Historically in most manufacturing organizations, operations was viewed

INCORRECT as an internal function that is buffered from the external environment.

1
A)True
B)Fals
e

Recently, there has been a decline in the interest in operations

2 CORRECT management.
A)True
B)Fals
e

The strategic issues of OM are broad in nature including how much

3 CORRECT capacity should be acquired.
A)True
B)Fals
e

Warehousing OM transformations are referred to as exchange

4 INCORRECT transformations.
A)True
B)Fals
e

Who developed the use of standardization in large-scale mass production

5 INCORRECT using a moving assembly line?
A)Frederick Winslow Taylor
B)Frank Gilbreth
C)Adam Smith
D)Charles Babbage
E)Henry Ford

Which of the following is NOT associated with the work of Taylor?

6 INCORRECT
A)A one-best way of doing things.
B)The hierarchal needs of labor.
C)The scientific method.
D)Clear distinctions between the responsibilities of labor and
management.

Match the transformations:

1. exchange A. manufacturing
7 INCORRECT 2. physical B. making a sick person well
3. physiological C. retailing
4. storage D. warehousing
A)1C, 2A, 3D,
 4B
B)1D, 2A, 3C,
4B
C)1A, 2B, 3D,
4C
D)1B, 2C, 3D,
4A
E)1C, 2A, 3B,
4D

8 INCORRECT Which of the following is NOT an OM tactical issue?

A)How many workers do we need?

B)Where do we locate the facility or facilities?
C)When should we have material delivered?
D)Should we work overtime or put on a second shift?

Which of the following is NOT an example of the shift of power from

9 CORRECT producers to consumers?
A)increasingly higher quality products
B)a focus on shorter delivery times
C)less emphasis on reducing labor and material costs
D)better utilization of facilities

Higher productivity derived from efficient operations leads to

10 CORRECT
A)more expensive goods and services
B)lower quality goods and services
C)higher discretionary incomes for consumers
D)increased dependence on expensive labor

Which of the following is consistent with contemporary operations

11 INCORRECT management?
A)limitation of expensive aluminum recycling efforts
B)raw waste disposal into waterways in acceptable
quantities
C)restricting air pollutant production to areas where pollution is
normal
D)replanting of forest land to reduce erosion

12 CORRECT Which of the following best describes the concept of the value chain?

A)adding financial value to an organization through the acquisition

of other firms
B)the step-wise increases in product prices as raw materials are
turned into goods/services
C)the steps in manufacturing that add value to finished products
D)all steps in the transformation process that add value even if
 they don't come from manufacturing

The correct answer for each question is indicated by a .

Corporate strategy refers to the overall strategy of the firm.

1 CORRECT
A)True
B)Fals
e

Operations strategy can be divided into two major categories, structural

2 CORRECT elements and infrastructural elements.
A)True
B)Fals
e

The four basic competitive priorities are cost, quality, delivery and
3 CORRECT flexibility.
A)True
B)Fals
e

4 CORRECT Service warranties are becoming more important as order winners.

A)True
B)Fals
e

Operations management divides decisions into three broad categories.

5 INCORRECT They are:
A)Strategic, operational and
financial
B)Personnel, financial and
operational
C)Strategic, tactical and
operational planning and control
D)Planning, tactical and control
E)Planning, organizing and
financial

Which of the following has been added most recently to the four basic
6 INCORRECT competitive priorities?
A)Service
B)Cost
C)Quality
D)Delivery
E)Flexibility
 According to the authors, which of the following is becoming the newest
7 INCORRECT competitive advantage?
A)Service
B)Delivery
C)Cost
D)Quality
E)Environmental friendliness

A market segmentation strategy refers to

8 INCORRECT
A)Selling to everyone in a
particular geographic area
B)Satisfying the needs of a
particular market niche
C)Offering products/services that
differ significantly from the
competition
D)Offering a wide variety of
products/services in a particular
area

If the perceived customer value is measured as the ratio of Total

9 INCORRECT Benefits/Total Costs, a customer feels 'ripped off' if the ratio is
A)<1
B)>1
C)=1

Davis and Meyer (Blur) indicate three factors that are changing the way
10 CORRECT we do business today. The factors are:
A)Location, cheap labor, just-in-
time systems
B)Connectivity, speed, and
intangibility
C)Cost, quality, and flexibility
D)Financial capital, marketing,
and transportation

With respect to the Customer's Activity Cycle (CAC), a firm's position in

11 INCORRECT the marketplace is strongest if it is involved in
A)The pre-purchase activities
B)The purchase activities
C)The post-purchase activities
D)All of these activities

A service that consists of specific functions that are part of the product
12 CORRECT itself is called a(n)
 A)Embedded service
B)Comprehensive service
C)Integrated solution
D)Distribution control
The correct answer for each question is indicated by a .

