Service Operations Management
Midterm Exam
Course Introduction
Service Operations Management focuses on the design, analysis, and improvement of processes that deliver services to customers across various industries. This course explores key concepts such as service strategy, capacity planning, service quality management, demand forecasting, and inventory control in service settings. Students learn to use operations management tools and techniques to enhance service efficiency, customer satisfaction, and competitiveness. Through case studies and real-world examples, the course also addresses challenges unique to services, including managing variability, customer involvement, and integrating technology into service delivery.
Recommended Textbook Operations Management 5th Canadian Edition by William J. Stevenson
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Page 2
Chapter 1: Introduction to Operations Management
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Sample Questions
Q1) System design decisions have very little impact on planning/control decisions.
A)True
B)False
Answer: False
Q2) Effectiveness refers to achieving intended goals whereas efficiency refers to minimizing cost and time.
A)True
B)False
Answer: True
Q3) It is essential to use the systems approach when something is being designed,redesigned,implemented,improved,or otherwise changed.
A)True
B)False
Answer: True
Q4) Storing an item earlier than the scheduled delivery date is an example of a value adding activity.
A)True
B)False Answer: False
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Chapter 2: Competitiveness, Strategic Planning, and Productivity
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Sample Questions
Q1) A measure of productivity which reflects a combination of some or all of the resources used to obtain a certain output is:
A) labour productivity.
B) machine productivity.
C) multifactor productivity.
D) materials productivity.
E) overhead productivity.
Answer: C
Q2) Which of the following is not a general factor that affects productivity?
A) Methods and management
B) Equipment and technology
C) Competitors
D) Labour
Answer: C
Q3) Service productivity is easier to measure than manufacturing productivity because it is more labour intensive.
A)True
B)False
Answer: False
Page 4
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Chapter 3: Demand Forecasting
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Sample Questions
Q1) MAD is equal to the square root of MSE.
A)True
B)False
Answer: False
Q2) Which of the following would be an advantage of using opinions of a sales force to develop a demand forecast?
A) The sales staff is least affected by changing customer needs.
B) The sales force can easily distinguish between customer desires and probable actions.
C) The sales staff is often aware of customers' future plans.
D) Salespeople are least likely to be influenced by recent events.
E) Salespeople are least likely to be biased by sales quotas.
Answer: C
Q3) What is this month's forecast using the least squares trend line for these data?
A) 1,250
B) 128.6
C) 102
D) 158
E) 164
Answer: D
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Chapter 4: A: Product Design
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Sample Questions
Q1) Core teams are teams of operations personnel that are empowered to plan and lead product development projects.
A)True
B)False
Q2) From focus groups,3M noticed consumers needed an extra hand when wrapping gifts so they created a Pop-up Tape Dispenser.This was an example of which approach to finding new product ideas?
A) Listening to market complaints
B) Gaps in the market
C) Exploring niche markets
D) Using new technology
E) Creating new market space
Q3) Standardization is beneficial for manufactured products but not for computer software applications.
A)True
B)False
Q4) Products are generally intangible; services are generally tangible.
A)True
B)False
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Chapter 4: B: Product Design
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Sample Questions
Q1) "Independent components" cannot exist in the same product.
A)True
B)False
Q2) The probability that a product will fail within a given amount of time is often described by the:
A) beta distribution.
B) binomial distribution.
C) negative Gaussian distribution.
D) normal distribution.
E) uniform distribution.
Q3) A certain product is comprised of two components: X and Y.Component X has a random failure rate of one in every ten years,while component Y's random failure rate is one in every five years.This product has a mean time to wear-out of eight years with a standard deviation of one year.What would be the reliability of this product if component X were backed up with an identical component?
Q4) A life monitoring system can operate an average of 15 months between failures.Determine these probabilities:
(i)a failure within 12 months of the previous failure
(ii)a failure between 12 and 18 months after the previous failure
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Chapter 5: A: Strategic Capacity Planning
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Sample Questions
Q1) An investment proposal will have annual fixed costs of $60,000,variable costs of $35 per unit of output,and revenue of $55 per unit of output.
(i)Determine the break-even quantity.
(ii)What volume of output will be necessary for an annual profit of $60,000?
Q2) What profit (loss)would there be for a quantity of 27,000?
Q3) If,for this machine,design capacity is 50 cords per day,effective capacity is 40 cords per day,and actual output is anticipated to be 35 cords per day,what would its utilization be?
A) 100%
B) 80%
C) 75%
D) 70%
E) 0%
Q4) The term capacity is the upper limit on the workload an operating unit can handle.
