Operations Management
Final Exam
Course Introduction
Operations Management is a foundational course that explores the principles and practices involved in the effective and efficient production of goods and services. Covering topics such as process analysis, capacity planning, inventory control, supply chain management, quality assurance, and operations strategy, the course equips students with analytical tools to design, operate, and improve organizational processes. Through real-world case studies and practical applications, students learn how to align operations with overall business strategy, optimize resource utilization, and drive continuous improvement within various sectors, including manufacturing, services, and technology-driven industries.
Recommended Textbook Operations Management 12th Edition by William
J. Stevenson
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Page 2
Chapter 1: Introduction to Operations Management
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Sample Questions
Q1) Modern firms increasingly rely on other firms to supply goods and services instead of doing these tasks themselves. This increased level of _____________ is leading to increased emphasis on ____________ management.
A) outsourcing; supply chain
B) offshoring; lean
C) downsizing; total quality
D) optimizing; inventory
E) internationalization; intercultural
Answer: A
Q2) Which of the following statements about variation is false?
A) Variation prevents a production process from being as efficient as it can be.
B) Some variation can be prevented.
C) Variation can either be assignable or random.
D) Any variation makes a production process less productive.
E) Random variation generally cannot be influenced by managers.
Answer: D
Q3) Assembly lines achieved productivity but at the expense of standard of living.
A)True
B)False
Answer: False
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Chapter 2: Competitiveness, Strategy, and Productivity
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Sample Questions
Q1) Strategy includes both organizational and functional strategies.
A)True
B)False
Answer: True
Q2) Tracking productivity measures over time enables managers to judge organizational performance and decide where improvements are needed.
A)True
B)False
Answer: True
Q3) Gourmet Pretzels bakes soft pretzels on an assembly line. It currently bakes 800 pretzels each eight-hour shift. If the production is increased to 1,200 pretzels each shift, then productivity will have increased by:
A) 50 percent.
B) 33 percent.
C) 25 percent.
D) 67 percent.
Answer: A
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Page 4
Chapter 3: Forecasting
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Sample Questions
Q1) Given forecast errors of 5, 0, -4, and 3, what is the bias?
A) -4
B) 4
C) 5
D) 12
E) 6
Answer: B
Q2) The mean absolute deviation is used to:
A) estimate the trend line.
B) eliminate forecast errors.
C) measure forecast accuracy.
D) seasonally adjust the forecast.
E) compute periodic forecast errors.
Answer: C
Q3) The naive forecast can serve as a quick and easy standard of comparison against which to judge the cost and accuracy of other techniques.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Product and Service Design
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Sample Questions
Q1) Which of the following is not one of the 3 Rs?
A) reuse
B) reduce
C) reposition
D) recycle
Q2) A software company is weighing whether to release a new version of its software. The company can go ahead and release the version now and correct flaws with subsequent patches or upgrades, or it can wait until the new version is reasonably bug-free. This is an example of:
A) life cycle analysis.
B) value analysis.
C) vaporware.
D) concurrent engineering.
E) design for production.
Q3) Modular design increases the costs of purchasing and controlling inventory compared to nonmodular.
A)True
B)False
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Chapter 4: Extension: Reliability
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Sample Questions
Q1) Reliability is the probability that a product or system will function when activated.
A)True
B)False
Q2) A system consists of two components, each of which must activate if the system is to activate. One component has a reliability of .99. The other has a reliability of .95. The components are independent of one another with respect to reliability. What is the overall system reliability?
A) .99
B) .95
C) .94
D) .90
E) Cannot be determined with this information.
Q3) Availability cannot be increased without improving the time between breakdowns.
A)True
B)False
Q4) Product reliability involves both short-term and long-term perspectives.
A)True
B)False
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Chapter 5: Strategic Capacity Planning for Products and Services
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Sample Questions
Q1) A Virginia county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Washington,
A) $0
B) $75,000
C) $50,000
D) $100,000
E) $300,000
Q2) Improving cash flow would be a reasonable thing to focus on when trying to overcome a _________ constraint.
A) financial
B) market
C) demand
D) supplier
E) material
Q3) The current trend toward global operations has made capacity decisions much easier since we have the whole world in which to consider operations.
A)True
B)False
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Chapter 5: Extension: Decision Theory
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Sample Questions
Q1) Among decision environments, uncertainty implies that states of nature have wide-ranging probabilities associated with them.
A)True
B)False
Q2) Among decision environments, risk implies that certain parameters have probabilistic outcomes.