Ford's Model T car, nylon fabric, and Xerox copiers were examples of
1 INCORRECT breakthrough products when they were introduced.
A)True
B)Fals
e

In designing for manufacturability, it is desirable to keep the number of

2 INCORRECT individual parts to a minimum.
A)True
B)Fals
e

A service-system design matrix helps in relating sales opportunity with

3 CORRECT production efficiency, as contact with the customer goes up, production
efficiency goes down.
A)True
B)Fals
e

4 CORRECT In services, service production and consumption are often simultaneous.

A)True
B)Fals
e

5 INCORRECT A jail is given as an example of a:

A)Facilities-based
service business
B)Field-based
business
C)Internal service
business

Which one of the following could best be run as an internal services

6 INCORRECT system?
A)A university billing
office
B)A dance studio
C)A branch office of a
professional
employment agency
D)A movie theater
 Which of the following types of processes will be used to produce
7 INCORRECT gasoline and petroleum products?
A)Job Shop
B)Batch
C)Assembly Line
D)Continuous
Processing
E)Project

The product-process matrix illustrates that for firms operating above the
8 CORRECT diagonal, there is
A)Greater flexibility,
higher cost
B)Less flexibility,
lower cost
C)Greater flexibility,
lower cost
D)Less flexibility,
higher cost

Which of the following is a major reason for the significant increase in

9 CORRECT foreign competition?
A)Advances in
telecommunications
B)A trend toward
higher trade
barriers
C)Fewer numbers of
trade organizations
D)Increased tariffs on
foreign goods

Which of the following factors contributes to successful product design?

10 INCORRECT
A)Using
engineers/designers
exclusively in the
design phase
B)Eliminating
prototype
development as a
part of the design
phase
C)Ignoring quality,
cost, and delivery
issues in the design
phase
D)Surprising the
customer with extra
features
 A new service with a high degree of content change and a high degree of
11 INCORRECT delivery change is categorized as
A)Breadth of offering
B)Revolutionary
C)Window dressing
D)Channel
development

What is the correct order for the stages of the new service development
process?
1. design
12 INCORRECT 2. full launch
3. development
4. analysis
A)1, 2, 3, 4
B)1, 4, 3, 2
C)4, 1, 3, 2
D)4, 3, 1, 2
The correct answer for each question is indicated by a .

The work breakdown structure is used to identify tasks to be performed

1 INCORRECT in a project.
A)True
B)Fals
e

The two main components in project management are behavior of

2 INCORRECT people and the technology of the method.
A)True
B)Fals
e

Resources from one parallel activity can rarely be transferred to the

3 CORRECT other parallel activity.
A)True
B)Fals
e

The Beta distribution is always the best distribution for estimating the
4 CORRECT distribution of activity times.
A)True
B)Fals
e

5 INCORRECT In CPM charts

A)Squares designate events, arrows designate

activities
 B)Circles designate events, arrows designate
activities
C)Circles designate activities, arrows designate nodes
D)Circles designate activities, arrows designate
precedence

The earliest expected completion date of the project is which of the

6 INCORRECT following?
A)27
B)19
C)17
D)15
E)12

The variance for activity C is which of the following?

7 INCORRECT
A)4
B)2
C)1/3
D)1/6
E)1/9

8 CORRECT The variance of the critical path is which of the following?

A)1/9
B)1/3
C)2/3
D)1/6
E)4/9

The EF for activity C is which of the following?

9 INCORRECT
A)4
B)13
C)15
D)17
E)27

10 INCORRECT The activity slack for activity D is which of the following?

A)0
B)4
C)12
D)13
E)17
 Which of the following is a major difference in managing projects as
11 INCORRECT opposed to managing ongoing processes?
A)Project teams are
permanent
B)Projects are typically managed with the
organization's formal structure
C)Projects require flexibility because they are not
repeated
D)Project tasks can always be perfectly defined

Which of the following would NOT be considered a crash cost?

12 CORRECT
A)Overtime pay
B)Vacation pay
C)Special shipping
costs
D)Pay for extra labor
The correct answer for each question is indicated by a .

Advances in technology are affecting every aspect of business, except

1 CORRECT operations management.
A)True
B)Fals
e

To properly integrate technology into an organization, managers must

2 CORRECT recognize the capabilities and shortcomings of that technology.
A)True
B)Fals
e

The traditional tradeoffs between operations strategies are no longer

3 INCORRECT valid due to improvements in technology.
A)True
B)Fals
e

Successful implementation of new technology never requires you to train

4 INCORRECT your customers.
A)True
B)Fals
e

To properly integrate new technology into their organization, a firm

5 INCORRECT should realize
A)that there are no limitations on the usefulness of that
technology
B)that customer training in the use of the technology will
typically be unnecessary
 C)that customer 'fear of the unknown' is still a real issue
D)that it will only work for tangible
products

An operation where machine tools are changed automatically are known

6 CORRECT as
A)a machine center
B)computer integrated manufacturing
C)a flexible manufacturing system
D)computer-aided design

Integration of all aspects of manufacturing through computers is known

7 INCORRECT as
A)using machine centers
B)computer integrated manufacturing
C)a flexible manufacturing system
D)computer-aided design and manufacturing

A software system providing a common software infrastructure and

8 CORRECT database is called
A)enterprise resource planning
B)supply chain management
C)new product development
D)customer relationship management

ERP is an outgrowth of
9 INCORRECT
A)MRP
B)EDI
C)JIT
D)CRM

One of the current technology trends in services is

10 INCORRECT
A)the growth of full-service operations
B)the increased importance of location
C)the shift away from time-dependent transactions
D)decreases in disintermediation

A key consideration for integrating new technology into services is

11 INCORRECT
A)the potential for slower service
B)the lack of knowledge about customers associated with
the new technology
C)the inability to offer a wide variety of services
D)the potential for labor cost reduction
 The most secure way of providing information to people within an
12 INCORRECT organization is the use of which type of e-service network?
A)internet
B)intranet
C)extranet
D)EDI
The correct answer for each question is indicated by a .

