Test Bank for Operations Management: Processes and Supply Chains 13th Edition by digitaldownload87

Operations Management: Processes and Supply Chains, 13e (Krajewski) Chapter 1 Using Operations to Create Value 1.1 Role of Operations in an Organization 1) Operations management refers to the direction and control of inputs that transform processes into products and services. Answer: TRUE Difficulty: Easy Keywords: operations management, inputs, process, transformation Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Describe the role of operations in an organization and its historical evolution over time.

2) An operation is a group of resources performing all or part of one or more processes. Answer: TRUE Difficulty: Easy Keywords: operations management, inputs, process, transformation Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Describe the role of operations in an organization and its historical evolution over time.

3) The three main line functions of any business include Operations, Finance and Marketing. Answer: TRUE Difficulty: Easy Keywords: operations, finance, marketing Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Describe the role of operations in an organization and its historical evolution over time.

4) The scope of supply chain management is restricted to the synchronization of the process among the various business functions within the firm. Answer: FALSE Difficulty: Easy Keywords: supply chain management, processes Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Describe the role of operations in an organization and its historical evolution over time.

5) Regardless of how departments like Accounting, Engineering, Finance, and Marketing function in an organization, they are all linked together through: A) management. B) processes. C) customers. D) stakeholders. Answer: B Difficulty: Moderate Keywords: departments, functions, processes Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Describe the role of operations in an organization and its historical evolution over time.

6) The foundations of modern manufacturing and technological breakthroughs were inspired by the creation of the mechanical computer by: A) Charles Babbage. B) James Watt. C) Eli Whitney. D) Frederick Taylor. Answer: A Difficulty: Moderate Keywords: Charles Babbage Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Describe the role of operations in an organization and its historical evolution over time.

7) Which of these Great Moments in Operations and Supply Chain Management did not occur in the twentieth century? A) invention of the assembly line B) publication of the Toyota Production Systems book C) establishment of railroads D) strategic planning for achieving product variety Answer: C Difficulty: Moderate Keywords: history, railroad Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Describe the role of operations in an organization and its historical evolution over time.

8) The three main line functions of any business include: A) operations. B) marketing. C) finance. D) information systems. E) all of the above F) only A), B) and C) above Answer: F Difficulty: Moderate Keywords: operations, finance, marketing Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Describe the role of operations in an organization and its historical evolution over time.

9) Operations management refers to the systematic design, direction, and control of ________ that transform ________ into products and services. Answer: processes, inputs Difficulty: Moderate Keywords: process, input, transform, product, service Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Describe the role of operations in an organization and its historical evolution over time.

10) The three mainline functions of any business are ________, ________, and ________. Answer: operations, finance, marketing Difficulty: Moderate Keywords: operations, finance, marketing, functions of a firm Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Describe the role of operations in an organization and its historical evolution over time.

11) Supply chain management is the synchronization of a firm's processes with those of its ________ and ________ to match the flow of materials, services, and information. Answer: suppliers, customers Difficulty: Moderate Keywords: supply chain management, suppliers, customers Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Describe the role of operations in an organization and its historical evolution over time.

12) What are the three key functions of a firm and what is each responsible for? Answer: The three main functions of a firm are operations, finance, and marketing. The operations function transforms material and service inputs into product and service outputs. The finance function generates resources, capital and funds from investors and sales of the firm's goods and services in the marketplace. The marketing function is responsible for producing sales revenue of the outputs. Difficulty: Moderate Keywords: manufacturing process, service process Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Describe the role of operations in an organization and its historical evolution over time.

1.2 A Process View 1) A process involves transforming inputs into outputs. Answer: TRUE Difficulty: Easy Keywords: process, inputs, outputs Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

2) Every process has a customer. Answer: TRUE Difficulty: Easy Keywords: process, customer relationship Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

3) Departments within a firm typically have a common set of objectives, and share resources among them to achieve those objectives. Answer: FALSE Difficulty: Moderate Keywords: functions, departments Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

4) At the level of the firm, service providers offer just services and manufacturers offer just products. Answer: FALSE Difficulty: Moderate Keywords: manufacturing, service, similarity, goods, services Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

5) The outputs of service processes typically cannot be held in a finished goods inventory. Answer: TRUE Difficulty: Easy Keywords: manufacturing, service, similarity, goods, services Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

6) Manufacturing processes tend to be capital intensive. Answer: TRUE Difficulty: Easy Keywords: manufacturing process, service process, capital intensive, labor intensive Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

7) Quality is more easily measured in a service process than in a manufacturing process. Answer: FALSE Difficulty: Moderate Keywords: manufacturing process, service process, quality Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

8) Contact with the customer is usually higher in a manufacturing process than in a service process. Answer: FALSE Difficulty: Easy Keywords: manufacturing process, service process, customer contact Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

9) The outputs from manufacturing processes can be produced, stored, and transported in anticipation of future demand. Answer: TRUE Difficulty: Easy Keywords: manufacturing, service, similarity, goods, services Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

10) Which of these statements about processes is not true? A) A process can have its own set of objectives. B) A process can involve work flow that cuts across departmental boundaries. C) A process can require resources from several departments. D) A process can exist without customers. Answer: D Difficulty: Moderate Keywords: process, customer relationship Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

11) Operations management is part of a production system that can be described in the following manner: Organization: inputs→processes→outputs. Which one of the following correctly describes a production system? A) Airline: pilots→planes→transportation B) Bank: tellers→computer equipment→deposits C) Furniture manufacturer: wood→sanding→chair D) Telephone company: satellites→cables→communication Answer: C Difficulty: Moderate Keywords: production system, input, process, output Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Reflective Thinking Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

Figure 1.1 You are the Production Manager for the toy manufacturing process at the ABC Company.

12) Use the information provided in Table 1.1. An example of an internal customer is: A) the lumber company. B) the Receiving Department at ABC. C) the Shipping Department at ABC. D) the toy store at the mall. Answer: C Difficulty: Moderate Keywords: internal customer Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Reflective Thinking Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

13) Use the information provided in Table 1.1. An example of an internal supplier is: A) the lumber company. B) the Receiving Department at ABC. C) the Shipping Department at ABC. D) the toy store at the mall. Answer: B Difficulty: Moderate Keywords: internal supplier Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Reflective Thinking Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

14) Use the information provided in Table 1.1. An example of an external customer is: A) the lumber company. B) the Customer Service Department at ABC. C) the Shipping Department at ABC. D) the toy store at the mall. Answer: D Difficulty: Moderate Keywords: external customer Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Reflective Thinking Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

15) Use the information provided in Table 1.1. An example of an external supplier is: A) the lumber company. B) the Receiving Department at ABC. C) the Customer Service Department at ABC. D) the toy store at the mall. Answer: A Difficulty: Moderate Keywords: external supplier Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Reflective Thinking Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

16) Which of the following is an example of a nested process? A) At the start of the new semester, a student first pays tuition and then goes to the bookstore. B) A customer service representative verifies a caller's account information. C) A candidate's intent to graduate is checked for financial holds by the Bursar and for degree requirements by Advising before the diploma mill prints their sheepskin. D) A stockbroker calls a client and advises her to sell silver short. Answer: C Difficulty: Easy Keywords: nested process Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

17) Which of the following statements is more of a general characteristic of a manufacturing organization, as compared to a service organization? A) Short-term demand tends to be highly variable. B) Operations are more capital intensive. C) Outputs are more intangible. D) Quality is more difficult to measure. Answer: B Difficulty: Moderate Keywords: manufacturing organization, service organization, capital intensity Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

18) Which one of the following statements is more of a general characteristic of a service organization, as compared to a manufacturing organization? A) Output can be inventoried. B) The response time is longer. C) There is less customer contact. D) Quality is not easily measured. Answer: D Difficulty: Moderate Keywords: manufacturing organization, service organization, facilities Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

19) Manufacturing processes usually have: A) physical, durable output. B) high levels of customer contact. C) output that cannot be inventoried. D) low levels of capital intensity. Answer: A Difficulty: Moderate Keywords: manufacturing organization, service organization, physical output Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

20) Service processes usually have: A) physical, durable output. B) low levels of customer contact. C) output that can be inventoried. D) shorter response times. Answer: D Difficulty: Moderate Keywords: manufacturing organization, service organization, capital intensity Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

21) A(n) ________ is any activity or group of activities that takes one or more inputs, transforms and adds value to them, and provides one or more outputs for its customers. Answer: process Difficulty: Moderate Keywords: process, activity, input, value Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

22) Service processes tend to produce ________, ________ outputs. Answer: intangible, perishable Difficulty: Moderate Keywords: manufacturing, service, similarity, goods, services Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

23) List and briefly describe five differences between services and manufacturing. Processes provide examples to illustrate your arguments. Answer: Manufacturing Processes Service Processes Physical, durable products Intangible, perishable products Output can be produced, stored, and transported Can't be stored and transported Customers can be part of the input and Low customer contact part of the process Have days to deliver Must be offered within minutes Capital intensive Labor intensive Quality easily measured Quality not easily measured Examples will vary. Difficulty: Moderate Keywords: manufacturing process, service process Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

24) Identify a large employer in your hometown. Describe this organization's inputs, processes, and outputs. Answer: Answers will vary based on the employer selected. Difficulty: Moderate Keywords: input, process, output Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Describe the process view of operations in terms of inputs, processes, outputs, information flows, suppliers, and customers.

1.3 A Supply Chain View 1) The customer relationship process includes the activities required to produce and deliver the service or product to the external customer. Answer: FALSE Difficulty: Moderate Keywords: customer relationship process, order fulfillment process Learning Outcome: Compare common approaches to supply chain design AACSB: Application of Knowledge Learning Objective: Describe the supply chain view of operations in terms of linkages between core and support processes.

2) The supplier relationship process selects the suppliers of services, materials and information, while the order fulfillment process facilitates the timely and efficient flow of these items into the firm. Answer: FALSE Difficulty: Moderate Keywords: supplier relationship, process, order fulfillment process Learning Outcome: Compare common approaches to supply chain design AACSB: Application of Knowledge Learning Objective: Describe the supply chain view of operations in terms of linkages between core and support processes.

3) One distinction between core processes and support processes is that core process can cut across the organization while support processes do not. Answer: FALSE Difficulty: Moderate Keywords: core process, process analysis Learning Outcome: Compare common approaches to supply chain design AACSB: Application of Knowledge Learning Objective: Describe the supply chain view of operations in terms of linkages between core and support processes.

4) A set of activities that delivers value to external customers is a: A) supply chain. B) core process. C) support process. D) system. Answer: B Difficulty: Moderate Keywords: activity, core process Learning Outcome: Compare common approaches to supply chain design AACSB: Application of Knowledge Learning Objective: Describe the supply chain view of operations in terms of linkages between core and support processes.

