It is define as the series of interlink activities that consume the resources to meet an output.

 Processes

People, equipment, materials, energy and time are examples of

 Input

This is part of the business that is engaged in managing the systems of creation of goods and
services.
 Operation management

The main goal of operation management

 Most customer’s satisfaction

The best example of business that provides pure service is

 Audit firm

Goods are items that are intangible, something that we consume

 false

Manufacturing organization produce tangible products and have low contact

 true

Service has more inventory on hand than goods

 False

It is process of maintaining and improving the high standard and excellence of a product
 Quality assurance

The use of internet to transact business

 e-commerce

Schools don’t have operation management

 false

Knowing the difference between what you have to do and what is the right thing to do
 Ethics

Technology changes the way we provide goods and services

 True

The change in business from a company associated with a single country to one operate with
many countries
 Globalization
Cutting, drilling, teaching are example of inputs
 false

Placing your business near your competitors is an example of

 Location planning

Which of the following is not a function of operation management in a fast foods chain?
 Gather information regarding the needs of customers
 Arrangement of facilities
 Prepare foods
 Finding the right supplier of inputs

An advantage of checking the quality of a product is

 It can prevent defective products to reach the customers

Just in time is best used in

 Manufacturing

There are ways to improve the productivity of the business except:

 Modern machineries
 Motivation
 Increase staff meetings
 Create a positive culture

Operational management objectives do not include

 Quality
 Profitability
 Cost efficiency
 flexibility

The reason for studying operation management:

 knowing how goods and services are consumed
 studying the costly part of enterprise

The father of scientific management

 Fredrick Taylor

The person who introduced standardized or interchangeable part was

 Eli Whitney

When tangible product is not included in the service it is called

  Pure service

Henry Ford noted for his contributions to

 Assembly line operations

Its purpose is to ensure that production proceeds efficiently and minimum amount of
resources are wasted
 maintenance

The products are produced as per preferences of the customers within specified time and
cost.
 Mass customization

It is design to react and adapt to changes in production process

 Flexible manufacturing system

Technology concern with the application of mechanical electronic and computer systems to
operate and control production
 Automation

Which is the best reason, why the companies are studying their operation management?
 Learning about the costly part of the enterprise

Almost all services and almost all goods are mixture of service and tangible products
 True

Extent to which there is an absence of variety in a product or service provided by business

 Standardization

Companies recycle for variety of reasons EXCEPT

 Social responsibility
 Customer preferences
 Environmental concerns
 Environmental regulations

Which one is the feature of store’s location?

 Located on an accessible street
 Near the suppliers of raw materials
 Near the labor force
 The location is not too crowded with potential customers

The process of organizing work into tasks required to perform a specific job
  Job design

The reason for studying operation management

 Knowing how goods and services are consumed
 Studying the costly part of enterprise
 A only
 Both a and b