Every set of activities represents a process that needs to be managed.

1 INCORRECT
A)True
B)Fals
e

2 INCORRECT "If you can't measure it, you can't manage it."

A)True
B)Fals
e

Competitive benchmarking involves comparing an organization's

3 CORRECT performance with that of its best competitors.
A)True
B)Fals
e

Reengineering means literally starting from the beginning with a clean

4 CORRECT sheet of paper.
A)True
B)Fals
e

5 CORRECT Which of the following is NOT a characteristic of a reengineering process.

A)Small incremental changes.

B)Several jobs are combined into one.
C)Workers make decisions.
D)Work is performed where it makes most sense.

What is the sequence of steps used in service blue printing?

1. Isolate fail points

6 INCORRECT 2. Establish a time fence
3. Analyze profitability

4. Identify the process

A)1-2-3-
 4
B)4-1-2-
3
C)2-4-1-
3
D)3-2-1-
4

A business process is a logical set of tasks or activities that

7 INCORRECT
A)Are specific to the operations function
B)Are specific to the marketing function
C)Are interdependent with other processes
D)Have exactly the same performance measures for any kind
of process

The degree of detail that is used in business process analysis is often

8 INCORRECT referred to as
A)Functional benchmarking
B)Modularization
C)Utilization
D)Granulation

Performance measures concerned with specific work processes that are

9 INCORRECT virtually the same for all industries refer to
A)Internal benchmarks
B)Competitive benchmarks
C)Functional benchmarks
D)Generic benchmarks

Agile manufacturing is most closely associated with

10 INCORRECT
A)Productivity
B)Capacity
C)Quality
D)Speed
E)Flexibility

11 INCORRECT Relative productivity increases only if

A)Your process outputs go up

B)Your process inputs go down
C)Your process outputs go up faster than your process inputs
D)Your productivity goes up faster than your competition's

12 INCORRECT Which of the following is NOT a classic process performance measure as

 discussed in the book?
A)Productivity
B)Profitability
C)Quality
D)Flexibility

The correct answer for each question is indicated by a .

Sunk costs are expenses which have no effect on a decision and

1 INCORRECT therefore, should not be taken into account in considering investment
alternatives.
A)True
B)Fals
e

Depreciation refers to the allocation of cost due to deterioration of

2 INCORRECT tangible assets.
A)True
B)Fals
e

Activity-based costing allocates overhead costs using actual estimates of

3 CORRECT direct labor consumed by an activity.
A)True
B)Fals
e

The net present value refers to the total stream of payments that an
4 INCORRECT asset will generate in the future discounted to the present.
A)True
B)Fals
e

An asset is purchased at a $10,000 value. The estimated salvage value

5 CORRECT of the asset at the end of 10 years is $1,000 and the useful life is 10
years. Which of the following is the straight line depreciation sum?
A)800
B)900
C)1000
D)1100
E)1200

A cost that must be incurred if an investment is not made is a(n):

6 INCORRECT
A)Sunk cost
B)Fixed cost
C)Avoidable cost
 D)Opportunity cost

A benefit foregone which results from choosing one investment over a

7 CORRECT better investment is an example of:
A)Fixed costs
B)opportunity
costs
C)avoidable costs
D)semivariable
costs

Investment A has a payback period of 3 years and a present value of

$40,000.
8 INCORRECT Investment B has a payback period of 4 years and present value of
$50,000.
A)Investment A should be chosen.
B)Investment B should be chosen.
C)Both should be chosen with half invested in each.
D)Neither should be chosen.
E)It's a managerial decision with no clearly defined choice.

Which of the following is NOT an underlying assumption of linear break-

9 INCORRECT even analysis:
A)Selling price per unit is constant.
B)Variable costs per unit remain constant.
C)Fixed costs remain constant.
D)The volume of units sold affects the per unit costs.

If process 1 has fixed costs of $10,000 and variables costs of $50 per
10 INCORRECT unit, and process 2 has fixed costs of $20,000 and variable costs of $30
per unit, what is the break-even point between these two processes?
A)500
B)667
C)2,000
D)3,750
E)5,000

Which of the following is NOT an economic investment decision?

11 INCORRECT
A)Purchasing new facilities
B)Improving labor efficiency
C)Make or buy
D)Closing a plant

Which of the following is NOT an Excel financial function?

12 INCORRECT
 A)Break-even
B)Future value
C)Net-present value
D)Internal rate of return
The correct answer for each question is indicated by a .

The quality movement can trace its roots back to Walter Shewhart.
1 INCORRECT
A)True
B)Fals
e

In the US, the importance of quality in the success of an organization

2 CORRECT didn't begin to be recognized until the late 1970's.
A)True
B)Fals
e

External failure costs in quality refer to costs that are incurred after the
3 INCORRECT product has been delivered to the customer.
A)True
B)Fals
e

4 INCORRECT Only Japanese firms can apply for the Deming Award.

A)True
B)Fals
e

5 CORRECT Which of the following firms has not won the Baldrige Award?

A)Ford
B)IBM
C)Milliken and Co.
D)Federal Express

Deming would argue that as much as 94% of poor quality is the

6 CORRECT responsibility of:
A)Management
B)The process
C)Workers
D)Engineering

Which of the following is an example of a stereo amplifier's features?

7 INCORRECT
A)Signal-to-noise ratio
 B)Remote control
C)Mean time to failure
D)Useful life

Which of the following is an example of a stereo amplifier's durability?

