Business Process Management
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Course Introduction
Business Process Management (BPM) is a systematic approach to analyzing, designing, implementing, monitoring, and optimizing organizational processes to improve efficiency, effectiveness, and agility. This course introduces students to the foundational concepts and methodologies of BPM, covering process modeling techniques, process analysis, process redesign, and the use of supporting technologies such as workflow management systems. Through case studies and practical exercises, students will learn how to align business processes with organizational goals, drive continuous improvement, and enhance overall performance across various industries.
Recommended Textbook
OM 5 5th Edition by David Alan Collier
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Page 2
Chapter 1: Goods, Services, and Operations Management
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Sample Questions
Q1) Operations management is the only function by which managers can directly affect the value provided to all stakeholders-customers, employees, investors, and society.
A)True
B)False
Answer: True
Q2) Peripheral goods and services are NOT essential to a primary good or service.
A)True
B)False
Answer: True
Q3) A support process could be any of the following EXCEPT _____.
A) assembling automobiles
B) purchasing materials and supplies
C) managing inventory
D) installing a product
Answer: A
Q4) Service facilities must always be physically located close to the customer.
A)True
B)False
Answer: False
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Chapter 2: Value Chains
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Sample Questions
Q1) Forward integration might include acquiring a customer.
A)True
B)False
Answer: True
Q2) Decentralizing value chain activities lessens the control that a firm has over cost, quality, and other important business metrics, and often leads to higher levels of risk.
A)True
B)False
Answer: True
Q3) A company has two alternatives for meeting a customer requirement for 9,000 units of a specialty molding. If done in-house, fixed cost would be $350,000, with variable cost at $30 per unit. If outsourced, the cost is $80 per unit. Determine the break-even point and determine if they should make the item in-house or outsource it.
A) break-even point = 7,000 units; outsource it
B) break-even point = 7,000 units; make it in-house
C) break-even point = 11,667 units; outsource it
D) break-even point = 11,667 units; make it in-house
Answer: B
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4
Chapter 3: Measuring Performance in Operations
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Sample Questions
Q1) The five dimensions of service quality measurement pertain to behavioral characteristics, which are easier to measure than physical and technical characteristics.
A)True
B)False
Answer: False
Q2) In the Baldrige Award criteria, the strategic planning category focuses on how an organization selects, gathers, analyzes, manages, and improves its data, information, and knowledge assets.
A)True
B)False
Answer: False
Q3) Identify the performance perspective in the balanced scorecard model that includes measures like intellectual and research assets, employee satisfaction, and skills development.
A) Financial perspective
B) Customer perspective
C) Innovation and Learning perspective
D) Internal perspective
Answer: C
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Page 5
Chapter 4: Operations Strategy
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Sample Questions
Q1) Reductions in flow time generally lead to a deterioration of quality.
A)True
B)False
Q2) _____ sustainability is driven by ethics and human ideals of protecting the planet and its people for the well-being of future generations.
A) Environmental
B) Social
C) Economic
D) Political
Q3) With regard to ways customers evaluate services compared to goods, which of the following is NOT true?
A) For services, customers seek and rely more on personal sources of information.
B) Customers normally adopt innovations in services faster.
C) Customers perceive greater results when buying services.
D) Dissatisfaction with services is often the result of a customer's inability to properly perform or co-produce their part of the service.
Q4) What do managers need to understand in order to create a sustainable competitive advantage?
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Chapter 5: Technology and Operations Management
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Sample Questions
Q1) Because of the Internet and e-commerce, all parts of the value chain can immediately know and react to changes in demand and supply. Thus, tight integration of the components of the value chain is no longer required.
A)True
B)False
Q2) Customer relationship management (CRM) systems aids in tracking sales trends and advertising effectiveness by customer and market segment.
A)True
B)False
Q3) The prominent vendors of enterprise resource planning (ERP) software are SAP and Oracle.
