1 Frederick W. Taylor is generally credited with introducing the moving assembly line.

A)True
B)False
 
2 Human effort, technology, raw materials, information and time are all examples of the necessary inputs
to operations.
A)True
B)False
 
3 Outputs of operations may be classified as goods, raw materials and profits.
A)True
B)False
 
4 It is easier to measure productivity for an operation that provides services than for one that produces
goods.
A)True
B)False
 
5 According to the Pareto principle, a relatively few factors are very important in achieving an objective or
solving a problem.
A)True
B)False
 
6 Two recent trends in operations management are supply chain management and specialization.
A)True
B)False
 
7 Which one of the following would not generally be considered an aspect of operations management?
A)Schedule work
B)Secure financial resources
C)Maintain quality
D)Oversee the transformation process
E)Manage inventories
 
8 Which one of these was not mentioned in the list of recent trends in operations management?
A)Total quality management
B)Worker involvement
C)Global competition.
D)Automation.
E)Environmental issues.
 
9 Which came last in the development of manufacturing techniques?
A)Lean production.
B)Division of labor.
C)Mass production.
D)Craft production.
E)Interchangeable parts.
 
10 Which of the following is not a type of operations?
A)goods production
B)storage/transportation
C)entertainment
D)communication
E)price reduction
 
11 Which of the following is not true about a lean production system?
A)It puts emphasis on quality, flexibility, and time reduction.
B)It puts emphasis on reducing a company's labor force.
C)It is involved in maintaining and improving the system with lower amounts of inventory.
D)It uses small production batch sizes.
E)It relies on buffers against unforeseen occurrences.
 
12          Which one of the following is not a typical question dealt with by an operations managers?
            A)        How much capacity will be needed in the months ahead?
            B)        What is a satisfactory location for a new facility?
            C)        Which products/services should be offered?
            D)        How to motivate employees?
            E)        All are typical of operations decisions.
 
13          Which one does not use operations management?
            A)        A CPA firm.
            B)        A bank.
            C)        A hospital
            D)        A supermarket
            E)        They all use it.
 
14          Which one is not generally considered to be an advantage of using models for decision making?
            A)        Providing a systematic approach to problem solving.
            B)        Emphasizing quantitative information.
            C)        Providing an exact representation of reality.
            D)        Enabling managers to answer "what if" questions
            E)        Requiring users to be specific about objectives.
 
15          Which came last in the development of manufacturing techniques?
            A)        Lean production.
            B)        Division of labor.
            C)        Mass production.
            D)        Craft production.
            E)        Interchangeable parts.
 
16        The three primary functions of a firm are financial management, operations management, and
accounting.
            A)        True
            B)        False
 
 
18        The principal activity in all production operations is to convert inputs into outputs that satisfy
consumer wants.
            A)        True
            B)        False
 
19        The father of scientific management was Henry Ford.
            A)        True
            B)        False
 
20        A model is an abstraction of reality.
            A)        True
            B)        False
 
21        It is easier to measure productivity for an operation that provides services than for one that
produces goods.
            A)        True
            B)        False
 
22        Both inputs and outputs are more uniform for an operation that provides services than for one that
produces goods.
            A)        True
            B)        False
 
23        The difference between the cost of inputs and the price of outputs is known as value added.
            A)        True
            B)        False
 
24        Craft production involves the use of interchangeable parts.
            A)        True
            B)        False
 
25       A supply chain is a sequence of organizations that are involved in producing goods and/or
producing services.
            A)        True
            B)        False
 
26        According to the Pareto principle, a relatively few factors are very important in achieving an
objective or solving a problem.
            A)        True
            B)        False
 
27        Two recent trends in operations management are flexibility and specialization.
            A)        True
            B)        False
 http://www.vuzs.info/
28        Mass production is based on the division of labor.
            A)        True
            B)        False