8 INCORRECT
A)Signal-to-noise ratio
B)Remote control
C)Mean time to failure
D)Useful life

Which of the following is an example of a firm's reputation?

9 INCORRECT
A)Ease of repair
B)Courtesy
C)Oak-finished cabinet
D)Consumer Reports ranking

ISO 9000 quality standards are targeted at organizations in

10 CORRECT
A)America
B)Japan
C)Europe
D)The international economic community

Which of the following is NOT consistent with the concept of TQM?

11 CORRECT
A)Organizational leadership
B)Quality control departments
C)Continuous improvement
D)Customer focus

Which of the following is appropriate for Six Sigma quality?

12 INCORRECT
A)Defects per hundred
B)Defects per thousand
C)Defects per hundred thousand
D)Defects per million
The correct answer for each question is indicated by a .

The achievement of maximum capacity denotes a highly efficient

1 CORRECT process.
A)True
B)Fals
e
 A GIS is a graph of a geographic area displaying demographics or other
2 INCORRECT information to support decision making.
A)True
B)Fals
e

Factor rating systems are the least frequently used of the techniques
3 CORRECT presented for plant location analysis.
A)True
B)Fals
e

For manufacturers, the facility location problem can be categorized as

4 CORRECT factory location and warehouse location.
A)True
B)Fals
e

According to the authors, two reasons that capacity and location

5 INCORRECT problems are interrelated are (choose the best answer):
A)Increased networking and information needs
B)The need for producers to locate near customers and the
growth of the network firm
C)Legal requirements and safety requirements
D)Logistics and information needs

6 INCORRECT The best operating level is:

A)The maximum point of the cost curve

B)The level of capacity for which average unit cost is minimized
C)Maximum capacity
D)The level of capacity for which total cost is minimized

The capability to deliver what the customer want within a lead time
7 INCORRECT shorter than the competitors is referred to as:
A)Process flexibility
B)Worker flexibility
C)External flexibility
D)Capacity flexibility
E)Plant flexibility

8 INCORRECT Long-range capacity planning should be the responsibility of:

A)Analysis
B)Middle management
C)Top management
 D)Marketing management

Which of the following is NOT a method which is used in location

9 INCORRECT analysis?
A)linear Programming-transportation model
B)best location method
C)cost analysis
D)center of gravity method

10 INCORRECT Flexible workers are typically:

A)Receive little training

B)Stay on task
C)Prefer standardized work
assignments
D)Better educated

11 INCORRECT Which of the following is NOT a qualitative factor in location decisions?

A)Local infrastructure
B)Worker education and skills
C)Product content requirements
D)Exchange rates
E)Political/economic stability

A brick and mortar operation is

12 INCORRECT
A)A facility that deals directly with the
customer
B)A facility that deals indirectly with the customer
C)A facility that has no contact with the
customer
D)Also known as a back-of-the-house operation

1._______ allows the manager to anticipate the future so then can plan accordingly.
• Forecasting
• Planning
• Organizing
• Leading
2. Forecasts are rarely perfect because of:
• Internal factors
• Randomness
• External factors
• All of the given options
3. Forecast accuracy ________ as time horizon increases.
• Increases
 • Decreases
• Remains the same
• None of the given options
4. __________ use explanatory variables to predict the future.
• Judgmental forecasts
• Time series forecasts
• Associative models
• All of the given options
5. All of the following are examples of judgmental forecasts except:
• Executive opinions
• Consumer surveys
• Delphi method
• Naïve forecasts
6. _________ requires completing a series of questionnaires, each developed from the
previous one, to achieve a consensus forecast.
• Naïve forecast
• Time series analysis
• Associative models
• Delphi method
7. One of the drawbacks of naïve forecasts is:
• Low accuracy
• High cost
• No ease at using
• None of the given options
8. All of the following are responsible for irregular variations except:
• Severe weather
• Earthquake
• Worker strikes
• Cultural changes
9. _______ is a technique that averages a number of recent actual values, updated as new
values.
• Moving average
• Weighted moving average
• Simple moving average
• Exponential smoothing
10. MAPE stands for:
• Measure Actual Performance Error
• Mean Absolute Percent Error
• Mean Actual Percent Error
• Mean Absolute Performance Error

1. The prime determinants of choosing a sampling plan include:

a) Cost
b) Time
c) Environment
 d) Both cost and time
2. The ideal sampling plan requires ______ inspection of each lot.
a) 100%
b) 50%
c) 10%
d) 25%
3. As the lot quality decreases, the probability _________.
a) Increases
b) Decreases
c) Remains neutral
d) None of the given options
4. ________ represents maximum AOQ for a range of fractions defective.
a) Acceptable Quality Level (AQL)
b) Average Outgoing Quality Limit (AOQL)
c) Lot Tolerance Percent Defective (LTPD)
d) None of the given options
5. ___________ refers to intermediate range capacity planning, usually covering 2 to 12
months.
a) Aggregate planning
b) Moderate planning
c) Long rang planning
d) Short range planning
6. _________ is an optimizing technique that seeks to minimize combined costs, using a
set of cost-approximating functions to obtain a single quadratic equation.
a) Linear programming
b) Linear decision rule
c) Aggregate planning
d) Lot Tolerance Percent Defective (LTPD)
7. ________ takes physical count of items at periodic intervals.
a) Periodic inventory system
b) Perpetual inventory system
c) Two-bin system
d) Universal bar code system
8. _______ refers to the cost to carry an item in inventory for a length of time.
a) Shortage cost
b) Ordering cost
c) Holding cost
d) None of the given options