5) Budgeting, recruiting, and scheduling are examples of a: A) development. B) core process. C) support process. D) system. Answer: C Difficulty: Moderate Keywords: activity, support process Learning Outcome: Compare common approaches to supply chain design AACSB: Application of Knowledge Learning Objective: Describe the supply chain view of operations in terms of linkages between core and support processes.

6) The process that facilitates the placement of orders and identifies, attracts, and builds relationships with external customers is called the: A) customer relationship process. B) new service development process. C) order fulfillment process. D) supplier relationship process. Answer: A Difficulty: Moderate Keywords: process, customer relationship Learning Outcome: Compare common approaches to supply chain design AACSB: Application of Knowledge Learning Objective: Describe the supply chain view of operations in terms of linkages between core and support processes.

7) The process that includes the activities required to produce and deliver the service or product to the external customer is called the: A) customer relationship process. B) new service development process. C) order fulfillment process. D) supplier relationship process. Answer: C Difficulty: Moderate Keywords: process, order fulfillment Learning Outcome: Compare common approaches to supply chain design AACSB: Application of Knowledge Learning Objective: Describe the supply chain view of operations in terms of linkages between core and support processes.

8) The process that that selects the suppliers of services, materials, and information and facilitates the timely and efficient flow of these items into the firm is called the: A) customer relationship process. B) new service development process. C) order fulfillment process. D) supplier relationship process. Answer: D Difficulty: Moderate Keywords: process, supplier relationship Learning Outcome: Compare common approaches to supply chain design AACSB: Application of Knowledge Learning Objective: Describe the supply chain view of operations in terms of linkages between core and support processes.

9) The cumulative work of the processes of a firm is a(n) ________. Answer: supply chain Difficulty: Moderate Keywords: processes, supply chain Learning Outcome: Compare common approaches to supply chain design AACSB: Application of Knowledge Learning Objective: Describe the supply chain view of operations in terms of linkages between core and support processes.

10) ________ provide vital resources and inputs to core processes. Answer: Support processes Difficulty: Moderate Keywords: support process, core process Learning Outcome: Compare common approaches to supply chain design AACSB: Application of Knowledge Learning Objective: Describe the supply chain view of operations in terms of linkages between core and support processes.

1.4 Operations Strategy 1) A firm's core competencies reflect the collective learning of the organization, especially in how to coordinate processes and integrate technologies. Answer: TRUE Difficulty: Easy Keywords: core competency, core process Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define an operations strategy and its linkage to corporate strategy and market analysis.

2) Firm A wants to enter a foreign market and has a skill that is difficult to duplicate. Firm B desires this skill, so Firm A works with Firm B in an arrangement known as a joint venture. Answer: FALSE Difficulty: Moderate Keywords: strategic alliance Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define an operations strategy and its linkage to corporate strategy and market analysis.

3) The framework for carrying out all of an organization's functions is: A) the competitive priority. B) the corporate strategy. C) the market analysis. D) the organizational design. Answer: B Difficulty: Moderate Keywords: corporate strategy Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define an operations strategy and its linkage to corporate strategy and market analysis.

4) Which element of a firm's core competency is particularly important in service organizations, where customers come in direct contact with employees? A) workforce B) facilities C) market knowledge D) systems and technology Answer: A Difficulty: Moderate Keywords: core competency, strategy Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define an operations strategy and its linkage to corporate strategy and market analysis.

5) A company realizes that recent layoffs at its primary company reflect potential falling demands for its customers' products, and hence for its own products. The company has engaged in: A) flow strategy. B) market segmentation. C) mission statement redefinition. D) environmental scanning. Answer: D Difficulty: Moderate Keywords: environmental scanning Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define an operations strategy and its linkage to corporate strategy and market analysis.

6) Core competencies are: A) product or service attributes that represent the needs of a particular market segment. B) another name for competitive priorities. C) various flow strategies. D) the unique resources and strengths that management considers when formulating strategy. Answer: D Difficulty: Moderate Keywords: core competency, strategy Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define an operations strategy and its linkage to corporate strategy and market analysis.

7) Which of the following is an example of a core competency? A) flexibility B) top quality C) low-cost operations D) systems and technology Answer: D Difficulty: Moderate Keywords: core competency Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define an operations strategy and its linkage to corporate strategy and market analysis.

8) Price, quality, and the degree of customization are all examples of: A) volume needs. B) other needs. C) product needs. D) delivery system needs. Answer: C Difficulty: Moderate Keywords: needs assessment Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define an operations strategy and its linkage to corporate strategy and market analysis.

9) The Gap, Inc. has targeted teenagers and young adults in need of casual clothes, and through its GapKids stores, the parents or guardians of infants through 12-year-olds. This is an example of: A) market segmentation. B) a collaborative effort between the company and its customers. C) a needs assessment. D) a mission statement. Answer: A Difficulty: Moderate Keywords: market segmentation Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define an operations strategy and its linkage to corporate strategy and market analysis.

10) One form of strategic alliance is the ________, in which two firms agree to cooperate to produce a product or service together. Answer: joint venture Difficulty: Moderate Keywords: joint alliance Learning Outcome: Compare common approaches to supply chain design AACSB: Application of Knowledge Learning Objective: Define an operations strategy and its linkage to corporate strategy and market analysis.

11) The process by which managers monitor trends in the external business environment for potential opportunities or threats is known as ________. Answer: environmental scanning Difficulty: Moderate Keywords: environmental scanning, strategy Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define an operations strategy and its linkage to corporate strategy and market analysis.

12) What are the four core processes in a firm and how are they related? Answer: The customer relationship process identifies, attracts, and builds relationships with external customers and facilitates the placement of orders. The order fulfillment process includes activities required to produce and deliver the service or product to the external customer. The new service/product development process designs and develops new services or products, which may be to customer specifications. The supplier relationship process selects the suppliers of services, materials, and information and facilitates the flow of these items into the firm. All of these processes exist to provide a service or product to the customer. Difficulty: Moderate Keywords: core process, customer relationship, service/product development, order fulfillment, supplier relationship Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define an operations strategy and its linkage to corporate strategy and market analysis.

1.5 Competitive Priorities and Capabilities 1) Competitive priorities are the means by which operations implements the firm's corporate strategies. Answer: FALSE Difficulty: Moderate Keywords: competitive priority, corporate strategy Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

2) Development speed for new product and service introductions is a possible competitive priority for operations management. Answer: TRUE Difficulty: Easy Keywords: time, competitive priority Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

3) A firm once made purchasing decisions based on which supplier had the lowest cost. But once cash flow was healthy, purchasing decisions were made based on the fastest delivery of goods and services by firms. In this case, delivery speed is clearly the order qualifier. Answer: FALSE Difficulty: Moderate Keywords: competitive priority, order qualifier Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

4) Volume flexibility is handling a wide assortment of products or services efficiently. Answer: FALSE Difficulty: Moderate Keywords: variety, volume flexibility Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

5) Admission to the prestigious school had become so competitive that a high GPA is no longer enough to separate one fresh-faced high school student from another. Today's outstanding candidate must also demonstrate their involvement in a myriad of extracurricular activities in order to be admitted. It seems that good grades are now: A) a needs assessment. B) order qualifiers. C) order winners. D) a mission statement. Answer: B Difficulty: Easy Keywords: order qualifier Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Reflective Thinking Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

6) The first three cars I bought all fell apart around 50,000 miles. It was called planned obsolescence and no one seemed to care until companies entered the market that promised 70,000, then 80,000, and finally 100,000 mile warranties. What sets a great car apart from a good one now is not the quality, which is assumed, but performance, safety and fuel economy. A car that can achieve all three is highly sought after. In the automotive market, performance, safety and fuel economy are sterling examples of: A) order winners. B) a needs assessment. C) order qualifiers. D) a mission statement. Answer: A Difficulty: Easy Keywords: order winner Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Reflective Thinking Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

7) You are interested in buying a laptop computer. Your list of considerations include the computer's speed in processing data, its weight, screen size, and price. You consider a number of different models, and narrow your list based on speed and monitor screen size, then finally select a model to buy based on its weight and price. In this decision, weight and price are examples of: A) order qualifiers. B) a needs assessment. C) order winners. D) a mission statement. Answer: C Difficulty: Easy Keywords: order winner Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Reflective Thinking Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

8) You are interested in buying a laptop computer. Your list of considerations include the computer's speed in processing data, its weight, screen size and price. You consider a number of different models, and narrow your list based on its speed and monitor screen size, then finally select a model to buy based on its weight and price. In this decision, speed and monitor screen size are examples of: A) order winners. B) a mission statement. C) a needs assessment. D) order qualifiers. Answer: D Difficulty: Easy Keywords: order qualifier Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Reflective Thinking Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

9) Using an airline example for competitive priorities, the process capability of handling service needs of all market segments and promotional programs would be best described by: A) top quality. B) variety. C) consistent quality. D) delivery speed. Answer: B Difficulty: Easy Keywords: variety, competitive priorities Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

10) A company's ability to quickly introduce a new service or product would be best described as: A) volume flexibility. B) variety. C) consistent quality. D) development speed. Answer: D Difficulty: Easy Keywords: development speed, competitive priorities Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

11) A business focusing on increasing the efficiency of its operations is more directly addressing: A) volume flexibility. B) variety. C) consistent quality. D) low-cost. Answer: D Difficulty: Easy Keywords: efficiency, low-cost, competitive priority Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

12) While other suppliers bidding for the contract brought bids with lower per unit costs, Orchard wanted to take delivery based on the fact that the components they were using were machined to their exacting specifications 99.99999% of the time. Orchard's competitive priority was: A) top quality. B) consistent quality. C) on-time delivery. D) delivery speed. Answer: B Difficulty: Moderate Keywords: competitive priority Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

13) A popular haberdashery could take a customer's measurements in the afternoon and produce a dandy suit ready for customer pickup by next morning. Their competitive priority was: A) variety. B) top quality. C) delivery speed. D) on-time delivery. Answer: C Difficulty: Moderate Keywords: competitive priority Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Reflective Thinking Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

14) For students not wanting a traditional major in marketing or accounting, for example, the college decided to create a general business major, which allowed any combination of the easiest business courses to comprise the program. The competitive priority achieved in this example is: A) customization. B) delivery speed. C) consistent quality. D) low-cost. Answer: A Difficulty: Easy Keywords: customization, competitive priority Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Reflective Thinking Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

15) A company's ability to support varying rates of production is best described as: A) volume flexibility. B) variety. C) consistent quality. D) development speed. Answer: A Difficulty: Moderate Keywords: volume flexibility, competitive priorities Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

16) A company's ability to handle a wide variety of services and products efficiently is best described as: A) volume flexibility. B) variety flexibility. C) customization. D) development speed. Answer: B Difficulty: Moderate Keywords: volume flexibility, competitive priorities Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