1. Locating all the drills in one work center, lathes in another work center, and milling machines in yet
another work center represents what type of layout?
a) fixed-position layout 
b) product layout 
c) cellular layout 
d) process layout 
e) none of the above
(Answer: d) 
{Text page 273 in the section on Process Layouts and the Lecture in the section on Process (Functional)
Layouts: Process or functional layouts group similar activities together in departments or work centers
according to the process or function they perform.}
2. Cycle time is not:
a) daily operating time divided by desired production 
b) the maximum allowable time at each work station 
c) how often items roll off the assembly line 
d) the time required to complete a product from start to finish 
e) Cycle time is all of the above
(Answer: d) 
{Text on page 287 in section on Line Balancing and the Lecture in the section on Designing Product
Layouts/Line Balancing: The cycle time can be viewed in a number of ways. First it is calculated as the
daily operating time divided by the desired production. This determines the maximum allowable time at
each work center and, since it is the time that an item remains at each workstation, it is also the time
between completed items rolling off the assembly line. The cycle time is not the time required to complete
a product from start to finish. This value would be the cycle time multiplied by the number of
workstations}
3. A common goal in designing process layouts is:
a) minimizing the number of workers 
b) minimizing idle time 
c) minimizing material handling costs 
d) balancing the work at each station 
e) maximizing output
(Answer: c) 
{Text on page 278 in the section on Designing Process Layouts and the Lecture in the section
on Designing Process Layouts: The primary objective in designing process layouts in manufacturing, and
in many services, is to minimize material handling costs which is a function of the amount of material
moved and the distance it has to move.}
4. An assembly line consists of 5 tasks with times of 12, 9, 8, 7, and 11 minutes. The cycle time for the line
is 25 minutes. The theoretical minimum number of workstations for this situation is
a) 1 
b) 2 
c) 3 
d) 4 
e) 5
(Answer: b) 
{Text on page 289 and the Lecture in the section on Theoretical Minimum Number of Workstations: The
theoretical minimum number of workstations represents the lower bound on the line balancing problem.
We cannot design a solution that would be more efficient than this. It is calculated as the sum of the task
times divided by the cycle time rounded up to the nearest integer. In this case the theoretical minimum
number of workstations is (12+9+8+7+11)/25 = 47/25 = 1.88 or 2 workstations.}
5. The flexible manufacturing system layout which is the most complex and most flexible is called
a) open-field system 
b) ladder layout 
c) closed-loop system 
d) progressive layout 
e) none of the above
(Answer: a) 
{Text on page 300 and the Lecture in the section on Flexible Manufacturing Systems: The open-field
layout is the most complex and flexible of the FMS layout schemes. It allows material to move among the
work centers in any order.}
6. Another term for a process layout is
a) job shop layout 
b) functional layout 
c) mixed-model layout 
d) group technology layout
(Answer: b) 
{Text on page 273 in the section on Process Layouts and the Lecture in the section on Process
(Functional) Layouts: Process layouts are also known as functional layouts because they group activities
by the function that is performed.}
Table 1

