract businesses are usually too expensive to justify the results
D)work primarily through the federal government and the Small Business Administration to obtain financial assistance for firms seeking to locate in their area

Accepted Answer

State and local governments often engage in fierce competition to attract businesses, including the offer of tax breaks, zoning changes, and financial aid. This is done to create jobs and increase economic development in their areas.

Question 6

Which of the following is an important part of operations management?
A)Determining the best means of financing the firm's operations
B)Developing the best advertising strategy to promote a firm's products
C)Deciding whether to pay a dividend to the firm's stockholders
D)Choosing the best location for a firm's facilities

Accepted Answer

Choosing the best location for a firm's facilities is an important part of operations management as it can impact the efficiency of production, transportation costs, and availability of resources. Option A, B and C are related to finance and marketing management respectively, which are not directly related to operations management.

Question 7

Production manager Marvin McNealy wants to link all the divisions and subsidiaries of his firm's computerized functions into a single,integrated software program that uses a single database.In order to achieve this goal,Marvin could make use of:
A)enterprise resource planning.
B)manufacturing resource planning.
C)program evaluation and review techniques.
D)Gantt Charts.

Accepted Answer

Enterprise resource planning (ERP) is a software solution that centralizes and integrates an organization's core business processes, such as accounting, procurement, human resources, and customer relationship management, into a single database. This would allow Marvin to link all the divisions and subsidiaries of his firm's computerized functions into a single, integrated software program that uses a single database as he desires. Manufacturing resource planning (MRP) is a system focused on production planning and inventory control, while program evaluation and review techniques (PERT) and Gantt charts are project management tools that help in planning and scheduling individual projects.

Question 8

Which of the following statements is most accurate?
A)Most manufacturing firms are turning to an assembly line layout to produce output as efficiently as possible
B)For service firms,the main objective in facility layout usually is to centralize the control of operations
C)Facility layout is important for manufacturing plants because facilities layout decisions can have a huge impact on the firm's costs
D)In a modular layout,workers are assigned a specific station along an assembly line and specialize in performing a specific task

Accepted Answer

Facility layout decisions can have a significant impact on manufacturing plants' costs, particularly in terms of materials handling, inventory levels, and transportation costs. The layout affects the flow of people, materials, and information throughout the facility, making it essential to design an efficient layout that minimizes waste and maximizes productivity. A and D are both incorrect since they focus on manufacturing firms only and ignore service firms. B is incorrect because it assumes that centralizing operations' control is the main goal for service firms, which is not always the case.

Question 9

A firm that is certified as meeting both ISO 9000 and ISO 14000 standards has demonstrated:
A)world-class management of both quality and environmental standards.
B)sound financial and marketing practices.
C)ethical treatment of both customers and employees.
D)that its recruitment and training programs for employees protect and promote basic human rights.

Accepted Answer

Certification of meeting both ISO 9000 and ISO 14000 standards indicates that the firm has implemented world-class management systems for quality and environmental standards, respectively. It does not necessarily imply sound financial and marketing practices, ethical treatment of customers and employees, or protection and promotion of basic human rights in employee recruitment and training programs.

Question 10

A small hospital in a suburb of a large metropolitan area wants to further develop its operations and services in order to compete with other hospitals in the region.In analyzing the criteria for making this happen,location is a primary concern.If it constructs additional floors,it could increase the quality of a few services in its present location,but city regulations would require more parking.As it looks for new property,which of the following criteria would not be an important consideration for this facility?
A)Access to good roads and interstate system
B)Tax benefits
C)Skilled labor
D)Time to market

Accepted Answer

"Time to market" is not a crucial criterion for selecting a new property for the hospital. It refers to the amount of time it takes a company to develop and introduce a new product or service to the market, which is not relevant in this context. The other criteria, such as access to good roads and interstate systems, tax benefits, and availability of skilled labor, are significant factors to consider when selecting a new location for the hospital.

Question 11

X-Sport Industries is a U.S.-based manufacturer of sporting goods.Recently,it has decided to make a major push to sell its products in the European Union.In order to succeed in this new market X-Sport will need to:
A)become certified in ISO 9000 standards.
B)convert its financial assets into Euros.
C)avoid reliance on the Deming cycle.
D)reduce the wages of its production workers.

