Test Bank for Service Management Operations, Strategy, Information Technology 9th Edition by Sanjeev

Service Management: Operations, Strategy, Information Technology, 9e (Bordoloi) Chapter 3 New Service Development 1) The "line of visibility" found in a service blueprint separates the front office operations from the back office operations.

Answer: TRUE Difficulty: 1 Easy Topic: Service Blueprinting Learning Objective: 03-06 Prepare a service blueprint.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 2) A factor that simplifies the design of service systems is the presence of the customer in the process.

Answer: FALSE Difficulty: 1 Easy Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 3) A "line of interaction" also can be found on a service blueprint.

Answer: TRUE Difficulty: 1 Easy Topic: Service Blueprinting Learning Objective: 03-06 Prepare a service blueprint.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 4) An increase in divergence can maximize the revenue that is generated by each customer.

Answer: TRUE Difficulty: 2 Medium Topic: Strategic Positioning Through Process Structure Learning Objective: 03-04 Explain and differentiate what is meant by the divergence and the complexity of a service process.

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5) Dry cleaning is an example of a service where isolation of the technical core would be inappropriate.

Answer: FALSE Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 6) Fast-food restaurants have adopted the production-line approach to service design.

Answer: TRUE Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 7) An important variable in the design process is the amount of customer participation in the delivery of the service.

Answer: TRUE Difficulty: 2 Medium Topic: Strategic Positioning Through Process Structure Learning Objective: 03-04 Explain and differentiate what is meant by the divergence and the complexity of a service process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 8) Financial consulting is a service with low complexity and high divergence.

Answer: TRUE Difficulty: 2 Medium Topic: Strategic Positioning Through Process Structure Learning Objective: 03-04 Explain and differentiate what is meant by the divergence and the complexity of a service process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

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9) Ideas for new service innovations often originate with customers.

Answer: TRUE Difficulty: 1 Easy Topic: New Service Development Learning Objective: 03-05 Describe the sequence of stages and the enablers of the new service development process cycle.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 10) A major incentive for innovation in services is the ability to patent an idea.

Answer: FALSE Difficulty: 2 Medium Topic: Innovation in Services Learning Objective: 03-02 Describe the fundamental characteristics of service innovation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 11) Service complexity can be measured by analyzing the number and intricacy of the steps required performing it.

Answer: TRUE Difficulty: 2 Medium Topic: Strategic Positioning Through Process Structure Learning Objective: 03-04 Explain and differentiate what is meant by the divergence and the complexity of a service process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 12) The "project authorization" in the NSD cycle is part of the development step.

Answer: FALSE Difficulty: 2 Medium Topic: New Service Development Learning Objective: 03-05 Describe the sequence of stages and the enablers of the new service development process cycle.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

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13) The "line of visibility" for a self-service process blueprint would be near the top of the diagram.

Answer: FALSE Difficulty: 2 Medium Topic: Service Blueprinting Learning Objective: 03-06 Prepare a service blueprint.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 14) A service blueprint will not facilitate creative problem solving because it will be too rigid a definition of the service delivery system.

Answer: FALSE Difficulty: 2 Medium Topic: Service Blueprinting Learning Objective: 03-06 Prepare a service blueprint.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 15) Investment banking is a financial service that has high complexity and high divergence.

Answer: TRUE Difficulty: 2 Medium Topic: Strategic Positioning Through Process Structure Learning Objective: 03-04 Explain and differentiate what is meant by the divergence and the complexity of a service process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 16) Limited discretion of service workers is a feature of the production-line approach to service design.

Answer: TRUE Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

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17) Basic research typically is limited to federal, university, and nonprofit organizations.

Answer: TRUE Difficulty: 1 Easy Topic: Innovation in Services Learning Objective: 03-02 Describe the fundamental characteristics of service innovation.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 18) In the new service development process cycle, development follows design.

Answer: FALSE Difficulty: 1 Easy Topic: New Service Development Learning Objective: 03-05 Describe the sequence of stages and the enablers of the new service development process cycle.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 19) JIT is an example of information driven technology innovation.

Answer: FALSE Difficulty: 1 Easy Topic: New Service Development Learning Objective: 03-05 Describe the sequence of stages and the enablers of the new service development process cycle.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 20) The service encounter is a structural service design element.

Answer: FALSE Difficulty: 1 Easy Topic: New Service Development Learning Objective: 03-05 Describe the sequence of stages and the enablers of the new service development process cycle.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

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21) Intellectual property is a creation of the mind.

Answer: TRUE Difficulty: 1 Easy Topic: Intellectual Property Learning Objective: 03-08 Explain how intellectual property rights protect a service brand.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 22) Intellectual property rights allow the owner to secure monopoly profits for a limited time.

Answer: TRUE Difficulty: 2 Medium Topic: Intellectual Property Learning Objective: 03-08 Explain how intellectual property rights protect a service brand.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 23) Radical service innovations are driven mostly by technological innovations.

Answer: TRUE Difficulty: 2 Medium Topic: Innovation in Services Learning Objective: 03-03 Describe the managerial issues associated with the adoption of new technology.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 24) Readiness to embrace new technology is a measure of how fast new technology is adopted in the marketplace.

Answer: FALSE Difficulty: 2 Medium Topic: Innovation in Services Learning Objective: 03-03 Describe the managerial issues associated with the adoption of new technology.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

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25) Blockchain technology is based upon the cyber currency Bitcoin.

