Operations Strategy
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Course Introduction
Operations Strategy explores the frameworks and tools organizations use to align their operational capabilities with overall business objectives. The course examines how firms develop long-term plans for designing, managing, and improving processes, products, and supply chains to gain competitive advantage. Students will analyze case studies and real-world scenarios to understand topics such as capacity planning, technology adoption, globalization, sustainability, and innovation. By the end of the course, students will be able to formulate coherent operations strategies that support organizational goals while responding to market dynamics and operational constraints.
Recommended Textbook
Managing Operations Across the Supply Chain 3rd Edition by Morgan Swink
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Page 2
Chapter 1: Introduction to Managing Operations Across the Supply Chain
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Sample Questions
Q1) Which of the following statements best describes "process thinking"?
A)It is a way to manage thought processes to make better decisions.
B)It is a way to view business as a system of inter-related activities
C)It is a way to approach work systematically
D)It is a way to categorize elements of work activities
Answer: B
Q2) How is "supply chain management" different than "operations management?"
A)They are exactly the same thing
B)Supply chain management focuses mainly on supplier relationships, while operations management focuses mainly on production
C)Supply chain management is about relationships and flows, while operations management is about processes
D)Supply chain management is external, while operations management is internal
Answer: C
Q3) Operations management is important because:
A)It affects the quality of life of workers and consumers
B)It is a major cost for firms that needs to be minimized
C)Managers need to continually find ways to automate processes
D)It is more important than finance or marketing
Answer: A
Page 3
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Chapter 2: Operations and Supply Chain Strategy
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Q1) Currently, our system is characterized by a lack of fit between what the customer wants and what the SCM system is best able to provide.As a result, which of the following would apply? I.The only way to restore fit is for the firm to change the market segment it is going after.
II)Unless something is done, our firm will not be the most effective and efficient long-term supplier.
III)Any firm can successfully counter such inconsistencies through the use of patents and aggressive advertising.
A)I only.
B)II only.
C)III only.
D)I and II only.
E)I, II, and III.
Answer: B
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Chapter 3: Managing Processes and Capacity
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Sample Questions
Q1) Which of the following two effects is directly a result of bottlenecks?
A)Increase in costs and increase in defects.
B)Increase in output and increase in lead-times.
C)Decrease in inspections and increase in costs.
D)Decrease in output and increase in lead-times.
Answer: D
Q2) If a company can eliminate all sources of variance in a process:
A)It will be able to operate at maximum capacity at all times.
B)There will be no constraints in the process.
C)Continuous improvement will not be necessary.
D)None of these are true.
Answer: D
Q3) An example of a short-term capacity decision is:
A)Adding specialized labor.
B)Installing new equipment.
C)Adding new facilities.
D)Adding low-skilled labor.
Answer: D
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5
Chapter 4: Product Process Innovation
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Sample Questions
Q1) Systems that combine automated machines, robots, and material handling systems and are controlled by a single computer are:
A)Transportation management systems (TMS).
B)Flexible manufacturing systems (FMS).
C)Manufacturing executive systems (EMS).
D)Warehouse management systems (WMS).
Q2) John Jones, CEO of Joes Corp., is unhappy because each product his company makes takes a unique route through the facility, so processing times tend to be high.His company most likely has a:
A)Fixed-position layout.
B)Sequential action layout.
C)Functional layout.
D)Product layout.
Q3) Compared to a functional layout, cellular layouts have:
A)Less work-in-process inventory.
B)More complexity in scheduling.
C)More frequent setups.
D)Lower efficiency.
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6
Chapter 5: Manufacturing and Service Process Structures
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Sample Questions
Q1) An application of the DMAIC process to product design is known as:
A)Design for Six Sigma.
B)Design for Quality.
C)Quality Function Deployment.
D)None of these answers are correct.
Q2) All of the following represent external failure cost EXCEPT the cost of:
A)Scrapping defective raw material.
B)Repairing items covered by warranty.
C)Replacing defective items found by customers.
D)Loss of goodwill and reputation.
Q3) The objective of the "control" step in the DMAIC process is:
A)To consider differing opinions regarding the root causes of problems
B)To create controlled experiments to analyze sources of variation
C)To be rigourous in following the DMAIC steps
D)To prevent an improved process from becoming highly variable again.
Q4) The types of costs included in a cost of quality analysis include:
A)Production, delivery, and marketing.
B)Internal and external.
C)Direct and indirect.
D)Prevention, appraisal, and failure.
Page 7
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Chapter 6: Managing Quality
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Sample Questions
Q1) The two types of data involved in quality control are:
A)Assignable factors and random factors.
B)Variables and attributes.
C)Random measurements and 100 percent measurements.
D)Accuracy and precision.
Q2) Which of the following quality improvement tools is most appropriate for identifying patterns in the data?
A)Cause and effect diagrams.
B)Process flow analysis.
C)Check sheets.