A)True
B)False
Q3) Consider the following decision scenario: \[\begin{array} { | l | l | l | l | l | }
\hline { \text { Alternative } } & { \text { State of Nature } } & & \\
\hline & \# 1 & \# 2 & \# 3 & \# 4 \\
\hline \text { A } & 1 & 0 & 1 & 6 \\
\hline \text { B } & 1 & 5 & 4 & 2 \\
\hline \text { C } & 3 & 2 & 2 & 3 \\
\hline
\end{array}\] If you feel that P(#1) = .4, P(#2) = .3, P(#3) = .2, and P(#4) = .1, which alternative will you select?
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Page 9
Chapter 6: Process Selection and Facility Layout
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Sample Questions
Q1) Continuous production has been a significant factor underpinning the U.S. standard of living over the last century.
A)True
B)False
Q2) Accounting, purchasing, and inventory control are fairly routine with process layouts.
A)True
B)False
Q3) What is it about job shops that make them appropriate for products in the introductory phase of their life cycle?
A) efficiency
B) technology
C) flexibility
D) high volume capacity
E) rigidity
Q4) Process layouts feature departments or other functional groupings of personnel or equipment.
A)True
B)False
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Page 10
Chapter 7: Work Design and Measurement
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Sample Questions
Q1) An analyst has observed 28 work cycles, for which the average cycle time was five minutes and the performance rating was 1.05. Allowances for the department are 25 percent of job time. What standard time is appropriate for this job?
Q2) The methods analysis chart which describes the portions of a work cycle during which an operator and equipment are busy or idle is a:
A) flow process chart.
B) worker-machine chart.
C) gang process chart.
D) simultaneous-motion chart.
E) time/efficiency chart.
Q3) A technique for estimating the proportion of time a worker spends on various activities is:
A) stopwatch time study.
B) standard elemental (historical) times.
C) simultaneous motion study.
D) predetermined (published) time standards.
E) work sampling.
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11
Chapter 7: Extension: Learning Curves
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Sample Questions
Q1) When are learning curves most relevant to managerial decision making in mass production settings?
A) late in product life cycles
B) in the maturity phase
C) in the decline phase
D) before processes are stabilized
E) never
Q2) A job has an 80 percent learning curve. If the first unit took 50 hours to complete, the third unit should take roughly how many hours?
A) 40
B) 36
C) 35
D) 32
E) 10
Q3) Developing work assignments in a job shop in a certain firm has a learning curve of 80 percent. If the second set of assignments takes 12 minutes, determine the length of time required for the following:
(A) the fifth set.
(B) sets 3, 4, and 5 together.
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Page 12
Chapter 8: Location Planning and Analysis
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Sample Questions
Q1) A location analysis has been narrowed down to three locations. The critical factors, their weights, and the ratings for each location are shown below: \[\begin{array} {c}
\quad\quad\quad\quad\quad\quad\quad\quad{ \text { Location } } \\
\begin{array} { l c c c c }
\text { Factor } &\text { Wt. } & \text { A } & \text { B } & \text { C } \\
\hline \text { Labor Cost } & .4 & 70 & 80 & 90 \\
\text { Transportation Cost } & .2 & 80 & 80 & 60 \\
\text { Market Access } & .2 & 90 & 70 & 60 \\
\text { Raw Materials Cost } & .1 & 50 & 70 & 90 \\
\text { Utility Cost } & .1 & 80 & 90 & 70
\end{array}\end{array}\] What is the composite score for location A?
A) 76
B) 75
C) 78
D) 74
E) 76.33
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Page 13
Chapter 8: Extension: The Transportation Model
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Sample Questions
Q1) Which of the following are assumptions or requirements of the transportation method?
(I) Goods are the same, regardless of source.
(II) There must be multiple sources.
(III) Minimum quantities must be shipped from each source.
(IV) Shipping costs per unit do not vary with the quantity shipped.
A) I and IV
B) II and III
C) I, II, and IV
D) I and III
E) I, II, III, and IV
Q2) The transportation model method for evaluating location alternatives minimizes total:
A) sources.
B) destinations.
C) capacity.
D) demand.
E) shipping cost.
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Page 14
Chapter 9: Management of Quality
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Sample Questions
Q1) The process of identifying other organizations that are best at some facet of your operations, and then modeling your organization after them is known as:
A) continuous improvement.
B) employee empowerment.
C) benchmarking.
D) copycatting.