From\To A B C D E F
 A   15 50     125

B 20       75  

C 50       120 120

D         25  

E   50 100     100

F 110   100      
Table 2 
Proposed Layout
A B C

D E F
7. Using the information in Tables 1 and 2, calculate the nonadjacent loads.
a) 118 
b) 450 
c) 270 
d) 180 
e) 335
(Answer: e) 
{Text on pages 279 - 281 in the section on Block Diagramming and the Lecture in the section on Block
Diagramming: In this diagram the nonadjacent cell pairs are (A,C), (A,F), (D,C) and (D,F). The sum of the
nonadjacent loads are then (50+50+125+110+0+0+0+0) = 335.}
8. Which of the following is an advantage of cellular layouts?
a) It is easier to balance the flow of work through a cell 
b) It requires less training of workers 
c) It has reduced work-in-process inventory 
d) It requires less capital investment
(Answer: c) 
{Text pages 295 - 296 and the Lecture in the section on Cellular Layouts: One of the advantages of the
cellular layout is that it reduces work-in-process (WIP) inventory. The other items are, in fact, among the
disadvantages of a cellular layout. It is more difficult to balance the flow of work through a cell than
through a single assembly line. Cellular layouts also require more worker training and are require greater
capital investments.}
9. In general, work-in-process inventory is ______ for a process layout, and _______ for a product layout.
a) small, large 
b) large, small 
c) large, large 
d) small, small
(Answer: b) 
{Text on page 277 and Table 7.1 and the Lecture in Table 7.1: The work-in-process inventories are
generally high in a process layout and small in a product layout.}
10. In a cellular layout, the layout between manufacturing cells resembles a product layout
a) True 
b) False
(Answer: b) 
{Text on pages 291-292 in the section on Cellular Layouts and the Lecture in the section on Cellular
Layouts: A cellular layout contains elements of both product and process layouts. The layoutwithin cells
corresponds to a product layout (assembly line), while the flow of products between cells follows a process
layout.}
11. The process of equalizing the amount of work at each workstation is called precedence diagramming.
a) True 
b) False
(Answer: b) 
{Text on page 185 in the section on Designing Product Layouts and the Lecture in the section
on Designing Product Layouts: The process of equalizing the amount of work at each workstation is
called line balancing.}
12. The main advantage of the product layout is flexibility and the main disadvantage is efficiency.
a) True 
b) False
(Answer: b) 
{Text on page 275 in the section on Product Layouts and Table 7.1 and the Lecture in Table 7.1: This
advantages and disadvantages are just the opposite. The advantage of the product layout is its efficiency.
The main disadvantage is its inflexibility.}
13. For an assembly line if balance delay is high then efficiency will be low and vice versa.
a) True 
b) False
(Answer: a) 
{Text on page 289 and the lecture in the section on Line Balancing: Balance delay is the percentage of
time that workstations are idle or 
Balance delay = 1 - efficiency 
Thus when balance delay is high then efficiency must be low and vice versa.}
14. Cellular layouts are based on the concept of group technology to organize parts into part families.
a) True 
b) False
(Answer: a) 
{Text on page 291 in the section on Cellular Layouts and the Lecture in the section on Cellular
Layouts: Among the preconditions for cellular layouts is group technology, a technique used to group parts
into families based on similar shapes, materials, or processing requirements, which must be used to
categorize parts made in the manufacturing facility.}
15. Although product and process layouts tend to look different and use different material handling
methods, the same goals and objectives in designing the layout.
a) True 
b) False
(Answer: b) 
{Text on page 277 in the section on Product Layouts: Product and process layouts look different, use
different material handling methods and have different layout concerns. The objective in a process layout is
to minimize material handling cost while the objective in a product layout is to balance the work across
workstations.}
1. A document which lists materials and components that go into a product is known as
a) an assembly chart 
b) an operations process chart 
c) a process flow chart 
d) a bill of material 
e) none of the above
(Answer: d) 
{Text page 242 in the section on Process Plans and Lecture in the section on Process Plans: A bill of
materials is a list of the materials and parts that go into a product.}
2. A company will usually choose to produce parts or products in-house when
 a) a level workforce is not important 
b) demand is uncertain 
c) the company is operating at less than full capacity 
d) when demand is volatile in nature 
e) none of the above
(Answer: c) 
{Text on page 239 in the section on Make-or-Buy Decisions and Lecture in the section on Process
Planning/Make-or-Buy Decisions: If a company is not operating at or near full capacity, they will usually
make parts in-house, especially if maintaining a level work force is important.}
3. Which of the following processes usually involves a large investment of funds and resources, and
produces one item at a time to customer order?
a) project 
b) continuous 
c) batch 
d) mass 
e) none of the above
(Answer: a) 
{Text on page 229 in the section on Projects and Lecture in the section on Types of Processes/Projects:
Projects are one-of-a-kind production for a single customer and tend to involve large sums of money and
last a long time.}
ABC, Inc. is a new company and must decide which of three processes to use in producing their product. The
product is expected to sell for $14 per unit and the costs associated with each process appear below.
Table 1
Process Fixed Costs Variable Costs

