Om Chap 4

Who defined ‘Taguchi’ methods?
Your Answer:
Joseph Juran
Correct Answer:
Genichi Taguchi
No, that’s not correct.
2.
Correct Quality function deployment (QFD) is used for design evaluation and improvement and focuses
on ensuring that the eventual design of a product or service meets the needs of its customers.
Your Answer:
True
Yes, that's correct.
3.
Incorrect Which of the following is NOT an example of an attempt to reduce design complexity?
Your Answer:
Modularisation
Correct Answer:
Diversification
No, that's not correct.
4.
Correct From a marketing perspective, the amount of market share a product or service stands to gain
relates to ‘acceptability’ of a concept.
Your Answer:
True
5.
Correct ‘Ideas’ are essentially the same as ‘concepts.
Your Answer:
False
6.
Correct The further on in the design activity:
Your Answer:
The higher the cost of change

7.
Correct At each stage, design decisions cut down the number of options which are available further
along the design activity.
Your Answer:
True
8.
Incorrect Which of the following is NOT correct?
Your Answer:
There is high uncertainty at the start the product design process

Correct Answer:
Screening is carried out after each stage of product / service design

No, this statement is true.
9.
Incorrect Which of the following is correct?
Your Answer:
Evaluation and improvement comes after preliminary design and final design
Correct Answer:
Screening comes before preliminary design, but after concept generation

No, that’s not correct. It comes after preliminary design, but before final design.
10.
Incorrect At a restaurant, which of the following is a ‘core’ part of the service?
Your Answer:
The preparation of food

Correct Answer:
The meal
11.
Correct If removed, ‘supporting’ goods and services will destroy the nature of the package.
Your Answer:
False
12.
Incorrect The following is NOT part of a service concept for a restaurant?
Your Answer:
An attractive environment
Correct Answer:
Three waiters and a chef

13.
Correct The timescale in product development in the pharmaceutical industry is typically longer than in
the computing and electronics industry.
Your Answer:
True
Yes, that's correct. In the pharmaceutical industry, it takes many years from the time a potential
new drug is conceived to having it on the market.
14.
Incorrect Where should product or service design start?
Your Answer:
With the marketing department

Correct Answer:
With the customer

15.
Incorrect Why is good product and service design important?
Your Answer:
The visual appeal of a product is the most important factor in selling it.
Correct Answer:
Products and services are usually the first thing customers see of a company, so they should have an
impact.
In process mapping derived from ‘scientific management’, what does the following symbol represent?
Your Answer:
Inspection
Correct Answer:
Storage
2.
Incorrect In process mapping derived from ‘scientific management’ what does the following
symbol represent?
Your Answer:
Direction of flow
Correct Answer:
Delay
No, that’s not correct.
3.
Incorrect In process mapping derived from system analysis, what does the following symbol
represent?
Your Answer:
Delay
Correct Answer:
Decision
4.
Incorrect The volume-variety position of an operation has implications for almost every aspect of
its design activities. In a low volume, high variety operation, which is the correct combination of design
decisions?
Your Answer:
Product/service standardisation low, location usually centralised, flow intermittent

Correct Answer:
Product/service standardisation low, location can be decentralised, flow intermittent

No, in a low volume, high variety operation, location can be decentralised.
5.
Incorrect Which of the following is not an example of modularisation?
Your Answer:
Computers
Correct Answer:
Electricity utility
No, this is increasingly a modularised product.
6.
Correct In a jobbing process the main order-winning criterion is generally:
Your Answer:
Capability
7.
Correct Which of the following statements would generally be considered as correct?
Your Answer:
Labour costs are higher in a job shop operation than in most other processes.
8.
Correct Which one of the following is generally considered a characteristic of a line process?
Your Answer:
Work is not fixed but moves through a sequence of operations.

9.
Incorrect Environmental protection issues now increasingly impact on the operations function.
Which one of the following is not an important consideration?
Your Answer:
The end-of-life of the product.

Correct Answer:
The cost of energy used in the process.

10.
Incorrect Types of professional services do not normally include:
Your Answer:
Architects' practices
Correct Answer:
Police stations
11.
Incorrect Creativity is increasingly seen as an essential ingredient in which part of the design
process?
Your Answer:
Design of product and services

Correct Answer:
Design of products, services, and processes

12.
Incorrect ‘You have to kiss a lot of frogs to find the prince. But remember, one prince can pay for a
lot of frogs’. Who is this quote attributed to?
Your Answer:
George Bush
Correct Answer:
Art Fry
13.
Incorrect Feasibility relates to:
Your Answer:
What could go wrong with the design.

Correct Answer:
How difficult the design is to bring to market.

14.
Correct The return in terms of financial and performance improvement of a design relates to which
evaluation criteria?
Your Answer:
Acceptability
15.
Correct Considering the impact of things not going to plan relates to which broad category of evaluation
for assessing design options?
Your Answer:
Vulnerability
Yes, that's correct
Multiple-Choice Quiz
(See related pages)

Please answer the following questions.
1 The advantages of standardization include: I. early freezing of the design. II. Fewer parts to deal with in
inventory. III. Reduced training cost and time. IV. More routine purchasing.
A) I, II
B) I, IV
C) I, II, III
D) II, III, IV
E) I, II, III, IV
2 The term that pertains to incorporating customer ideas in product design is:
A) TQM
B) CAD
C) QFD
D) Robust design.
E) Reverse engineering
3 Product designs that use computers is referred to as:

A) QFD
B) CED
C) RFD
D) CAD
E) TQM
4 Taking apart a competitor's product to better understand how it operates is:
A) Remanufacturing
B) Concurrent engineering
C) Robust design
D) Illegal
E) None of the above.

5 Which of these is a stage in the life cycle of a product or service?
A) Incubation.
B) Growth.
C) Maturity.
D) Saturation.
E) All of the above are stages.

6 The Taguchi Approach is most closely associated with:
A) Total Quality Management
B) Standardization.
C) Quality function deployment.
D) Robust design.
E) Concurrent engineering.
7 Which one of these is not related to mass customization?
A) Standardization
B) Reverse engineering
C) Delayed differentiation
D) Modular design
E) Manufacturability
8 Remanufacturing means:
A) Reassembling a defective product.
B) Redesigning the layout of the factory.

C) Refurbishing used products.
D) Redesigning the product.
E) Retraining the workers.
9 Basic research, applied research and development are all part of the product life cycle.
A) True
B) False
10 The Uniform Commercial Code specified that a product must be suitable for its intended purpose.
A) True
B) False
11 The term robust design refers to a product that has exceptional strength.
A) True
B) False
12 The term concurrent engineering refers to bringing engineering and manufacturing personnel together early
in the design phase.
A) True
B) False
13 Modular design is a form of standardization.

A) True
B) False
14 CAD uses computer graphics for product design.

A) True
B) False
15 Quality function deployment is a method of integrating the "voice of the customer" into the design process.
A) True
B) False
16 Equipment breakdowns is a frequent cause of delayed differentiation.

A) True
B) False
17 Standardized parts are interchangeable parts.
A) True
B) False
18 Designing for disassembly and designing for recycling are nearly synonymous terms.
A) True
B) False
19 The name Taguchi is associated with robust design.
A) True
B) False
20 Recycling is essentially remanufacturing.
A) True
B) False
21 A major consideration in product design is manufacturability.
A) True
B) False
22 Environmental scanning refers to checking environmental regulations before proceeding with product
design.
A) True
B) False
23 The term concurrent engineering refers to bringing engineering and manufacturing personnel together early
in the design phase.
A) True
B) False
24 Delayed differentiation and modular design are two tactics useful for mass customization.
A) True
B) False
25 Quality function deployment is a method of integrating the "voice of the customer" into the design process.
A) True
B) False
26 Product designs that use computers is referred to as:
A) QFD
B) CAM
C) RFD
D) CAD
E) TQM
27 Which of the following may be a dimension of quality?
A) Performance.
B) Conformance.
C) Reliability.
D) Durability.
E) All may be dimensions of quality.

28 Remanufacturing means:
A) Reassembling a defective product.
B) Redesigning the layout of the factory.

C) Replacing worn out components in products and reselling the products.
D) Redesigning the product.

E) Retraining the workers.
29 One possible disadvantage of modular design is that:
A) Replacement and repair is more difficult.

B) Failure diagnosis is more complex.
C) Number of configurations of modules decreases.
D) Individual parts lose their identities.

E) Inventory problems arise.
30 As part of a strategy for improving competitiveness, a manager may have to initially sacrifice:
A) Research and development

B) Short-term performance
C) Employee pay rises
D) Product or service quality

E) all of the above
31 Service design generally differs from product design in which of the following ways?
A) Service design tends to focus on tangible factors.

B) There is less latitude in detecting and correcting errors prior to delivery.
C) There is a lesser requirement to be aware of competitors' offerings.
D) There is less visibility to customers.

