TEST BANK for Operations Management, 14th Edition by William J. Stevenson,.pdf

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TEST BANK for Operations Management,
14th Editionby William J Stevenson
Chapters 1 - 19

TO GET ALL CHAPTERS EMAIL ME AT>>>>>
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Table of Contents
Chapter 01 Introduction to Operations Management
Chapter 02 Competitiveness, Strategy, and Productivity
Chapter 03 Forecasting
Chapter 04 Product and Service Design
Chapter 04S Reliability
Chapter 05 Strategic Capacity Planning for Products and Services Chapter
05S Decision Theory
Chapter 06 Process Selection and Facility Layout
Chapter 07 Work Design and Measurement Chapter
07S Learning Curves
Chapter 08 Location Planning and Analysis
Chapter 08S The Transportation Model
Chapter 09 Management of Quality Chapter
10 Quality Control
Chapter 10S Acceptance Sampling
Chapter 11 Aggregate Planning and Master Scheduling
Chapter 12 MRP and ERP
Chapter 13 Inventory Management Chapter
14 JIT and Lean Operations Chapter 14S
Maintenance
Chapter 15 Supply Chain Management
Chapter 16 Scheduling
Chapter 17 Project Management

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Chapter 18 Management of Waiting Lines Chapter
19 Linear Programming
Chapter 01 Introduction to Operations Management
Student:
1. Operations managers are responsible for assessing consumer wants and needs and selling and
promoting the organization's goods or services.
True False
2. Often, the collective success or failure of companies' operations functions will impact the
ability of a nation to compete with other nations.
True False
3. Companies are either producing goods or delivering services. This means that only one of the
two types of operations management strategies are used.
True False
4. Operations, marketing, and finance function independently of each other in most
organizations.
True False
5. The greater the degree of customer involvement, the more challenging the design and
management of operations.
True False

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6. Goods producing organizations are not involved in service activities.
True False
7. Service operations require additional inventory because of the unpredictability of consumer
demand.
True False
8. The value of outputs is measured by the prices customers are willing to pay for goods or
services.
True False
9. The use of models will guarantee the best possible decisions.
True False
10. People who work in the field of operations should have skills that include both knowledge
and people skills.
True False
11. Assembly lines achieved productivity but at the expense of standard of living.
True False
12. The operations manager has primary responsibility for making operations system design
decisions, such as system capacity and location of facilities.
True False
13. The word "technology" is used only to refer to "information technology".
True False

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14. ‘Value added' by definition is always a positive number since 'added' implies increases.
True False
15. Service often requires greater labor content, whereas manufacturing is more capital
intensive.
True False
16. Measurement of productivity in service is more straightforward than in manufacturing since it
is not necessary to take into account the cost of materials.
True False
17. Special-purpose technology is a common way of offering increased customization in
manufacturing or services without taking on additional labor costs.
True False
18. One concern in the design of production systems is the degree of standardization.
True False
19. Most people encounter operations only in profit-making organizations.
True False
20. Service involves a much higher degree of customer contact than manufacturing.
True False
21. A systems approach emphasizes interrelationships among subsystems, but its main theme is
that the whole is greater than the sum of its individual parts.
True False

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22. The Pareto phenomenon is one of the most important and pervasive concepts that can be
applied at all levels of management.
True False
23. Operations managers, who usually use quantitative approaches, are not really concerned with
ethical decision-making.
True False
24. The optimal solutions produced by quantitative techniques should always be evaluated in
terms of the larger framework.
True False
25. Managers should most often rely on quantitative techniques for important decisions since
quantitative approaches result in more accurate decisions.
True False
26. Many operations management decisions can be described as tradeoffs.
True False
27. A systems approach means that we concentrate on efficiency within a subsystem and thereby
assure overall efficiency.
True False
28. Prior to the Industrial Revolution, goods were produced primarily by craftsmen or their
apprentices using custom made parts.
True False
29. Elton Mayo's "Hawthorne Experiment" was the focal point of the Human Relations
Movement, which emphasized the importance of the human element in job design. True
False

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30. Among Ford's many contributions was the introduction of mass production, using the
concept of interchangeable parts and division of labor.
True False
31. Operations management and marketing are the two functional areas that exist to support
activities in other functions such as accounting, finance, IT and human resources.
True False
32. Lean production systems incorporate the advantages of both mass production and craft
production.
True False
33. As an abstraction of reality, a model is a simplified version of a real phenomenon.
True False
34. Lean production systems use a highly skilled work force and flexible equipment.
True False
35. The lean production philosophy has been slow to be adopted in service industries.
True False
36. Operations Management activities will be less important in the future because many firms are
becoming service-oriented operations rather than goods producing operations.
True False
37. A modern firm has two supply chain considerations - external links with suppliers and
customers, and an internal network of flows to and between the operations function itself.
True False

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38. Operations management involves continuous decision-making; hopefully most decisions
made will be:
A. redundant
B. minor in nature
C. informed
D. quantitative
E. none of the above
39. A 'product package' consists of:
A. the exterior wrapping
B. the shipping container
C. a combination of goods and services
D. goods if a manufacturing organization
E. customer relations if a service organization
40. Business organizations consist of three major functions which, ideally:
A. support one another
B. are mutually exclusive
C. exist independently of each other
D. function independently of each other
E. do not interface with each other
41. Which of the following is not a type of operations?
A. goods production
B. storage/transportation
C. entertainment
D. communication
E. all the above involve operations
42. Technology choices seldom affect:
A. costs.
B. productivity.
C. union activity.
D. quality.
E. flexibility.