A $6,000 $8

B $8,000 $4

C $9,000 $3
4. Using the information in Table 1, what is the breakeven point for Process A?
a) 1,000 units 
b) 571 units 
c) 6,000 units 
d) 429 units 
e) none of the above
(Answer: a) 
{Text on page 233-235 in the section on Process Selection with Break-Even Analysis and Lecture in the
section Process Selection with Break-Even Analysis: The break-even point is the volume level at which
total costs are equal to total revenues and the total profit is zero. This is numerically equal to the fixed costs
divided by the difference between the price per unit and the variable costs per unit. In this case the break
even point for Process A is 6,000/(14 - 8) = 1,000 units.}
5. In Table 6.1 the point of indifference for Process A and Process B is
a) 7,000 units 
b) 500 units 
c) 2,667 units 
d) 2,000 units
(Answer: b) 
{Text on page 237 in the section on Process Selection with Break-Even Analysis and Lecture in the
section Process Selection with Break-Even Analysis: The point of indifference is the volume level at
which the total costs of the alternatives are equal. It is found by setting the total cost equations of the two
alternatives equal to one another and solving for the indifference point. In this case 6000 + 8X = 8000 +
4X  or 4X = 2000;  X = 500}
6. If demand is 1100 units would you recommend
a) adopting Process A 
b) adopting Process B 
c) adopting Process C 
d) none of the above
(Answer: c) 
{This problem can be solved by finding the point of indifference between each pair of alternatives or by
computing the total costs of each alternative and picking the one with the lowest total costs providing that
the total costs do not exceed the revenues generated, i.e. that the volume is above the break-even point for
that alternative. In this situation 
Total Costs Process A = 6000 + 8(1100) = $14,800 
Total Costs Process B = 8000 + 4(1100) = $12,400 
Total Costs Process C = 9000 + 3(1100) = $12,300}
7. A driverless truck that follows a path of rails or wires embedded in the floor is called
a) an ATC 
b) a FMS 
e) an AS/RS 
d) a DNC 
e) an AGV
(Answer: e) 
{Text on page 255 in the section on Automated Material Handling and the Lecture in the section
on Automated Material Handling: An automated guided vehicle (AGV) is a driverless truck vehicle that
follows a path of rails, wires, specially painted lines on the floor, or radio signals.}
8. _______ is a strategy for organizing and controlling a factory rather than a technology that can be
purchased.
a) FMS 
b) CAPP 
c) CIM 
d) CPSS
(Answer: c) 
{Text on page 257-258 in the section on Computer-Integrated Manufacturing and Lecture in the section
on Computer-Integrated Manufacturing: CIM is a strategy for organizing and controlling a factory rather
than a specific technology that can be purchased.}
9. Very high volume commodity products are best suited to
a) projects. 
b) batch production. 
c) mass production. 
d) continuous processes.
(Answer: d) 
{Text on page 232 in the section on Continuous Production and the Lecture in the section on Continuous
Process Production: Continuous processes are used for very high-volume commodity products that are
standardized.}
10. Process flowcharts incorporate nonproductive activities as well as productive activities.
a) True 
b) False
(Answer: a) 
{Text on page 245 in the section on Process Analysis and the Lecture in the section on Process
Flowcharts: incorporating nonproductive activities as well as productive activities process flowcharts can
be used to analyze the efficiency of a process.}
11. Typically, it is better to produce in-house those parts or products with uncertain demand patterns rather
than subcontracting them out.
 a) True 
b) False
(Answer: b) 
{Text on page 239 in the section on Make-or-Buy Decisions: The stability of demand is also important to
this decision. If demand is steady then it is usually better to produce in-house but if demand patterns are
uncertain or volatile then the part is usually subcontracted.}
12. In general, more automated processes have higher fixed costs but lower variable costs.
a) True 
b) False
(Answer: a) 
{Text page 236 in the section on Process Selection with Break-Even Analysis: Since more automated
processes have higher fixed costs but lower variable costs break-even analysis is especially helpful in
automation decisions.}
13. At the break-even point, total revenue equals total cost.
a) True 
b) False
(Answer: a) 
{Text on page 234 in the section on Process Selection with Break-Even Analysis and the lecture in the
section on in the section on Process Selection with Break-Even Analysis: By definition, the break even
point is when total profit is equal to zero or when total revenue exactly equals total cost}
14. The main advantage of robots is that they can perform jobs much faster than humans can.
a) True 
b) False
(Answer: b) 
{Text on page 257 in the section on Robotics: Robots do not necessarily perform a job faster than human
workers but they can tolerate hostile environments, work longer hours and do the job more consistently.}
15. The reengineering process starts with a detailed map of the current process.
a) True 
b) False
(Answer: b) 
{Text on page pages246-247 in the section on Process Reengineering and the Lecture in the section
on Process Reengineering: The reengineering process starts with the goals and specifications for system
performance. It is only after a high-level process map is completed that a detailed process map is done.
Even here, the detailed map is a map of the new process, not the current one. In fact, reengineering is often
said to begin with a "blank sheet", i.e. without reference to the current process.}
1. Which of the following is not one of the ways of managing the uncertainty associated with the supply chain as
described in the lecture?
 