E) None of the above
MGT613 Operation Management Solved MCQS Chapert 3b by William Stevenson

Forecasting
52. Forecasts based on judgment and opinion don't include
A. executive opinion
B. salesperson opinion
C. second opinions
D. customer surveys
E. Delphi methods
Second opinions generally refer to medical diagnoses, not demand forecasting.
53. In business, forecasts are the basis for:

A. capacity planning
B. budgeting
C. sales planning
D. production planning
E. all of the above
A wide variety of areas depend on forecasting.
54. Which of the following features would not generally be considered common to all forecasts?
A. Assumption of a stable underlying causal system.
B. Actual results will differ somewhat from predicted values.
C. Historical data is available on which to base the forecast.
D. Forecasts for groups of items tend to be more accurate than forecasts for individual items.
E. Accuracy decreases as the time horizon increases.
In some forecasting situations historical data are not available.
55. Which of the following is not a step in the forecasting process?

A. determine the purpose and level of detail required
B. eliminate all assumptions
C. establish a time horizon
D. select a forecasting model
E. monitor the forecast
We cannot eliminate all assumptions.
56. Minimizing the sum of the squared deviations around the line is called:
A. mean squared error technique
B. mean absolute deviation
C. double smoothing
D. least squares estimation
E. predictor regression
Least squares estimations minimizes the sum of squared deviations around the estimated regression function.
57. The two general approaches to forecasting are:

A. mathematical and statistical
B. qualitative and quantitative
C. judgmental and qualitative
D. historical and associative
E. precise and approximation
Forecast approaches are either quantitative or qualitative.
58. Which of the following is not a type of judgmental forecasting?

A. executive opinions
B. sales force opinions
C. consumer surveys
D. the Delphi method
E. time series analysis
Time series analysis is a quantitative approach.
59. Accuracy in forecasting can be measured by:

A. MSE
B. MRP
C. MAPE
D. MTM
E. A & C
MSE is mean squared error; MAPE is mean absolute percent error.
60. Which of the following would be an advantage of using a sales force composite 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.
Members of the sales force should be the organization's tightest link with its customers.
61. Which phrase most closely describes the Delphi technique?

A. associative forecast
B. consumer survey
C. series of questionnaires
D. developed in India
E. historical data
The questionnaires are a way of fostering a consensus among divergent perspectives.
62. The forecasting method which uses anonymous questionnaires to achieve a consensus forecast is:
A. sales force opinions
B. consumer surveys
C. the Delphi method
D. time series analysis
E. executive opinions
Anonymity is important in Delphi efforts.
63. One reason for using the Delphi method in forecasting is to:
A. avoid premature consensus (bandwagon effect)
B. achieve a high degree of accuracy
C. maintain accountability and responsibility
D. be able to replicate results
E. prevent hurt feelings
A bandwagon can lead to popular but potentially inaccurate viewpoints to drown up other important
considerations.
64. Detecting non-randomness in errors can be done using:

A. MSEs
B. MAPs
C. Control Charts
D. Correlation Coefficients
E. Strategies
Control charts graphically depict the statistical behavior of forecast errors.
65. Gradual, long-term movement in time series data is called:

A. seasonal variation
B. cycles
C. irregular variation
D. trend
E. random variation
Trends move the time series in a long-term direction.
66. The primary difference between seasonality and cycles is:

A. the duration of the repeating patterns
B. the magnitude of the variation
C. the ability to attribute the pattern to a cause
D. the direction of the movement
E. there are only 4 seasons but 30 cycles
Seasons happen within time periods; cycles happen across multiple time periods.
67. Averaging techniques are useful for:

A. distinguishing between random and non-random variations
B. smoothing out fluctuations in time series
C. eliminating historical data
D. providing accuracy in forecasts
E. average people
Smoothing helps forecasters see past random error.
68. Putting forecast errors into perspective is best done using

A. Exponential smoothing
B. MAPE
C. Linear decision rules
D. MAD
E. Hindsight
MAPE depicts the forecast error relative to what was being forecast.
69. Using the latest observation in a sequence of data to forecast the next period is:
A. a moving average forecast
B. a naive forecast
C. an exponentially smoothed forecast
D. an associative forecast
E. regression analysis
Only one piece of information is needed for a naïve forecast.
70. For the data given below, what would the naive forecast be for the next period (period #5)?
A. 58
B. 62
C. 59.5
D. 61
E. cannot tell from the data given
Period 5's forecast would be period 4's demand.
71. Moving average forecasting techniques do the following:

A. immediately reflect changing patterns in the data
B. lead changes in the data
C. smooth variations in the data
D. operate independently of recent data
E. assist when organizations are relocating
Variation is smoothed out in moving average forecasts.
72. Which is not a characteristic of simple moving averages applied to time series data?
A. smoothes random variations in the data
B. weights each historical value equally
C. lags changes in the data
D. requires only last period's forecast and actual data
E. smoothes real variations in the data
Simple moving averages can require several periods of data.
73. In order to increase the responsiveness of a forecast made using the moving average technique, the number
of data points in the average should be:
A. decreased
B. increased
C. multiplied by a larger alpha
D. multiplied by a smaller alpha
E. eliminated if the MAD is greater than the MSE
Fewer data points result in more responsive moving averages.
74. A forecast based on the previous forecast plus a percentage of the forecast error is:
A. a naive forecast
B. a simple moving average forecast
C. a centered moving average forecast
D. an exponentially smoothed forecast
E. an associative forecast
Exponential smoothing uses the previous forecast error to shape the next forecast.
75. Which is not a characteristic of exponential smoothing?

A. smoothes random variations in the data
B. weights each historical value equally
C. has an easily altered weighting scheme
D. has minimal data storage requirements
E. smoothes real variations in the data
The most recent period of demand is given the most weight in exponential smoothing.
76. Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a
naive forecast?
A. 0
B. .01
C. .1
D. .5
E. 1.0
An alpha of 1.0 leads to a naïve forecast.
77. Simple exponential smoothing is being used to forecast demand. The previous forecast of 66 turned out to be
four units less than actual demand. The next forecast is 66.6, implying a smoothing constant, alpha, equal to:
A. .01
B. .10
C. .15
D. .20
E. .60
A previous period's forecast error of 4 units would lead to a change in the forecast of 0.6 if alpha equals 0.15.
78. Given an actual demand of 59, a previous forecast of 64, and an alpha of .3, what would the forecast for the
next period be using simple exponential smoothing?
A. 36.9
B. 57.5
C. 60.5
D. 62.5
E. 65.5
Multiply the previous period's forecast error (-5) by alpha and then add to the previous period's forecast.
79. Given an actual demand of 105, a forecasted value of 97, and an alpha of .4, the simple exponential
smoothing forecast for the next period would be:
A. 80.8
B. 93.8
C. 100.2
D. 101.8
E. 108.2
Multiply the previous period's forecast error (8) by alpha and then add to the previous period's forecast.
80. Which of the following possible values of alpha would cause exponential smoothing to respond the most
quickly to forecast errors?
A. 0
B. .01
C. .05
D. .10
E. .15
Larger values for alpha correspond with greater responsiveness.
81. A manager uses the following equation to predict monthly receipts: Yt = 40,000 + 150t. What is the forecast
for July if t = 0 in April of this year?
A. 40,450
B. 40,600
C. 42,100
D. 42,250
E. 42,400
July would be period 3, so the forecast would be 40,000 + 150(3).
82. In trend-adjusted exponential smoothing, the trend adjusted forecast (TAF) consists of:
A. an exponentially smoothed forecast and a smoothed trend factor
B. an exponentially smoothed forecast and an estimated trend value
C. the old forecast adjusted by a trend factor
D. the old forecast and a smoothed trend factor
E. a moving average and a trend factor
Both random variation and the trend are smoothed in TAF models.
83. In the "additive" model for seasonality, seasonality is expressed as a ______________ adjustment to the
average; in the multiplicative model, seasonality is expressed as a __________ adjustment to the average.
A. quantity, percentage
B. percentage, quantity
C. quantity, quantity
D. percentage, percentage
E. qualitative, quantitative
The additive model simply adds a seasonal adjustment to the de-seasonalized forecast. The multiplicative model
adjusts the de-seasonalized forecast by multiplying it by a season relative or index.
84. Which technique is used in computing seasonal relatives?

A. double smoothing
B. Delphi
C. Mean Squared Error (MSE)
D. centered moving average
E. exponential smoothing
The centered moving average serves as the basis point for computing seasonal relatives.
85. A persistent tendency for forecasts to be greater than or less than the actual values is called:
A. bias
B. tracking
C. control charting
D. positive correlation
E. linear regression
Bias is a tendency for a forecast to be above (or below) the actual value.
86. Which of the following might be used to indicate the cyclical component of a forecast?
A. leading variable
B. Mean Squared Error (MSE)
C. Delphi technique
D. exponential smoothing
E. Mean Absolute Deviation (MAD)
Leading variables, such as births in a given year, can correlate strongly with long-term phenomena such as
cycles.
87. The primary method for associative forecasting is:

A. sensitivity analysis
B. regression analysis
C. simple moving averages
D. centered moving averages
E. exponential smoothing
Regression analysis is an associative forecasting technique.
88. Which term most closely relates to associative forecasting techniques?