9. Inputs to MRP include all of the following except:

a) Master schedule plan
b) Bill of materials
c) Inventory records
d) Control charts
10. ________ represents the process of determining short-range capacity requirements.
a) Capacity requirements planning
b) Aggregate planning
c) Capacity planning
d) Schedule planning
1. Which of the following activities is unnecessary ,when an organization
decides to design its new product or service or refine its existing product or
service:
a Translate customer wants and needs into product and service requirements
b Refine existing products and services
c Develop new products and services
d Manage the purchasing activities religiously and diligently. 
2. While focusing on capacity planning, organizations look for which of the
following alternatives.
a. How much will it cost 
b. How much holidays the workers can enjoy.
c. How much compensation they need to pay to their CEO.
d. None of the above

3. Which of the following is not one of the assumptions for Cost Volume
Analysis
a. One product is not involved 
b. Everything produced can be sold
c. Variable cost per unit is the same regardless of volume
d. Fixed costs do not change with volume

4. Which of the following does not fall under Economic Production Quantity
( EPQ)
a. Only two or more item are involved 
b. Annual demand is known
c. Usage rate is constant
d. Usage occurs continually

5. Advantages of Process Layout Include

a. Equipment used is less costly 
b. Low unit cost.
c. Labor specialization.
d. Low material handling cost

6. Common types of Operations include

a. Continuous Processing.
b. Intermittent Processing.
c. Automation
 d. All of the above 
7. System performance is measured by
a. Average number of customers being refused service
b. Average time customers wait
c. System utilization
d. b and c. 
8. Inventory carrying costs are influenced by:
a. Order Quantity in Units
b. Holding carrying cost per unit.
c. Demand
d. a and b only. 
9. Bar coding helps in determining the :
a. Status of the inventory of an item in warehouse
b. Price of the product
c. Size of the lot as well as the size and specifications of the product
d. All of the above 
10. Therbligs are basic elemental motions which include:
a. Search
b. Select
c. Throw
d. a and b only 
11. Key issues in inspection include where to inspect, how often to inspect and
whether to inspect on site or in a lab.
12. Total Quality Management TQM has two important aspects first being
problem solving and second being process improvement
13. Sampling Plans specify lot size, sample size, number of samples and
acceptance/rejection criteria.
14. Aggregate planning establishes general level of employment, output and
inventories for periods of 2 to 12 Months.
15. Master schedule is prepared by desegregating the Aggregate Plan.
16. Inventory levels must be carefully planned in order to balance the Holding
Costs of inventory and cost of providing levels of customer service
17. Economic Order Quantity (EOQ) and Economic Production Quantity (EPQ)
make use of the same set of assumptions except orders are received
incrementally during production. .
18. To be successful MRP requires a computer program, accurate master
schedule, bills of material, and inventory data.
19. Manufacturing Resources Planning (MRP II) and Enterprise Resource
Planning (ERP) are natural extensions of MRP, which cover broader scopes as
well as Supply Chain Managements.
20. Process Layouts group similar activities into departments or other work
centers.

21. Fixed Position Layouts are used when size, fragility, cost or other factors
make it undesirable or impractical to move a product through a system.
22. The design of work systems involves job design, work measurements and
compensation
23. The primary location options available to an existing organization include
expanding the existing location, move to a new location, maintain existing
facilities while adding additional facility or do nothing.
24. Most organizations are influenced by location of raw materials, labor supply,
market considerations, community related factors, site related factors and
climate.
25. ISO 9000 and ISO 14000 represent quality standards and environment
standards respectively.
26. Two basic tools of process control are control charts and run tests.
27. The decision to shift or convert from Traditional Manufacturing System to
Just in Time or Lean Systems could be sequential in order to help
management have better control, first hand learning experience and more time
for conversion from one system type to another.
28. The ultimate goal of a Just in Time System is to achieve a balanced, smooth
flow of production.
29. Logistics involve movement of materials to and from the organization
including shipment and distribution.
30. Electronic Data Interchange has increased productivity and accuracy in
Supply Chain Management Systems.
 Virtual University of Pakistan
Production Operations Management
MGT 613
Quiz 01
Solution
Fill in the Blanks

1. strategy that focuses on reduction of time needed to accomplish tasks is called

time based strategy

2. Mission is the reason for existence of an organization

3. Judgmental forecasts are the forecasts that use subjective inputs such as

opinions from consumer surveys, sales staff, managers, executives and experts.

4. A long term upward or downward movement in data is called trend

5. The forecast for any period that equals the previous period’s actual value is called

naive forecast

6. A decision tree is a schematic representation of the available alternatives and

their possible consequences.

