

Strategic Operations Management
Question Bank
Course Introduction
Strategic Operations Management explores the role of operations within an organizations overall strategy, focusing on how effective operations can provide a competitive advantage. The course examines key concepts such as process analysis, supply chain management, quality control, capacity planning, and operational decision-making. Through real-world case studies and practical applications, students learn how to align operations with business objectives, innovate processes, and optimize resource allocation for improved efficiency and effectiveness. The course also addresses current challenges such as sustainability, globalization, and technological advancements, providing students with critical tools for strategic leadership in dynamic business environments.
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Chapter 1: Operations and Productivity
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Sample Questions
Q1) As the administrative manager in a law office, you have been asked to develop a system for evaluating the productivity of the 15 lawyers in the office. What difficulties are you going to have in doing this, and how are you going to overcome them?
Answer: Productivity measures for a law office are difficult. Simple criteria, like number of cases processed, fail to consider complexity of the case. Even counting wins is difficult, as many cases are settled with some sort of compromise. External elements such as the quality of the opposing counsel and the tenacity of the opposition also make counting look rather silly.
Categories of cases can help-(i.e., uncontested divorce, no personal injury auto case, etc.) However, many firms end up counting hours billed. This in turns leads to other problems, as noted by the number of False billing cases.
Q2) The marketing function's main concern is with
A) producing goods or providing services
B) procuring materials, supplies, and equipment
C) building and maintaining a positive image
D) generating the demand for the organization's products or services
E) securing monetary resources
Answer: D
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Chapter 2: Operations Strategy in a Global Environment
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Sample Questions
Q1) Porter's Five Forces Model is used to evaluate competition based on which 5 aspects?
A) research and development, cost, legal regulations, suppliers, customers
B) immediate rivals, potential entrants, customers, suppliers, and substitute products
C) potential entrants, customers, suppliers, legal regulations, and cost
D) immediate rivals, potential entrants, cost, substitute products, and legal regulations
E) none of the above
Answer: B
Q2) NAFTA seeks to phase out all trade and tariff barriers between the United States and Asia.
A)True
B)False
Answer: False
Q3) Production processes are being dispersed to take advantage of national differences in labor costs.
A)True
B)False
Answer: True
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Chapter 3: Project Management
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Sample Questions
Q1) A network has been crashed to the point where all activities are critical. Additional crashing
A) is unnecessary
B) is impossible
C) is prohibitively expensive
D) may require crashing multiple tasks simultaneously
E) can be done, but all critical tasks must be reduced in duration
Answer: D
Q2) Which of the following statements regarding time-cost tradeoffs in CPM networks is False?
A) "Project Crashing" shortens project duration by assigning more resources to critical tasks.
B) Crashing sometimes has the reverse result of lengthening the project duration.
C) Crashing must consider the impact of crashing an activity on all paths in the network.
D) Activities not on the critical path can become critical after crashing takes place.
E) All of the above are False.
Answer: B
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Chapter 4: Forecasting
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Sample Questions
Q1) The two general approaches to forecasting are
A) qualitative and quantitative
B) mathematical and statistical
C) judgmental and qualitative
D) historical and associative
E) judgmental and associative
Q2) A naïve forecast for September sales of a product would be equal to the forecast for August.
A)True
B)False
Q3) The smoothing constant is a weighting factor used in __________.
Q4) __________ forecasts are concerned with rates of technological progress, which can result in the birth of exciting new products, requiring new plants and equipment.
Q5) The following trend projection is used to predict quarterly demand: Y = 250 - 2.5t, where t = 1 in the first quarter. Seasonal (quarterly) indices are Quarter 1 = 1.5; Quarter 2 = 0.8; Quarter 3 = 1.1; and Quarter 4 = 0.6. What is the seasonally adjusted forecast for the next four quarters?
Q6) Identify the seven steps involved in forecasting.
Q7) List and briefly describe the three major types of forecasts.
Page 6
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Chapter 5: Design of Goods and Services
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Sample Questions
Q1) Payoffs, alternatives, and expected monetary values are terms associated with A) virtual reality
B) Product Lifecycle Management
C) Quality Function Deployment
D) decision trees
E) make-or-buy analysis
Q2) A manufacturing plant uses a computerized scanner to measure the inner diameters of the belts it produces to ensure they are within the specifications. This is referred to as
A) CAM
B) CAD
C) QFD
D) DFMA
E) STEP
Q3) Computer-aided design (CAD) refers to the use of specialized computer programs to direct and control manufacturing equipment.