Answer: TRUE Difficulty: 2 Medium Topic: Innovation in Services Learning Objective: 03-02 Describe the fundamental characteristics of service innovation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 26) Blockchain is a trusted immutable digital ledger that deletes all but recent transactions.

Answer: FALSE Difficulty: 2 Medium Topic: Innovation in Services Learning Objective: 03-02 Describe the fundamental characteristics of service innovation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 27) Which of the following is not a characteristic of a production-line approach to provide a service?

A) Division of labor.

B) Substitution of technology for people.

C) Standardization of the process and service provided.

D) High employee autonomy in task execution.

Answer: D Difficulty: 1 Easy Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

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28) One advantage of reduced divergence is ________.

A) quicker response to market demands B) greater efficiency C) maximization of revenue per customer D) the ability to command higher prices Answer: B Difficulty: 2 Medium Topic: Strategic Positioning Through Process Structure Learning Objective: 03-04 Explain and differentiate what is meant by the divergence and the complexity of a service process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 29) Service processes can be classified according to each of the following, except the ________.

A) degree of customer satisfaction B) degree of customer contact C) object of the service activity defined as goods, information or people D) degree of divergence ranging from standard to customized service Answer: A Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 30) Which one of the following is not an example of a high customer contact service?

A) Dry cleaning.

B) Banking.

C) School.

D) Hotel.

Answer: A Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

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31) The term "customer contact" refers to the ________.

A) handling of the product by the customer B) influence the customer has on service design C) amount of time spent waiting in the system D) physical presence of the customer in the system Answer: D Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 32) A service with a low degree of divergence allows a manager to consider all but one of the following options.

A) Hire workers who have little technical skills.

B) Substitute automation for repetitive tasks.

C) Empower workers with decision-making authority.

D) Incorporate a "production-line" approach to service.

Answer: C Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 33) The most interactive element in the service blueprint of a fitness facility is the ________.

A) choice of music played B) amount and type of exercise equipment C) attention given to prospective members on their initial visit D) cleanliness of the locker rooms Answer: C Difficulty: 2 Medium Topic: Service Blueprinting Learning Objective: 03-06 Prepare a service blueprint.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

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34) A service blueprint can be used for all but one of the following.

A) Educate customers.

B) Identify areas of service improvement.

C) Maintain the level of service complexity and divergence.

D) Identify points where moments of truth will occur.

Answer: C Difficulty: 2 Medium Topic: Service Blueprinting Learning Objective: 03-06 Prepare a service blueprint.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 35) For companies offering customized services, which one of the following is true?

A) A comprehensive employee hiring process is very important.

B) Employee tasks are low on divergence.

C) A production-line approach to service is desirable.

D) Information processing plays a minor role.

Answer: A Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 36) Which of the following is not an increase in service complexity?

A) A supermarket adds a florist shop.

B) A supper club opens for Sunday brunch.

C) A restaurant switches from "house salad" to a salad bar with 40 items.

D) A health spa hires a massage therapist.

Answer: B Difficulty: 2 Medium Topic: Strategic Positioning Through Process Structure Learning Objective: 03-04 Explain and differentiate what is meant by the divergence and the complexity of a service process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

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37) Which of the following is not an advantage of reducing the divergence of a service process?

A) Improved productivity.

B) Uniformity.

C) Greater flexibility.

D) Reduced costs.

Answer: C Difficulty: 2 Medium Topic: Strategic Positioning Through Process Structure Learning Objective: 03-04 Explain and differentiate what is meant by the divergence and the complexity of a service process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 38) A service blueprint with a large number of intricate steps is considered to have a ________.

A) high degree of divergence B) low degree of complexity C) high degree of complexity D) low degree of divergence Answer: C Difficulty: 2 Medium Topic: Service Blueprinting Learning Objective: 03-06 Prepare a service blueprint.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 39) The new service development process cycle contains all but one of the following activities.

A) Engineering.

B) Analysis.

C) Development.

D) Full launch.

Answer: A Difficulty: 1 Easy Topic: New Service Development Learning Objective: 03-05 Describe the sequence of stages and the enablers of the new service development process cycle.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

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40) Which of the following is not an incremental service innovation?

A) Service line extension.

B) Service improvements.

C) Style changes.

D) Service quality initiative.

Answer: D Difficulty: 2 Medium Topic: Innovation in Services Learning Objective: 03-02 Describe the fundamental characteristics of service innovation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 41) Which of the following is not a service design element?

A) Capacity planning.

B) Managing capacity and demand.

C) Market research.

D) Information.

Answer: C Difficulty: 1 Easy Topic: New Service Development Learning Objective: 03-05 Describe the sequence of stages and the enablers of the new service development process cycle.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 42) Which of the following features does not illustrate a contribution that the customer can make in the delivery of services?

A) Substitution of customer labor for provider labor.

B) Smoothing service demand.

C) Service standardization.

D) None of the above.

Answer: C Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

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43) Only ________ exceeded the United States in percent of nonmanufacturing share of total business R&D expenditure in 2001.

A) Japan B) Norway C) Sweden D) United Kingdom Answer: B Difficulty: 1 Easy Topic: Innovation in Services Learning Objective: 03-02 Describe the fundamental characteristics of service innovation.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 44) Internet ________ shared the highest customer satisfaction score with Express Delivery.

A) search engines B) auctions C) brokerage D) retail Answer: D Difficulty: 2 Medium Topic: Sources of Service Sector Growth Learning Objective: 03-01 Describe the sources of service sector growth.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 45) ________ is not a source of technology-driven service innovation.