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43. Measurements taken at various points in the transformation process for control purposes are
called:
A. plans
B. directions
C. controls
D. feedback
E. budgets
44. Budgeting, analysis of investment proposals, and provision of funds are activities associated
with the function.
A. operation
B. marketing
C. purchasing
D. finance
E. internal audit
45. Which one of the following would not generally be classified under the heading of
transformation?
A. assembling
B. teaching
C. staffing
D. farming
E. consulting
46. Manufacturing work sent to other countries is called:
A. downsized
B. outsourced
C. internationalization
D. vertical integration
E. entrepreneurial ship

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47. Product design and process selection are examples of decisions.
A. financial
B. tactical
C. system design
D. system operation
E. forecasting
48. The responsibilities of the operations manager are:
A. planning, organizing, staffing, procuring, and reviewing
B. planning, organizing, staffing, directing, and controlling
C. forecasting, designing, planning, organizing, and controlling
D. forecasting, designing, operating, procuring, and reviewing
E. designing and operating
49. Knowledge skills usually don't include:
A. process knowledge
B. accounting skills
C. communication skills
D. global knowledge
E. all of the above
50. Which of the following is not true about systems approach?
A. A systems viewpoint is almost always beneficial in decision making.
B. A systems approach emphasizes interrelationships among subsystems.
C. A systems approach concentrates on efficiency within subsystems.
D. A systems approach is essential whenever something is being redesigned or improved.
E. All of the above are true.
51. What is credited with gains in industrial productivity, increased standards of living and
affordable products?
A. personal computers
B. the internet
C. mass transportation
D. assembly lines
E. multi-level marketing

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52. Production systems with customized outputs typically have relatively:
A. high volumes of output
B. low unit costs
C. high amount of specialized equipment
D. fast work movement
E. skilled workers
53. Which is not a significant difference between manufacturing and service operations?
A. cost per unit
B. uniformity of output
C. labor content of jobs
D. customer contact
E. measurement of productivity
54. Which of the following is not a characteristic of service operations?
A. intangible output
B. high customer contact
C. high labor content
D. easy measurement of productivity
E. low uniformity of output
55. Which of the following is a recent trend in business?
A. pollution control
B. total quality management
C. supply chain management
D. competition from foreign manufacturers
E. technological change
56. Farming is an example of:
A. an obsolete activity
B. a virtual organization
C. non-manufactured goods
D. a growth industry
E. customized manufacturing

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57. Dealing with the fact that certain aspects of any management situation are more important
than others is called:
A. analysis of tradeoffs
B. sensitivity analysis
C. recognition of priorities
D. analysis of variance
E. decision table analysis
58. The fact that a few improvements in a few key areas of operations will have more impact
than many improvements in many other areas is consistent with the:
A. Irwin phenomenon
B. Pareto phenomenon
C. Stevenson phenomenon
D. Tellier phenomenon
E. Adam Smith phenomenon
59. The process of comparing outputs to previously established standards to determine if
corrective action is needed is called:
A. planning
B. directing
C. controlling
D. budgeting
E. disciplining
60. Which of the following does not relate to system design?
A. altering the system capacity
B. location of facilities
C. inventory management
D. selection and acquisition of equipment
E. physical arrangement of departments

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61. Taking a systems viewpoint with regard to operations in today's environment increasingly
leads decision-makers to consider _ in response to the .
A. flexibility; pressure to be more efficient
B. offshoring; need to promote domestic production
C. sustainability; threat of global warming
D. technology; impact of random variation
E. forecasting; stabilization of demand
62. Some companies attempt to maximize the revenue they receive from fixed operating capacity by
influencing demands through price manipulation. This is an example of
:
A. Illegal price discrimination
B. Collusion
C. Volume analysis
D. Revenue management
E. Outsourcing
63. Which of the following is not an ongoing trend in manufacturing?
A. globalization
B. quality improvement
C. flexibility and agility
D. mass production for greater economies of scale
E. technological advances
64. Which of the following is not a benefit of using models in decision making?
A. They provide a standardized format for analyzing a problem.
B. They serve as a consistent tool for evaluation.
C. They are easy to use and less expensive than dealing with the actual situation.
D. All of the above are benefits.
E. None of the above is a benefit.

