Question 1

​A large drilling machine is being built to dig a tunnel under a river. The drilling machine will be very big and is unlikely to be used after this project. It is being built close to the project site on the river bank. Which of the following ways of organizing a process should be used to produce the drilling machine?

Accepted Answer

The best choice for producing the large drilling machine is a fixed position layout since it is being built close to the project site on the river bank, and will not be moved until the project is completed. This layout involves bringing all the necessary resources, equipment, and personnel to the site and assembling the product in one place.

Question 2

When the vice president of operations for a popular fast food chain looks for a new franchise location, which of the following questions should he or she consider first?

Accepted Answer

The most important consideration for a new franchise location is its proximity to customers and suppliers. This ensures that the franchise will receive enough business and can operate efficiently. Local taxes and fees, healthcare facilities, and elementary schools can also be important considerations, but they are secondary to the primary concern of location.

Question 3

Which of the following statements best illustrates the changing scenario of operations management in American business over the past few decades?

Accepted Answer

There has been a significant shift away from the production of goods toward a service-based economy in American business over the past few decades. This means that operations management in American business has increasingly focused on managing and improving service delivery processes rather than optimizing manufacturing processes.

Question 4

_____ are stocks of goods or other items held by an organization.

Accepted Answer

Inventories refer to stocks of goods or other items that an organization holds. Options A, B and C do not accurately describe this concept.

Question 5

A(n) _____ is a set of related activities that transform inputs into outputs, thus adding value.

Accepted Answer

A process involves a set of related activities that transform inputs into outputs, adding value along the way. The other choices (network, layout, design) do not necessarily involve this transformation of inputs into outputs.

Question 6

_____ hold inventories of raw materials, components and parts, work in process, and finished goods.

Accepted Answer

Manufacturing firms are responsible for producing tangible goods, and therefore they must hold inventories of raw materials, components, work in process, and finished goods. Retail firms may hold inventories of finished goods, but typically do not hold inventories of raw materials or work in process. Service firms do not typically hold inventories at all, as they provide intangible services rather than tangible goods. Consulting firms also do not typically hold inventories as they provide advice and guidance rather than physical products.

Question 7

The inventory level at Middleton Enterprises currently far exceeds the level needed for normal operations. Which of the following does NOT support this situation?

Accepted Answer

If Middleton is aware that it does not have enough storage space for the inventory it ordered, it suggests that Middleton may have ordered more inventory by mistake, rather than intentionally carrying excess inventory for operational purposes. The other options suggest valid reasons why Middleton might intentionally carry excess inventory.

Question 8

The _____ is a project management tool that illustrates relationships among all activities involved in completing a project, thus enabling operations managers to identify activities that are most likely to delay the project's completion.

Accepted Answer

The critical path method is specifically designed to illustrate the relationships among all activities involved in completing a project, and to identify the activities that are most likely to delay the project's completion. The other options listed are not project management tools designed for this specific purpose.

Question 9

The decision about where to locate a business facility:

Accepted Answer

The decision about where to locate a business facility usually requires the analysis of several different factors, such as proximity to suppliers and customers, transportation infrastructure, availability of skilled labor, quality of life, legal and political factors, and costs of production. The importance of each factor varies depending on the specific industry, so it is important to consider all of them in order to make an informed decision.

Question 10

A _____ usually holds large inventories of the finished goods it sells as well as basic supplies that the business needs, but it does not hold work in process or raw materials.

Accepted Answer

A retail firm typically holds large inventories of finished goods it sells, such as clothing, electronics, and home goods. They may also have basic supplies like cash registers or packaging materials, but they do not hold work in process or raw materials since they do not manufacture their own products.

Question 11

Given the nature of their products, service firms base their facility location decisions primarily on:

Accepted Answer

Service firms rely heavily on their proximity to customers as their products are intangible and cannot be shipped or stored. Being close to customers also allows for better communication and faster response times to customer needs. Quality of life issues, availability of natural resources, and outsourcing considerations are not as important for service firms in their facility location decisions.

Question 12

In the last 50 years there have been key changes in operations management. Which of the following key changes resulted in an organizational shift from a cost perspective to a value perspective?

Accepted Answer

The shift from simple supply chains to complex value chains reflects a move from focusing solely on cost to emphasizing value creation, as organizations aim to deliver greater value to customers through more integrated and sophisticated networks.