A)True
B)False
Q4) Products or services designed in easily segmented components are known as
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Chapter 6: Managing Quality
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Sample Questions
Q1) Which of the following is not a typical inspection point?
A) upon receipt of goods from your supplier
B) when production or service is complete
C) before the product is shipped to the customer
D) at the supplier's plant while the supplier is producing
E) after a costly process
Q2) __________ selects a demonstrated standard of performance that represents the very best performance for a process or activity.
Q3) Which of the following is False regarding control charts?
A) Values above the upper control limits always imply that the product's quality is exceeding expectations.
B) Control charts are built so that new data can be quickly compared to past performance data.
C) Control charts graphically present data.
D) Control charts plot data over time.
E) None of the above is False.
Q4) Identify the major concepts of TQM.
Q5) Identify the five core elements of ISO 14000.
Q6) Identify the five steps of DMAIC.

Page 8
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Chapter 7: Statistical Process Control
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Sample Questions
Q1) The acceptable quality level (AQL) is the average level of quality we are willing to accept.
A)True
B)False
Q2) Jars of pickles are sampled and weighed. Sample measures are plotted on control charts. The ideal weight should be precisely 11 oz. Which type of chart(s) would you recommend?
A) p-charts
B) c-charts
C) \(\overline { \mathrm { X } }\) - and R-charts
D) \(\overline { \mathrm { X } }\) -, but not R-charts
E) both p- and c-charts
Q3) Averages of small samples, not individual measurements, are generally used in statistical process control.
A)True
B)False
Q4) A(n) __________ is a graph that describes how well an acceptance plan discriminates between good and bad lots.
Q5) What is the difference between natural and assignable causes of variation?
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Chapter 8: Process Strategy
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Sample
Questions
Q1) Mary is considering purchasing a machine from two suppliers. Supplier A's machine has an annual fixed cost of $10,000 and a unit variable cost of $2.10. Supplier B's machine has an annual fixed cost of $16,000 and a unit variable cost of $3.00. How large should Mary's annual demand be in order to make Supplier B's machine the better choice?
Q2) What is the link between focused processes and specialization? What kinds of focus are possible?
Q3) Identify the typical elements in a process control system.
Q4) Frito-Lay is to __________ focus as Harley Davidson is to __________ focus. A) pocess, repetitive B) product, repetitive
C) repetitive, product
D) process, product
E) product, mass customization
Q5) The textbook described four basic process models, and hinted that there are others. Construct an example of a hybrid process. Can this process be applied in any well-known organization? How common do you think hybrid processes are?
Q6) Name the tools of process analysis and design. Describe them in a sentence or two each.
Page 10
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Chapter9: Capacity and Constraint Management
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Sample Questions
Q1) The staff training center at a large regional hospital provides training sessions in CPR to all employees. Assume that the capacity of this training system was designed to be 1800 employees per year. Since the training center was first put in use, the program has become more complex, so that 1400 now represents the most employees that can be trained per year. In the past year, 1350 employees were trained. Calculate the efficiency and the utilization of this system.
Q2) Which of the following is <b>False</b> regarding capacity expansion?
A) "Average" capacity sometimes leads demand, sometimes lags it.
B) If "lagging" capacity is chosen, excess demand can be met with overtime or subcontracting.
C) Total cost comparisons are a rather direct method of comparing capacity alternatives.
D) Capacity may only be added in large chunks.
E) All of the above are true.
Q3) A firm produces three products. Product A sells for $60; its variable costs are $20. Product B sells for $200; its variable costs are $120. Product C sells for $25; its variable costs are $10. Last year, the firm sold 1000 units of A, 2000 units of B, and 10,000 units of C. The firm has fixed costs of $320,000 per year. Calculate the break-even point of the firm.
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Chapter 10: Location Strategies
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Sample Questions
Q1) Political risk, cultural issues, and exchange rates are among those __________ that affect which country will be selected for a location decision.
Q2) Which of the following worker characteristics would likely be least important for U.S. firms looking to open up call centers in different countries?
A) willing to accept low wages
B) have a high level of education
C) speak English
D) possess an in-depth knowledge of American popular culture
E) are young
Q3) __________ costs are readily identifiable and can be measured with precision.
