Issuu

Reid & Sanders / Operations Management, 8th edition

Test Bank

Testbank Chapter 1: Introduction to Operations Management LO Section

Subsection

Question #

What is Operations Management?

Untitled Introduction

Differences Between Manufacturing and Service Organizations

Untitled Introduction

1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 81, 82, 83, 84, 85, 114, 115, 116, 117, 118, 119 19, 20, 21, 22, 23, 24, 86, 87, 120, 121, 122, 123, 124, 125, 126

Operations Management Decisions

Untitled Introduction

25, 26, 27, 28, 127, 128, 129

Historical Development

Why OM?

29, 30

Historical Milestones

31, 32, 88, 130

The Industrial Revolution

33, 34, 35, 36, 89, 90

Scientific Management

37, 38, 39, 40, 41, 42, 43, 44, 45, 91, 92, 93, 131, 132

The Human Relations Movement

46, 47, 48, 49, 50, 51, 52, 94, 95, 96, 97

Management Science

53, 54, 55, 98, 99

The Computer Age

100, 133

Just-in-Time

56, 57, 58

Total Quality Management

59, 60, 61

Business Process Reengineering Flexibility

62, 134, 135

Time-Based Competition

64, 102

Supply Chain Management

65, 103, 136

Global Marketplace

66, 67

Sustainability and Green Operations Electronic Commerce

68, 104, 137

Outsourcing and Flattening of the World Artificial Intelligence (AI), Machine Learning and Analytics Untitled Introduction Untitled Introduction

106

Within OM: How It All Fits

78, 79, 80, 110, 111, 112, 113,

Today's OM Environment Operations Management in Practice

63, 101

69, 70, 71, 105

107 72, 73, 74, 75, 108, 138, 139 76, 77, 109

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Reid & Sanders / Operations Management, 8th edition

Together – OM across the Organization

Test Bank

140

© John Wiley & Sons, Inc. or the author. All rights reserved. Instructors who are authorized users of this course are permitted to download these materials and use them in connection with the course. Except as permitted herein or by law, no part of these materials should be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise.

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Reid & Sanders / Operations Management, 8th edition

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Multiple Choice 1. Every business is managed through what three major functions? a) accounting, finance, and marketing b) engineering, finance, and operations management c) accounting, purchasing, and human resources d) accounting, engineering, and marketing e) finance, marketing, and operations management Answer: e Solution: Every business is managed through three major functions: finance, marketing, and operations management. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Knowledge Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 1 min 2. Which business function is responsible for managing cash flow, current assets, and capital investments? a) accounting b) finance c) marketing d) operations management e) purchasing Answer: b Solution: Finance is the function responsible for managing cash flow, current assets, and capital investments. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Knowledge Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 1 min 3. The finance function is responsible for a) sales, generating customer demand, and understanding customer wants and needs. b) planning and coordinating all the resources needed to design, produce, and deliver the merchandise to its various retail locations.

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Reid & Sanders / Operations Management, 8th edition

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c) planning, coordinating, and controlling the resources needed to produce a company’s products and services. d) managing cash flow, current assets, and capital investments. e) efficiency and costs. Answer: d Solution: The financial function is responsible for managing cash flow, current assets, and capital investments. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Knowledge Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 1 min 4. Which business function is responsible for sales, generating customer demand, and understanding customer wants and needs? a) finance b) human resources c) marketing d) operations management e) purchasing Answer: c Solution: Marketing is responsible for sales, generating customer demand, and understanding customer wants and needs. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Knowledge Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 1 min 5. Which business function is responsible for planning, coordinating, and controlling the resources needed to produce a company’s products and services? a) engineering b) finance c) human resources d) marketing e) operations management Answer: e

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Reid & Sanders / Operations Management, 8th edition

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Solution: Operations management is the business function that plans, organizes, coordinates, and controls the resources needed to produce a company’s goods and services. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Knowledge Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 1 min 6. At a casual apparel retailer, which function plans and coordinates all the resources needed to design, produce, and deliver the merchandise to its various retail locations? a) engineering b) human resources c) marketing d) operations management e) purchasing Answer: d Solution: It is the operations function that plans and coordinates all the resources needed to design, produce, and deliver the merchandise to the various retail locations. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 1 min 7. Operations management is responsible for increasing the organization’s efficiency, which means the company will be able to a) add to the engineering process. b) take for granted current operations. c) increase the number of positions under the manager’s position. d) eliminate activities that do not add value. e) increase purchasing opportunities. Answer: d Solution: An important role of operations is to analyze all activities, eliminate those that do not add value, the restructure processes and jobs to achieve greater efficiency. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension

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Reid & Sanders / Operations Management, 8th edition

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Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 1 min 8. Which of the following is NOT an example of a value-added activity? a) having a haircut b) riding a train c) manufacturing a radio d) waiting to see a doctor e) having a surgery Answer: d Solution: Value added refers to the net increase between the final value of a product and the value of all the inputs. Waiting to see a doctor is an activity that does not add value toward the final output, a healthy person. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Medium Bloom’s: Application Learning Objective 1: Define operations management. AACSB: Analytic Time on Task: 1 min 9. At a factory, the transformation process is a (an) ______ change of raw materials and components into products. a) locational b) imperceptible c) hypothetical d) irreversible e) physical Answer: e Solution: At a factory, the transformation process is the physical change of raw materials into products. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 1 min 10. All of the following may be inputs of a transformation process EXCEPT

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Reid & Sanders / Operations Management, 8th edition

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a) services. b) managers. c) buildings. d) technology. e) information. Answer: a Solution: Services are outputs of a transformation process. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 1 min 11. Operations management is responsible for orchestrating all the resources needed to produce the final product. This includes all of the following EXCEPT a) managing cash flow. b) arranging schedules. c) managing inventory. d) controlling quality. e) designing work methods. Answer: a Solution: Finance is the function responsible for managing cash flow. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 1 min 12. Which second-tier computer company utilized a drastic change in its operations function to become an industry leader in the late 1990s? a) Apple b) Compaq c) Dell d) IBM e) Kozmo Answer: c Solution: Dell was a second-rate computer maker that managed its operations similarly to others

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Reid & Sanders / Operations Management, 8th edition

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in the industry. Then in 1994 Dell implemented a new business model that completely changed the role of its operations function. In 2019, the Digital Supply Chain Institute listed Dell as a top leader in their industry, and as a Top 25 supply chain company by Gartner in 2021. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 1 min 13. Which initially successful Web-based home-delivery company had to shut down in 2001 due to inadequate management of its operations? a) Contact.com b) Time Saver.com c) Kozmo.com d) Kramer.com e) Neptune.com Answer: c Solution: Kozmo.com was founded in 1997 as a Web-based home delivery company. It was technology enabled and rapidly became a huge success. Yet the company had to close in 2001 due to its inadequate operations management. Due to a strong foundation, Kosmo back in business in 2018, led by new owners and a new vision. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 1 min 14. In order to be successful with Web-based online shopping, companies must do all of the following EXCEPT a) manage distribution centers and warehouses. b) operate fleets of trucks. c) maintain adequate inventories of products. d) increase the cost of production. e) schedule deliveries. Answer: d Solution: To ensure meeting promises, companies must forecast what customers want, maintain adequate inventories of goods, manage distribution centers and warehouses, operate fleets of trucks, and schedule deliveries, all while keeping costs low and customer satisfied.

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Reid & Sanders / Operations Management, 8th edition

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Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 1: Define operations management. AACSB: Technology Time on Task: 1 min 15. What outsourcing functions does UPS provide for its clients? a) accounting and inventories b) inventories and deliveries c) accounting and deliveries d) accounting and maintenance e) deliveries and maintenance Answer: b Solution: Some companies hire outside firms for certain functions, such as outsourcing the management of inventories and deliveries to UPS. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 1 min 16. Which of the following is NOT an example of a value-added activity? a) removing iron ore from the ground and shipping it to a steel mill b) filling the underground gasoline tanks at a service station c) making a wedding cake d) moving components to a warehouse for storage until the factory needs them e) moving luggage from a cab to the airport ticket counter Answer: d Solution: Moving components to a warehouse for storage does not add value to the final output. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Medium Bloom’s: Application Learning Objective 1: Define operations management. AACSB: Analytic Time on Task: 1 min

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Reid & Sanders / Operations Management, 8th edition

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17. OM’s transformation role is to add value. Value added is a) performing activities well for the least possible cost. b) the net decrease between output product value and input material value. c) increasing product value in the first stage. d) the net increase between output product value and input material value. e) customizing a product, regardless of expense, to satisfy customer needs. Answer: d Solution: Value added is the net increase created during the transformation of inputs into final outputs. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Knowledge Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 1 min 18. Sadie was recently hired as an operations manager by Wang Group, a top sneaker manufacturer in China. Which of the following is least likely to be among her job responsibilities? a) designing products b) controlling product quality c) managing inventory d) arranging labor schedules e) generating customer demand Answer: e Solution: Marketing is responsible for generating customer demand. Operations management is responsible for orchestrating all the resources need to produce the final product, which includes designing the product, controlling quality, managing inventory, and arranging labor schedules. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Medium Bloom’s: Application Learning Objective 1: Define operations management. AACSB: Analytic Time on Task: 1 min 19. Which term is used to describe the companies that have low customer contact and are capital intensive, yet they provide a service? a) quasi-service organizations b) manufacturing organizations c) quasi-manufacturing organizations

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Reid & Sanders / Operations Management, 8th edition

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d) service organizations e) Industrial Revolution era operations management Answer: c Solution: Quasi-manufacturing organizations are the companies that have low customer contact and are capital intensive, yet they provide a service. Section Ref: Differences between Manufacturing and Service Organizations Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 2: Describe the difference between manufacturing and service organizations. AACSB: Knowledge Time on Task: 1 min 20. In what area does General Motors earn its highest return on capital? a) selling cars b) selling logo merchandise c) financing d) selling racing engines e) post-sales parts and service Answer: e Solution: General Motors’ greatest return on its capital does not come from selling cars, but rather from post-sales parts and service. Section Ref: Differences between Manufacturing and Service Organizations Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 2: Describe the difference between manufacturing and service organizations. AACSB: Knowledge Time on Task: 1 min 21. Which of the following is an example of a “back room” operation for an airline company? a) serving food and drinks to passengers b) collecting tickets and checking passengers in at the gate c) loading luggage onto the airplane d) demonstrating use of the seat belt and other safety features of the airplane e) assisting passengers in getting off of the plane Answer: c Solution: A “back room” operation is a behind the scene operation. Loading luggage onto an airplane has no direct customer contact and can be managed like a manufacturing operation. Section Ref: Differences between Manufacturing and Service Organizations Sub Section Ref: Untitled Introduction

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Reid & Sanders / Operations Management, 8th edition

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Level: Medium Bloom’s: Application Learning Objective 2: Describe the difference between manufacturing and service organizations. AACSB: Analytic Time on Task: 1 min 22. What type of organization would the capital intensive U.S. Postal Service be an example of? a) pseudo-manufacturing organizations b) quasi-manufacturing organizations c) hierarchical manufacturing organizations d) service factories e) quasi-service organizations Answer: b Solution: Quasi-manufacturing organizations are the organizations that have low customer contact and are capital intensive, yet they provide a service. The U.S. Postal Service is an example of a quasi-manufacturing type of company. It provides a service: speedy, reliable delivery of letters, documents, and packages Section Ref: Differences between Manufacturing and Service Organizations Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 2: Describe the difference between manufacturing and service organizations. AACSB: Knowledge Time on Task: 1 min 23. What percentage of total nonfarm jobs in the U.S. economy comes from service-producing industries? a) 20% b) 50% c) 60% d) 80% e) 95% Answer: d Solution: Since the 1960s, the percentage of jobs in the service-producing industries of the U.S. economy has increased from less than 50 to over 80 percent of total nonfarm jobs. Section Ref: Differences between Manufacturing and Service Organizations Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Knowledge Learning Objective 2: Describe the difference between manufacturing and service organizations. AACSB: Knowledge Time on Task: 1 min

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Reid & Sanders / Operations Management, 8th edition

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24. Canton Gourmet is a restaurant offering both Japanese and Chinese food. Customer service and contact are important parts of the business. Yet, Canton Gourmet manages its kitchen segment of the operation like a manufacturing operation. What manufacturing characteristics does the kitchen segment have? a) intangible outputs and low customer contact b) intangible outputs and high customer contact c) tangible outputs and low customer contact d) tangible outputs and high customer contact Answer: c Solution: The kitchen segment produces tangible output, food, but it has low customer contact. Section Ref: Differences between Manufacturing and Service Organizations Sub Section Ref: Untitled Introduction Level: Medium Bloom’s: Application Learning Objective 2: Describe the difference between manufacturing and service organizations. AACSB: Analytic Time on Task: 1 min 25. What are long-term decisions that set the direction for the entire organization called? a) tactical b) operational c) directional d) distant e) strategic Answer: e Solution: Long-term decisions that set the direction for the entire organization are called strategic decisions. Section Ref: Operations Management Decisions Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Knowledge Learning Objective 3: Describe decisions that operations managers make. AACSB: Knowledge Time on Task: 1 min 26. Which of the following is true with respect to strategic and tactical decisions? a) Tactical decisions focus on more specific day-to-day decisions. b) Tactical decisions determine the direction for strategic decisions. c) Strategic decisions are bound by tactical decisions. d) Strategic decisions are made more frequently and routinely.