a) inventory 
b) just-in-time systems 
c) TQM 
d) vertical integration 
(Answer: c) 
{Lecture in the section on Supply Chain Design -- A Strategic Issue: Some organizations carry inventory
to guard against unexpected events. Increasingly companies are adopting just-in-time practices to ensure a
steady flow of information and materials. Still other companies choose to vertically integrate to own the
supplies and thereby exercise control and reduce uncertainty.}
2. Which mode of transportation is the least expensive per ton-mile?
 
a) trucking 
b) railroads 
c) air 
d) waterways 
(Answer: d) 
{Text on page 291-292 in the section on Transportation and Distribution Systems: The cheapest modes of
transportation are pipelines and water, each averaging less than 2 cents per tone-mile.}
3. _____________ limits suppliers to gain more control over quality and delivery.
a) electronic data interchange 
b) single-sourcing 
c) multiple sourcing 
d) direct-response 
(Answer: b) 
{Text on page 280 in the section on Single-Sourcing: With single-sourcing a company purchases a part or material
from a very few suppliers and therefore has more direct influence and control over the quality and delivery
performance of the supplier.}
ABC Company is considering the location for its new distribution center It has assembled the following
information about its five retail stores, including the location coordinates and number of monthly
shipments: 
 

Retail Store Coordinates Monthly Shipments

A (5, 2) 300

B (5, 5) 400

C (3, 7) 450

D (2, 6) 150

E (6, 4) 250
4. Using the data above, determine the least cost location using the center-of-gravity method. Which of
the following identifies the correct coordinates?
a) (4.94, 4.29) 
b) (4.20, 4.80) 
c) (73.81, 64.58) 
d) (4.3, 4.9) 
e) none of the above 
(Answer: d) 
{Text on pages 203-204 in the section on the Center-of-Gravity Technique and the Lecture in the section
on Center-of-Gravity Technique: In this technique, the x and y coordinates are calculated as the sum of the
corresponding coordinates multiplied by the traffic amount divided by the sum of the amounts shipped. In
this case

} 
  
 
5. Supply chain management includes all of the following except
 
a) purchasing or procurement 
b) inventory control 
c) advertising 
d) customer service 
(Answer: c) 
{Text on page 267 in the introductory section and the Lecture in the section on Supply Chain Design -- A Strategic
Issue: Supply chain management includes planning and managing supply and demand, acquiring materials,
producing and scheduling the product or service; warehousing, inventory control, and distribution; and delivery and
customer service. Functions within the supply chain include forecasting, sourcing, procurement, inventory control,
scheduling production, shipping and delivery, information management, quality management and customer service.}
6. Which of the following is used by companies to speed distribution and reduce delivery cost to
customers?
a) trucking 
b) outsourcing distribution 
c) electronic data interchange 
d) location factor rating 
(Answer: b) 
{Text on page 291 in the section on Distribution Outsourcing:  . . . outsourcing allows the company to focus on its
core competencies.  It aslo takes advantage of the expertise that distribution companies have developoed. 
Outsourcing distribution activities tends to lower inventory levels and reduce costs for the outsourcing company.}
7. Which of the following factors makes the sourcing and procurement decisions strategic decisions for a
company
a) cost of transporting goods 
b) the interdependence of organizations in a supply chain 
c) the number of suppliers or vendors used 
d) multiple warehouses for distribution 
(Answer: b) 
{Text on page 268 in the section on Supply Chain Design: A Strategic Issue: This level of interdependence of the
organizations in the supply chain makes the selection of suppliers (sourcing) and the purchasing process
(procurement) important strategic decisions for a company}
8. In the United States, the greatest volume of freight is shipped by trucking.
a) True 
b) False 
(Answer: b) 
{In the text on page 291 in the section on Transportation and Distribution Systems: In the United States the
greatest volume of freight is shipped by railroads (approximately one third of the total).}
9. Intermodal transportation refers to shipments that are transported over more than one railroad.
a) True 
b) False 
(Answer: b) 
{Text on page 292 in the section on Transportation and Distribution Systems: Combining different modes of
transportation is referred to as intermodal transportation.}
10. In single-sourcing or partnering, the supplier is sometimes also given product design responsibilities.
a) True 
b) False 
(Answer: a) 
{Text on page 280 in the section on Single-Sourcing and in the Lecture in the section on Single-Sourcing: An
additional aspect of the partnering relationship in single-sourcing is the involvement of the supplier in the product
design process. In many cases the supplier is given the responsibility of designing a new part or component to meet
the quality standards and features outlined by the company.}
11. Measuring current performance against where a company wants performance to be is called cross
docking.
a) True 
b) False 
(Answer: b) 
{Text on page 283 in the section on Wal-Mart:  Goods "cross" from one loading dock to another in 48 hours or less. 
This feature is known as cross-docking.} 
  
