Business Process Management
Exam Answer Key
Course Introduction
Business Process Management (BPM) is a comprehensive course that introduces students to the concepts, methodologies, and tools necessary for understanding, analyzing, and improving organizational processes. The course covers the lifecycle of business processes, including modeling, analysis, design, implementation, monitoring, and optimization. Students learn how effective process management can drive efficiency, quality, and agility within organizations. Utilizing real-world case studies, BPM software, and simulation exercises, the course equips students with practical skills in process mapping, performance measurement, and continuous improvement approaches, preparing them to manage and lead process innovation initiatives in diverse business environments.
Recommended Textbook
Foundations of Operations Management 3rd Canadian Edition by Larry P. Ritzman
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Chapter 1: Creating Customer Value through Operations
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Sample Questions
Q1) Which one of the following statements is TRUE?
A) Increased market segmentation and technological advances mandate long development cycles.
B) Recent trends are for manufacturing firms not to involve operations until the final design stage has been reached.
C) The process of concurrent engineering requires design engineers, manufacturing specialists, and marketers to work jointly in designing a product and selecting a production process.
D) Firms like Ford and Honda found that the concept of concurrent engineering is not cost effective.
Answer: C
Q2) Productivity is defined as ________ over ________.
Answer: output,input
Q3) Every process has a customer.
A)True
B)False
Answer: True
Q4) The concept of a process within a process is referred to as a(n)________.
Answer: nested process
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Chapter 2: Supply Chain Management
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Sample Questions
Q1) What is the order-fulfillment process?
Answer: The activities required to deliver a product or service to a customer.
Q2) Customer service is an important point of contact between the firm and its customers.
A)True
B)False
Answer: True
Q3) Regarding the purchasing process,name four supply change process measures. Answer: percentage of suppliers deliveries on time suppliers' lead times percentage of defects in purchased materials and services cost of purchase materials and services
Q4) Backward integration describes the practice of gaining control over supplies by acquiring a controlling interest in one or more of a company's major suppliers .
A)True
B)False
Answer: True
Q5) ________ is the total of all items held in inventory for a firm. Answer: Average aggregate inventory value
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Chapter 3: Process Configuration
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Sample Questions
Q1) Develop a process chart for a manual car wash.
Answer: Answers will vary.A typical answer might look like the following: 11ea2242_5d86_7490_a568_dbc9a5126629_TB2786_00
Q2) Which one of the following is an example of BACKWARD integration?
A) an automobile company opening a plant to manufacture spark plugs
B) an airline company purchasing a retail clothing store
C) a personal computer manufacturer opening retail computer sales stores
D) a local bank opening branch offices in neighboring states
Answer: A
Q3) Process re-engineering involves incremental improvements to the design of processes.
A)True
B)False
Answer: False
Q4) Flow diagrams are effective for documenting and evaluating processes. A)True
B)False
Answer: True
Q5) A(n)________ is a table that lists and categorizes the steps in the process.
Answer: process chart
5
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Chapter 4: Capacity
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Sample Questions
Q1) The first step in the application of the Theory of Constraints (TOC)is to identify the bottlenecks.
A)True
B)False
Q2) Which one of the following statements about capacity is best?
A) Companies with flexible flow processes tend to have small-capacity cushions.
B) Companies with high capital costs tend to have large-capacity cushions.
C) Companies that have considerable customization tend to have larger-capacity cushions.
D) Constant demand rates require larger-capacity cushions.
Q3) The ________ strategy refers to a condition which involves smaller,more frequent jumps in capacity.
Q4) Define the following two terms: peak capacity and effective capacity.
Q5) The theory of constraints is an approach to management that focuses on whatever impedes progress toward the goal of maximizing the flow of total value-added funds or sales less discounts and variable costs.
A)True
B)False
Q6) Within a process,what is a bottleneck?