MIDTERM

It refers to the management of activities directly related to the production of goods and
services.
 Operation management
It involves the use of internet to transact business
 E-business
Henry Ford is noted for his contributions to:
 Assembly line operation
The impact of strategies on the general direction and basic character of a company must be:
 Long range
Which of the following is not a key way in which business organization compete with one
another?
 Product cost
 Product duplication
 Flexibility
 Quality
All of the following decisions fall within the scope of operations management except for?
 Promotion
 Design of product and processes
 Locations of facilities
 Quality management
An example of strategic operation management decision is the choice where to locate the
facilities
 True
A mission statement should provide guide for the formulation of strategies
 True
Measure of productivity which reflects a combination of some or all of the resources used to
obtain a certain output is
 Multifactor productivity
Quantitative methods of forecasting include
 Sales force composite
 Consumer market survey
 Exponential smoothing
  Jury execution opinion
Demand is 106 in January. 120 February, 134 March, and 142 in April, what is the 3-month
simple moving average for May?
 132
Last period’s forecast 65, last period’s demand 62, what is the exponential smoothing w/an
alpha of 0.4 for the next period?
 63.8
Time series patterns that repeat themselves after a period of days or weeks are called ____.
 Seasonality
Forecasts for groups of items tend to be less accurate than forecasts for individual items.
 False
Previous month’s actual demand is the same as a forecast for this month if the forecast is
based on
 Naïve method
Judgemental forecasts
 Forecasting that uses explanatory variables to predict future demand
 Forecast that project patters identified in recent time series observation
 Forecast that use inputs such as opinions from consumer, sales staff manager
Time series forecasts
 Forecasting that uses explanatory variables to predict future demand
 Forecast that project patters identified in recent time series observation
 Forecast that use inputs such as opinions from consumer, sales staff manager
Which of the following statement is not true in the case of goods?
 Tangible
 Can be stored
 With physical shape
 Intangible
Which of the following is not an objective of operations management?
 Customer satisfaction
 Profitability
 Cut cost at the expense of the quality of the output
 Timeliness
All of the following are differences between manufacturing and service operations EXCEPT
 Quality is more easily to measured in service operation
 Productivity is easier to measure in manufacturing operations
 Contact with customers is more prevalent with persons working in services
 Increase or decrease in inventory of finished products is more in goods
It is the measure of the quantity of output per unit of input.
 Productivity
Lilian and Frank Gilbreth are responsible for principles of
 Motion study
A system that is used to maintain the desired level of quality in a product or service.
  Quality control
A person responsible for popularizing interchangeable parts of manufacturing was
 Eli Whitney
Trend
 Caused by unusual circumstances
 Wavelike variations lasting more than one year
 Short term regular variations related to the calendar or time of day
 A long term upward or downward movement in data
Cycle
 Caused by unusual circumstances
 Wavelike variations lasting more than one year
 Short term regular variations related to the calendar or time of day
 A long term upward or downward movement in data
Moving average is a technique that averages a number of recent actual values, updated as
new values become available.
 False
In the weighted average the more recent values in a series are given less weight in computing
a forecast
 False
Which of the following is not correct?
 Screening is carried out after each stage of product/service design
 Certainty regarding the final design increases over time
 There is high uncertainty at the start the product design process
 There is a large number of design options during screening
Why is good product and service design important?
 Products and services are usually the first thing customers see of the company
 Products are the last thing a customer sees of a company
 The visual appeal of a product is the most important factor in selling it
 Operations managers’ pay is determined by the quality of product design
Under this product life cycle stage, customer awareness is already increasing.
 Growth
The term degree of awareness is associated with?
 Degree of design change
All are the advantages of standardization except
 Early freezing of the design
 Fewer parts to deal with in inventory
 Reduced training cost and time
 More routine purchasing
Remanufacturing means:
 Reassembling a defective product
 Replacing worn out components in products and reselling the products
 Redesigning the product
  Retraining the workers
If the Output is 10,000 units and the number of employees is 25, what is the labour
productivity per employee?
 400
The following are all likely to improve productivity except which one?
 Increased automation
 Increased staff meetings
 Improved staff motivation
 Increased staff meetings
Which of these is a common measure of labour productivity?
 Output scrap rate
 Profit margin
 Quality assurance
 Output per worker per day
Refers to the development of the product in terms of specifications which are required to
transform idea into output
 Product development
 Product design
 Standardization
 Mass customization
What is meant by term standardization?
 Creating a product but not finishing it until customer preferences realized
 Absence of variety in product, service, and process
 Variety in product, service, and process
 Consider environmental regulations
New product development starts with
 Idea generation
The stage in product life cycle where the organization expects to maximize their resources
 Maturity
Which of the following is a true statement about the introduction stage of the product life
cycle?
 Profits are usually non-existent
 Costs are low
 Sales growth are exploding
 There is intense competition
All are advantages of production systems with standardized outputs EXCEPT
 Have relatively high volume in outputs
 Have relatively low unit costs
 With variety to meet the preferences of customers
 Use relatively low skilled of workers
The fundamental purpose for the existence of any organization is described by its:
 Mission
Which of the following is a true about strategies?
 An organization should stick to their strategy for the life of the business
 All firms within the industry should adopt the same strategy
 Well defined mission make strategy development easier
 WE don’t need to scan our business environment to create strategy
The ability of an organization to produce goods or services that have some uniqueness in
their characteristics is….
 Time based strategy
 Quality based approach
 Competing with differentiation
 Competing in productivity
All of the following decisions fall within the scope of operations management except for…
 Design of goods and services
 Location of facilities
 Creating company income statement
 Managing quality
Which of the following statements about organizational missions is false?
 They reflect company purpose
 They indicate what company intends to contribute to community
 They are formulated after strategies are known
 They provide guidance for functional areas
Providing a reasonable working environment for our employees is part of what operational
management are?
 Human resource and job design
It concerns in the physical placement of resources such as equipment and storage facilities in
operation systems
 Layout design
Form of inventory management that requires working closely with suppliers, so raw
materials arrive as production to begin
 Just-in-time
An order qualifier is…
 Characteristics of goods that can use to win business from customers
 Characteristics of goods, customers do not expect
 Characteristics of goods present only in high quality products
 Minimum standard characteristics of a product
The ability to change a product or service offering to suit customer’s need is called
 Flexibility
The capability of an organization which helps it gaining competitive advantage over its
competitors
 Core competencies
Firms try to achieve competitive advantage by competing on
 Order winners
Which of the following is not true for forecasting?
 Forecasts are rarely perfect
 The underlying casual system will remain same in the future
 Forecast for group of items is accurate than individual item
 Short range forecasts are less accurate than long range forecasts
The demand for period 1 and 2 is 10 and 12 cases respectively. As per naïve method, the
demand for next period is __
 14
The process of using the present and past conditions for analysing future aspects is classified
as ___
 Forecasting
A company that is analysing customer needs and competitors actions are likely to be in what
phase of product development
 Idea generation
The first step in developing a service blueprint is…
 Reach a consensus on which activities are more important than other
 Identify all key activities involved in creating and delivering the service
 Identify the links between customer contact and employees
 Identify the key customers
Service blueprint can pinpoint the stages in the process where customers commonly have to
wait
 True
Productivity has direct impact on competitiveness
 True
The approach that related to product, process or method of production to improve
organization’s ability
 Operation strategy
Focused on reducing the time needed to accomplish tasks
 Time based
Plans created to achieve the organizational goals
 Strategy
Finished product 7,040 units, inputs; labor P1,000; materials P520; and overhead P2,000.
Compute the total productivity
 2 units
What are you looking if you are asked to find the units of output per shift?
 Labor
All are reasons for businesses to go global except
 Expansion
 Promote products of homes country
 More profits
 All are reasons
The best external source to improve the product
  Customers
 Use of capital intensive methods to achieve high output volume and low unit costs
 Scale based stategies