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65. Modern firms increasingly rely on other firms to supply goods and services instead of doing
these tasks themselves. This increased level of is leading to increased emphasis
on management.
A. outsourcing; supply chain
B. offshoring; lean
C. downsizing; total quality
D. optimizing; inventory
E. internationalization; intercultural
66. Operations and sales are the two functions in businesses.
A. strategic
B. tactical
C. support
D. value-adding
E. line
67. Marketing depends on operations for information regarding .
A. productivity
B. lead time
C. cash flow
D. budgeting
E. corporate intelligence
68. Two widely used metrics of variation are the and the .
A. mean; standard deviation
B. productivity ratio; correlation
C. standardized mean; assignable deviation
D. randomized mean; standardized deviation
E. normal distribution; random variation
69. Which of the following statements about variation is FALSE?
A. Variation prevents a production process from being as efficient as it can be.
B. Some variation can be prevented.
C. Variation can either be assignable or random.
D. Any variation makes a production process less productive.
E. Random variation generally cannot be influenced by managers.

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70. Which of the following is essential to consider with respect to managing a process to meet
demand?
A. strategy
B. demand forecasts
C. capacity
D. random variability
E. all of the above

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ch1 Key
1. Operations managers are responsible for assessing consumer wants and needs and selling and promoting the
organization's goods or services.
FALSE
Operation managers are not responsible for promoting goods/services.
AACSB: Reflective Thinking
Blooms: Remember Difficulty:
Easy
Learning Objective: 01-04 Describe the operations function and the natureofthe operations managers job. Stevenson - Chapter 01 #1
Topic Area: The Scope of Operations Management
2. Often, the collective success or failure of companies' operations functions will impact the ability of a nation to
compete with other nations.
TRUE
A nation is often only as competitive as its companies.
Easy
Learning Objective: 01-01 Define the term operations management. Stevenson -
Chapter 01 #2
TopicArea:OperationsToday
3. Companies are either producing goods or delivering services. This means that only one of the two types of
operations management strategies are used.
FALSE
Most systems involve a blend of goods and services.
Blooms: Understand Difficulty:
Medium
Learning Objective: 01-03 Identify similarities and differences between production and service operations. Stevenson - Chapter 01 #3
Topic Area: Introduction

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4. Operations, marketing, and finance function independently of each other in most organizations.
FALSE
Operations, marketing and finance are naturally dependent upon one another.
Blooms:Remember Difficulty:
Medium
Learning Objective: 01-02 Identify the three major functional areas of organizations and describe how they interrelate. Stevenson - Chapter 01
#4
TopicArea:Introduction
5. The greater the degree of customer involvement, the more challenging the design and management of
operations.
TRUE
Greater customer involvement leads to more complexity in the design and management of operations.
Easy
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job. Stevenson - Chapter 01 #5
6. Goods producing organizations are not involved in service activities.
FALSE
Most systems involve a blend of goods and services.
Medium
Learning Objective: 01-03Identifysimilaritiesanddifferencesbetween production and serviceoperations. Stevenson - Chapter 01 #6
7. Service operations require additional inventory because of the unpredictability of consumer demand.
FALSE
Service operations cannot use inventory as a hedge against unpredictable demand.
Easy

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8. The value of outputs is measured by the prices customers are willing to pay for goods or services.
TRUE
Customers' willingness to pay for goods or services sets the value of these outputs.
Easy
9. The use of models will guarantee the best possible decisions.
FALSE
Models are useful, but their use does not guarantee the best decisions.
Medium
Learning Objective: 01-06 Explain the key aspects of operations management decision making. Stevenson - Chapter 01 #9
Topic Area: Operations Management and Decision Making
10. People who work in the field of operations should have skills that include both knowledge and people
skills.
TRUE
Operations management requires a blend of knowledge and people skills.
Medium
Learning Objective: 01-04 Describe the operations function and the nature ofthe operations managers job. Stevenson - Chapter 01 #10
11. Assembly lines achieved productivity but at the expense of standard of living.
FALSE
Productivity and standard of living go hand in hand.
Hard
Learning Objective: 01-07 Briefly describe the historical evolution of operations management. Stevenson - Chapter 01 #11
Topic Area: The Historical Evolution of Operations Management

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12. The operations manager has primary responsibility for making operations system design decisions, such as
system capacity and location of facilities.
FALSE
The operations manager plays a role in these decisions but is not primarily responsible for them.
Hard
13. The word "technology" is used only to refer to "information technology".
FALSE
Technology also refers to the technology involved in resource transformations.
Easy
Learning Objective: 01-08 Characterize current trends in business that impact operations management. Stevenson - Chapter 01 #13
Topic Area: Operations Today
14. ‘Value added' by definition is always a positive number since 'added' implies increases.
FALSE
Some transformations result in the output being worth less than the inputs.
Medium
15. Service often requires greater labor content, whereas manufacturing is more capital intensive.
TRUE
Service operations tend to be more labor-intensive than manufacturing.
Medium

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16. Measurement of productivity in service is more straightforward than in manufacturing since it is not
necessary to take into account the cost of materials.
FALSE
Materials cost must be considered in services as well.
Medium
17. Special-purpose technology is a common way of offering increased customization in manufacturing or
services without taking on additional labor costs.
FALSE
Special-purpose technology typically reduces costs through standardization.
Hard
18. One concern in the design of production systems is the degree of standardization.
TRUE
How standardized outputs will be is a critical consideration in the system design question.
Easy
19. Most people encounter operations only in profit-making organizations.
FALSE
Operations are also relevant to not-for-profit organizations such as the Red Cross.
Medium

