Professional Documents
Culture Documents
9781285451374
Full link download
Test Bank: https://testbankpack.com/p/test-bank-for-om-5-5th-
edition-collier-evans-1285451376-9781285451374/
Solution Manual:
https://testbankpack.com/p/solution-manual-for-om-5-5th-edition-
collier-evans-1285451376-9781285451374/
OM5 C2
Test Bank
Chapter 2 – Value Chains
Multiple Choice
ANS: C
ANS: C
ANS: D
ANS: A
5. In the value chain model for a hospital, patients, drugs, and staff would be considered as
_.
a. suppliers
b. inputs
c. transformation processes
d. outputs
1
OM5 C2
Test Bank
ANS: B
6. For a restaurant, order taking, bill payment, and home delivery would be considered as
_.
a. services
b. inputs
c. processes
d. outputs
ANS: C
ANS: D
8. In the value chain model for a hospital, pharmaceutical companies and organ donors
would be considered as _.
a. suppliers
b. inputs
c. processes
d. outputs
ANS: A
9. In the context of the perspectives of a value chain, product and service guarantees,
contract negotiations and consulting services would be considered as _.
a. preproduction services
b. production processes
c. postproduction services
d. after-sales services
ANS : A
10. In the context of the perspectives of a value chain, training and transportation delivery
services for customers would be considered as _.
a. preproduction services
b. production processes
c. postproduction services
d. packaging services
ANS: C
2
2
OM5 C2
Test Bank
ANS: C
12. The control of Walmart's value chain is , while the control of General Electric's is
_.
a. postproduction focused; preproduction focused
b. horizontal; vertical
c. centralized; decentralized
d. backward integrated; forward integrated
ANS: C
13. A company has two alternatives for meeting a customer requirement for 9,000 units of a
specialty molding. If done in-house, fixed cost would be $350,000, with variable cost at $30 per
unit. If outsourced, the cost is $80 per unit. Determine the break-even point and determine if
they should make the item in-house or outsource it.
a. break-even point = 7,000 units; outsource it
b. break-even point = 7,000 units; make it in-house
c. break-even point = 11,667 units; outsource it
d. break-even point = 11,667 units; make it in-house
ANS: B
14. A company has two alternatives for meeting a customer requirement for 6,000 units of a
specialty molding. If done in-house, fixed cost would be $350,000, with variable cost at $30 per
unit. If outsourced, the cost is $80 per unit. Determine the break-even point and determine if
they should make the item in-house or outsource it.
a. break-even point = 7,000 units; outsource it
b. break-even point = 7,000 units; make it in-house
c. break-even point = 11,667 units; outsource it
d. break-even point = 11,667 units; make it in-house
ANS: A
Mak
e Buy
Fixed cost per year $8,000 $0
3
3
OM5 C2
Test Bank
15. The annual cost to make the roller gear assembly in-house is
_. a. less than or equal to $30,000
b. more than $30,000 but less than or equal to $40,000 c.
more than $40,000 but less than or equal to $50,000 d.
more than $50,000 but less than or equal to $60,000
ANS: D
ANS: D
17. The volume they are indifferent regarding the decision to make or buy is
units. a. less than or equal to 2,000
b. more than 2,000 but less than or equal to 4,000 c.
more than 4,000 but less than or equal to 6,000 d.
more than 6,000 but less than or equal to 8,000
ANS: C
A U.S. motorcycle manufacturer has the option of either making the gas tank in their newly
designed motorcycle, or subcontracting it to a manufacturer from Sinagpore. The manufacturer
expects to produce 1,000 units per year. Costs for the two options are:
ANS: B
4
4
OM5 C2
Test Bank
ANS: A
20. The volume they are indifferent regarding the decision to make or buy is
units. a. less than or equal to 2,000
b. more than 2,000 but less than or equal to
4,000 c. more than 4,000 but less than or equal to
6,000 d. more than 6,000 but less than or equal
to 8,000 e. more than 8,000.
ANS: A
21. A large hotel and casino in Las Vegas is currently under construction. There will be an Italian
restaurant in the hotel that will serve pizza. Management is trying to decide whether to make
the pizza themselves or buy it frozen and simply heat it to customer order. One major source of
commercial-grade frozen pizza is Chun-Yee Corporation. If they make the pizza themselves a
substantial amount of preparation equipment will be required, along with skilled personnel.