A) Power/energy B) Material C) Location D) Facility design Answer: C Difficulty: 2 Medium Topic: New Service Development Learning Objective: 03-05 Describe the sequence of stages and the enablers of the new service development process cycle.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

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46) In service design, to promote sales opportunity, ________ is preferred to ________.

A) phone contact; face-to-face customized B) onsite technology; website C) website; onsite technology D) None of the above.

Answer: B Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 47) ________ is not one of the categories of intellectual property.

A) A trademark B) A trade secret C) Industrial design D) Process layout Answer: D Difficulty: 2 Medium Topic: Intellectual Property Learning Objective: 03-08 Explain how intellectual property rights protect a service brand.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 48) Check processing is an example of a process with ________.

A) indirect customer contact and low divergence B) direct customer contact and low divergence C) no customer contact and high divergence D) no customer contact and low divergence Answer: D Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

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Chapter 2

Service Strategy

1) A characteristic of the overall cost leadership strategy is the incurring of start-up losses to build market share.

Answer: TRUE Difficulty: 1 Easy Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 2) On-line networks between suppliers and their customers create a barrier to entry.

Answer: TRUE Difficulty: 1 Easy Topic: The Strategic Service Vision Learning Objective: 02-01 Formulate a strategic service vision.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 3) When pursuing a differentiation strategy, a service firm should work to ensure that the service being offered is standardized.

Answer: FALSE Difficulty: 1 Easy Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

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4) Service winners are the competitive dimensions used by customers to decide among qualified service providers.

Answer: TRUE Difficulty: 2 Medium Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 5) Quality is considered to be a structural element of the strategic service concept.

Answer: FALSE Difficulty: 1 Easy Topic: The Strategic Service Vision Learning Objective: 02-01 Formulate a strategic service vision.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 6) Service industries have low entry barriers because economy-of-scale opportunities are limited.

Answer: FALSE Difficulty: 1 Easy Topic: The Strategic Service Vision Learning Objective: 02-01 Formulate a strategic service vision.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 7) The use of micromarketing has the potential to create customer concerns about invasion of privacy.

Answer: TRUE Difficulty: 2 Medium Topic: The Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

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8) Implementing a low-cost strategy can sometimes revolutionize an industry.

Answer: TRUE Difficulty: 2 Medium Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 9) A cost-leadership strategy often involves customizing a standard service.

Answer: FALSE Difficulty: 2 Medium Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 10) The competitive dimension of dependability is a likely candidate for becoming a service loser.

Answer: TRUE Difficulty: 2 Medium Topic: Winning Customers in the Marketplace Learning Objective: 02-04 Explain what is meant by qualifiers, service winners, and service losers.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 11) Selling information and developing new services are examples of the role that information technology plays in generating revenue.

Answer: FALSE Difficulty: 2 Medium Topic: The Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

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12) Information technology can be used to promote customer loyalty.

Answer: TRUE Difficulty: 2 Medium Topic: The Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 13) The IRS has identified frequent-user programs as anti-competitive.

Answer: FALSE Difficulty: 2 Medium Topic: The Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 14) American Airlines' early development of the SABRE reservation system became the foundation for its yield management innovation.

Answer: TRUE Difficulty: 1 Easy Topic: The Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 15) Information databases are an asset, because they represent a source of revenue.

Answer: TRUE Difficulty: 2 Medium Topic: The Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

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16) Information is a substitute for inventory.

Answer: TRUE Difficulty: 2 Medium Topic: The Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 17) Focus is a competitive strategy that creates a service perceived as being unique.

Answer: FALSE Difficulty: 2 Medium Topic: The Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 18) Service encounter, quality, information, and capacity planning are all managerial elements of a strategic service concept.

Answer: FALSE Difficulty: 2 Medium Topic: The Strategic Service Vision Learning Objective: 02-01 Formulate a strategic service vision.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 19) Ordering from L.L. Bean by telephone is an example of a service firm maximizing opportunities for economies of scale.

Answer: TRUE Difficulty: 2 Medium Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

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20) A firm facing serious competition for the first time is in the journeyman stage of a service firm's competitiveness.

Answer: TRUE Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 21) World-class service operations strive to replace workers with enhanced automation.

Answer: FALSE Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 22) Firms classified as "available for service" view quality improvement efforts with disdain.

Answer: TRUE Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 23) For a firm achieving "journeyman" competitive status, the back-office function is considered an activity that plays an important role in service delivery.

Answer: FALSE Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

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24) In a world-class service firm, the front-line management controls the process.

Answer: FALSE Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 25) The job design premise in a world-class service organization is division of labor.

Answer: FALSE Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 26) Porter's five forces analysis is used at the industry level to determine competitive intensity.

Answer: TRUE Difficulty: 1 Easy Topic: Strategic Analysis Learning Objective: 02-03 Perform a SWOT and Five Forces Analysis.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 27) SWOT analysis is objective with easily agreed upon results.

Answer: FALSE Difficulty: 1 Easy Topic: Strategic Analysis Learning Objective: 02-03 Perform a SWOT and Five Forces Analysis.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

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28) Scalability is a measure of how unit variable cost relates to transaction volume.

Answer: TRUE Difficulty: 1 Easy Topic: Economics of Scalability Learning Objective: 02-08 Explain what features of a service firm lead to economics of scalability.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 29) Infinite scalability can occur only when the variable cost is zero.

Answer: TRUE Difficulty: 2 Medium Topic: Economics of Scalability Learning Objective: 02-08 Explain what features of a service firm lead to economics of scalability.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 30) Healthcare is an example of a service that exhibits high scalability.

