Question 1

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 integrates all the functions and processes of a business into a single software program, including divisions and subsidiaries, making it more comprehensive compared to MRP which is mostly concerned with production planning and scheduling. ERP also allows for real-time monitoring of the overall performance of a firm, making it an effective tool for decision making. The other options are not true of ERP.

Question 2

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 become more like a department in the producing firm rather than a separate business. This is because they must work closely with the manufacturer to coordinate small and frequent deliveries of materials and parts. This close partnership allows for better communication and more efficient production processes.

Question 3

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 the costs of manufacturing firms. The layout can affect the flow of materials, the use of space, the efficiency of operations, and the safety of workers. Therefore, it is essential for manufacturing firms to consider and optimize their facility layout to reduce costs and increase efficiency. Options A, B, and D either provide only partial information or are not accurate statements.

Question 4

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 by offering incentives such as tax breaks, zoning changes, and financial aid. This approach is known as economic development, and it aims to stimulate job growth and increase tax revenue. While competition can sometimes create tensions, it is a common strategy for state and local governments to influence the location decisions of businesses.

Question 5

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 a quality control method that involves monitoring and controlling a process by using statistical techniques to detect and prevent defects. SPC aims to make sure that products meet quality standards all along the production process, rather than just examining samples of output at the end of the process. Therefore, D is the best choice as it aligns with the primary purpose of SPC.

Question 6

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

Interfirm process means that multiple firms are working together to produce goods and services. This applies to contemporary operations management planning where firms collaborate closely with suppliers, customers, and other partners to anticipate and adapt to a changing business environment. Options A and D may apply to within-firm processes, but they do not capture the interdependent relationships that contemporary operations management planning relies on. Option B is not accurate, as interfirm processes are typically shared among partners to ensure alignment and coordination.

Question 7

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

ISO 9000 and ISO 14000 are both standards related to quality management and environmental management, respectively. A firm that is certified as meeting both standards has demonstrated world-class management in both quality and environmental standards.

Question 8

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 major highways and rail hubs and major population centers suggest that reducing time to market is an important consideration for their location choice. This would allow for faster and more efficient transportation of their products to customers. Quality of life, access to cheap land, and access to low cost labor may also be important factors, but they are not explicitly mentioned in the scenario as key considerations for Millennium's location choice.

Question 9

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 usually reduces costs for the producer, but not its suppliers, as it requires the producer to receive supplies from its suppliers only when they are needed for production. This reduces inventory costs for the producer, but the suppliers may have to incur additional costs to ensure timely delivery of supplies.

Question 10

Superior Supplies' largest customer recently implemented a just-in-time inventory system.As a supplier of materials to this customer,Superior Supplies' will:
A) realize significant freedom in scheduling deliveries.
B) likely increase its effort and likely experience higher transportation costs.
C) place less emphasis on quality and greater emphasis on quantity.
D) need to deliver large quantities at regularly scheduled intervals.

Accepted Answer

With the implementation of a just-in-time inventory system, the customer will only order materials when they are needed, meaning Superior Supplies will need to be more attentive and likely increase their efforts to ensure they can deliver quickly. This may result in higher transportation costs as they will need to transport materials more frequently.

Question 11

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 system that integrates all aspects of a business, including production, finance, procurement, human resources, and customer service into a single, unified database. This would be the best choice for Marvin McNealy's goal of linking all divisions and subsidiaries into a single software program using a single, integrated database.

Question 12

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 in the Making Ethical Decisions box titled "Stay or Leave?" is the need for firms to consider the economic impact of its existence and/or departure from a particular location. This means that firms should not only prioritize finding the lowest cost location, but also the implications of their presence or absence in that location. Therefore, option D is the best choice as it captures the central message of the box.

Question 13

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

With the ability to work remotely and communicate easily through digital means, firms have more flexibility in choosing their location. They are no longer restricted to areas with the best access to technology, as they can bring the technology with them.

Question 14

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

Managing a remote sales force is possible through the use of technology such as teleconferencing and telecommuting. This allows for regular communication and collaboration between the sales force and management, without the need for physical offices across the nation and internationally. An advanced MRP system may also be used, but it alone may not be enough to manage a remote sales force. Option A and B are not feasible or sustainable solutions for managing a remote sales force.

Question 15

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 is a quality management system that is recognized and respected in the European Union. This will give X-Sport Industries an advantage in the market as it demonstrates its commitment to producing high-quality products. Converting financial assets into Euros and reducing wages of production workers would not necessarily lead to success in the European Union market. Avoiding reliance on the Deming cycle is not relevant to this situation as it is a quality management approach used in manufacturing processes.

Question 16

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 allows for testing samples of product components to identify deviations in quality and precision, which is exactly what the new supplier in Omaha was able to do. Just-in-time inventory control, lean manufacturing, and flexible manufacturing do not directly address the issue of quality control for product components.

Question 17

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

Recent advances in information technology have made it easier for firms to locate in areas that were previously deemed unsuitable due to lack of skilled labor or infrastructure. For example, companies that can rely on remote work or telecommuting can now locate in areas where the cost of living is lower, or where housing is more affordable. Similarly, businesses that depend on e-commerce or digital marketing can operate from almost anywhere, regardless of its proximity to major cities. This greater flexibility in location decisions is one of the most significant impacts of information technology on business.

Question 18

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

This statement is the most accurate because manufacturers often seek to reduce time-to-market by locating their facilities in areas with access to key modes of transportation. This allows them to move their products quickly and efficiently to reach their customers faster. While labor costs and proximity to major urban areas can also be factors in facility location decisions, they are not as universally applicable as the need for efficient transportation options. The statement in option D is not accurate as many companies expand beyond their initial location and may choose to locate major facilities in different regions or even different countries.

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 a(n):
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

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 an important consideration for this facility because it is not looking to introduce a new product or service to the market, but rather expand its existing operations and services. Access to good roads and interstate systems, tax benefits, and skilled labor are all important factors to consider when selecting a new property location.

Quiz 9: Production and Operations Management

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

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

Which of the following statements is most accurate?

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

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

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

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

Superior Supplies' largest customer recently implemented a just-in-time inventory system.As a supplier of materials to this customer,Superior Supplies' will:

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:

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

New developments in information technology have:

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?

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:

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

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

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 a(n) :