Operations Strategy
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Course Introduction
Operations Strategy is a course that explores the strategic role of operations within an organization and its connection to overall business competitiveness. Students learn how to design and implement operations systems that align with long-term corporate goals, manage resources efficiently, and respond to dynamic market demands. Topics include capacity planning, process innovation, supply chain management, quality systems, and the integration of technology into operations. Through case studies and analytical tools, the course examines how operational decisions impact cost, quality, flexibility, and delivery helping students develop strategies that create sustainable value and competitive advantage.
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Sanjeev Bordoloi
Chapter 1: The Service Economy
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Q1) Retail and wholesale trade had the greatest percentage of U.S. employment by industry in 2014.
A)True
B)False
Answer: True
Q2) Division of labor is the central concept of ________.
A) industrial societies
B) preindustrial societies
C) agrarian societies
D) postindustrial societies
Answer: A
Q3) ________ is a foundation premise of Service-Dominant Logic
A) The customer is always right
B) Only post-industrial economies are service economies
C) Goods are distribution mechanisms for service provision
D) Money is the fundamental basis of exchange
Answer: C
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Chapter 2: Service Strategy
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Q1) Using the dimensions of strategic focus and competitive use of information can identify four strategic roles of information. Which of the following is not a strategic role of information?
A) Create barriers to entry.
B) Generate revenue.
C) Create a data base asset.
D) Provide global communications.
Answer: D
Q2) The Internet of Things (IoT) trajectory begins with ________.
A) surveillance
B) RFID tags
C) monitoring
D) location
Answer: B
Q3) Which one of the following is not a dimension of scalability?
A) Information vs. goods content.
B) Degree of self-service.
C) Cost of after-sales service.
D) Shipping and handling costs.
Answer: B
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Chapter 3: New Service Development
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Q1) In the new service development process cycle, development follows design.
A)True
B)False
Answer: False
Q2) Which one of the following is not an example of a high customer contact service?
A) Dry cleaning.
B) Banking.
C) School.
D) Hotel.
Answer: A
Q3) The most interactive element in the service blueprint of a fitness facility is the ________.
A) choice of music played
B) amount and type of exercise equipment
C) attention given to prospective members on their initial visit
D) cleanliness of the locker rooms
Answer: C
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Chapter 4: The Service Encounter
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Q1) A customer who does not clear his or her table at a fast-food restaurant has violated his or her script.
A)True
B)False
Q2) When the customer's role is built into the service delivery system, he or she is said to be a coproducer.
A)True
B)False
Q3) In the context of the service encounter triad, the trade-off between the service organization and the contact personnel is one of ________.
A) efficiency versus satisfaction
B) efficiency versus autonomy
C) perceived control
D) autonomy versus satisfaction
Q4) Delegation is acting on another's behalf.
A)True
B)False
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Chapter 5: Supporting Facility and Process Flows
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Q1) The procedure to improve flow distance in a process layout by arranging the relative location of departments is known as operations sequence analysis.
A)True
B)False
Q2) In a product layout, the bottleneck operation defines the capacity of the service.
A)True
B)False
Q3) Mid-Columbia Medical Center has a special employee-only entrance to enhance security.
A)True
B)False
Q4) Facility layout is discussed with attention to traffic flow, space planning, and which one of the following?
A) Need to avoid unnecessary travel.
B) Eliminating bottlenecks.
C) Aesthetic factors.
D) Cost of providing service.
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Chapter 6: Service Quality
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Q1) A process is said to be in control when all the variation that is noticed can be assigned to specific causes.
A)True
B)False
Q2) A gap in service quality is not the difference between ________.
A) customer expectations and management's perceptions of customer expectations
B) the service delivery and the results that are communicated externally to the customer C) customer expectations and management's perception of the delivered service
D) the perceptions of the delivered service that are translated into service quality specifications and the actual service delivery
Q3) A customer's failure to remember the process steps is an error that falls in the preparation category.
A)True
B)False
Q4) According to the SERVQUAL quality assessment instrument, responsiveness is the most important dimension of service quality.
A)True
B)False
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Chapter 7: Process Improvement
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Q1) Which of the following statements is not part of Deming's 14-point philosophy?
A) Create constancy of purpose for improvements of product and service.
B) Promote numerical goals for the workforce.
C) Constantly and forever improve the system of production and service.
D) Cease dependence on mass inspection.
Q2) The objective of Six Sigma is to eliminate variation in process performance.
A)True
B)False
Q3) Which of the following is not an element of a Quality Improvement Program?
A) Emphasizing subjective data over difficult-to-analyze objective data.
B) Maintaining SOPs for routine and crisis situations.
C) Assuming employees are self-motivated and innovative.
D) Focusing on customer satisfaction.
Q4) Lean service is based upon the Toyota Production System.
A)True
B)False
Q5) The fishbone chart offers a structured approach for a team to identify, explore, and display graphically all of the possible causes of a problem.
A)True
B)False
Page 9
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Chapter 8: Service Facility Location
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Q1) The disadvantage of saturation marketing lies in which of the following areas?
A) Increased advertising costs.
B) Cannibalization.
C) Increased requirement for supervision.
D) Reduction in customer awareness.