D)Process capability analysis.
Q3) A process can be said to be capable when:
A)The C<sub>p</sub> is greater than 1.5.
B)The C<sub>pk</sub> is less than 1.0.
C)The process is perfectly centered within the specification.
D)The C<sub>pk</sub> is greater than 1.5.
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Chapter 7: Managing Inventories
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Q1) Unnecessary automation is an example of which of the following forms of waste?
A)Overproduction
B)Process
C)Motion
D)Rework
Q2) Which of the following is NOT one of the product/process design principles associated with lean/just-in-time production?
A)Encourage use of unique components.
B)Design products with as few parts as possible.
C)Design products that are easy to assemble.
D)Use flexible processes and cross-trained workers as much as possible.
Q3) Tools at the point of use is an example of which of the following elements of the 5-S program?
A)Seiri/Sort/Clear out
B)Seiton/Straighten/Configure
C)Seiso/Scrub/Clean and check
D)Seiketsu/Systematize/Confirm
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9
Chapter 8: Lean Systems
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Q1) Alpha Company has a performance standard of 97 percent fill rate.Last month it achieved a 94 percent fill rate.This is an example of:
A)A knowledge gap.
B)A standards gap.
C)A performance gap.
D)A perception gap.
Q2) Lead time performance is an element of:
A)Minimal importance to most industrial customers.
B)Basic service.
C)Customer satisfaction.
D)Customer success.
Q3) If a company has some customers who express that they are satisfied with the company's performance, the company can count on the fact that:
A)Those customers are happy.
B)Those customers will continue to buy and be loyal.
C)The company meets requirements of those customers.
D)None of these selections.
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Chapter 9: Customer Service Management
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Sample Questions
Q1) Which of the following is NOT a benefit of outsourcing?
A)Greater flexibility to change product specifications
B)Better access to market information
C)Lower supply management costs
D)Less capital needed for investment
Q2) All of the following are true about supplier scorecards EXCEPT:
A)They reduce the need for incoming quality inspection.
B)They are used to provide performance feedback to suppliers.
C)They are often used to categorize suppliers based on an overall score.
D)They are used to measure supplier performance based on key performance indicators.
Q3) Competitive bidding should be used when:
A)There is only one qualified supplier.
B)Product innovation is more important than price.
C)The spend is small.
D)Product specifications are known and clear.
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Chapter 10: Sourcing and Supply Management
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Sample Questions
Q1) Computer controlled systems that use robots for materials handling activities are:
A)Is an example of the use of RFID.
B)Increases material handling costs.
C)Is an example of unitization.
D)Increases the complexity of materials handling.
Q2) Zanda Corp.can make three individual deliveries to three different customers at a cost of $500 each or can consolidate them into one shipment with a cost of $1,300 and a stop-off charge of $100 per stop.Should Zanda do this?
A)Yes, it will save $100.
B)Yes, it is simpler to do.
C)No, it will increase cost by $100.
D)It doesn't matter based on cost.
Q3) The sum of all product and logistics related cost is:
A)Total landed costs.
B)Total cost of ownership.
C)Cost-to-cost tradeoffs.
D)Cost-to-service trade-offs.
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Chapter 11: Logistics Management
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Sample Questions
Q1) Over a six-month period, the demand for a product has been: June = 200, July = 210, August = 240, September = 240, October = 260, and November = 280.The three-month moving average forecast for December is A)240.
B)260. C)280. D)300.
Q2) Assume that the forecast for the last period is FIT<sub>t</sub> = 200 units, and recent experience suggests a likely sales increase of 10 units each period.Actual sales for the last period reached 230 units.Assuming a smoothing coefficient of = 0.20 and a trend smoothing coefficient of = 0.10, what is the BASE forecast for the next period?
A)210
B)206 C)236
D)226
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Chapter 12: Demand Planning: Forecasting and Demand Management
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Q1) John Jones, senior VP for Zanda Corp., is looking at three alternative aggregate production plans for the next six-month period.At his company, demand varies by month with substantial month-to-month differences.The three alternatives are a "pure level plan," which keeps an absolutely constant workforce, a "pure chase plan" relying on hiring and layoffs, and a hybrid plan.He is most likely to find that the pure level plan:
A)Has lower inventory carrying cost than the hybrid plan.
B)Has higher hiring/layoff cost than the chase plan.
C)Has higher hiring/layoff cost than the hybrid plan.
D)Has higher inventory carrying cost than the chase plan.
Q2) If a company strongly prefers that its aggregate output plan be closer to a level plan than a chase plan, this implies that it is concerned about minimizing:
A)Inventory carrying costs.
B)Hiring and layoff costs.
C)Cost of subcontracting.
D)Overtime cost
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Page 14
Chapter 13: Sales and Operations Planning
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Q1) Advanced planning and scheduling systems:
A)Use a simpler logic than the logic used in MRP.
B)Consolidate all business planning systems and data throughout an organization.