A. time series data
B. expert opinions
C. Delphi technique
D. consumer survey
E. predictor variables
Associate techniques use predictor variables.
89. Which of the following corresponds to the predictor variable in simple linear regression?
A. regression coefficient
B. dependent variable
C. independent variable
D. predicted variable
E. demand coefficient
Demand is the typical dependent variable when forecasting with simple linear regression.
90. The mean absolute deviation (MAD) is used to:

A. estimate the trend line
B. eliminate forecast errors
C. measure forecast accuracy
D. seasonally adjust the forecast
E. all of the above
MAD is one way of evaluating forecast performance.
91. Given forecast errors of 4, 8, and - 3, what is the mean absolute deviation?
A. 4
B. 3
C. 5
D. 6
E. 12
Convert each error into an absolute value and then average.
92. Given forecast errors of 5, 0, - 4, and 3, what is the mean absolute deviation?
A. 4
B. 3
C. 2.5
D. 2
E. 1
Convert each error into an absolute value and then average.
93. Given forecast errors of 5, 0, - 4, and 3, what is the bias?
A. - 4
B. 4
C. 5
D. 12
E. 6
Sum the forecast errors.
94. Which of the following is used for constructing a control chart?

A. mean absolute deviation (MAD)
B. mean squared error (MSE)
C. tracking signal (TS)
D. bias
E. none of the above
The mean squared error leads to an estimate for the sample forecast standard deviation.
95. The two most important factors in choosing a forecasting technique are:
A. cost and time horizon
B. accuracy and time horizon
C. cost and accuracy
D. quantity and quality
E. objective and subjective components
More accurate forecasts cost more but may not be worth the additional cost.
96. The degree of management involvement in short range forecasts is:

A. none
B. low
C. moderate
D. high
E. total
Short range forecasting tends to be fairly routine.
97. Which of the following is not necessarily an element of a good forecast?

A. estimate of accuracy
B. timeliness
C. meaningful units
D. low cost
E. written
A good forecast can be quite costly if necessary.
98. Current information on _________ can have a significant impact on forecast accuracy:
A. prices
B. promotion
C. inventory
D. competition
E. all of the above
Demand in the future could be subject to decision-making prompted by prices, promotions, inventory or
competition. Accuracy will be affected if these are (or are not) taken into consideration.
99. A managerial approach toward forecasting which seeks to actively influence demand is:
A. reactive
B. proactive
C. influential
D. protracted
E. retroactive
Simply responding to demand is a reactive approach.
100. Customer service levels can be improved by better:

A. mission statements
B. control charting
C. short term forecast accuracy
D. exponential smoothing
E. customer selection
41. In the 1970's and 1980's in the USA, organizations concentrated on:
A. operations strategies
B. improving quality
C. marketing and financial strategies
D. revising mission statements
E. environmental issues
This led to U.S. firms being not very competitive with regard to their operations.
42. In the past, a significant reason why U.S. productivity was the highest in the world was high:
A. agricultural productivity
B. manufacturing productivity
C. labor productivity
D. savings productivity
E. governmental productivity
This freed up resources for productivity improvements in a wide variety of non-agricultural sectors.
43. Which of the following is not a factor that affects productivity?

A. computer viruses
B. design of the workspace
C. use of the Internet
D. standardizing processes
E. wireless cellular phones
These don't lead to fundamental changes in operations.
44. Which of these factors affects productivity?

A. methods and technology
B. workers
C. management
D. a and b only
E. all of the above
All of these affect productivity.
45. Which of the following is not a key step toward improving productivity?
A. developing productivity measures for all operations
B. improving the bottleneck operations
C. establishing reasonable goals for improvement
D. considering incentives to reward workers
E. converting bond debt to stock ownership
A firm's productivity is independent of its capital structure.
46. For an organization to grow its market share, it must:

A. advertise using multimedia
B. lower prices
C. exceed minimum standards of acceptability for its products or services
D. establish an internet website
E. broaden its mission statement
Only by exceeding standards can an organization grow its market share.
47. The ratio of good output to quantity of raw material input is called
A. non-defective productivity
B. process yield
C. worker quality measurement
D. total quality productivity
E. quantity/quality ratio
This is sometimes a useful productivity measure in service industries.
48. The fundamental purpose for the existence of any organization is described by its:
A. policies
B. procedures
C. corporate charter
D. mission statement
E. bylaws
A mission statement is the organization's attempt to justify its existence.
49. A productivity increase in one operation that doesn't improve overall productivity of the business isn't
A. worthwhile
B. trivial
C. competence-destroying
D. an order winner
E. an order qualifier
Only system-wide productivity improvement makes the organization more productive.
50. Value added can be calculated by:

A. average productivity gains over time
B. inputs divided by the outputs
C. outputs divided by the inputs
D. input plus output divided by two
E. outputs minus inputs
Value added represents the change in value of the original inputs.
51. Which of the following is true?

A. Corporate strategy is shaped by functional strategies.
B. Corporate mission is shaped by corporate strategy.
C. Functional strategies are shaped by corporate strategy.
D. External conditions are shaped by corporate mission.
E. Corporate mission is shaped by functional strategies.
Corporate strategy shapes strategies at lower levels.
52. Core competencies in organizations generally relate to:

A. cost
B. quality
C. time
D. flexibility
E. all of the above
These are all representative of core competencies.
53. Which of the following is considered to be a cause of poor U.S. global competitiveness?
A. the tendency to view labor as a cost factor to be minimized
B. decision-making based on short-term horizons
C. weaknesses in technological practice
D. powerful trading partners
E. all of the above
A number of factors can negatively shape a country's competitiveness.
54. Which of the following is not typically considered a cure for poor competitiveness?
A. remove communications barriers within organizations
B. minimize attention to the operations function
C. put less emphasis on short-term financial results
D. recognize labor as a valuable asset and act to develop it
E. improve quality
Operations is a prime area for improving competitiveness.
55. Time-based approaches of business organizations focus on reducing the time to accomplish certain
necessary activities. Time reductions seldom apply to:
A. product/service design time
B. processing time
C. delivery time
D. response time for complaints
E. internal audits
Internal audits have little to do with core value-adding efforts.
56. The external elements of SWOT analysis are:

A. strengths and weaknesses
B. strengths and threats
C. opportunities and threats
D. weaknesses and opportunities
E. strengths and opportunities
Opportunities and threats relate to the organization and its external environment.
57. In an assembly operation at a furniture factory, six employees assembled an average of 450 standard dining
chairs per 5-day week. What is the labor productivity of this operation?
A. 90 chairs/worker/day
B. 20 chairs/worker/day
C. 15 chairs/worker/day
D. 75 chairs/worker/day
Divide the output of 450 chairs by the inputs of 30 worker-days.
58. Which of the following is not a reason for poor performance of our organization in the marketplace?
A. placing too much emphasis on product/service design and too little on process design
B. failing to take into account customer wants and needs
C. putting too much emphasis on short-term financial performance
D. taking advantage of strengths/opportunities, and recognizing competitive threats
Taking advantage of strengths/opportunities and recognizing competitive threats would enable good
performance.
59. The manager of a carpet store is trying to determine the best installation crew size. He has tried various
crew sizes with the results shown below. Based on productivity, what crew size do you recommend?
A. 2
B. 3
C. 4
Crews of two workers are most productive.
60. Which of the following is not a key factor of competitiveness?

A. price
B. product differentiation
C. flexibility
D. after-sale service
E. size of organization
61. Gourmet Pretzels bakes soft pretzels on an assembly line. It currently bakes 800 pretzels each 8-hour shift.
If the production is increased to 1,200 pretzels each shift, then productivity will have increased by:
A. 50%
B. 33%
C. 25%
D. 67%
Divide the difference in productivity by the original productivity.
62. The weekly output of a fabrication process is shown below together with data for labor and material inputs.
Standard selling price is $125 per unit. Overhead is charged weekly at the rate of $1,500 plus .5 times direct
labor cost. Assume a 40-hour week and an hourly wage of $16. Material cost is $10 per foot. What is the
average multifactor productivity?
Error! Filename not specified.

A. 1.463
B. 1.457
C. 1.431
Calculate multifactor productivity for each week, then average the two.
63. The Balanced Scorecard is a useful tool for helping managers translate their strategy into action in the following areas:
A. Sustainability; Flexibility; Efficiency; Technology
B. Customers; Financial; Internal Business Processes; Learning and Growth
C. Customization; Standardization; Efficiency; Effectiveness
D. The Environment; The Community; Suppliers; Other Stakeholders
E. Strategy; Tactics; Productivity; Profitability
These are the four core areas addressed by the Balanced Scorecard.
64. A firm pursuing a strategy based on customization and variety will tend to structure and manage its supply
chain to accommodate more _____________ than a firm pursuing a strategy based on low-cost and high-
volume.
A. Variation
B. Streamlined flow
C. Quality
D. Capacity
E. Productivity
Customization and variety lead to variation that must be accommodated.