7. A measure of the effective use of resources, usually expressed as the ratio of

output to input is called productivity

8. The ability to adapt quickly to changes is called flexibility

9. The operations function involves the conversion of inputs into output

10. The considering of events and trends that present threats or opportunities for a

company are called environmental scanning

1. -------------------- is the maximum output rate or service capacity an operation,

process or facility.
a. Efficiency
b. Effective Capacity
c. Design Capacity
2. -------------- is the rate of output actually achieved.
 a. Actual Output
b. Design Capacity
c. Utilization
3. A knowledge of economies and diseconomies of scale is -----------
a. Important for operations manager
b. Not Important for operations manager
c. It makes no difference
4. If the output rate is less than the optimal level, increasing output rate results in
-------------------- average unit cost
a. Increasing
b. Decreasing
c. Stabilizing
5. As the output is increased, the unit cost is decreased because
a. Of external factors
b. Because there are more units to absorb the fixed costs
c. None of the above
6. as the general capacity of the plant increased, the optimal output rate increases
and the minimal cost for the optimal rate
a. Decreases
b. Increases
c. It has no effect with the output rate
7. The primary purpose of cost- volume analysis is
a. To estimate the income of an organization
b. To analyze initial costs incurred under different operating conditions
c. Both A and B
8. variable costs vary ---------------- with volume of output
a. Inversely
b. Directly
9. -------------- refers to the way, an organization chooses to produce its goods or
services
a. Process selection
b. Capacity planning
c. Cost volume analysis
10. Ice cream is an example of
a. Batch processing
b. Job shop
c. Repetitive processing

Fill in the blanks.

1. Eliminating the disruptions and making the system flexible are __________goals
of the JIT. (supporting)
2. Incremental Holding Cost incurred by using slower alternative is computed
through Incremental Holding Cost =________________.( H*(d/365) )
3. One of the basic elements of the Supply Chain Management is ____________ for
evaluating suppliers and supporting operations.( purchasing)
 4. CPFR stands for______________________________.(Collaborative Planning
Forecasting and Replacement)
5. ________________reflects company’s efforts to achieve response from EDI and
bar codes.(Efficient Consumer Response(ECR) )
6. The rate at which inventory goes through the supply chain is
____________(Inventory velocity)
7. In ____________we establish the timing of the use of equipment, facilities and
human activities in an organization.( Scheduling)
8. Scheduling for high-volume flow system is referred to as _______________.
(Flow-shop Scheduling)
9. ____________ is used as a visual aid for loading and scheduling.(Gantt chart)
10. Executive responsibilities, project selection, project manager selection, and
organizational structure are major administrative issues of _________________.
(Project Management)
QUIZ # 01
MGT-613
PRODUCTIONS & OPERATIONS MANAGEMENT

INSTRUCTIONS:

You are required to put answers in the following format.

Solutions not following this format will be marked as ‘ZERO’.

1. B 11. C
2. B 12. B
3. C 13. A
4. C 14. C
5. C 15. C
6. B 16. A
7. C 17. D
8. C 18. B
9. D 19. B
10. B 20. B

Question: Highlight the correct options.

1. ________ is a procedure for acquiring informed judgments
and opinions from knowledgeable individuals to sue as
subjective forecast.

a. Naïve forecasting method

b. Delphi method

c. Associative method

d. Judgmental forecasting

2. ______ is an oscillating movement in demand that occurs

periodically in the short run and is repetitive.

a. Trend

b. Seasonal pattern

c. Cyclic pattern

d. Irregular pattern

3. ________ is an averaging method of forecasting which

weights the most recent data more strongly than the
distant data.

a. Linear regression

b. Moving average

c. Exponential smoothing

d. Adjusted exponential smoothing

4. Which of the following demand pattern does not define

any underlying time pattern of demand of product /
service

a. Horizontal demand
 b. Systematic demand

c. Random variation

d. Repeatable pattern variation

5. Which of the following is forecasting method which relies

on historical demand data and recognizes trends and
seasonal patterns?

a. Judgmental methods

b. Regression methods

c. Time series methods

d. Averaging methods

6. ______ are the characteristics of products and services

that qualify it to be considered for purchase.

a. Order winner

b. Order qualifier

c. Order runner

d. Order competitor

7. In automotive industry, high quality has become an order

____ and innovative design is order ________ .

a. Winner, Qualifier

b. Winner, Runner

c. Qualifier, Winner

d. Qualifier, Runner
8. Which of the following includes the ability of organization
to produce a wide variety of products, to introduce new
products and modify existing ones quickly?

a. Organization’s standardization

b. Organization’s agility

c. Organization’s flexibility

d. None of the above

9. In decision trees, Circular nodes represent which of the

following?

a. Decision points

b. Alternatives

c. Consequences

d. None of the above

10. In decision tree, ‘Branches’ should be read from:

a. Right to left

b. Left to right

c. Center to left

d. Center to right

11. Which of the following is the Second step in

forecasting process?

a. Identification of forecasting purpose

b. Selecting a forecasting model

c. Collecting historic data

 d. Identification of demand pattern

12. Which of the following is a schematic model of

alternatives available to the decision maker along with
possible consequences and alternatives?

a. Decision making model

b. Decision tree

c. Decision preference matrix

d. None of the above

13. A textile company is contemplating the future of one

of its plants. Following payoff table describes the
situation:

Decision State of Nature

Good conditions Poor conditions
To expand Rs. 800,000 500,000
To maintain status 1,300,000 -150,000
quo
To sell now 320,000 320,000

Under Minimax-regret criteria, what would be the decision makers

decision would be?
.
a. To expand

b. To maintain status quo

c. To sell plant

d. Decision would be made using some other criterion

14. Mr. A determined that his service employees have

used a total of 2400 hours of labor this week to process
560 insurance forms. Last week the same crew used only
2000 hours of labor to process 480 forms. Which
productivity measure should be used?
 a. Total productivity measure

b. Partial productivity measure

c. Both a and b

d. None of the above

15. An operations and supply strategy is concerned with

which of the following?