Answer: FALSE Difficulty: 2 Medium Topic: Economics of Scalability Learning Objective: 02-08 Explain what features of a service firm lead to economics of scalability.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 31) A highly scalable firm such as Kelly Blue Book (kkb.com) requires a call center.

Answer: FALSE Difficulty: 2 Medium Topic: Economics of Scalability Learning Objective: 02-08 Explain what features of a service firm lead to economics of scalability.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

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32) Scalability is enhanced with self-service.

Answer: TRUE Difficulty: 1 Easy Topic: Economics of Scalability Learning Objective: 02-08 Explain what features of a service firm lead to economics of scalability.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 33) Customers seldom take note of firms that are leaders in the sustainability movement.

Answer: FALSE Difficulty: 2 Medium Topic: Sustainability in Services Learning Objective: 02-07 Discuss service firm sustainability and the triple bottom line impact.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 34) Recycling paper and reducing energy usage often is the first step towards sustainability.

Answer: TRUE Difficulty: 1 Easy Topic: Sustainability in Services Learning Objective: 02-07 Discuss service firm sustainability and the triple bottom line impact.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 35) Data analytics and big data are associated terms.

Answer: TRUE Difficulty: 1 Easy Topic: The Virtual Value Chain Learning Objective: 02-06 Explain the concept of the virtual value chain and its role in service innovation.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

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36) Wisdom is the last layer of the five layer data analytic model.

Answer: FALSE Difficulty: 1 Easy Topic: The Virtual Value Chain Learning Objective: 02-06 Explain the concept of the virtual value chain and its role in service innovation.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 37) The idea of IoT is to create "swarm intelligence".

Answer: TRUE Difficulty: 1 Easy Topic: The Virtual Value Chain Learning Objective: 02-06 Explain the concept of the virtual value chain and its role in service innovation.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 38) Adopting IoT raises privacy concerns.

Answer: TRUE Difficulty: 1 Easy Topic: The Virtual Value Chain Learning Objective: 02-06 Explain the concept of the virtual value chain and its role in service innovation.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 39) The qualifier for an airline offering short commuter flights is ________.

A) quality of the meals B) safety record C) politeness of the crew D) on-time performance Answer: B Difficulty: 2 Medium Topic: Winning Customers in the Marketplace Learning Objective: 02-04 Explain what is meant by qualifiers, service winners, and service losers.

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40) Place the McDonald's fast food chain within the following matrix.

A) (a) B) (b) C) (c) D) (d) Answer: A Difficulty: 2 Medium Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 41) A difficult economic environment exists for service industries for all but one of the following reasons.

A) Relatively high overall entry barriers.

B) Product substitution.

C) Minimal opportunities for economies of scale.

D) Exit barriers.

Answer: A Difficulty: 2 Medium Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

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42) A personal training facility that is located in the exclusive Beverly Hills area with only one other competitor could adopt a service strategy that emphasizes ________.

A) overall cost leadership B) differentiation C) focus D) personalization Answer: B Difficulty: 2 Medium Topic: Economics of Scalability Learning Objective: 02-08 Explain what features of a service firm lead to economics of scalability.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 43) Of the nine dimensions of service competition, three are regarded as most likely to become service losers. Which of the following is not one of those three vulnerable dimensions?

A) Speed B) Price C) Dependability D) Personalization Answer: B Difficulty: 2 Medium Topic: Winning Customers in the Marketplace Learning Objective: 02-04 Explain what is meant by qualifiers, service winners, and service losers.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 44) Which of the following is not identified as a strategy common to many successful service providers?

A) Close coordination between the marketing and operations.

B) The exploitation of information to generate new business.

C) A project-oriented organizational structure.

D) Redirection of the strategic service vision inward to focus on employees.

Answer: C Difficulty: 2 Medium Topic: Winning Customers in the Marketplace Learning Objective: 02-04 Explain what is meant by qualifiers, service winners, and service losers.

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45) Which of the following usually is not a good idea with respect to an overall cost leadership strategy?

A) Offer as many different services as possible to spread overhead costs.

B) Concentrate on routine/standardized services.

C) Replace labor with capital where possible.

D) Perform some service activities off-line at a centralized site.

Answer: A Difficulty: 2 Medium Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 46) The nature of the service act depends on to whom or to what the service is directed and the degree of "tangibility" of the service provided. An example of a tangible service directed to the possessions of a customer would be ________.

A) a stay in a hotel B) an investment advising session C) a fortune telling session D) a full-service car wash Answer: D Difficulty: 2 Medium Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

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47) Which one of the following is not a key characteristic that leads to a difficult competitive environment for service industries?

A) Low barriers to entry.

B) Lack of sustainable competitive advantage.

C) Lack of government regulation and oversight.

D) Low switching costs for customers.

Answer: C Difficulty: 2 Medium Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 48) In which of the following cases does the use of information raise ethical issues?

A) Yield management.

B) Selling information.

C) Micromarketing.

D) All of the above.

Answer: D Difficulty: 2 Medium Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 49) American Airlines' SABRE reservation system fills the following strategic role of information ________.

A) revenue generation B) productivity enhancement C) creation of barriers to entry D) data base asset Answer: C Difficulty: 2 Medium Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

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50) Services can create barriers to entry by______.

A) using economies of scale B) creating switching costs C) using databases and information technology D) all of the above Answer: D Difficulty: 2 Medium Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 51) Which of the following is an example of the competitive use of information in generating revenue?