A)True
B)False
Q5) What are total costs for the break-even quantity?
Q6) What is the break-even quantity (produced and sold)?
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Chapter 5: B: Strategic Capacity Planning
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Sample Questions
Q1) Typically the choice to "do nothing" based on a preference to stick with the status quo is not considered in the list of possible alternatives for a decision.
A)True B)False
Q2) In a decision tree,square nodes represent chance events,and circular nodes denote decision points.
A)True B)False
Q3) Graphical sensitivity analysis is limited to cases with no more than two alternatives. A)True B)False
Q4) The difference between expected payoff under certainty and expected payoff under risk is the:
A) expected monetary value.
B) expected value of perfect information.
C) expected net present value.
D) expected rate of return.
E) none of the above.
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Chapter 6: A: Process Design and Facility Layout
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Sample Questions
Q1) The overall goals of CIM include all of the following EXCEPT?
A) To achieve rapid response to customer orders
B) To allow rapid production
C) To reduce indirect labour costs
D) Accommodate increased product variety
E) To achieve rapid response to product changes
Q2) For output to equal projected demand,what should be the actual cycle time for this production line?
A) 54 seconds
B) 27 seconds
C) 20 seconds
D) 18 seconds
E) 14 seconds
Q3) Heuristic approaches to line balancing guarantee an optimal solution.
A)True
B)False
Q4) The first step in process design is to decide whether to make or buy a product or service.
A)True
B)False
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Chapter 6: B: Process Design and Facility Layout
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Sample Questions
Q1) The equation 5x + 7y = 10 is linear.
A)True
B)False
Q2) The term "range of feasibility" refers to coefficients of the objective function.
A)True
B)False
Q3) In graphical linear programming the objective function is: I.linear.
II.a family of parallel lines.
III.a family of is profit lines.
A) I only
B) II only
C) III only
D) I and II only
E) I, II, and III
Q4) The feasible solution space only contains points that satisfy all constraints.
A)True
B)False
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Chapter 7: A: Design of Work Systems
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Sample Questions
Q1) What is the standard time (ST)for this task if the employee worked at a twenty percent faster pace than is average,and an allowance of twenty-five percent of job time is used?
A) 20 seconds
B) 25 seconds
C) 26.7 seconds
D) 30 seconds
E) 32 seconds
Q2) In a stopwatch time study,the average time it takes a given worker to perform a task a certain number of times is the:
A) observed time.
B) normal time.
C) standard time.
D) allowance time.
E) performance rating time.
Q3) 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?
Q4) What is the observed time for this task?
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Chapter 7: B: Design of Work Systems
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Sample Questions
Q1) A company is preparing a bid on a government contract for 40 units of a certain product.The operations manager estimates the assembly time required for the first two units to be 10.4 hours and 8.8 hours,respectively.What is the expected time required to produce the 40<sup>th</sup> unit?
A) 3.2 hours
B) 4.4 hours
C) 5.9 hours
D) 3.7 hours
E) 2.2 hours
Q2) A company is preparing a bid on a government contract for 40 units of a certain product.The operations manager estimates the assembly time required for the first two units to be 10.4 hours and 8.8 hours,respectively.Approximately how long will it take to produce the last ten units?
A) 33 hours
B) 69 hours
C) 45 hours
D) 38 hours
E) It is impossible to say without additional information.
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Chapter 8: A: Location Planning and Analysis
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Sample Questions
Q1) Which of the following are community/site-related considerations in location decisions?
I.Location of raw materials.
II.Labour laws.
III.Land prices.
IV.Room for expansion.
A) I, II
B) I, III
C) III, IV
D) I, III, IV
E) I, II, III, IV
Q2) For the preferred site for 20,000 units per year,what would be your cost savings compared to each of the other two sites?
Q3) For manufacturing firms,two dominating factors in location analysis are abundance of energy and proximity to raw materials.
A)True
B)False
Q4) For what quantity would you be indifferent between selecting site A or site B?
Q5) What are total costs for site B for a quantity of 5,000 units per year?
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Chapter 8: B: Location Planning and Analysis
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Sample Questions
Q1) The transportation model assumes one mode of transport between each origin and destination.
A)True
B)False
Q2) The transportation model assumes transportation cost per unit is the same regardless of the number of units shipped.
A)True
B)False
Q3) Which of the following are assumptions or requirements of the transportation method?
I.Goods are the same,regardless of the source.
II.There must be multiple sources.
III.Minimum quantities must be shipped.
IV.Shipping costs per unit do not vary with the quantity shipped.