Before finals quiz

Which of the following does not cause to production delay
 Shortage of space
 MINIMUM MATERIAL HANDLING
 Long distance movement of materials
 Spoiled work
The following type of layout is preferred to manufacture a standard product in large quantity
 Product layout
 Process layout
 Fixed position layout
 Combination layout
Layout that is preferred for low volume of production of non-standard products
 PROCESS LAYOUT
In ship manufacturing, the type of layout preferred is
 FIXED POSITION LAYOUT
Process selection is primarily considered during
 PLANNING
Type of operation being carried out by an organization depends upon
 BOTH VOLUME AND STANDARIZATION
Automation is preferred because of the following EXCEPT
 Offers lesser dependence on workers
 Reduce variable cost
 MORE LABOR FORCE TO HIRE
 Easy handling
An eyeglass repair shop would be matched with which type of process?
 JOB SHOP
Best process you would need for custom man-made handbag that requires a lot of detailed
work
 BATCH
Which of the following is not true regarding process types?
 THEY ALWAYS EXISTS IN THEIR PURE FORMS
 They influence many activities of the organizations
 Managers must know when to shift from one process type to next
 Hybrid process have elements of other processes types
Continuous processing is the best way to produce customized product
 FALSE
Which of the following is not a way of organizing a production process?
 Continuous
  FACTORY
 Job shop
 repetitive
Which is the disadvantage of automation
 VERY HIGH INITIAL COSTS
 Technology is cheap
 Automation is more flexible
 None of these
Which is these is disadvantage of continuous pocess?
 Lack of variety
 Costly to change
 rigidity
 ALL OF THE ABOVE
Facility layout which utilizes stationary products
 FIXED POSITION LAYOUT
Product layouts usually require less skilled workers than process layouts
 TRUE
For service organizations, the dominant factor is raw materials
 FALSE
A process type which associated with the highest volume and lowest variety
 CONTINUOUS
Type of process the unit cost is low
 CONTINUOUS

Mass or repetitive production is characterized by

 (HIGH VOLUME, LOW VARIETY

In a _______ layout all machines and process of the same type are group together
 PROCESS
Company owns and control businesses that are ahead in the value of its industry

 FORWARD INTEGRATION

Refers to a productive process that requires a high percentage of investment in fixed assets
like automation

 CAPITAL INTENSITY

Type of Process used by schools

 BATCH

Main objective is to have a smooth flow of work

 FACILITIES LAYOUT
All are objectives of facility layout except

 CAN DUPLICATE WORK

In designing a process of a company, the first thing that you have to do is

 GATHER INFORMATION IN PROCESS REQUIREMENTS

The way in which a firm competes has no relationship to the way the tasks are organized