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Reid & Sanders / Operations Management, 8th edition

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e) Strategic decisions must be aligned with tactical decisions. Answer: a Solution: Tactical decisions focus on more specific day-to-day issues, such as the quantities and timing of the specific resources. Section Ref: Operations Management Decisions Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 3: Describe decisions that operations managers make. AACSB: Knowledge Time on Task: 1 min 27. Which of the following is NOT primarily performed by the operation management function? a) job design and work measurement b) advertising strategy c) location analysis d) quality management e) facility layout Answer: b Solution: Marketing is responsible for advertising. All others are OM decisions. Section Ref: Operations Management Decisions Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 3: Describe decisions that operations managers take. AACSB: Knowledge Time on Task: 1 min 28. Angel is a supply chain manger. She oversees the company’s supply chain and logistics operations and is involved in a variety of decision-making processes. If she is currently faced with making a tactical rather than a strategic decision, which of the following issues is she addressing? a) Should the company make or buy the product? b) How many suppliers should the company use? c) What relationship should the company develop with its suppliers? d) How should the company deal with the issues of ethics in managing suppliers? e) What should be the quantity and timing of our next order from Supplier A? Answer: e Solution: The quantity and timing of the next order from Supplier A would be considered as a tactical decision since it is short-term in nature and focuses on more specific day-to-day operations. The other decisions would be considered strategic because they are broad in scope

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Reid & Sanders / Operations Management, 8th edition

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and long-term in nature. Section Ref: Operations Management Decisions Sub Section Ref: Untitled Introduction Level: Medium Bloom’s: Application Learning Objective 3: Describe decisions that operations managers make. AACSB: Analytic Time on Task: 1 min 29. Which famous economist once suggested that “The production problem has been solved”? a) John Nash b) Irving Fisher c) John Kenneth Galbraith d) Adam Smith e) John Maynard Keynes Answer: c Solution: The distinguished economist John Kenneth Galbraith observed, “The production problem has been solved.” Section Ref: Historical Development Sub Section Ref: Why OM? Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 30. What was the primary reason that American firms lost market dominance in many industries in the 1970s and 1980s? a) OPEC oil embargoes. b) The Vietnam war had drained the economy of resources. c) After Richard Nixon was President, foreign consumers began to mistrust American firms. d) They had become lax due to the lack of competition in the 1950s and 1960s. e) Foreign government subsidies for business. Answer: d Solution: In the 1970s and 1980s, American companies experienced large declines in productivity growth. It appeared that they had become lax due to the lack of competition in the 1950s and 1960s. Section Ref: Historical Development Sub Section Ref: Why OM? Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management.

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Reid & Sanders / Operations Management, 8th edition

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AACSB: Knowledge Time on Task: 1 min 31. When did operations management emerge as a formal field of study? a) during the late 1950s and early 1960s b) during the late 1970s and early 1980s c) during World War II d) during the nineteenth century e) during the early 1900s Answer: a Solution: Operations management did not emerge as a formal field of study until the late 1950s and early 1960s, when scholars began to recognize that all production systems face a common set of problems and to stress the systems approach to viewing operations processes Section Ref: Historical Development Sub Section Ref: Historical Milestones Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 32. Managing the transformation of inputs into goods and services is a) a postindustrial era process. b) a direct contributor to the curved earth syndrome. c) as old as time. d) a twenty-first century developed process. e) a design of Frederick Taylor. Answer: c Solution: When we think of what operations management does, we can see that as a function it is as old as time. Section Ref: Historical Development Sub Section Ref: Historical Milestones Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 33. Who invented the steam engine during the Industrial Revolution? a) James Watt b) Adam Smith

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Reid & Sanders / Operations Management, 8th edition

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c) Eli Whitney d) Henry Ford e) Frederick Taylor Answer: a Solution: James Watt invented the steam engine in 1764. Section Ref: Historical Development Sub Section Ref: The Industrial Revolution Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 34. What concept involves breaking down the production of a product into a series of small, elementary tasks, each of which is performed by a different worker? a) division of labor b) interchangeable parts c) scientific management d) the Hawthorne effect e) operations research Answer: a Solution: Division of labor means that the production of a good is broken down into a series of small, elemental tasks, each of which is performed by a different worker. Section Ref: Historical Development Sub Section Ref: The Industrial Revolution Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 35. Who wrote The Wealth of Nations in 1776, describing division of labor? a) James Watt b) Adam Smith c) Eli Whitney d) Henry Ford e) Frederick Taylor Answer: b Solution: Adam Smith described the concept of division of labor in 1776 in The Wealth of Nations. Section Ref: Historical Development

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Reid & Sanders / Operations Management, 8th edition

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Sub Section Ref: The Industrial Revolution Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 36. The concept of interchangeable parts was introduced by a) Adam Smith. b) Frederick Taylor. c) Eli Whitney. d) Henry Ford. e) W. Edwards Deming. Answer: c Solution: Eli Whitney introduced the concept of interchangeable parts in 1790. Section Ref: Historical Development Sub Section Ref: The Industrial Revolution Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 37. Who created scientific management? a) James Watt b) Adam Smith c) Eli Whitney d) Frederick W. Taylor e) Henry Ford Answer: d Solution: Scientific management was an approach to management promoted by Frederick W. Taylor at the turn of the twentieth century. Section Ref: Historical Development Sub Section Ref: Scientific Management Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 38. What was Frederick W. Taylor’s background?

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Reid & Sanders / Operations Management, 8th edition

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a) physics b) human resources management c) operations research d) psychology e) engineering Answer: e Solution: Taylor was an engineer with an eye for efficiency. Section Ref: Historical Development Sub Section Ref: Scientific Management Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 39. A key feature of scientific management is that it assumed that workers are motivated only by a) love. b) power. c) challenging work. d) money. e) fame. Answer: d Solution: Scientific management assumed that workers are motivated only by money and are limited only by their physical ability. Section Ref: Historical Development Sub Section Ref: Scientific Management Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 40. A key feature of scientific management is that it assumed that workers are limited only by a) machinery. b) co-workers. c) their job description. d) their tools. e) their physical ability. Answer: e Solution: Scientific management assumed that workers are motivated only by money and are limited only by their physical ability.

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Reid & Sanders / Operations Management, 8th edition

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Section Ref: Historical Development Sub Section Ref: Scientific Management Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 41. The creator of scientific management believed that a) worker productivity is governed by scientific laws. b) workers should have a lot of control over their jobs. c) efficiency is overrated. d) workers should be paid based on seniority. e) mathematical models are the basis for management of production. Answer: a Solution: Taylor believed that worker productivity is governed by scientific laws and that it is up to management to discover these laws through measurement, analysis, and observation. Section Ref: Historical Development Sub Section Ref: Scientific Management Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 42. Which of the following operations management concepts did NOT evolve from scientific management? a) moving assembly lines b) interchangeable parts c) stopwatch time studies d) piece-rate incentives e) setting time standards for task performance Answer: b Solution: The concept of interchangeable parts was introduced by Eli Whitney during the Industrial Revolution in late 1700s. All others were evolved from scientific management in the early 1900s. Section Ref: Historical Development Sub Section Ref: Scientific Management Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge

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Reid & Sanders / Operations Management, 8th edition

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Time on Task: 1 min 43. Who popularized the moving assembly line? a) James Watt b) Adam Smith c) Eli Whitney d) Frederick W. Taylor e) Henry Ford Answer: e Solution: Ford introduced the moving assembly line to produce Ford cars. Section Ref: Historical Development Sub Section Ref: Scientific Management Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 44. Under scientific management, information from what is used to set time standards for task performance? a) stopwatch time studies b) observance of similar tasks c) computer simulation d) negotiations with unions e) arbitration Answer: a Solution: In stopwatch time studies, observations are made and recorded of worker performing a task over many cycles. This information is then used to set a time standard for performing the particular task. Section Ref: Historical Development Sub Section Ref: Scientific Management Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 45. Which of the following concepts is linked the LEAST with Henry Ford? a) scientific management b) mass production c) mass customization

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d) technology e) interchangeable parts Answer: c Solution: Mass customization is linked the least with Ford. Ford introduced moving assembly lines by combining scientific management with technology and developed the concept of mass production by combining scientific management with the division of labor and interchangeable parts. Section Ref: Historical Development Sub Section Ref: Scientific Management Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 46. What movement started with the publication of the results of the Hawthorne studies? a) scientific management b) human relations c) management science d) marketing research e) operations management Answer: b Solution: The publication of the results of the Hawthorne studies led to the human relations movement. Section Ref: Historical Development Sub Section Ref: The Human Relations Movement Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 47. What is the Hawthorne effect? a) workers responding to the attention they are given b) stopwatch time studies leading to time standards c) the use of quantitative methods for solving management problems d) the use of interchangeable parts e) more lighting increasing productivity Answer: a Solution: The Hawthorne effect is a term referring to the tendency that people will modify their behavior and respond to the attention they are given.

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Reid & Sanders / Operations Management, 8th edition

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Section Ref: Historical Development Sub Section Ref: The Human Relations Movement Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 48. Increasing the level of responsibility of a job by adding planning tasks is a) job enlargement. b) job rotation. c) job involvement. d) job enrichment. e) job backward integration. Answer: d Solution: Job enrichment is an approach in which workers are given a greater role in planning. Section Ref: Historical Development Sub Section Ref: The Human Relations Movement Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 49. What term describes the approach of giving workers a larger portion of the total task to do? a) job enlargement b) job rotation c) job involvement d) job enrichment e) job backward integration Answer: a Solution: Job enlargement is an approach in which workers are given a larger portion of the total task to do. Section Ref: Historical Development Sub Section Ref: The Human Relations Movement Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min

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50. When were the Hawthorne Studies conducted? a) 1770s b) 1830s c) 1930s d) 1960s e) 1980s Answer: c Solution: The Hawthorne studies were conducted at a Western Electric plan in Hawthorne, Illinois, in the 1930s. Section Ref: Historical Development Sub Section Ref: The Human Relations Movement Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 51. In which company were the Hawthorne Studies conducted? a) Westinghouse b) General Electric c) Hawthorne Incorporated d) General Motors e) Western Electric Answer: e Solution: The Hawthorne studies were conducted at a Western Electric plant in Hawthorne, Illinois, in the 1930s. Section Ref: Historical Development Sub Section Ref: The Human Relations Movement Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 52. Which of the following historical figures would probably have the MOST different management style from the others? a) Elton Mayo b) Henry Ford c) Eli Whitney d) Frederick W. Taylor e) Adam Smith

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Answer: a Solution: Elton Mayo focused on understanding human elements of job design, such as worker motivation. All the others focused more on improving production efficiency, such as division of labor, interchangeable parts, and scientific management. Section Ref: Historical Development Sub Section Ref: The Human Relations Movement Level: Medium Bloom’s: Application Learning Objective 4: Identify major historical developments in operations management. AACSB: Analytic Time on Task: 1 min 53. The first military use of management science was solving complex problems of logistics control, weapons system design, and deployment of missiles during a) World War I. b) World War II. c) the Korean War. d) the Vietnam War. e) Operation Desert Storm. Answer: b Solution: World War II posted many military, strategic, logistic, and tactical problems. The techniques of management science were used to solve many of these problems. Section Ref: Historical Development Sub Section Ref: Management Science Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 54. Management science focuses on a) profit margin. b) qualitative systems analysis. c) management promotion metrics. d) quantitative techniques for solving personnel issues. e) quantitative techniques for solving operations problems. Answer: e Solution: Management science is a field of study that focuses on the development of quantitative techniques to solve operations problems. Section Ref: Historical Development Sub Section Ref: Management Science Level: Easy

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Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 55. When was the first mathematical model for inventory management developed? a) 1770 b) 1865 c) 1900 d) 1913 e) 1930 Answer: d Solution: The first mathematical model for inventory management was developed by F. W. Harris in 1913. Section Ref: Historical Development Sub Section Ref: Management Science Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 56. Where was the just-in-time philosophy developed? a) Germany b) United States c) Canada d) Japan e) Italy Answer: d Solution: Just-in-time is a major operations management philosophy developed in Japan in the 1980s. Section Ref: Historical Development Sub Section Ref: Just-in-Time Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 57. Just-in-time a) is applicable to both manufacturing and service organizations.