Q4) Suppose that a bus company is deciding where to locate its central hub. There are 6 possible destinations for the buses. Suppose that the center of town will be used as the reference for describing the possible destinations. A is located 5 miles South and 3 miles West. B is located 3 miles North and 2 miles East. C is located 1 mile South and 5 miles East. D is located 2 miles North and 3 miles West. E is located exactly in the center of town. F is located 10 miles North and 5 miles East. Assume that traffic to each destination will be equal. Where should the hub go so that travel time is minimized?
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Chapter 11: Layout Strategies
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Sample Questions
Q1) Product-oriented layouts tend to have high levels of work-in-process inventories.
A)True
B)False
Q2) What are the advantages and disadvantages of product layouts?
Q3) The work cell layout, a special arrangement of machinery and equipment to focus on the production of a single product or group of related products, is for manufacturing applications and has no relevance to services.
A)True
B)False
Q4) Cross-docking is
A) seldomly placing an item in storage, it is sent straight from incoming to outbound
B) using docks for either incoming or outbound shipments
C) using a single dock to unload and then load the same truck
D) all of the above
E) none of the above
Q5) "Having a focused work center is like having a factory within a factory." Discuss. Include in your discussion what conditions make focused work centers appropriate.
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Chapter 12: Human Resources, Job Design, and Work Measurement
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Sample Questions
Q1) What is methods analysis?
Q2) Most pit crew members have background experience in what area?
A) mechanical engineering
B) athletics
C) No specific area, crew members come from all sorts of backgrounds.
D) automobile race drivers
E) car mechanics
Q3) Labor standards can help to determine
A) labor content of a product
B) staffing needs
C) incentive plans
D) efficiency
E) all of the above
Q4) A work sampling study requires an acceptable error level of 10 percent and 95 percent confidence. a. What is the adequate sample size if the sample proportion is as large as 50 percent?
b. What is the adequate sample size if the sample proportion is estimated to be about 20 percent?
Page 14
Q5) Identify the five components of job design.
Q6) __________ are drawings used to analyze movement of people or material.
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Chapter 13: Supply-Chain Management
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Sample Questions
Q1) Which of the following is an aspect of environmental risk in supply-chain management?
A) political issues
B) management metrics
C) secure financial transactions
D) raw material availability
E) All of the above are environmental risks.
Q2) One classic type of negotiation strategy is the market-based price model.
A)True
B)False
Q3) When Daimler and BMW pooled resources to develop standardized auto components the supply-chain strategy could best be described by
A) keiretsu
B) virtual companies
C) joint venture
D) vertical integration
E) few suppliers
Q4) __________ is developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor.
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Chapter 14: Outsourcing as a Supply-Chain Strategy
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Sample Questions
Q1) The number-one reason driving outsourcing for many firms is to focus on core competencies.
A)True
B)False
Q2) What permits CEOs, who prefer short-term planning and are interested only in bottom-line improvements, to use the outsourcing strategy to make quick gains at the expense of longer-term objectives?
Q3) Identify three factors fueling the continuing growth of outsourcing.
Q4) Identify some ethical principles as applied to outsourcing.
Q5) Identify several outsourcing processes, that is, activities that firms should undertake when embarking on outsourcing.
Q6) Identify five main advantages of outsourcing.
Q7) Offshoring is the practice of procuring from foreign external sources services or products that are normally part of an organization.
A)True
B)False
Q8) In the electronics industry, the __________ sets environmental standards, bans child labor and excessive overtime, and audits outsourcing producers to ensure compliance.
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Chapter 15: Inventory Management
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Sample Questions
Q1) A specific product has demand during lead time of 100 units, with a standard deviation of 25 units. What safety stock (approximately) provides a 95% service level?
A) 41
B) 55
C) 133
D) 140
E) 165
Q2) ABC analysis divides on-hand inventory into three classes, generally based upon
A) item quality
B) unit price
C) the number of units on hand
D) annual demand
E) annual dollar volume
Q3) Demand for a product is approximately normal, averaging 5 units per day with a standard deviation of 1 unit per day. Lead time for this product is approximately normal, averaging 10 days with a standard deviation of 3 days. What reorder point provides a service level of 90 percent?
Q4) __________ inventory is material that is usually purchased, but has yet to enter the manufacturing process.
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Chapter 16: Aggregate Planning
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Sample Questions
Q1) What is the typical planning horizon for aggregate planning?
Q2) Which choice best describes level scheduling?
A) Daily production is variable from period to period.
B) Subcontracting, hiring, and layoffs manipulate supply.
C) Price points are calculated to match demand to capacity.