a. Setting specific policies and plans

b. Short term competitive strategies

c. Coordination of operational goals

d. All of the above

16. A travel agency processed 240 customers on Day 1

with a staff of 12, and 360 customers the on Day 2 with a
staff of 15. What can be said about the productivity shift
from Day 1 to Day 2?

a. An increase in productivity from Day 1 to Day 2

b. A decrease in productivity from Day 1 to Day 2

c. The same productivity from Day 1 to Day 2

d. Can not be computed from data above

17. Which of the following behaviors is exhibited by a

time series having an up-and-down movement in a
variable that repeats itself over a long period of time?

a. Random variation
 b. Trend

c. Seasonality

d. Cycle

18. Which one of the following reasons account for

using moving average in forecasting?

a. It eliminates the trend

b. It smoothes the random fluctuations

c. It counteracts the seasonal variations

d. It approximates the period average

19. Which of the following statements corresponds to

an order-winning characteristic?

a. A factor which may be significant in other parts of the

organization

b. A factor which gives an organization a competitive edge

c. A factor which serves as a minimum standard for purchase

d. A factor which increases the profitability of the

organization

20. Which of the following is a characteristic of linear

regression?

a. It is superior to a moving average

b. It is a causal forecasting model

c. It compensates for both trend and seasonal variations in

demand
 d. It is superior to a exponential smoothing

BEST OF LUCK!

1. d 11. a
2. a 12. c
3. c 13. b
4. b 14. d
5. b 15. b
6. b 16. a
7. a 17. d
8. c 18. b
9. b 19. a
10. d 20. c

1. Which one of the following is the overall objective of product

and service design?
a) Customer satisfaction and variety
b) Reliability and variety
c) Quality and reliability
d) Customer satisfaction and profitability
2. Which one of the following statements is true about OSHA?
a) To safeguard against potential hazards
b) To develop cost effective processes
c) To implement legal standards
d) To carry out implication of manufacturability and fitness
3. Which one of the following is the most significant
disadvantage of standardization?
a) Frozen designs
b) Interchangeable parts
c) Reduced variety
d) Customized parts
4. Which one of the following is the final stage of product life
cycle?
a) Growth
b) Decline
c) Maturity
d) Planning
5. _______________ is the bringing together of engineering design
and manufacturing personnel early in the design phase.
a) Reverse engineering
b) Concurrent engineering
c) Manufacturability
d) Serviceability
6. Robustness of a product is _____________ related with the
probability of failure.
a) Directly
b) Inversely
c) Linearly
d) Positively
7. Which one of the following mathematical expressions can be
used to compute availability?
a) (MTBF)/ (MTBF+MTR)
b) (MTBF)/ (MTBF‐MTR)
c) (MTR)/ (MTBF+MTR)
d) (MTR)/ (MTBF‐MTR)
8. A product ‘A’ is specified to work well up to 30 degree
Celsius temperature and 30% humidity. What would these
specifications represent?
a) Reliability factor
b) Standard conditions
c) Normal operating conditions
d) Standard operating procedure
9. Which one of the following is a curve showing failure rate
over time?
a) Cost curve
b) Bath tub curve
c) Fish bone diagram
d) Reliability curve
10. The frequency of capacity choice decisions is influenced by
all of the following factors EXCEPT:
a) Stability of demand
b) Technological changes
c) Competitive forces
d) Cost factor
11. Which one of the following refers to the maximum output
that a firm can produce under ideal conditions?
a) Design capacity
b) Effective capacity
c) Capacity planning
d) Utilization rate
12. The process selection should take into account all of the
following EXCEPT:
a) Capacity planning
b) Design of work systems
 c) Production forecasts
d) Selection of technology
13. The type of processing structure that is used for producing
discrete products at higher volume is:
a) Continuous Flow
b) Assembly Line
c) Batch
d) Job Shop
14. The type of processing structure that is used to produce
gasoline, chemicals, and steel is known as.
a) Job Shop
b) Batch
c) Assembly Line
d) Continuous Flow
15. In which of the following layouts, work stations are
arranged according to the general function they perform
without regard to any particular product?
a) Product
b) Process
c) Fixed‐position
d) Storage
16. Which one of the following is the correct order of layout
types from low volume/high variety to high volume/low
variety?
a) Fixed position, process, cell, product
b) Fixed position, cell, process, product
c) Fixed position, process, product, cell
d) Process, fixed position, cell, product
17. Which one of the following statements is NOT correct about
cycle time?
a) It represents daily operating time divided by desired
production
b) It is the maximum allowable time at each work station
c) It determines the time often items take to roll off in assembly
line
d) It is the time required to complete a product from start to
finish
18. What would be the required cycle time for a process that
operates 9 hours daily with a desired output of 300 units
per day?
a) 0.03 minutes
b) 1.8 minutes
c) 2700 minutes
d) 33.33 minutes
19. What would be the output capacity if an assembly line
operates for 7 hours per day with a cycle time of 2.0
minutes?
a) 210 units per day
b) 3.5 units per day
c) 0.004 units per day
d) 14 units per day
20. Which one of the following is TRUE about work sampling?
 a) It describes individual human motions that are used in a job
task
b) It involves determining the length of time it will take to
undertake a particular task
c) It involves determining the amount of time a worker spends
on various activities
d) It providing standard times for micro motions such as reach,
move and release