 FALSE

Process analysis is used to determine possible improvement the way products is to be

produced

 TRUE

Technology is the most cause of changes in process

 TRUE

All are financial justifications in technology except

 LOCATION

Capacity planning seeks to match demand to available resources

 TRUE

Actual output divided design capacity is a measure of

 UTILIZATION

The maximum output of a system in a given period is called

 DESIGNED CAPACITY

Our estimates regarding short run variations in demand can influence our desired design
capacity

 TRUE

Peak loads, seasonal requirements, affect design capacity, as well as effective capacity and
actual output

 TRUE

The efficiency of our operations will increase as the ratio of design capacity to actual output
increases

 FALSE

Given the ff data: effective capacity, 20 units; design is 60 units; actual output is 15 units,
utilization
  25%
Capacity management might include

 INVENTORY LEVEL ADJUSTMENTS

One drawback of process layouts is that equipment utilization rates are lower than in product
layout

 TRUE

The system that has the highest equipment flexibility

 JOB SHOP

How output related to capacity

 AN INCREASE IN CAPACITY CAN INCREASE OUTPUT

Capacity is measured with two ratios

 CAPACITY EFFICIENCY AND CAPACITY UTILIZATION

One reason of economies of scale drives down cost is the spreading of fixed costs

 TRUE

Diseconomies of scale states that the average unit cost of a production can be reduced by
increasing its output rate

 TRUE

Long term capacity plans deal with

 INVESTMENT IN NEW FACILITIES

All are determinants of effective capacity EXCEPT

 Product and service factors

 Supply chain factors
 Operational factors
 FORECASTING

The objective of retail layout is to maximize net profit per square foot of store space

 TRUE

Job-shop processing system generally requires less-skilled workers than a continuous

processing system

 FALSE

Layout all machines process of the same type are group together

 PROCESS
Product layout usually require less skilled workers than process layouts

 TRUE

_____ Layout which materials are fed into first machine and finished products come out on
last machine

 PRODUCT

Layout that preferred to manufacture a standard product in large quantity

 PRODUCT LAYOUT

FINALS
Which of the following explain the need for facility location selection?

 When the existing business unit has outgrown its original facilities
 When the lease expired and the landlord does not renew the lease
 When a business is newly started
 All of the above

Which of the following is the first step in making a correct location choice?

 Development location alternatives

 Decide the criteria for evaluation location alternatives
 Evaluate the alternatives
 Make a decision and select the location

Technique emphasizes transportation cost in the determination of facility location?

 Transportation model

Transportation cost mainly depends on which of the following factors?

 Distance
 Weight of merchandise
 Time required for transportation
 All of the above

Service/ retail/ professional location analysis typically has a

 Revenue focus

Which of the following is not a factor in the country location decision?

 Labor availability
 Government rules
 Location of markets
  Zoning restrictions

Technique used for finding the best location for a single distribution point that services
several stores or areas

 Center of gravity

The transportation method

 Performs a cost-volume analysis

 Determine point of supply and point of demand
 Find location of distribution center that minimizes distribution cost
 Used both qualitative and quantitative factor

A goods-producing location decision would stress the importance of

 Utility and labor costs

Type of layout preferred to manufacture a standard product in a large quantity

 Product layout

Type of layout is preferred for low volume production of non standard products

 Process layout

The expected qualities of a product are

 It satisfies the needs and expectations of the customer

 It has a pleasing appearance and handles
 Has high reliability and functions safely over is intended life
 All of these

Process selection is primarily considered during:

 Planning

The type of operation being carried out by an organization depends upon:

 Volume
 Standardization
 Both
 None of the above
 Automation is preferred because of the following EXCEPT
 Offers lesser dependence on workers
 Reduce variable costs
 Easy handling
 More handling force to hire

Regional factors for location planning include all of the following EXCEPT:
  Raw materials
 Markets
 Labor costs
 Attitudes

You can place your business anywhere and it will make profit, since you have innovative
product

 False

Business locations is define as the positions in which business are placed

 True

Best process you would need for custom man made handbags that requires a lot of detailed
work

 Batch

Location decisions typically to consider all EXCEPT

 Minimize cost
 Globalization
 Labor cost
 Supplier’s need

Which of the following is most likely to affect location strategy of a manufacturing firm?

 Appearance of the area

 Utility costs
 Purchase power of are
 Competition

Which of this is disadvantage of continuous process?