A) I and IV only
B) II and III only
C) I, II, and IV only
D) I and III only
E) I, II, III, and IV
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Chapter 9: Management of Quality
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Sample Questions
Q1) Quality planning and administration,quality training,and quality control procedures are examples of:
A) internal failure costs.
B) external failure costs.
C) appraisal costs.
D) prevention costs.
E) replacement costs.
Q2) TQM expands the traditional view of quality which is looking only at the quality of the final product or service to looking at every aspect of an organization that affects quality and customer satisfaction..
A)True
B)False
Q3) Product serviceability is the primary dimension of fitness for use.
A)True
B)False
Q4) Broadly defined,quality refers to the ability of a product or service to consistently meet or exceed design specifications.
A)True
B)False
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Chapter 10: A: Statistical Quality Control
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Sample Questions
Q1) A control chart used to monitor the process mean is the:
A) p-chart
B) R-chart
C) x-bar chart
D) c-chart
E) Gantt chart
Q2) Studies on a machine that molds plastic water pipe indicate that when it is injecting 25 mm diameter pipe,the process standard deviation is 0.50 mm.The 25 mm pipe has a specification of 25 mm plus or minus 1.0 mm.What is the process capability index (Cp)?
A) 0.50
B) 0.67
C) 1.00
D) 2.00
E) None of the choices are correct.
Q3) A c-chart is used to monitor the number of defects per unit of a process output.
A)True
B)False
Q4) If the process proportion of defectives is unknown,what is the estimate of it?
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Chapter 10: B: Statistical Quality Control
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Sample Questions
Q1) The Quality Manager for Microelectronics,Inc.is concerned about the quality of the batch of several thousand IC's (integrated circuits)which his company is about to ship.If he uses an acceptance sampling plan of n = 20 and c = 1,what is the probability that,if this batch is 15% defectives,it will be rejected and completely inspected prior to shipment?
A) 0.0263
B) 0.1237
C) 0.1756
D) 0.8244
E) 0.9737
Q2) Acceptance sampling plans might call for selection of:
A) a single sample.
B) two samples.
C) several samples.
D) all of the choices.
E) none of the choices.
Q3) The steeper an OC curve is,the less it tends to discriminate between good and bad lots.
A)True
B)False
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Chapter 11: Supply Chain Management
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Sample Questions
Q1) Which one of the following is the interface between the firm and the suppliers?
A) Purchasing
B) Production
C) Distribution
D) All of the choices are interfaces
E) None of the choices are interfaces
Q2) The purchasing cycle ends when the receiving staff are notified that the supplier has shipped the items.
A)True
B)False
Q3) Holding safety stock inventory at multiple retail outlets rather than at a centralized distribution centre is an example of risk pooling.
A)True
B)False
Q4) Supplier analysis is the process that evaluates the source of supply in terms of price,quality,delivery,and service.
A)True
B)False
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Chapter 12: Inventory Management
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Sample Questions
Q1) Lead time is exactly 20 days long.Daily demand is normally distributed with a mean of 10 gallons per day and a standard deviation of 2 gallons.What is the standard deviation of demand during lead time?
A) 20 × 2
B) 20 × 10
C) 2 times the square root of 20
D) 2 times the square root of 10
E) None of the choices.
Q2) Which one of the following is implied by a "lead time" service level of 95 percent?
A) Approximately 95 percent of demand during lead time will be satisfied.
B) The probability is 95 percent that demand during lead time will not exhaust the inventory.
C) The probability is 95 percent that demand during lead time will exactly equal the amount on hand at the beginning of lead time.
D) The probability is 95 percent that demand during lead time will not exceed the amount on hand at the beginning of lead time.
E) None of the choices.
Q3) For the economic order quantity,what is the average inventory level?
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Chapter 13: Aggregate Operations Planning
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Sample Questions
Q1) Aggregate operations planning is used to establish general levels of employment,production levels and changes in inventory levels over an intermediate range of time.
A)True
B)False
Q2) Make-to-order companies use inventory whereas make-to-stock companies use backorders to shift demand.
A)True
B)False
Q3) The goal of aggregate operations planning is to achieve a production plan that will satisfy total forecast demand at minimum cost.
A)True
B)False
Q4) In aggregate operations planning,both pricing and promotion are options to shift demand to align more closely with capacity.
A)True
B)False
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Chapter 14: Material Requirements Planning and Enterprise Resource Planning
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Sample Questions
Q1) If the firm is using lot size for a fixed period of two,what is the order size for the first order?
A) 120
B) 200
C) 280
D) 160
E) 150
Q2) ERP automates the tasks involved in performing a business process,such as order fulfilment and financial reporting.