A)True
B)False
Q4) General Electric (GE) would best be described as what type of company?
A) Business to business (B2B)
B) Business to customer (B2C)
C) Customer to customer (C2C)
D) Government to customer (G2C)
Q5) Explain the concept of industrial robots.
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Chapter 6: Goods and Service Design
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Sample Questions
Q1) Assume the specifications for a television remote control part (in inches) are 5.00 ± 0.10, and the Taguchi loss function is estimated to be L(x) = 5,500 (x - T)<sup>2</sup>.
Determine the estimated loss per part if the quality characteristic (i.e., actual process performance) under study takes on a value of 4.91 inches.
A) More than $30 but less than or equal to $50
B) More than $50 but less than or equal to $70
C) More than $70 but less than or equal to $90
D) More than $90
Q2) Which of the following is NOT one of the six customer attributes that impact the design and configuration of a customer benefit package?
A) Time
B) Information
C) Exchange
D) Reliability
Q3) Quality function deployment (QFD) is focused primarily on developing a viable quality control plan.
A)True
B)False
Q4) Explain the concept of reliability.
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Chapter 7: Process Selection, Design, and Analysis
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Sample Questions
Q1) Job shop processes use flexible, general purpose equipment that is capable of customizing work for individual customers.
A)True
B)False
Q2) The average number of entities completed per unit time-the output rate-from a process is called _____.
A) utilization
B) throughput
C) service rate
D) work-in-process
Q3) Explain why the product-process matrix does not transfer well to services.
Q4) How many computer repair technicians should be on duty from 8:00 p.m. to midnight if the total demand during that period is 60 calls? The service rate is five (5) calls per hour and the target utilization is 90%.
Q5) Give three examples of goods or services associated with each of the process types: project, job shop, flow shop, and continuous flow.
Q6) What are the major activities in designing a goods-producing or service-providing process?
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Chapter 8: Facility and Work Designs
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Sample Questions
Q1) Differentiate between a flow-blocking delay and lack-of-work delay. How can each be reduced?
Q2) The typical layout of facilities in a pizza restaurant would be an example of a _____ layout.
A) product
B) process
C) cellular
D) fixed-position
Q3) The cycle time is _____ seconds.
A) 45
B) 60
C) 75
D) 100
Q4) Process layouts generally require less investment in equipment than product layouts because the equipment is less specialized.
A)True
B)False
Q5) Product layouts are less flexible than process layouts.
A)True
B)False
Page 10
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Chapter 9: Supply Chain Design
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Sample Questions
Q1) _____ is the process of delaying product customization until the product is closer to the customer at the end of a supply chain.
A) Postponement
B) Sourcing
C) Deferral
D) Multisite management
Q2) Describe how supply chains should be designed for multisite management situations.
Q3) Which one of the following statements is FALSE?
A) Postponement is a form of remanufacturing.
B) Reverse logistics combined with forward supply chain is called a closed loop system.
C) Selecting suppliers that support sustainability is a part of supply chain management.
D) Reverse logistics includes remarketing and selling the recovered good for reuse or resale to wholesalers and retailers.
Q4) Differentiate between a push system and a pull system. Include the advantages of each.
Q5) Explain how the center of gravity is determined.
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11
Chapter 10: Capacity Management
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Sample Questions
Q1) Average rate of output per unit of time is a formal definition of capacity.
A)True
B)False
Q2) According to the David Christopher, Orthopedic Surgeon, case study, which of the following statements is TRUE?
A) Total setup and changeover time for both surgeons was 15 percent of total workload time.
B) The best option to fix the demand-capacity shortage is to eliminate hip and shoulder replacement surgeries.
C) The surgery mix is analogous to a product mix.
D) The best option to fix the demand-capacity shortage is to hire a third surgeon.
Q3) An example of safety capacity would be planning additional capacity to account for employee summer vacations.
A)True
B)False
Q4) Capacity lag strategy results in constant capacity shortages.