1. All of the following are the major factors affecting design strategy except:
• Cost
• Market
• Time-to-market
• Revenue
2. All of the following are the primary reasons for design process except:
• Economic
• Social and demographic
• Political, liability, or legal
• Personal
3. ______ refers to a manufacturer being liable for an injury or damage caused by a faulty
product.
• Product liability
• Manufacturer’s liability
• Organizational liability
• All of the given options
4. _________ is the postponement tactic.
• Product differentiation
• Delayed differentiation
• Service differentiation
• All of the given options
5. The situation in which a product, part or system does not perform as intended is
referred to as:
• Reliability
• Durability
• Failure
• Maturity
6. DFA stands for:
• Design for Assurance
• Design for Accuracy
• Design for Authenticity
• Design for Assembly
7. Taguchi approach helps in determining:
• Controllable factors only
• Un -controllable factors only
• Both controllable factors and un -controllable factors
• None of the given options
8. ________ is the bringing together of engineering, design and manufacturing personnel
together early in the design phase.
 • Robust design
• Concurrent engineering
• Canabalization
• Design for Manufacturing (DFM)
9. Reliability can be measured effectively by using:
• Probability
• Durability
• Failure
• Forecasting
10. _____________ determines the best possible outcome.
• Maximum
• Minimax
• Maximax
• Laplace
11. Decision tree is analyzed from:
• Left to right
• Right to left
• Any side
• All of the above
12. Judgmental forecasts include all of the following except:
• Executive opinion
• Consumer surveys
• Delphi method
• Regression analysis
13. In order to design a new product or service, an organization takes into account:
• External factors
• Internal factors
•a&b
• Economic, social and demographic conditions
14. FDA, OSHA and CRS resolve:
• Legal issues
• Political issues
• Ethical issues
• Environmental issues
15. Design that results in products or services that can function over a broad range of
conditions is called:
• Computer Aided Design
• Robust design
• Design for remanufacturing
• Modular design

16. Which of the following is wrong with respect to Naïve forecast?

• Quick and easy to prepare
• Provides high accuracy
• Simple to use
• Can be a standard for accuracy
17. Steps in CPFR include all of the following except:
 • Creation of a front end partnership agreement
• Sharing forecast
• Inventory replenishment
• Development of supply forecasts
18. Identify the right sequence in product or service life cycle.
• Introduction, Maturity, Growth, Decline, Saturation
• Introduction, Growth, Maturity, Saturation, Decline
• Introduction, Growth, Saturation, Maturity, Decline
• Introduction, Saturation, Growth, Maturity, Decline
19. In the absence of enough time, ________ forecasts are preferred.
• Qualitative
• Quantitative
• Naïve forecasts
• None of the given options
20. ___________ are based on samples taken from potential customers.
• Executive opinion
• Consumer surveys
• Delphi method
All of the given options

1. The goal of Total Quality Management is:

a) Customer satisfaction
b) Product differentiation
c) Brand equity
d) Acting globally
2. The most common form of quality control includes:
a) Planning
b) Organizing
c) Inspection
d) Directing
3. Process selection is primarily considered during:
a) Planning
b) Organizing
c) Leading
d) Controlling
4. The type of operation being carried out by an organization depends upon:
a) Degree of standardization
b) Volume of output
c) Demand
d) Both (a) and (b)
5. Repetitive processing results in output that is:
a) Highly standardized
b) Highly customized
c) Partially customized
d) None of the given options
6. Job shop and batch processing are differentiated on the basis of:
a) Job requirements
b) Degree of standardization
 c) Volume of output
d) Both (b) and (c)
7. Automation is preferred because it:
a) Offers lesser dependence on workers
b) Results in reduction in variable cost
c) Offers easy handling of repetitive work
d) All of the given options
8. Product layout is preferably used for:
a) Repetitive processing
b) Intermittent processing
c) Both (a) and (b)
d) Neither (a) nor (b)
9. Process layout is used for:
a) Repetitive processing
b) Intermittent processing
c) Both (a) and (b)
d) Neither (a) nor (b)

10. The most significant advantage of U-shaped layout is:

a) Cost minimization
b) Easy handling of process
c) Increased flexibility in work
d) All of the given options
11. The goal of motion study is to achieve:
a) Cost minimization
b) Maximum efficiency
c) Profitability
d) All of the given options
12. Location decisions are viewed primarily as part of:
a) Marketing strategy
b) Growth factors
c) Financial aspect
d) Both (a) and (b)
13. Regional factors for location planning include all of the following except:
a) Raw materials
b) Markets
c) Labor considerations
d) Attitudes
14. Transportation method is a __________ approach.
a) Quantitative
b) Qualitative
c) Scientific
d) All of the given options
15. Fredrick Taylor’s concern for quality includes:
a) Product inspection
b) Gauging system
c) Statistical control chart
d) Both (a) and (b)
16. Kaoru Ishikawa is famous for:
a) Statistical quality control
b) Fish bone diagram
c) Loss function concept
d) All of the given options
17. Poor quality adversely affects:
a) Costs
b) Productivity
c) Profitability
d) All of the given options
18._________ is intended to assess a company’s performance In terms of
environmental performance:
a) ISO 14000
b) ISO 9000
c) Six sigma
d) All of the given options
19. The purpose of ISO 9000 is to:
a) Promote quality standards to improve efficiency and productivity
b) Earn high profit
c) Avoid unfavorable outcomes
d) Gain high market share
20. A product performing consistently refers to which of the following dimensions of
quality:
a) Safety
b) Conformance
c) Durability
d) Reliability