17) A firm gains competitive advantage by outperforming competitors in terms of competitive priorities, which fall into four major groups: ________, ________, ________, and ________. Answer: cost, quality, time, flexibility Difficulty: Moderate Keywords: competitive priorities, cost, quality, time, flexibility Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

18) ________ is the elapsed time between receiving a customer's order and filling it. Answer: Lead time Difficulty: Easy Keywords: time, delivery speed Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

19) ________ measures the frequency with which delivery-time promises are met. Answer: On-time delivery Difficulty: Moderate Keywords: on-time delivery Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

20) ________ is the ability to satisfy the unique needs of each customer by changing service or product designs. Answer: Customization Difficulty: Moderate Keywords: customization, flexibility Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

21) Every sub-contractor knew that their quality had to be excellent to be considered for the project; it was their ability to deliver on time that would secure the lucrative contract. Quality was recognized as being a(n) ________, but on-time delivery was the ________. Answer: order qualifier, order winner Difficulty: Moderate Keywords: order qualifier, order winner Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Reflective Thinking Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

22) The Minimal level required from a set of criteria for a firm to do business in a particular market segment is called a(n) ________. Answer: order qualifier Difficulty: Moderate Keywords: order qualifier, order winner Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Reflective Thinking Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

23) Explain what an operations strategy is and the importance of competitive priorities. Give an example from an organization (public or private, manufacturing or service). Answer: An operations strategy is the means by which operations implements the firm's corporate strategy. Competitive priorities are the key capabilities that operations must develop to compete successfully in a market segment. Possible competitive priorities include low-cost operation, highperformance design, consistent quality, delivery speed, on-time delivery, development speed, customization, and volume flexibility. Examples will vary. Difficulty: Moderate Keywords: operations strategy competitive priorities Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

24) Name the two competitive priorities for quality and give an example of each. Answer: The two competitive priorities are top quality, which is the determination of the level of operations performance required in making a product or performing a service, and consistent quality, which measures the frequency with which the product or service meets design specifications. Examples will vary. Difficulty: Moderate Keywords: competitive priorities, top quality, consistent quality Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

25) Name the three competitive priorities for time and give an example of each. Answer: The three competitive priorities for time are delivery speed, on-time delivery, and development speed. Delivery speed refers to the elapsed time between receiving a customer's order and filling it. On-time delivery measures the frequency with which delivery-time promises are met. Development speed measures how quickly a new product or service is introduced. Examples will vary. Difficulty: Moderate Keywords: competitive priorities, delivery speed, on-time delivery, development speed Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Identify nine competitive priorities used in operations strategy, and explain how a consistent pattern of decisions can develop organizational capabilities.

1.6 Trends and Challenges in Operations Management 1) Most products today are composites of global materials and services from throughout the world. Answer: TRUE Difficulty: Moderate Keywords: globalization, products Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

2) The increased global presence of many firms has lessened the burden to behave ethically. Answer: FALSE Difficulty: Easy Keywords: ethics, global presence Learning Outcome: Discuss the influences of the global competitive environment on operations management AACSB: Ethical Understanding and Reasoning Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

3) In an assembly operation at a furniture factory, ten employees assembled an average of 600 custom chairs per 5-day week. What is the labor productivity of this operation? A) 12 chairs per worker per day B) 20 chairs per worker per day C) 15 chairs per worker per day D) 25 chairs per worker per day Answer: A Difficulty: Moderate Keywords: labor productivity Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

4) A manufacturing process requires 12 minutes of labor to make 10 units of product. Which of the following actions will increase productivity? 1. Increase labor per 10 units of production 2. Decrease labor per 10 units of production 3. Increase number of units per 10 minutes of labor 4. Decrease number of units per 12 minutes of labor A) 1 and 3 only B) 2 and 4 only C) 1 and 4 only D) 2 and 3 only Answer: D Difficulty: Easy Keywords: labor productivity Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

5) The details of weekly output and input for a fabrication process are as follows: output is 600 units, with a standard selling price of $50 per unit. For the week, total labor costs are: 8 workers at 40 hours for the week, are paid $20 per hour. Total material costs for the 400 units are $8,000. Weekly overhead is charged at the rate of 1.3 times the labor costs. What is the multifactor productivity for the week? A) 0.54 B) 1.32 C) 1.84 D) 2.00 Answer: B Difficulty: Moderate Keywords: multifactor productivity Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

Table 1.2 The Green Battery Company manufactures lithium ion batteries. The current process uses 15 workers and produces 50 units per hour. You are considering changing the process with new automated technologies that increase output to 75 units per hour, but will require only 10 workers. Particulars are as follows:

OUTPUT (UNITS / HOUR) NUMBER OF WORKERS MATERIAL COST / HOUR

CURRENT PROCESS 50 15 $1000

NEW PROCESS 75 10 $1250

Workers are paid at a rate of $15 per hour, and overhead is charged at 150% (or 1.5 times) labor costs. Finished batteries sell for $200 / unit. 6) Use the information provided in Table 1.2. What is the multifactor productivity of the current process? A) less than or equal to 6.0 B) greater than 6.0 but less than or equal to 9.0 C) greater than 9.0 but less than or equal to 12.0 D) greater than 12.0 Answer: B Difficulty: Moderate Keywords: multifactor productivity Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

7) Use the information provided in Table 1.2. What is the multifactor productivity of the new process? A) less than or equal to 6.0 B) greater than 6.0 but less than or equal to 9.0 C) greater than 9.0 but less than or equal to 12.0 D) greater than 12.0 Answer: C Difficulty: Moderate Keywords: multifactor productivity Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

8) Use the information provided in Table 1.2. Based on your productivity calculations, what decision should you make? A) implement the new process B) stay with the current process C) need more information to make a decision D) Either process is acceptable (since the multi-factor productivities are the same). Answer: A Difficulty: Moderate Keywords: multifactor productivity Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

9) It takes the Blacksburg shipyard twenty weeks with 200 workers to build an airplane. Material costs are $15 million and overhead costs are $1.5 million. Workers cost $35 per hour including benefits and work 40 hours per week. Each airplane sells for $50 million. What is the multifactor productivity ratio? A) less than 1.0 B) greater than 1.0 but less than or equal to 2.0 C) greater than 2.0 but less than or equal to 3.0 D) greater than 3.0 Answer: C Difficulty: Moderate Keywords: multifactor productivity Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

10) Which of the following would be considered a disadvantage resulting from globalization of operations? A) loss of proprietary technology in working with offshore suppliers B) alienation of customers in foreign market of operation C) high levels of worker skills in foreign countries D) strong global competition and increased worldwide demand Answer: A Difficulty: Moderate Keywords: global competition Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Diverse and Multicultural Work Environments Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

11) With regards to globalized operations and cost advantages, what China is to manufacturing, India is to: A) services. B) human resources. C) finance. D) supply chain. Answer: A Difficulty: Moderate Keywords: global competition Learning Outcome: Discuss the influences of the global competitive environment on operations management AACSB: Application of Knowledge Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

12) Companies that do not have operations in China find it difficult to compete based on the basis of low prices with companies that do. Instead those companies tend to compete based on: A) quality and social responsibility. B) speed and small production runs. C) luxury. D) quality and small production runs. Answer: B Difficulty: Moderate Keywords: global competition Learning Outcome: Discuss the influences of the global competitive environment on operations management AACSB: Application of Knowledge Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

13) Productivity is defined as ________ divided by ________. Answer: output, input Difficulty: Moderate Keywords: output, input, productivity Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

14) Half of the world's greenhouse gases are produced by only seven nations including ________, ________ and ________. Answer: China, United States, India (students can answer in any order) Difficulty: Moderate Keywords: environment, greenhouse gas Learning Outcome: Discuss the role of operations management in corporate social responsibility and sustainability AACSB: Ethical Understanding and Reasoning Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

15) How has global competition affected productivity? Cite specific examples and reference the productivity equation to support your thesis. Answer: Examples will vary; students should argue that the increase in global competition has increased productivity for those firms that have survived. Firms that fail (or have already failed) to effectively compete with new competition suffer from reduced sales, so the numerator in the productivity equation will be lower, perhaps without a commensurate decrease in the denominator, resulting in reduced productivity. Firms that are effectively competing against global competition probably have higher levels of productivity. Global operations might include cheaper or better raw materials and labor, resulting in a smaller denominator and higher productivity. Global competition might also inject new management techniques and leaner operations if some services are outsourced to specialist companies. Difficulty: Moderate Keywords: productivity, raw materials, labor Learning Outcome: Discuss the influences of the global competitive environment on operations management AACSB: Application of Knowledge Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

16) What are some disadvantages of globalization? Answer: Operations in other countries can have disadvantages. A firm may have to relinquish proprietary technology if it turns over some of its component manufacturing to offshore suppliers or if suppliers need the firm's technology to achieve desired quality and cost goals. Political risks may also be involved. Each nation can exercise its sovereignty over the people and property within its borders. The extreme case is nationalization, in which a government may take over a firm's assets without paying compensation. Exxon and other large multinational oil firms are scaling back operations in Venezuela due to nationalization concerns. Further, a firm may actually alienate customers back home if jobs are lost to offshore operations. Employee skills may be lower in foreign countries, requiring additional training time. South Korean firms moved much of their sports shoe production to low-wage Indonesia and China, but they still manufacture hiking shoes and in-line roller skates in South Korea because of the greater skills required. In addition, when a firm's operations are scattered globally, customer response times can be longer. Coordinating components from a wide array of suppliers can be challenging. Difficulty: Moderate Keywords: globalization Learning Outcome: Discuss the influences of the global competitive environment on operations management AACSB: Application of Knowledge Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

17) What are some ethical issues that are prevalent in organizations that have a global operations presence? Answer: Some countries are more sensitive than others about conflicts of interest, bribery, discrimination against minorities and women, minimum-wage levels, and unsafe workplaces. Managers must decide whether to design and operate processes that do more than just meet local standards. In addition, technological change brings debates about data protection and customer privacy. In an electronic world, businesses are geographically far from their customers, so a reputation of trust is paramount. Difficulty: Moderate Keywords: ethical issues, ethics, globalization Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Ethical Understanding and Reasoning Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

18) Barry's Tire Service completed 100 tire changes, six brake jobs, and 16 alignments in an eight-hour day with his standard crew of six mechanics. A brake specialist costs $16 per hour, a tire changer costs $8 per hour, and an alignment mechanic costs $14 per hour. The materials cost for a day was $2,000, and overhead cost was $500. a. What is the shop's labor productivity if the retail price for each respective service is $60, $150, and $40? b. What is the multifactor productivity, if the crew consisted of two of each type mechanic? Answer: a.

