Business Process Management
Test Preparation
Course Introduction
Business Process Management (BPM) is a disciplined approach to identifying, designing, executing, monitoring, and optimizing organizational processes. This course explores the principles and techniques used to analyze and improve business workflows in order to achieve organizational goals, enhance efficiency, and ensure compliance. Students will learn about process mapping, process modeling, performance measurement, and continuous improvement strategies, utilizing industry-standard BPM tools and methodologies. Case studies and practical exercises illustrate how BPM contributes to operational excellence, agility, and value creation in various sectors.
Recommended Textbook
OM 4th Edition by David Alan Collier
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23 Chapters
1572 Verified Questions
1572 Flashcards
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Page 2
Chapter 1: Goods, Services, and Operations Management
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65 Verified Questions
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Sample Questions
Q1) Which is generally related to service operations?
A)tangible product
B)need for flexible capacity
C)separation of production from consumption
D)large amount of inventory
Answer: B
Q2) Which one of the following statements about the structure of the U.S.economy is true?
A)About 91 percent of all U.S.jobs are in service-providing processes.
B)All goods-producing jobs account for 25 percent of total U.S.jobs.
C)All service-providing jobs account for 65 percent of total U.S.jobs.
D)The largest U.S.industry with respect to U.S.jobs is manufacturing.
Answer: A
Q3) The following terms -- interchangeability of parts, division of labor, highly repetitive tasks -- best relate to a focus on
A)quality
B)efficiency
C)time
Answer: B
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Chapter 2: Value Chains
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Sample Questions
Q1) A value chain describes the flow of customer information through a production system.
A)True
B)False
Answer: False
Q2) Which of the following is not true? To increase value, an organization must
A)decrease price or cost while holding perceived benefits constant.
B)hold perceived benefits constant while increasing price or cost.
C)increase perceived benefits while holding price or cost constant.
D)increase perceived benefits while reducing price or cost.
Answer: B
Q3) In the value chain model for a hospital, patients, drugs and staff would be considered
A)suppliers
B)inputs
C)processes
D)outputs
Answer: B
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Chapter 3: Measuring Performance in Operations
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80 Verified Questions
80 Flashcards
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Sample Questions
Q1) A coffee shop's average transaction price is $3, the contribution margin is 60 percent, the typical customer makes a purchase once a week or 52 weeks per year, and management estimates the value of a loyal customer over the buying life cycle as $520.What is the customer defection rate?
Answer: VLC = (P)(RF)(CM)(BLC)
520 = (3)(52)(.60)(BLC)
BLC = 1/customer defection rate
5.5556 = 1/customer defection rate
Customer defection rate = 1/5.5556 = 0.18 or 18%
Q2) Define interlinking.Why is this concept significant?
Answer: The quantitative modeling of cause-and-effect relationships between external and internal performance criteria is called interlinking.Interlinking tries to quantify the performance relationships between all parts of the value chain - the processes ("how"), goods and services outputs ("what") and customer experiences and outcomes ("why").With interlinking models, managers can objectively make internal decisions that impact external outcomes, for example, determining the effects of adding resources or changing the operating system to reduce waiting time.
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Chapter 4: Operations Strategy
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Sample Questions
Q1) With regard to the three types of customer attributes in evaluating the quality of goods and services, those associated with buying furniture would best be classified as
A)search attributes
B)experience attributes
C)credence attributes
D)reflect attributes
Q2) Which one of the following statements in the Lawn Care Company (LCC) case study is true?
A)The LCC already had experience and capabilities in the residential lawn application service and market segment, and was considering using this expertise to enter the golf and park market segment.
B)The gross margin on grass seed and fertilizer were higher than on the lawn application service.
C)Service management skills play a major role in the LCC current strategy and vision of the business.
D)The order winner for the current strategy at LCC is high physical goods quality.
Q3) What do we mean by core competencies?
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Chapter 5: Technology and Operations Management
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Sample Questions
Q1) From the perspective of operations management, all manufacturing organizations, regardless of their size or type of product, face similar issues regarding technology.
A)True
B)False
Q2) Enterprise Resource Planning Systems (ERP)
A)are a subset of supply chain management
B)give each function the ability to set up its own databases
C)handle customer ordering, inventory management and production scheduling on a real-time basis.
D)are easy to implement
Q3) Flexible manufacturing systems integrate machines or robots with automated handling devices to route work, load tools, and control operations.
A)True
B)False
Q4) Bar code scanners are examples of soft-technology.
A)True
B)False
Q5) Explain the concept of ERP - Enterprise Resource Planning Systems.