Financial data is as shown below (variable costs are estimated based on an average pizza
purchase):
Fixed
Source Cost/year Variable Cost
Make in-house $7,870 $3.20
Chun-Yee $2,460 $4.50
ANS: C
22. is the process of managing information, physical goods, and services to ensure
their availability at the right place, at the right time, at the right cost, at the right quantity,
and with the highest attention to quality.
a. Offshoring
b. Value proposition
c. Operational structure
d. Value chain integration
ANS: D
23. refers to acquiring capabilities in the value (supply) chain toward distributions or
even customers.
a. Backward integration
5
5
OM5 C2
Test Bank
b. Outsourcing
c. Offshoring
d. Forward integration
ANS: D
24. refers to the process of acquiring and consolidating elements of a value chain to
achieve more control.
a. Vertical integration
b. Horizontal integration
c. Outsourcing
d. Offshoring
ANS: A
25. The first, second, and third waves of outsourcing experienced by the United States involve
respectively.
a. goods-producing jobs, simple service work, and skilled knowledge work
b. simple service work, goods-producing jobs, and skilled knowledge work
c. simple service work, skilled knowledge work, and goods-producing jobs
d. skilled knowledge work, simple service work, and goods-producing jobs
ANS:A
ANS:D
27. is the process of having suppliers provide goods and services that were
previously provided internally.
a. Outsourcing
b. Horizontal integration
c. Reshoring
d. Vertical integration
ANS: A
28. The United States has experienced three waves of outsourcing. Which of the following is NOT
one of the waves?
a. Skilled knowledge work
b. Mass customization
c. Simple service work
6
6
OM5 C2
Test Bank
d. Goods-producing jobs
ANS: B
ANS: C
30. When break-even analysis is applied to an outsourcing decision, the break-even quantity is
_.
a. the ratio of fixed costs to the difference between variable outsourcing cost and variable
in-house production cost
b. the ratio of the difference between variable outsourcing cost and variable in-
house production cost to fixed costs
c. the product of the variable costs and the fixed costs
d. the product of the variable costs and the production quantity
ANS: A
ANS: D
32. Outsourcing is _.
a. the same as offshoring
b. the opposite of vertical integration
c. the opposite of backward integration
d. the same as diversifying
ANS: B
33. A hospital is evaluating whether to outsource or perform in-house a large set of blood and
urine laboratory tests. The fixed cost of the laboratory located in the hospital is $800,000, and
the weighted average variable cost per test if performed in-house is $28.75. A third-party lab
located one city block from the hospital will perform the same tests and distribute the results
electronically to the hospital at a price of $32.00. If the annual volume last year was 250,000
tests, the hospital should:
a. outsource these lab tests to this third-party lab.
77
OM5 C2
Test Bank
ANS: C
34. Pre-planning, response, and recovery from natural or anthropogenic disasters is called
_.
a. reshoring
b. offshoring
c. emergency management
d. vertical integration
ANS: C
ANS: B
ANS: D
True/False Questions
system. ANS: F
ANS: F
3. A value chain views an organization from an integrative perspective of goods and services,
while a supply chain focuses mainly on the physical movement of goods and materials.
ANS: T
4. While cultural differences are important in managing operations in different countries, they
88
OM5 C2
Test Bank
ANS: F
ANS: T
6. One approach to increasing value is to maintain perceived benefits while increasing price
or cost.
ANS: F
7. The success of the entire value chain depends on how it is designed and
managed. ANS: T
8. The focus on value has forced many traditional goods-producing companies to reduce
services to their customer benefits packages.
ANS: F
ANS: F
10. The decision to purchase a good or service or a customer benefit package is based on an
assessment by a customer of the perceived benefits in relation to its price.
ANS: T
11. A value chain can be considered a "cradle-to-grave" input-output model of the operations
function.
ANS: T
12. A value chain begins with the goods and services that are provided to
customers. ANS: F
ANS: F
99
OM5 C2
Test Bank
14. Postproduction services might include customer financing, customer benefit package
design, and promotion/advertising.
10
1
0
OM5 C2
Test Bank
ANS: F
ANS: T
16. Support processes are the ones that directly create and deliver goods and services.
ANS: F
17. A vertical integration strategy generally reduces the complexity of managing a value chain.
ANS: F
18. An organization that outsources still retains ownership of an outsourced process or function.
ANS: F
ANS: F
integration. ANS: T
21. Decentralizing value chain activities lessens the control that a firm has over cost, quality, and
other important business metrics, and often leads to higher levels of risk.
ANS: T
customer. ANS: T
distribution. ANS: F
24. In break-even analysis, whenever the anticipated volume is greater than the break-
even quantity, the firm should not outsource.
ANS: T
11
1
1
OM5 C2
Test Bank
25. Value chain integration for goods-producing firms requires consolidating information systems
among suppliers, factories, distributors, and customers; managing the supply chain and
12
1
2
OM5 C2
Test Bank
ANS: T
26. Third-party “system integrators” are often used for vertical integration
strategies. ANS: F
location. ANS: F
28. Offshoring is the same as outsourcing in terms of transferring ownership and control.
ANS: F
ANS: T
30. General Electric would be considered a multinational enterprise because it sources, markets,
and produces its goods in several countries.