= $157/hr

= 2.43

Difficulty: Moderate Keywords: labor productivity, multifactor productivity Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

Table 1.3 The Abco Company manufactures electrical assemblies. The current process uses 10 workers and produces 200 units per hour. You are considering changing the process with new assembly methods that increase output to 300 units per hour, but will require 14 workers. Particulars are as follows:

OUTPUT (UNITS / HOUR) NUMBER OF WORKERS MATERIAL COST / HOUR

CURRENT PROCESS 200 10 $120

NEW PROCESS 300 14 $150

19) Use the information in Table 1.3. Workers are paid at a rate of $10 per hour, and overhead is charged at 140% (or 1.4 times) labor costs. Finished switches sell for $20/unit. a. Calculate the multifactor productivity for the current process. b. Calculate the multifactor productivity for the new process. c. Determine if the new process should be implemented. Answer: a.

= 11.11

= 12.35

c. The new process increases multifactor productivity and should be implemented. Difficulty: Moderate Keywords: labor productivity, multifactor productivity Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

20) The three-person crew worked their way through the neighborhood, mowing lawns, edging, applying fertilizer and weed treatments where necessary and collecting all the clippings for use as mulch as part of their new green initiative. Their pricing scheme appears in Table 1.4 and the mix of orders and service costs appear in Table 1.5: a. What is their multifactor productivity for these orders in the prestigious Edmond Oaks neighborhood? b. Which of the service combinations provided by them is the most productive service combination from a multifactor perspective? c. What is their labor productivity for the same mix of orders? Table 1.4: Price List SERVICE Mow lawn Edge Fertilizer treatment Weed prevention treatment

Multiple services

PRICE $75 $20 $120

LABOR 1 hr .25 .25

MATERIAL $2 $1 $45

$80 5% discount times the number of services

.25

$25

Workers are paid at a rate of $10 per hour, and overhead is charged at 120% (or 1.2 times) labor costs. For a customer that gets both mowing and edging, their $95 bill would be discounted for two services times 5% for a total of 10% off the $95 straight charge for a cost of $85.50. A customer receiving three services would get a 15% discount off their service bill. Labor hours shown in Table 1.4 are total hours for the three-person crew. Table 1.5 Orders Processed SERVICE Mow lawn & edge Mow lawn, edge, and fertilize Mow lawn, edge, and weed prevention treatment Mow lawn & fertilize

# Customers 6 3 2 2

Answer: a. Multifactor Productivity Overall Total Revenue = $86 × 6 + $182.75 × 3 + $148.75 × 2 + $175.50 × 2 = $1,709.75 Labor Cost = $12.50 × 6 + $15 × 3 + $15 × 2 + $12.50 × 2 = $175 Material Cost = $3 × 6 + $48 × 3 + $28 × 2 + $47 × 2 = $312 Overhead Cost = 1.2 × ($12.50 × 6 + $15 × 3 + $15 × 2 + $12.50 × 2) = $210 Multifactor Productivity = Multifactor Productivity = 2.45 b. Multifactor Productivity by Service Mow & Edge =

= 2.8

Mow & Edge & Fertilize =

= 2.26

Mow & Edge & Weed =

= 2.44

Mow & Fertilize =

= 2.36

The package with the highest multifactor productivity is the Mow & Edge c. Overall Labor Productivity. Total Revenue = $85.59 × 6 + $182.75 × 3 + $148.75 × 2 + $175.50 × 2 = $1,709.75 Labor Cost = $12.50 × 6 + $15 × 3 + $15 × 2 + $12.50 × 2 = $175 Labor Productivity = Labor Productivity = 9.77 Difficulty: Challenging Keywords: labor productivity, multifactor productivity Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

21) The three-person crew worked their way through the neighborhood, testing doorknobs and windows and slipping past security systems like a team of ninjas. Of course, they weren't ninjas, but a crew of brazen burglars, hoping to grab cash and other valuables to fence at the next level of their supply chain. Fortune smiles on them on this day in the prestigious Edmond Oaks neighborhood. A lawn maintenance crew is creating a tremendous racket mowing and edging lawns, which completely drowns out the sounds of breaking glass. Details of the day's haul appear in Table 1.6. a. What is the multifactor productivity? b. What is the labor productivity? Table 1.6: The Haul ITEM Krugerrand Flat screen TV $200 cash Lava lamp Rolex watch

SALES PRICE $1,500 $250 $200 $5 $180

LABOR 1 hr .25 .05 .15 .10

MATERIAL $2 $1 $45 $25 $1

Workers are paid at a flat rate of 20% of the sales price of the merchandise. Materials cost represents the cost of gasoline and surgical gloves, and overhead is 20% of the sales price of the merchandise. Answer: a. Multifactor Productivity Total Revenue = $1,500 + $250 + $200 + $5 + $180 = $2,135 Labor Cost = 20% × ($1,500 + $250 + $200 + $5 + $180) = $427 Material Cost = $2 + $1 + $45 + $25 + $1 = $74 Overhead Cost = 20% × ($1,500 + $250 + $200 + $5 + $180) = $427 Multifactor Productivity = Multifactor Productivity = 2.30 b. Labor Productivity Total Revenue = $1,500 + $250 + $200 + $5 + $180 = $2,135 Labor Cost = 20% × ($1,500 + $250 + $200 + $5 + $180) = $427 Labor Productivity = Labor Productivity = 5 Difficulty: Moderate Keywords: labor productivity, multifactor productivity Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Identify the latest trends in operations management and understand how firms can address the challenges facing operations and supply chain managers in a firm.

1.7 Fourth Industrial Revolution (Industry 4.0) 1) The fourth industrial revolution that ushered in the digital age, introduced the use of computers in the production process. Answer: FALSE Difficulty: Moderate Keywords: industry 4.0, technology Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define the fourth industrial revolution (Industry 4.0) and understand how its embedded technologies and automation are transforming the practice of operations and supply chain management.

2) The Internet of Things is a trend that affects operations and supply chain management in a minor way. Answer: FALSE Difficulty: Easy Keywords: technology, challenges, internet Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define the fourth industrial revolution (Industry 4.0) and understand how its embedded technologies and automation are transforming the practice of operations and supply chain management.

3) Artificial Intelligence is a constellation of technologies that allows machines to sense, comprehend, act, and learn. Answer: TRUE Difficulty: Easy Keywords: technology, artificial intelligence Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define the fourth industrial revolution (Industry 4.0) and understand how its embedded technologies and automation are transforming the practice of operations and supply chain management.

4) Which of the following statements about "big data" is false? A) The data must be organized and analyzed to be of any use. B) Firms use high-powered analytical models to sift through the data C) Data may be collected instantly or over a period of months. D) It is not necessary for operations managers to be involved in implementation of "big data" processes. Answer: D Difficulty: Moderate Keywords: technology, internet, data Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define the fourth industrial revolution (Industry 4.0) and understand how its embedded technologies and automation are transforming the practice of operations and supply chain management.

5) The question of whether a manufacturer has rights to utilize data collected from a health monitoring device to improve future versions of the product is a concern of: A) privacy. B) technology. C) security. D) hardware costs. Answer: A Difficulty: Moderate Keywords: technology, internet, data Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define the fourth industrial revolution (Industry 4.0) and understand how its embedded technologies and automation are transforming the practice of operations and supply chain management.

6) The utilization of sensor data to detect deteriorating machine parts prior to product failure is an example of which operations management application? A) product design and development B) inventory management C) preventive maintenance D) logistics Answer: C Difficulty: Moderate Keywords: technology, internet, data Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define the fourth industrial revolution (Industry 4.0) and understand how its embedded technologies and automation are transforming the practice of operations and supply chain management.

7) Computer systems used in manufacturing to track and document the transformation of raw materials into finished goods are known as: A) manufacturing execution systems. B) distributed production networks. C) additive manufacturing systems. D) grid technology networks. Answer: A Difficulty: Moderate Keywords: industry 4.0, technology Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define the fourth industrial revolution (Industry 4.0) and understand how its embedded technologies and automation are transforming the practice of operations and supply chain management.

8) Interconnected objects such as sensors that can automate the collection and exchange of data over a network are known as: A) grid technology networks. B) internet of things. C) computer aided manufacturing systems. D) distributed production networks. Answer: A Difficulty: Easy Keywords: industry 4.0, technology Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define the fourth industrial revolution (Industry 4.0) and understand how its embedded technologies and automation are transforming the practice of operations and supply chain management.

9) The use of sensors that can be used to monitor how products are performing in the field and the use of digital remote interfaces that can be used to connect those products to their manufacturer is an example of which type of smart technology? A) smart customer technology B) smart product technology C) smart supply technology D) smart intranet technology Answer: B Difficulty: Easy Keywords: industry 4.0, smart technology Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define the fourth industrial revolution (Industry 4.0) and understand how its embedded technologies and automation are transforming the practice of operations and supply chain management.

10) What type of barrier is the bandwidth that will be needed to support the interconnectivity of billions of devices under a smart technology model? A) privacy B) technology C) security D) organizational Answer: B Difficulty: Moderate Keywords: technology, IoT Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define the fourth industrial revolution (Industry 4.0) and understand how its embedded technologies and automation are transforming the practice of operations and supply chain management.

11) Which of the following is not an implication of additive manufacturing for operations and supply chain management? A) increased material inputs B) simplified production C) production flexibility D) decentralized production networks Answer: A Difficulty: Moderate Keywords: additive manufacturing, 3D printing Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define the fourth industrial revolution (Industry 4.0) and understand how its embedded technologies and automation are transforming the practice of operations and supply chain management.

12) Which is currently the greatest challenge in using additive manufacturing to produce more sophisticated, high valued parts? A) intellectual property rights B) quality assurance C) modification of processes D) workforce skills Answer: B Difficulty: Moderate Keywords: additive manufacturing, 3D printing Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define the fourth industrial revolution (Industry 4.0) and understand how its embedded technologies and automation are transforming the practice of operations and supply chain management.

13) In order to utilize the capabilities of the internet of things, the organizational roles of ________ and ________ will have to become more aligned, although they are traditionally two separate functional areas. Answer: operations management, information technology Difficulty: Challenging Keywords: internet, technology Learning Outcome: Discuss the role of operations management in corporate social responsibility and sustainability AACSB: Application of Knowledge Learning Objective: Define the fourth industrial revolution (Industry 4.0) and understand how its embedded technologies and automation are transforming the practice of operations and supply chain management.

14) The technologies that build three-dimensional (3D) objects by adding layers of material such as plastic, metal, or concrete is known as ________. Answer: additive manufacturing Difficulty: Moderate Keywords: additive manufacturing, 3D printing Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Define the fourth industrial revolution (Industry 4.0) and understand how its embedded technologies and automation are transforming the practice of operations and supply chain management.