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b) was first used in services. c) focuses primarily on the efficiency of assembly line operations. d) is a major operations management philosophy developed in the United States. e) is a philosophy designed to achieve operations effectiveness through the use of computers. Answer: a Solution: JIT has been implemented in both manufacturing and service organizations. It is a philosophy designed to achieve high-volume production through elimination of waste and continuous improvement. Section Ref: Historical Development Sub Section Ref: Just-in-Time Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 58. When was the just-in-time philosophy developed? a) 1980s b) 1930s c) 1800s d) 1700s e) 1990s Answer: a Solution: Just-in-time was developed in Japan in the 1980s. Section Ref: Historical Development Sub Section Ref: Just-in-Time Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 59. What is a philosophy that aggressively seeks to improve product quality by eliminating causes of product defects and making quality an all-encompassing organizational philosophy? a) CQI b) TQM c) SPC d) JIT e) BPR Answer: b Solution: TQM is a philosophy that aggressively seeks to improve product quality by eliminating

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causes of product defects and making quality an all-encompassing organizational philosophy. Section Ref: Historical Development Sub Section Ref: Total Quality Management Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 60. Who among the following is considered a “quality guru”? a) Elton Mayo b) W. Edwards Deming c) Alex Gamble d) F. W. Harris e) Frederick W. Taylor Answer: b Solution: TQM is a philosophy promulgated by “quality gurus” such as W. Edwards Deming. Section Ref: Historical Development Sub Section Ref: Total Quality Management Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 61. Many companies require their suppliers to meet what standards as a condition for obtaining contracts? a) RFO 6000 b) PUR 8000 c) ISO 9000 d) MACH 5000 e) SUP 2000 Answer: c Solution: ISO 9000 is a global set of standards. Many companies require their suppliers to meet the standards as a condition for obtaining contracts. Section Ref: Historical Development Sub Section Ref: Total Quality Management Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min

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62. All of the following are true for business process reengineering EXCEPT a) it can increase efficiency. b) it cannot be used to improve quality. c) it can reduce costs. d) it involves asking why things are done in a certain way. e) it involves redesigning processes. Answer: b Solution: Business process reengineering means redesigning a company’s processes to increase efficiency, improving quality, and reducing costs. Reengineering requires asking why things are done in a certain way, questioning assumptions, and then redesigning the processes. Section Ref: Historical Development Sub Section Ref: Business Process Reengineering Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 63. Sue and her husband are planning an Alaska cruise vacation. They are excited about the trip and are debating which excursions to take, such as a train ride up to the White Pass Summit or a glacier adventure by helicopter from Juneau. The cruise company has determined that a standard cruise vacation package with several options satisfies the different needs of customers. What is the cruise company’s philosophy an example of? a) total quality management (TQM) b) just-in-time (JIT) c) business process reengineering d) time-based competition e) flexibility Answer: e Solution: The standard vacation package with different excursion choices is an example of flexibility. Section Ref: Historical Development Sub Section Ref: Flexibility Level: Medium Bloom’s: Application Learning Objective 4: Identify major historical developments in operations management. AACSB: Analytic Time on Task: 1 min 64. One of the two most important features of time-based competition involves

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a) advertising on the Internet. b) stopwatch time studies. c) setting time standards for task performance. d) instantaneous access to inventory information. e) developing new products and services faster than competitors. Answer: e Solution: Time-based competition focuses on efforts to develop new products and services and deliver them to customers faster than competitors. Section Ref: Historical Development Sub Section Ref: Time-Based Competition Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 65. Supply chain management involves managing a) the flow of internal information only. b) the flow of materials and information from suppliers to customers. c) the flow of raw materials to inventory only. d) the flow of information among customers. e) the stock room supply only. Answer: b Solution: Supply chain management involves managing the flow of materials and information from suppliers to customers in order to reduce overall cost and increase responsiveness to customers. Section Ref: Historical Development Sub Section Ref: Supply Chain Management Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 66. NAFTA (the North American Free Trade Agreement) is a) a certification group. b) a regional trade agreement. c) a quality control method. d) a logistics provider. e) a U.S. government agency. Answer: b

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Solution: Regional trading agreements, such as NAFTA, EU, and WTO, are designed to guarantee continued competition on the international level. Section Ref: Historical Development Sub Section Ref: Global Marketplace Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 67. Today’s business must think in terms of a) regional trade zones. b) the EPA. c) the U.S. Defense Department. d) the global marketplace. e) the curved world Answer: d Solution: Today businesses must think in terms of a global marketplace in order to compete effectively. Section Ref: Historical Development Sub Section Ref: Global Marketplace Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 1 min 68. ISO 14000 standards provide guidelines for what? a) business ethics b) environmentally responsible actions c) supplier certification d) quality control e) website development Answer: b Solution: ISO 14000 standards provide guidelines and a certification program documenting a company’s environmentally responsible actions. Section Ref: Historical Development Sub Section Ref: Sustainability and Green Operations Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge

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Time on Task: 1 min 69. What type of commerce makes up the highest percentage of electronic transactions? a) B2C b) C2C c) B4B d) B2B e) B4C Answer: d Solution: The electronic commerce that occurs between businesses, known as B2B commerce, makes up the highest percentage of transactions. Section Ref: Historical Development Sub Section Ref: Electronic Commerce Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Technology Time on Task: 1 min 70. The Internet was developed from a government network called ARPANET created in 1969 by a) Japanese scientists. b) the EPA. c) the U.S. Defense Department. d) NSF. e) ISO. Answer: c Solution: The Internet was developed from a government network called ARPANET created in 1969 by the U.S. Defense Department. It has become an essential business medium since the late 1990s. Section Ref: Historical Development Sub Section Ref: Electronic Commerce Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Technology Time on Task: 1 min 71. General Electric’s Trading Process Network primarily handles transactions between a) individual customers. b) companies and individual customers. c) companies and their shipping firms.

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d) companies and their distributors. e) companies and their suppliers. Answer: e Solution: The most common B2B exchanges occur between companies and their suppliers, such as General Electric’s Trading Process Network. Section Ref: Historical Development Sub Section Ref: Electronic Commerce Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Technology Time on Task: 1 min 72. What is a concept that takes a total system approach to creating efficient operations? a) lean systems b) enterprise resource planning c) customer relationship management d) management science e) management information systems Answer: a Solution: Lean systems take a total system approach to creating an efficient operation and pull together best practices concepts. Section Ref: Today's OM Environment Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Knowledge Learning Objective 5: Identify current trends in operations management. AACSB: Knowledge Time on Task: 1 min 73. What are software solutions that allow the firm to collect customer-specific data? a) MRP b) CRM c) ERP d) JIT e) ISO Answer: b Solution: CRM encompasses software solutions that enable the firm to collect customer-specific data, information that can help the firm identify profiles of its most loyal customers, and provide customer-specific solutions. Section Ref: Today's OM Environment

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Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Knowledge Learning Objective 5: Identify current trends in operations management. AACSB: Technology Time on Task: 1 min 74. Today’s operations management is characterized by a) its use of the Internet. b) its reliance on the intranet. c) its increased use of cross-functional decision making. d) its use of cross-functional job sharing. e) its use of interchangeable parts. Answer: c Solution: One characteristic of today’s OM environment is the increased use of cross-functional decision making. Section Ref: Today’s OM Environment Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 5: Identify current trends in operations management. AACSB: Knowledge Time on Task: 1 min 75. The business school at Jersey State University formed a task force to review its undergraduate curricula for currency, relevance, and content. The group includes professors from different departments. One of its charges is to examine what core topics related to the emerging discipline of business analytics are currently being covered, in which courses, and by which departments. The group will then make a recommendation to the business faculty on how to best present business analytics across several disciplines. This type of decision making is called a) organizational decision making. b) employee decision making. c) cross-functional decision making. d) managerial decision making. Answer: c Solution: Cross-functional decision making requires coordinated interaction and decision making among the different business functions of the organization. In this scenario, experts from different departments formed a cross-functional team to help solve organizational problems. Section Ref: Today’s OM Environment Sub Section Ref: Untitled Introduction Level: Medium Bloom’s: Application

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Learning Objective 5: Identify current trends in operations management. AACSB: Analytic Time on Task: 1 min 76. Entry-level positions for operations management graduates include all of the following EXCEPT a) quality specialist. b) inventory analyst. c) plant manager. d) production analyst. e) production supervisor. Answer: c Solution: Plant manager is a midlevel position. The other positions, such as quality specialist, product analyst, inventory analyst, and production supervisor are below the midlevel. Section Ref: Operations Management in Practice Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 6: Describe the flow of information between operations management and other business functions. AACSB: Knowledge Time on Task: 1 min 77. Operations management personnel perform a variety of functions, including all of the following EXCEPT a) analyzing production problems. b) analyzing potential mergers. c) developing forecasts. d) developing employee schedules. e) monitoring inventory. Answer: b Solution: OM is responsible for a variety of operational functions, such as analyzing product problems, developing forecasting, monitoring inventory, and developing employee schedules. It is not responsible for analyzing potential mergers. Section Ref: Operations Management in Practice Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 6: Describe the flow of information between operations management and other business functions. AACSB: Knowledge Time on Task: 1 min

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78. Operations management interacts with all of the following functions EXCEPT a) marketing. b) information systems. c) finance. d) engineering. e) total quality management (TQM). Answer: e Solution: TQM is not a function; it is a philosophy that seeks to improve quality by eliminating causes of product defects and by making quality the responsibility of everyone in the organization. Section Ref: Operations Management in Practice Sub Section Ref: Within OM: How It All Fits Together – OM across the Organization Level: Easy Bloom’s: Comprehension Learning Objective 6: Describe the flow of information between operations management and other business functions. AACSB: Knowledge Time on Task: 1 min 79. Wyatt is a marketing manager responsible for deploying successful marketing campaigns and owning their implementation from ideation to execution. Which of the following questions will he need the answer to from operations management in order to perform his task? a) What are customer expectations? b) What are financial constraints? c) What are operating capabilities? d) What are labor requirements? e) What are technological capabilities? Answer: c Solution: To fully capable of meeting customer needs and making sales, marketing managers need to understand what operations can produce, what due dates it can and cannot meet, and what types of customization operations can deliver. Section Ref: Operations Management in Practice Sub Section Ref: Within OM: How It All Fits Together – OM across the Organization Level: Medium Bloom’s: Application Learning Objective 6: Describe the flow of information between operations management and other business functions. AACSB: Analytic Time on Task: 1 min

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80. Wyatt is a marketing manager responsible for deploying successful marketing campaigns and owning their implementation from ideation to execution. He often needs information from operations to make decisions. Which of the following would he LEAST likely pose to an operations manager? a) production capabilities b) production capacities c) product specifications d) inventory levels Answer: d Solution: Product specifications is an information flow from Engineering to OM. Section Ref: Operations Management in Practice Sub Section Ref: Within OM: How It All Fits Together – OM across the Organization Level: Medium Bloom’s: Application Learning Objective 6: Describe the flow of information between operations management and other business functions. AACSB: Analytic Time on Task: 1 min

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True/False 81. Operations management is the business function that plans, coordinates, and controls the resources needed to produce a company’s products and services. Answer: True Solution: OM is the business function that plans, organizes, coordinates, and controls the resources needed to produce a company’s goods and services. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Knowledge Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 0.5 mins 82. Marketing is one of the three major functions of every company. Answer: True Solution: Every business is managed through three major functions: finance, marketing, and operations management. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Knowledge Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 0.5 mins 83. An example of a transformation at a hospital is waiting to see the doctor. Answer: False Solution: At a hospital, the transformation involves organizing resources, such as doctors, medical procedures, and medications, to transform sick people into healthy ones. Waiting to see a doctor is not a value-added activity. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Medium Bloom’s: Application Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 0.5 mins

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84. At a factory, the transformation process is the physical change of raw materials and components into products. Answer: True Solution: At a factory, the transformation is the physical change of raw materials into products, such as transforming leather and rubber into sneakers, denim into jeans, or plastic into toys. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 0.5 mins 85. Efficiency means being able to perform most activities. Answer: False Solution: Efficiency means performing activities well and at the lowest possible cost. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Knowledge Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 0.5 mins 86. An example of a “back room” operation for an airline company is loading luggage onto the airplane. Answer: True Solution: “Back room” or “behind the scene” operations are the service operations that have low customer contact. Loading luggage onto the airplane is an operation that has no direct customer contact and can be managed like a manufacturing operation. Section Ref: Differences between Manufacturing and Service Organizations Sub Section Ref: Untitled Introduction Level: Medium Bloom’s: Application Learning Objective 2: Describe the difference between manufacturing and service organizations. AACSB: Knowledge Time on Task: 0.5 mins 87. Companies that have low customer contact and are capital intensive, yet provide a service,

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are called service factories. Answer: False Solution: Companies that have low customer contact and are capital intensive, yet they provide a service, are called quasi-manufacturing organizations. Section Ref: Differences between Manufacturing and Service Organizations Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Knowledge Learning Objective 2: Describe the difference between manufacturing and service organizations. AACSB: Knowledge Time on Task: 0.5 mins 88. Operations management is a result of a single event, the Industrial Revolution. Answer: False Solution: Many events helped shape operations management today. Section Ref: Historical Development Sub Section Ref: Historical Milestones Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 0.5 mins 89. The Industrial Revolution started in the 1770s with the development of a number of inventions that relied on machine power instead of human power. Answer: True Solution: The Industrial Revolution started in the 1770s with the development of a number of inventions that relied on machine power instead of human power. Section Ref: Historical Development Sub Section Ref: The Industrial Revolution Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 0.5 mins 90. Division of labor involves breaking down the production of a product into a series of small, elementary tasks, each of which is performed by a different worker. Answer: True

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Solution: Division of labor means that the production of a good is broken down into a series of small, elemental tasks, each of which is performed by a different worker. Section Ref: Historical Development Sub Section Ref: The Industrial Revolution Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 0.5 mins 91. A key feature of scientific management is that workers are limited only by their tools. Answer: False Solution: A key feature of scientific management is that it assumed that workers are motivated only by money and are limited only by their physical ability. Section Ref: Historical Development Sub Section Ref: Scientific Management Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 0.5 mins 92. The creator of scientific management believed that worker productivity was governed by scientific laws. Answer: True Solution: Tylor believed that worker productivity is governed by scientific laws and that it is up to management to discover these laws through measurement, analysis, and observation. Section Ref: Historical Development Sub Section Ref: Scientific Management Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 0.5 mins 93. Worker participation in decision making is a key feature of scientific management. Answer: False Solution: One key feature of scientific management is the separation of management and labor. Management is responsible for designing productive systems and determining acceptable worker output. Workers have no input into this process.