A)True
B)False
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Chapter 11: Forecasting and Demand Planning
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Sample Questions
Q1) Discuss the three planning horizons used in forecasting and the types of decisions made in each.
Q2) A single moving average is most appropriate for data with identifiable trends.
A)True
B)False
Q3) Which of the following statements is TRUE about single exponential smoothing?
A) Large values of alpha ( ) place more emphasis on recent data.
B) values range from 0.6 to 1.
C) Smaller values of smoothing constant have the advantage of quickly adjusting the forecasts when forecasting errors occur.
D) Larger values of smoothing constant do not allow the forecast to react faster to changing conditions.
Q4) The four-period moving average for next week (week 5) is:
A) less than or equal to 100.
B) more than 100 but less than or equal to 110.
C) more than 110 but less than or equal to 120.
D) more than 120 but less than or equal to 130.
Q5) Explain how forecasting is used at different levels of an organization.
Q6) Define forecast error and describe its metrics.
Page 13
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Chapter 12: Managing Inventories
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Sample Questions
Q1) A _____ is defined as the inability to satisfy the demand for an item.
A) Reorder point
B) Stockout
C) Lost sale
D) Backorder
Q2) Which of the following statements is TRUE?
A) The level of safety stock maintained decreases when the desired cycle service level increases.
B) The level of safety stock maintained decreases when the standard deviation of demand during lead time increases.
C) In a fixed-period inventory system, the value of Q is kept the same from one cycle to another.
D) In a fixed-order-quantity system, the reorder point is the average demand during the lead time, plus the additional safety stock when demand is uncertain.
Q3) Finished-goods inventory consists of completed products that are ready for sale.
A)True
B)False
Q4) What are the four categories of inventory costs?
Q5) Explain the difference between independent demand and dependent demand.
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Chapter 13: Resource Management
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Sample Questions
Q1) A company that makes inkjet printers is trying to determine a MRP schedule for the print cartridges it needs in its newest model of printer. They have gross requirements of 1000 units in week 2 and 900 units in week 4. The minimum lot size is 500 units and the lead time is 1 week. They currently have 300 units on hand that includes a safety stock of 150 and another 100 units already allocated. They have 500 units scheduled for receipt in week 1.
a.What is the number of units available in Week 1?
b.What is the planned order release in Week 3?
Q2) Good solutions to aggregate planning situations using spreadsheets can be found by trial-and-error approaches.
A)True
B)False
Q3) Describe the options that managers have for developing aggregate plans to respond to fluctuating demand.
Q4) In materials requirements planning (MRP), it is essential that all dependent demand requirements be ordered at the beginning of the planning period.
A)True
B)False
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Page 15
Chapter 14: Operations Scheduling and Sequencing
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Sample Questions
Q1) Triage by nurses in an emergency room would be an example of:
A) scheduling.
B) sequencing.
C) appointments.
D) work shifts.
Q2) Using Johnson's rule to sequence the patients, and if your uncle is patient B, he will be finished with surgery in _____.
A) less than or equal to 5 hours
B) more than 5 but less than or equal to 10 hours
C) more than 10 but less than or equal to 15 hours
D) more than 15 but less than or equal to 20 hours
Q3) Using the shortest processing time (SPT) rule, the average flow time for the five jobs is _____.
A) less than or equal to 5 days
B) more than 5 but less than or equal to 10 days
C) more than 10 but less than or equal to 15 days
D) more than 15 but less than or equal to 20 days
Q4) Differentiate between scheduling and sequencing.
Q5) Describe the algorithm that defines Johnson's sequencing rule for the two-resource sequencing problem.
Page 16
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Chapter 15: Appendix: Quality Management
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Sample Questions
Q1) A yacht manufacturer signed a contract to build five sailboats for a California resort. Assuming an 85 percent learning curve, how many labor-hours will it take to build all five sailboats if it took 7,000 standard hours to build the original sailboat?