ANS: T
31. Global value chains face higher levels of risk and uncertainty, requiring more inventory and
day-to-day monitoring to prevent product shortages.
ANS: T
revenues. ANS: T
Case Study Questions (To reward students who attend class, listen and learn, and take
good class notes on the case discussion and/or student team presentation.)
1. Which one of the following statements regarding the Bookmaster case study is TRUE?
a. Advantages of the bricks-and-mortar value chain include more customization, more
product variety, and using more customer labor (self-service).
b. Operations play no role in the Internet-based value chain.
c. The nature of the service encounter did not change between the bricks-and-mortar
versus Internet-based value chain.
d. The case is an example of where physical assets are replaced by information.
ANS: D
13
1
3
OM5 C2
Test Bank
2. Which one of the following statements is TRUE regarding the Bookmaster case study?
a. One advantage of the virtual (web-based) value chain is mass customization using
self-service (i.e., customer labor).
b. One advantage of the bricks-and-mortar value chain is more customer convenience and scope of
greater product selection.
c. One advantage of the virtual (web-based) value chain is more management control.
d. One advantage of the bricks-and-mortar value chain is less of a carbon footprint.
ANS: A
3. Which of the following lessons from the Bookmaster case study is FALSE?
a. Total customer processing time increases in the traditional bricks-and-mortar book value
chain compared to an e-book value chain.
b. An advantage of the internet-based e-book value chain is convenience.
c. The nature of service encounters changed from the traditional bricks-and-mortar book
value chain to an e-book value chain.
d. The carbon footprint for the total traditional bricks and mortar book value chain is less
than for an e-book value chain.
ANS: D
Problems for Manual Grading, Take-Home Exams and Partial Credit (Also, review the OM
Instructor’s Manual for end -of-chapter questions/problems)
1. Define value and discuss three ways for organizations to increase value.
ANS:
Value is the perception of the benefits associated with a good, service, or bundle of goods
and services in relation to what buyers are willing to pay for them. One of the simplest
functional forms of value is:
Value = Perceived benefits/Price (cost) to the customer.
2. Explain a value proposition. Relate this to a customer benefits package of goods and services.
ANS:
A competitively dominant customer experience is often called a value proposition. The
economist Adam Smith, in his 1776 book The Wealth of Nations, recognized that economic
exchange is based on the production of goods that acquire value during design and
manufacturing processes. However, he also noted that “real value” is represented by “value in-
14
1
4
Another random document with
no related content on Scribd:
groups. To these four divisions we, however, add temporarily a fifth,
viz. Pupipara. This is included by Brauer in Schizophora, but it
appears to be really an unnatural complex, and had better be kept
separate till it has been entirely reconsidered. These great sections
may be thus summarised:—
Series I. Nemocera.—In this section the habit occurs in no less than five
families, viz.:
Blepharoceridae. Curupira; in the female only; larva aquatic.
Culicidae. Culex, Mosquitoes; in the female only; other genera, with one or
two exceptions, do not suck blood; larvae aquatic.
Chironomidae. Ceratopogon, Midge; in the female only; exceptional even
in the genus, though the habit is said to exist in one or two less
known, allied genera; larval habits not certain; often aquatic; in C.
bipunctatus the larva lives under moist bark.
Psychodidae. Phlebotomus: in the female only (?); quite exceptional in the
family; larva aquatic or in liquid filth.
Simuliidae. Simulium, sand-flies; general in the family (?), which, however,
is a very small one; larva aquatic, food probably mixed vegetable and
animal microscopic organisms.
Series II. Brachycera. Tabanidae. Gad-flies: apparently general in the
females of this family; the habits of the exotic forms but little known; in
the larval state, scarcely at all known; some are aquatic.
Series IV. Cyclorrhapha Schizophora: Stomoxys, Haematobia; both sexes
(?); larvae in dung. [The Tse-tse flies, Glossina, are placed in this family,
though their mode of parturition is that of the next section].
Series V. Pupipara. The habit of blood-sucking is probably common to all the
group and to both sexes. The flies, with one exception, frequent
Vertebrates; in many cases living entirely on their bodies, and
apparently imbibing much blood; the larvae are nourished inside the
flies, not on the imbibed blood, but on a milky secretion from the mother.
Sub-Order Aphaniptera. Fleas. The habit of blood-sucking is common to all
the members and to both sexes. The larvae live on dried animal matter.
Thirty years or more ago the Russian naturalist, Wagner, made the
very remarkable discovery that the larva of a Cecidomyiid produces
young; and it has since been found by Meinert and others that this
kind of paedogenesis occurs in several species of the genera
Miastor and Oligarces. The details are briefly as follows:—A female
fly lays a few, very large, eggs, out of each of which comes a larva,
that does not go on to the perfect state, but produces in its interior
young larvae that, after consuming the interior of the body of the
parent larva, escape by making a hole in the skin, and thereafter
subsist externally in a natural manner. This larval reproduction may
be continued for several generations, through autumn, winter, and
spring till the following summer, when a generation of the larvae
goes on to pupation and the mature, sexually perfect fly appears.