Page 6
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Chapter 5: Inventory Management
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Sample Questions
Q1) Which of the following statements regarding a continuous review (Q)system for inventory control is FALSE?
A) The reorder point is the fixed quantity Q of the item that is ordered each time inventory is replenished.
B) The remaining inventory of an item is tracked every time a withdrawal is made.
C) On-hand inventory, scheduled receipts and backorders are used to calculate the inventory position.
D) A fixed quantity of inventory is ordered each time the inventory position reaches a predetermined minimum level.
Q2) ________ is an inventory control method whereby storeroom personnel physically count a small percentage of the total number of items each day,correcting errors that they find.
Q3) The EOQ is the lot size that minimizes total annual inventory holding and ordering costs.
A)True
B)False
Q4) A(n)________ system is a visual system in which an item's inventory is stored at two different locations.
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Chapter 6: Quality and Process Improvement
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Sample Questions
Q1) A(n)________ is a time-ordered diagram that is used to determine whether observed variations are normal.
Q2) Products never have more than one defect per unit.
A)True
B)False
Q3) A control chart is a time-ordered diagram that is used to determine whether observed variations are abnormal.
A)True
B)False
Q4) Historically,the average proportion of defective bars has been 0.015.Samples will be of 100 bars each.Construct a p-chart using z = 3.What is the value of UCL?
A) less than or equal to 0.050
B) greater than 0.050 but less than or equal to 0.060
C) greater than 0.060 but less than or equal to 0.070
D) greater than 0.070
Q5) Process capability measures the ability of the process to meet the ________ for a product or service.
Q6) Explain the distinction between variable and attribute measures of quality.
Q7) How can "quality be free"?
Page 8
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Chapter 7: Lean Systems
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Sample Questions
Q1) Suppliers often cite which of the following as a major concern?
A) large lot sizes
B) zero defect production
C) minimization of inventory
D) long-term contracts
Q2) If infrequent,large shipments of purchased items are arranged with suppliers,large inventory savings for these items can be realized.
A)True
B)False
Q3) How do small lots tribute to high quality,flexibility,and cost efficiencies?
Q4) With respect to JIT systems,what is the advantage of standardized components?
Q5) One benefit of a just-in-time system is that it reduces space requirements. A)True
B)False
Q6) Just-in-time systems do not need stable master production schedules. A)True
B)False
Q7) ________ is the philosophy that waste can be eliminated by cutting unnecessary inventory and removing non-value-adding activities in operations.
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Chapter 8: Managing Projects
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Sample Questions
Q1) The ________ is the sequence of activities between a project's start and finish that takes the longest time to complete.
Q2) Using Table 3.2,if the project manager wants at least a 98% probability that the project will be completed on or before the due date,what is the shortest project due date that will satisfy the manager? You will need to refer to a standard normal table to answer the question.
A) less than or equal to 28 days
B) greater than 28 days but less than or equal to 30 days
C) greater than 30 days but less than or equal to 32 days
D) greater than 32 days
Q3) Of the four major phases in project life cycles,typically the execution stage requires the most resources.
A)True
B)False
Q4) Many small incremental changes to project objectives,which in total significantly expand the scope are referred to as ________.
Q5) Identify and briefly explain the four categories of project risks.
Q6) ________ simply adds more of an overloaded resource to maintain the schedule of an activity.
Page 10
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Chapter 9: Location and Layout
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Sample Questions
Q1) Which of the following usually is an advantage of on-site expansion,compared to building a new facility?
A) reduced construction time and costs
B) focused facility
C) simplified production control
D) reduced transportation cost
Q2) Use the information in Table 9.5.Assume that two plants,rather than one,are to be located.Plant 1 serves distribution centers A,B,and C.Plant 2 serves distribution centers D and E.What is the center of gravity for plant 1?
A) x ? 4, y ? 7
B) x ? 4, y ? 7
C) x ? 4, y ? 7
D) x ? 4, y ? 7
Q3) Location factors can be divided into dominant and secondary factors.
