Business Operations
Practice Questions
Course Introduction
Business Operations is a comprehensive exploration of the processes, strategies, and practices that organizations use to deliver goods and services efficiently and effectively. The course covers foundational concepts such as supply chain management, process optimization, quality control, inventory management, and logistics. Students will analyze how operations contribute to strategic goals, assess operational performance using key metrics, and evaluate the impact of technology on business processes. Through case studies and real-world examples, learners develop problem-solving skills and gain a practical understanding of how operational excellence drives organizational success and competitive advantage.
Recommended Textbook
Introduction to Operations and Supply Chain Management 3rd Edition by Cecil B. Bozarth
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Page 2
Chapter 1: Introduction to Operations and Supply Chain Management
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Sample Questions
Q1) The professional society for persons interested in operations and supply chain management is ________.
Answer: APICS
Q2) Inputs to the transformation process are tangible,but the outputs may be tangible or intangible.
A)True
B)False
Answer: False
Q3) A(n)________ supervises production in a manufacturing setting.
Answer: production manager
Q4) To participate in a supply chain,a firm must actually handle the physical goods at some point.
A)True
B)False
Answer: False
Q5) The transformation process takes materials,intangible needs,and information and turns those into these three broad categories of outputs: ________,________,and
Answer: tangible goods,fulfilled needs,satisfied customers
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Chapter 2: Operations and Supply Chain Strategies
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Q1) The vision statement addresses a company's reason for existence,core values,and domain.
A)True
B)False
Answer: False
Q2) The ability to produce a wide range of products or services is referred to as
Answer: mix flexibility
Q3) What are the differences between performance,conformance,and reliability dimensions of quality?
Answer: Performance quality addresses the basic operating characteristics of the product or service.Conformance quality addresses whether the product was made or the service performed to specifications.Reliability addresses whether a product will work for a long time without failing or requiring maintenance.
Q4) Superior performance on a(n)________ will not,by itself,give a company a competitive advantage.
Answer: order qualifier
Q5) The ________ explains why an organization exists.
Answer: mission statement
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Chapter 3: Process Choice and Layout Decisions in Manufacturing and Services
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Q1) As the degree of customer contact decreases,more of the service package is provided by the ________.
Answer: back room
Q2) In a service process,the greater the emphasis on intangible activities is,the more critical is the training and retention of skilled employees and the development and maintenance of the firm's knowledge assets.
A)True
B)False
Answer: True
Q3) Products that are customized only at the very end of the manufacturing process are known as:
A)make-to-stock.
B)assemble-to-order.
C)make-to-order.
D)engineer-to-order.
Answer: B
Q4) In a service blueprint,the two layers the customer sees are the ________ and the ________.
Answer: customer action,onstage activities
Page 5
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Chapter 4: Business Processes
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Q1) Green Belts have:
A)more Six Sigma training than Black Belts but less Six Sigma training than Champions. B)more Six Sigma training than Champions but less Six Sigma training than Team Members.
C)more Six Sigma training than Black Belts but less Six Sigma training than Master Black Belts.
D)more Six Sigma training than Team Members but less Six Sigma training than Black Belts.
Q2) When should a process be art,not science? Provide examples to frame your discussion.
Q3) A(n)________ is used to record how frequently a certain event occurs.
Q4) What is benchmarking and how do the two types differ?
Q5) Develop a logical order for use of these analysis tools (flow chart,scatter plot,Pareto chart,cause and effect diagram,check sheet)for a process troubleshooter that is unfamiliar with the business process she has been called to help fix.In addition to assigning an order of use,explain why you feel it is in her best interest to use the tools in the order you provide.
Q6) What is the general procedure for developing a swim lane process map?
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Chapter 5: Managing Quality
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Sample Questions
Q1) One international standard for managing quality across the supply chain is:
A)ISO 9000.
B)ISO 14000.
C)AQL.
D)LTPD.
Q2) ________ measures of interest refer to the presence or absence of a particular characteristic.
Q3) A technique used to translate customer requirements into technical requirements is:
A)quality assurance.
B)statistical quality control.
C)quality function deployment.
D)continuous improvement.
Q4) The ability of a non-centered process to meet certain quality standards is measured by its ________.
Q5) The regional manager is more concerned about the consistency of the process,figuring that if the cups are filled,the amount will be close enough for beverage work.Develop three sigma control limits to monitor the process and determine whether the process is in control.
Q6) What are the seven core ideas of total quality management?
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Chapter 6: Managing Capacity
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Sample Questions
Q1) A collection of companies decides to work together for a while to provide service for what they see as a short-term window of opportunity.These firms plan to coordinate their activities by deploying sophisticated information systems to share critical data.Each of these companies is skilled at one or two core activitiesdesign,manufacturing,distribution,marketing,and so on.This association of companies can be described as a(n)________.