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Chapter 6: Goods and Service Design
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Sample Questions
Q1) In a design specification 25 \(\pm\) 1.5, the value 25 is called the ____, while \(\pm\) 1.5 is called the ____.
A)nominal, reliability
B)average, tolerance
C)average, nominal
D)nominal, tolerance
Q2) Define reliability.Include the four major elements.
Q3) Discuss the concept of servicescape.
Q4) Japan's Genichi Taguchi argued that any variation within the specification limits is equally good in terms of quality and long-run cost.
A)True
B)False
Q5) Ensuring that hotel staff at the front desk address a guest by name is an example of a servicescape requirement.
A)True
B)False
Q6) Explain the basic principles of Quality Function Deployment (QFD).Also, discuss the advantages of using this methodology.
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Chapter 7: Process Selection, Design, and Analysis
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Sample Questions
Q1) Little's Law
A)Removes process bottlenecks
B)Is a form of simulation
C)Focuses on finished goods inventory
D)Evaluates average process performance
Q2) A legal defense preparation is an example of a project.
A)True
B)False
Q3) Differentiate among custom, option and standard goods and services.Also give a goods and a service example of each.
Q4) Compare and contrast a product-process matrix with a service positioning matrix.
Q5) An accounting firm is capable of processing 20 EZ tax forms per day and the average number of forms on-hand in the office is 64 forms.The average processing time per EZ tax form is
Q6) Dell computers and Subway sandwiches are examples of ____ goods.
A)Custom
B)Option
C)Standard
D)Job shop
Q7) Explain why the product-process matrix does not transfer well to services.
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Chapter 8: Facility and Work Design
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Sample Questions
Q1) List the many questions that must be addressed in designing a workstation.
Q2) Process layouts generally require less investment in equipment than product layouts because the equipment is less specialized.
A)True
B)False
Q3) Which of the following is not a common reason for facility layout studies?
A)There is significant change in demand or throughput volume.
B)A new good or service is introduced to the customer benefit package.
C)A new material supplier is used.
D)Different process, equipment and/or technology are installed.
Q4) In a perfectly balanced assembly line, no bottlenecks exist.
A)True
B)False
Q5) The typical layout of facilities in a hospital would be an example of a ____ layout.
A)Product
B)Process
C)Cellular
D)Fixed position
Q6) Explain the role of ergonomics in job design.
Page 10
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Chapter 9: Supply Chain Design
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Sample Questions
Q1) Managing the flow of goods and materials from the customer backward through the supply chain is called
A)Reverse Logistics
B)The Pull System
C)The Push System
D)Response Management
Q2) A supply chain is broader in scope than the value chain, and encompasses all preand post-production activity.
A)True
B)False
Q3) For Dell Inc., the push-pull boundary is very early in the supply chain, where suppliers store inventory for frequent deliveries.
A)True
B)False
Q4) A great servicescape and facility layout can usually overcome a poor location decision.
A)True
B)False
Q5) Explain the typical structure of a supply chain.
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Chapter 10: Capacity Management
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Sample Questions
Q1) Reservations reduce risks for customers but provide little benefit for service providers.
A)True
B)False
Q2) Define capacity including the two ways it can be viewed.Provide an example of each way.
Q3) Discuss the following:
a.Approaches to adjust short-term capacity
b.Approaches for shifting and stimulating demand
Q4) The capacity expansion approach that provides the most safety capacity is
A)One large capacity increase
B)Small capacity increases that match demand
C)Small capacity increases that lead demand
D)Small capacity increases that lag demand
Q5) Complementary goods or services balance seasonal demand cycles and therefore use excess capacity available.
A)True
B)False
Q6) Define Economies of Scale and Diseconomies of Scale.Explain how they relate to capacity decisions.
Page 12
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Chapter 11: Forecasting and Demand Planning
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Sample Questions
Q1) A tracking signal provides a method for quantifying forecast
A)bias
B)error
C)accuracy
D)outliers
Q2) If single exponential smoothing is used and the time series has a negative trend, the forecast will
A)Lag
B)Overshoot
C)Be on target
D)Have a MAD equal to zero
Q3) In practice, managers rely almost exclusively on statistical forecasts.
A)True
B)False
Q4) A major difference between MSE and MAD is that MAD is influenced much more by large forecast errors than by small errors.
A)True
B)False
Q5) Explain judgmental forecasting, including grass roots forecasting and the Delphi Method.
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Chapter 12: Managing Inventories
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Sample Questions
Q1) Costs associated with inspecting, unpacking and putting into storage incoming inventory are components of ____ cost.
A)Ordering or setup
B)Holding
C)Shortage
D)Unit
Q2) Demand that is stable over time is called ____.
