Operations and Supply Chain Management
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Course Introduction
Operations and Supply Chain Management explores the strategies and practices essential for efficiently producing goods and delivering services. The course covers topics such as process analysis, sourcing and procurement, inventory management, logistics, quality control, and supply chain design. Emphasizing both conceptual frameworks and real-world applications, students will learn how organizations coordinate operations within and across organizational boundaries to maximize value, reduce costs, and respond effectively to market demands. Ethical, technological, and sustainability considerations in global supply chains are also addressed, preparing students to navigate and excel in a dynamic business environment.
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OM 4th Edition by David
Alan Collier
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Chapter 1: Goods, Services, and Operations Management
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Q1) Support processes would typically include all of the following except
A)inventory management
B)customer help desk operations
C)research and development
D)manufacturing and assembly
Answer: D
Q2) A toothbrush is an example of a nondurable good.
A)True
B)False
Answer: True
Q3) Which of the following is not a current challenge to OM?
A)globalization
B)technology
C)quality
D)mass production
Answer: D
Q4) Every job entails some aspect of operations management.
A)True
B)False
Answer: True
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Chapter 2: Value Chains
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Q1) A vertical integration strategy provides a firm more control and generally reduces the complexity of managing the value chain.
A)True
B)False
Answer: False
Q2) Operational structure of the value chain deals with
A)management hierarchy
B)vertical integration
C)configuration of resources
D)culture
Answer: C
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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Q1) Customer satisfaction rating increases as time-on-hold waiting decreases is an example of
A)productivity index
B)interlinking
C)value of a loyal customer
D)operational definitions
Answer: B
Q2) The only important measurement category in business is financial.
A)True
B)False
Answer: False
Q3) The value chain model is probably the dominant model for operations managers.
A)True
B)False
Answer: True
Q4) The quote "Happy employees create happy customers" best characterizes the Service-Profit Chain (SPC) model.
A)True
B)False
Answer: True
Page 5
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Chapter 4: Operations Strategy
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Questions
Q1) What do managers need to understand in order to create a sustainable competitive advantage?
Q2) Professor Terry Hill has presented a four-loop framework for operations strategy through an iterative and integrated process.The initial loop is
A)Operations evaluates the implications of competitive priorities in terms of process choices and infrastructure
B)Operations determines if process choice decisions and capabilities are consistent with infrastructure capabilities
C)Operations input into corporate and marketing strategy
D)Ties together corporate strategy and marketing strategy
Q3) Using the Four Key Decision Loops in Professor Terry Hill's Generic Strategy Framework, which statement is true?
A)The four loops are highly integrated and require improvement cycles.
B)The first loop ties strategy to operations.
C)Operations has no input loop into corporate strategy or marketing strategy.
D)Infrastructure decisions must come before marketing strategy decisions.
Q4) Explain Professor Hill's strategy development framework.What are the key elements of operations strategy within this framework?
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Chapter 5: Technology and Operations Management
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Q1) Dell Computer would best be described as what type of company?
A)B2B
B)B2C
C)C2C
D)Both a and b
Q2) A principal advantage of numerical control (NC) is that an operator has only to load and unload parts and push a button to begin processing, and thus can tend several NC machines at one work center.
A)True
B)False
Q3) Industrial robots automate the skills that most humans can readily perform.
A)True
B)False
Q4) List some of the key issues that organizations face in using technology.
Q5) CRM helps firms gain competitive advantage by all of the following except
A)providing real-time transaction processing
B)segmenting markets
C)tracking sales trends and advertising effectiveness
D)identifying which customers should be the focus of targeted marketing initiatives
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Chapter 6: Goods and Service Design
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Q1) The text presents an integrative case study of LensCrafters.Which statement is correct?
A)LensCrafters primary product is eyewear.
B)Each store has very different layout and servicescape.
C)Each store has a visible low contact area.
D)Low cost makes a long drive to a LensCrafters store worthwhile.
Q2) Which of the following steps is not the same for both goods and services?
A)detailed goods, services and process design
B)Customer Benefit Package design and configuration
C)market introduction/deployment
D)marketplace evaluation
Q3) Which of the following is not included in a failure-mode-and-effects analysis (FMEA)?
A)ways in which components might fail
B)calculation of the component reliability
C)consequences of failure
D)how potential failures can be corrected in the design
Q4) Product simplicity encourages the use of standard parts and components.
A)True
B)False
Page 8
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Chapter 7: Process Selection, Design, and Analysis
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Q1) The average number of hotel rooms occupied per day during the month of March is 225.Rooms are booked on average for 2.5 days.On average, how many new bookings occur each day?
Q2) Once a firm decides on the most appropriate process, they can then determine the type of goods they need to create.
A)True
B)False
Q3) In using the Product-Process Matrix, the most appropriate match between products and processes occurs along the diagonal of the matrix.
A)True
B)False
Q4) Explain why the product-process matrix does not transfer well to services.
Q5) Service encounter repeatability provides a measure analogous to product volume for goods-producing firms.
A)True
B)False
Q6) Define reengineering.How does it differ from other approaches to process improvement?
Q7) What are some management strategies to improve process designs?
9
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Chapter 8: Facility and Work Design
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Q1) In a product layout, a breakdown of one piece of equipment will not cause the entire process to shut down.
A)True
B)False
Q2) The determination of specific job tasks and responsibilities is called ____.
A)Job design
B)Ergonomics
C)Job enlargement
D)Job enrichment
Q3) Process layouts generally require less investment in equipment than product layouts because the equipment is less specialized.
A)True
B)False
Q4) ____ classifies parts into families so that cellular layouts can be effectively used.
A)Ergonomics
B)Job enlargement
C)Group technology
D)CRAFT
Q5) Describe approaches used for process layout design.
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Chapter 9: Supply Chain Design
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Q1) The metric "perfect order fulfillment" is often used to measure ____.
A)Delivery reliability
B)Responsiveness
C)Supply chain efficiency
D)Supply chain financial performance
Q2) 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
Q3) Explain the typical structure of a supply chain.
Q4) A(n) ____ produces only what is needed at upstream stages in the supply chain in response to customer demand signals.
A)Responsive supply chain
B)Efficient supply chain
C)Push system
D)Pull system
Q5) Explain the difference between a supply chain and a value chain.
Q6) Summarize the Supply Chain Operations Reference (SCOR) model.
Q7) What are the key functions of a supply chain?
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Chapter 10: Capacity Management
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Q1) According to the Theory of Constraints, ____ is the amount of money generated per time period through actual sales.
A)Throughput
B)Non-Bottleneck (NBN) work activity
C)Non-physical constraint
D)Utilization
Q2) Explain the concept of a focused factory.Include different ways a factory can be focused.
Q3) Reservations reduce risks for customers but provide little benefit for service providers.
A)True
B)False
Q4) Safety capacity is intended for all of the following except A)power outages
B)equipment breakdowns
C)seasonal demand
D)material shortages
Q5) Discuss each of the four strategies for capacity expansion.Include the risks and benefits of each.
Q6) What are complementary goods and services and why do firms have them?
Page 12
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Chapter 11: Forecasting and Demand Planning
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Q1) A long-range forecast typically covers a planning horizon of 3 to 12 months.
A)True
B)False
Q2) An exponential smoothing model can be found easily by applying the Excel Add Trendline option to a time series.
A)True
B)False
Q3) The smoothing constant, \(\alpha\), used in the basic exponential smoothing model, can range in value from -1 to +1.
A)True
B)False
Q4) Another name for planning horizon is time bucket.
A)True
B)False
Q5) An R<sup>2</sup> of 0.70 mean 30% of the variability in the dependent variable was explained by the independent variable.
A)True
B)False
Q6) Define regression analysis and explain how it is an approach to forecasting.
Page 13
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Chapter 12: Managing Inventories
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Q1) Define the EOQ model and explain its major assumptions.
Q2) You manage a candy store in a high traffic shopping mall where you have collected the following information.Answer the next four questions based on these data.
Weekly demand for small candy boxes = 90 boxes
Cost to place one purchase order with the box supplier = $19.80
Cost to hold one box for one year in inventory = $2.45
Lead time = 2 weeks
Weeks in a year = 52 weeks
a.What is the Economic Order Quantity (EOQ)?
b.Assuming the EOQ is ordered, what is the average inventory level (i.e., cycle inventory)?
c.Assuming the EOQ is ordered, what is the total annual order and inventory holding cost?
d.If a Fixed Period System (FPS) is adopted, what is the replenishment level (M) without safety stock?
Q3) Summarize the characteristics of the inventory environment that management considers when developing an inventory management system.
Q4) Discuss two types of stockouts.
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Chapter 13: Resource Management
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Sample Questions
Q1) The direct inputs to material requirements planning include all of the following except
A)Master Production Schedule
B)Inventory, SKU, and Transaction files
C)Bills of Material
D)Capacity Requirements Plan
Q2) Which lot sizing rule might base the order quantity on a standard-size container or pallet load?
A)Lot-for-Lot (LFL)
B)Fixed order quantity (FOQ)
C)Periodic order quantity (POQ)
D)Gross Requirements (GR)
Q3) In a bill of materials, each component is comprised of one or more parent items.
A)True
B)False
Q4) Define resource management and list its key objectives.
Q5) A company currently has no items in inventory.The demand for the next four months is 200, 400, 250 and 350 units.Determine the level production rate if a level strategy is selected with the goal of ending Period 4 with 100 units in inventory.
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Chapter 14: Operations Scheduling and Sequencing
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Q1) The time needed to process a given set of jobs is called
A)Flow time
B)Ready time
C)Makespan
D)Due date
Q2) In sequencing jobs in a flow shop with two resources, Johnson's rule finds a sequence that has the smallest makespan.
A)True
B)False
Q3) Differentiate between scheduling and sequencing.
Q4) Telling an umpire crew to work baseball games in Chicago, then Milwaukee, and then Cleveland is an example of a sequence.
A)True
B)False
Q5) When several products share common facilities, product sequencing affects cost. A)True
B)False
Q6) What four (4) decisions are considered in designing an appointment system?
Q7) Describe Johnson's sequencing rule for the two-resource sequencing problem.
Page 16
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Chapter 15: Quality Management
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Q1) Because of the expense and training involved, Six Sigma is practical only in large manufacturing organizations.
A)True
B)False
Q2) To get top management's attention about quality issues, it is useful to measure quality in monetary terms rather than from the operational perspective on the number of defects and nonconformances.
A)True
B)False
Q3) ISO 9000 is mainly used in the United States.
A)True
B)False
Q4) The Deming philosophy focuses on bringing about improvements in product and service quality by reducing uncertainty and variability in goods and services design and associated processes.
A)True
B)False
Q5) Describe the rationale underlying ISO 9000:2000.
Q6) List the three principles of total quality and why they are important.
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Chapter 16: Quality Control and Spc
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Q1) A steel company is interested in determining if a particular process in its mini?mill is capable of meeting customer expectations.The thickness of steel has an upper limit of .540 mm and a lower limit of .480 mm.The process has a standard deviation of .02 mm.
a.What is the process capability index (C<sub>p</sub>) for this process?
b.What must the standard deviation of the process be changed to for the C<sub>p</sub> to equal 1.00?
Q2) The time to check out guests at a hotel was measured over the course of several weeks.Management believes that the target time for checking out guests should be between 2 and 4 minutes with a target of 3 minutes.The data gathered had a mean time of 2.75 minutes with a standard deviation of 0.4 minutes.Find and interpret C<sub>p</sub>, C<sub>pl</sub>, C<sub>pu</sub>, and C<sub>pk</sub> in the context of this situation.
Q3) Which of the following is not a component of a control system?
A)Statistical sampling
B)Measures of actual performance
C)Goals or standards
D)Comparison of actual performance with standards or goals for corrective action if necessary
Q4) Define "quality at the source."
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Chapter 17: Lean Operating Systems
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Q1) Explain the purpose of visual controls and give examples.
Q2) Which of the following is not a basic principle of a lean operating system?
A)Elimination of waste
B)Batching
C)Increased speed and response
D)Improved quality
Q3) According to the Toyota Motor Company, which of the following is not one of the seven major waste categories?
A)Overproduction
B)Transportation
C)Motion
D)Single-piece flow
Q4) A clean and organized work area is an important principle of lean thinking.
A)True
B)False
Q5) In lean thinking, waste need not be classified as simply material waste such as scrap and defective parts.
A)True
B)False
Q6) Define lean enterprise and the four principles of lean operating systems.