  
1 Frederick W. Taylor is generally credited with introducing the moving assembly line.
A)True
B)False
 
2 Human effort, technology, raw materials, information and time are all examples of the necessary inputs
to operations.
A)True
B)False
 
3 Outputs of operations may be classified as goods, raw materials and profits.
A)True
B)False
 
4 It is easier to measure productivity for an operation that provides services than for one that produces
goods.
A)True
B)False
 
5 According to the Pareto principle, a relatively few factors are very important in achieving an objective or
solving a problem.
A)True
B)False
 
6 Two recent trends in operations management are supply chain management and specialization.
A)True
B)False
 
7 Which one of the following would not generally be considered an aspect of operations management?
A)Schedule work
B)Secure financial resources
C)Maintain quality
D)Oversee the transformation process
E)Manage inventories
 
8 Which one of these was not mentioned in the list of recent trends in operations management?
A)Total quality management
B)Worker involvement
C)Global competition.
D)Automation.
E)Environmental issues.
 
9 Which came last in the development of manufacturing techniques?
A)Lean production.
B)Division of labor.
C)Mass production.
D)Craft production.
E)Interchangeable parts.
 
10 Which of the following is not a type of operations?
A)goods production
B)storage/transportation
C)entertainment
D)communication
E)price reduction
 
11 Which of the following is not true about a lean production system?
A)It puts emphasis on quality, flexibility, and time reduction.
B)It puts emphasis on reducing a company's labor force.
C)It is involved in maintaining and improving the system with lower amounts of inventory.
D)It uses small production batch sizes.
E)It relies on buffers against unforeseen occurrences.
 
12          Which one of the following is not a typical question dealt with by an operations managers?
            A)        How much capacity will be needed in the months ahead?
            B)        What is a satisfactory location for a new facility?
            C)        Which products/services should be offered?
            D)        How to motivate employees?
            E)        All are typical of operations decisions.
 
13          Which one does not use operations management?
            A)        A CPA firm.
            B)        A bank.
            C)        A hospital
            D)        A supermarket
            E)        They all use it.
 
14          Which one is not generally considered to be an advantage of using models for decision making?
            A)        Providing a systematic approach to problem solving.
            B)        Emphasizing quantitative information.
            C)        Providing an exact representation of reality.
            D)        Enabling managers to answer "what if" questions
            E)        Requiring users to be specific about objectives.
 
15          Which came last in the development of manufacturing techniques?
            A)        Lean production.
            B)        Division of labor.
            C)        Mass production.
            D)        Craft production.
            E)        Interchangeable parts.
 
16        The three primary functions of a firm are financial management, operations management, and
accounting.
            A)        True
            B)        False
 
 
18        The principal activity in all production operations is to convert inputs into outputs that satisfy
consumer wants.
            A)        True
            B)        False
 
19        The father of scientific management was Henry Ford.
            A)        True
            B)        False
 
20        A model is an abstraction of reality.
            A)        True
            B)        False
 
21        It is easier to measure productivity for an operation that provides services than for one that
produces goods.
            A)        True
            B)        False
 
22        Both inputs and outputs are more uniform for an operation that provides services than for one that
produces goods.
            A)        True
            B)        False
 
23        The difference between the cost of inputs and the price of outputs is known as value added.
            A)        True
            B)        False
 
24        Craft production involves the use of interchangeable parts.
            A)        True
            B)        False
 
25       A supply chain is a sequence of organizations that are involved in producing goods and/or
producing services.
            A)        True
            B)        False
 
26        According to the Pareto principle, a relatively few factors are very important in achieving an
objective or solving a problem.
            A)        True
            B)        False
 
27        Two recent trends in operations management are flexibility and specialization.
            A)        True
            B)        False
 http://www.vuzs.info/
28        Mass production is based on the division of labor.
            A)        True
            B)        False
1 A supply chain is defined as the group of firms that provide all processes required to make a
finished product available to the customer.
A) True
B) False

2 SCM can include having suppliers actually on site producing products or services in a
manufacturers facility.
A) True
B) False
3 SCM suppliers should be viewed as "partners."
A) True
B) False