65. Unique attributes of firms that give them a competitive edge are called ______________.
A. Functional strategies
B. Balanced scorecards
C. Supply chains
D. Core competencies
E. Sustainable initiatives
Core competencies can be translated into competitive advantage.
66. Years ago in the overnight delivery business, providing package tracking capability gave some firms a
competitive advantage. Now, all firms must offer this capability simply to be in this line of business. This is an
example of ______________ becoming ____________ over time.
A. Tactical implications; strategic
B. Strategic implications; tactical
C. Order winners; order qualifiers
D. Profitability factors; productivity factors
E. Order qualifiers; order winners
What is an order qualifier and what is an order winner changes over time.
67. For firms competing in worldwide markets, conducting __________________ is more complex, since what
works in one country or region might not work in another.
A. Productivity analysis
B. Environmental analysis
C. Strategy implementation
D. Sustainability analysis
E. Growth forecasting
Environmental analysis takes into account the relevant factors in the environment; there are more of these if
there are more markets to consider.
68. Increasing the service offered to the customer makes it more difficult to compete on the basis of ______.
A. order qualifiers
B. customization
C. quality
D. price
E. flexibility
More extensive service can be more costly, and more costly outputs make price-based strategies more difficult.
69. ___________ is generally used to facilitate an organization strategy that emphasizes low cost.
A. Speed to market
B. Flexibility
C. Customization
D. Sustainability
E. None of the above
Forecasting techniques generally assume an existing causal system that will continue to exist in the future.
TRUE
Forecasts depend on the rules of the game remaining reasonably constant.
2. For new products in a strong growth mode, a low alpha will minimize forecast errors when using exponential
smoothing techniques.
FALSE
If growth is strong, alpha should be large so that the model will catch up more quickly.
3. Once accepted by managers, forecasts should be held firm regardless of new input since many plans have
been made using the original forecast.
FALSE
Flexibility to accommodate major changes is important to good forecasting.
4. Forecasts for groups of items tend to be less accurate than forecasts for individual items because forecasts for
individual items don't include as many influencing factors.
FALSE
Forecasting for an individual item is more difficult than forecasting for a number of items.
5. Forecasts help managers plan both the system itself and provide valuable information for using the system.
TRUE
Both planning and use are shaped by forecasts.
6. Organizations that are capable of responding quickly to changing requirements can use a shorter forecast
horizon and therefore benefit from more accurate forecasts.
TRUE
If an organization can react quicker, its forecasts need not be so long term.
7. When new products or services are introduced, focus forecasting models are an attractive option.
FALSE
Because focus forecasting models depend on historical data, they're not so attractive for newly introduced
products or services.
8. The purpose of the forecast should be established first so that the level of detail, amount of resources, and
accuracy level can be understood.
TRUE
All of these considerations are shaped by what the forecast will be used for.
9. Forecasts based on time series (historical) data are referred to as associative forecasts.
FALSE
Forecasts based on time series data are referred to as time-series forecasts.
10. Time series techniques involve identification of explanatory variables that can be used to predict future
demand.
FALSE
Associate forecasts involve identifying explanatory variables.
11. A consumer survey is an easy and sure way to obtain accurate input from future customers since most
people enjoy participating in surveys.
FALSE
Most people do not enjoy participating in surveys.
12. The Delphi approach involves the use of a series of questionnaires to achieve a consensus forecast.
TRUE
A consensus among divergent perspectives is developed using questionnaires.
13. Exponential smoothing adds a percentage (called alpha) of last period's forecast to estimate next period's
demand.
FALSE
Exponential smoothing adds a percentage to the last period's forecast error.
14. The shorter the forecast period, the more accurately the forecasts tend to track what actually happens.
TRUE
Long-term forecasting is much more difficult to do accurately.
15. Forecasting techniques that are based on time series data assume that future values of the series will
duplicate past values.
FALSE
Time-series forecast assume that future patterns in the series will mimic past patterns in the series.
16. Trend adjusted exponential smoothing uses double smoothing to add twice the forecast error to last period's
actual demand.
FALSE
Trend adjusted smoothing smoothes both random and trend-related variation.
17. Forecasts based on an average tend to exhibit less variability than the original data.
TRUE
Averaging is a way of smoothing out random variability.
18. The naive approach to forecasting requires a linear trend line.

FALSE
The naïve approach is useful in a wider variety of settings.
19. The naive forecast is limited in its application to series that reflect no trend or seasonality.
FALSE
When a trend or seasonality is present, the naïve forecast is more limited in its application.
20. The naive forecast can serve as a quick and easy standard of comparison against which to judge the cost and
accuracy of other techniques.
TRUE
Often the naïve forecast performs reasonably well when compared to more complex techniques.
21. A moving average forecast tends to be more responsive to changes in the data series when more data points
are included in the average.
FALSE
More data points reduce a moving average forecast's responsiveness.
22. In order to update a moving average forecast, the values of each data point in the average must be known.
TRUE
The moving average cannot be updated until the most recent value is known.
23. Forecasts of future demand are used by operations people to plan capacity.
TRUE
Capacity decisions are made for the future and therefore depend on forecasts.
24. An advantage of a weighted moving average is that recent actual results can be given more importance than
what occurred a while ago.
TRUE
Weighted moving averages can be adjusted to make more recent data more important in setting the forecast.
25. Exponential smoothing is a form of weighted averaging.

TRUE
The most recent period is given the most weight, but prior periods also factor in.
26. A smoothing constant of .1 will cause an exponential smoothing forecast to react more quickly to a sudden
change than a smoothing constant value of .3.
FALSE
Smaller smoothing constants result in less reactive forecast models.
27. The T in the model TAF = S+T represents the time dimension (which is usually expressed in weeks or
months).
FALSE
The T represents the trend dimension.
28. Trend adjusted exponential smoothing requires selection of two smoothing constants.
TRUE
One is for the trend and one is for the random error.
29. An advantage of "trend adjusted exponential smoothing" over the "linear trend equation" is its ability to
adjust over time to changes in the trend.
TRUE
A linear trend equation assumes a constant trend; trend adjusted smoothing allows for changes in the
underlying trend.
30. A seasonal relative (or seasonal indexes) is expressed as a percentage of average or trend.
TRUE
Seasonal relatives are used when the seasonal effect is multiplicative rather than additive.
31. In order to compute seasonal relatives, the trend of past data must be computed or known which means that
for brand new products this approach can't be used.
TRUE
Computing seasonal relatives depends on past data being available.
32. Removing the seasonal component from a data series (de-seasonalizing) can be accomplished by dividing
each data point by its appropriate seasonal relative.
TRUE
Deseasonalized data points have been adjusted for seasonal influences.
33. If a pattern appears when a dependent variable is plotted against time, one should use time series analysis
instead of regression analysis.
TRUE
Patterns reflect influences such as trends or seasonality that go against regression analysis assumptions.
34. Curvilinear and multiple regression procedures permit us to extend associative models to relationships that
are non-linear or involve more than one predictor variable.
TRUE
Regression analysis can be used in a variety of settings.
35. The sample standard deviation of forecast error is equal to the square root of MSE.
TRUE
The MSE is equal to the sample variance of the forecast error.
36. Correlation measures the strength and direction of a relationship between variables.
TRUE
The association between two variations is summarized in the correlation coefficient.
37. MAD is equal to the square root of MSE which is why we calculate the easier MSE and then calculate the
more difficult MAD.
FALSE
MAD is the mean absolute deviation.
38. In exponential smoothing, an alpha of 1.0 will generate the same forecast that a naïve forecast would yield.
TRUE
With alpha equal to 1 we are using a naïve forecasting method.
39. A forecast method is generally deemed to perform adequately when the errors exhibit an identifiable
pattern.
FALSE
Forecast methods are generally considered to be performing adequately when the errors appear to be randomly
distributed.
40. A control chart involves setting action limits for cumulative forecast error.
FALSE
Control charts set action limits for the tracking signal.
41. A tracking signal focuses on the ratio of cumulative forecast error to the corresponding value of MAD.
TRUE
Large absolute values of the tracking signal suggest a fundamental change in the forecast model's performance.
42. The use of a control chart assumes that errors are normally distributed about a mean of zero.
TRUE
Over time, a forecast model's tracking signal should fluctuate randomly about a mean of zero.
43. Bias exists when forecasts tend to be greater or less than the actual values of time series.
TRUE
A tendency in one direction is defined as bias.
44. Bias is measured by the cumulative sum of forecast errors.

TRUE
Bias would result in the cumulative sum of forecast errors being large in absolute value.
45. Seasonal relatives can be used to de-seasonalize data or incorporate seasonality in a forecast.
TRUE
Seasonal relatives are used to de-seasonalize data to forecast future values of the underlying trend, and they are
also used to re-seasonalize de-seasonalized forecasts.
46. The best forecast is not necessarily the most accurate.