Q2) The manager at a sewing factory uses a piece?rate pay system. She has just received an order for 600 dresses from a discount house downtown. She is trying to figure out what her costs are for the project. She has conducted a time study and found the following times for operations:
2 minutes to sew one sleeve
3 minutes to sew body of the dress
3.5 minutes to hem all unfinished edges
1 minute to attach the collar
3 minutes to attach all buttons
The workers must sit idle while they wait for supplies on the conveyor belt for an average of 30 seconds. Their performance rating is equal to one. She pays the workers $6.00 per hour.
a. What is the allowance factor for the operation?
b. What is the labor standard (in minutes) per dress?
c. What is the labor cost per dress?
d. What is the labor cost for the entire order of 600 dresses?
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Page 17
Chapter 15: Quality Management
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Sample Questions
Q1) Using color-coded wires to reduce mistakes associated with assembling complex electronic products is an example of an application of the poka-yoke concept.
A)True
B)False
Q2) Explain the four components of the cost of quality.
Q3) What are the Seven Quality Control (QC) Tools and what is their significance in quality improvement? Briefly explain how each tool is used.
Q4) A _____ graphically displays the relationships between different variables.
A) Pareto diagram
B) cause-and-effect diagram
C) scatter diagram
D) control chart
Q5) The dpmo or epmo for a three-sigma process is _____.
A) 66,807
B) 6,210
C) 233
D) 3.4
Q6) List the three principles of total quality.
Q7) Define root cause and describe root cause analysis.
Page 18
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Chapter 16: Quality Control and Spc
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Sample Questions
Q1) Common causes of variation generally accounts for about 80 to 90 percent of the observed variation within a process.
A)True
B)False
Q2) For the Proctor and Gamble detergent box problem, the lower control limit for the x-bar chart is _____.
A) less than or equal to 12
B) more than 12 but less than or equal to 14
C) more than 14 but less than or equal to 16
D) more than 16
Q3) Which of the following is NOT related to a continuous metric?
A) Length
B) x-bar and R-charts
C) p-chart
D) Time
Q4) Explain the issues associated with selecting the appropriate sample size and sampling frequency for control charts.
Q5) Find the control limits for a c-chart with c-bar= 7.
Q6) Define quality at the source.
19
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Chapter 16: Appendix: Queuing Analysis
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Sample Questions
Q1) The multiple-server queuing model assumes that jockeying can take place.
A)True
B)False
Q2) For a single-server queuing model, which of the following is NOT a key assumption?
A) The pattern of arrivals follows a Poisson probability distribution.
B) Service times follow an exponential probability distribution.
C) The queue discipline is random.
D) No balking or reneging happens.
Q3) In queuing models, what are channels?
A) The walking paths through service systems
B) Service phases
C) The number of waiting lines in a system
D) External sources from which customers originate
Q4) Discuss three categories of information necessary to develop a queuing model.
Q5) Describe at least four queue disciplines.
Q6) Many analytical queuing models exist, each based upon unique assumptions about the nature of arrivals.
A)True
B)False
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Chapter 17: Appendix: Modeling Using Linear Programming
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Sample Questions
Q1) Differentiate between a feasible solution and an optimal solution.
Q2) The Alpha Beta Corporation makes laser and inkjet printers for personal computers. Each laser printer yields $40.00 in profits and each ink jet printer provides $20.00. Each of the printers goes through two assembly areas. The following table provides processing times per unit (in minutes) as well as total available processing times per department: \(\begin{array}{lcc}\text { Printer }&\text { Dept. A }&\text { Dept. B }\\
\text { Laser } & 9 & 12 \\
\text { Inkjet } & 6 & 8 \\
\text { Total time per day } & 216 & 384 \end{array}\)
Sales commitments require at least 5 laser printers and 10 inkjet printers to be made per day. The company is interested in determining how many of each printer to produce so as to maximize its profit.
a. What is the objective function for this LP problem?
b. What are the constraints corresponding to Dept. A if x<sub>1</sub> corresponds to laser printers?
c. What are the optimal solution points for this problem?
d. What is the optimal value of the objective function?
