Operations Management Practice Exam
Course Introduction
Operations Management explores the fundamental concepts, strategies, and techniques used to efficiently design, operate, and improve business processes within both manufacturing and service organizations. The course examines topics such as process analysis, capacity planning, supply chain management, quality control, inventory systems, and project management. By integrating quantitative and qualitative approaches, students learn how effective operations management can drive competitive advantage through cost reduction, innovation, and customer satisfaction. Real-world case studies and practical applications help illustrate the challenges and best practices in optimizing resources and processes across diverse industries.
Recommended Textbook
Supply Management 8th Edition by David N. Burt
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Page 2
Chapter 1: The Progression to Professional Supply Management
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Sample Questions
Q1) Lean Thinking can help reduce total cost of ownership (TCO), this means the supply team in the entire chain must work to:
A)lower conversion cost
B)reduce cycle time cost
C)reduce risk cost
D)reduce non-value costs
E) reduce processing costs
Answer: D
Q2) Materials have always been vital in the history of industrial growth.
A)True
B)False
Answer: False
Q3) Which bullet is not true of the mechanical stage of SM?
A) Engage in eCommerce II
B) Transactional focus
C) React to requisitions
D) Not involved in key source selections
E) Emphasis: purchase price
Answer: A
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Chapter 2: Organizational Issues
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Sample Questions
Q1) Aside from the benefits of synergy,cross functional teams provides input from all affected functions.
A)True
B)False
Answer: True
Q2) One of the key skills for any leader is to be an effective listener.
A)True
B)False
Answer: True
Q3) Managing contract and blanket order releases are operational responsibilities.
A)True
B)False
Answer: True
Q4) One of the big challenges and problems with cross functional teams is the lack of time for the team member participation and role conflict.
A)True
B)False
Answer: True
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Page 4
Chapter 3: Supply Management: an Organization Spanning Activity
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Sample Questions
Q1) Virtually all of the problems present in manufacturing organizations are present in government procurement.
A)True
B)False
Answer: True
Q2) As a philosophy,SM is internally focused.
A)True
B)False Answer: False
Q3) Supply management professionals should be involved in new product development as the directors of the design process.
A)True
B)False
Answer: False
Q4) Efforts to improve do not cease at an organization's internal functions,but should span over the supply chain as well.
A)True
B)False
Answer: True
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Chapter 4: A Portfolio of Relationships
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Sample Questions
Q1) The Quaker Oats case history demonstrates that in addition to having the trust required to form an alliance:
A) Both parties must have mutual respect
B) Volume quantities must be fixed
C) There is still a need for a comprehensive contract, including such questions and answers as "what if"?
D) It is not necessary to have open book accounting
E) Legal provisions are still necessary
Q2) One of the advantages of collaborative relationships is that lower skill levels of procurement personnel are required.
A)True
B)False
Q3) Which of the following is not an action to develop and manage trust?
A) Hold back critical information from the alliance partner, just in case
B) Negotiation is used as a trust-building opportunity
C) Both firms work together on technology plans
D) Technical personnel from both firms visit the other
E) Contractual relations are designed to enhance trust
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Chapter 5: New Product Development
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Sample Questions
Q1) Early Supply Management involvement often requires policy development from upper management to ensure initial involvement.
A)True
B)False
Q2) Supply managers must add value to the design process in order to become a viable and lasting member of the design team.
A)True
B)False
Q3) Which of the following questions does not typically belong on a value-engineering checklist?
A) Can the weight be reduced?
B) Is there a similar item in inventory that could be substituted?
C) Can standard parts be replaced by complex parts?
D) Are closer tolerances specified than are necessary?
E) Is unnecessary machining performed on the item?
Q4) Early Supply Management Involvement requires policy development that only affects supply management.
A)True B)False
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Chapter 6: Purchasing Descriptions and Specifications
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Sample Questions
Q1) A simple specification for buying ketchup might be "12 ounce plastic bottle of Heinz tomato ketchup."