 Lack of variety
 Costly to change
 Rigidity
 All of the above

Facility layout utilizes stationary products

 Fixed position layout

 Product layouts usually require less skilled workers than process layout
 True
 For service organizations, the dominant factor is raw materials.
 False
 A process type associated with the highest volume and lowest variety?
 Continuous
  Type of process the unit cost is low
 Continuous
 In a _____ layout all machines and process of the same type are grpup together
 Process
 If the cost of doing business in your existing location becomes higher what would
you do?
 Close existing and relocate
 Fast food chains and other retail services locate their business
 Near the markets
 When transporting finished good is more expensive than transporting materials it is
better to locate business
 Near the market
 Plants are designed to serve particular geographic area
 Market area plant strategy
 Most widely used location technique
 Factor-Rating Model
 Company owns and control business that are ahead in the value chain of its industry
 Forward integration
 It refers to a productive process that requires a high percentage of investment in fixed
assets like automation
 Capital intensity
 Type of process used by schools
 Batch
 All are objectives of facility layout EXCEPT
 Can duplicate work

The way in which s firm competes has no relationship to the way the tasks are organized

 TRUE
Process analysis is used to determine possible improvement the way products is to be
produced

 TRUE

All are financial justifications in technology except

 Location
 Risk
 Revenue enhancement
 Purchase cost

The process of evaluating where to place the business facilities base on the objectives of the
firm
  Location planning
 Process design
 Facilities design
 Product design

The term capacity refers to the maximum quantity an operating unit can process over given
period

 TRUE

Design capacity refers to maximum output rate that can be achieved under ideal conditions

 TRUE

How output is related to capacity?

 Increase in capacity can increase output

 It is not
 Decrease in capacity increases output
 An increase in capacity reduces output

Efficiency is defined as ration of

 Actual output to effective capacity

 Actual output to design capacity
 Design capacity to effective capacity
 Effective capacity to actual output

Which of the following is not criterion for developing capacity alternatives?

 Design structured rigid systems

 Take big picture approach
 Prepare to deal with capacity to chunks
 Identify optimal operating level

Assured quality is necessary for building customer confidence

 TRUE

All of the following costs are likely to decrease as a result of better quality expect

 Customer dissatisfaction
 Maintenance costs
 Warranty costs
 Liabilities to consumers

Quality is defined by the customer is?

  Unrealistic definition of quality
 User based definition of quality
 Manufacturing based definition of quality
 Product based definition of quality

Quality practices must be carried out

 At the start of the project

 Throughout the life of the project
 At the end of the project
 No need to carry out quality practices

Detecting defective output is part of

 Quality assurance
 Quality control
 Quality improvement
 Quality planning

It focuses on the prevention of defects

 Quality planning
 Quality assurance
 Quality control
 Quality development

Which of the following is not a target of total quality management?

 Customer satisfaction
 Reducing manpower
 Continuous cost reduction
 Continuous operational improvement

In supply chain management, after planning, the next step involves

 Developing
  Building strong relationship with suppliers
 Sourcing
 All are need to consider

Testing, training and inspections are part of

 Liabilities
 Cost of conformance
 Cost of non- conformance
 External costs

Supply chain management control or link the production to

 Directing
 Distribution
 Finance
 Human resource

Encompasses all activities associated with the flow and transformation of goods from
suppliers to end customers

 Production line
 Supply chain
 Marketing channel
 warehouse

Logistic is the term for all physical activities involved in?

 procurement
 distribution of goods to consumers
 accounting of raw materials in transit
 all

Selecting suppliers and purchasing items are is also known as

 negotiation
 procurement
 contracting
 selection

Due to small changes in customer demands, inventory become progressively larger through
the supply chain
 bullwhip effect
  reverse auction
 negotiation
 procurement

TQM emphasizes
 responsibility of quality control staff to identify quality problems
 commitment to quality that goes beyond internal companies, are all involved
 process where marketing is the only department involved
 system where managers are make decisions on their own what they want

Which of the following is not an area of responsibility for logistics manager?

 Inventory
 Purchasing
 Warehousing
 Marketing

Which of the following is true?

 Value is always lower than price
 Value is what consumers are prepared to pay
 Price is always lower than value
 Value cannot be used to measure quality

When the organization owns it suppliers it is known as

 Forward integration
 Backward integration
 Distribution

If a business can develop a reputation for high quality then it maybe able to create an
advantage to its competitors
 True

SCM means managing costs at every step and delivering goods to consumers as quickly as
possible
 True

The objective of location strategy is to maximize the benefits of location of the firm
 True