Q2) The process step that limits throughput for the entire process chain is the ________.
Q3) A busy toll highway that has four toll collectors for northbound traffic is an example of a single-channel,single-phase system.
A)True
B)False
Q4) A steady stream of eager fresh-faced students waits in line to register for spring semester classes.Students arrive at the rate of 100 per hour and it takes the registrar 30 seconds to check their schedule and verify they have paid in full.What is the average time waiting in line and the average number of people in line? How busy is the registrar?
Q5) The ________ capacity strategy attempts to adjust the current capacity to a level equivalent to the current demand.
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Chapter 7: S Advanced Waiting Line Theory and Simulation
Modeling
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Sample Questions
Q1) The effect of the Excel formula =20 RAND()is that:
A)twenty entries of a random variable with a mean of zero will be created.
B)twenty entries of a random variable with a mean of one will be created.
C)one entry of a random variable with a mean of twenty will be created.
D)one entry of a random variable with a mean of ten will be created.
Q2) A process is ________ if the outcome of one trial does not have any impact on the next trial.
Q3) Why would someone choose to use simulation to analyze a waiting line problem rather than use a formula? What are the advantages and disadvantages of a simulation approach?
Q4) Develop a full description of the system performance.How much does performance improve if another barber is added to the customer service staff?
Q5) ________ is an Excel function that generates a uniformly distributed random number between 0 and 1.
Q6) It is more costly to create a more realistic simulation than one that is less realistic. A)True B)False
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Q7) If 5 minutes pass between customer arrivals,then the ________ is 12 per hour.
Chapter 8: Supply Management
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Q1) The two basic types of purchasing contracts are:
A)fixed-price and cost-based.
B)bid-rigged and cost-plus.
C)cost-zero and fixed-variable.
D)fixed-quantity and variable-cost.
Q2) Define outsourcing and discuss its advantages and disadvantages.
Q3) The ratio of earnings to sales for a given time period is a firm's profit margin.
A)True
B)False
Q4) Which of the following is required in order to execute a successful spend analysis?
A)graphics capabilities found in charting packages and Visio
B)a sophisticated statistical software package such as SPSS or SAS
C)ability to analyze large quantities of data
D)a minimum of six months uninterrupted work time
Q5) A company using portfolio analysis decides to form partnerships with suppliers;the products in question probably fall in the ________ quadrant.
Q6) The bulk of insourcing costs are usually ________ costs.
Q7) Profit margin is the ratio of ________ to ________.
Page 10
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Chapter 9: Logistics
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Q1) Your new Garden Weasel fails to "completely satisfy" you so you decide to return it for a full refund.What is the name for the system that will carry your weasel back to the manufacturer?
A)upstream logistics
B)reverse ordering
C)upstream ordering
D)reverse logistics
Q2) The mode of transportation that is highly cost effective for bulky items but has relatively poor delivery reliability and speed is:
A)highway.
B)water.
C)rail.
D)air.
Q3) Seasonal goods such as holiday decorations and recreational equipment may be placed in a(n)________ close to the marketplace.
Q4) The net result of the renaissance in logistics is that logistics costs are expected to decline.
A)True
B)False
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Chapter 10: Forecasting
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Q1) Nora Damus reviews her forecasting triumphs and failures as part of her annual report to the Chief Operating Officer.She notes that her monthly forecast for batteries has a mean forecast error of 20,and a mean absolute deviation of 20.Which of the following statements about her forecast is BEST?
A)Nora has miscalculated her mean forecast error.
B)Nora has miscalculated her mean absolute deviation.
C)Nora has a strongly negative tracking signal.
D)Nora has a strongly positive tracking signal.
Q2) A seasonal pattern in time series data is evident when the level of the variable of interest moves erratically up or down from one period to the next.
A)True
B)False
Q3) The greater the randomness in the model,the greater the number of periods should be used in a moving average forecast.
A)True
B)False
Q4) Dividing actual demand by the model's forecast yields an index that can be used to adjust for ________ in the data.
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Chapter 11: Sales and Operations Planning Aggregate Planning
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Q1) How can and why should a firm link S&OP throughout the supply chain?
Q2) Detailed planning and control offers the greatest ability to adjust capacity.
A)True
B)False
Q3) A company that makes the rocket widget has one machine capable of producing this unique item.The machine requires an attendant,who works 40 hours a week for $12 per hour and has made himself available for a maximum of 8 hours of overtime.It costs $20 per hour to run the machine and it is capable of producing 10,000 rocket widgets per hour.The widgets sell for $10 per hundred and cost $1 per hundred in materials.If the production manager wishes to develop a sales and operations plans using an optimization model,which of the following statements is valid?