E) industrial espionage.
Q2) Juran describes quality management as a trilogy that consists of quality planning, control of quality costs, and quality improvement.
A)True
B)False
Q3) Which is not a cost of quality?
A) prevention cost
B) external failure
C) extended service contracts
D) internal failure
E) appraisal costs
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Chapter 10: Quality Control
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Sample Questions
Q1) An R value of zero (on a range chart) means that the process must be in control since all sample values are equal.
A)True
B)False
Q2) A p-chart is used to monitor the fraction of defectives in the output of a process.
A)True
B)False
Q3) A c-chart is used to monitor the number of defects per unit for process output.
A)True
B)False
Q4) Run tests give managers an alternative to control charts; they are quicker and cost less.
A)True
B)False
Q5) C<sub>pk</sub> is useful even when the process is not centered. A)True
B)False
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Page 16
Chapter 10: Extension: Acceptance Sampling
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Sample Questions
Q1) The quality manager for Microelectronics, Inc., is concerned about the quality of the batch of several thousand Z-box games which his company is about to ship. If he uses an acceptance sampling plan of n = 20 and c = 1, what will be the average outgoing quality for batches with 15 percent defectives?
A) .0263
B) .1237
C) .1756
D) .8244
E) .9737
Q2) Flexible acceptance sampling revises the sampling plan in response to actual results.
A)True
B)False
Q3) A firm uses acceptance sampling to evaluate batches of inputs. Ideally, the defect rate would be no more than 3.5 percent. The firm knows that on occasion, batches with higher defect rates will be accepted. However, if the defect rate reaches 7 percent, the firm would like there to be very little chance of that batch being accepted. This value, 7 percent, is the firm's:
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Chapter 11: Aggregate Planning and Master Scheduling
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Sample Questions
Q1) When the opportunity cost of lost revenue is relatively high, _________ become(s) relatively more attractive.
A) layoffs
B) back orders
C) excess capacity
D) disaggregation
E) minimal inventory
Q2) The more __________ demand is, the more the aggregate plan will tend to reflect the ____________ strategy.
A) stable; level
B) aggregated; outsourcing
C) variable; level
D) complex; uncommitted
E) stable; chase
Q3) After the first period of the planning horizon, available-to-promise is computed only for those periods in which there is an MPS quantity.
A)True
B)False
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18
Chapter 12: MRP and ERP
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Sample Questions
Q1) The identification of parent items is called:
A) paternity.
B) pegging.
C) requirement I.D.
D) relationship tracking.
E) master scheduling.
Q2) A net-change MRP system is one that is updated periodically but not less frequently than once a week.
A)True
B)False
Q3) Which of the following is a direct input into capacity requirements planning?
(I) the master production schedule
(II) routing information
(III) current shop loads
(IV) planned-order releases
A) II, III, and IV only
B) I, II, and IV only
C) I, III, and IV only
D) I and II only
E) I, II, III, and IV
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Chapter 13: Inventory Management
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Sample Questions
Q1) The Operations Manager for Shadyside Savings & Loan orders cash from her home office for her very popular "BIG BUCKS" automated teller machine, which only dispenses $100 bills. She estimates that this machine dispenses an average of 12,500 bills per month, and that carrying a bill in inventory costs 10 percent of its value annually. She knows that each order for these bills costs $300 for clerical and armored car delivery costs, and that order lead time is six days. If she were to order 6,000 bills at a time, what would be the dollar value of the average inventory level?
A) $3,000
B) $6,000
C) $12,500
D) $300,000
E) $600,000
Q2) The EOQ should be regarded as an approximate quantity rather than an exact quantity. Thus, rounding the calculated value is acceptable.
A)True
B)False
Q3) The average inventory level is inversely related to order size.
A)True
B)False
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Page 20
Chapter 14: Jit and Lean Operations
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Sample Questions
Q1) Setup time and its associated cost can often be reduced by the use of group technology.
A)True
B)False
Q2) A functioning MRP system is required prior to adopting lean planning and control systems.
A)True
B)False
Q3) Value stream mapping is a technique focused on finding new ways of adding value for critical stakeholders such as customers.
A)True
B)False
Q4) Preventive maintenance will eliminate the need to carry supplies of spare parts.
A)True
B)False
Q5) One way of reducing the number of suppliers to the organization is to limit contacts to two tiers of suppliers.
A)True
B)False
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Chapter 14: Extension: Maintenance
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Sample Questions
Q1) Factors affecting the decision of how much preventive maintenance is desirable typically include all of the following except:
A) age of equipment.