4 Wal-Mart's EDI system issues electronic purchase orders and receives electronic invoices from
virtually all of Wal-Mart's suppliers.
A) True
B) False

5 Which of the following is NOT a reason that companies are depending more on their suppliers?
A) More focus on core competencies
B) Need for more flexibilities
C) Desire to share risks
D) More control over their suppliers

6 The trend in organizations is to place the SCM function:

A) Under the manufacturing function
B) Under the finance function
C) Under the engineering function
D) At the same level as the other major functions

7 Which of the following is NOT a factor impacting the supply chain?

A) Reduced number of suppliers
B) Increased competition
C) Longer product life cycles
D) Increased opportunities to strategically use technology

8 If two potential suppliers can deliver a part with the same quality and prices, the selection
should be based on:
A) Age of the firms
B) A coin flip
C) Outside evaluation
D) The capabilities and flexibilities of the firms

9 Just-in-time/SCM purchasing requires the following condition:

A) Many suppliers
B) Short-term contracts
C) Cooperation between purchasing and suppliers
D) Continuous competitive bidding

10 The amount of inventory kept at each stock point in a warehouse network is usually based on:
A) Minimizing transportation costs
B) Constant demand
C) Tradeoffs between warehousing, inventory, and transportation costs
D) Product pricing strategy

11 Which of the following is NOT a benefit of SCM/JIT Purchasing?

A) Consistent quality
B) Savings on resources
C) Lower costs
D) Less dependence on suppliers

12 Purchased items account for approximately what % of costs of goods sold?

A) 30-40%
B) 40-50%
C) 50-60%
D) 60-70%
E) 70-80%
1. _______ analysis relates to what processes, activities, and decisions actually create costs in your
supply chain.
A. Cost driver
B. Value proposition
C. Cost reduction
D. Target costing
cost driver analysis considers how processes, activities, and decisions actually create costs in the value
chain/supply chain.
2. In the 1980s, Toyota and Honda outcompeted American carmakers because they relied on suppliers
for approximately _______ percent of a car’s value.
A. 30
B. 45
C. 60
D. 80
4.The _______ has made it possible for other companies to eliminate intermediaries and sell directly to
the end consumer. 
A. SCM
B. Internet
C. competition
D. global sourcing
The World Wide Web has made it possible for each consumer, sans intermediaries, to access the sellers
in the market place directly. If a business has been constrained by its ability to present itself directly in the
market place, there will be growing opportunities to by pass intermediaries and sell directly to the end
consumer.
5. Value stream mapping is an application of process mapping, developed to apply _______ principles to
process improvement.
A. management
B. lean 
C. supply chain
D. cycle time
Value stream mapping has supporting methods that are often used in Lean environments to analyze and
design flows at the system level (across multiple processes).
6. A supply chain is made up of a series of processes that involve an input, a _______, and an output.
A. shipment
B. supplier
C. customer
D. transformation 
7. _______ is a tool to chart how individual processes are currently being conducted and to help lay out
new improved processes.
A. Process mapping
B. Pareto charting
C. Supply chain design
D. Design chain mapping
8.Identify from the following list a major strategic risk associated with outsourcing.
A. Outsourcing landed cost is usually higher than insourcing cost.
B. The supplier is purchased by a competitor.
C. The business loses sight of market trends.
D. The cost of supplied material is passed on to the customer.
9. _______ is the design of seamless value-added processes across organization boundaries to meet the
real needs of the end customer.
A. Operations
B. Supply chain management
C. Process engineering
D. Value charting
10. The impact of cost reduction on profits is much larger than the impact of increased
A. innovation.
B. production.
C. information.
D. sales. 

11. _______ considers how your organization competes and is an essential element of corporate
strategy.
A. Value proposition analysis
B. Leadership
C. A consultant
D. A competitor
12. “3PL” involves using a supplier to provide _______ services.
A. marketing
B. design
C. logistics 
D. contract manufacturing
Third Party Logistics; using an OUTSOURCED supplier to provide some combination of logistics activities
such as transportation, warehousing, procurement, manufacturing, inventory management, and customer
service.
13. The collective learning in the organization, especially how to coordinate diverse production
skills and integrate multiple streams of technologies, is called
A. innovative constraint.
B. second-tier competency.
C. corporate skill.
D. core competency. 
Core competencies are the collective learning in organizations, and involve how to coordinate diverse
production skills and integrate multiple streams o