15) What are some of the concerns operations managers must address regarding using the internet of things? Cite a specific example. Answer: Examples will vary, but students will mention concerns with technology, privacy, security, or organizational roles. They may also discuss the challenges of implementing the hardware, gathering the "big data", analysis of the data, and use of the data to aid in decision-making processes. Difficulty: Moderate Keywords: technology, internet, challenges Learning Outcome: Discuss the influences of the global competitive environment on operations management AACSB: Application of Knowledge Learning Objective: Define the fourth industrial revolution (Industry 4.0) and understand how its embedded technologies and automation are transforming the practice of operations and supply chain management.

1.8 Developing Skills for Your Career 1) Understanding the concepts in this text will help you become an effective manager in any functional area of business. Answer: TRUE Difficulty: Easy Keywords: process design, supply chains Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand how to develop skills for your career using this textbook.

2) Managing supply chains does not involve processes external to the firm. Answer: FALSE Difficulty: Easy Keywords: process design, supply chains Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand how to develop skills for your career using this textbook.

3) The effective operation of a firm and its supply chain is more important than the design and implementation of its processes. Answer: FALSE Difficulty: Moderate Keywords: process design, supply chains Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand how to develop skills for your career using this textbook.

4) It is the sole responsibility of the operations function of an organization to design and operate processes that are part of a supply chain. Answer: FALSE Difficulty: Moderate Keywords: process design, supply chains Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand how to develop skills for your career using this textbook.

5) The topics of forecasting, inventory management and resource planning is associated with which part of supply chain and operations management? A) process strategy and analysis B) managing customer demand C) designing logistics networks D) statistical process control Answer: B Difficulty: Moderate Keywords: customer demand, supply chains Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand how to develop skills for your career using this textbook.

6) Operations managers are involved at both the strategic and tactical levels of corporate strategy. Answer: TRUE Difficulty: Easy Keywords: strategic level, tactical level Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand how to develop skills for your career using this textbook.

7) If a retail store owner does not have a popular item in stock because he underestimated the forecasted sales for that item, he most likely has a challenge with: A) managing processes. B) managing customer demand. C) managing supply chains. D) managing people. Answer: B Difficulty: Moderate Keywords: process design, supply chains Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand how to develop skills for your career using this textbook.

8) The key decisions to eliminate activities that do not add value while improving those that do are an important part of: A) managing processes. B) managing customer demand. C) managing supply chains. D) managing people. Answer: A Difficulty: Moderate Keywords: process design, supply chains Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand how to develop skills for your career using this textbook.

9) ________ are often responsible for key performance measures such as cost and quality. Answer: Operations Managers Difficulty: Moderate Keywords: process innovation, supply chains Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand how to develop skills for your career using this textbook.

10) Each function of an organization is connected with operations through shared ________. Answer: processes Difficulty: Moderate Keywords: process innovation, supply chains Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand how to develop skills for your career using this textbook.

11) Effective management of its processes can allow a firm to reduce its ________ and also increase ________. Answer: costs, customer satisfaction Difficulty: Moderate Keywords: process innovation, supply chains Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand how to develop skills for your career using this textbook.

12) Explain the types of decisions that operations managers are involved in and how they are linked to a firm's strategy. Answer: Operations managers are involved in tactical decisions such as process improvement, performance measurement, the management and planning of projects, staffing management, inventory management, and resource scheduling. Operations manager's decisions should reflect corporate strategy. These decisions have strategic impact because they allow the firm to gain a competitive advantage. Difficulty: Moderate Keywords: strategy, innovation, supply chains Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand how to develop skills for your career using this textbook.

Operations Management: Processes and Supply Chains, 13e (Krajewski) Chapter 2 Process Strategy and Analysis 2.1 Process Structure in Services 1) Process decisions are strategic in nature. Answer: TRUE Difficulty: Easy Keywords: process strategy Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

2) The greater the cost of equipment relative to the cost of labor, the lower is the capital intensity. Answer: FALSE Difficulty: Easy Keywords: capital intensity, process decisions Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

3) All parts of an organization, as well as external suppliers and customers across the supply chain, need to be involved to ensure that processes are providing the most value to their internal and external customers. Answer: TRUE Difficulty: Easy Keywords: supply chain process, business process Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

4) Processes, by their nature, are found only in the operations function of an organization. Answer: FALSE Difficulty: Easy Keywords: operations function, process Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

5) Customer involvement reflects the ways in which customers become part of the process and the extent of their participation. Answer: TRUE Difficulty: Moderate Keywords: customer contact, customer participation, customer involvement Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

6) Service providers with a line process tend to move customers, materials, or information in a fixed sequence from one operation to the next. Answer: TRUE Difficulty: Moderate Keywords: line process, service provider, standard process Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

7) A moment of truth or service encounter is face-to-face interaction between the customer and a service provider. Answer: TRUE Difficulty: Easy Keywords: moment of truth, face-to-face interaction, customer, service provider Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

8) Divergence is the extent to which the process is customized with considerable latitude on how the tasks are performed. Answer: TRUE Difficulty: Moderate Keywords: divergence, customization Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

9) A front office structure features high levels of customer contact where the service provider interacts directly with the internal or external customer. Answer: TRUE Difficulty: Easy Keywords: front office process structure, customer contact, service provider interaction Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

10) Back office work is typically routine, with many steps having considerable divergence. Answer: FALSE Difficulty: Easy Keywords: back office process structure, divergence Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

11) The mix of equipment and human skills in a process determines the level of: A) process structure. B) capital intensity. C) customer involvement. D) resource flexibility. Answer: B Difficulty: Moderate Keywords: capital intensity, process decisions Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

12) Table service where food is served at a traditional sit down restaurant is an example of: A) active contact. B) hybrid office. C) passive contact. D) back office. Answer: A Difficulty: Easy Keywords: service processes, active contact Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

13) An interior designer decorates homes for a clientele that wants a one-of-a-kind living space. This service process can be described as: A) divergent. B) complex. C) specialized. D) hybrid. Answer: A Difficulty: Moderate Keywords: service processes, process divergence Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

14) The process structure that best describes a waiter's position at a restaurant would be classified as: A) front office. B) back office. C) hybrid office. D) inner office. Answer: A Difficulty: Easy Keywords: services processes, process structure, front office Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

15) A service provided delivering packages to a locker for customers to pick up at their convenience is an example of: A) front office. B) passive contact. C) active contact. D) hybrid office. Answer: B Difficulty: Easy Keywords: service processes, passive contact Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

16) An example of a process that is primarily back office is: A) a taxi driver. B) the teller at a bank. C) the payroll clerk that calculates your paycheck. D) the hostess at a restaurant. Answer: C Difficulty: Moderate Keywords: service processes, process structure, back office Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

17) Front offices typically emphasize: A) low cost operations and on-time delivery. B) top quality and customization. C) on-time delivery and standardization. D) top quality and low cost operations. Answer: B Difficulty: Easy Keywords: services processes, process structure, front office Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

18) Back offices typically emphasize: A) low cost operations and on-time delivery. B) high divergence and customization. C) on-time delivery and customization. D) high customer contact and low cost operations. Answer: A Difficulty: Easy Keywords: service processes, process structure, back office Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

19) The physical arrangement of operations (or departments) relative to each other is known as ________. Answer: layout Difficulty: Moderate Keywords: process layout, process decisions Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

20) The ease with which employees and equipment can handle a wide variety of products, output levels, duties, and functions is known as ________. Answer: resource flexibility Difficulty: Moderate Keywords: resource flexibility, process decisions Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

21) What are three principles of process strategy that should govern choices that process designers make? Provide examples of well-conceived process strategy choices to illustrate each of your three principles. Answer: The three principles discussed in the text are: 1) The key to successful process decisions is to make choices that fit the situation and that make sense together. They should not work at cross-purposes, with one process optimized at the expense of other processes. A more effective process is one that matches key process characteristics and has a close strategic fit. 2) Individual processes are the building blocks that eventually create the firm's whole supply chain. The cumulative effect on customer satisfaction and competitive advantage is huge. 3) Whether processes in the supply chain are performed internally or by outside suppliers and customers, management must pay particular attention to the interfaces between processes. Dealing with these interfaces underscores the need for cross-functional coordination. Examples of process strategy choices will vary. Difficulty: Moderate Keywords: process decisions, process strategy Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

22) What are the different dimensions of customer contact in service processes? Provide an example of a service that has high levels of customer contact and one that has very low levels of customer contact. Answer: The dimensions of customer contact are physical presence, what is processed, contact intensity, personal attention, and method of delivery. Examples will vary. Difficulty: Moderate Keywords: customer contact intensity, physical presence, personal attention, delivery method, what processed Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

23) Describe and highlight differences among the three process structures in services. Answer: The three process structures form a continuum and are front office, hybrid office, and back office. The front office structure is a process with high customer contact in which the service provider interacts directly with the customer. This process is more complex and has considerable divergence. The back office structure is a process with low customer contact in which the service provider interacts little with the customer. The work tends to be standardized and routine, with line flows from one service provider to the next with little variation. The hybrid office is a process with moderate levels of customer contact and standard services with perhaps some options available. Work flow progresses from one station to the next with some dominant paths apparent. Work is reasonably complex and some customization exists in how the process is performed. Difficulty: Moderate Keywords: service process structure, front office, back office, hybrid office Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in services and how to position a service process on the customer-contact matrix.

2.2 Process Structure in Manufacturing 1) A continuous flow process is characterized by a high degree of job customization. Answer: FALSE Difficulty: Moderate Keywords: continuous flow process, customization Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

2) A job process has the highest level of customization of the process choices. Answer: TRUE Difficulty: Moderate Keywords: job process, customization Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

3) Line processes generally have lower volumes as compared to job processes. Answer: FALSE Difficulty: Moderate Keywords: job process, line process, volume Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

4) In a line process, there is little variability in the products manufactured, and production and material handling equipment are often specialized. Answer: TRUE Difficulty: Moderate Keywords: line process, product variability, specialized equipment Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

5) Petroleum refineries typically use continuous flow processes. Answer: TRUE Difficulty: Moderate Keywords: continuous flow process Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

6) The product-process matrix brings together the elements of volume, process, and quality. Answer: FALSE Difficulty: Moderate Keywords: product-process matrix, manufacturing volume, process, quality Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

7) Specialized medical equipment would usually be produced using a line process. Answer: FALSE Difficulty: Moderate Keywords: product-process matrix, line process, job process Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

8) A make-to-stock strategy involves holding items in stock for immediate delivery and is feasible for standardized products with high volumes and reasonably accurate forecasts. Answer: TRUE Difficulty: Easy Keywords: make-to-stock strategy, standardized products, volume, product forecasts Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

9) The degree of process divergence is what keeps a large batch process from being economically produced using a line process. Answer: TRUE Difficulty: Moderate Keywords: batch process, line process, divergence Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

10) A make-to-order strategy produces products to customer specifications in large volumes. Answer: FALSE Difficulty: Moderate Keywords: make-to-order strategy Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

11) The principle of postponement is modeled by the worker that has known his assignment for several weeks, but waits until the day before the product is to be delivered to begin production. Answer: FALSE Difficulty: Moderate Keywords: postponement, procrastination Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