A)Static
B)Dynamic
C)Stochastic
D)Deterministic
Q3) In the fixed period system, managers must make two key decisions: the time interval between reviews, and the replenishment level.
A)True
B)False
Q4) Airline seats and call center phone lines are examples of inventory in service organizations.
A)True
B)False
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Chapter 13: Resource Management
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Sample Questions
Q1) End items in a master production schedule or final assembly schedule must be forecast.
A)True
B)False
Q2) An example of aggregation would be an ice cream manufacturer developing targets for the number of gallons of each flavor to produce along with purchasing requirements for specific ingredients.
A)True
B)False
Q3) A bill of materials characterizes the structure of dependent demand among all items that comprise a finished good.
A)True
B)False
Q4) Work center load reports are used in capacity requirements planning.
A)True
B)False
Q5) Dependent demand does not occur in the service business.
A)True
B)False
Q6) What are the components of an MRP record?
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Chapter 14: Operations Scheduling and Sequencing
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66 Flashcards
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Sample Questions
Q1) Scheduling refers to specifying
A)The sequence that jobs must be completed
B)The due date for each job
C)The start and completion times of jobs
D)The makespan of each job
Q2) When several products share common facilities, product sequencing affects cost.
A)True
B)False
Q3) UPS, the world's largest package delivery company, is highly dependent on scheduling but not sequencing.
A)True
B)False
Q4) Sequencing is not as much of a concern when several activities use a common resource.
A)True B)False
Q5) Rescheduling rarely occurs unless customers change their requested due dates. A)True
B)False
Q6) Differentiate between scheduling and sequencing.
Page 16
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Chapter 15: Quality Management
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Sample Questions
Q1) Root cause analysis uses all of the following tools and methods except A)Zero Defects
B)Seven Quality Control Tools
C)5-Why Technique
D)DMAIC
Q2) Which one of the following statements is false?
A)Kaizen is the process of specifying design specifications for goods and services.
B)A cause-and-effect diagram is also called a fishbone diagram.
C)Scrap and rework costs are part of internal failure quality costs.
D)The Deming Cycle is named after a famous quality guru and consists of four stepsPlan, Do, Study, Act (PDSA).
Q3) W.Edward Deming believed that higher quality leads to higher costs, but to even higher market share.
A)True
B)False
Q4) Define Six Sigma and explain the key concepts used to implement a Six Sigma quality initiative.
Q5) Define root cause and describe root cause analysis.
Q6) Discuss Kaizen and how it differs from a Kaizen Blitz.
Page 17
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Chapter 16: Quality Control and Spc
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Sample Questions
Q1) The value of C<sub>pk</sub> is the average of the lower and upper capability indexes; that is, C<sub>pk</sub> = (C<sub>pl</sub> + C<sub>pu</sub>)/2.
A)True
B)False
Q2) The lower the rate of defects, the higher the sample size should be in p-charts.
A)True
B)False
Q3) A system governed only by common causes is called a stable system.
A)True
B)False
Q4) Which is not related to a discrete metric?
A)Counting
B)Visual inspection
C)Good or bad
D)Time
Q5) In manufacturing, quality control is generally applied at the receiving stage from suppliers, during various production processes, and at the finished goods stage.
A)True
B)False
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Chapter 17: Lean Operating Systems
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Sample Questions
Q1) Southwest Airlines illustrates the application of "lean principles" when it
A)reduces airplane turnaround time at airport gates.
B)assigns airplane seats.
C)serves all passengers in-flight dinners.
D)requires a change of ticket fee for missing a scheduled flight.
Q2) A goal of total productive maintenance is to have zero accidents in the entire life cycle of the operating system.
A)True
B)False
Q3) Ford Motor Company has decided to switch to a pull system of manufacturing and distribution for its vehicles.Which one of the following is most likely to occur?
A)Inventory levels will increase.
B)Component parts and subassemblies will be replenished only when needed.
C)Dealer parking lot space will need to be increased.
D)Finished goods inventory will decrease, but raw materials and work-in-process inventories will increase.
Q4) Production Kanbans trigger the movement of parts.
A)True
B)False
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Chapter 18: Project Management
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Sample Questions
Q1) In a matrix organization, functional managers may be reluctant to provide the resources and employees, and the employees assigned to projects may relegate a project to a lower priority than their daily functional job.
A)True
B)False
Q2) Which of the following is incorrect regarding time/cost trade-offs?