A)True
B)False
Q2) In the Unreasonable Tolerances Example, what was the source of the problem between the two managers?
Q3) Which of the following is not an organization that can assist as a source of standards?
A) International Organization for Standardization
B) National Bureau of Standards
C) American National Standards Institute
D) English Units Society
E) American Society for Testing and Materials
Q4) In the Unreasonable Tolerances Example, what are some of the ways the problem could have been prevented five years earlier?
Q5) What should a company do before implementing EST?
Q6) Simplification is the same thing as standardization.
A)True
B)False
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Chapter 7: Managing for Quality
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Sample Questions
Q1) Which of the following is not a principle of the Quality Management System (QMS)?
A) Customer focus
B) Leadership
C) Involvement of people
D) Drive for Perfection
E) Process approach
Q2) Which of the following is not true of Six Sigma?
A) The lofty goal of statistical six sigma is used as a driver of organizational change
B) Six Sigma starts with the customer
C) Six Sigma provides a consistent metric
D) Six Sigma links the effort to an ambitious goal
E) Six Sigma requires ISO 9000:2000 registration
Q3) All sampling plans continue sample taking until the lot is either: fully inspected,rejected,or accepted.
A)True
B)False
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Chapter 8: The Procurement of Equipment
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Sample Questions
Q1) When proposals for capital equipment are received,the sourcing team must tabulate and run comparisons for a total profitability analysis.The key input in this analysis is:
A) Delivery time
B) Maintenance
C) Labor
D) TCO
E) Pay off time
Q2) Prior to purchasing used equipment,a buyer should check the reputation of the supplier,inspect the equipment,conduct destructive testing and determine the age.
A)True
B)False
Q3) Which of the following is usually not included in a lease contract?
A) Responsibility of both parties
B) Acceptance testing and inspection
C) Guarantee conditions
D) Maintenance refund arrangements
E) Penalties
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Chapter 9: Purchasing Services
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Sample Questions
Q1) In writing an effective S.O.W.as given in the textbook,the S.O.W.should: limit abbreviations to those in common usage,include procedures and eliminate extraneous statements.
A)True
B)False
Q2) In writing an effective S.O.W.as given in the textbook,the S.O.W.should not include explanations of the interrelationship between tasks or constraints and limitations.
A)True
B)False
Q3) Which is usually not included in planning the statement of work?
A) Second and third tier supplier obligations
B) Description of the work
C) Schedule
D) Specifications and requirements
E) Quality requirements
Q4) The ideal services supplier focus on cost reduction ahead of customer satisfaction. A)True
B)False
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Chapter 10: Outsourcing
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Sample Questions
Q1) Which one of the following points is not a reason that the Make-or-Buy Decision is often a volatile decision?
A) Rigid formulas and rules of thumb are often used, which are often a poor choice to apply
B) The make-or-buy question is influenced by a multitude of diverse factors that are constantly changing
C) Companies do not support promotions based on cost savings
D) The relevant factors for the decision often vary immensely from one firm to another E) Companies often do not periodically evaluate the effectiveness of their past decisions to generate information helpful in guiding future decisions
Q2) From a strategic level,which of the following items is the most logical to outsource?
A) An item that can be bought and sold in a commodity exchange
B) An item that is critical to the success of the product
C) An item that requires specialized design, manufacturing skills or equipment
D) An item that fits well within the firm's core competencies
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Chapter 11: Sourcing
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Sample Questions
Q1) The strategic sourcing plan should be developed in an environment that does not include any functional area representatives.
A)True
B)False
Q2) In the discovery stage of the strategic sourcing plan given in the textbook,several analyses and approaches were presented to aid the decision.Which of the following was not one of those approaches?
A) Supplier Surveys
B) Facility Visits
C) Trial and Error
D) Third Party Evaluators
E) Evaluation Conference
Q3) Which of the following is not a typical reason for utilizing ESI?