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Section Ref: Historical Development Sub Section Ref: Scientific Management Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 0.5 mins 94. Job enrichment is an approach in which workers are given a larger portion of the total task to do. Answer: False Solution: Job enrichment is an approach in which workers are given a greater role in planning, i.e., giving more meaning to jobs. Job enlargement is an approach in which workers are given a larger portion of the total tasks to do. Section Ref: Historical Development Sub Section Ref: The Human Relations Movement Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 0.5 mins 95. Operations research started with the publication of the results of the Hawthorne studies. Answer: False Solution: The human relations movement started with the publication of the results of the Hawthorne studies. Section Ref: Historical Development Sub Section Ref: The Human Relations Movement Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 0.5 mins 96. The Hawthorne effect is that workers are motivated by the attention they are given. Answer: True Solution: The idea of workers responding to the attention they are given came to be known as the Hawthorne effect. Section Ref: Historical Development Sub Section Ref: The Human Relations Movement

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Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 0.5 mins 97. Increasing the level of responsibility of a job by adding planning tasks is called job enrichment. Answer: True Solution: Job enrichment is an approach to giving more meaning to jobs, in which workers are given a greater role in planning. Section Ref: Historical Development Sub Section Ref: The Human Relations Movement Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 0.5 mins 98. The first mathematical model for inventory management was developed by Elton Mayo. Answer: False Solution: The first mathematical model for inventory management was developed by F. W. Harris in 1913. Section Ref: Historical Development Sub Section: Management Science Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 0.5 mins 99. Management science focuses on developing quantitative techniques for solving operations problems. Answer: True Solution: Management science is a field of study that focuses on the development of quantitative techniques to solve operations problems. Section Ref: Historical Development Sub Section Ref: Management Science Level: Easy Bloom’s: Knowledge

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Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 0.5 mins 100. The advent of the computer age paved the way for the development of MRP for inventory control and scheduling. Answer: True Solution: The use of computers in business became widespread in the 1970s. A particularly important computerized system, MRP, was developed for inventory control and scheduling. Section Ref: Historical Development Sub Section Ref: The Computer Age Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Technology Time on Task: 0.5 mins 101. The need to offer to customers a greater variety of product choices of a traditionally standardized product is the challenge of flexibility. Answer: True Solution: One of the current competitive challenges for companies is the need to offer to customers a greater variety of product choices of a traditionally standardized product. This is the challenge of flexibility. Section Ref: Historical Development Sub Section Ref: Flexibility Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 0.5 mins 102. One of the most important trends in companies today is competition based on time. Answer: True Solution: One of the most important trends within companies today is time-based competition— developing new products and services faster than the competition, reaching the market first, and meeting customer orders most quickly. Section Ref: Historical Development Sub Section Ref: Time-based Competition Level: Easy Bloom’s: Comprehension

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Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 0.5 mins 103. The objective of supply chain management is to have every member of the chain compete against each other to enhance competitive abilities. Answer: False Solution: The objective of SCM is to have everyone in the chain work together to reduce overall cost and improve quality and service delivery. Section Ref: Historical Development Sub Section Ref: Supply Chain Management Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 0.5 mins 104. Sustainability was an early 1950s management function and focus. Answer: False Solution: Sustainability is a current trend in business to consciously reduce waste, recycle, and reuse products and parts. Section Ref: Historical Development Sub Section Ref: Sustainability and Green Operations Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 0.5 mins 105. The highest percentage of transactions on the Internet occurs between businesses and their customers (B2C). Answer: False Solution: B2B makes up the highest percentage of transactions. Section Ref: Historical Development Sub Section Ref: Electronic Commerce Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Technology Time on Task: 0.5 mins

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106. Outsourcing is providing goods or services to an outside provider. Answer: False Solution: Outsourcing is obtaining goods or services from an outside provider. Section Ref: Historical Development Sub Section Ref: Outsourcing and Flattening of the World Level: Easy Bloom’s: Knowledge Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 0.5 mins 107. Big Data Analytics allows companies to precisely understand what happened in the past and better predict the future. Answer: True Solution: Big data analytics enables converting the large amount of information into an unprecedented amount of business intelligence. It allows companies to precisely understand what happened in the past and better predict the future. Section Ref: Historical Development Sub Section Ref: Artificial Intelligence (AI), Machine Learning and Analytics Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Technology Time on Task: 0.5 mins 108. JIT systems identify and plan the enterprise-wide resources needed to coordinate all company activities involved in producing and delivering products. Answer: False Solution: ERP systems are large, sophisticated software programs for identifying and planning the enterprise-wide resources needed to coordinate all activities involved in producing and delivering products to customers. Section Ref: Today’s OM Environment Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Knowledge Learning Objective 5: Identify current trends in operations management.. AACSB: Knowledge Time on Task: 0.5 mins

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109. Today many corporate CEOs have come through the ranks of operations. Answer: True Solution: Many Corporate CEOs today have come through the ranks of operations. Section Ref: Operations Management in Practice Sub Section Ref: Untitled introduction Level: Easy Bloom’s: Knowledge Learning Objective 6: Describe the flow of information between operations management and other business functions. AACSB: Knowledge Time on Task: 0.5 mins 110. Engineering is tied to operations management. Answer: True Solution: Engineering and other disciplines that are not in the business field are also tied to operations. Operations management provides engineering with the operations capabilities and design requirements, and engineering, in turn, provides valuable input on technological tradeoffs and product specifications. Section Ref: Operations Management in Practice Sub Section Ref: Within OM: How It All Fits Together – OM across the Organization Level: Easy Bloom’s: Comprehension Learning Objective 6: Describe the flow of information between operations management and other business functions. AACSB: Knowledge Time on Task: 0.5 mins 111. Marketing can always meet the customer’s needs. Answer: False Solution: Marketing cannot fully meet the customer needs if marketing managers do not understand what operations can produce, what due dates it can and cannot meet, and what types of customization operations can develop. Section Ref: Operations Management in Practice Sub Section Ref: Within OM: How It All Fits Together – OM across the Organization Level: Easy Bloom’s: Comprehension Learning Objective 6: Describe the flow of information between operations management and other business functions. AACSB: Knowledge Time on Task: 0.5 mins

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112. Marketing can meet the customer needs if they understand what operations can produce. Answer: True Solution: Marketing can meet the customer needs if marketing managers understand what operations can produce, what due dates it can and cannot meet, and what types of customization operations can deliver. Section Ref: Operations Management in Practice Sub Section Ref: Within OM: How It All Fits Together – OM across the Organization Level: Easy Bloom’s: Comprehension Learning Objective 6: Describe the flow of information between operations management and other business functions. AACSB: Knowledge Time on Task: 0.5 mins 113. Finance cannot judge the need for capital investments if they understand operations concepts and needs. Answer: False Solution: Finance cannot realistically judge the need for capital investments, make-or-buy decisions, plant expansions, or relocation if finance managers do not understand operations concepts and needs. Section Ref: Operations Management in Practice Sub Section Ref: Within OM: How It All Fits Together – OM across the Organization Level: Easy Bloom’s: Comprehension Learning Objective 6: Describe the flow of information between operations management and other business functions. AACSB: Knowledge Time on Task: 0.5 mins

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Problems 114. Define operations management. Answer: The business function responsible for planning, organizing, coordinating, and controlling the resources needed to produce a company’s products and services Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Knowledge Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 2 mins 115. What must companies focus on in order to survive in today’s business environment? Answer: To survive, companies today must focus on quality, time-based competition, efficiency, international perspectives, innovation, cost, diversity, and customer relationships. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 3 mins 116. What are the three major functions through which every business is managed? Answer: Finance, marketing, and operations management Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Knowledge Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 1 min 117. What is the “role” of operations management? Answer: To transform organizational inputs into outputs (the finished goods or services) Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction

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Level: Easy Bloom’s: Comprehension Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 2 mins 118. List five different possible inputs to a transformation process. Answer: Examples may be: workers, managers, buildings, equipment, materials, technology, information, etc. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 1: Define operations management. AACSB: Knowledge Time on Task: 2 mins 119. What must companies do in order to be successful with Web-based online shopping? Answer: Manage distribution centers and warehouses, operate fleets of trucks, forecast what customers want and maintain adequate inventories of products, and schedule deliveries while keeping costs low and customers happy. Section Ref: What Is Operations Management? Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 1: Define operations management. AACSB: Technology Time on Task: 3 mins 120. In what ways do service organizations differ from manufacturing organizations? Answer: Manufacturing organizations produce a physical, tangible product that can be stored in inventory before it is needed, while service organizations produce an intangible product that cannot be produced ahead of time; and for manufacturing organizations most customers have no direct contact with the operation, while for service organizations customers are typically present during creation of the service. Also, service organizations tend to have a shorter response time and are more labor intensive. Section Ref: Differences between Manufacturing and Service Organizations Sub Section Ref: Untitled Introduction Level: Medium Bloom’s: Analysis

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Learning Objective 2: Describe the difference between manufacturing and service organizations. AACSB: Knowledge Time on Task: 3 mins 121. While customers and service organizations interact directly, customers and manufacturers interact through what? Answer: Through service organizations like distributors, wholesalers, and retailers Section Ref: Differences between Manufacturing and Service Organizations Sub Section Ref: Untitled Introduction Level: Medium Bloom’s: Analysis Learning Objective 2: Describe the difference between manufacturing and service organizations. AACSB: Analytic Time on Task: 2 mins 122. Manufacturers often provide services as part of their business. Provide some examples. Answer: Shipping, helping customers use products, repairs, replacement parts, warranty service, and credit Section Ref: Differences between Manufacturing and Service Organizations Sub Section Ref: Untitled Introduction Level: Medium Bloom’s: Application Learning Objective 2: Describe the difference between manufacturing and service organizations. AACSB: Analytic Time on Task: 3 mins 123. Service providers may also transform inputs into goods that support their services. Provide some examples. Answer: Examples may be: restaurant food preparation, hair and skin care products, and final assembly of bicycles, tricycles, wagons, furniture, and other products. Section Ref: Differences between Manufacturing and Service Organizations Sub Section Ref: Untitled Introduction Level: Medium Bloom’s: Application Learning Objective 2: Describe the difference between manufacturing and service organizations. AACSB: Analytic Time on Task: 3 min 124. The U.S. Postal Service (USPS) is a service provider, yet most of its operations are similar

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to those that occur in manufacturing. What manufacturing-like characteristics does USPS have? Answer: low customer contact, capital intensive, large amount of inventory, etc. Section Ref: Differences between Manufacturing and Service Organizations Sub Section Ref: Untitled Introduction Level: Medium Bloom’s: Application Learning Objective 2: Describe the difference between manufacturing and service organizations. AACSB: Analytic Time on Task: 3 mins 125. While service and manufacturing firms contribute more to the economy and offer more jobs at all levels, which firms in other industries are also important to our lives and the economy? Hint: Agriculture firms is one example. Answer: Agriculture, fishing, and forestry; construction, and extraction (mining, oil and natural gas, industrial gases) Section Ref: Differences between Manufacturing and Service Organizations Sub Section Ref: Untitled Introduction Level: Hard Bloom’s: Evaluation Learning Objective 2: Describe the difference between manufacturing and service organizations. AACSB: Analytic Time on Task: 3 mins 126. While operations management focuses on privately-owned firms, federal, state, and local governments provide many services and some goods, such as? Answer: postal service; family, social, and aged assistance and care; health care; transportation; safety and security; transportation facility maintenance; education and libraries; real estate title and ownership recording; professional licensing; skill testing; recreation and related licensing (fishing and hunting); historic preservation Section Ref: Differences between Manufacturing and Service Organizations Sub Section Ref: Untitled Introduction Level: Hard Bloom’s: Evaluation Learning Objective 2: Describe the difference between manufacturing and service organizations. AACSB: Analytic Time on Task: 4 mins 127. List five typical operations management decisions. Answer: The list may include:

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What are the unique features of the business that will make it competitive? (Operations strategy) What are the unique features of the product? (Product design) What are the unique features of the process that give the product its unique characteristics? (Process selection) How do we manage our sources of supply? (Supply chain management) How will managers ensure the quality of the product, measure quality, and identify quality problems? (Quality management) What is the expected demand for the product? (Forecasting) Where will the facility be located? (Location analysis) How large should the facility be? (Capacity planning) How should the facility be laid out? (Facility layout) What jobs will be needed in the facility, who should do what task, and how will their performance be measured? (Job design and work measurement) How will the inventory of raw materials be monitored? When will orders be placed? (Inventory mgt.) Who will work on what schedule? (Scheduling) Section Ref: Operations Management Decisions Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 3: Describe decisions that operations managers make. AACSB: Knowledge Time on Task: 3 mins 128. Why are operations management decisions typically more complex for large companies than for small companies? Answer: Because of the size and scope of large companies: they typically produce a greater variety of products, have multiple location sites, and often use both domestic and international suppliers. Section Ref: Operations Management Decisions Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 3: Describe decisions that operations managers make. AACSB: Knowledge Time on Task: 2 mins 129. Tactical decisions can be distinguished from strategic decisions by what set of characteristics? Answer: Tactical decisions focus on specific day-to-day issues; tactical decisions are made after strategic decisions; tactical decisions must be aligned with strategic decisions; tactical decisions