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20. Service involves a much higher degree of customer contact than manufacturing.
TRUE
Customer contact tends to be much higher in services.
Easy
21. A systems approach emphasizes interrelationships among subsystems, but its main theme is that the whole is
greater than the sum of its individual parts.
TRUE
Optimizing the performance of individual subsystems does not guarantee optimal performance from the overall
system.
Medium
Learning Objective: 01-06 Explain the key aspects ofoperations management decision making. Stevenson - Chapter 01 #21
22. The Pareto phenomenon is one of the most important and pervasive concepts that can be applied at all levels
of management.
TRUE
Pareto phenomena can be observed in a wide variety of organization situations.
Medium
Learning Objective: 01-06 Explain the key aspects of operations management decision making. Stevenson - Chapter 01
#22

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23. Operations managers, who usually use quantitative approaches, are not really concerned with ethical
decision-making.
FALSE
Ethics issues are touching on all areas of management, including operations.
AACSB: Ethics Blooms:
Understand Difficulty:
Medium
Topic Area: Key Issues for Todays Business Operations
24. The optimal solutions produced by quantitative techniques should always be evaluated in terms of the larger
framework.
TRUE
Quantitative techniques have limitations that must be considered.
Medium
25. Managers should most often rely on quantitative techniques for important decisions since quantitative
approaches result in more accurate decisions.
FALSE
Just as other techniques do, quantitative techniques have limitations.
Hard

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26. Many operations management decisions can be described as tradeoffs.
TRUE
Managing tradeoffs is the essence of operations management.
Medium
TopicArea: Operations Managementand Decision Making
27. A systems approach means that we concentrate on efficiency within a subsystem and thereby assure overall
efficiency.
FALSE
Subsystem efficiency doesn't necessarily translate into overall efficiency.
Medium
28. Prior to the Industrial Revolution, goods were produced primarily by craftsmen or their apprentices using
custom made parts.
TRUE
After the Industrial Revolution, more standardized approaches became common.
Medium
Learning Objective: 01-07 Briefly describe the historical evolution of operations management. Stevenson - Chapter 01 #28

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29. Elton Mayo's "Hawthorne Experiment" was the focal point of the Human Relations Movement, which
emphasized the importance of the human element in job design.
TRUE
The Hawthorne Experiments were the beginning of the Human Relations Movement.
Medium
Learning Objective: 01-07 Briefly describe the historical evolution of operations management. Stevenson - Chapter 01
#29
30. Among Ford's many contributions was the introduction of mass production, using the concept of
interchangeable parts and division of labor.
TRUE
Ford made mass production a practical success.
Easy
Learning Objective: 01-07 Briefly describe the historical evolution of operations management. Stevenson - Chapter 01
#30
31. Operations management and marketing are the two functional areas that exist to support activities in other
functions such as accounting, finance, IT and human resources.
FALSE
Operations management and marketing are supported by these functions.
Medium
#31

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32. Lean production systems incorporate the advantages of both mass production and craft production.
TRUE
Lean production blends the best of both worlds.
Medium
Learning Objective: 01-08 Characterize current trends in business that impact operations management. Stevenson - Chapter
01 #32
TopicArea: TheHistorical Evolution ofOperations Management
33. As an abstraction of reality, a model is a simplified version of a real phenomenon.
TRUE
Models are valuable abstractions and simplifications of real, complex phenomena.
Easy
34. Lean production systems use a highly skilled work force and flexible equipment.
TRUE
Lean depends on a skilled workforce.
Easy
Learning Objective: 01-08Characterize currenttrends in businessthatimpactoperations management. Stevenson - Chapter 01
#34
35. The lean production philosophy has been slow to be adopted in service industries.
FALSE
Lean concepts apply very well in service industries.
Medium
01 #35

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36. Operations Management activities will be less important in the future because many firms are becoming
service-oriented operations rather than goods producing operations.
FALSE
Operations management is just as important for service firms.
Medium
37. A modern firm has two supply chain considerations - external links with suppliers and customers, and an
internal network of flows to and between the operations function itself.
TRUE
Supply chain considerations are at play both in and beyond the modern firm.
Easy
38. Operations management involves continuous decision-making; hopefully most decisions made will be:
A. redundant
B. minor in nature
C. informed
D. quantitative
Informed decisions incorporate all relevant issues.
Easy

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39. A 'product package' consists of:
A. the exterior wrapping
B. the shipping container
C. a combination of goods and services
D. goods if a manufacturing organization
E. customer relations if a service organization
Most firms are not pure service or manufacturing firms; they produce combinations of goods and services.
Medium
40. Business organizations consist of three major functions which, ideally:
A. support one another
B. are mutually exclusive
C. exist independently of each other
D. function independently of each other
E. do not interface with each other
Finance, Marketing and Operations are these major functions.
Medium
Learning Objective: 01-02 Identify the three major functional areas of organizations and describe how they interrelate. Stevenson - Chapter 01 #40
41. Which of the following is not a type of operations?
A. goods production
B. storage/transportation
C. entertainment
D. communication
E. all the above involve operations
All of these involve taking inputs and transforming them.
Medium
Learning Objective: 01-01 Define the term operations management. Stevenson -
Chapter 01 #41