TRUE
More accuracy often comes at too high a cost to be worthwhile.
47. A proactive approach to forecasting views forecasts as probable descriptions of future demand, and requires
action to be taken to meet that demand. http://www.vuzs.info
FALSE
Proactive approaches involve taking action to influence demand.
48. Simple linear regression applies to linear relationships with no more than three independent variables.
FALSE
Simple linear regression involves only one independent variable.
49. An important goal of forecasting is to minimize the average forecast error.

FALSE
Regardless of the model chosen, so long as there is no fundamental bias average forecast error will be zero.
50. Forecasting techniques such as moving averages, exponential smoothing, and the naive approach all
represent smoothed (averaged) values of time series data.
FALSE
The naïve approach involves no smoothing.
51. In exponential smoothing, an alpha of .30 will cause a forecast to react more quickly to a large error than
will an alpha of .20.
TRUE
Listing products in descending order of their individual dollar contribution to the firm is called
Your Answer:
value engineering.
Correct Answer:
product-by-value analysis.
INCORRECT. Focuses on improving product during engineering stage.
2.
Incorrect A route sheet
Your Answer:
is a correction or modification of an engineering drawing or bill of materials.

Correct Answer:
lists the operations necessary to produce the component.

INCORRECT. This would be an engineering change notice (ECN).
3.
Incorrect An assembly chart is a(n)
Your Answer:
list of the operations necessary to produce the component.

Correct Answer:
schematic showing how the product is assembled.

INCORRECT. This would be a route sheet.
4.
Correct Self-checkout at a grocery store is an example of
Your Answer:
customer participation in service delivery.

CORRECT.
5.
Correct Which of the following is characteristic of the maturity phase?
Your Answer:
Competitors are well established.
CORRECT.
6.
Correct When ordering a new zagflatz, customers must choose the style of three major components, each
of which has about ten variations. This is an example of:
Your Answer:
modular design.
CORRECT.
7.
Incorrect Which of the following is NOT a concept of green manufacturing?
Your Answer:
Use less harmful ingredients.

Correct Answer:
Make products so that small variations in production do not adversely affect the product.
INCORRECT. This is a concept of green manufacturing.
8.
Incorrect Which of the following is an external product development strategy?
Your Answer:
new internally developed products

Correct Answer:
joint venture
INCORRECT. This is an internal development strategy.
9.
Incorrect Which of the following is an internal product development strategy?
Your Answer:
alliances
Correct Answer:
migration of existing products

INCORRECT. This is an external strategy.
10.
Incorrect There is a 0.7 probability of experiencing an increase in demand and a 0.3 probability of
a decrease. If a company redesigns an existing product, they will gain $400,000 if there is a demand
increase and $100,000 if demand falls. If the company designs a new product, they will gain $300,000 if
demand increases and $200,000 if demand falls. If the company does nothing, they will not increase
revenue at all. Which statement below is best?
Your Answer:
The company should be indifferent about these two alternatives.

Correct Answer:
The company should redesign the existing product.

INCORRECT. A product redesign has a higher EMV.
11.
Incorrect In the service industry, the crucial moment that exemplifies, enhances, or detracts from
the customer's expectations is called
Your Answer:
the payoff.
Correct Answer:
the moment of truth.

INCORRECT. This is a monetary value associated with each combination of alternative and state
of nature in a decision tree.
12.
Incorrect An umbrella of software programs that may include CAD/CAM, DFMA, product routing,
maintenance, and other product concerns is called
Your Answer:
material requirements planning software.

Correct Answer:
product lifecycle management software.

INCORRECT. This software focuses on manufacturing.
13.
Incorrect When a customer places a request for a product or service with a producer
Your Answer:
an engineering change notice is created.

Correct Answer:
a work order is created.

INCORRECT. This may be produced if the customer has specified something unusual, but it is
not the best answer.
14.
Incorrect Product design may be accomplished more quickly through the use of cross-functional
teams that work on various aspects of the design at the same time. This approach is known as
Your Answer:
the house of quality.
Correct Answer:
concurrent engineering.
INCORRECT. This term is used to describe a QFD diagram.
15.
Incorrect A house of quality would depict the strength of relationship between which two items?
Your Answer:
The customer's need for a sealable change pocket and the customer's need for plastic inserts to display
pictures.
Correct Answer:
The customer's desire for a durable wallet and the company's choice of material for the wallet.
1. Which of the following is (are) important consideration(s) concerning activity times?
Activity time should be obtained from the person responsible for the completion of an activity
Activity time must be independent of any influence which the preceding or succeeding activity may have
on it.
Activity time may assume that just the normal quantity of resources required to carry out the activity are
available.
All of the above
View answer
Correct answer: (D)
All of the above
2. Objective of Work Study is to improve ---------
Cycle time
Productivity
Production
All of the above
View answer
Correct answer: (B)
Productivity
3. The following is not a major contributor in the development of Control Charts and Sampling plan
F H Dodge
H G Roming
Walter Schewhart
J M Juran
View answer
Correct answer: (D)
J M Juran
4. Organizational models are
multinational model
international model
global organizational model
All of the above
View answer
Correct answer: (D)
All of the above
5. The ––––––––– is the defect level for which lots are regarded as bad lots.
Acceptable quality level

Consumer’s risk
Producer’s risk
Lot Tolerance Percentage Defective
View answer
Correct answer: (D)
Lot Tolerance Percentage Defective
6. What are the advantages of templates over diagrams?
Can be conveniently moved on the graph paper

Less laborious
Saves time
All of the above
View answer
Correct answer: (D)
All of the above
7. Attack strategies are
Frontal attack
Flank attack
Encirclement attack
All of the above
View answer
Correct answer: (D)
All of the above
8. Which of the following are assignable cause?
Large variations in hardness of material

Tool wear
Errors in setting
All of the above
View answer
Correct answer: (D)
All of the above
9. Which of the following are activities of corrective maintenance?
Overhauling
Emergency repairs
Modifications and improvements
All of the above
View answer
Correct answer: (D)
All of the above
10. Limitations of Traditional cost accounting are
Assumes factory as an isolated entity

It measures only the cost of producing
both (A) and (B)
none of the above
View answer
Correct answer: (C)
both (A) and (B)
The purpose of the transportation approach for locational analysis is to minimize

a) total costs
b) total shipping costs
c) total variable costs
d) total fixed costs
e) the number of shipments
2. The initial solution to a transportation problem can be generated in any manner, so

long as
a. it minimizes cost
a. b it ignores cost
b. all supply and demand are satisfied
c. degeneracy does not exist
d. all cells are filled
3. Which of the following statements about the northwest corner rule is false?
a. One must exhaust the supply for each row before moving down to the next row.
b. One must exhaust the demand requirements of each column before moving to the next
column.
c. When moving to a new row or column, one must select the cell with the lowest
cost.
d. One must check that all supply and demand constraints are met.
e. All of the above are false.
4. In transportation model analysis the stepping-stone method is used to

a. obtain an initial optimum solution
b. obtain an initial feasible solution
c. evaluate empty cells for potential solution improvements
d. evaluate empty cells for possible degeneracy
e. balance supply and demand
5. A transportation problem has a feasible solution when

a. all of the improvement indexes are positive
b. the number of filled cells is one less than the number of rows plus the number of
columns
c. all the squares are used
d. the solution yields the lowest possible cost
e. all demand and supply constraints are satisfied
6. When the number of shipments in a feasible solution is less than the number of rows
plus the number of columns minus one
a. the solution is optimal
b. there is degeneracy, and an artificial allocation must be created
c. a dummy source must be created
d. a dummy destination must be created
e. the closed path has a triangular shape
7. The total cost of the optimal solution to a transportation problem

a. is calculated by multiplying the total supply (including any dummy values) by the
average cost of the cells
b. cannot be calculated from the information given
c. can be calculated from the original non-optimal cost, by adding the savings made at
each improvement
d. is found by multiplying the amounts in each cell by the cost for that cell for each row
and then subtract the products of the amounts in each cell times the cost of each cell for
the columns
e. can be calculated based only on the entries in the filled cells of the solution
8. The stepping-stone method

a. is an alternative to using the northwest corner rule
b. often involves tracing closed paths with a triangular shape
c. is used to evaluate the cost effectiveness of shipping goods via transportation
routes not currently in the solution
d. is used to identify the relevant costs in a transportation problem
e. helps determine whether a solution is feasible or not
9. In a minimization problem, a negative improvement index in a cell indicates that the

a. solution is optimal
b. total cost will increase if units are reallocated to that cell
c. total cost will decrease if units are reallocated to that cell
d. current iteration is worse than the previous one
e. problem has no feasible solution
10. In a minimization problem, a positive improvement index in a cell indicates that

a. the solution is optimal
b. the total cost will increase if units are reallocated to that cell
c. the total cost will decrease if units are reallocated to that cell
d. there is degeneracy
e. the problem has no feasible solution
11. An improvement index indicates

a.whether a method other than the stepping stone should be used
b. whether a method other that the northwest corner rule should be used
c. whether the transportation cost in the upper left-hand corner of a cell is optimal
d. how much total cost would increase or decrease if the largest possible quantity were
reallocated to that cell
e. how much total cost would increase or decrease if a single unit was reallocated
to that cell
12. Which of the following would not generally be a motive for a firm to hold inventories?
To
a. take advantage of quantity discounts
b. minimize holding costs
c. reduce stockout risks
d. decouple production from distribution
e. meet anticipated demand
13. Which of the following statements about ABC analysis is false?