A)True
B)False
Q3) MRP requires information on inventory on hand,open orders and lead times and purchase orders for each item in stock.
A)True
B)False
Q4) Gross requirements for components are equal to the gross requirements of their immediate parent multiplied by the quantity per parent.
A)True
B)False
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Chapter 15: A: Just-In-Time and Lean Production
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Sample Questions
Q1) JIT purchasing requires frequent bidding for contracts by multiple sources to ensure the buyer of competitive prices.
A)True
B)False
Q2) The ideal scheduling for JIT/lean operations follows a push system of planning.
A)True
B)False
Q3) The Four Star Publishing Company uses sixty reams of paper each hour at one of its high speed printing stations.The waiting time for a standard container,which holds 15 reams of paper,averages forty minutes.If management has decided to use three containers,what safety factor was applied?
Q4) Material requirements planning (MRP)is an example of a(n):
A) push system.
B) pull system.
C) backward communications approach.
D) inventory accumulation approach.
E) none of the choices.
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Chapter 15: B: Just-In-Time and Lean Production
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Sample Questions
Q1) Planned periodic inspections is one method of determining when preventive maintenance activities should be performed.
A)True B)False
Q2) The goal of maintenance is to maintain the productive system in good working order at minimum costs.
A)True B)False
Q3) Maintenance activities are often organized into the two groups: buildings and grounds,and equipment maintenance.
A)True
B)False
Q4) "Total productive maintenance" is best described as:
A) avoiding all breakdown maintenance.
B) doing a great deal of preventative maintenance to try to avoid breakdown maintenance.
C) having workers that operate equipment responsible for performing maintenance.
D) extending preventative maintenance back to design.
E) none of the choices are correct.
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Chapter 16: Job and Staff Scheduling
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Sample Questions
Q1) Two different approaches to load work centres in job scheduling are:
A) economic order quantity (EOQ) and material requirements planning (MRP).
B) Gantt charts and shop-floor control.
C) infinite loading and finite loading.
D) linear programming and trial-and-error.
E) none of the choices.
Q2) As a performance measure in scheduling,job flow time includes:
I.movement time between operations.
II.processing time.
III.idle time.
A) I only
B) II only
C) II and III only
D) I and II only
E) I, II, and III
Q3) In job scheduling,most loading of work centres is based on infinite loading.
A)True
B)False
Q4) What is the schedule sequence using the Minimum Slack Time (MST)priority rule?
To break a tie,use the Critical Ratio (CR)rule.
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Chapter 17: Project Management
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Q1) Which of the following is used to compute the earliest finish times once the earliest start times are calculated for an activity on a precedence network?
A) Expected activity duration
B) Activity slack time
C) Activities that are on the critical path
D) Variance in project duration
E) Maximum project duration
Q2) Which of the following is a part of project scheduling?
A) Identify resource requirements for activities
B) Estimate the duration of activities
C) Identify activities in the work breakdown structure
D) Identify sequential dependencies among activities
E) All of the choices are a part of project scheduling.
Q3) Companies that are organized as pure project organizations are equivalent to matrix organizations that temporarily group specialists from different departments.
A)True
B)False
Q4) What activities make up the critical path?
Q5) What are the estimated expected (mean)durations (in weeks)for activities A-H?
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Chapter 18: A: Waiting-Line Analysis
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Q1) In an infinite source model,the average time in line is equal to the average number of customers in line divided by the average arrival rate.
A)True
B)False
Q2) The cost of having customers wait has to be balanced with the cost of providing service capacity.
A)True
B)False
Q3) A single bay car wash with a Poisson arrival rate and an exponential service time has cars arriving an average of 10 minutes apart,and an average service time of four minutes.The server utilization is:
A) .24
B) .40
C) .67
D) 2.50
E) none of these
Q4) What is average time in the system for a high priority item?
Q5) What is the average number of all items waiting in line for service?
Q6) What is average time in the system for a low priority item?
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Chapter 18: B: Waiting-Line Analysis
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Q1) Natural logarithms are used in simulating the:
A) binomial distribution.
B) exponential distribution.
C) normal distribution.
D) Poisson distribution.
E) uniform distribution.
Q2) In the sets of random numbers,every possible combination of the numbers has the same probability of appearing,and there are no discernible patterns.
A)True
B)False
Q3) A simulation model is validated if it adequately depicts real system performance.
A)True
B)False
Q4) Simulation is used to determine the optimal solution to a problem.
A)True
B)False
Q5) Monte Carlo simulations yield approximate rather than exact answers.
A)True
B)False
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