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provide feedback to strategic decision. Section Ref: Operations Management Decisions Sub Section Ref: Untitled Introduction Level: Medium Bloom’s: Analysis Learning Objective 3: Describe decisions that operations managers make. AACSB: Analytic Time on Task: 3 mins 130. What does the historical development of operations management reflect? Answer: The accumulation of experience and ideas over time. Solution: As a function, OM is as old as time. The accumulation of many historical events, experiences and ideas, helped shape OM today. Section Ref: Historical Development Sub Section Ref: Historical Milestones Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 2 mins 131. What four operations management approaches came out of the scientific management movement? Answer: moving assembly lines, stopwatch time studies, piece rate incentives, and setting time standards for task performance Section Ref: Historical Development Sub Section Ref: Scientific Management Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 2 mins 132. What are the two key features of scientific management? Answer: First, it is assumed that workers are motivated only by money and are limited only by their physical ability. Second, management should perform “planning” separately from the workers who perform the “doing.” Section Ref: Historical Development Sub Section Ref: Scientific Management Level: Easy

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Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 2 mins 133. What were the major impacts on operations management that resulted from the widespread use of computers in the 1970s? Answer: Using quantitative models on a larger scale; development of material requirements planning; and ease of data processing, with advances in forecasting, scheduling, and inventory management Section Ref: Historical Development Sub Section Ref: The Computer Age Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Technology Time on Task: 3 mins 134. What is the basic approach for business process reengineering and what are its major impacts? Answer: It involves asking why things are done in a certain way, questioning assumptions, and then redesigning the processes. It can help increase efficiency, improve quality, and reduce costs. Section Ref: Historical Development Sub Section Ref: Business Process Reengineering Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 3 mins 135. What does business process reengineering mean? Answer: Business process reengineering means redesigning a company’s processes to increase efficiency, improve quality, and reduce costs. It questions existing practices and accepts changes OM is a key player in a company’s reengineering efforts. Section Ref: Historical Development Sub Section Ref: Business Process Reengineering Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge

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Time on Task: 2 mins 136. How have information technology tools helped with supply chain management? Answer: They enable collaborative planning and scheduling. They allow synchronized supply chain execution and design collaboration, and they allow companies to respond better and faster to changing market needs. Section Ref: Historical Development Sub Section Ref: Supply Chain Management Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 3 mins 137. What are environmental issues faced by businesses today? Answer: air pollution, water pollution, global warming, waste disposal, etc. Section Ref: Historical Development Sub Section Ref: Sustainability and Green Operations Level: Easy Bloom’s: Comprehension Learning Objective 4: Identify major historical developments in operations management. AACSB: Knowledge Time on Task: 2 mins 138. Why is today’s operations management environment described as very different from what it was just a few years ago? Answer: Customers demand better quality, greater speed, and lower costs. Best practices can be quickly passed to competitors. There is the use of ERP to improve efficiency and the use of CRM to gain a deeper knowledge about customers. There is an increased use of cross-functional decision making. Section Ref: Today’s OM Environment Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 5: Identify current trends in operations management. AACSB: Knowledge Time on Task: 3 mins 139. In today’s information age, applying best practices to operations management is not enough

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to give a competitive advantage. Why? Answer: Because best practices are quickly passed to competitors. Solution: Applying best practices to operations management is not enough to give a company a competitive advantage. The reason is that in today’s information age, best practices are quickly passed to competitors. Section Ref: Today’s OM Environment Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 5: Identify current trends in operations management. AACSB: Knowledge Analytic Time on Task: 3 mins 140. What should be the relationship and information flow between operations and other business functions in order to achieve the goals of the organization? Answer: Operations and other functions should interact and coordinate with each other, understand what others do, and share the information. Section Ref: Operations Management in Practice Sub Section Ref: Within OM: How It All Fits Together – OM across the Organization Level: Easy Bloom’s: Comprehension Learning Objective 6: Describe the flow of information between operations management and other business functions. AACSB: Knowledge Time on Task: 3 mins

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Chapter 2: Operations Strategy and Competitiveness LO Section

Subsection

Question #

The Role of Operations Strategy

Untitled Introduction

1, 2, 87, 88, 89, 90, 91, 114

The Importance of Operations Strategy Mission

3, 4, 115, 116

Environmental Scanning

6, 7, 8, 9, 10, 92, 93, 118, 119, 120

Core Competencies

11, 12, 13, 14, 121, 122, 123

Putting It Together Untitled Introduction

15 16

Competitive Priorities Competitive Priorities – Cost

17 94, 124

Competitive Priorities – Quality

Competitive Priorities – Time Competitive Priorities – Flexibility The Need for Trade-Offs

18, 96 19, 20, 21, 22

Order Winners and Qualifiers

24, 25, 98, 99

Translating Competitive Priorities into Production Requirements Untitled Introduction

26, 27, 100, 101, 102, 103, 126

Types of Technologies

28, 29, 30, 31, 105, 106, 127

Technology as a Tool for Competitive Advantage Measuring Productivity

32, 33, 34

Developing a Business Strategy

Developing an Operations Strategy

Strategic Role of Technology

Productivity

Interpreting Productivity Measures

5, 117

23, 97, 125

104

35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 107, 108, 109, 110, 128, 129, 130, 131, 132, 133, 134 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 135, 136, 137, 138, 139

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Reid & Sanders / Operations Management, 8th edition

Productivity (Cont’d)

Operations Strategy within OM: How It All Fits Together

Productivity and Competitiveness Productivity and Competitiveness – Pandemic Effects Productivity and the Service Sector Untitled Introduction

Test Bank

111, 140 84, 85, 86 112 113

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Multiple Choice 1. Which of the following operations decisions did FedEx make to support its business strategy of competing on time and providing dependability of deliveries? a) Have its own fleet of tractor trailers and use a sophisticated bar code technology. b) Have its own fleet of tractor trailers and have a large warehouse in every state. c) Have its own fleet of airplanes and have a large warehouse in every state. d) Use a sophisticated bar code technology and have a large warehouse in every state. e) Have its own fleet of airplanes and use a sophisticated bar code technology. Answer: e Solution: To provide spend of delivery, FedEx acquired its own fleet of airplanes. To provide dependability of deliveries, FedEx invested in a sophisticated bar-code technology to track all packages. Section Ref: The Role of Operations Strategy Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 1: Explain the role of operations strategy in the organization. AACSB: Knowledge Time on Task: 1 min 2. Happy Donuts is a U.S.-based bakery company. Recently, the company opened its first store in China. Which of the following is MOST likely to be one of the reasons for this movement? a) It helps the company to be a cost leader. b) It helps the company to compete on differentiation. c) It supports the company’s business strategy. d) It facilitates the implementation of TQM within the company. Answer: c Solution: Business strategy is a long-range plan for a business. Opening a store supports the company’s long-range plan for its business. Section Ref: The Role of Operations Strategy Sub Section Ref: Untitled Introduction Level: Medium Bloom’s: Application Learning Objective 1: Explain the role of operations strategy in the organization. AACSB: Analytic Time on Task: 1 min 3. Operational efficiency is a) driving the business strategy. b) ensuring the right tasks are performed.

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c) decreasing the firm’s input requirements. d) increasing the firm’s output. e) performing operations tasks well Answer: e Solution: Operational efficiency is performing operations tasks well, even better than competitors. Section Ref: The Role of Operations Strategy Sub Section Ref: The Importance of Operations Strategy Level: Easy Bloom’s: Knowledge Learning Objective 1: Explain the role of operations strategy in the organization. AACSB: Knowledge Time on Task: 1 min 4. During the 1970s and 1980s, firms from which country provided the MOST serious competitive threat to U.S. companies? a) Germany b) Canada c) Mexico d) Japan e) United Kingdom Answer: d Solution: During the 1970s and 1980s, Japanese companies began offering products of superior quality at lower cost, and the U.S. companies lost market share to their Japanese counterparts. Section Ref: The Role of Operations Strategy Sub Section Ref: The Importance of Operations Strategy Level: Easy Bloom’s: Knowledge Learning Objective 1: Explain the role of operations strategy in the organization. AACSB: Knowledge Time on Task: 1 min 5. Which of the following is FALSE of company mission statements? a) They are unique to each company. b) They define what the business is. c) They consider the values of the business. d) They are not customer focused. e) They answer what business the company is in. Answer: d Solution: Mission statements consider the customer. They answer the question of who the customers will be, and what are the expected customer attributes.

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Section Ref: Developing a Business Strategy Sub Section Ref: Mission Level: Medium Bloom’s: Application Learning Objective 2: Explain how a business strategy is developed. AACSB: Analytic Time on Task: 1 min 6. Environmental scanning helps organizations recognize a) strengths and weaknesses. b) strengths and opportunities. c) opportunities and weaknesses. d) opportunities and threats. e) weaknesses and threats. Answer: d Solution: Environmental scanning allows a company to identify opportunities and threats. Section Ref: Developing a Business Strategy Sub Section Ref: Environmental Scanning Level: Easy Bloom’s: Comprehension Learning Objective 2: Explain how a business strategy is developed. AACSB: Knowledge Time on Task: 1 min 7. The process of monitoring the external environment is called what? a) environmental examination b) environmental inspection c) environmental scrutiny d) environmental perusal e) environmental scanning Answer: e Solution: Environmental scanning is the process of monitoring the external environment for changes and trends to determine business opportunities and threats. Section Ref: Developing a Business Strategy Sub Section Ref: Environmental Scanning Level: Easy Bloom’s: Knowledge Learning Objective 2: Explain how a business strategy is developed. AACSB: Knowledge Time on Task: 1 min

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8. Environmental scanning would NOT provide information on a) changes in customer wants and expectations. b) the firm’s internal inefficient distribution system. c) opportunities and threats. d) changes in information technology. e) changes in global competition. Answer: b Solution: Environmental scanning looks at external environmental trends that can affect the business and allows a company to identify business opportunities and threats. It does not focus on a company’s own strengths and weakness (e.g., the internal inefficient distribution system). Section Ref: Developing a Business Strategy Sub Section Ref: Environmental Scanning Level: Easy Bloom’s: Comprehension Learning Objective 2: Explain how a business strategy is developed. AACSB: Knowledge Time on Task: 1 min 9. Which of the following has used the Internet to conduct a fashion show in order to boost sales? a) The Gap b) Eddie Bauer c) Fruit of the Loom d) Victoria’s Secret e) Nordstrom Answer: d Solution: Victoria’s Secret uses the Internet to conduct fashion shows in order to boost sales. Section Ref: Developing a Business Strategy Sub Section Ref: Environmental Scanning Level: Easy Bloom’s: Comprehension Learning Objective 2: Explain how a business strategy is developed. AACSB: Technology Time on Task: 1 min 10. Which of the following is NOT described in the chapter as one of the major environmental trends that firms should monitor? a) marketplace trends b) global climate trends c) economic trends d) political trends e) social trends

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Answer: b Solution: Environmental scanning does not monitor global climate trends. It monitors trends in the market and some other types of trends that can affect business, such as economic, political, and social trends. Section Ref: Developing a Business Strategy Sub Section Ref: Environmental Scanning Level: Easy Bloom’s: Comprehension Learning Objective 2: Explain how a business strategy is developed. AACSB: Knowledge Time on Task: 1 min 11. Which of the following would NOT be considered a core competency that a company might have? a) a highly trained workforce b) an inefficient distribution system c) skills in attracting and raising capital d) use of information technology e) quality control techniques Answer: b Solution: Core competencies are the unique strengths of an organization. The examples include special skills of workers, financial know-how, knowledge of production and information technology, etc. An inefficient distribution system is weakness of the business. Section Ref: Developing a Business Strategy Sub Section Ref: Core Competencies Level: Easy Bloom’s: Comprehension Learning Objective 2: Explain how a business strategy is developed. AACSB: Knowledge Time on Task: 1 min 12. Which of the following is NOT typically considered to be a core competency? a) workforce b) mission c) market understanding d) technology e) facilities Answer: b Solution: Core competencies are the unique strengths of a business. A company may have core competencies in workforce, facilities, market understanding, financial know-how, and technology. Mission is a statement indicating what business the company is in. Section Ref: Developing a Business Strategy

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Sub Section Ref: Core Competencies Level: Easy Bloom’s: Comprehension Learning Objective 2: Explain how a business strategy is developed. AACSB: Knowledge Time on Task: 1 min 13. What term describes the process of obtaining goods or services from an outside provider? a) outproviding b) transferization c) outsourcing d) subsourcing e) supersourcing Answer: c Solution: Outsourcing is obtaining goods or services from an outside provider. Section Ref: Developing a Business Strategy Sub Section Ref: Core Competencies Level: Easy Bloom’s: Knowledge Learning Objective 2: Explain how a business strategy is developed. AACSB: Knowledge Time on Task: 1 min 14. Juan is a high school graduate entering a university. He is particularly good in verbal communication and persuasion but not as good in mathematics. Taking advantage of his core competencies means that Juan should major in a) engineering. b) science. c) economics. d) marketing. Answer: d Solution: Core competencies are the unique strengths of a business. Studying a major in marketing would give Juan an advantage, since his strengths, or core competencies, are verbal communications and persuasion. Section Ref: Developing a Business Strategy Sub Section Ref: Core Competencies Level: Medium Bloom’s: Application Learning Objective 2: Explain how a business strategy is developed. AACSB: Analytic Time on Task: 1 min