A) Reservation systems.

B) Data envelopment analysis.

C) Micromarketing.

D) Expert systems.

Answer: C Difficulty: 2 Medium Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 52) Which of the following is not a role of information technology?

A) Creating a barrier to entry for competitors.

B) Generating revenues.

C) Displacing workers.

D) Managing multisite operations.

Answer: C Difficulty: 2 Medium Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

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53) Using the dimensions of strategic focus and competitive use of information can identify four strategic roles of information. Which of the following is not a strategic role of information?

A) Create barriers to entry.

B) Generate revenue.

C) Create a data base asset.

D) Provide global communications.

Answer: D Difficulty: 2 Medium Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 54) Real-time information technologies that have a focus on internal operations can play a competitive role in increasing revenue opportunities. Which one of the following uses of information does not play a role in generating revenue?

A) Yield management.

B) Point of sale.

C) Expert systems.

D) Sale of information.

Answer: C Difficulty: 2 Medium Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 55) Bar coding and checkout scanner technology have created a wealth of consumer buying information that can be used to target customers with precision. This process is an example of ________.

A) service development B) micromarketing C) data envelopment analysis D) point of sale Answer: B Difficulty: 1 Easy Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 30 Copyright © 2019 McGraw-Hill

56) ________ is not a component of big data.

A) Value B) Volume C) Velocity D) Variety Answer: A Difficulty: 2 Medium Topic: The Virtual Value Chain Learning Objective: 02-06 Explain the concept of the virtual value chain and its role in service innovation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 57) Which one the following is not a subordinate area of data analytics?

A) Descriptive analytics.

B) Diagnostic analytics.

C) Predictive analytics.

D) Disruptive analytics.

Answer: D Difficulty: 2 Medium Topic: The Virtual Value Chain Learning Objective: 02-06 Explain the concept of the virtual value chain and its role in service innovation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 58) The Internet of Things (IoT) trajectory begins with ________.

A) surveillance B) RFID tags C) monitoring D) location Answer: B Difficulty: 2 Medium Topic: The Virtual Value Chain Learning Objective: 02-06 Explain the concept of the virtual value chain and its role in service innovation.

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59) Internet of Things (IoT) involves a convergence of multiple technologies but not ________.

A) GPS positioning B) wireless communications C) commodity sensors D) machine learning Answer: A Difficulty: 2 Medium Topic: The Virtual Value Chain Learning Objective: 02-06 Explain the concept of the virtual value chain and its role in service innovation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 60) Kraft targeted its cream cheese flavors to match the tastes of a store's customers using off-line analysis of POS (point-of-sale) data. This is an example of ________.

A) yield management B) expert systems C) data envelopment analysis D) micromarketing Answer: D Difficulty: 1 Easy Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

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32 Copyright © 2019 McGraw-Hill

61) Service firms use information technology to create barriers to entry, generate revenue, enhance productivity, and serve as data base assets. Which cell in the matrix below is productivity enhancement?

A) (a) B) (b) C) (c) D) (d) Answer: D Difficulty: 1 Easy Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 62) Which of the following service quality descriptions would be considered "World Class"?

A) It raises the customer's expectations and improves continuously.

B) It exceeds the customer's expectations and is consistent on many dimensions.

C) It is less important than cost and is highly variable.

D) It contributes to service and plays an important role in total service.

Answer: A Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

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63) Not satisfied with just meeting customer expectations, this category of service firms expands upon the expectations to levels that competitors find difficult to meet.

A) Available-for-service.

B) Journeyman.

C) Distinctive competence achieved.

D) World class service delivery.

Answer: D Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 64) The innovation of moving from a "country" store where the proprietor fills the shopper's list with items from behind the counter to a self-service supermarket where the shopper fills a cart with items represents a move between which of the following pairs of competitive stages?

A) From available-for-service to journeyman.

B) From available-for-service to distinctive competence achieved.

C) From journeyman to distinctive competence achieved.

D) From distinctive competence achieved to world class service delivery.

Answer: B Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 65) Which of the following stages of a firm's competitiveness describes customers who seek out a firm based upon its sustained reputation for meeting customer expectations?

A) Available-for-service.

B) Journeyman.

C) Distinctive competence achieved.

D) World class service delivery.

Answer: C Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

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66) Which one of the following does SWOT analysis not have as its aim?

A) Reveal competitive advantages.

B) Determine the competitive intensity.

C) Analyze prospects.

D) Development of contingency plans.

Answer: B Difficulty: 2 Medium Topic: Strategic Analysis Learning Objective: 02-03 Perform a SWOT and Five Forces Analysis.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 67) Porter's five forces analysis does not include which one of the following considerations?

A) Pricing power.

B) Potential new entrants.

C) Threat of substitutes.

D) Bargaining power of suppliers.

Answer: A Difficulty: 2 Medium Topic: Strategic Analysis Learning Objective: 02-03 Perform a SWOT and Five Forces Analysis.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 68) Which one of the following is not a dimension of scalability?

A) Information vs. goods content.

B) Degree of self-service.

C) Cost of after-sales service.

D) Shipping and handling costs.

Answer: B Difficulty: 2 Medium Topic: Economics of Scalability Learning Objective: 02-08 Explain what features of a service firm lead to economics of scalability.

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35 Copyright © 2019 McGraw-Hill

69) Which of the following is not considered a criterion for evaluating the triple bottom line?

A) Social progress.

B) Economic growth.