Accepted Answer

Becoming certified in ISO 9000 standards will help X-Sport Industries ensure consistency in their products and processes, which is important for success in any market. It will also demonstrate to EU customers that the company is committed to quality, which can make it more attractive to do business with.

B, C, and D are not relevant or necessary for success in the EU market. Converting financial assets into Euros may be helpful, but it is not critical. Avoiding reliance on the Deming cycle (a quality management framework) is not necessary or helpful. Reducing the wages of production workers could have negative consequences on quality and employee morale.

Question 12

For the past two years,Mountain High Bike Company used suppliers from India,Japan,and Malaysia to provide them with precision parts for its custom bikes.There was only one problem: The quality of the parts from all locations lacked precision and consistency.Skilled technicians complained that as many as three out of five parts had to be discarded due to imperfections.The quality control manager convinced the owners to partner with a slightly higher priced company in Omaha,Nebraska,who utilized _________________ to test samples of product components for deviations in quality and precision,prior to sending them to Mountain High Bike Company.The bike company realized savings in both time and money.
A)statistical process control
B)just-in-time inventory control
C)lean manufacturing
D)flexible manufacturing

Accepted Answer

The use of statistical process control involves testing samples of product components to ensure that they meet strict quality standards before being sent to the manufacturer. This approach helps to identify and address deviations in quality and precision, which can lead to significant savings in both time and money by reducing the number of parts that need to be scrapped or repaired. Just-in-time inventory control, lean manufacturing, and flexible manufacturing are all important concepts in manufacturing, but they are not directly related to the issue at hand, which is how to improve the quality of the supplier's products.

Question 13

A just-in-time inventory system usually reduces costs for:
A)both the producer and its suppliers.
B)suppliers,but not the producer.
C)the producer,but not its suppliers.
D)neither the supplier nor the producer,though it does lead to more flexibility for both.

Accepted Answer

A just-in-time inventory system allows the producer to reduce holding costs and waste by only ordering the necessary raw materials or components right before they are needed in the production process. This can lead to cost savings for the producer. However, it may not necessarily lead to cost savings for suppliers who may have to adjust their production schedules to meet the producer's just-in-time ordering system. Therefore, option C is the best choice.

Question 14

A firm would be most likely to employ statistical process control SPC)if it wanted to:
A)simplify the quality control process by taking samples at the end of the production process rather than examining every unit of output produced.
B)eliminate the expenses incurred by the Deming Cycle.
C)redefine quality control on the basis of customer needs.
D)make sure products meet quality standards all along the production process.

Accepted Answer

Statistical process control (SPC) is used to monitor and control a process to ensure that it operates at its full potential to produce conforming product. SPC provides ongoing assurance that processes are stable and in control, and it helps to identify special causes of variation. SPC is used to make sure products meet quality standards all along the production process, making choice D the best option.

Question 15

New developments in information technology have:
A)had little effect on business location decisions.
B)given firms even greater flexibility in their location decisions.
C)caused a movement of firms back to urban areas where access to this technology is greatest.
D)reduced the impact government policies have on location decisions.

Accepted Answer

New developments in information technology have enabled firms to have greater flexibility in their location decisions. With the ability to connect and communicate virtually, some firms may choose to locate in areas with lower costs of living or more favorable business climates, regardless of distance from major urban areas.

Question 16

Which of the following statements best describes the impact of recent advances in information technology on business location decisions?
A)Advances in information technology give firms a greater incentive to locate near big cities,because that is where they can take full advantage of these advances
B)Western states tend to benefit the most from improvements in information technology,because most states in this region have invested heavily in Internet technology
C)Advances in information technology will have no real effect on location decisions
D)Advances in information technology will give firms more flexibility in their location decisions by reducing the need to locate close to sources of labor

Accepted Answer

With advancements in technology, companies are now able to operate in a more efficient and virtual environment, reducing the need for proximity to sources of labor. This provides companies with more flexibility in their location decisions, as they are not restricted to specific geographical areas and can access a wider range of talent virtually.