a. ABC analysis is based on the presumption that controlling the few most important
items produces the vast majority of inventory savings.
b. In ABC analysis, "A" Items are tightly controlled, have accurate records, and receive
regular review by major decision makers.
c. ABC analysis is based on the presumption that all items must be tightly
controlled to produce important cost savings.
d. In ABC analysis, "C" Items have minimal records, periodic review, and simple controls
e. None of the above statements are true.
14. ABC analysis divides on-hand inventory into three classes, generally based upon
a. unit price
b. the number of units on hand
c. annual demand
d. annual dollar volume
e. item quality
15. Among the advantages of cycle counting is that it

a. makes the annual physical inventory more acceptable to management
b. allows more rapid identification of errors and consequent remedial action than is
possible with annual physical inventory
c. does not require the detailed inventory records necessary when annual physical
inventory is used
d. does not require highly trained people
e. does not need to be performed for less expensive items
16. The two most basic inventory questions answered by the typical inventory model are
a. timing and cost of orders
b. quantity and cost of orders
c. timing and quantity of orders
d. order quantity and service level
e. ordering cost and carrying cost
17. Which of the following statements about the basic EOQ model is true?
a. If the ordering cost were to double, the EOQ would rise.
b. If annual demand were to double, the EOQ would increase.
c. If the carrying cost were to increase, the EOQ would fall.
d. If annual demand were to double, the number of orders per year would decrease.
e. All of the above statements are true.
18. An inventory decision rule states that "when the inventory level goes down to 14
gearboxes, 100 gearboxes will be ordered." Which of the following statements is
true?
a. 100 is the reorder point, and 14 is the order quantity.
b. The number 100 is a function of demand during lead time.
c. 14 is the safety stock, and 100 is the reorder point.
d. 14 is the reorder point, and 100 is the order quantity.
e. None of the above.
19. The Production Order Quantity model

a. relaxes the assumption of known and constant demand
b. uses Ordering Cost, not Setup Cost, in its formula
c. assumes instantaneous delivery
d. results in larger average inventory than an equivalent EOQ model
e. is appropriate when units are sold/used as they are produced
20. Which of the following statements regarding the Production Order Quantity model is
true?
a. It applies only to items produced in the firm's own production departments.
b. It relaxes the assumption that the demand rate is constant.
c. It minimizes the total production costs.
d. It relaxes the assumption that all the order quantity is received at one time.
e. It minimizes inventory.
21. Which of the following statements about quantity discounts is false?

a. The cost-minimizing solution may, or may not, be where annual holding costs equal
annual ordering costs.
b. In inventory management, item cost becomes relevant to inventory decisions only when
a quantity discount is available.
c. The larger annual demand, the less attractive a discount schedule will be.
d. The smaller the ordering cost, the less attractive a discount schedule will be.
e. If carrying costs are expressed as a percentage of value, EOQ is larger at each lower
price in the discount schedule.
22. The layout strategy that deals with low-volume, high-variety production is
a. fixed-position layout
b. retail/service layout
c. warehouse layout
d. all of the above
e. none of the above
23. A good layout requires determining

a. capacity and space requirements
b. material handling requirements
c. environment and aesthetics
d. flows of information
e. all of the above
24. For which of the following operations would a fixed-position layout be most
appropriate?
a. assembly of an automobile
b. production of cameras and TV sets
c. construction of a ship
d. refining of crude oil
e. grocery store
25. The type of layout which features departments or other functional groupings in
which similar activities are performed is
a. process
b. product
c. fixed-position
d. mass
e. unit
26. According to Heizer and Render, an office layout

a. groups workers, their equipment, and spaces/offices to provide for movement of
information
b. addresses the layout requirements of large, bulky projects such as ships and buildings
c. seeks the best personnel and machine utilization in repetitive or continuous production
d. allocates shelf space and responds to customer behavior
e. deals with low-volume, high-variety production
27. According to Heizer and Render, a retail/service layout

a. groups workers, their equipment, and spaces/offices to provide for movement of
information
b. addresses the layout requirements of large, bulky projects such as ships and buildings
c. seeks the best personnel and machine utilization in repetitive or continuous production
d. allocates space and responds to customer behavior
e. deals with low-volume, high-variety production
28. Balancing low-cost storage with low-cost material handling is important in

a. a fixed-position layout
b. a process-oriented layout
c. an office layout
d. a product-oriented layout
e. a warehouse layout
29. which type of layout is used to achieve a smooth and rapid flow of large volumes of
output?
a. process
b. batch
c. product
d. unit
e. fixed-position
30. Which of the following are strongly associated with "crossdocking"?

a. non-value-adding activities such as receiving and storing
b. multi-modal transportation facilities at seaports
c. processing items as soon as they are received into a distribution center
d. use of manual product identification systems
e. all of the above
What are the input resources to any transformation process?
Your Answer:
Staff, facilities, materials, information and customers.

2.
Incorrect What do we mean by micro-operations?
Your Answer:
The more detailed activities carried out within operations.

Correct Answer:
The component transformation processes which together make up the macro-operation.

3.
Correct Disneyland Paris is one of the largest and best known theme parks in Europe. In terms of the four
Vs (volume, variety, variation, visibility) how would you describe it?
Your Answer:
High volume, low variety, high variation, high visibility.

4.
Incorrect Operations can be classified according to their volume and variety of production as well
as the degree of variation and visibility. Which of the following operations would be classified as high
volume, low variety?
Your Answer:
A family doctor
Correct Answer:
A fast food restaurant

5.
Correct Which of the following activities is NOT a direct responsibility of operations management?
Your Answer:
Determining the exact mix of products and services that customers will want.
6.
Incorrect The three-stage operations model requires transformation of the input resource into some
form of output. Any one 'resource' can be involved at all three stages. True or false?
Your Answer:
False
Correct Answer:
True
7.
Incorrect Which one of the following transformational processes is not associated with the
processing of materials?
Your Answer:
Location
Correct Answer:
Psychological state
8.
Correct Operations typically differ in terms of volume of output, variety of output, variation in demand or
the degree of 'visibility' (i.e. customer contact) that they give to customers of the production process.
Please match the following element with the most appropriate of the above dimensions. Short waiting
tolerance is most closely matched to:
Your Answer:
Visibility
9.
Correct Low-variety operations do not include:
Your Answer:
A tax consultancy advice service

10.
Incorrect Which of the following functions is NOT a core function of an organisation?
Your Answer:
The product/service development function

Correct Answer:
The accounting and finance function

No, this is a core function.
11.
Incorrect Which of the following is the least likely decision to be made by Operations Managers?
Your Answer:
Selecting the location and layout of a facility

Correct Answer:
Deciding which market areas to manufacture products for

12.
Incorrect Which performance objectives do IKEA focus most on?
Your Answer:
Quality
Correct Answer:
Cost
13.
Incorrect What other names may be given to an operations manager?
Your Answer:
Administrative manager
Correct Answer:
All of the above

14.
Incorrect The overall direction and contribution of the operations function with the business and
the way in which market requirements and operations capabilities are reconciled relates to what?
Your Answer:
Operations Management
Correct Answer:
Operations Strategy
15.
Incorrect Service processes that are devoted to producing knowledge-based or advice-based

services are called:
Your Answer:
Value services
Correct Answer:
Professional services
1. OPERATIONS MANAGEMENT is concerned with the transformation of

‘inputs’ into ‘outputs’ that meet the needs of the customer.
1.
A. False
B. True
2. Operations management refers to the activities required to produce and
deliver a product or a service.
1.
A. True
B. False
3. Operation management includes:
1.
A. Purchasing
B. Warehousing
C. Transportation
D. All of the above
4. At its simplest, operations management tries to ensure that organizations
are run as efficiently as possible.
1.
A. Correct
B. Incorrect
5. An organization can achieve significant competitive advantage over its
rivals through superior operating capabilities of its resources, examples
include:
1.
A. Assets
B. Work force skills
C. Supplier relationships
D. All of the above
6. The objectives for operations should be consistent with the perceived
requirements of customers. Suggest suitable performance objectives in
following situations.
1.
• When customers want a low-priced product.
A. The performance objectives in operational strategy should

focus mainly on reducing costs and producing a low-cost
output
B. The performance objectives in operational strategy should focus on
achieving the required quality standards
C. The operational objective should be to set targets for reliability
D. All of the above
• When customers want a product or service with certain quality
characteristics and willing to pay more for better quality.
A. The operational objective should be to set targets for reliability