C) Environmental stewardship.

D) Market share.

Answer: D Difficulty: 2 Medium Topic: Sustainability in Services Learning Objective: 02-07 Discuss service firm sustainability and the triple bottom line impact.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 70) Service innovation is driven by which factor listed below?

A) New product technology.

B) Customer needs.

C) Observant contact employee.

D) All of the above.

Answer: D Difficulty: 2 Medium Topic: The Virtual Value Chain Learning Objective: 02-06 Explain the concept of the virtual value chain and its role in service innovation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation Service Management: Operations, Strategy, Information Technology, 9e (Bordoloi) Chapter 3 New Service Development 1) The "line of visibility" found in a service blueprint separates the front office operations from the back office operations.

Answer: TRUE Difficulty: 1 Easy Topic: Service Blueprinting Learning Objective: 03-06 Prepare a service blueprint.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 2) A factor that simplifies the design of service systems is the presence of the customer in the process.

Answer: FALSE 36 Copyright © 2019 McGraw-Hill

Difficulty: 1 Easy Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 3) A "line of interaction" also can be found on a service blueprint.

Answer: TRUE Difficulty: 1 Easy Topic: Service Blueprinting Learning Objective: 03-06 Prepare a service blueprint.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 4) An increase in divergence can maximize the revenue that is generated by each customer.

Answer: TRUE Difficulty: 2 Medium Topic: Strategic Positioning Through Process Structure Learning Objective: 03-04 Explain and differentiate what is meant by the divergence and the complexity of a service process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 5) Dry cleaning is an example of a service where isolation of the technical core would be inappropriate.

Answer: FALSE Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 6) Fast-food restaurants have adopted the production-line approach to service design.

Answer: TRUE Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: 37 Copyright © 2019 McGraw-Hill

production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 7) An important variable in the design process is the amount of customer participation in the delivery of the service.

Answer: TRUE Difficulty: 2 Medium Topic: Strategic Positioning Through Process Structure Learning Objective: 03-04 Explain and differentiate what is meant by the divergence and the complexity of a service process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 8) Financial consulting is a service with low complexity and high divergence.

Answer: TRUE Difficulty: 2 Medium Topic: Strategic Positioning Through Process Structure Learning Objective: 03-04 Explain and differentiate what is meant by the divergence and the complexity of a service process.

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9) Ideas for new service innovations often originate with customers.

Answer: TRUE Difficulty: 1 Easy Topic: New Service Development Learning Objective: 03-05 Describe the sequence of stages and the enablers of the new service development process cycle.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 10) A major incentive for innovation in services is the ability to patent an idea.

Answer: FALSE Difficulty: 2 Medium Topic: Innovation in Services Learning Objective: 03-02 Describe the fundamental characteristics of service innovation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 11) Service complexity can be measured by analyzing the number and intricacy of the steps required performing it.

Answer: TRUE Difficulty: 2 Medium Topic: Strategic Positioning Through Process Structure Learning Objective: 03-04 Explain and differentiate what is meant by the divergence and the complexity of a service process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 12) The "project authorization" in the NSD cycle is part of the development step.

Answer: FALSE Difficulty: 2 Medium Topic: New Service Development Learning Objective: 03-05 Describe the sequence of stages and the enablers of the new service development process cycle.

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39 Copyright © 2019 McGraw-Hill

13) The "line of visibility" for a self-service process blueprint would be near the top of the diagram.

Answer: FALSE Difficulty: 2 Medium Topic: Service Blueprinting Learning Objective: 03-06 Prepare a service blueprint.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 14) A service blueprint will not facilitate creative problem solving because it will be too rigid a definition of the service delivery system.

Answer: FALSE Difficulty: 2 Medium Topic: Service Blueprinting Learning Objective: 03-06 Prepare a service blueprint.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 15) Investment banking is a financial service that has high complexity and high divergence.

Answer: TRUE Difficulty: 2 Medium Topic: Strategic Positioning Through Process Structure Learning Objective: 03-04 Explain and differentiate what is meant by the divergence and the complexity of a service process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 16) Limited discretion of service workers is a feature of the production-line approach to service design.

Answer: TRUE Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

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40 Copyright © 2019 McGraw-Hill

17) Basic research typically is limited to federal, university, and nonprofit organizations.

Answer: TRUE Difficulty: 1 Easy Topic: Innovation in Services Learning Objective: 03-02 Describe the fundamental characteristics of service innovation.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 18) In the new service development process cycle, development follows design.

Answer: FALSE Difficulty: 1 Easy Topic: New Service Development Learning Objective: 03-05 Describe the sequence of stages and the enablers of the new service development process cycle.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 19) JIT is an example of information driven technology innovation.

Answer: FALSE Difficulty: 1 Easy Topic: New Service Development Learning Objective: 03-05 Describe the sequence of stages and the enablers of the new service development process cycle.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 20) The service encounter is a structural service design element.

Answer: FALSE Difficulty: 1 Easy Topic: New Service Development Learning Objective: 03-05 Describe the sequence of stages and the enablers of the new service development process cycle.

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41 Copyright © 2019 McGraw-Hill

21) Intellectual property is a creation of the mind.

Answer: TRUE Difficulty: 1 Easy Topic: Intellectual Property Learning Objective: 03-08 Explain how intellectual property rights protect a service brand.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 22) Intellectual property rights allow the owner to secure monopoly profits for a limited time.