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42. Technology choices seldom affect:
A. costs.
B. productivity.
C. union activity.
D. quality.
E. flexibility.
Union activity can affect a firm's technology choices, but not the other way around.
Medium
43. Measurements taken at various points in the transformation process for control purposes are called:
A. plans
B. directions
C. controls
D. feedback
E. budgets
Feedback is used to monitor and improve processes.
Hard
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job. Stevenson - Chapter 01
#43
44. Budgeting, analysis of investment proposals, and provision of funds are activities associated with the
function.
A. operation
B. marketing
C. purchasing
D. finance
E. internal audit
These are the primary tasks for the finance function.
Easy
Learning Objective: 01-02 Identify the three major functional areas of organizations and describe how they interrelate. Stevenson - Chapter 01 #44

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45. Which one of the following would not generally be classified under the heading of transformation?
A. assembling
B. teaching
C. staffing
D. farming
E. consulting
Staffing doesn't involve transforming resources so much as it involves acquiring them.
Hard
Topic Area: Process Management
46. Manufacturing work sent to other countries is called:
A. downsized
B. outsourced
C. internationalization
D. vertical integration
E. entrepreneurial ship
Outsourcing is increasingly a part of operations management.
Medium
47. Product design and process selection are examples of decisions.
A. financial
B. tactical
C. system design
D. system operation
E. forecasting
These major decisions affect decisions made at lower levels.
Hard
Learning Objective: 01-05 Summarize the two major aspects of process management. Stevenson - Chapter 01 #47

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48. The responsibilities of the operations manager are:
A. planning, organizing, staffing, procuring, and reviewing
B. planning, organizing, staffing, directing, and controlling
C. forecasting, designing, planning, organizing, and controlling
D. forecasting, designing, operating, procuring, and reviewing
E. designing and operating
The scope of operations management ranges across the organization.
Medium
49. Knowledge skills usually don't include:
A. process knowledge
B. accounting skills
C. communication skills
D. global knowledge
E. all of the above
Communication skills generally are considered to be people skills.
Medium
50. Which of the following is not true about systems approach?
A. A systems viewpoint is almost always beneficial in decision making.
B. A systems approach emphasizes interrelationships among subsystems.
C. A systems approach concentrates on efficiency within subsystems.
D. A systems approach is essential whenever something is being redesigned or improved.
E. All of the above are true.
Subsystem efficiency doesn't necessarily translate into overall system efficiency.
Medium

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51. What is credited with gains in industrial productivity, increased standards of living and affordable
products?
A. personal computers
B. the internet
C. mass transportation
D. assembly lines
E. multi-level marketing
Mass production has played a prominent role in increasing standards of living.
Hard
01 #51
TopicArea:The Historical Evolution of Operations Management
52. Production systems with customized outputs typically have relatively:
A. high volumes of output
B. low unit costs
C. high amount of specialized equipment
D. fast work movement
E. skilled workers
Skilled workers are necessary to accommodate the variation inherent in customized outputs.
Hard
53. Which is not a significant difference between manufacturing and service operations?
A. cost per unit
B. uniformity of output
C. labor content of jobs
D. customer contact
E. measurement of productivity
Manufacturing operations aren't necessarily more or less efficient than service operations.
Hard

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54. Which of the following is not a characteristic of service operations?
A. intangible output
B. high customer contact
C. high labor content
D. easy measurement of productivity
E. low uniformity of output
The productivity of service operations is often hard to measure.
Medium
55. Which of the following is a recent trend in business?
A. pollution control
B. total quality management
C. supply chain management
D. competition from foreign manufacturers
E. technological change
Supply chain management involves a broader systemic view of operations.
Medium
56. Farming is an example of:
A. an obsolete activity
B. a virtual organization
C. non-manufactured goods
D. a growth industry
E. customized manufacturing
Farm operations are not manufacturing operations.
Medium

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57. Dealing with the fact that certain aspects of any management situation are more important than others is
called:
A. analysis of tradeoffs
B. sensitivity analysis
C. recognition of priorities
D. analysis of variance
E. decision table analysis
Solutions tend to be targeted toward higher priority aspects of a situation.
Hard
58. The fact that a few improvements in a few key areas of operations will have more impact than many
improvements in many other areas is consistent with the:
A. Irwin phenomenon
B. Pareto phenomenon
C. Stevenson phenomenon
D. Tellier phenomenon
E. Adam Smith phenomenon
Pareto phenomena direct our attention to the difference between the "important few" and the "trivial many."
Medium
59. The process of comparing outputs to previously established standards to determine if corrective action is
needed is called:
A. planning
B. directing
C. controlling
D. budgeting
E. disciplining
Controls are used to maintain performance.
Hard