A)True
B)False
Q4) ________ are the smallest units of work that can be performed independently.
Q5) ________ is the distance between two points with a series of 90-degree turns.
Q6) A(n)________ layout groups workstations or departments according to function.
Page 11
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Chapter 10: Managing Demand and Forecasting
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Sample Questions
Q1) Which one of the following is an example of causal forecasting technique?
A) weighted moving average
B) linear regression
C) exponential smoothing
D) Delphi method
Q2) Which one of the following basic patterns of demand is difficult to predict because it is affected by national or international events or because of a lack of demand history reflecting the stages of demand from product development to decline?
A) horizontal
B) seasonal
C) random
D) cyclical
Q3) The ________ is a process of gaining consensus from a group of experts while maintaining their anonymity.
Q4) Explain how the value of alpha affects forecasts produced by exponential smoothing.
Q5) A regression is run on data yielding the following information: a = 10.2 ,b = -0.8 ,the coefficient of determination = 0.16.Determine the coefficient of linear correlation.
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Chapter 11: Operations Planning and Scheduling
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Sample Questions
Q1) The ________ strategy tries to match demand during the planning horizon by varying either the workforce level or the output rate.
Q2) Varying the workforce by hiring or firing is one of the demand options of aggregate planning.
A)True
B)False
Q3) When a company maintains a constant output rate,no hirings or firing will take place.
A)True
B)False
Q4) A(n)________ is a statement of its production rates,workforce levels,and inventory holdings based on estimates of customer requirements and capacity limitations.
Q5) The purpose of a rotating schedule is to
A) assign each employee to work the same days and hours each week.
B) assign senior employees more opportunity to have weekends off.
C) deal with certain undesirable aspects of several individual workforce schedules.
D) make sure the legal constraints imposed on workforce schedules are satisfied.
Q6) Compare the chase versus level strategy options.
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Chapter 12: Resource Planning
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Sample Questions
Q1) MRP can be used to best advantage under which one of the following circumstances?
A) when the item's demand depends only on customer demand
B) when the item's demand is uniform
C) when the item's demand is constant
D) when the item's demand depends on its parent's demand
Q2) MRP explosion means estimating the total number of
A) subassemblies, components, and raw materials needed for each parent item.
B) raw materials to be purchased from all suppliers.
C) parts to be produced for each parent item.
D) parts needed to be produced less the number of parts on hand for each parent item.
Q3) The ________ is a record of all components of an item,the parent-component relationships,and usage quantities derived from engineering and process design.
Q4) In an MRP system,from what sources are an item's gross requirements derived?
Q5) The principles of MRP should not be applied to distribution systems.
A)True
B)False
Q6) ________ ties the basic MRP system to the company's financial system.
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Chapter 13: Decision Making
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Sample Questions
Q1) Zipco is in serious negotiations to purchase a chunking machine that will enable them to perform their own chunking at $1 per unit.They currently have their chunking outsourced at a cost of $1.50 per unit and a fixed cost of $45,000.Their marketing team feel that they can sustain an annual volume of 10,000 units.What is the maximum fixed cost that Zipco should be willing to bear in order to perform their own chunking?
A) $50,000
B) $45,000
C) $40,000
D) $35,000
Q2) A new product will sell in the market for $12.It costs $7 (unit variable cost)to manufacture on a new lathe machine.If the break-even quantity is 10,000 units,what is the annual fixed cost involved in acquiring the machine and in paying other fixed costs?
A) Less than $40,000
B) Greater than $40,000 but less than or equal to $55,000
C) Greater than $55,000 but less than or equal to $70,000
D) Greater than $70,000
Q3) If probabilities for events can be estimated,then the situation faced by the decision maker is called ________.
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Chapter 14: Financial Analysis
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Sample Questions
Q1) Discounting is the process by which interest on an investment accumulates,and then earns interest itself for the remainder of the investment period. \[\frac { \rho \lambda } { \mu - \lambda }\]
A)True
B)False
Q2) Depreciation
A) is an allowance for the consumption of capital.