D) Inventory goes up or down to buffer the difference between demand and production.
E) Seasonal demand fluctuations are matched without hirings or layoffs.
Q3) Which of the following inputs helps an aggregate planner select the rate of output for a facility over the next 3 to 18 months?
A) facility capacity
B) inventory on hand
C) workforce size
D) demand forecasts
E) all of the above
Q4) The __________ strategy maintains a constant output rate, or work force level, over the planning horizon.
Q5) __________ is the process of breaking the aggregate plan into greater detail.
Q6) __________ work with a few variables at a time and are easy to understand and use.
Page 19
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Chapter 17: Material Requirements Planning MRP and ERP
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Sample Questions
Q1) Bills of material organized by major subassemblies or by product options are called
Q2) A process-focus facility (for example, a print shop) will likely schedule __________ as the focus of its master production schedule.
Q3) The minimum record accuracy required for successful MRP is approximately A) lower than 90%
B) 90%
C) 95%
D) 97%
E) 99%
Q4) In MRP, a "bucket" refers to a fixed order quantity, such as an EOQ.
A)True B)False
Q5) What is MRP?
Identify four benefits from its use.
Q6) A(n) __________ can illustrate whether a work center has been scheduled beyond its capacity.
Q7) The __________ is used to correct an erroneous dimension, quantity, or other specification in a bill of material.
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Chapter 18: Short-Term Scheduling
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Sample Questions
Q1) Eight jobs have been sequenced at a single work center. Total processing time for the eight jobs is 34 hours and total flow time for the sequence is 85 hours. For this schedule, utilization is __________ and average jobs in the system is __________.
A) 100 percent; 10.625
B) low; .0941
C) 0.400 or 40 percent; 2.5
D) 0.235 or 23.5 percent; 4.25
E) maximized; minimized
Q2) Sequencing (or dispatching)
A) assigns dates to specific jobs or operations steps
B) assigns jobs to work centers
C) specifies the order in which jobs should be done at each center
D) assigns workers to jobs
E) assigns workers to machines
Q3) __________ is an input-output control system that uses cards to manage the amount of work in a work center.
Q4) What are some limitations of rule-based scheduling systems? What alternatives are there to rules-based scheduling systems?
Q5) __________ are used to schedule resources and allocate time.
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Chapter 19: Just-In-Time and Lean Options
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Sample Questions
Q1) Which of the following is specifically characterized by the elimination of waste through a focus on exactly what the customer wants?
A) Just-in-time (JIT)
B) Toyota Production System (TPS)
C) Lean operations
D) Material requirements planning (MRP)
E) kanban
Q2) You have read that in JIT and lean production the optimum lot size is one, with some exceptions for packaging and physical limitations. If a product currently has a lot size of 25, what must happen to setup time for the lot size to truly fall to one?
Data for this problem are D=100 units, S=$75 based on setup time of 50 minutes at $1.50 per minute, and H=$40 per unit per year.
Q3) Describe level schedules. What purpose do they serve?
Q4) Identify Ohno's Seven Wastes. Which one of these deals most directly with distance reductions?
Q5) Define manufacturing cycle time in the context of JIT systems.
Q6) Handling material more than once is an example of the waste called __________.
Q7) Compare and contrast throughput with manufacturing cycle time.
Page 22
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Chapter 20: Maintenance and Reliability
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Sample Questions
Q1) A system has three components in series with reliabilities 0.9, 0.7, and 0.5. System reliability is
A) 0.315
B) 0.500
C) 0.700
D) 0.900
E) 2.100
Q2) Autonomous maintenance occurs when
A) employees are empowered to observe, check, adjust, clean, and notify
B) a remote computer system signals the need for breakdown maintenance
C) a remote computer system signals the need for preventative maintenance
D) employees perform their own breakdown maintenance
E) none of the above
Q3) Which of the following costs tend to be ignored in determining the optimal maintenance policy?
A) expected breakdown costs
B) preventive maintenance costs
C) the costs associated with various levels of commitment to maintenance
D) cost of low morale
E) all of the above
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Chapter 21: Decision-Making Tools
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Sample Questions
Q1) What is the expected value of perfect information of the following decision table?
\[~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~{ \text { States of Nature } } \\
\begin{array} { | l | c | c | }
\hline \text { Alternatives } & \mathrm { S } _ { 1 } & \mathrm {~S} _ { 2 } \\
\hline \mathrm { p } & .6 & .4 \\
\hline \text { Option 1 } & 200 & 300 \\
\hline \text { Option } 2 & 50 & 350 \\
\hline
\end{array}\]
A) 0
B) 20
C) 50
D) 150
E) 200
Q2) Identify, in order, the six steps of analytical decision making.