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15. A business strategy is focused on which of the following? a) short-term plans b) medium-term plans c) long-term plans d) all plans for the organization and is not time-bound e) the long-term operational strategy Answer: c Solution: The business strategy defines the long-range plans of the company. The operations strategy is the plan that supports the long-range plan. Section Ref: Developing a Business Strategy Sub Section Ref: Putting It Together Level: Easy Bloom’s: Comprehension Learning Objective 2: Explain how a business strategy is developed. AACSB: Knowledge Time on Task: 1 min 16. Once a business strategy has been developed, a) service prices must be established. b) competition must be identified. c) an operations strategy must be formulated. d) contracting with external sources must begin. e) insourcing will be conducted Answer: c Solution: Once a business strategy has been developed, an operation strategy must be formulated. Section Ref: Developing an Operations Strategy Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 3: Describe how an operations strategy is developed. AACSB: Knowledge Time on Task: 1 min 17. Which of the following is NOT considered one of the four broad categories of competitive priorities? a) technology b) cost c) quality d) flexibility e) time

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Reid & Sanders / Operations Management, 8th edition

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Answer: a Solution: The four broad categories of competitive priorities: cost, quality, time, and flexibility. Section Ref: Developing an Operations Strategy Sub Section Ref: Competitive Priorities Level: Easy Bloom’s: Comprehension Learning Objective 3: Describe how an operations strategy is developed. AACSB: Knowledge Time on Task: 1 min 18. How does Federal Express maintain its ability to compete on time during peak demand periods? a) It subcontracts overload to other firms. b) It purchases more planes. c) It schedules full-time employees to work overtime. d) It uses a very flexible part-time workforce. e) It purchases more vans. Answer: d Solution: FedEx relies on a very flexible part-time workforce, such as college students, to cover workforce requirements during peak periods without having to schedule full-time workers. Section Ref: Developing an Operations Strategy Sub Section Ref: Competitive Priorities – Time Level: Easy Bloom’s: Comprehension Learning Objective 3: Describe how an operations strategy is developed. AACSB: Knowledge Time on Task: 1 min 19. Which of the following competitive priorities typically requires the use of more generalpurpose equipment? a) technology b) cost c) quality d) flexibility e) time Answer: d Solution: Flexibility is a competitive priority focusing on offering a wide variety of products and services and meeting unique customer requirements. It typically requires the use of more general-purpose equipment that can be used to make many different kinds of products. Section Ref: Developing an Operations Strategy Sub Section Ref: Competitive Priorities – Flexibility

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Reid & Sanders / Operations Management, 8th edition

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Level: Easy Bloom’s: Comprehension Learning Objective 3: Describe how an operations strategy is developed. AACSB: Knowledge Time on Task: 1 min 20. Highly skilled workers would be MOST needed by companies employing which of the following competitive priorities? a) location b) cost c) flexibility d) development speed e) time Answer: c Solution: Workers in flexible companies tend to have higher skill levels and can often perform many different tasks in order to meet customer needs. Section Ref: Developing an Operations Strategy Sub Section Ref: Competitive Priorities – Flexibility Level: Easy Bloom’s: Comprehension Learning Objective 3: Describe how an operations strategy is developed. AACSB: Knowledge Time on Task: 1 min 21. Howard Plastics makes a variety of products out of plastics, ranging from plastic trays to body guards for cars. The company’s claim is: “We are ready to meet your custom plastics needs.” This is an example of a company that competes based on a) time. b) cost. c) quality. d) flexibility. e) efficiency. Answer: d Solution: Lee Plastics competes based on flexibility, i.e., offering a wide variety of products and customize them to the unique customer requirements. Section Ref: Developing an Operations Strategy Sub Section Ref: Competitive Priorities – Flexibility Level: Medium Bloom’s: Application Learning Objective 3: Describe how an operations strategy is developed. AACSB: Analytic Time on Task: 1 min

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Reid & Sanders / Operations Management, 8th edition

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22. Fusion Gourmet Cookery is a restaurant offering a range of dishes from India and the Middle East. The slogan of the restaurant is “We will personalize any dish.” This suggests that the restaurant competes based on a) cost. b) quality. c) time. d) flexibility. e) efficiency. Answer: d Solution: The slogan suggests that the restaurant’s competitive priority is flexibility. That is, it can offer a variety of foods to the customer specifications. Section Ref: Developing an Operations Strategy Sub Section Ref: Competitive Priorities – Flexibility Level: Medium Bloom’s: Application Learning Objective 3: Describe how an operations strategy is developed. AACSB: Analytic Time on Task: 1 min 23. When making competitive priority decisions the firm needs to a) select the correct supply chain. b) ensure the PWP is correctly established. c) focus on the one competitive priority at the exclusion of all others. d) make trade-off decisions. e) isolate the competing internal departments. Answer: d Solution: The operation function must place emphasis on those priorities that directly support the business strategy. Thus, it needs to make trade-offs between the different priorities. Section Ref: Developing an Operations Strategy Sub Section Ref: The Need for Trade-Offs Level: Easy Bloom’s: Comprehension Learning Objective 3: Describe how an operations strategy is developed. AACSB: Knowledge Time on Task: 1 min 24. Order winners and qualifiers a) are consistent between manufacturing and service organizations. b) only matter when responding to formal competitive bid requests. c) remain constant over time.

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Reid & Sanders / Operations Management, 8th edition

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d) change over time. e) only apply to quasi-manufacturing firms. Answer: d Solution: Order winners and order qualifiers change over time. Section Ref: Developing an Operations Strategy Sub Section Ref: Order Winners and Qualifiers Level: Easy Bloom’s: Comprehension Learning Objective 3: Describe how an operations strategy is developed. AACSB: Knowledge Time on Task: 1 min 25. The competitive priorities that a company has to meet if it wants to do business in a particular market are referred to as a) order qualifiers b) order standards c) order takers d) order criteria e) order winners Answer: a Solution: Order qualifiers are those competitive priorities that a company has to meet if it wants to do business in that particular market. Section Ref: Developing an Operations Strategy Sub Section Ref: Order Winners and Qualifiers Level: Easy Bloom’s: Comprehension Learning Objective 3: Describe how an operations strategy is developed. AACSB: Knowledge Time on Task: 1 min 26. Which of the following is an operations decision related to the structure of the production process? a) organization of operations b) facilities c) worker pay d) quality control measures e) management policies Answer: b Solution: The structure of the production process involves operations decisions related to the design of the production process, such as characteristics of facility used, selection of technology, and flow of goods and services through the facility.

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Reid & Sanders / Operations Management, 8th edition

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Section Ref: Developing an Operations Strategy Sub Section Ref: Translating Competitive Priorities into Production Requirements Level: Easy Bloom’s: Comprehension Learning Objective 3: Describe how an operations strategy is developed. AACSB: Knowledge Time on Task: 1 min 27. Which of the following is an operations decision related to the infrastructure of the production process? a) quality control approaches b) characteristics of facilities c) robots d) flow of goods and services through the facility e) flexible manufacturing system (FMS) machines Answer: a Solution: The infrastructure of the production process involves operations decisions related to the planning and control systems of the operations, such as organization of the operations functions, skills and pay of workers, and quality control approaches. Section Ref: Developing an Operations Strategy Sub Section Ref: Translating Competitive Priorities into Production Requirements Level: Easy Bloom’s: Comprehension Learning Objective 3: Describe how an operations strategy is developed. AACSB: Knowledge Time on Task: 1 min 28. What are the three primary types of technology? a) product technology, process technology, and information technology b) product technology, process technology, and environmental technology c) product technology, process technology, and safety technology d) information technology, environmental technology, and safety technology e) environmental technology, information technology, and process technology Answer: a Solution: The three primary types of technologies are: product technology, process technology, and information technology. Section Ref: Strategic Role of Technology Sub Section Ref: Types of Technologies Level: Easy Bloom’s: Knowledge Learning Objective 4: Explain the strategic role of technology. AACSB: Technology

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Reid & Sanders / Operations Management, 8th edition

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Time on Task: 1 min 29. Teflon, the material used in no-stick fry pans, is an example of ______ technology. a) process b) information c) environmental d) safety e) product Answer: e Solution: Product technology is any new technology developed by a firm. One example of this is Teflon, the material used in no-stick fry pans. Teflon became an emerging technology in the 1970s and is currently used in numerous applications. Section Ref: Strategic Role of Technology Sub Section Ref: Types of Technologies Level: Easy Bloom’s: Comprehension Learning Objective 4: Explain the strategic role of technology. AACSB: Technology Time on Task: 1 min 30. Computer-aided manufacturing (CAM) is an example of ______ technology. a) process b) information c) environmental d) safety e) product Answer: a Solution: Process technology is the technology used to improve the process of creating goods and services. Computer-aided manufacturing (CAM) is a technology that uses computers to assist engineers in the way they manufacture products. Section Ref: Strategic Role of Technology Sub Section Ref: Types of Technologies Level: Easy Bloom’s: Comprehension Learning Objective 4: Explain the strategic role of technology. AACSB: Technology Time on Task: 1 min 31. Which type of technology has had the greatest impact on business? a) process technology b) information technology

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c) environmental technology d) safety technology e) product technology Answer: b Solution: Information technology enables communication, processing, and storage of information. It has grown rapidly over recent years and has had a profound impact on business. Section Ref: Strategic Role of Technology Sub Section Ref: Types of Technology Level: Easy Bloom’s: Comprehension Learning Objective 4: Explain the strategic role of technology. AACSB: Technology Time on Task: 1 min 32. Deciding on the acquisition of technology is based on the premise that it a) is fun. b) keeps the employees happy. c) doesn’t cost very much. d) always improves productivity. e) supports the company’s chosen competitive priorities. Answer: e Solution: The technology a company acquires should not be decided on randomly. Rather, the selected technology needs to support the organization’s competitive priorities. Section Ref: Strategic Role of Technology Sub Section Ref: Technology as a Tool for Competitive Advantage Level: Easy Bloom’s: Comprehension Learning Objective 4: Explain the strategic role of technology. AACSB: Technology Time on Task: 1 min 33. Rapid technological change increases the risk of a) inefficiency. b) lack of quality. c) cost overruns. d) obsolescence. e) None of the above choices are correct. Answer: d Solution: Investing in technology can be costly and entail risks, such as overestimating the benefits of the technology or incurring the risk of obsolescence due to rapid new inventions. Section Ref: Strategic Role of Technology Sub Section Ref: Technology as a Tool for Competitive Advantage

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Reid & Sanders / Operations Management, 8th edition

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Level: Easy Bloom’s: Comprehension Learning Objective 4: Explain the strategic role of technology. AACSB: Technology Time on Task: 1 min 34. After identifying various types of technologies that her company could acquire, Lisa and her team list a set of key critical success factors to evaluate each. Which of the following is LEAST likely to be considered? a) Gain a competitive advantage. b) Improve current processes. c) Maintain up-to-date standards. d) Follow the latest trend. Answer: d Solution: The technology a company acquires should not be decided on randomly, such as following the latest fad or industry trend. Technology should be acquired to help gain a competitive advantage, maintain up-to-date technology, and improve processes. Section Ref: Strategic Role of Technology Sub Section Ref: Technology as a Tool for Competitive Advantage Level: Medium Bloom’s: Application Learning Objective 4: Explain the strategic role of technology. AACSB: Analytic Time on Task: 1 min 35. When does productivity increase? a) Inputs increase while outputs remain the same. b) Inputs decrease while outputs remain the same. c) Outputs decrease while inputs remain the same. d) Inputs and outputs increase proportionally. e) Inputs and outputs decrease proportionally. Answer: b Solution: Productivity = Outputs / Inputs. Productivity increases when using less inputs to produce the same amount of outputs. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Analysis Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1 min

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36. Which of the following is a valid productivity measure? a) multi-output productivity measure b) partial productivity measure c) multi-part productivity measure d) multi-component productivity measure e) imperfect productivity measure Answer: b Solution: Productivity measures include: total productivity measures, partial productivity measures, and multifactor productivity measures. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Easy Bloom’s: Knowledge Learning Objective 5: Define productivity and identify productivity measures. AACSB: Knowledge Time on Task: 1 min 37. Consider a pizza parlor. Which of the following would NOT be a valid productivity measure? a) pizzas produced / number of workers used b) pizzas produced / number of ovens c) pizzas produced / cost of workers and ingredients d) pizzas produced / cost of all inputs used e) labor hours / pizzas produced Answer: e Solution: Productivity = Outputs / Inputs. Labor hours / pizzas produced = Inputs / Outputs is not a valid productivity measure. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1 min 38. If inputs increase by 30% and outputs decrease by 15%, what is the percentage change in productivity? a) 100% decrease b) 11.54% increase c) 34.62% decrease d) 15% increase e) 15% decrease

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Answer: c Solution: P = O / I. New productivity = (1-0.15) / (1+0.3) = 0.85 / 1.3 = 0.6538, so the productivity is decreased by 1-0.6538 = 0.3462, or 34.63%. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Analysis Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 3 mins 39. If inputs increase by 6% and outputs increase by 24%, what is the percentage increase in productivity? a) 400.00% b) 16.98% c) 0.25% d) 4.00% e) 18.00% Answer: b Solution: P = O / I. New productivity = 1.24 / 1.06 = 1.1698. The productivity is increased by 1.1698 –1 = 0.1698 or 16.98%. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Analysis Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 3 mins 40. An airline has determined that its baggage handlers can handle 12,000 bags when 3 baggage handlers are on shift. What is the baggage handler productivity? a) 4,000 bags/shift b) 4,000 bags/handler c) 14,000 bags/shift d) 12,000 bags/shift e) 2,000 bags/handler Answer: b Solution: P = O / I = 12000 / 3 = 4000 bags/handler Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium

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Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1.5 mins 41. If inputs increase by 10% and outputs increase by 4%, what is the percentage change in productivity? a) 5.45% increase b) 250.00% increase c) 5.45% decrease d) 5.77% increase e) 5.77% decrease Answer: c Solution: P = O / I. New productivity = 1.04 / 1.10 = 0.9455. Since inputs were higher than outputs, this represents a loss or negative; the productivity is decreased by 1.00 –. 9455 = .0545, or 5.45%. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Analysis Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 3 mins 42. If inputs increase by 10% and outputs increase by 5%, what is the percentage change in productivity? a) 4.55% decrease b) 4.55% increase c) 4.76% increase d) 4.76% decrease e) 50.00% increase Answer: a Solution: P = O / I. New productivity = 1.05 / 1.10 = .9545. Since inputs were higher than outputs, this represents a loss or negative; the productivity is decreased by 1.00 –.9545 = .0455, or 4.55%. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Analysis Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 3 mins

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43. If Joe’s Diner serves 150 meals in one day using 3 kitchen staff, what is the kitchen staff daily productivity? a) 40 meals/staff b) 45 meals/staff c) 50 meals/staff d) 55 meals/staff e) 60 meals/staff Answer: c Solution: P = O / I =150 / 3 = 50 meals per staff Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1 min 44. If inputs increase by 30% and outputs increase by 15%, what is the percentage change in productivity? a) 50.00% decrease b) 88.46% increase c) 88.46% decrease d) 11.54% increase e) 11.54% decrease Answer: e Solution: P = O / I. New productivity = 1.15 / 1.30 = .8846. Since inputs were higher than outputs, this represents a loss or negative. The productivity is decreased by 1.00 –.8846 = .1154, or 11.54%. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Analysis Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 3 mins 45. A firm produces 100 units using 800 labor hours. What is its labor productivity? a) 0.125 units/hour b) 8 units/hour c) 100 units/hour

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d) 800 units/hour e) –0.125 units/hour Answer: a Solution: Labor productivity = O / I = 100 / 800 = .125 units/hr Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Analysis Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1.5 mins 46. A firm produces 2000 products using 10 workers on an eight-hour shift. What is the labor productivity per worker? a) 200 units/hour b) 25 units/hour c) 250 units/hour d) 20 units/hour e) 0.04 units/hour Answer: b Solution: Labor productivity = 2000 units / (10*8 hr) = 25 units/hr Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Analysis Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1.5 mins 47. A machine shop produces metal frames on two different machines. The average daily production on machine 1 is 300 frames, and the average daily production on machine 2 is 180 frames. What is the daily machine productivity? a) 480 frames/machine b) 330 frames/machine c) 240 frames/machine d) 160 frames/machine e) 300 frames/machine Answer: c Solution: Daily machine productivity = (300 + 180) /2 = 240 frames/machine. Section Ref: Productivity Sub Section Ref: Measuring Productivity

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Level: Medium Bloom’s: Analysis Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1.5 mins 48. A machine shop produces metal brackets on two different machines. Machine 1 can produce a bracket every 10 minutes. Machine 2 can produce a bracket every 4 minutes. What is the average productivity per machine? a) 4.3 brackets/hour b) 8.6 brackets/hour c) 10.5 brackets/hour d) 21.0 brackets/hour e) 7.0 brackets/hour Answer: c Solution: Average machine productivity = (60 mins /10 mins + 60 mins /4 mins) / 2= 21 /2 = 10.5 brackets / hour per machine. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Analysis Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1.5 mins 49. A firm produces handbags using three workers. On Tuesday, Jane completed 60 bags in 6 hours, Ron completed 50 bags in 7 hours, and Mary completed 80 bags in 5 hours. What was the overall productivity of the firm? a) 7.92 bags/hour b) 11.05 bags/hour c) 10.00 bags/hour d) 10.56 bags/hour e) 61.67 bags/hour Answer: d Solution: Overall labor productivity = Total bags / Total labor hours = (60 + 50 + 80) / (6 + 7+ 5) = 10.56 bags/hour. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Analysis Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic

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Time on Task: 1.5 mins 50. Suppose that output is worth $400, and labor and materials costs are $200 and $100, respectively. What is the materials productivity? a) 2.00 b) 1.33 c) 0.25 d) 0.75 e) 4.00 Answer: e Solution: Materials productivity = 400 / 100 = 4.00. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Analysis Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1 min 51. A firm produces 500 units per day using five workers on a five-hour shift. On average, 15% of the units produced are defective and must be scrapped. What is the labor productivity for nondefective units? a) 17 units/hour b) 3 units/hour c) 20 units/hour d) 85 units/hour e) 15 units/hour Answer: a Solution: Labor productivity = Nondefective units / Total labor hours = (500*0.85) / (5*5) = 17 units/hour. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Analysis Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1.5 mins 52. Suppose that weekly output is worth $1000, and labor and materials costs are $300 and $200, respectively. What is the multifactor productivity ratio? a) 1000

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b) 8 c) 2 d) 3 e) 0.5 Answer: c Solution: Multifactor productivity = 1000 / (300 + 200) = 1000 / 500 = 2. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Analysis Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1.5 mins 53. Each day a firm produces 50 products worth $40 each. Raw materials cost per unit are $12. The firm uses 4 workers on an eight-hour shift earning $10 per hour each. What is the multifactor productivity ratio? a) 1.82 b) 0.77 c) 3.16 d) 0.12 e) 2.17 Answer: e Solution: Multifactor productivity = Total outputs / Total inputs = (50 * 40) / (50 * 12 + 4 * 8 * 10) = 2.17. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Analysis Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 2 mins 54. A bakery bakes bread in two different ovens. Oven 1 can bake a loaf every 30 minutes. Oven 2 can bake a loaf every 15 minutes. What is the average productivity per oven? a) 6.00 loaves/hour b) 3.00 loaves/hour c) 2.67 loaves/hour d) 1.33 loaves/hour e) 0.38 loaves/hour Answer: b

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Solution: Oven 1 can bake 2 per hour. Oven 2 can bake 4 per hour. Total 6 loaves per hr / 2 ovens = 3 loaves per hour. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Analysis Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1.5 mins 55. If the telecommunication company sold $10,000,000 of Internet service using $50,000 of labor, $25,000 of leased bandwidth, $45,000 service fees, and $80,000 or replacement parts, what is the telecommunication multifactor productivity? a) 35 b) 40 c) 45 d) 50 e) 55 Answer: d Solution: Multifactor productivity = 10,000,000 / (50k + 25k + 45k + 80k) = 10,000,000 / 200k = 50. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Analysis Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1.5 mins 56. Last week Jason painted 11 houses in 4 days. This week he painted 14 houses in 5 days. What was his percent productivity increase? a) 1.82% b) 1.79% c) 27.27% d) 25.00% e) 5.00% Answer: a Solution: Last week: 11 / 4 = 2.75 This week: 14 / 5 = 2.8 2.8 / 2.75 = 1.01818. The productivity was increased by 0.01818 or 1.82%.

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Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Analysis Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1.5 mins 57. Last month a plant produced 10,000 units using 2000 labor hours. This month it produced 12,000 units using 3000 labor hours. What is the percent productivity decrease? a) 200% b) 100% c) 50% d) 25% e) 20% Answer: e Solution: Last month: 10000 / 2000 = 5 This month: 12000 / 3000 = 4 Percentage of productivity change = (4 – 5) / 5 = –0.2, or 20% decrease. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Analysis Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1.5 mins 58. On Tuesday George produced 100 units in 8 hours. On Wednesday he produced 120 units in 10 hours. What was his percent productivity change? a) 0.50% b) 4.17% c) 4.17% d) 4.00% e) 4.00% Answer: d Solution: Tuesday: 100 / 8 = 12.5 Wednesday: 120 / 10 = 12 Percent productivity change = (12 – 12.5) / 12.5 = –0.04, or 4% decrease. Section Ref: Productivity Sub Section Ref: Measuring Productivity

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Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1.5 mins 59. Last month Stacy sold 10 houses while working 20 days. This month she sold the same number of houses in 22 days. What is her percent productivity change? a) 10.00% b) 9.1% c) 9.1% d) 10.00% e) 4.55% Answer: b Solution: Last month: 10 / 20 = 0.5 This month: 10 / 22 = 0.4545 Percent productivity change: (.4545 – 0.5) / 0.5 = –.0.091, or 9.1% decrease. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1.5 mins 60. Yesterday, John produced 100 units in 8 hours. Today he produced the same amount in 6 hours. What is his percent productivity change? a) 33.33% b) 0.00% c) 25.55% d) 25.00% e) 4.67% Answer: a Solution: Yesterday: 100 / 8 = 12.5 Today: 100 / 6 = 16.666 Percent productivity change: (16.666 – 12.5) / 12.5 = 0.3333, or 33.33% productivity increase. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Application

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Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1.5 mins 61. A company used to produce 500 units every 2 days, but 10% of the units were defective. After installing a new process, defects have been eliminated while output has remained the same. What is the percent increase in productivity due to installing the new process? a) 10.00% b) 25.00% c) 11.11% d) 0.00% e) 5.56% Answer: c Solution: Productivity = Outputs / Inputs Old process: (500 * 0.9) / 2 = 225 units per day New process: (500) / 2 = 250 units per day Percent productivity increase = (250 – 225) / 225 = 0.111, or 11.11%. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 2 mins 62. A company used to produce 300 units every day, but 20% of the units were defective. After installing a new process, the defect rate has been reduced to 5%, while output has remained the same. What is the percent increase in productivity due to installing the new process? a) 15.79% b) 0.00% c) 15.00% d) 18.75% e) 75.00% Answer: d Solution: Old process: Nondefective output = 300 – (20% x 300) = 240 units New process: Nondefective output = 300 – (5% x 300) = 285 units With the same amount of inputs, the % productivity change = (285 – 240) / 240 = 0.1875, or 18.75% increase. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium

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Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 2 mins 63. Last month a plant produced 1200 units using 150 labor hours. This month it produced 1500 units using 300 labor hours. What is the percent productivity decrease? a) 37.50% b) 60.00% c) 100.00% d) 300.00% e) 200.00% Answer: a Solution: Last month: 1200 / 150 = 8 units/hour This month: 1500 / 300 = 5 units/hour Percent productivity decrease = (5 – 8) / 8 = –0.375, or 37.5%. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1.5 mins 64. Suppose that a plant manager is only evaluated based on the partial productivity measure: output / (number of employees). If she replaces 10% of the workforce with robots (one robot per replaced worker), and output remains the same, what will be the percent change in this measure of productivity? a) 0% increase b) 10% decrease c) 11.1% increase d) 11.1% decrease e) no change in productivity Answer: c Solution: Partial labor productivity = O / I = 1 / (1*0.9) = 1.111, or 11.1% increase in labor productivity. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures.

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AACSB: Analytic Time on Task: 1.5 mins 65. Productivity is essentially a) something to fill out managers’ reports. b) a measure of resource effectiveness. c) a scorecard of how efficiently resources are used. d) a balance scorecard metric. e) the current business fad. Answer: c Solution: Productivity is a measure of how efficiently an organization converts inputs into outputs. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Easy Bloom’s: Comprehension Learning Objective 5: Define productivity and identify productivity measures. AACSB: Knowledge Time on Task: 1 min 66. The IT workshop at a state university is open from 9 a.m. to 5 p.m. Monday through Friday. It uses 4 part-time student technicians per day with each of them working a 4-hour shift. On average, the workshop solves 50 computer hardware- and software-related requests per day. What is the student productivity ratio? a) 50 requests per day b) 25 requests per shift c) 6.25 requests per hour d) 3.125 requests per hour e) 1.5625 requests per hour Answer: d Solution: Student productivity = value of output / labor-hours of input = 50 / (4 * 4) = 3.125 requests per hour. Section Ref: Productivity Sub Section Ref: Measuring Productivity Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 2 mins

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67. Suppose that on Monday the cost of inputs sums to $1000, and the value of outputs sums to $4000. For which of the following values on Tuesday would productivity increase? a) inputs = $1100, outputs = $4000 b) inputs = $1100, outputs = $4200 c) inputs = $850, outputs = $3600 d) inputs = $1000, outputs = $3900 e) inputs = $2000, outputs = $8000 Answer: c Solution: Calculate the P= O/I for each. “Inputs = $850 and outputs = $3,600” leads to the productivity of 3,600 / 850 = 4.235, which is the only one higher than the productivity on Monday (4000 / 1000 = 4). Section Ref: Productivity Sub Section Ref: Interpreting Productivity Measures Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 2 mins 68. Suppose that a plant has a daily productivity of 200 parts per employee. What can we conclude? a) The daily productivity is excellent. b) The plant can hire more workers and still earn profits. c) The plant is not earning profits. d) The plant must be highly automated. e) No specific conclusion can be made. Answer: e Solution: No specific conclusion can be made. To interpret the meaning of a productivity measure, it must be compared with a similar productivity measure. The number by itself does not tell us very much. Section Ref: Productivity Sub Section Ref: Interpreting Productivity Measures Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1.5 mins 69. Suppose that a plant has a daily productivity of 0.85 parts per employee. What can we conclude? a) The plant must be very labor-intensive. b) The plant is not earning profits.