B) acts as a tax shield.
C) is not a legitimate cash flow.
D) All of the above.
Q3) Straight-line depreciation is an accelerated depreciation method.
A)True
B)False
Q4) Depreciation is not a legitimate cash flow.
A)True
B)False
Q5) The ________ is used to evaluate projects by calculating the amount of time that will elapse before the total of after-tax cash flows will equal the initial investment.
Q6) The ________ is the discount rate that makes the NPV of a project zero.
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Chapter 15: Work Measurement
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Sample Questions
Q1) The ________ is a measurement found by multiplying the select time,the frequency of work,and the rating factor.
Q2) When using a work-sampling study,
A) the underlying assumption is that the proportion of time during which the activity is observed in the sample will be the proportion of time spent on the activity in general.
B) the underlying assumption is that small samples of an activity can provide accurate measures of time spent on the activity.
C) an advantage is that the study can normally be concluded in a day or less.
D) the analyst must be highly trained in statistical observation.
Q3) The method used most often for setting time standards for a job is
A) the elemental standard data approach.
B) the time study method.
C) the predetermined data approach.
D) the work sampling method.
Q4) A predetermined data approach to time standards can be completed before actual production begins.
A)True
B)False
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Chapter 16: Learning Curve Analysis
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Sample Questions
Q1) The ________ can be represented by a line called a learning curve.
Q2) How long will it take to make 25 units if the first one took 8 hours and there is a 90 percent learning rate? Refer to the copy of Table G.1 above.
A) Fewer than or equal to 130 hours
B) Greater than 130 hours but fewer than or equal to 140 hours
C) Greater than 140 hours but fewer than or equal to 150 hours
D) Greater than 150 hours
Q3) Which one of the following is an assumption of learning curves?
A) The cumulative time of production decreases as production increases.
B) Time reduction per unit increases as cumulative production increases.
C) The same learning curve should be used when a company increases its level of automation.
D) The reduction in time per unit follows an exponential curve.
Q4) The learning rate depends on factors such as ________ and ________.
Q5) What are the three major assumptions of the learning curve?
Q6) As the cumulative number of units produced becomes large
A) the learning effect is more noticeable.
B) the learning effect increases.
C) the learning effect is less noticeable.
D) the learning effect decreases.
Page 18
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Chapter 17: Computer-Integrated Manufacturing
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Sample Questions
Q1) Flexible Manufacturing Cells do NOT contain
A) a materials handling system.
B) a single NC machine.
C) a computer-controlled material handling system.
D) a small group of NC machines.
Q2) ________ are versatile,computer-controlled machines programmed to perform various tasks.
Q3) Which of the following statements about industrial robots is NOT true?
A) The first industrial robot joined the GM production line in 1961.
B) Industrial robots are computer-controlled.
C) Most robots are mobile and glide on tractor belts.
D) There are six standard movements of a robot's arm.
Q4) Which one of the following is NOT a possible benefit from robot installation?
A) Less waste materials
B) More consistent quality
C) Longer lead time
D) Accepting zero wages and performing hazardous tasks without complaint
Q5) ________ is an electronic system for designing new parts or products or altering existing ones,replacing drafting traditionally done by hand.
Page 19
Q6) Briefly describe two types of flexible automation for materials handling.
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Chapter 18: Acceptance Sampling Plans
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Sample Questions
Q1) ________ is the worst level of quality that the customer can tolerate.
Q2) A quality manager has established a sampling plan that calls for a sample size of 50 units and an acceptance number of 2.The supplier has agreed to a contract that calls for an AQL of 0.02 and an LTPD of .07.What is the producer's risk? Table I.1 is appended to this exam.