A) To formalize the alliance arrangement
B) Get supplier inputs before the design is frozen
C) Capitalize on the latest technology
D) Save time since design cycles are getting shorter
E) Let the supplier know that it is part of the team
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Chapter 12: Global Supply Management
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Sample Questions
Q1) Which of the following steps is not given in the textbook as recommended to include in a technical and commercial analysis in preparation for direct relations?
A) Prepare and review specifications and drawings
B) Avoid including the requirements for special packaging
C) Pack samples or photos of required materials if helpful
D) Clearly prepare the quality requirements
E) Identify specific scheduling requirements
Q2) A pro forma invoice enables the firm to obtain an import or exchange permit.
A)True
B)False
Q3) Which of the following information points is not recommended in the textbook as a point that should be included in the initial meeting with a direct supplier?
A) Provide gifts to the supplier's critical personnel
B) Provide a briefing on your firm
C) Provide a tour of your facility if the meeting is at your facility
D) Meet with critical personnel
E) Describe how and when the supplier's firm would get paid
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14
Chapter 13: Total Cost of Ownership
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Sample Questions
Q1) An easy problem to resolve in TCO analysis of manufacturers is the accurate allocation of manufacturing overhead to products being purchased.
A)True
B)False
Q2) Activity-based costing (ABC)is a technique for accumulating cost for a given cost object that represents the total and true economic resources required or consumed by the object.
A)True
B)False
Q3) Which of the following is not an ownership cost?
A) Financing Costs
B) Downtime Costs
C) Risk Costs
D) Non-Value Added Costs
E) Supply Chain Costs
Q4) TCO is not applicable in one's private life to enable better decision-making.
A)True
B)False
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Page 15
Chapter 14: Price and Cost Analysis
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Sample Questions
Q1) Independent cost estimates should not be used if other methods are available.
A)True
B)False
Q2) Cost analysis provides little benefit in supply management activities such as negotiation,pricing,forecasting and alliance development.
A)True
B)False
Q3) A commonly used discount is 2 / 10,net 30,which means that a discount of 2 percent is given if the invoice is paid within 10 days.
A)True
B)False
Q4) A learning curve effect is a quantitative model of the commonsense observation that the unit cost of a new product decreases as more units of the product is made because of the learning process.
A)True
B)False
Q5) In the short run,a firm must recover all costs.
A)True
B)False
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Chapter 15: Methods of Compensation
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Sample Questions
Q1) Cost Plus Incentive Fee arrangements combine the incentive arrangement and the cost plus fixed fee arrangement.
A)True
B)False
Q2) Which of the following is not a cost type arrangement?
A) Cost reimbursement
B) Cost plus hidden charges
C) Cost plus fixed fee
D) Cost plus award fee
E) Cost without fee
Q3) Cost Plus Incentive Fee arrangements combine the incentive arrangement and the FFP arrangement.
A)True
B)False
Q4) FPEPA is not similar to an FFP contract.
A)True
B)False
Q5) The target profit is an amount considered fair and reasonable by both parties. A)True
B)False
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Chapter 16: Negotiation
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Sample Questions
Q1) "Narrowing the Differences" is a stage of face-to-face discussions.
A)True
B)False
Q2) A murder board is a powerful preparation activity for an upcoming negotiation.
A)True
B)False
Q3) In a negotiation,a minimum position is developed on the premise a large number of required seller actions will turn out unsatisfactorily and therefore force concessions on the part of the seller to reduce prices.
A)True
B)False
Q4) Which of the following is not a typical collaborative and alliance negotiating technique?
A) Use diversions
B) Separate the people (negotiators) from the problem (quality, price)
C) Focus on interests, not positions
D) Invent options for mutual gain
E) Insist on using objective criteria
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Page 18
Chapter 17: Contract Formation and Legal Issues
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Sample Questions
Q1) The most powerful tool a supply professional has to avoid legal problems is skill in selecting sound,reliable suppliers.
A)True
B)False
Q2) The best way to deal with legal disputes is to utilize litigation.