Question 17

The main idea in the Making Ethical Decisions box,"Stay or Leave?" indicates:
A)a need for firms to place a higher level of importance on time to market when choosing facilities locations.
B)that the goal of finding the lowest cost location should never be overshadowed by other concerns if the firm is to remain loyal to its stockholders.
C)that many locations do not meet ISO 14000 standards.
D)a need for firms to consider the economic impact of its existence and/or departure from a particular location.

Accepted Answer

The main idea suggests that it is important for firms to consider the economic impact of their existence and/or departure from a particular location, indicating the need to make ethical decisions in regards to location choices. Option A is incorrect as it focuses solely on time to market, ignoring other important factors. Option B is incorrect as it suggests that finding the lowest cost location should take priority over other concerns, which is not ethical. Option C is not mentioned in the text and therefore can be eliminated.

Question 18

In a just-in-time inventory system,suppliers:
A)deliver materials and parts in large quantities only a few times a year.
B)enjoy much lower delivery costs.
C)have a great deal of flexibility in determining when to make deliveries.
D)become more like a department in the producing firm rather than a separate business.

Accepted Answer

In a just-in-time inventory system, suppliers must become more like a department in the producing firm rather than a separate business. This is because they are required to deliver materials and parts in small quantities frequently, and often on short notice to keep up with the production needs of the company. This requires a high degree of coordination and communication between the supplier and the producing firm, often leading to a closer relationship between the two.

Question 19

At Stevens Manufacturing workers are organized in teams that combine their efforts to produce complex units of a final product.Stevens is using a facility layout known as an):
A)consolidated process layout.
B)continuous flow layout.
C)modular layout.
D)assembly team layout.

Accepted Answer

The answer of At Stevens Manufacturing workers are organized in...

Question 20

Contemporary operations management planning is an interfirm process.This means:
A)the process must integrate all of the functional units of a firm's operation,including production,marketing,finance,and logistics.
B)the process is a confidential plan that is not shared with suppliers or customers.It stays within the firm.
C)it is a process where several firms work closely together to produce goods and services,and anticipate a changing environment.
D)it is a process that seeks stability by adhering to top down management.

Accepted Answer

Contemporary operations management planning is about collaboration and cooperation between firms in order to produce goods and services which best meet customers' needs. This means that contemporary operations management planning is not only about integrating all the functional units of a single firm's operation, but also about working closely with suppliers and customers. This inter-firm process allows firms to pool resources and expertise, and work towards common goals, in order to be more effective in responding to a changing environment. Therefore, option C is the best answer. Option A is not fully correct as it only describes the internal workings of a firm, while contemporary operations management planning goes beyond the boundaries of a single firm. Option B is incorrect as contemporary operations management planning requires open communication and collaboration with suppliers and customers. Option D is incorrect as contemporary operations management planning seeks flexibility and adaptability rather than stability.

Quiz 9: Production and Operations Management

As businesses strive for market expansion,companies add to their sales force,but opt to eliminate sales offices across the nation and internationally.How are these firms able to remotely operate a sales force that contributes toward increasing the bottom line?

Which of the following statements about facility location is most accurate?

Enterprise resource planning ERP) goes beyond the capabilities of MRP because it:

Which of the following statements best reflects the approach state and local governments take to influence the location decisions of businesses? State and local governments:

Which of the following is an important part of operations management?

Production manager Marvin McNealy wants to link all the divisions and subsidiaries of his firm's computerized functions into a single,integrated software program that uses a single database.In order to achieve this goal,Marvin could make use of:

Which of the following statements is most accurate?

A firm that is certified as meeting both ISO 9000 and ISO 14000 standards has demonstrated:

X-Sport Industries is a U.S.-based manufacturer of sporting goods.Recently,it has decided to make a major push to sell its products in the European Union.In order to succeed in this new market X-Sport will need to:

A just-in-time inventory system usually reduces costs for:

A firm would be most likely to employ statistical process control SPC) if it wanted to:

New developments in information technology have:

Which of the following statements best describes the impact of recent advances in information technology on business location decisions?

The main idea in the Making Ethical Decisions box,"Stay or Leave?" indicates:

In a just-in-time inventory system,suppliers:

At Stevens Manufacturing workers are organized in teams that combine their efforts to produce complex units of a final product.Stevens is using a facility layout known as an) :

Contemporary operations management planning is an interfirm process.This means: