Operations Management Exam Practice
Tests
Course Introduction
Operations Management is a comprehensive course that examines the processes and strategies involved in the efficient production and delivery of goods and services. Students will explore key concepts such as process analysis, capacity planning, inventory management, quality control, supply chain coordination, and project management. The course emphasizes both quantitative and qualitative approaches to problem-solving and decision-making, equipping students with the analytical tools necessary to improve organizational performance. By integrating real-world case studies and hands-on projects, students develop practical skills to design, operate, and optimize business operations in a variety of industries.
Recommended Textbook
OM 4th 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) Customers and service providers often work together to co-produce a service.
A)True
B)False Answer: True
Q2) Service facilities must be physically located close to the customer.
A)True
B)False Answer: False
Q3) Differentiate between a good and a service.What is the difference between a durable and nondurable good.Give an example of each.
Answer: A good is a physical product you can see, touch or possibly consume.A service is any primary or complementary activity that does not directly produce a physical product.Services represent the non-goods part of a transaction between a buyer (customer) and a seller (supplier).
A durable good is a product that typically lasts at least three years.Vehicles, dishwashers and furniture are examples of durable goods.A nondurable good is perishable and generally lasts for less than three years.Examples include toothpaste, software, shoes and fruit.
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3
Chapter 2: Value Chains
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Sample Questions
Q1) Pre-production services might include on-line training services, billing, and warranty service.
A)True
B)False
Answer: False
Q2) Contrast outsourcing with vertical integration.Also, contrast backward integration with forward integration.
Answer: Outsourcing is the process of having suppliers provide goods and services that were previously provided internally.Vertical integration refers to the process of acquiring and consolidating elements of a value chain to achieve more control. Backward integration refers to acquiring capabilities at the front-end of the supply chain (suppliers, for example), while forward integration refers to acquiring capabilities toward the back-end of the supply chain (distribution or even customers, for example).Backward integration provides more control over the production portion of the supply chain.Forward integration can provide better marketing advantages.
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4
Chapter 3: Measuring Performance in Operations
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Sample Questions
Q1) Which one of the following statements is true regarding FedEx's Service Quality Indicator (SQI)?
A)FedEx's SQI is an example of volume flexibility.
B)FedEx's SQI places the most weight (importance) on late pickups.
C)FedEx's SQI places the most weight (importance) on damaged and lost packages.
D)FedEx's SQI places the most weight (importance) on delivery on the wrong day.
Answer: C
Q2) Explain the difference between design flexibility and volume flexibility.
Answer: Design flexibility is the ability to develop a wide range of customized goods or services to meet different or changing customer needs.Volume flexibility is the ability to respond quickly to changes in the volume and type of demand.This might mean rapid changeover from one product to another as the demand for certain goods increases or decreases, or the ability to produce a wide range of volumes as demand fluctuates.
Q3) Having intensive care nurses on call in case of a dramatic increase in patient demand is an example of design flexibility.
A)True
B)False
Answer: False
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Chapter 4: Operations Strategy
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Sample Questions
Q1) With regard to the three types of attributes customers use in evaluating the quality of goods and services, a vacation would best be classified as high in
A)Search attributes
B)Experience attributes
C)Credence attributes
D)Competitive advantage attributes
Q2) The ease by which one can create original music compositions using a software package such as Band in a Box or Apples' Garage Band would be an example of an experience attribute.
A)True
B)False
Q3) Eventually, order qualifiers become order winners.
A)True
B)False
Q4) What do managers need to understand in order to create a sustainable competitive advantage?
Q5) A clean bed in a hotel would be considered as an order satisfier.
A)True
B)False
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Chapter 5: Technology and Operations Management
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Sample Questions
Q1) Which of the following enables engineers to design, analyze, test, simulate, and "manufacture" products before they physically exist?
A)CNC
B)CAD/CAE
C)CIM
D)CAM
Q2) Technology provides the capability of eliminating many of the traditional components of value chains.
A)True
B)False
Q3) Database systems, artificial intelligence programs and voice-recognition software are examples of
A)hard technology
B)soft technology
C)computer numerical control
D)integrated operating systems
Q4) Differentiate between hard technology and soft technology.
Q5) Explain the concept of ERP - Enterprise Resource Planning Systems.
Q6) List some of the key issues that organizations face in using technology.
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Chapter 6: Goods and Service Design
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Sample Questions
Q1) In design specification terminology, permissible variation is called A)nominal
B)buffer
C)tolerance
D)leeway
Q2) Suppose that a manufacturing specification of a dimension is 1.0 \(\pm\) 0.05.The permissible range of variation from 0.95 to 1.05 is called the tolerance.
A)True
B)False
Q3) List the five elements of a service delivery system.
Q4) The "goal post model" of conforming to specifications by specifying a nominal dimension and a tolerance is the basis for calculating the Taguchi loss function. A)True
B)False
Q5) Product simplicity encourages the use of standard parts and components. A)True
B)False
Q6) Explain the concept of Design Failure-Mode-and-Effect analysis.
Q7) Describe the Taguchi loss function.Contrast it to the "goal post" model.
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Chapter 7: Process Selection, Design, and Analysis
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Sample Questions
Q1) In a customer routed service, customers follow a very small number of possible and predetermined pathways through the service system.
A)True
B)False
Q2) Define a value stream map.How does this differ from a regular process map?
Q3) An automobile emissions testing center has six (6) inspectors and tests 50 autos per hour.Each inspector can inspect twelve (12) autos per hour.What would the service rate need to be in order to achieve 90% utilization?
Q4) The terms, "general purpose equipment," "flexible and capable of customizing work" and "wide variety of goods or services" best relate to
A)Projects
B)Job shops
C)Flow shop processes
D)Continuous flow processes
Q5) In the introduction phase of the product life cycle, operations managers need to quickly standardize their processes.
A)True
B)False
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Chapter 8: Facility and Work Design
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Sample Questions
Q1) Which one of the following fits best with process layout?
A)Skilled workers
B)Standardization
C)Specialized equipment
D)Little work-in-process inventories
Q2) The objective of assembly line balancing is to group tasks among workstations so that the amount of work assigned to each workstation is highly variable, thus maximizing flexibility.
A)True
B)False
Q3) The determination of specific job tasks and responsibilities is called ____.
A)Job design
B)Ergonomics
C)Job enlargement
D)Job enrichment
Q4) All of the following are limitations to process layout except
A)Higher movement and transportation costs
B)More complicated planning and control systems
C)Longer total processing time
D)Limited range of products
Page 10
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Chapter 9: Supply Chain Design
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Sample Questions
Q1) With vendor-managed inventory, a manufacturer monitors and managers inventory for a customer.
A)True
B)False
Q2) Large order sizes and frequent price changes will reduce the bullwhip effect in a supply chain.
A)True
B)False
Q3) Orders are passed upstream in a supply chain, while materials and finished goods are sent downstream in a supply chain.
A)True
B)False
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) What are the key functions of a supply chain?
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Chapter 10: Capacity Management
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Sample Questions
Q1) Which of the following is not a key consideration in long-term capacity strategy?
A)Equipment sharing
B)Initial investment in facilities and equipment
C)Annual cost of operating and maintaining facilities and equipment
D)Opportunity loss incurred from lost sales and reduced market share
Q2) C&M Machining is developing plans for a dedicated production line and needs to determine how many drill presses will be needed.Engineering estimates are that one drill press will be able to process 120 parts per hour.Daily demand is 2400 parts.C&M operates one 8 hour shift per day.How many drill presses are needed to meet the capacity requirements?
Q3) Complementary goods or services balance seasonal demand cycles and therefore use excess capacity available.
A)True
B)False
Q4) Safety capacity or a capacity cushion is
A)needed for processes with little demand variability
B)provided for anticipated events
C)generally higher in a job shop
D)not appropriate for service organizations
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Chapter 11: Forecasting and Demand Planning
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Sample Questions
Q1) 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
Q2) ____ forecasts are needed for planning production schedules and to assign workers to jobs.
A)Long-range
B)Intermediate-range
C)Short-range
D)Demand planning
Q3) Define regression analysis and explain how it is an approach to forecasting.
Q4) A group of international experts published a set of principles of forecasting that includes all of the following except
A)Use quantitative rather than qualitative methods.
B)Combine forecasts from approaches that are similar.
C)Ask experts to justify their forecasts in writing.
D)Use multiple measures of forecast accuracy.
Q5) Explain how forecasting is used at different levels of an organization.
Page 13
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Chapter 12: Managing Inventories
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Sample Questions
Q1) 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?
Q2) Safety stock inventory is an additional amount of inventory kept over and above the average amount required to meet demand during the lead time.
A)True
B)False
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Chapter 13: Resource Management
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Sample Questions
Q1) 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.
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) The lower the skill requirements of the workforce, the more feasible it is to change workforce levels as an aggregate planning option.
A)True
B)False
Q4) A company currently has no items in inventory.The demand for the next four months is 200, 400, 250 and 350 units.Assuming a level production rate of 250 units per month, determine the month in which a backorder will materialize.
Q5) A POQ for a one-week time period is equivalent to LFL lot sizing.
A)True
B)False
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Chapter 14: Operations Scheduling and Sequencing
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Sample Questions
Q1) Flow time is the amount of time a job spends in a shop or factory.
A)True
B)False
Q2) Considering a two-resource sequencing problem,
A)The makespan is the same for any sequence of jobs
B)Flow time is minimized
C)The goal is to minimize makespan
D)Each job can be processed by either resource first
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) Gantt charts can show what jobs are ahead of schedule, behind schedule, and on schedule.
A)True
B)False
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Chapter 15: Quality Management
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Sample Questions
Q1) Because of the amount of resources required, a Kaizen blitz is generally performed outside of normal working hours over several weeks or months.
A)True
B)False
Q2) In Six Sigma terminology, a defect is any mistake or error that is passed on to the customer.
A)True
B)False
Q3) List the three principles of total quality and why they are important.
Q4) At a gas station, a diesel pump nozzle that will not fit into a non-diesel automobile is an example of ____?
A)Kaizen blitz
B)dpmo
C)Poka-yoke
D)External failure
Q5) Define Six Sigma and explain the key concepts used to implement a Six Sigma quality initiative.
Q6) What are the 7 QC Tools and what value are they for quality improvement? Briefly explain how each tool is used.
Page 17
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Chapter 16: Quality Control and Spc
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Sample Questions
Q1) Define and give an example of the three components of any control system.
Q2) Find the control limits for a c chart with \(\overline{c}\) = 7.
Q3) Indications in a control chart of an out-of-control situation include all of the following except
A)Six or seven consecutive points that increase or decrease in value
B)About the same number of points above and below the center line
C)There are points outside control limits
D)There are no more points near the center line than there are close to the control limits
Q4) Discuss the three basic quality control practices used in manufacturing.
Q5) Over several days, 25 samples of 100 items each were tested for electrical resistance.A total of 60 items failed.Determine \(\overline{p}\) and the control limits for a p chart.
Q6) A key element of a control system is the ability to measure performance and compare it to a performance standard.
A)True
B)False
Q7) What is the purpose of a process-capability study and what is a process capability index?
Page 18
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Chapter 17: Lean Operating Systems
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Sample Questions
Q1) Lean Six Sigma is simply the union of lean approaches with quality improvement techniques, each of which has been used independently in other applications.
A)True
B)False
Q2) The number of Kanban cards is directly proportional to the amount of work-in-process inventory.
A)True
B)False
Q3) In the 5Ss, items identified as unnecessary and thus removed from a workplace would be included with which S?
A)Sort
B)Synchronize
C)Shine
D)Standardize
Q4) Quick setup or changeover of tooling and fixtures is associated with ____.
A)Visual controls
B)Single minute exchange of dies
C)5Ss
D)Six Sigma
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Chapter 18: Project Management
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Sample Questions
Q1) A type of organization which "loans" resources to projects while still maintaining control over them is called
A)Pure project structure
B)Pure functional structure
C)Matrix structure
D)Product structure
Q2) The slack for an activity is equal to its latest finish time minus its earliest start time.
A)True
B)False
Q3) Crashing refers to the process of shortening selected activity times in order to reduce the overall project completion time.
A)True
B)False
Q4) The early start time for an activity is computed by finding the largest early finish time of all immediate predecessors.
A)True
B)False
Q5) Explain the stages of the project life cycle.