A)True
B)False
Q3) A buyer operates under two types of authority: true authority and inherent authority.
A)True
B)False
Q4) Supply managers need not possess and utilize knowledge of legal issues and considerations,but need to know where to find someone who has knowledge of legal issues and considerations.
A)True
B)False
Q5) The best way to deal with legal disputes is to avoid them in the first place!
A)True
B)False
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Chapter 18: Contact and Relationship Management
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Sample Questions
Q1) A typical cost ratio is calculated by dividing the total dollar purchase from that supplier by the sum of the cost and the total dollar purchase.
A)True
B)False
Q2) Several changes in business have increased the need for better contract management.Which of the following is not one of those changes?
A) Collaboration is continuing to become more important
B) Large inventories are available
C) Quality is expected
D) Deliveries are expected to be on time, not early or late
E) Schedules must be integrated and maintained
Q3) As a project manager,we need to know the critical path to identify the tasks we should focus our efforts on controlling.
A)True
B)False
Q4) The critical path is the longest path through the network.
A)True
B)False
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Chapter 19: Ethics and Social Responsibilities
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Sample Questions
Q1) The following list provides ethics guidelines for firms that are using competitive bidding.Which point does not belong in the list?
A) Share the lowest bid information to other suppliers to coerce them to change their bid
B) Treat all bidders alike
C) Do not accept bids after the announced bid closing date and time
D) Do not take advantage of apparent mistakes in the supplier's bid
E) Do not "shop" or conduct auctions for low prices
Q2) Supply Managers must understand the Clean Air Act.
A)True
B)False
Q3) Supply professionals should conduct international supply management in accordance with the laws,customs,and practices of foreign countries,consistent with your country's laws,and the employing organization's policies.
A)True
B)False
Q4) According to the textbook,"There's No Such Thing as a Free Lunch."
A)True
B)False
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21
Chapter 20: Production and Inventory Control
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Sample Questions
Q1) The MRP inventory/open order netting function is used to develop "planned order releases".
A)True
B)False
Q2) The relationship between the aggregate plan and Master Production Schedule (MPS)is:
A) The aggregate plan balances the plant's capacity with demand and the MPS translates this plan into numbers of specific products in time frames
B) The aggregate plan is for 6 months and the MPS is for 3 months
C) The aggregate plan uses simulation and the MPS uses regression analysis
D) The MPS calculates labor time and the aggregate calculates labor and material
E) MPS starts with macro units and the aggregate plan starts with micro units
Q3) EOQ analysis seeks to reveal:
A) The lowest acquisition costs
B) The lowest carrying costs
C) The low point on the TC curve
D) The safety or buffer stock number
E) The lowest purchase price
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Chapter 21: Demand Management and Logistics
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Sample Questions
Q1) Supply management provides the critical skills required to manage the interrelationships on which successful supply chains are built.
A)True
B)False
Q2) Demand management seeks to estimate,control,smooth,coordinate,balance and influence the demand and supply for a firm's products and services in an effort to reduce total costs for the firm and its supply chain.
A)True
B)False
Q3) Unfortunately,many companies define logistics as synonymous with the term SCM,thus ignoring the contributions and roles of supply management and demand management.
A)True
B)False
Q4) Competition in the supply chain is not just firm versus firm,but chain versus chain (or network versus network.)
A)True
B)False
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Chapter 22: Implementing Value Network Management
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Sample Questions
Q1) Value Network Management calls for creating a new vision where leadership capabilities and capacities are enabled and unleashed.
A)True
B)False
Q2) Megatronic's Vision Statement given in Chapter 22 is "Supply management at Megatronics will perfect its worldwide process resulting in totally delighted customers and shareholders."
A)True
B)False
Q3) The Progression to VNM should include all of the following activities and approaches except one.Which one should not be included?
A) Vertically integrate by buying suppliers
B) Reporting: member, executive group
C) Data: facilitates strategic planning
D) Understand key supply industries
E) E-Commerce II
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Page 24