Question 13

Large Homes Inc. is currently in the midst of a big residential construction project. The company's operations manager is looking at estimated completion dates for the various phases of construction. A major problem that he encounters is that the site excavation took three weeks longer than anticipated. The operations manager wants to make up the lost time in the other phases, but those phases are also falling behind because of the use of construction materials and methods the company has never used before. Which of the following tools might have helped the operations manager better manage the project scheduling?

Accepted Answer

The Critical Path Method (CPM) would have helped the operations manager better manage the project scheduling. CPM is a project management technique that identifies the critical path of a project, which is the longest sequence of tasks that must be completed in order to meet the project's deadline. By identifying the critical path, the operations manager could have focused on those tasks and made changes to their scheduling and resource allocation in order to keep the project on track. This would have helped compensate for the lost time during site excavation and ensure that the other phases didn't fall too far behind.

Question 14

Janice, the manager at a local toy store, has ordered in advance for a large number of skateboards before the holiday season begins. Her strategy behind this tactic is that she wants to:

Accepted Answer

By ordering in advance for a large number of skateboards, Janice hopes to reduce the chance of stock-outs and lost sales during the holiday season. This results in better customer satisfaction and higher revenue for the store. Investing in storage equipment or building more storage space may be a result of this strategy, but the primary goal is to ensure there is enough stock to meet customer demand. Creating jobs for skateboard manufacturers is not the main driver behind this decision.

Question 15

Most manufacturing firms are concerned about the availability of reliable electricity and water supplies while making location decisions. These considerations primarily deal with the:

Accepted Answer

Manufacturing firms require a dependable supply of electricity and water to operate their plants, and these utilities' availability is a critical factor in making location decisions. As a result, adequacy of utilities is the most important consideration when it comes to manufacturing firms.

Question 16

Companies that hold large amounts of inventory because they are concerned with increased paperwork and handling expenses from procuring too often are trying to:

Accepted Answer

By holding large amounts of inventory, companies are trying to reduce their ordering costs. They may believe that the paperwork and handling expenses of procuring too often outweigh the benefits of having only the necessary amount of inventory on hand. This is not necessarily directly related to protecting against stock-outs, creating smoother production schedules, or outsourcing paperwork.

Question 17

Blue Casuals Inc. is a manufacturer of denim jeans. The company has employed a strategy which allows it to produce jeans that suit the needs of specific customers. This strategy allows Blue Casuals to produce its goods and stock up its inventory within a short period at a cost almost as low as those associated with traditional production techniques. Which of the following techniques is it using?

Accepted Answer

Blue Casuals Inc. is employing the strategy of mass customization, which allows it to produce jeans according to the needs of specific customers while maintaining a low production cost and stocking up inventory quickly.

Question 18

Anne Miles owns a small business that produces gourmet candies that are popular with local households during the holiday party season­from Halloween through New Years. Although it is only mid­September, Anne's storage pantries are beginning to fill with boxes of her special candies. Given the nature of her business, the most likely explanation for Anne's large inventory of sweets is that she:

Accepted Answer

Since Anne's business specializes in holiday candies from Halloween through New Years, it is likely that the demand for the candies is seasonal. Therefore, to avoid the risk of stock-out during the peak season, Anne builds up inventory during slower periods so that she can maximize her sales during the peak season without the additional cost of increasing her production capacity.

Question 19

A vehicle wheel manufacturing company headquartered in Chicago is opening a new branch. If it decides to locate the branch overseas, _____ is most likely to be the location factor that influenced this decision.

Accepted Answer

The most likely location factor that influenced the company to open a branch overseas is the availability of low-wage labor. This is because labor costs can significantly impact the overall cost of production, and locating in a country with lower labor costs could increase the company's profitability. The other options like transportation distance, climatic conditions, and superior technology may also be important factors, but they are not as likely to be the primary factor in a decision to locate a manufacturing facility overseas.

Question 20

_____ are experienced and not consumed.

Accepted Answer

Services are experienced but not consumed in the same way as tangible goods or perishables. They are intangible and can be performed multiple times without being used up or depleted in the same way as physical products.

Quiz 17: Om: Putting It All Together Endnotes