Answer: TRUE Difficulty: 2 Medium Topic: Intellectual Property Learning Objective: 03-08 Explain how intellectual property rights protect a service brand.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 23) Radical service innovations are driven mostly by technological innovations.

Answer: TRUE Difficulty: 2 Medium Topic: Innovation in Services Learning Objective: 03-03 Describe the managerial issues associated with the adoption of new technology.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 24) Readiness to embrace new technology is a measure of how fast new technology is adopted in the marketplace.

Answer: FALSE Difficulty: 2 Medium Topic: Innovation in Services Learning Objective: 03-03 Describe the managerial issues associated with the adoption of new technology.

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25) Blockchain technology is based upon the cyber currency Bitcoin.

Answer: TRUE Difficulty: 2 Medium Topic: Innovation in Services Learning Objective: 03-02 Describe the fundamental characteristics of service innovation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 26) Blockchain is a trusted immutable digital ledger that deletes all but recent transactions.

Answer: FALSE Difficulty: 2 Medium Topic: Innovation in Services Learning Objective: 03-02 Describe the fundamental characteristics of service innovation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 27) Which of the following is not a characteristic of a production-line approach to provide a service?

A) Division of labor.

B) Substitution of technology for people.

C) Standardization of the process and service provided.

D) High employee autonomy in task execution.

Answer: D Difficulty: 1 Easy Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

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43 Copyright © 2019 McGraw-Hill

28) One advantage of reduced divergence is ________.

A) quicker response to market demands B) greater efficiency C) maximization of revenue per customer D) the ability to command higher prices Answer: B Difficulty: 2 Medium Topic: Strategic Positioning Through Process Structure Learning Objective: 03-04 Explain and differentiate what is meant by the divergence and the complexity of a service process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 29) Service processes can be classified according to each of the following, except the ________.

A) degree of customer satisfaction B) degree of customer contact C) object of the service activity defined as goods, information or people D) degree of divergence ranging from standard to customized service Answer: A Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 30) Which one of the following is not an example of a high customer contact service?

A) Dry cleaning.

B) Banking.

C) School.

D) Hotel.

Answer: A Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

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31) The term "customer contact" refers to the ________.

A) handling of the product by the customer B) influence the customer has on service design C) amount of time spent waiting in the system D) physical presence of the customer in the system Answer: D Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 32) A service with a low degree of divergence allows a manager to consider all but one of the following options.

A) Hire workers who have little technical skills.

B) Substitute automation for repetitive tasks.

C) Empower workers with decision-making authority.

D) Incorporate a "production-line" approach to service.

Answer: C Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 33) The most interactive element in the service blueprint of a fitness facility is the ________.

A) choice of music played B) amount and type of exercise equipment C) attention given to prospective members on their initial visit D) cleanliness of the locker rooms Answer: C Difficulty: 2 Medium Topic: Service Blueprinting Learning Objective: 03-06 Prepare a service blueprint.

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45 Copyright © 2019 McGraw-Hill

34) A service blueprint can be used for all but one of the following.

A) Educate customers.

B) Identify areas of service improvement.

C) Maintain the level of service complexity and divergence.

D) Identify points where moments of truth will occur.

Answer: C Difficulty: 2 Medium Topic: Service Blueprinting Learning Objective: 03-06 Prepare a service blueprint.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 35) For companies offering customized services, which one of the following is true?

A) A comprehensive employee hiring process is very important.

B) Employee tasks are low on divergence.

C) A production-line approach to service is desirable.

D) Information processing plays a minor role.

Answer: A Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 36) Which of the following is not an increase in service complexity?

A) A supermarket adds a florist shop.

B) A supper club opens for Sunday brunch.

C) A restaurant switches from "house salad" to a salad bar with 40 items.

D) A health spa hires a massage therapist.

Answer: B Difficulty: 2 Medium Topic: Strategic Positioning Through Process Structure Learning Objective: 03-04 Explain and differentiate what is meant by the divergence and the complexity of a service process.

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37) Which of the following is not an advantage of reducing the divergence of a service process?

A) Improved productivity.

B) Uniformity.

C) Greater flexibility.

D) Reduced costs.

Answer: C Difficulty: 2 Medium Topic: Strategic Positioning Through Process Structure Learning Objective: 03-04 Explain and differentiate what is meant by the divergence and the complexity of a service process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 38) A service blueprint with a large number of intricate steps is considered to have a ________.

A) high degree of divergence B) low degree of complexity C) high degree of complexity D) low degree of divergence Answer: C Difficulty: 2 Medium Topic: Service Blueprinting Learning Objective: 03-06 Prepare a service blueprint.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 39) The new service development process cycle contains all but one of the following activities.

A) Engineering.

B) Analysis.

C) Development.

D) Full launch.

Answer: A Difficulty: 1 Easy Topic: New Service Development Learning Objective: 03-05 Describe the sequence of stages and the enablers of the new service development process cycle.

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47 Copyright © 2019 McGraw-Hill

40) Which of the following is not an incremental service innovation?

A) Service line extension.

B) Service improvements.

C) Style changes.

D) Service quality initiative.

Answer: D Difficulty: 2 Medium Topic: Innovation in Services Learning Objective: 03-02 Describe the fundamental characteristics of service innovation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 41) Which of the following is not a service design element?

A) Capacity planning.

B) Managing capacity and demand.

C) Market research.

D) Information.

Answer: C Difficulty: 1 Easy Topic: New Service Development Learning Objective: 03-05 Describe the sequence of stages and the enablers of the new service development process cycle.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 42) Which of the following features does not illustrate a contribution that the customer can make in the delivery of services?