14. Integration of business economics and strategic planning has given rise to a new area of
study called __________.
A. Micro Economics
C. Corporate Economics
B. Macro Economics
D. Managerial Economics
1. What term describes a vertical expansion of job duties in order to give the worker more
responsibility?
a. Job enlargement
b. Job rotation
c. Job enrichment
d. Job design

2. What are the two basic types of production systems?

a. Automated and manual
b. Intermittent and non-intermittent process
c. Normal and continuous process
d. Continuous process and batch

3. What type of process would a paper mill be most likely to use?

a. Continuous flow
b. Project
c. Job shop
d. Flow shop

4. What technique deals with the problem of supplying sufficient facilities to production lines
or individuals that require uneven service?
a. Supply-demand theory
b. PERT
c. Inventory theory
d. Queuing theory

5. A manufacturer has been receiving excessive numbers of defective standard machine parts
from a vendor on a regular basis. What is the most effective way to design a formal inspection
system
for incoming parts?
a. Queuing analysis
b. Time series analysis
c. Statistical quality control
d. Regression analysis

6. A set of simultaneous equations that has more variables than constraints has
a. no solution
b. an infinite number of solutions
c. a finite solution
d. an infinite solution

7. In a PERT/CPM network, computing the critical path requires

a. determining the total project duration
b. assigning the earliest finish time for an activity as the earliest start time for the next
c. that the latest finishing time for an activity not delay the overall project beyond initial
expectation
d. a sophisticated and complex computer program

8. At the completion of the forward and backward passes, the slack for an activity is given by the
a. difference between early start and early finish
b. difference between early start and latest finish
c. difference between latest start and early finish
d. amount of idle labor on the critical path

9. What type of control chart is used to monitor the number of defects per unit?
a. p-chart
b. R-chart
c. c-chart
d. x-bar chart

10. A project has three paths: A—B—C has a length of 25 days. A—D—C has a length of 15
days. A—E—C has a length of 20 days. Which of the following statements is correct?
a. A—D—C is the critical path.
b. A—B—C has the most slack.
c. The expected duration of the project is 25 days.
d. The expected duration of this project is 60 days.

11. The operating characteristic (OC) curve shows the probability of

a. rejection for every possible true percentage of defectives
b. acceptance for every possible true percentage of defectives
c. making type I errors for various percentages of defectives
d. none of the above

12. If an artificial variable remains in the solution with a positive value after the stopping criterion
has been reached, the problem
a. is infeasible
b. is optimal
c. needs a new basis
d. has more than one solution

13. What are the two sources of costs in queuing analysis?

a. Arrivals and departures
b. Arrivals and idleness
c. Waiting customers and capacity
d. Equipment breakdowns and departures

14. The transportation model method that is used to evaluate location alternatives minimizes total
a. sources
b. destinations
c. capacity
d. shipping costs

15. What is simulation?

a. A quick solution method to problem-solving
b. A formalized deterministic approach to problem-solving
c. A graphical method to problem-solving
d. A trial-and-error approach to problem-solving

16. What priority rule is being used when jobs are processed according to the lowest ratio of due
date to remaining processing time?
a. CR (critical ratio)
b. EDD (earliest due date first)
c. FCFS (first come, first served)
d. S/O (least slack per operation first)

17. Moving from the aggregate plan to a master production schedule requires
a. rough cut capacity planning
b. sub-optimization
c. disaggregation
d. strategy formulation

18. Which of the following statements is true of Lean-Six Sigma?

a. Lean principles focus on advanced statistical methods.
b. Lean principles and Six-Sigma are separate bodies of knowledge
c. Lean principles have been developed over a lengthy period of time.
d. Lean principles include the 5Ss framework and practices.

19. When the flow of materials is variable,

a. layout by process is most suitable
b layout by product is most suitable
c. layout by fixed position is most suitable
d. line balancing is most suitable

20. A fixed interval system

a. adds the same predetermined amount to inventory each time replenishment occurs
b. is suitable for joint replenishment items
c. is triggered at the reorder level
d. requires perpetual monitoring of inventory records

Answers 
1. c 2. b 3. a 4. d 5. c 6. b 7. b 8. a 9. c 10. c 11. b 12. a 13. c 14. d 15. d 16. a 17. c 18. d 19. a 20. b