A)The relationship between time and cost is proportional
B)Some activities cannot be crashed
C)The minimum cost can be found by crashing all activities as much as possible
D)Crashing priority is based on the amount of uncertainty in activity times
Q3) When finding the earliest finish (EF) time for an activity with two or more predecessor activities, the largest EF among the predecessor activities is used to calculate the EF for that activity.
A)True
B)False
Q4) The Critical Path Method (CPM) allows for an evaluation of uncertainty in project completion times.
A)True
B)False
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Chapter 19: Work Measurement, Learning Curves, and Standards
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Sample Questions
Q1) Personal fatigue and delay allowances are added to ____ to arrive at ____.
A)Standard time; normal time
B)Standard time; desired time
C)Normal time; desired time
D)Normal time; standard time
Q2) Work samplings
A)Are based on normal distribution
B)Are used for repetitive work activities
C)Determine the allowance factor
D)Require a systematic (non-random) sample
Q3) A furniture manufacturer has an order for 20 custom wine cabinets for a large hotel in Hawaii.It is estimated that the first cabinet will take 100 hours of shop time.An 85% learning curve is expected.The labor rate is $12.00 per hour.The pricing policy is to charge two times the labor cost for the order.
a.How many hours will the 20th wine cabinet take?
b.How many hours should the whole order take?
c.What is the price of each cabinet?
Q4) A 90% learning curve implies faster learning than an 80% learning curve.
A)True
B)False
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Chapter 20: Queuing Analysis
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Sample Questions
Q1) With a restaurant as an example, discuss the psychological methods used to affect customers' perceptions of waiting (to be seated, to be served, etc.).
Q2) Which of the following is not a psychological strategy for dealing with a long wait-time?
A)Distraction
B)Telling customers the length of the wait, which allows them to decide whether to wait or to come back another time
C)Displaying artwork
D)Technology
Q3) Describe seven operating characteristics of a waiting line (no formulas).
Q4) Triage is a form of preemption.
A)True
B)False
Q5) Queuing models
A)Yield optimal solutions
B)Are generally deterministic
C)Cannot be used in manufacturing
D)Use formulas only when arrivals and service times follow certain distributions
Q6) Discuss three categories of information necessary to analyze a waiting line.
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Chapter 21: Modeling Using Linear Programming
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Sample Questions
Q1) The normal-time project cost does not depend on what crashing decisions are made.As a result, total crash costs can be minimized for a linear programming objective.
A)True
B)False
Q2) Neither the R<sub>m</sub>, increase in the total production levels during Month 'm' compared to Month m-1, or the D<sub>m</sub>, decrease in the total production level during Month 'm' compared to Month m-1, can be negative because only positive changes would be permitted due to the non-negativity requirement.
A)True
B)False
Q3) A company has normal capacity for 2,500 units a month.If, for a given month, X = demand, which of the following correctly allows for either overtime or under-time in a given month?
A)X<sub>t</sub> + O<sub>t</sub> - U<sub>t</sub> = 2,500
B)X<sub>t</sub> - O<sub>t</sub> + U<sub>t</sub> = 2,500
C)X<sub>t</sub>- O<sub>t</sub> + U<sub>t</sub> < 2,500
D)X<sub>t</sub> + O<sub>t</sub> - U<sub>t</sub> > 2,500
Q4) Explain the essence of a transportation problem.
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Chapter 22: Simulation
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Sample Questions
Q1) Differentiate and explain the importance of verification and validation.
Q2) Needing the actual time of arrival and actual time of serving relates best with A)Fixed-time-incremental simulation
B)Next-event simulation
C)Random numbers
D)Queuing formula
Q3) It doesn't make sense to use simulation for waiting-line problems since queuing models give optimal solutions.
A)True
B)False
Q4) Discuss three advantages and three disadvantages of simulation models.
Q5) The queuing model operating characteristics formula only characterizes short-term average results and, in many practical situations, managers are interested in understanding long-term dynamic behaviors of queuing systems
A)True
B)False
Q6) Explain the major differences between a fixed-time and a next-event simulation model.Include advantages and disadvantages of each.
Q7) Define simulation and give some operations management examples.
Page 24
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Chapter 23: Decision Analysis
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Sample Questions
Q1) The expected value of a decision alternative cannot be negative.
A)True
B)False
Q2) A conservative or risk-averse approach to one-time decisions without event probabilities is ____.
A)Maximax
B)Maximin
C)Minimax regrets
D)Expected value
Q3) With some modification, the decision rules for one-time decisions without event probabilities can be applied to situations where the payoff is cost.
A)True
B)False
Q4) Which of the following is not a similarity between a decision matrix and a decision tree?
A)Time
B)States of nature
C)Alternatives
D)Probabilities
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