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c) The plant must be highly automated. d) The plant should lay off workers. e) No specific conclusion can be made. Answer: e Solution: No specific conclusion can be made. To interpret the meaning of a productivity measure, it must be compared with a similar productivity measure. The number by itself does not tell us very much. Section Ref: Productivity Sub Section Ref: Interpreting Productivity Measures Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1.5 mins 70. Suppose that a plant has a total productivity measure of 0.85. What can we conclude? a) The plant is not earning profits. b) No specific conclusion can be made. c) The plant should lay off workers. d) The plant is highly automated. e) The daily productivity is excellent. Answer: a Solution: Productivity = Outputs / Inputs. A plant cannot earn profit if its productivity is < 1 (i.e., inputs > outputs). Section Ref: Productivity Sub Section Ref: Interpreting Productivity Measures Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1.5 mins 71. Suppose that last month the cost of inputs summed to $100,000, and the value of outputs summed to $800,000. For which of the following values this month would productivity increase? a) inputs = $110,000, outputs = $800,000 b) inputs = $50,000, outputs = $400,000 c) inputs = $200,000, outputs = $1,600,000 d) inputs = $100,000, outputs = $820,000 e) inputs = $300,000, outputs = $1,600,000 Answer: d

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Solution: Calculate the P= O/I for each; “inputs = $100,000, outputs = $820,000” is the only one higher than last month, i.e., 820,000 / 100,000 = 8.2 > 800,000 / 100,000 = 8, indicating a productivity increase. Section Ref: Productivity Sub Section Ref: Interpreting Productivity Measures Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 2 mins 72. Suppose that in week 1 a company produced 1,000 units using 60 labor hours. For which of the following values in week 2 would labor productivity decrease? a) units = 2,000, hours = 120 b) units = 1,500, hours = 95 c) units = 1,000, hours = 58 d) units = 500, hours = 30 e) units = 2,000, hours = 100 Answer: b Solution: Calculate the P= O/I for each; “units = 1,500, hours = 95” is the only one with the productivity lower than week 1, i.e., 1,500 / 95 =15.789 < 1,000 / 60 = 16.67 units/hour, indicating a decrease in labor productivity. Section Ref: Productivity Sub Section Ref: Interpreting Productivity Measures Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 2 mins 73. Suppose that on Wednesday the cost of inputs summed to $4,000, and the value of outputs summed to $10,000. For which of the following values on Thursday will productivity stay the same? a) inputs = $2,000, outputs = $5,000 b) inputs = $5,000, outputs = $10,000 c) inputs = $4,000, outputs = $8,000 d) inputs = $10,000, outputs = $4,000 e) inputs = $12,000, outputs = $40,000 Answer: a Solution: Calculate the P= O/I for each; “inputs = $2,000 and outputs = $5,000” = 5000 / 2000 = 2.5 is the only one that equals to Wednesday’s (10,000 / 4,000 = 2.5). Section Ref: Productivity

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Sub Section Ref: Interpreting Productivity Measures Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 2 mins 74. Vericol, Inc. manufactures drugs using workers and automated machines. The firm has decided to replace two workers with a new machine, while the output per day is not expected to change. Which of the following CANNOT be true? a) Labor productivity will increase. b) Machine productivity will decrease. c) Labor productivity will decrease. d) Multifactor productivity will increase. e) Multifactor productivity will decrease. Answer: c Solution: Labor productivity = Output / Labor. If replacing 2 workers with a new machine while keeping the same level of output, the labor productivity will increase (fewer hours used), not decrease. Since no further information about machines available, multifactor productivity and machine productivity cannot be computed, so no conclusive statements can be made. That is, they may increase or decrease. Section Ref: Productivity Sub Section Ref: Interpreting Productivity Measures Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 3 mins 75. A manager has just replaced three workers with a machine that is cheaper to operate than the cost of the three replaced workers. Output is expected to remain the same. Which of the following is true? a) Labor productivity will decrease. b) Machine productivity will increase. c) Multifactor productivity will decrease. d) Multifactor productivity will increase. e) The value of output will decrease. Answer: d Solution: Total inputs will decrease since the machine is cheaper to operate. While the output remains the same, multifactor productivity will increase. Section Ref: Productivity Sub Section Ref: Interpreting Productivity Measures

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Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 1.5 mins 76. Suppose that in January a company produced 5,000 units using 1,000 labor hours. For which of the following values in February would labor productivity decrease? a) units = 5,000, hours = 900 b) units = 10,000, hours = 1,500 c) units = 10,000, hours = 2,000 d) units = 2,500, hours = 500 e) units = 5,000, hours = 1,100 Answer: e Solution: Calculate the P= O/I for each; “units = 5,000, hours = 1,100” is the only one less than January, i.e., 5,000 / 1,100 = 4.54 < 5,000 / 1,000 = 5, indicating a labor productivity decrease. Section Ref: Productivity Sub Section Ref: Interpreting Productivity Measures Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 2 mins 77. Suppose that in year 1 a company produced $100 million worth of outputs while inputs totaled $50 million. For which of the following values in year 2 would productivity decrease? a) outputs = $90 million, inputs = $50 million b) outputs = $400 million, inputs = $200 million c) outputs = $250 million, inputs = $100 million d) outputs = $50 million, inputs = $25 million e) outputs = $60 million, inputs = $25 million Answer: a Solution: Calculate P= O/I for each; “output = $90 million, inputs = $50 million” is the only one less than year 1 (i.e., 90 / 50 = 1.8 < 100 / 50 = 2), indicating a productivity decrease. Section Ref: Productivity Sub Section Ref: Interpreting Productivity Measures Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 2 mins

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78. Suppose that on Thursday a company produced 80 units using 160 labor hours. For which of the following values on Friday would daily labor productivity increase? a) units = 70, hours = 160 b) units = 80, hours = 180 c) units = 240, hours = 500 d) units = 160, hours = 300 e) units = 40, hours = 100 Answer: d Solution: Calculate the P= O/I for each; “units = 160, hours = 300” is the only one more than Thursday (160 / 300 = 0.5333 > 80 / 160 = 0.5), indicating a productivity increase. Section Ref: Productivity Sub Section Ref: Interpreting Productivity Measures Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 2 mins 79. Johnny employs five painters. He collected the following data from last week. Painter Hours Walls Completed Julius 40 60 Margaret 32 68 Dave 50 78 Suzy 36 70 Fawn 44 74 Which painter was LEAST productive last week? a) Julius b) Margaret c) Dave d) Suzy e) Fawn Answer: a Solution: Calculate by dividing walls completed by the hours; Julius was LEAST productive with 1.5 walls per hour. Painter Hours Walls Completed Walls per Hour Julius 40 60 1.5 Margaret 32 68 2.125 Dave 50 78 1.56 Suzy 36 70 1.94 Fawn 44 74 1.68 Section Ref: Productivity Sub Section Ref: Interpreting Productivity Measures

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Reid & Sanders / Operations Management, 8th edition

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Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 2 mins 80. A bakery uses five ovens to bake muffins. Yesterday’s data are provided below. Oven Hours Muffins Baked Oven 1 5 600 Oven 2 10 1500 Oven 3 8 1280 Oven 4 8 800 Oven 5 6 780 Which oven was the MOST productive? a) Oven 1 b) Oven 2 c) Oven 3 d) Oven 4 e) Oven 5 Answer: c Solution: Calculate by dividing muffins baked by the hours; oven 3 was most productive with productivity of 160 muffins per hour. Oven Hours Muffins Baked Muffins per Hour Oven 1 5 600 120 Oven 2 10 1500 150 Oven 3 8 1280 160 Oven 4 8 800 100 Oven 5 6 780 130 Section Ref: Productivity Sub Section Ref: Interpreting Productivity Measures Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 2 mins 81. The state government utilizes five workers to stamp license plates. Last month’s data are provided below: Worker Days Worked Units Stamped Pete 30 1440 Tommy 20 1600 Laura 24 2000 Julie 28 2100 ©2023 John Wiley & Sons, Inc. All rights reserved.

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Reid & Sanders / Operations Management, 8th edition

Test Bank

Susan 29 1200 Which worker was the LEAST productive? a) Pete b) Tommy c) Laura d) Julie e) Susan Answer: e Solution: Calculate by dividing units stamped by the days; Susan was least productive with productivity of 41.38 units per day. Worker Days Worked Units Stamped Units Stamped per Day Pete 30 1440 48 Tommy 20 1600 80 Laura 24 2000 83.33 Julie 28 2100 75 Susan 29 1200 41.38 Section Ref: Productivity Sub Section Ref: Interpreting Productivity Measures Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 2 mins 82. A firm uses five plants to produce its products. Each final product has a value of $100. The following table provides last week’s output, labor hours used (at $15 per hour), and materials cost per unit. Plant Output (in units) Labor Hours Materials Cost per Unit Plant 1 2000 400 $20 Plant 2 5000 900 $18 Plant 3 9000 2000 $20 Plant 4 1000 150 $30 Plant 5 2000 440 $18 Which plant was MOST productive last week? a) Plant 1 b) Plant 2 c) Plant 3 d) Plant 4 e) Plant 5 Answer: b Solution: Plant 1 = 2000 / (400 x 15 + 20 x 2000) = .043 Plant 2 = 5000 / (900 x 15 + 18 x 2000) = .048

TB 2-39

Reid & Sanders / Operations Management, 8th edition

Test Bank

Plant 3 = 9000 / (2000 x 15 + 20 x 2000) = .042 Plant 4 = 1000 / (150 x 15 + 30 x 2000) = .031 Plant 5 = 2000 / (440 x 15 + 18 x 2000) = .047 Plant 2 was most productive with the highest productivity ratio of 0.048. Section Ref: Productivity Sub Section Ref: Interpreting Productivity Measures Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 2 mins 83. A firm uses five plants to produce its products. Output value and total input cost for last week are provided below. Plant Output Value Total Cost Plant 1 $20,000 $25,000 Plant 2 $50,000 $60,000 Plant 3 $40,000 $42,000 Plant 4 $80,000 $99,000 Plant 5 $25,000 $29,000 Which plant was LEAST productive last week? a) Plant 1 b) Plant 2 c) Plant 3 d) Plant 4 e) Plant 5 Answer: a Solution: Plant 1 = 20000 / 25000 = .800 Plant 2 = 50000 / 60000 = .833 Plant 3 = 40000 / 42000 = .952 Plant 4 = 80000 / 99000 = .808 Plant 5 = 25000 / 29000 = .862 Plant 1 was least productive with the lowest productivity ratio of 0.800. Section Ref: Productivity Sub Section Ref: Interpreting Productivity Measures Level: Medium Bloom’s: Application Learning Objective 5: Define productivity and identify productivity measures. AACSB: Analytic Time on Task: 2 mins 84. The pandemic created disruptions for which of the following?

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Reid & Sanders / Operations Management, 8th edition

Test Bank

a) levels of demand b) supply levels c) buyers d) manufacturers e) all of the above Answer: e Section Ref: Productivity Sub Section Ref: Productivity and Competiveness – Pandemic Effects Level: Easy Bloom’s: Knowledge Learning Objective 5: Define productivity and identify productivity measures. AACSB: Knowledge Time on Task: 1 min 85. The rate of growth and supply chain disruptions have caused companies to recognize the importance of a) time management. b) cost management. c) flexibility. d) overstocking inventory. e) consumer demand. Answer: c Section Ref: Productivity Sub Section Ref: Productivity and Competiveness – Pandemic Effects Level: Easy Bloom’s: Knowledge Learning Objective 5: Define productivity and identify productivity measures. AACSB: Knowledge Time on Task: 1 min 86. The pandemic has forced business leaders to realize that a) disruption is temporary. b) disruptions are now part of the global landscape. c) disruptions should be prevented by only purchasing from local suppliers. d) all disruptions can be prevented by increasing the amount of spending. e) the most successful businesses in navigating disruptions are those that use global suppliers. Answer: b Section Ref: Productivity Sub Section Ref: Productivity and Competiveness – Pandemic Effects Level: Easy Bloom’s: Knowledge

TB 2-41

Reid & Sanders / Operations Management, 8th edition

Test Bank

Learning Objective 5: Define productivity and identify productivity measures. AACSB: Knowledge Time on Task: 1 min

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Reid & Sanders / Operations Management, 8th edition

Test Bank

True/False 87. An operations strategy covers a relatively short time horizon, whereas a business strategy covers a relatively long time horizon. Answer: False Solution: A business strategy is a long-range plan of a business. An operation strategy is a longrange plan for the operations function that specifies the design and use of resources to support the business strategy. Section Ref: The Role of Operations Strategy Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 1: Explain the role of operations strategy in the organization. AACSB: Knowledge Time on Task: 0.5 mins 88. To provide speed of delivery, Federal Express invested in a sophisticated bar code technology. Answer: False Solution: To provide speed of delivery, FedEx acquired its own fleet of airplanes. To provide dependability of deliveries, FedEx invested in a sophisticated bar code technology to track all packages. Section Ref: The Role of Operations Strategy Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 1: Explain the role of operations strategy in the organization. AACSB: Knowledge Time on Task: 0.5 mins 89. To provide dependability of deliveries, Federal Express acquired its own fleet of airplanes. Answer: False Solution: To provide dependability of deliveries, FedEx invested in a sophisticated bar code technology to track all packages. It acquired its own fleet of airplanes to ensure speed of delivery. Section Ref: The Role of Operations Strategy Sub Section Ref: Untitled Introduction Level: Easy Bloom’s: Comprehension Learning Objective 1: Explain the role of operations strategy in the organization.

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