12) Which of the following is sometimes called mass production? A) batch process and make-to-order strategy B) line process and make-to-stock strategy C) continuous flow process and assemble-to-order strategy D) job process and make-to-order strategy Answer: B Difficulty: Moderate Keywords: manufacturing processes, mass production, line, line process Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

13) A job process should be preferred when: A) workforce and equipment are specialized. B) products are made to stock type. C) customization is high and volume is low. D) customization is low and volume is high. Answer: C Difficulty: Moderate Keywords: manufacturing processes, job process, customization, volume Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

14) A petroleum refinery would use which process? A) batch process B) line process C) continuous flow process D) job process Answer: C Difficulty: Moderate Keywords: manufacturing processes, continuous flow process Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

15) The product-process matrix used to analyze manufacturing operations brings together the elements of: A) volume, process, and intensity. B) process, intensity, and product design. C) intensity, volume, and process. D) customization, volume, and process. Answer: D Difficulty: Moderate Keywords: manufacturing processes, product-process matrix Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

16) Which one of the following statements about process management is best? A) When customization must be high, equipment should be general purpose, and employees need to perform a broader range of duties. B) The traditional relationship between capital intensity and resource flexibility is that if one is high, so is the other. C) Creating a more capital-intensive process tends to reduce the fixed cost and raise the variable unit cost. D) Economies of scope mean that a process should be devoted to a single product or service to achieve high volumes. Answer: A Difficulty: Challenging Keywords: manufacturing processes, process management, customization Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

17) A manufacturer that produces standard products in large volumes is likely to be using a(n): A) make-to-stock strategy. B) make-to-order strategy. C) assemble-to-order strategy. D) engineer-to-order strategy. Answer: A Difficulty: Easy Keywords: production and inventory strategies, make-to-stock Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

18) The principle of postponement is employed by a producer using a(n): A) make-to-stock strategy. B) make-to-order strategy. C) assemble-to-order strategy. D) engineer-to-order strategy. Answer: C Difficulty: Moderate Keywords: production and inventory strategies, assemble-to-order Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

19) The strategy of delaying final activities in the provision of a product until the orders are received is known as ________. Answer: postponement Difficulty: Moderate Keywords: postponement, assemble-to-order Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

20) Describe the differences among make-to-order, assemble-to-order, and make-to-stock strategies from the producer's and from the customer's perspective. Answer: A make-to-order strategy produces to customer specifications in low volumes; typically using highly divergent job or batch processes that are highly flexible. This level of customization requires a great deal of planning and control by the producer; the customer receives exactly what has been requested which may literally be a one-of-a-kind item. The customer must suffer through a lead time period during which the item is being fabricated. The assemble-to-order strategy produces wide variety from relatively few assemblies in a line or batch process. The process does not require as much flexibility and since the subassemblies are standardized, the production planning and supply chain management is easier for the producer. The customer again receives exactly what is ordered (which may be precisely what was desired) and the item could be one-of-a-kind. Again, the customer must wait for the item to be produced, but this wait tends to be shorter than in a make-to-order system. The make-to-stock strategy allows the producer to manufacture standardized items in high volumes based on a forecast. Production planning and control is much simpler and inventory can be used as a buffer for variable demand. The customer's order is filled immediately and the product is far from one-of-a-kind. Difficulty: Moderate Keywords: process strategy, make-to-order, make-to-stock, assemble-to-order Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

21) List and briefly define four different basic types of manufacturing processes. Answer: The four basic process types are job process, batch process, line process, and continuous flow process. A job process creates the flexibility needed to produce a variety of products or services in significant quantities. Customization is relatively high, and volume for any one product or service is low. A batch process differs from the job process with respect to volume, variety, and quantity. The primary difference is that volumes are higher because the same or similar products or services are provided repeatedly. A line process lies between the batch and continuous processes on the continuum, volumes are high, and products or services are standardized. The continuous flow process is the extreme end of high-volume, standardized production with rigid line flows. Difficulty: Moderate Keywords: batch, job, line, continuous flow Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

22) Sketch and discuss the product-process matrix for manufacturing. Answer: The product-process matrix brings together the elements of volume, product design, and process. It synchronizes the product to be manufactured with the process. Good manufacturing design depends first on volume, so if high customization is needed, then volume is usually lower and vice versa. The vertical dimension of the product-process matrix deals with divergence and flow. Combinations that are best choices are reflected along the diagonal of the matrix.

Difficulty: Moderate Keywords: product- process matrix, manufacturing, volume, customization, divergence, line-flow Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Understand the process structure in manufacturing and how to position a manufacturing process on the product-process matrix.

2.3 Process Strategy Decisions 1) High customer involvement increases service provider productivity and makes quality measurement easier. Answer: FALSE Difficulty: Moderate Keywords: customer involvement, productivity, quality Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

2) Fixed automation is appropriate for both line and continuous flow operations. Answer: TRUE Difficulty: Moderate Keywords: fixed automation, continuous flow Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

3) The ability to reprogram machines is useful for both low-customization and high-customization processes. Answer: TRUE Difficulty: Moderate Keywords: customization, programmable automation Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

4) Capital intensive automation is best suited for low volume operations. Answer: FALSE Difficulty: Moderate Keywords: automation, capital intensity Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

5) High task divergence calls for lower resource flexibility. Answer: FALSE Difficulty: Moderate Keywords: resource flexibility Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

6) In a service process, capital intensity varies with volume in both front office and back office operations. Answer: TRUE Difficulty: Moderate Keywords: capital intensity, front office service, back office service Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

7) Economies of scope reflect the fact that it is more expensive to produce multiple products in combination than separately. Answer: FALSE Difficulty: Moderate Keywords: economies of scope, capital intensity Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

8) Additive manufacturing capabilities, such as 3D printing, prevent firms from achieving substantial economies of scope. Answer: FALSE Difficulty: Moderate Keywords: service process, economies of scope Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

9) Which of the following statements about customer involvement is best? A) In service industries, customer contact is of minor importance. B) High task divergence and flexible process flows require more flexibility of the process's employees, facilities and equipment. C) A firm that produces standardized products often seeks customer specifications. D) When customer involvement is highly customized, a process is more likely to use a standardizedservices process rather than a customized-services process. Answer: B Difficulty: Moderate Keywords: customer involvement Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

10) Active customer contact and personalized attention can lower cost to the customer by: A) increasing the capital intensity. B) trading fixed costs for an equivalent variable cost. C) substituting customer efforts for those of the service provider. D) lowering the level of technology involved. Answer: C Difficulty: Moderate Keywords: customer contact, cost Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

Scenario 2.4 A company is considering two options for the production of a part needed downstream in the manufacturing process. Particulars are as follows: Specialized automation General automation:

Fixed Costs = $12,000 / month Fixed Costs = $4,000 / month

Variable Cost / Unit = $3 Variable Cost / Unit = $8

11) Use Scenario 2.4 to answer this question. What is the monthly break-even quantity for choosing between the two automation approaches? A) 500 units B) 800 units C) 3,200 units D) 1,600 units Answer: D Difficulty: Moderate Keywords: capital-intensive operations, automation, break even quantity Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Explain the major process strategy decisions and their implications for operations.

12) Use Scenario 2.4 to answer this burning question. For a monthly volume of 1,000 units, which automation approach should be chosen? A) specialized automation B) general automation C) Either approach is acceptable, because costs are the same for either option at 3,000 units. D) Can't be determined with information given. Answer: B Difficulty: Moderate Keywords: automation, total cost, low-cost option Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Explain the major process strategy decisions and their implications for operations.

13) Use Scenario 2.4 to solve this problem. At a volume of 3,000 units, how much does the company save each month by selecting lowest cost option over the other higher cost option? A) $5,000 B) $3,000 C) $7,000 D) Can't be determined with information given. Answer: C Difficulty: Moderate Keywords: automation, total cost Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Explain the major process strategy decisions and their implications for operations.

Scenario 2.6 Your company is implementing a new production line for making solar panels. The company has two main alternatives in setting up the production line: either use highly automated equipment or use general-purpose equipment. Cost information for these two options is as follows: ALTERNATIVE Automated Equipment General-Purpose Equipment

FIXED COST $900,000 per year $150,000 per year

VARIABLE COST $50 per unit $100 per unit

14) Use Scenario 2.6 to answer this question. What is the break-even quantity between the two options? A) 10,000 units per year B) 15,000 units per year C) 40,000 units per year D) 60,000 units per year Answer: B Difficulty: Moderate Keywords: capital-intensive operations, general-purpose equipment, special-purpose equipment, break=even quantity Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Explain the major process strategy decisions and their implications for operations.

15) Use Scenario 2.6 to answer this question. What are total costs under the Automated Equipment option for an annual quantity of 5,000 units? A) $400,000 B) $750,000 C) $1,150,000 D) $1,500,000 Answer: C Difficulty: Easy Keywords: general-purpose equipment, special-purpose equipment, total cost Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Explain the major process strategy decisions and their implications for operations.

16) Use Scenario 2.6 to answer this question. What are total costs under the General-Purpose Equipment option for an annual quantity of 5,000 units? A) $400,000 B) $650,000 C) $800,000 D) $950,000 Answer: B Difficulty: Easy Keywords: general-purpose equipment, special-purpose equipment, total cost Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Explain the major process strategy decisions and their implications for operations.

17) Use Scenario 2.6 to solve this riddle. For what range of output is the General-Purpose Equipment the low-cost option? A) 0-10,000 units per year B) 0-15,000 or more units per year C) 15,000 or more units per year D) 0-25,000 units per year Answer: B Difficulty: Moderate Keywords: general-purpose equipment, special-purpose equipment, total cost Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Explain the major process strategy decisions and their implications for operations.

18) Use Scenario 2.6 to answer this question. For what range of output is the Automated Equipment the low-cost option? A) 0-10,000 units per year B) 0-15,000 or more units per year C) 15,000 or more units per year D) 0-25,000 units per year Answer: C Difficulty: Moderate Keywords: general-purpose equipment, special-purpose equipment, total cost, low-cost option Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Explain the major process strategy decisions and their implications for operations.

19) Use Scenario 2.6 to solve this mystery. At an annual requirement of 20,000 units, what does the company save per year by selecting the lower-cost option? A) $150,000 B) $250,000 C) $350,000 D) $400,000 Answer: B Difficulty: Moderate Keywords: general-purpose equipment, special-purpose equipment, total cost, low-cost option Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Explain the major process strategy decisions and their implications for operations.