Much discussion has taken place as to the mode of origination of the
larvae; Carus and others thought they were produced from the
rudimental, or immature ovaries of the parent larva. Meinert, who
has made a special study of the subject,[370] finds, however, that this
is not the case; in the reproducing larva of the autumn there is no
ovary at all; in the reproducing larvae of the spring-time rudimentary
ovaries or testes, as the case may be, exist; the young are not,
however, produced from these, but from germs in close connection
with the fat-body. In the larvae that go on to metamorphosis the
ovaries continue their natural development. It would thus appear that
the fat-body has, like the leaf of a Begonia, under certain
circumstances, the power, usually limited to the ovaries, of producing
complete and perfect individuals.
The habits of many of the larvae are very peculiar, owing to their
spinning or exuding a mucus, that reminds one of snail-slime; they
are frequently gregarious, and some of them have likewise, as we
shall subsequently mention, migratory habits. Perris has described
the very curious manner in which Sciophila unimaculata forms its
slimy tracks;[371] it stretches its head to one side, fixes the tip of a
drop of the viscous matter from its mouth to the surface of the
substance over which it is to progress, bends its head under itself so
as to affix the matter to the lower face of its own body; then stretches
its head to the other side and repeats the operation, thus forming a
track on which it glides, or perhaps, as the mucus completely
envelops its body, we should rather call it a tunnel through which the
maggot slips along. According to the description of Hudson[372] the
so-called New Zealand Glow-worm is the larva of Boletophila
luminosa; it forms webs in dark ravines, along which it glides, giving
a considerable amount of light from the peculiarly formed terminal
segment of the body. This larva is figured as consisting of about
twenty segments. The pupa is provided with a very long, curiously-
branched dorsal structure: the fly issuing from the pupa is strongly
luminous, though no use can be discovered for the property either in
it or in the larva. The larva of the Australian Ceroplatus mastersi is
also luminous. Another very exceptional larva is that of Epicypta
scatophora; it is of short, thick form, like Cecidomyiid larvae, and has
a very remarkable structure of the dorsal parts of the body; by
means of this its excrement, which is of a peculiar nature, is spread
out and forms a case for enveloping and sheltering the larva.
Ultimately the larval case is converted into a cocoon for pupation.
This larva is so different from that of other Mycetophilidae, that Perris
was at first unable to believe that the fly he reared really came from
this unusually formed larva. The larva of Mycetobia pallipes (Fig.
221) offers a still more remarkable phenomenon, inasmuch as it is
amphipneustic instead of peripneustic (that is to say, it has a pair of
stigmata at the termination of the body and a pair on the first thoracic
segment instead of the lateral series of pairs we have described as
normal in Mycetophilidae). This larva lives in company with the
amphipneustic larva of Rhyphus, a fly of quite another family, and
the Mycetobia larva so closely resembles that of the Rhyphus, that it
is difficult to distinguish the two. This anomalous larva gives rise, like
the exceptional larva of Epicypta, to an ordinary Mycetophilid fly.[373]
But the most remarkable of all the Mycetophilid larvae are those of
certain species of Sciara, that migrate in columns, called by the
Germans, Heerwurm. The larva of Sciara militaris lives under layers
of decomposing leaves in forests, and under certain circumstances,
migrates, sometimes perhaps in search of a fresh supply of food,
though in some cases it is said this cannot be the reason. Millions of
the larvae accumulate and form themselves by the aid of their
viscous mucus into great strings or ribbons, and then glide along like
serpents: these aggregates are said to be sometimes forty to a
hundred feet long, five or six inches wide, and an inch in depth. It is
said that if the two ends of one of these processions be brought into
contact, they become joined, and the monstrous ring may writhe for
many hours before it can again disengage itself and assume a
columnar form. These processional maggots are met with in
Northern Europe and the United States, and there is now an
extensive literature about them.[374] Though they sometimes consist
of almost incredible numbers of individuals, yet it appears that in the
Carpathian mountains the assemblages are usually much smaller,
being from four to twenty inches long. A species of Sciara is the
"Yellow-fever fly" of the Southern United States. It appears that it has
several times appeared in unusual numbers and in unwonted
localities at the same time as the dreaded disease, with which it is
popularly supposed to have some connection.
There are more than 1000 species of these flies known, and many
genera. They form three sub-families, which are by some considered
distinct families, viz.: Ptychopterinae, Limnobiinae or Tipulidae
Brevipalpi, Tipulinae or Tipulidae Longipalpi.