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60. Which of the following does not relate to system design?
A. altering the system capacity
B. location of facilities
C. inventory management
D. selection and acquisition of equipment
E. physical arrangement of departments
Inventory management is a system operation decision area.
Medium
61. Taking a systems viewpoint with regard to operations in today's environment increasingly leads decision-
makers to consider in response to the .
A. flexibility; pressure to be more efficient
B. offshoring; need to promote domestic production
C. sustainability; threat of global warming
D. technology; impact of random variation
E. forecasting; stabilization of demand
Sustainability is a relatively recent operations management consideration.
Hard
62. Some companies attempt to maximize the revenue they receive from fixed operating capacity by influencing
demands through price manipulation. This is an example of :
A. Illegal price discrimination
B. Collusion
C. Volume analysis
D. Revenue management
E. Outsourcing
Revenue management is used to ensure that as much perishable capacity as possible is sold.
Medium

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63. Which of the following is not an ongoing trend in manufacturing?
A. globalization
B. quality improvement
C. flexibility and agility
D. mass production for greater economies of scale
E. technological advances
Manufacturers are moving away from mass production for economies of scale.
Medium
Learning Objective: 01-08 Characterize current trends in business that impact operations management. Stevenson - Chapter 01
#63
64. Which of the following is not a benefit of using models in decision making?
A. They provide a standardized format for analyzing a problem.
B. They serve as a consistent tool for evaluation.
C. They are easy to use and less expensive than dealing with the actual situation.
D. All of the above are benefits.
E. None of the above is a benefit.
Models are useful tools for making decisions without confronting the actual situation with all of its complexity.
Hard
65. Modern firms increasingly rely on other firms to supply goods and services instead of doing these tasks
themselves. This increased level of is leading to increased emphasis on
management.
A. outsourcing; supply chain
B. offshoring; lean
C. downsizing; total quality
D. optimizing; inventory
E. internationalization; intercultural
Supply chain management takes a more systemic view of the firm, its operations, and its suppliers.
Medium
01 #65

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66. Operations and sales are the two functions in businesses.
A. strategic
B. tactical
C. support
D. value-adding
E. line
Others are support functions.
Easy
#66
Topic Area: Why Learn about Operations Management?
67. Marketing depends on operations for information regarding .
A. productivity
B. lead time
C. cash flow
D. budgeting
E. corporate intelligence
Marketing uses lead time information to make promises to customers.
Easy
Topic Area: Why Learn about Operations Management?
68. Two widely used metrics of variation are the and the .
A. mean; standard deviation
B. productivity ratio; correlation
C. standardized mean; assignable deviation
D. randomized mean; standardized deviation
E. normal distribution; random variation
The mean and standard deviation summarize important facets regarding the variation in a process.
Easy
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job. Stevenson - Chapter 01
#68

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69. Which of the following statements about variation is FALSE?
A. Variation prevents a production process from being as efficient as it can be.
B. Some variation can be prevented.
C. Variation can either be assignable or random.
D. Any variation makes a production process less productive.
E. Random variation generally cannot be influenced by managers.
The choice to offer customers greater variety might increase variation but increase productivity even more.
Hard
70. Which of the following is essential to consider with respect to managing a process to meet demand?
A. strategy
B. demand forecasts
C. capacity
D. random variability
E. all of the above
All of these play a role in determining whether a process can meet demand.
Medium

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ch1 Summary
Category
AACSB: Ethics
# of Questions
1
AACSB: Reflective Thinking 69
Blooms: Remember 48
Blooms: Understand 22
Difficulty: Easy 17
Difficulty: Hard 15
Difficulty: Medium 38
Learning Objective: 01-01 Define the term operations management. 2
Learning Objective: 01-02 Identify the three major functional areas of organizations and describe how they interrelate. 5
Learning Objective: 01-03 Identify similarities and differences between production and service operations. 10
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job. 18
Learning Objective: 01-05 Summarize the two major aspects of process management. 4
Learning Objective: 01-06 Explain the key aspects of operations management decision making. 15
Learning Objective: 01-07 Briefly describe the historical evolution of operations management. 4
Learning Objective: 01-08 Characterize current trends in business that impact operations management. 12
Stevenson - Chapter 01 70
Topic Area: Introduction 20
Topic Area: Key Issues for Todays Business Operations 6
Topic Area: Operations Management and Decision Making 16
Topic Area: Operations Today 5
Topic Area: Process Management 4
Topic Area: The Historical Evolution of Operations Management 8
Topic Area: The Scope of Operations Management 9
Topic Area: Why Learn about Operations Management? 2
ch2
Student:
1. An example of a strategic operations management decision is the choice of where to locate.
True False
2. An example of an operational operations management decision is inventory level management.
True False

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3. Government statistics are a good source of data about productivity trends in the service sector.
True False
4. An example of a tactical operations management decision is determining employment levels.
True False
5. Productivity is defined as the ratio of output to input.
True False
6. Productivity is defined as the ratio of input to output.
True False
7. Competitiveness relates to the profitability of an organization in the marketplace.
True False
8. If people would only work harder, productivity would increase.
True False
9. Tracking productivity measures over time enables managers to judge organizational performance and decide
where improvements are needed.
True False
10. Productivity is directly related to the ability of an organization to compete.
True False
11. A characteristic that was once an order winner may become an order qualifier, and vice versa.
True False
12. Outsourcing tends to improve quality but at the cost of lowered productivity.
True False