Q3) In a decision tree, a square symbol represents a state of nature node.
A)True
B)False
Q4) What limitation(s) do decision trees overcome compared to decision tables?
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Chapter 22: Linear Programming
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Q1) The region that satisfies the constraint 4X + 15Z 1000 includes the origin of the graph.
A)True
B)False
Q2) The difference between minimization and maximization problems is that
A) minimization problems cannot be solved with the corner-point method
B) maximization problems often have unbounded regions
C) minimization problems often have unbounded regions
D) minimization problems cannot have shadow prices
E) None of the above are true.
Q3) A maximizing linear programming problem with constraints C1, C2, and C3 has been solved. The dual values associated with the problem are C1 = $2, C2 = $0.50, and C3 = $0. Which statement below is <b>False</b>?
A) One more unit of the resource in C1 would add $2 to the objective function value.
B) One more unit of the resource in C2 would add one more unit each of X and Y.
C) The resource in C3 has not been used up
D) The resources in C1 and in C2, but not in C3, are scarce.
E) All of the above are true.
Q4) What is the feasible region in a linear programming problem?
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Chapter 23: Transportation Models
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Q1) The initial solution to a transportation problem can be generated several ways, so long as
A) it minimizes cost
B) it ignores cost
C) all supply and demand conditions are satisfied
D) degeneracy does not exist
E) all cells are filled
Q2) Which of the following is <b>not </b>needed in order to use the transportation model?
A) the source points and their capacity
B) the fixed costs of source points
C) the destination points and their demand
D) the cost of shipping one unit from each source to each destination
E) All of these are needed.
Q3) The transportation model is an excellent tool for minimizing shipping costs among existing facilities, but it is not useful when firms consider new facility locations.
A)True
B)False
Q4) What is the difference between a feasible solution and an optimal solution?
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Chapter 24: Waiting-Line Models
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Sample Questions
Q1) A waiting-line system that meets the assumptions of M/M/1 has = 1, = 4. For this system, the probability of fewer than two units in the system is approximately
A) 0.0625
B) 0.25
C) 0.75
D) 0.9375
E) certain
Q2) A finite population waiting line model has an average service time T of 100 minutes and an average time between service requirements U of 400 minutes; the service factor X is 0.25.
A)True
B)False
Q3) In queuing problems, arrival rates are generally described by the normal probability distribution.
A)True
B)False
Q4) Balk and renege are elements of queue discipline.
A)True
B)False
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Chapter 25: Learning Curves
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Sample Questions
Q1) Explain how learning curves might be applied in a scheduling application.
Q2) A learning curve
A) plots man-hours per dollar versus time
B) is mathematically described by a parabola
C) should be plotted on polar coordinate graph paper
D) is based on the premise that organizations learn from experience E) follows a normal distribution
Q3) Which one of the following courses of actions would not be taken by a firm wanting to pursue a learning curve steeper than the industry average?
A) following an aggressive pricing policy
B) focusing on continuing cost reduction
C) keeping capacity equal to demand to control costs
D) focusing on productivity improvement
E) building on shared experience
Q4) The __________ is the simplest approach to learning curve problems.
Q5) The seventh unit of production took 63.423 minutes while the ninth unit of production took 59.8 minutes. What is the improvement rate?
Q6) __________ are based on the premise that people and organizations get better at their tasks as the tasks are repeated.
Page 28
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Chapter 26: Simulation
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Sample Questions
Q1) What are the advantages and disadvantages of simulation models?
Q2) Explain the difference between random numbers and random number intervals.
Q3) What is the Monte Carlo method?
Q4) Provide a small example illustrating how random numbers are used in Monte Carlo simulation.
Q5) Monte Carlo simulations applied to queuing problems have what advantage?
A) simpler
B) Arrival distribution does not need to be a Poisson distribution.
C) Unloading rates can vary randomly.
D) B and C
E) A, B, and C
Q6) A simulation is "Monte Carlo" when the elements of a system being simulated exhibit chance in their behavior.
A)True
B)False
Q7) In most real-world inventory problems, lead time and demand vary in ways that make simulation a necessity because mathematical modeling is extremely difficult.
A)True
B)False
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