C)Integrate materials and capacity planning into one system.
D)All of these.
Q2) The longest lead time path in the BOM is the:
A)Time bucket.
B)Planning horizon.
C)Time window.
D)Cumulative lead time.
Q3) A bill-of-materials file contains:
A)Invoices for materials that must be paid in this period.
B)Lists of materials required to produce end item products.
C)Accounts payable for materials.
D)None of these.
Q4) Which of the following is NOT an input into the MRP?
A)Bill of materials
B)Inventory records file
C)Master production schedule
D)Planned order release
15
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Chapter 14: Materials and Resource Requirements Planning
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Q1) Which of the following statements about projects and project management is NOT true?
A)A project is typically a one-time event.
B)Completing a project within budget is the most critical criterion for project success.
C)Projects are typically staffed with people from several different functional areas who may have more loyalty to their function than to the project.
D)None of the statements is true.
Q2) Joe Jones is a project manager on a major installation.He has been asked to provide weekly status reports on the project schedule.Joe should consider using which of the following:
A)Gantt chart
B)Crashing reports
C)WBS report
D)Network diagram
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Chapter 15: Project Management
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Q1) Task X has a most likely duration of 10 days, a best case duration of 8 days, and a worst case duration of 15 days.What is the probability that it will be completed in 12 days or less?
A)0 percent
B)95.7 percent
C)90.1 percent
D)75.3 percent
Q2) Task X has a 82% probability of completion in 20 days or less.The standard deviation of its duration is 5 days.What is its expected duration?
A)15.4 days
B)15.9 days
C)19.1 days
D)12.3 days
Q3) Which of the following statements best describes "crash cost"?
A)Estimated cost to reduce a project task duration by one time unit.
B)Estimated cost to reduce a project duration by one time unit.
C)Estimated cost to reduce the project schedule by one time unit.
D)Actual cost to reduce a project duration by one time unit.
E)Actual cost to change a project schedule.
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Page 17
Chapter 16: Sustainable Operations Management
preparing for the Future
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Sample Questions
Q1) Which of the following mapping techniques identifies and integrates functional responsibilities into the process mapping process?
A)Process flow diagram
B)Value stream mapping
C)Service blueprinting
D)Swim lanes
Q2) You observe three different people doing the same task using three different approaches (with differing levels of quality, output, and lead time).Which of the following disposition options is most appropriate for this situation?
A)Keep
B)Rethink
C)Combine
D)Eliminate
Q3) Which of the following traits is not one associated with a critical process?
A)It is a bottleneck operation
B)It has been identified by management as critical.
C)It is visible to the customer
D)It is associated with a core competency.
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Chapter 17: Process Mapping and Analysis
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Q1) _______________ transform product specifications and new process technology into a new or revised production system.
A)New process design and development projects
B)New product design and development projects
C)Concurrent engineering projects
D)Operations management projects
Q2) The stage of the product life cycle in which process innovation becomes an important way to increase efficiencies is:
A)Launch
B)Growth
C)Maturity
D)Decline
Q3) Companies usually first build working product prototypes in which stage of product/process innovation?
A)Concept development
B)Detailed design and development
C)Market testing
D)Commercialization
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Chapter 18: Quality Improvement Tools
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Q1) Next year a tire company wants to have an inventory turnover rate of 22 times per year.To achieve this turnover rate, what should be the average number of days of supply?
A)16.6 days
B)36 days
C)0.6 days
D)22 days
Q2) Which of the following might a company try to do to reduce the total amount of safety stock it holds?
A)Implement and use ABC analysis of inventory items.
B)Attempt to reduce variation in supplier lead times.
C)Implement demand management approaches.
D)All of these selections.
Q3) Jones Company has calculated that the EOQ for a particular item is 1,000 units.However, Jones does not have enough capital to order that many units each time, so it only orders 250 units at a time.This will result in:
A)Higher annual inventory carrying cost than ordering the EOQ quantity.
B)Lower annual inventory carrying cost than ordering the EOQ quantity.
C)Lower annual ordering cost than ordering the EOQ quantity.
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Page 20
Chapter 19: Advanced Methods for Project Scheduling
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Q1) Which of the following sustainability issues has a significant impact on supply chain relationships?
A)Culture
B)Common usage of lean systems
C)Location
D)Governmental regulations and tariffs
Q2) Walmart has announced that suppliers must attempt to improve their efforts in environmental management.In this announcement, Walmart could have included a requirement that suppliers meet the standards of:
A)ISO 9000.
B)ISO 2011.
C)ISO 9002.
D)ISO 14000.
Q3) Which of the following terms best describes the impact of sustainability initiatives on the business model?
A)Sustainability affects primarily the capabilities offered by the supply chain.
B)Sustainability helps the firm to change its value proposition.
C)Sustainability impacts primarily the customers that we serve.
D)Sustainability affects the entire business model.
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