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13. Productivity tends to be only a very minor factor in an organization's ability to compete.
True False
14. An organization that is twice as productive as its competitor will be twice as profitable.
True False
15. National productivity is determined by averaging the productivity measures of various companies or
industries.
True False
16. Wage and salary increases that are not accompanied by productivity increases tend to exert inflationary
pressures on a nation's economy.
True False
17. Global competition really only applies to multi-national organizations.
True False
18. A business that is rated highly by its customers for service quality will tend to be more profitable than a
business that is rated poorly.
True False
19. Services often don't fit simple yield measurements.
True False
20. A mission statement should provide a guide for the formulation of strategies for the organization.
True False
21. The hierarchy and sequence of planning and decision-making is: mission, organizational strategy, tactics, and
operational decisions.
True False

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22. Strategy includes both organizational and functional strategies.
True False
23. Organizational strategy should be determined without considering the realities of functional area strengths
and weaknesses since they can be changed to meet our strategy.
True False
24. Mission statements should be as specific as possible regarding exactly how they will be accomplished.
True False
25. Improving efficiency will guarantee a similar improvement in productivity.
True False
26. As long as we match a competitor on quality and price we will gain market share.
True False
27. Environmental scanning is a search for events or trends that present either threats or opportunities to the
organization.
True False
28. Standardization has the advantage of reducing variability.
True False
29. Traditional strategies of business organizations have tended to emphasize cost minimization or product
differentiation.
True False
30. The majority of our textbook deals with tactical operations that support established functional strategies.
True False

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31. Quality-based strategies focus on customer satisfaction by ensuring that each product is carefully and
thoroughly inspected prior to delivery to prevent sending out bad product.
True False
32. Time-based strategies focus on reducing the time required to accomplish certain activities, such as new
product development or delivery to the customer.
True False
33. Functional strategies should be designed to directly support a firm's mission.
True False
34. Companies are required to use environmental scanning because of both federal and state regulations
regarding environmental pollution control.
True False
35. The Balanced Scorecard is an attractive tool to use in the formation of strategy.
True False
36. One major shortcoming of the Balanced Scorecard is that it doesn't tend to take into account sustainability
issues.
True False
37. Competitiveness doesn't include:
A. Productivity
B. Effectiveness
C. Profitability
D. Operations Strategy
E. Operations Management
38. Product design and choice of location are examples of decisions.
A. strategic
B. tactical
C. operational
D. customer focused
E. design

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39. Scheduling personnel is an example of an operations management:
A. mission implementation
B. operational decision
C. organizational strategy
D. functional strategy
E. tactical decision
40. Productivity is expressed as:
A. output plus input
B. output minus input
C. output times input
D. output divided by input
E. input divided by output
41. In the 1970's and 1980's in the USA, organizations concentrated on:
A. operations strategies
B. improving quality
C. marketing and financial strategies
D. revising mission statements
E. environmental issues
42. In the past, a significant reason why U.S. productivity was the highest in the world was high:
A. agricultural productivity
B. manufacturing productivity
C. labor productivity
D. savings productivity
E. governmental productivity
43. Which of the following is not a factor that affects productivity?
A. computer viruses
B. design of the workspace
C. use of the Internet
D. standardizing processes
E. wireless cellular phones

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44. Which of these factors affects productivity?
A. methods and technology
B. workers
C. management
D. a and b only
E. all of the above
45. Which of the following is not a key step toward improving productivity?
A. developing productivity measures for all operations
B. improving the bottleneck operations
C. establishing reasonable goals for improvement
D. considering incentives to reward workers
E. converting bond debt to stock ownership
46. For an organization to grow its market share, it must:
A. advertise using multimedia
B. lower prices
C. exceed minimum standards of acceptability for its products or services
D. establish an internet website
E. broaden its mission statement
47. The ratio of good output to quantity of raw material input is called
A. non-defective productivity
B. process yield
C. worker quality measurement
D. total quality productivity
E. quantity/quality ratio
48. The fundamental purpose for the existence of any organization is described by its:
A. policies
B. procedures
C. corporate charter
D. mission statement
E. bylaws

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49. A productivity increase in one operation that doesn't improve overall productivity of the business isn't
A. worthwhile
B. trivial
C. competence-destroying
D. an order winner
E. an order qualifier
50. Value added can be calculated by:
A. average productivity gains over time
B. inputs divided by the outputs
C. outputs divided by the inputs
D. input plus output divided by two
E. outputs minus inputs
51. Which of the following is true?
A. Corporate strategy is shaped by functional strategies.
B. Corporate mission is shaped by corporate strategy.
C. Functional strategies are shaped by corporate strategy.
D. External conditions are shaped by corporate mission.
E. Corporate mission is shaped by functional strategies.
52. Core competencies in organizations generally relate to:
A. cost
B. quality
C. time
D. flexibility
E. all of the above
53. Which of the following is considered to be a cause of poor U.S. global competitiveness?
A. the tendency to view labor as a cost factor to be minimized
B. decision-making based on short-term horizons
C. weaknesses in technological practice
D. powerful trading partners
E. all of the above