Q2) The advantage of substituting communication for travel becomes possible when face-to-face interaction between server and customer is not necessary.
A)True
B)False
Q3) The Huff model for retail outlet location postulates an inverse relationship between the attractiveness of a location and the travel time to that location for a particular customer.
A)True
B)False
Q4) The absence of quantifiable criteria considerably diminishes the importance of facility location methods in the public sector.
A)True
B)False
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Chapter 9: Service Supply Relationships
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Q1) Sources of value in service chain management include all but one of the following:
A) bidirectional optimization
B) management of productive capacity
C) management of mobile workers
D) management of perishability
Q2) All but one of the following is a caution when considering outsourcing services:
A) loss of direct control over quality
B) jeopardize employee loyalty because of job-loss fears
C) costs might increase
D) in-house capability to perform service will atrophy
Q3) The impact of the production element on physical goods supply chain management was ________ before and ________ after.
A) push; pull
B) inflexible; flexible
C) vertical; virtual
D) multinational; global
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Chapter 10: Globalization of Services
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Q1) When franchising which one of the following is not a benefit to the franchiser?
A) Proven business.
B) Rapid expansion.
C) Right to dictate conditions.
D) Fees from the franchisee.
Q2) American Express is an example of a firm that has a multisite, multiservice expansion strategy.
A)True
B)False
Q3) The start-up phase for a franchise business is shorter than that for an independent business, because of the existence of a well-known brand.
A)True
B)False
Q4) USAA, which provides financial services to military officers by mail, telephone, and Internet, is an example of a ________.
A) focused service
B) focused network
C) clustered service
D) diversified network
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Chapter 11: Managing Capacity and Demand
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Q1) ________ variability is not one of the five sources of customer-induced variability.
A) Arrival
B) Capability
C) Effort
D) Demand
Q2) When yield management is implemented, which one of the following does not result?
A) Consumer surplus increases.
B) Multiple prices are offered.
C) Capacity is more fully utilized.
D) Market for the service is segmented.
Q3) Which of the following is not a strategy for managing capacity?
A) Developing complementary services.
B) Using part-time employees.
C) Forecasting demand.
D) Scheduling shifts.
Q4) The critical fractile is a cumulative probability of demand.
A)True
B)False
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Chapter 12: Managing Waiting Lines
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Q1) The time a consumer will spend waiting is directly related to the amount of money he is paying for the service. The less the service costs him, the longer he is willing to wait.
A)True
B)False
Q2) For a single channel queuing system with finite queue, the value of may exceed because some potential customers are forced to balk.
A)True
B)False
Q3) Concealment of the waiting line or at least part of it is a very effective deterrent against reneging.
A)True
B)False
Q4) In analytical queuing models, the calling population mainly determines whether the queue will be finite or infinite.
A)True
B)False
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Chapter 13: Capacity Planning and Queuing Models
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Q1) In the equation Ls = Lq + , refers to ________.
A) number of servers
B) traffic density
C) mean number of customers being served
D) number of customer that have been served
Q2) In analytical terms, the modern self-serve supermarket would be approximated best by the M /M /c model, where c is the number of servers.
A)True
B)False
Q3) Simulation can be viewed as a laboratory for experimenting with service systems.
A)True
B)False
Q4) In the long run, if service capacity is inadequate for the arrival rate, which one of the following will likely occur?
A) Servers will slow down.
B) Customers will demand less.
C) Reneging will occur.
D) Prices will be increased.
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Chapter 14: Forecasting Demand for Services
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Q1) The Delphi method is best used when forecasting ________.
A) customer demand
B) technological change
C) correlations between events
D) future economic conditions
Q2) Characteristics of forecasting models include all of the following, except ________.
A) data required
B) economic conditions
C) relative cost
D) forecast horizon
Q3) Long-term forecasts do not deal with predictions for ________.
A) new services
B) changes in mix of services
C) overtime or temporary labor requirements
D) process technology
Q4) Fast-food restaurants use a causal model to forecast daily demand for menu items.
A)True
B)False
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Chapter 15: Managing Service Inventory
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Q1) A continuous review system is generally used for Class C items in the ABC system of classification.
A)True
B)False
Q2) One role of holding inventory is to hedge against anticipated increases in the cost of the inventoried items.
A)True
B)False
Q3) In the design of an inventory system all of the following is considered except ________.
A) type of customer demand
B) relevant inventory costs
C) constraints
D) safety stocks
Q4) Patients waiting for heart transplants are an example of an inventory model that has a backorder cost of zero.
A)True
B)False
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Chapter 16: Managing Service Projects
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Q1) A major assumption in project network analysis is that sufficient resources are available to perform many activities concurrently.
A)True
B)False
Q2) Gantt project charts are useful for all of the following reasons, except ________.
A) visual presentation is appealing
B) they show interdependence of activities
C) they are easy to understand
D) they assist in planning construction forces
Q3) For a project with uncertain activity times, the probability of project completion exceeding the expected time calculated for the critical path is ________.
A) 25 percent
B) 50 percent
C) 75 percent
D) None of these answers are correct.
Q4) The single important attribute of a project manager is leadership ability.
A)True
B)False
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