Page 19
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Chapter 18: Project Management
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Q1) Because the preparation of annual reports is done on a repeating basis, project management techniques are not appropriate.
A)True
B)False
Q2) Activity times must be estimated from historical data of similar work tasks to provide realism for a project.
A)True
B)False
Q3) Define critical path and explain how it is identified once a project schedule is calculated
Q4) Describe the four major steps in the project-planning process.
Q5) Which of the following is not considered a project?
A)Writing and implementing a computer program
B)Introducing a new product
C)Production of soft drinks
D)Building a bridge
Q6) Explain the stages of the project life cycle.
Q7) List at least six principal factors (contributors) to project success.
Q8) Explain the role of the project managers and some principles for success.
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Chapter 19: Work Measurement, Learning Curves, and Standards
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Q1) The learning curve does not apply to supervisory personnel, some skilled craftspeople or jobs that have non-repetitive job tasks.
A)True
B)False
Q2) Define and relate normal time and standard time.
Q3) Work standards
A)Improve motivation if set by managers
B)Increase variability if set by works
C)Are best set informally
D)Work best when designed by workers
Q4) Job and process analysis should follow work measurement.
A)True
B)False
Q5) Normal time needs to be adjusted for personal time and avoidable delays.
A)True
B)False
Q6) For a work sampling study, there is a 95% probability that the processing time of an activity has an error of less than 0.06 minutes.The best estimate we have for "p" is 0.30.Determine the size sample that should be used for this work sampling study.
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Chapter 20: Queuing Analysis
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Q1) ____ is the process of a customer evaluating the waiting line and server system and deciding not to join the queue.
A)Triage
B)Reneging
C)Balking
D)Value-based queuing
Q2) Discuss the seven key assumptions for the multiple-server waiting line model.
Q3) Since most service times follow an exponential distribution, there is no need to collect data on actual service times.
A)True
B)False
Q4) With a restaurant as an example, discuss the psychological methods used to affect customers' perceptions of waiting (to be seated, to be served, etc.).
Q5) When \(\lambda\) = \(\mu\), the operating characteristics are not defined, which means that these times and numbers of items grow infinitely large.
A)True
B)False
Q6) Contrast wait cost with server cost.Which is harder to estimate?
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Chapter 21: Modeling Using Linear Programming
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Q1) Discuss the concept of constrained optimization.Include some examples.
Q2) (a month's production) + (beginning inventory) - (ending inventory) - (number of lost sales for the month) =
A)Overtime limits
B)Demand in the month
C)Increase in product
D)Decrease in production
Q3) Excel solver can handle basic linear programming but not the special transportation problem.
A)True
B)False
Q4) If Activity C directly precedes both D and E on a project network and C can be crashed three (3) times in using linear programming,
A)Crash time affects only C
B)Crash time affects only C and D
C)Crash time affects only C and E
D)Crash time affects both D and E
Q5) Explain the steps necessary to solve a linear programming problem using Microsoft Excel's Solver.
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Chapter 22: Simulation
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Q1) All of the following are disadvantages of simulation except
A)Limited application
B)Difficulty of collecting the appropriate input data
C)Selecting the correct probability distribution
D)The accuracy of outputs
Q2) Explain the major differences between a fixed-time and a next-event simulation model.Include advantages and disadvantages of each.
Q3) 'Balking' means a customer finds the wait while in line too long and thus leaves the line.
A)True
B)False
Q4) 'Face validity' means the programmers agree to the model's logic.
A)True
B)False
Q5) Which of the following is not correct regarding next-event simulation models?
A)Used more commonly in practice
B)Basis for most commercial simulation software
C)Waste computer time
D)More accurate than fixed-time-increment simulation
Q6) Discuss three advantages and three disadvantages of simulation models.
Page 24
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Chapter 23: Decision Analysis
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Q1) 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
Q2) Differentiate between uncertainty and risk.
Q3) Explain the Expected Value of Perfect Information (EVPI) and how it helps a decision-maker.
Q4) The expected value of a decision alternative cannot be negative.
A)True
B)False
Q5) Which of the following is best related to the expected value approach?
A)Best used for one-time decisions
B)Since there are many states of nature, the individual probabilities, when added, can be greater than 1.0
C)It is an average
D)Probabilities are not appropriate
Q6) Decision analysis situations often have multiple objectives.
A)True
B)False
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