20) A higher level of fixed automation can be justified by: A) decreased labor productivity. B) longer cycle time. C) higher demand volumes. D) lower sales. Answer: C Difficulty: Moderate Keywords: fixed automation, volume Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

21) Which one of the following statements about flexible automation is best? A) Investment cost is lower when a transfer machine handles many operations. B) Chemical processing plants and oil refineries mainly utilize programmable automation. C) It is an automatic process that can be reprogrammed to handle various products. D) It achieves top efficiency; accommodating new products is difficult and costly. Answer: C Difficulty: Moderate Keywords: flexible automation, reprogramming Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

22) With flexible automation, the ability to reprogram instructions can be useful in: A) line flow, but not flexible flow, operations. B) flexible flow, but not line flow, operations. C) either line flow or flexible flow operations. D) situations in which top efficiency is mandatory, but only if volumes are high. Answer: C Difficulty: Moderate Keywords: flexible automation, reprogramming, line flow Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

23) Higher volume in a process is generally associated with: A) more resource flexibility. B) more capital intensity. C) greater customer involvement. D) fewer opportunities for standardization. Answer: B Difficulty: Moderate Keywords: volume, process, capital intensity Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

24) Which of the following statements regarding resource flexibility is best? A) Training is a small part of worker flexibility. B) Specialization of employees is consistent with worker flexibility. C) Worker flexibility is not a priority if the process is subject to hourly or seasonal peaks in demand. D) Resource flexibility requires employees to be able to perform a broad range of duties, and equipment usually must be more general purpose. Answer: D Difficulty: Moderate Keywords: resource flexibility, flexible workforce Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

25) Which of the following statements concerning resource flexibility is best? A) Flexible equipment is useful to companies with low production volumes and high customization. B) Investment in general-purpose equipment is warranted if the firm expects to sell more than the breakeven amount. C) Manufacturing efficiency increases with general-purpose equipment. D) Resource flexibility is crucial for line-flow processing. Answer: A Difficulty: Moderate Keywords: resource flexibility, volume, customization Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

26) Suppose that competitive priorities call for offering a wide variety of customized services. Which of the following process decisions would be more likely? A) more capital intensity B) more resource flexibility C) more process automation D) less customer involvement Answer: B Difficulty: Challenging Keywords: resource flexibility, customized service Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

27) Which statement about economies of scope is not true? A) Economies of scope are often attained through programmable automation. B) Economies of scope bring together two competitive priorities–customization and low price. C) Economies of scope reflect the ability to produce multiple products more cheaply in combination than separately. D) Economies of scope reflect low capital intensity and high resource flexibility. Answer: D Difficulty: Moderate Keywords: economies of scope, capital intensity, resource flexibility Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

28) Which of the following statements about additive manufacturing capabilities is not true? A) Changes in product design are difficult and costly to incorporate. B) It allows firms to react to a wider variety of customer demands. C) Three-dimensional (3D) printing technology is one example of additive manufacturing. D) It enables firms to achieve substantial economies of scope. Answer: A Difficulty: Moderate Keywords: service process, economies of scope Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

29) Two manufacturing processes are being considered for making a new product. Process #1 is less capital intensive, with fixed costs of $50,000 per year and variable costs of $700 per unit. Process #2 has fixed costs of $400,000 annually, with variable costs of $200 per unit. a. What is the break-even quantity for the two processes? b. If annual sales are expected to be 600 units, which process should be selected? c. If lowest overall costs per year is your overall objective, for what range of annual production quantities should you select Process #1? Process #2? d. Operations and Engineering have found a way to reduce the cost of Process #2, such that the fixed costs for this process decrease from $400,000 to $300,000 annually. All other costs remain the same (Process #1 fixed = $50,000 / year, Process #1 variable = $700 / unit, Process #2 variable = $200 / unit). What is the new break even quantity between the two processes? e. Does this change the process selection for the annual sales volume of 600 units? If so, for what range of annual production quantities should you select Process #1 and Process #2? Answer: a. $50,000 + $700(Q) = $400,000 + $ 200(Q) $500(Q) = $350,000 → Q = 700 units per year b.

Process #1: $50,000 + $700(600) = $470,000 Process #2: $400,000 + $200(600) = $520,000

Process #1 should be selected, since it will save $50,000 compared to Process #2 at an annual volume of 600 units. c. In part b, we have seen that Process #1 is the better choice at volumes below the break even quantity of 700 units per year. Therefore, Process #1 should be selected for volumes from 0 - 700 units per year; Process #2 should be selected for volumes of 700 or more units per year. d.

$50,000 + $700(Q) = $300,000 + $ 200(Q) $500(Q) = $250,000 → Q = 500 units per year

In this case, Process #1: $50,000 + $700(600) = $470,000 Process #2: $300,000 + $200(600) = $420,000

Process #2 should be selected, since it will now save $50,000 compared to Process #1 at an annual volume of 600 units. Process #1 should be selected for volumes from 0 — 500 units per year; Process #2 should be selected for volumes of 500 or more units per year. Difficulty: Moderate Keywords: general-purpose equipment, special-purpose equipment, break even quantity, total cost, low-cost option Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Explain the major process strategy decisions and their implications for operations.

30) The break-even graph shown below represents the cost structure associated with a flexible production process and one that is fixed (less flexible). Using the information displayed in the graph, determine the cost structures associated with the two alternative production methods.

Answer: The Fixed alternative has a fixed cost of $17,000. The Flexible alternative has a fixed cost of $28,000. Their point of intersection is at an output volume of 55,000 units, which results in a cost of $41,750. For the Fixed alternative, $41,750 = $17,000 + 55,000 × VC VC = ($41,750 - $17,000)/55,000 VC = $0.45 For the Flexible alternative, $41,750 = $28,000 + 55,000 × VC VC = ($41,750 - $28,000)/55,000 VC = $0.25 Difficulty: Moderate Keywords: general-purpose equipment, special-purpose equipment, break even quantity, total cost, low-cost option Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Explain the major process strategy decisions and their implications for operations.

31) An entrepreneur considers three possibilities for the production of her new product. One alternative, a job process, would have fixed costs of $22,000 and a per unit cost of $11.63. The large batch option would have a fixed cost of $54,000 and a per unit cost of $8.82. The line process would have a fixed cost of $85,000 and a per unit cost of $7.33. Graph the total cost lines and determine over what range of output each production alternative is superior. Answer: The Line alternative total cost line has the equation 85,000 + 7.33x The Large Batch alternative total cost line equation is 54,000 + 8.82x The Job alternative total cost line equation is 22,000 + 11.63x

We know that the alternative with the lowest fixed cost must initially be superior and the alternative with the lowest variable cost must ultimately be the cheapest alternative, so our answer begins at 0 output with Job and ends at infinity (or at least very large output with Line). At a volume of 11,388 the Job process becomes more expensive than the Large Batch process. 54,000 + 8.82x = 22,000 + 11.63x 32,000 = 2.81x x = 11,388 At a volume of 20,805 the Line process becomes less expensive than the Large Batch process. 85,000 + 7.33x = 54,000 + 8.82x 31,000 = 1.49x x = 20,805 The Line and Job processes' point of indifference is immaterial since the Large Batch process cost is lower than both at their intersection point. The ranges for each alternative are: Job 0 - 11,388 units Large Batch 11,388 - 20,805 units Line 20,805 - infinite demand Difficulty: Challenging Keywords: break-even quantity, total cost Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Analytical Thinking Learning Objective: Explain the major process strategy decisions and their implications for operations.

32) ________ is the ease with which employees and equipment can handle a wide variety of products, output levels, duties, and functions. Answer: Resource flexibility Difficulty: Moderate Keywords: resource flexibility Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

33) ________ reflects the ways in which customers become part of the process and the extent of their participation. Answer: Customer involvement Difficulty: Moderate Keywords: customer involvement, customer participation Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

34) ________ is the mix of equipment and human skills in a process. Answer: Capital intensity Difficulty: Moderate Keywords: capital intensity, equipment, human skills Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

35) ________ automation produces only one type of product or part in a sequence of simple operations. Answer: Fixed Difficulty: Moderate Keywords: fixed automation Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

36) ________ automation can handle various products through programmability. Answer: Flexible Difficulty: Moderate Keywords: flexible automation, programmable automation Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

37) Provide examples of three different processes that rely on the customer for approximately 100% of the process; about 50%; and about 0%. What unique challenges exist for operations and supply chain managers and process designer in each one of these scenarios? Answer: Examples will vary. Some students might argue that the process designer must be more careful to error-proof the process that relies more heavily on the customer while the manager takes a greater role in a process that does not rely on the customer. The burden for training shifts from an internal to an external focus as the customer becomes a bigger part of the production process. Students should also comment on customer buy-in for the final product and the appropriateness of a limited number and type of processes for customer involvement. Difficulty: Moderate Keywords: customer involvement Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

38) Comment on the need for flexibility in both the workforce and capital equipment. What process types and production situations require greater flexibility? Answer: As the authors indicate, high task divergence and flexible process flows require more flexibility of the process's resources — its employees, facilities, and equipment. Employees need to perform a broad range of duties, and equipment must be general purpose. Otherwise, resource utilization will be too low for economical operations. Highly task divergent operations are required when customers have unique needs; casting these needs in the product-process matrix suggests that job processes and batch processes, both large and small, would benefit from flexibility. In the customer-contact matrix, both front office and hybrid office types would reap the benefits of greater worker and equipment flexibility. Difficulty: Moderate Keywords: resource flexibility, flexible workforce Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

39) Define economies of scope, and identify how they relate to flexible automation. Answer: Economies of scope are the ability to produce multiple products more cheaply in combination than separately. Flexible automation provides economies of scope by allowing the producer to use the same productive resource to make intermediate volumes of a range of products, resulting in a shorter payback period for the capital equipment than if it were fixed automation. Difficulty: Moderate Keywords: economies of scope, flexible automation Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Explain the major process strategy decisions and their implications for operations.

2.4 Strategic Fit 1) Back offices generally emphasize low cost operation and consistent quality. Answer: TRUE Difficulty: Easy Keywords: back office, customer contact, service, internal customer, external customer Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Discuss how process decisions should strategically fit together.

2) When volume is higher, automation and capital intensity are more likely. Answer: TRUE Difficulty: Moderate Keywords: back office, line process Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in services AACSB: Application of Knowledge Learning Objective: Discuss how process decisions should strategically fit together.

3) Which one of the following statements on the concept of focused factories is best? A) emphasizes economies of scale, rather than diseconomies of scale B) prefers larger facilities producing all of the products or services the company offers C) reduces the range of demands placed on an operation so management can concentrate on fewer tasks D) emphasizes flexibility rather than cost Answer: C Difficulty: Moderate Keywords: focused factory Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Discuss how process decisions should strategically fit together.

4) One method for a factory to gain operational focus is to: A) build large enough factories to produce all products and services the company offers. B) hire more specialists and supervisors to control the operations. C) reorganize existing facilities to the plant-within-plant (PWP) approach. D) remodel stores to create the effect of many small boutiques under one roof. Answer: C Difficulty: Moderate Keywords: focus, process, plants within plants Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Discuss how process decisions should strategically fit together.