B) type of product.
C) degree of technology.
D) type of production process.
E) how critical to the production process.
Q2) Breakdown maintenance is _____________; preventive maintenance is
A) reactive; proactive
B) proactive; reactive
C) expensive; inexpensive
D) inexpensive; expensive
E) easy; hard
Q3) In the broadest sense, preventive maintenance extends back to the installation stage of equipment and facilities.
A)True
B)False
Q4) Breakdown maintenance is best performed on a regularly scheduled basis. A)True
B)False
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Chapter 15: Supply Chain Management
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Sample Questions
Q1) A factor that makes it desirable for business organizations to actively manage their supply chains is:
A) more potential vendors.
B) increasing globalization.
C) downsizing.
D) the Internet.
E) RFIDs.
Q2) Disintermediation refers to the phenomenon that the traditional retailer or service provider is reduced or eliminated in a supply chain.
A)True
B)False
Q3) In e-commerce, the front-end design is significantly more important than the back-end design.
A)True
B)False
Q4) E-commerce involves business-to-business (B2B) interaction only.
A)True
B)False
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Page 23
Chapter 16: Scheduling
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Sample Questions
Q1) Scheduling pertains to:
A) hiring workers.
B) process selection.
C) buying machinery.
D) timing the use of specific resources.
E) determining the lowest cost.
Q2) Job X, which has a duration of four days, is due by the close of business on Friday, December 23. Without looking at the work already at X's required resource, the scheduler schedules X to be begun immediately and assumes that X will be done four days from now. This is an example of:
A) infinite scheduling.
B) finite scheduling.
C) forward scheduling.
D) backward scheduling.
E) prioritization.
Q3) When operations are often bottlenecked, additional planned idle time will improve the throughput in those areas.
A)True
B)False
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Page 24
Chapter 17: Project Management
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Sample Questions
Q1) Although PERT and CPM were originally developed for somewhat different types of projects, they are now nearly identical in terms of analysis and procedures.
A)True
B)False
Q2) Path probabilities are calculated by dividing path mean by path standard deviations.
A)True
B)False
Q3) Which of the following would probably not involve the use of PERT?
A) planning and constructing a new city hall
B) developing an advertising campaign for a new product
C) designing and constructing a subway system
D) writing a poem
E) preparing for the visit of a foreign dignitary
Q4) The sum of times of the longest path in a network indicates expected project completion time, and the activities represent the critical activities.
A)True
B)False
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Chapter 18: Management of Waiting Lines
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Sample Questions
Q1) The most commonly used queuing models assume that the arrival rate can be described by a Poisson distribution.
A)True
B)False
Q2) A basic difference between infinite-source and finite-source queuing models is the:
A) number of servers.
B) average waiting time.
C) arrival distribution.
D) size of potential calling population.
E) processing rate.
Q3) The goal of waiting-line management is to eliminate customer waiting lines.
A)True
B)False
Q4) An alternative strategy to increase the capacity of a service system is:
A) reducing the number of arrivals.
B) increasing variability.
C) increasing the processing rate.
D) reducing the number of servers.
E) reducing the processing rate.
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Chapter 19: Linear Programming
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Sample Questions
Q1) Wood Specialties Company produces wall shelves, bookends, and shadow boxes. It is necessary to plan the production schedule for next week. The wall shelves, bookends, and shadow boxes are made of oak, of which the company has 600 board feet. A wall shelf requires 4 board feet, bookends require 2 board feet, and a shadow box requires 3 board feet. The company has a power saw for cutting the oak boards into the appropriate pieces; a wall shelf requires 30 minutes, bookends require 15 minutes, and a shadow box requires 15 minutes. The power saw is expected to be available for 36 hours next week. After cutting, the pieces of work in process are hand finished in the finishing department, which consists of 4 skilled and experienced craftsmen, each of whom can complete any of the products. A wall shelf requires 60 minutes of finishing, bookends require 30 minutes, and a shadow box requires 90 minutes. The finishing department is expected to operate for 40 hours next week. Wall shelves sell for $29.95 and have a unit variable cost of $17.95; bookends sell for $11.95 and have a unit variable cost of $4.95; a shadow box sells for $16.95 and has a unit variable cost of $8.95.
(A) Is this a problem in maximization or minimization?
(B) What are the decision variables? Suggest symbols for them.
(C) What is the objective function?
(D) What are the constraints?
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