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54. Which of the following is not typically considered a cure for poor competitiveness?
A. remove communications barriers within organizations
B. minimize attention to the operations function
C. put less emphasis on short-term financial results
D. recognize labor as a valuable asset and act to develop it
E. improve quality
55. Time-based approaches of business organizations focus on reducing the time to accomplish certain
necessary activities. Time reductions seldom apply to:
A. product/service design time
B. processing time
C. delivery time
D. response time for complaints
E. internal audits
56. The external elements of SWOT analysis are:
A. strengths and weaknesses
B. strengths and threats
C. opportunities and threats
D. weaknesses and opportunities
E. strengths and opportunities
57. In an assembly operation at a furniture factory, six employees assembled an average of 450 standard dining
chairs per 5-day week. What is the labor productivity of this operation?
A. 90 chairs/worker/day
B. 20 chairs/worker/day
C. 15 chairs/worker/day
D. 75 chairs/worker/day
58. Which of the following is not a reason for poor performance of our organization in the marketplace?
A. placing too much emphasis on product/service design and too little on process design
B. failing to take into account customer wants and needs
C. putting too much emphasis on short-term financial performance
D. taking advantage of strengths/opportunities, and recognizing competitive threats

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59. The manager of a carpet store is trying to determine the best installation crew size. He has tried various crew
sizes with the results shown below. Based on productivity, what crew size do you recommend?
A. 2
B. 3
C. 4
60. Which of the following is not a key factor of competitiveness?
A. price
B. product differentiation
C. flexibility
D. after-sale service
E. size of organization
61. Gourmet Pretzels bakes soft pretzels on an assembly line. It currently bakes 800 pretzels each 8-hour shift. If
the production is increased to 1,200 pretzels each shift, then productivity will have increased by:
A. 50%
B. 33%
C. 25%
D. 67%
62. The weekly output of a fabrication process is shown below together with data for labor and material inputs.
Standard selling price is $125 per unit. Overhead is charged weekly at the rate of $1,500 plus .5 times direct labor
cost. Assume a 40-hour week and an hourly wage of $16. Material cost is $10 per foot. What is the average
multifactor productivity?
A. 1.463
B. 1.457
C. 1.431

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63. The Balanced Scorecard is a useful tool for helping managers translate their strategy into action in the
following areas:
A. Sustainability; Flexibility; Efficiency; Technology
B. Customers; Financial; Internal Business Processes; Learning and Growth
C. Customization; Standardization; Efficiency; Effectiveness
D. The Environment; The Community; Suppliers; Other Stakeholders
E. Strategy; Tactics; Productivity; Profitability
64. A firm pursuing a strategy based on customization and variety will tend to structure and manage its supply
chain to accommodate more than a firm pursuing a strategy based on low-cost and high-
volume.
A. Variation
B. Streamlined flow
C. Quality
D. Capacity
E. Productivity
65. Unique attributes of firms that give them a competitive edge are called .
A. Functional strategies
B. Balanced scorecards
C. Supply chains
D. Core competencies
E. Sustainable initiatives
66. Years ago in the overnight delivery business, providing package tracking capability gave some firms a
competitive advantage. Now, all firms must offer this capability simply to be in this line of business. This is an
example of becoming over time.
A. Tactical implications; strategic
B. Strategic implications; tactical
C. Order winners; order qualifiers
D. Profitability factors; productivity factors
E. Order qualifiers; order winners
67. For firms competing in worldwide markets, conducting is more complex, since what
works in one country or region might not work in another.
A. Productivity analysis
B. Environmental analysis
C. Strategy implementation
D. Sustainability analysis
E. Growth forecasting

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68. Increasing the service offered to the customer makes it more difficult to compete on the basis of .
A. order qualifiers
B. customization
C. quality
D. price
E. flexibility
69. is generally used to facilitate an organization strategy that emphasizes low cost.
A. Speed to market
B. Flexibility
C. Customization
D. Sustainability
E. None of the above
70. Which of the following factors would tend to reduce productivity?
A. improvements in workplace safety
B. reductions in labor turnover
C. more inexperienced workers
D. reductions in the scrap rate
71. Suppose a country's productivity last year was 84. If this country's productivity growth rate of 5% is to be
maintained, this means that this year's productivity will have to be _.
A. 88.2
B. 79.8
C. 82.8
D. 78.9
E. 4.2

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72. The weekly output of a production process is shown below, together with data for labor and material inputs.
The standard inventory value of the output is $125 per unit. Overhead is charged weekly at the rate of $1500 plus
.5 times direct labor cost. Assume a 40-hour week and an hourly wage of $16. Material cost is $10 per running foot.
What is the average multi-factor productivity for this process?
73. A company has introduced a process improvement that reduces processing time for each unit, so that output is
increased by 25% with less material, but one additional worker required. Under the old process, five workers could
produce 60 units per hour. Labor costs are $12/hour, and material input was previously $16/unit. For the new
process, material is now $10/unit. Overhead is charged at 1.6 times direct labor cost. Finished units sell for
$31 each. What increase in productivity is associated with the process improvement?

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