A) Less than 0.07
B) Between 0.07 and 0.09
C) Between 0.09 and 0.11
D) Greater than 0.11
Q3) Acceptance sampling is an inspection procedure used to determine whether to accept or reject a specific quantity of material.
A)True
B)False
Q4) Use Table I.1 for the following question.What is the acceptance number of a single-sampling plan if n = 300,LPTD = 0.02,and ? = 0.15?
A) c = 0
B) c = 1
C) c = 2
D) c = 3
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Chapter 19: Simulation
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Sample Questions
Q1) What is the difference between a waiting-line model as described in Supplement C and a simulation model of a waiting-line problem?
Q2) A number that has the same probability of being selected as any other is called a(n)
A) Monte Carlo number.
B) decision number.
C) uncontrolled number.
D) random number.
Q3) ________ is a feature of simulation models that allows them to obtain operating-characteristic estimates in much less time than is required to gather the same operating data from a real system.
Q4) Which one of the following statements regarding simulation analysis is FALSE?
A) Simulation analysis is a form of hypothesis testing.
B) Analysis of variance is a commonly used statistical method for simulation analysis.
C) Statistical methods require the replication of simulation runs.
D) Each time a simulation model is run for a given set of decision variables, the same random numbers must be used.
Q5) ________ are random events that the decision maker cannot control.
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Chapter 20: Special Inventory Models
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Sample Questions
Q1) Which of these statements about the one-period model is best?
A) Purchasing a quantity with the highest expected payoff will result in a positive payoff regardless of demand during the period.
B) The loss per unit cannot exceed the profit per unit.
C) If demand exceeds the purchased quantity then the payoff exceeds the expected payoff.
D) The expected payoff is always less than the actual payoff.
Q2) As an inventory manager,you must decide on the order quantity for an item.Its annual demand is 1,000 units.Ordering costs are $50 each time an order is placed,and the holding cost is 25 percent of the per-unit price.Your supplier provided the following price schedule.
\[\begin{array} { | c | c | }
\hline \text { Quantity } & \text { Price per Unit } \\
\hline 1 - 199 & \$ 10.00 \\
200 - 499 & \$ 9.80 \\
500 \text { or more } & \$ 9.60 \\
\hline
\end{array}\]
What ordering-quantity policy do you recommend?
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Chapter 21: Linear Programming
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Sample Questions
Q1) While glancing over the sensitivity report,you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours.If your original right hand value for stitching labor was 30 hours,you know that
A) the next worker that offers to work an extra 8 hours should receive at least $80.
B) you can send someone home 6 hours early and still pay them the $60 they would have earned while on the clock.
C) you would be willing pay up to $60 for someone to work another 6 hours.
D) you would lose $80 if one of your workers missed an entire 8 hour shift.
Q2) The ________ problem is a one-period type of aggregate planning problem,the solution of which yields optimal output quantities of a group of products or services,subject to resource capacity and market demand conditions.
Q3) Decision variables are represented in both the objective function and the constraints while formulating a linear program.
A)True
B)False
Q4) ________ is an assumption that the decision variables must be either positive or zero.
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Chapter 22: Waiting Lines
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Sample Questions
Q1) Use the information in Scenario C.3.What is the probability that an arrival at the gas station must wait?
A) Less than or equal to 0.50
B) Greater than 0.50 but less than or equal to 0.60
C) Greater than 0.60 but less than or equal to 0.70
D) Greater than 0.70
Q2) A bank that dedicates one window for commercial account customers and one window for personal account channel has two channels.
A)True
B)False
Q3) Use the information in Scenario C.3.What is the average time a customer spends in the system?
A) Fewer than or equal to five seconds
B) Greater than five seconds but fewer than or equal to six seconds
C) Greater than six seconds but fewer than or equal to seven seconds
D) Greater than seven seconds
Q4) ________ is a fundamental law that relates the number of customers in a waiting-line system to the waiting time of customers.
Q5) Explain how waiting lines can develop even when the service time is a constant.
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