B. The performance objectives in operational strategy should
focus on achieving the required quality standards, with costs
in certain limits
C. The operational objective should be to achieve sufficient flexibility
to handle the variations in customer requirements.
D. None
•
• When customers want fast delivery of a product or service.
1.
1.
A. The operational performance objective will concentrate on speed of
operations.
B. The performance objective will be making the product or service
more readily available.
C. Either A or B
D. None
•
• When customers want reliability.
1.
1.
1. The performance objective should be to set targets for
reliability and ensure that these are met.
2. The performance objectives in operational strategy should focus on
3. The performance objectives in operational strategy should focus
mainly on reducing costs and producing a low-cost output
4. None
•
• When customers want products or services to be designed to their own
specification.
1.
1.
A. The performance objectives in operational strategy should focus
mainly on reducing costs and producing a low-cost output.
B. The performance objectives must be to achieve sufficient
flexibility to handle the variations in customer requirements,
and provide differing products/service accordingly.
C. Either A or B
D. None
•
• When customers want to alter the timing or delivery of services they
receive.
1.
1.
A. The performance objectives in operational strategy should focus on
B. The performance objectives in operational strategy should focus
mainly on reducing costs and producing a low-cost output
C. The main operational objective will be flexibility.
D. None
7. Identify the parts, as suggested by Mintzberg, that an organization is made
of.
1.
A. Operational core and Strategic apex
B. Techno structure, middle line, Support staff
C. Neither of above
D. All of the above
Adam Smith introduced the concept of specialization of labour in the manufacturing process.
Ans. True
2. By the end of the eighteenth century, the internal combustion engine had been invented.
Ans. False
3. Digital manufacturing has disabled companies to rapidly build to order, maintain nonstop production
and integrate their supply chains.
Ans. False
4. The term ___ is applicable to entities like manufacturing units, machinery, equipment, assembly lines,
etc.
Ans. Production
5. Production theories and practices were being used in a broad range of ___ and conditions, which have
very little or no link with industries or manufacturing.
Ans. Operations
6. A ___ comprises a process wherein an input is transformed or converted into the desired output with a
feedback procedure.
Ans. System
7. The six Ms associated with the production process are ___, ___, ___, ___, ___, and ___
Ans. Man, machine, materials, money, method, management
8. The transformation process includes ___, ___, ____, and ____

Ans. The alteration, transportation, storage, output
9. Goods are tangible but ___ are intangible.

Ans. Services
10. Marketing establishes the demand for goods and sells what is produced.
Ans. True
11. Finance provides the capital for equipment and resources.

Ans. True
12. Human Resource Management provides and manages manpower.

Ans. True
13. An organization can survive only if its products satisfy the ___.
Ans. Customers
14. The ____ of the product should be competitive to achieve sales.

Ans. Pricing
15. Production and ___ management play a vital role in providing the product or service on time by
effectively maintaining production schedules.
Ans. Operations
16. Layout planning deals with the study of how the factory or plant should be laid out for optimum
production.
Ans. True
17. Material management deals with the study of the significance of material flow in an organization, the
different methods of material handling, etc.
Ans. False
18. Materials handling deals with methods to control inventory, inventory analysis, etc.
Ans. False
19. ___ makes way for fast and efficient operations in manufacturing companies, as well as facilitates
cost-saving measures.
Ans. Technology
20. Characteristics of a human being are not thought of as fixed quantities..

Ans. True
21. The ___ process starts by determining that which is required and then working on the pattern for
achieving that target.
Ans. Planning
22. A company’s operation strategy is decided by framing its ___.

Ans. Key Success Factors (KSFs)
23.__ related competencies render firm competent to provide products at a lesser price than that offered
by rivals.
Ans. Cost/Price
24. ___ priorities are necessary to design new products and services at operational levels.
Ans. Competitive
25. The functional-level managers and supervisors are not required to take timely initiatives and make
quick decisions.
Ans. False
26. The common objectives of any kind of organization are ___, ___ and ____.
Ans. Customer satisfaction, profitability, timeliness
27. An effective POM needs to produce goods or render services of the right quality in the right quantities
at the right time and at ____.
Ans. Minimal costs
28. The three most important functions in an organization are___, ____, ___, and ____.
Ans. Finance, operations, marketing and sales
29. Production process selection helps in evaluating different process options possible to produce the type
of product in terms of volume and variety and other factors to select the best-suited process.
Ans. True
30. Purchasing management is responsible for making the input material available in time, at the right
price and in the right quantity and quality.
Ans. True
31. Quality control is responsible for maintaining a minimum inventory of all critical materials and
ensuring no overstocking takes place.
Ans. False
32. ____ is a measure of the quantity of output per unit of input.

Ans. Productivity
33. While ____ means doing something at the lowest possible cost, ___ means doing the right thing to
create maximum value for the company.
Ans. Efficiency, effectiveness
34. Domestic austerity measures, rising unemployment rates and decelerating external demand for goods
and services had a positive impact on growth in 2012.
Ans. False
35. Market analysis makes the assessment of the strength of the competitors for adopting or making
changes in the strategy as per the needs of the buyer and offers cost-effective solutions.
Ans. True
36. Companies bring out goods as per the new technological advancement in automotive, electronics and
all other fields that provide improved facilities and comforts to the buyers.
Ans. True
37. Resources can be hired but not purchased by the management.

Ans. False
38. The planning of operational strategy and execution is the inherent job to be done by the management.
Ans. True
39. According to ___ (1994), ‘an organization needs a sense of where it is going and what forces in its
environment are going to help or hinder it in achieving its goal’.
Ans. Mintzberg
40. A top-down hierarchical approach to strategy consists of three main levels of strategy: ___, ____, and
___.
Ans. Corporate, business, functional
41. Strategy means a planned methodology to complete a given job.

Ans. True
42. Operations strategy is a set of decisions taken across the organization to help support the
implementation of competitive business strategies.
Ans. True
43. The ___ crisis dominated the headlines in 2012 as policymakers attempted to rescue it from the break-
up.
Ans. Euro Zone
44. The sales forecasting for a year or lesser period is known as long-run forecasting.
Ans. True
45. The grassroots method suffers from the disadvantage of being highly subjective.
Ans. True
46. Delphi method was developed by the Rand Corporation in the 1950s.
Ans. True
47. Time series method uses ___ data to predict the future.
Ans. Historical
48. The simple average method smoothens random ___.

Ans. Fluctuation
49. Forecasting means to predict about ___ events by the best possible means or tools.
Ans. Future
Kaizen means
answer choices
Continuous interaction
Continuous meetings
Continuous improvement
Continuous communication
Question 2 20 seconds
Q. Lean production essentially means the elimination of
answer choices
Labour
Time
Waste
Problems
Q. Added value is when
answer choices
Inputs are transformed to create outputs that meet customer demand
Inputs are made
Inputs are transformed to create different outputs
Inputs of a high quality have more value
Q. Operational Objectives do not include
answer choices
Profitability
Flexibility
Lower unit cost
Quality
Q. If the Output is 10,000 units and the number of employees is 25 what is the Labour productivity per
employee.
answer choices
40
4000
400
40000
Q. If the Unit cost is £30 and the output is £5,000 units, the fixed costs are £12,000 what are the variable
costs?
answer choices
£28.00
£27.00
£27.60
£27.50
Q. Capacity Utilisation is 40% and present output is 600 units. What is the capacity?
answer choices
1200
2400
240
1500
Q. Which of the following is true
answer choices
Increasing Capacity utilisation will leave total costs unchanged
Increasing Capacity utilisation will reduce average cost per unit
Increasing Capacity utilisation will increase total costs
Increasing Capacity utilisation will increase unit costs
Q. The following are all likely to improve productivity except which one?
answer choices
Increased automation
Increased training
Improved staff motivation
Increased staff meetings
Q. The total cost of producing 3,000 units is £9,000. At a profit margin of 50%, what is the unit cost?
answer choices
£3 per unit
£30 per unit
£1.50 per unit
£15 per unit
Q. Which of these is a common measure of labour productivity?
answer choices
Output scrap rate
Profit margin
Quality assurance level
Output per worker per day
Q. Which of these pairs are ways to improve quality?
answer choices
Researching and Trialling
Researching and Marketing
Copying and Marketing
Copying and Researching
Q. An advantage of using inspection in quality control is that
answer choices
Inspectors know what to look for
Costs are increased because there is more waste
It can prevent defective product from reaching customers
It assures the reliability of the production process
Q. TQM systems emphasise the need for close links between all members of the
answer choices
workforce
business community
supply chain
trade association
Q. An inventory lead time is
answer choices
The maximum level of inventory a Business can or wants to hold
The average delay in handling customer orders
the amount of time between placing an order with a supplier and receiving the stock
the time taken to process outstanding sales orders
Which of the following is (are) important consideration(s) concerning activity times?
(A) Activity time should be obtained from the person responsible for the completion of an activity
(B) Activity time must be independent of any influence which the preceding or succeeding activity may
have on it.
(C) Activity time may assume that just the normal quantity of resources required to carry out the activity
are available.
(D) All of the above
2-Which of the following are assignable cause?
(A) Large variations in hardness of material