A)The objective function should limit overtime to less than 8 hours per week.
B)The objective function should maximize the amount of rocket widgets produced.
C)The objective function must be to minimize costs.
D)None of these statements will help plan production using optimization modeling.
Q4) Your book describes three phases in the implementation of sales and operations planning in an organization.What are the three phases and what takes place in each?
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Chapter 12: Managing Inventory Throughout the Supply Chain
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Q1) In order for the economic order quantity model to work,demand must be known and constant.
A)True
B)False
Q2) A company using the basic EOQ model has annual ________ costs equal to annual ________ costs.
Q3) The bullwhip effect says that a small change in demand downstream in the supply chain causes a large change in demand upstream.
A)True
B)False
Q4) A replenishment order for inventory is made when a predetermined stock level is reached in a(n)________ inventory system.
Q5) The ________ is an extreme change in the supply position upstream generated by a small change in demand downstream.
Q6) The excess cost of an item is the profit you would have made on it.
A)True
B)False
Q7) Describe any four types of inventory and the drivers that spur their need.
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Chapter 13: Managing Production Across the Supply Chain
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Q1) Since the booked orders figure represents actual customer demand in a master schedule,that value is always less than or equal to forecasted demand.
A)True
B)False
Q2) Component J is ordered on February 1,is received,and is ready to use on February 8.Its planning lead time is seven days.
A)True
B)False
Q3) Throughout every MRP record,ending inventory is equal to the ending inventory from the previous period,plus the master production schedule quantity,minus the orders booked for that period.
A)True
B)False
Q4) MRP uses backward scheduling.
A)True
B)False
Q5) What organizational disciplines are required in order for an organization to successfully run a material requirements planning system?
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Chapter 14: S Supply Chain Information Systems
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Q1) A supply chain information system that is used in the internal supply chain at the strategic level is a(n):
A)CRM.
B)DSS.
C)ERP.
D)SRM.
Q2) An organization can use ________ as a repository to access documents or other files from anywhere in the world whenever they are needed.
Q3) Market analysis,order management,and service center management are all examples of applications found in a(n)________ system.
Q4) What are the information needs at the four levels (execution and transaction processing,routine decision making,tactical planning,and strategic decision making)of supply chain activity?
Q5) Enterprise resource planning applications span the supplier,customer,and internal supply chain areas.
A)True
B)False
Q6) Warehouse and transportation planning systems support ________ planning efforts.
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Chapter 15: Jitlean Production
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Sample Questions
Q1) Lean supply chain management focuses on eliminating waste:
A)in a firm's sourcing and logistics activities.
B)within a firm's internal operations.
C)in flows of information and money among supply chain partners.
D)in all of the above areas.
Q2) Inflexible or unreliable processes that cause organizations to produce goods before they are required are called:
A)excess motion.
B)inappropriate processes.
C)overproduction.
D)defects.
Q3) What is the Lean perspective on inventory?
Q4) Recent developments in Lean thinking have combined these principles with Six Sigma and with supply chain management.Pick either one of these programs and describe its elements.Then provide an example from current business news of an operation or supply chain that has embraced these principles.
Q5) What are the consequences of unstable demand and interrupted flows on a supply chain managed with a JIT philosophy?
Q6) Describe any five of the wastes identified by the JIT philosophy.
Page 17
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Chapter 16: Managing Projects
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Q1) In the project definition phase,project planners identify,among other tasks,how to accomplish the work and how to organize for the project.
A)True
B)False
Q2) Develop a Gantt chart for this project and indicate the finish times for each activity.
Q3) Performance or time targets for each major group of activities in a project are set during the planning phase of a project.
A)True
B)False
Q4) Project planners develop a broad definition of what the project is and what its scope will be during the:
A)concept phase.
B)project definition phase.
C)planning phase.
D)performance phase.
Q5) What are the early and late start and finish times for all of these activities?
Q6) For critical path activities,slack is ________.
Q7) The actual work gets done during the ________ phase of a project.
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Chapter 17: Developing Products and Services
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Q1) Safety and health issues over the product's projected life cycle are addressed by ________.
Q2) Product design refers to the development of physical products and intangible services.
A)True
B)False
Q3) In high tech firms,the group most likely to be responsible for the success of a product development process is:
A)scientists and engineers.
B)marketing.
C)consumers.
D)accounting/finance.
Q4) What are the phases of the product development process and what takes place in each?
Q5) What are the advantages for a manufacturer of parts standardization and modular architecture and how are they related?
Q6) The ease with which parts can be replaced,checked or evaluated is testability.
A)True
B)False
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