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Chapter 19: Work Measurement, Learning Curves, and Standards
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Sample Questions
Q1) Determine the sample size for the following time study given a standard deviation of three ounces and a 92% probability that the value of the sample mean is within two ounces?
Q2) Define work measurement and what it leads to from an operations perspective.
Q3) The Chester Table Company mass produces quality end tables for motels.They produce 5,000 end tables per week.The owner is trying to determine how many workers he needs.The workers work 40 hours per week but are idle about three percent of the time due to cleaning up their area.Their performance rating is equal to one.The owner has developed these time standards for operations per table:
Transporting the table through the plant = 2 minutes
Table top = 10 minutes
One leg = 4 minutes
Finishing = 5 minutes
a.How long does it take (in minutes) to produce one table?
b.What is the labor standard (in minutes) for this operation?
c.What is the minimum number of workers needed to produce 5000 tables in one week?
Q4) Discuss several factors that can affect the application of the learning curve or experience curve and/or the amount of learning that occurs.
Page 21
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Chapter 20: Queuing Analysis
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Sample Questions
Q1) Which of the following cannot be found by queuing formulas?
A)the average number of units waiting for service
B)the average time a unit spends in the system
C)the probability that the service system is idle
D)the maximum time a unit is in the system
Q2) Describe seven operating characteristics of a waiting line (no formulas).
Q3) A multiple-server queuing model has three servers with a mean service time of five customers per server per hour.It has been determined that arrivals will average 12 per hour.Arrivals follow a Poisson distribution and service times follow an exponential distribution.
a.Calculate the probability that all three service channels are idle.
b.Determine the probability of five customers in the system.
c.Determine the average number of customers waiting for service.
d.Determine the average number of customers in the system.
e.Determine the average time a customer spends waiting for service.
f.Determine the average time a customer spends in the system.
g.Determine the probability an arriving customer will wait for service.
Q4) The multiple-server queuing model assumes jockeying can take place.
A)True
B)False
Page 22
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Chapter 21: Modeling Using Linear Programming
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Sample Questions
Q1) Any particular combination of decision variables is referred to as a(n) ____.
A)Objective
B)Solution
C)Constraint
D)Optimization
Q2) The constraint that requires the beginning inventory plus production minus sales to equal the ending inventory is called material-balance equation.
A)True
B)False
Q3) A company is considering a rate change, either an increase or a decrease in production, and
X<sub>t</sub> = production in a time period
R<sub>t</sub> = increase in production rate from Period t-1 to Period t
D<sub>t</sub> = decrease in production rate from Period t-1 to Period t
Which of the following is correct?
A)X<sub>t</sub> - X<sub>t - 1</sub> = D<sub>t</sub> - R<sub>t</sub>
B)X<sub>t - 1</sub> - X<sub>t</sub> = D<sub>t</sub> - R<sub>t</sub>
C)X<sub>t - 1</sub> - X<sub>t</sub> = R<sub>t</sub> -D<sub>t</sub>
D)X<sub>t</sub> - X<sub>t - 1</sub> = R<sub>t</sub> - D<sub>t</sub>
Q4) What characterizes a linear function?
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Chapter 22: Simulation
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Sample Questions
Q1) 'Face validity' means the programmers agree to the model's logic.
A)True
B)False
Q2) With a fixed-time-increment simulation model, detailed information is lost.
A)True
B)False
Q3) 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
Q4) A simulator is a general purpose simulation model.
A)True
B)False
Q5) The Excel function RAND ( ) generates random numbers that provide a continuous range of values.Unlike those for two-digit numbers, these values are not limited to probability increments of 0.01.
A)True
B)False
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Chapter 23: Decision Analysis
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Sample Questions
Q1) The expected value of perfect information represents the maximum amount a company should be willing to pay for any information about events, no matter how good it is.
A)True
B)False
Q2) Describe how the following criteria are applied to a decision problem in which the object is maximization.
a.Maximax
b.Maximin
c.Minimax regrets
Q3) The minimax regret approach is neither aggressive nor conservative.
A)True
B)False
Q4) In what type of situation would the expected monetary value criterion be useful? In what type situation would it not be useful?
Q5) A numerical value associated with a decision coupled with some event is called a decision tree.
A)True
B)False
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