(B) Tool wear
(C) Errors in setting
3-What is the reason of excessive friction between parts?
(A) Improper or lack of lubrication
(B) Material of parts
(C) both (A) and (B)
(D) None of above
4-Which kind of labour force is required in case of Jobbing Production?
(A) Highly Skilled
(B) Semi skilled
(C) Unskilled
(D) Any of the above
5-What is the location of lower control limit in the X bar-R control chart?
(A) 3 standard deviations below central line
(B) 2 standard deviations below central line
(C) 1 standard deviations below central line
6-Which photographic technique is used to record path of motions of the members of the body during
method study?
(A) Acrograph
(B) Cyclograph
(C) Cyclogram
(D) Cycloscope
7-The term ________ implies the foregone profit due to inability of company to produce.
(A) Opportunity cost
(B) Marginal cost
(C) Overhead cost
8-In case of an OC curve, the risk of rejecting a good quality lot may vary between ________.
(A) 0.01 to 5%
(B) 0.01 to 10%
(C) 0.01 to 15%
(D) 0.01 to 20%
9-Objective of Work Study is to improve _______
(A) Cycle time
(B) Productivity
(C) Production
10-Which of the following are activities of corrective maintenance?
(A) Overhauling
(B) Emergency repairs
(C) Modifications and improvements

11-Capacity decisions have a direct influence on performance of production system in respect of

________
(A) Delivery performance
(B) Quality control
(C) Plant size
(D) Manpower
12-Which of the following is not the characteristic of Project Production?
(A) Continuous flow of material
(B) Highly mechanised material handling
(C) Virtually zero manufacturing cycle time
13-Which of the following Principles of Management is not advocated by F W Taylor?
(A) Selection of best worker for each particular task
(B) Division of work between worker and management
(C) Training and development of the workmen
(D) Involvement of workers in strategy planning
14-How does ‘structure’ reduce external uncertainty arising out of human behaviour
(A) Research and planning
(B) Forecasting
(D) none of the above
15-The following is not a major contributor in the development of Control Charts and Sampling plan
(A) F H Dodge
(B) H G Roming
(C) Walter Schewhart
(D) J M Juran
16-Limitations of Traditional cost accounting are
(A) Assumes factory as an isolated entity
(B) It measures only the cost of producing
17-Business is rated on which dimensions
(A) Market attractiveness
(B) Business strength
18-Like roots of a tree, ________of organization is hidden from direct view.
(A) goodwill
(B) core competence
(C) Higher management

(D) Capital investment
19-OC curve of ideal sampling plan suggests that all lots less than 3% defectives have the probability of
acceptance of ________.
(A) 0.25
(B) 0.5
(C) 0.75
(D) 1
20-Inadequate production capacity ultimately leads to
(A) Poor quality
(B) Poor Customer Service
(C) Poor inventory control
Answers:
1-(D), 2-(D), 3-(A), 4-(A), 5-(A), 6-(B), 7-(A), 8-(B), 9-(B), 10-(D), 11-(A), 12-(D), 13-(D), 14-(C), 15-
(D), 16-(C), 17-(C), 18-(B), 19-(D), 20-(B)
21-Organizational models are
(A) multinational model
(B) international model
(C) global organizational model
22-Which kind of defect can be called as minor defect?

(A) Which does not reduce the usability of the product for its intended use
(B) The cost of repairing the defect is less
(C) Both (A) and (B)
(D) None of the above
23-Which of the following policies is advisable in case of low product variety and large volumes?
(A) Skilled labour, special purpose machines
(B) Low skilled labour, general purpose machine
(C) Low Skilled Labour, Special Purpose Machines
24-Fixed position layout is adopted when
(A) Products are of different variety
(B) Product is very heavy involving assembly of large number of parts
(C) Products are in large numbers
25-Scale model used for layout analysis have following advantages
(A) Nontechnical person finds it easy to comprehend
(B) Overhead facilities can be shown
(C) Models can be shifted easily
26-Which of the following are the objectives of a good maintenance system?
(A) Minimisation of wear and tear of machines

(B) Ensuring maximum plant availability
27-What do you understand by the inspection conducted on all non reworkable jobs prior to their
movement to the scrap yard?
(A) Final inspection
(B) Endurance inspection
(C) Functional inspection
(D) Salvage inspection
28-The ________ is the defect level for which lots are regarded as bad lots.
(A) Acceptable quality level
(B) Consumer’s risk
(C) Producer’s risk
(D) Lot Tolerance Percentage Defective
29-General Electric Matrix is divided into how many cells
(A) 4
(B) 9
(C) 16
(D) 25
30-In an organization there may not be a formal PPC department if
(A) Work is highly repetitive in nature
(B) Planning activities are performed by the line staff

(C) Number of workmen is not very large
31-Which of the following is not a type of specification?
(A) Material specifications
(B) Dimensional specifications
(C) Manpower specification
(D) Performance specifications
32-Which are three different bases to establish an activity time?
(A) Past experience
(B) Judgement
(C) Historical data
33-Inherent Safety’ is one of the principle of good layout. In context of layout, this can be achieved by the
following
(A) Clear gangway
(B) Location of material and material handling system
34-Control should involve________ amount of information.

(A) Minimum
(B) Sufficient
(C) Maximum
35-A/An ________ history card is the record of all repairs, replacements and engineering changes carried
out in the equipment during it’s period of service.
(A) Service
(B) Equipment
(C) Repair
36-What are the advantages of templates over diagrams?
(A) Can be conveniently moved on the graph paper
(B) Less laborious
(C) Saves time
37-An approach that strives to follow ethical principles and percepts is
(A) Moral management
(B) Amoral management
(C) Immoral management
38-‘W’ in SWOT stands for
(A) What do you do well?

(B) What could you improve?
(C) What doors are open to you?
(D) What threats could harm you
39-______ should have the ability to develop a vision to see patterns into the future.
(A) Leaders
(B) Workers
(C) Management
40-Attack strategies are
(A) Frontal attack
(B) Flank attack
(C) Encirclement attack
Answers:
21-(D), 22-(A), 23-(C), 24-(B), 25-(D), 26-(C), 27-(D), 28-(D), 29-(B), 30-(D), 31-(C), 32-(D), 33-(C),
34-(A), 35-(B), 36-(D), 37-(A), 38-(B), 39-(A), 40-(D)

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Who defined ‘Taguchi’ methods?

Correct ‘Ideas’ are essentially the same as ‘concepts.

The higher the cost of change

Incorrect Which of the following is NOT correct?

There is high uncertainty at the start the product design process

Screening is carried out after each stage of product / service design

Incorrect Which of the following is correct?

Screening comes before preliminary design, but after concept generation

Incorrect At a restaurant, which of the following is a ‘core’ part of the service?

The preparation of food

Incorrect The following is NOT part of a service concept for a restaurant?

Three waiters and a chef

Incorrect Where should product or service design start?

With the marketing department

With the customer

Incorrect Why is good product and service design important?

Product/service standardisation low, location usually centralised, flow intermittent

Product/service standardisation low, location can be decentralised, flow intermittent

Correct In a jobbing process the main order-winning criterion is generally:

Correct Which of the following statements would generally be considered as correct?

Work is not fixed but moves through a sequence of operations.

The end-of-life of the product.

The cost of energy used in the process.

Incorrect Types of professional services do not normally include:

Design of product and services

Design of products, services, and processes

Incorrect Feasibility relates to:

What could go wrong with the design.

How difficult the design is to bring to market.

(See related pages)

3 Product designs that use computers is referred to as:

4 Taking apart a competitor's product to better understand how it operates is:

E) None of the above.

E) All of the above are stages.

A) Total Quality Management

B) Redesigning the layout of the factory.

E) Retraining the workers.

13 Modular design is a form of standardization.

14 CAD uses computer graphics for product design.

16 Equipment breakdowns is a frequent cause of delayed differentiation.

17 Standardized parts are interchangeable parts.

19 The name Taguchi is associated with robust design.

20 Recycling is essentially remanufacturing.

21 A major consideration in product design is manufacturability.

26 Product designs that use computers is referred to as:

E) All may be dimensions of quality.

A) Reassembling a defective product.

B) Redesigning the layout of the factory.

D) Redesigning the product.

A) Replacement and repair is more difficult.

C) Number of configurations of modules decreases.

D) Individual parts lose their identities.

A) Research and development

C) Employee pay rises

D) Product or service quality

A) Service design tends to focus on tangible factors.

C) There is a lesser requirement to be aware of competitors' offerings.

D) There is less visibility to customers.

MGT613 Operation Management Solved MCQS Chapert 3b by William Stevenson

53. In business, forecasts are the basis for:

55. Which of the following is not a step in the forecasting process?

57. The two general approaches to forecasting are:

58. Which of the following is not a type of judgmental forecasting?