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21
Chapter 17: Lean Operating Systems
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Sample Questions
Q1) To accomplish single piece flow, a manufacturer needs the ability to change between products quickly and inexpensively.
A)True
B)False
Q2) A withdraw Kanban authorizes _____.
A) the production of parts
B) suppliers to produce
C) the transfer of an empty container
D) shipping to customers
Q3) Timken Company illustrates the application of lean principles when it _____.
A) reduces the total cycle time for new product development
B) increases safety stock in its inventory system
C) expands factories and distribution centers
D) maximizes the number of parts or items in its systems
Q4) Explain the purpose of visual controls and give examples.
Q5) According to the Toyota Motor Company, waiting time is necessary in production and is not classified as waste.
A)True
B)False
Q6) Explain the concept of Single Minute Exchange of Dies (SMED).
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Chapter 18: Appendix: Simulation
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Sample Questions
Q1) Define simulation and give some operations management examples.
Q2) All of the following are verification techniques EXCEPT:
A) developing logical flowcharts.
B) developing a model with high face validity.
C) conceptualizing a problem into smaller pieces or modules.
D) enabling people other than the programmer to check codes.
Q3) Larry sells sweatshirts at football games. The quantity supplied to him is sometimes less than he ordered. The probability distribution below shows the probability of these shortages. \(\begin{array}{cc}\text { Sweatshirts (units short) }&\text { Probability }\\
0 & 0.5 \\
100 & 0.3 \\
200 & 0.2
\end{array}\) Simulate the average number of shortages for 15 consecutive orders, using the following single digit random numbers: 1, 6, 8, 3, 4, 5, 7, 0, 3, 8, 9, 3, 2, 4, and 2.
Q4) Explain the major differences between a fixed-time and a next-event simulation model.
Q5) Differentiate between verification and validation. Discuss the most objective and scientific means of validation.
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Chapter 18: Project Management
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Sample Questions
Q1) If activity C is delayed by three weeks, the revised earliest project completion time is:
A) 9 weeks.
B) 10 weeks.
C) 11 weeks.
D) 12 weeks.
Q2) Crash time is the longest possible time in which the activity can realistically be completed.
A)True
B)False
Q3) Which of the following is NOT an assumption of the critical path method?
A) Activities are independent of one another.
B) Activity time estimates are stable.
C) Activity times are characterized by a beta probability distribution.
D) Once an activity is started, it continues uninterrupted until completion.
Q4) Which of the following activities has the largest amount of slack?
A) Activity A
B) Activity B
C) Activity C
D) Activity D
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Chapter 19: Appendix: Decision Analysis
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Q1) A regional fast?food restaurant is considering an expansion program. The major factor influencing the success of such a program is the future level of interest rates. It is estimated that there is a 20 per-cent chance that interest rates will increase by 2 percentage points, a 50 percent chance that they will remain the same, and a 30 percent chance that they will decrease by 2 percentage points. The alternatives they are considering and possible payoffs are shown in the following table: \(\begin{array}{lcc}&\text { Rates Up } & \text { Rates } & \text { Rates Dow1 } \\ &2 \text { Percent } & \text { Unchanged }&2 \text { Percent } \\ \text { Build } 50 \text { new places } & -\$ 200,000 & \$ 50,000&\$150,000 \\ \text { Build } 25 \text { new places } & -\$ 115,000 & \$ 26,000 &\$80,000\\
\text { Do nothing } & -\$ 70,000 & 0&\$5,000 \end{array}\)
a. Using decision tree analysis, what is the expected value (EV) for building 50 new restaurants?
b. Using decision tree analysis, what is the expected value (EV) for building 25 new restaurants?
c. What is the action and corresponding expected value EV for this overall decision tree problem?
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