5) A firm that chooses to compete based on delivery speed and variety would most likely have: A) a make-to-order production and inventory strategy. B) an assemble-to-order production and inventory strategy. C) a make-to-stock production and inventory strategy. D) an engineer-to-order production and inventory strategy. Answer: B Difficulty: Moderate Keywords: assemble-to-order, delivery speed Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Discuss how process decisions should strategically fit together.

6) Which one of the following statements on the concept of gaining focus is best? A) Focused factories maximize the amount of customization. B) Small sizes of many focused factories make it difficult to compete on the basis of shorter lead times. C) Plants within plants are different operations within a facility that can have individualized competitive priorities and processes. D) Focused factories are large factories producing all the products that the company offers. Answer: C Difficulty: Moderate Keywords: focus, process, plants within plants Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Discuss how process decisions should strategically fit together.

7) ________ are different operations within a facility with individualized competitive priorities, processes, and workforces under the same roof. Answer: Plants within plants Difficulty: Moderate Keywords: plants within plants, PWP Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Discuss how process decisions should strategically fit together.

8) The result of a firm splitting large plants that produced all of a company's products into serval specialized smaller plants is known as ________. Answer: focused factories Difficulty: Moderate Keywords: focused factories Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Discuss how process decisions should strategically fit together.

2.5 Strategies for Change 1) Process improvement is the fundamental rethinking and radical redesign of processes to improve performance dramatically. Answer: FALSE Difficulty: Moderate Keywords: process reengineering, process improvement Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

2) With a dramatic flourish, the team leader tore the employee orientation guidelines into pieces. He then distributed blank pieces of paper to the team and asked them to envision the perfect orientation process without regard to how it has always been done. This team is probably engaging in process reengineering. Answer: TRUE Difficulty: Easy Keywords: process reengineering, clean-slate Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

3) More often than not, process improvement takes place whether or not a process is reengineered. Answer: TRUE Difficulty: Easy Keywords: reengineering, process improvement Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

4) "Improve" is the last step in the Six Sigma Process Improvement Model. Answer: FALSE Difficulty: Moderate Keywords: process improvement, Six Sigma Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

5) Process improvement teams that focus on processes that cut across departmental boundaries have the silo mentality. Answer: FALSE Difficulty: Easy Keywords: silo, improvement teams, process analysis Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

6) Which one of the following statements concerning the role of process reengineering is best? A) Reengineering is the fundamental rethinking and radical redesign of business processes. B) Reengineering efforts should focus on one functional department at a time. C) Information technology should be kept separate from reengineering initiatives. D) Reengineering requires an attitude of incremental improvement. Answer: A Difficulty: Moderate Keywords: reengineering, radical redesign, information technology Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

7) Which of these tools is considered a primary enabler of process reengineering? A) supply chain partners B) information technology C) logistics D) infrastructure Answer: B Difficulty: Moderate Keywords: process reengineering, information technology Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

8) A team consisting of members from each functional area affected by the process change is referred to as a(n): A) reengineering team. B) cross-functional team. C) process team. D) improvement team. Answer: B Difficulty: Moderate Keywords: cross-functional team Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Interpersonal Relations and Teamwork Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

9) Which of the following is not a step in the Six Sigma Process Improvement Model? A) define B) measure C) reengineer D) control Answer: C Difficulty: Moderate Keywords: reengineering, Six Sigma, process improvement Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

10) Process analysis focuses on: A) how work is actually done. B) who is responsible for the customer. C) the customer's needs. D) the number of steps in between supplier and customer. Answer: A Difficulty: Easy Keywords: process analysis Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

11) A systematic approach to process analysis includes the step: A) reengineering. B) integration. C) order fulfillment. D) define scope. Answer: D Difficulty: Moderate Keywords: define scope, process analysis, systematic approach Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

12) Performance measures such as average response times, repair times, and percent defective are referred to as: A) benchmarks. B) metrics. C) targets. D) tactics. Answer: B Difficulty: Moderate Keywords: metrics, performance measures Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

13) Widespread participation in process analysis is essential not only because of the work involved but also because: A) employees tend to neglect their regular work duties, thus no one falls too far behind. B) it builds commitment. C) no one can analyze a process by himself. D) a silo mentality should prevail and this requires large numbers of workers. Answer: B Difficulty: Moderate Keywords: process analysis, participation, commitment Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Interpersonal Relations and Teamwork Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

14) ________ is the documentation and detailed understanding of how work is performed and how it can be redesigned. Answer: Process analysis Difficulty: Moderate Keywords: process analysis Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

15) The first step of the systematic approach to process analysis is ________. Answer: identify opportunities Difficulty: Moderate Keywords: identify opportunities, process analysis Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

16) Employees who have achieved the first level of training in a Six Sigma program are known as________. Answer: Green Belts Difficulty: Moderate Keywords: Six Sigma, process improvement Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

17) ________ are performance measures that are established for a process and the steps within it. Answer: Metrics Difficulty: Easy Keywords: metric Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

18) The first step in the Six Sigma Process Improvement Model is ________. Answer: define Difficulty: Moderate Keywords: Six Sigma, process improvement Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

19) A(n) ________ means that a department focuses on its own tasks without understanding the role and processes of departments outside its own organizational boundaries. Answer: silo mentality Difficulty: Moderate Keywords: silo mentality Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

20) The authors list six key elements of reengineering. Pick any three and describe their contribution to the reengineering effort. Answer: The six elements are: 1. Critical processes - focus on core business processes to reengineer, leave normal processes to incremental improvement 2. Strong leadership - senior executives must actively support reengineering or the effort will fail 3. Cross-functional teams - the team must be composed of each functional area affected by the change 4. Information technology - a primary enabler; most reengineering projects design processes around information flows 5. Clean slate philosophy - discard the old way of doing things and consider the way the customer wants to deal with the company 6. Process analysis - the reengineering team must understand things about the current process, how it performs, and have a grasp on the performance metrics Difficulty: Moderate Keywords: process reengineering, redesign, rethinking Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge Learning Objective: Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

2.6 Defining, Measuring, and Analyzing the Process 1) Swim lane flowcharts are most appropriate to depict the process within a single department of an organization. Answer: FALSE Difficulty: Easy Keywords: swim lane flowchart, process flow Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

2) In a swim lane flowchart, the line of visibility is used to separate the process steps in view of the customer from those hidden from view of the customer. Answer: FALSE Difficulty: Moderate Keywords: swim lane flowchart, service blueprint Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

3) A service blueprint is a flowchart of a service process that shows which of its steps has high customer contact. Answer: TRUE Difficulty: Moderate Keywords: service blueprint, service process, flowchart Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

4) Time estimates for different steps in a process are useful for capacity planning and scheduling purposes. Answer: TRUE Difficulty: Easy Keywords: work measurement, time estimates Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

5) Elemental standard time data can help managers develop time standards for new work before production begins. Answer: TRUE Difficulty: Moderate Keywords: elemental standard data Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

6) The predetermined data approach eliminates the need for time studies. Answer: TRUE Difficulty: Moderate Keywords: predetermined data approach, time studies Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

7) A predetermined data approach to time standards can be completed before actual production begins. Answer: TRUE Difficulty: Moderate Keywords: predetermined data approach Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

8) Data from work sampling estimates can be used to assess a process's productivity and spot areas for process improvement. Answer: TRUE Difficulty: Moderate Keywords: work sampling, process productivity Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

9) When using work sampling, the times of day when the analyst collects the sample data should be predetermined over the length of the study. Answer: FALSE Difficulty: Moderate Keywords: work sampling, data collection Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

10) A learning curve is a line showing the relationship between processing time and the cumulative quantity of a product or service produced. Answer: TRUE Difficulty: Moderate Keywords: learning curve analysis Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

11) The learning rate for a process is independent of the cumulative quantity of the product or service produced. Answer: FALSE Difficulty: Moderate Keywords: learning curve analysis Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

12) A checklist would be an ideal data analysis tool for recording the frequency of late deliveries from a pizza store. Answer: TRUE Difficulty: Moderate Keywords: data analysis, checklist Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Analytical Thinking Learning Objective: Discuss how to define, measure, and analyze processes.

13) The general principle that 20% of a company's complaints come from 80% of their customers is known as the Pareto concept. Answer: FALSE Difficulty: Moderate Keywords: Pareto chart, Pareto principle Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

14) A scatter diagram is a graphical technique that shows whether two variables may be related. Answer: TRUE Difficulty: Moderate Keywords: scatter diagram, variables Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

15) A fishbone diagram identifies which category is most frequently observed out of all the categories for which you have data. Answer: FALSE Difficulty: Moderate Keywords: fishbone diagram, cause-and-effect diagram Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

16) A flowchart traces the flow of all except the following: A) information through a process. B) customers through a process. C) equipment through a process. D) safety regulations through a process. Answer: D Difficulty: Moderate Keywords: flowchart, information, customers, equipment Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

17) A flowchart created at the strategic level of an organization should show: A) core processes and their linkages. B) details of a process as bracketed by its scope. C) individual steps that may have been aggregated at a higher level of analysis. D) areas that are seen and unseen by the customer. Answer: A Difficulty: Moderate Keywords: flowchart, strategic decision making Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

18) Cross-functional coordination is at particular risk where: A) there is low process divergence. B) there are handoffs in the process. C) swim lane flowcharts are utilized. D) it is not possible to create a flowchart. Answer: B Difficulty: Moderate Keywords: handoff, coordination, cross functional coordination Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Interpersonal Relations and Teamwork Learning Objective: Discuss how to define, measure, and analyze processes.

19) A swim lane flowchart is an appropriate tool to use when: A) the process features only intangible outputs. B) the process involves more than one department. C) the process scope is difficult to define. D) the process has a person or group of people at a workstation or with a customer. Answer: B Difficulty: Moderate Keywords: swim lane flowchart, process definition tool Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

20) An effective tool for showing steps of a service process with a high level of customer contact is a: A) Pareto chart. B) flowchart. C) service blueprint. D) check sheet. Answer: C Difficulty: Moderate Keywords: service blueprint, customer contact, process definition tool Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

21) A process chart activity that changes, creates, or adds something is a(n): A) operation. B) transportation. C) inspection. D) delay. Answer: A Difficulty: Easy Keywords: process chart Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

22) A process chart activity that checks or verifies something but does not change it is a(n): A) operation. B) transportation. C) inspection. D) delay. Answer: C Difficulty: Easy Keywords: process chart Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.

23) Which one of the following groups of activities is likely to be shown on a process chart? A) operation, inspection, delay B) operation, capital intensity, flow strategy C) transportation, material flow, physical layout D) storage, delay, personnel involved Answer: A Difficulty: Moderate Keywords: process chart Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality AACSB: Application of Knowledge Learning Objective: Discuss how to define, measure, and analyze processes.