A) Substitution of customer labor for provider labor.

B) Smoothing service demand.

C) Service standardization.

D) None of the above.

Answer: C Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

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43) Only ________ exceeded the United States in percent of nonmanufacturing share of total business R&D expenditure in 2001.

A) Japan B) Norway C) Sweden D) United Kingdom Answer: B Difficulty: 1 Easy Topic: Innovation in Services Learning Objective: 03-02 Describe the fundamental characteristics of service innovation.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 44) Internet ________ shared the highest customer satisfaction score with Express Delivery.

A) search engines B) auctions C) brokerage D) retail Answer: D Difficulty: 2 Medium Topic: Sources of Service Sector Growth Learning Objective: 03-01 Describe the sources of service sector growth.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 45) ________ is not a source of technology-driven service innovation.

A) Power/energy B) Material C) Location D) Facility design Answer: C Difficulty: 2 Medium Topic: New Service Development Learning Objective: 03-05 Describe the sequence of stages and the enablers of the new service development process cycle.

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46) In service design, to promote sales opportunity, ________ is preferred to ________.

A) phone contact; face-to-face customized B) onsite technology; website C) website; onsite technology D) None of the above.

Answer: B Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 47) ________ is not one of the categories of intellectual property.

A) A trademark B) A trade secret C) Industrial design D) Process layout Answer: D Difficulty: 2 Medium Topic: Intellectual Property Learning Objective: 03-08 Explain how intellectual property rights protect a service brand.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 48) Check processing is an example of a process with ________.

A) indirect customer contact and low divergence B) direct customer contact and low divergence C) no customer contact and high divergence D) no customer contact and low divergence Answer: D Difficulty: 2 Medium Topic: Generic Approaches to Service System Design Learning Objective: 03-07 Compare and contrast the four approaches to service system design: production-line, customer as coproducer, customer contact, and information empowerment.

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Service Management: Operations, Strategy, Information Technology, 9e (Bordoloi) 50 Copyright © 2019 McGraw-Hill

Chapter 2

Service Strategy

1) A characteristic of the overall cost leadership strategy is the incurring of start-up losses to build market share.

Answer: TRUE Difficulty: 1 Easy Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 2) On-line networks between suppliers and their customers create a barrier to entry.

Answer: TRUE Difficulty: 1 Easy Topic: The Strategic Service Vision Learning Objective: 02-01 Formulate a strategic service vision.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 3) When pursuing a differentiation strategy, a service firm should work to ensure that the service being offered is standardized.

Answer: FALSE Difficulty: 1 Easy Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

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4) Service winners are the competitive dimensions used by customers to decide among qualified service providers.

Answer: TRUE Difficulty: 2 Medium Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 5) Quality is considered to be a structural element of the strategic service concept.

Answer: FALSE Difficulty: 1 Easy Topic: The Strategic Service Vision Learning Objective: 02-01 Formulate a strategic service vision.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 6) Service industries have low entry barriers because economy-of-scale opportunities are limited.

Answer: FALSE Difficulty: 1 Easy Topic: The Strategic Service Vision Learning Objective: 02-01 Formulate a strategic service vision.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 7) The use of micromarketing has the potential to create customer concerns about invasion of privacy.

Answer: TRUE Difficulty: 2 Medium Topic: The Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

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8) Implementing a low-cost strategy can sometimes revolutionize an industry.

Answer: TRUE Difficulty: 2 Medium Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 9) A cost-leadership strategy often involves customizing a standard service.

Answer: FALSE Difficulty: 2 Medium Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 10) The competitive dimension of dependability is a likely candidate for becoming a service loser.

Answer: TRUE Difficulty: 2 Medium Topic: Winning Customers in the Marketplace Learning Objective: 02-04 Explain what is meant by qualifiers, service winners, and service losers.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 11) Selling information and developing new services are examples of the role that information technology plays in generating revenue.

Answer: FALSE Difficulty: 2 Medium Topic: The Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

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12) Information technology can be used to promote customer loyalty.

Answer: TRUE Difficulty: 2 Medium Topic: The Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 13) The IRS has identified frequent-user programs as anti-competitive.

Answer: FALSE Difficulty: 2 Medium Topic: The Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 14) American Airlines' early development of the SABRE reservation system became the foundation for its yield management innovation.

Answer: TRUE Difficulty: 1 Easy Topic: The Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 15) Information databases are an asset, because they represent a source of revenue.

Answer: TRUE Difficulty: 2 Medium Topic: The Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

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16) Information is a substitute for inventory.

Answer: TRUE Difficulty: 2 Medium Topic: The Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 17) Focus is a competitive strategy that creates a service perceived as being unique.

Answer: FALSE Difficulty: 2 Medium Topic: The Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 18) Service encounter, quality, information, and capacity planning are all managerial elements of a strategic service concept.

Answer: FALSE Difficulty: 2 Medium Topic: The Strategic Service Vision Learning Objective: 02-01 Formulate a strategic service vision.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 19) Ordering from L.L. Bean by telephone is an example of a service firm maximizing opportunities for economies of scale.

Answer: TRUE Difficulty: 2 Medium Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

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20) A firm facing serious competition for the first time is in the journeyman stage of a service firm's competitiveness.

Answer: TRUE Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 21) World-class service operations strive to replace workers with enhanced automation.

Answer: FALSE Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 22) Firms classified as "available for service" view quality improvement efforts with disdain.

Answer: TRUE Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 23) For a firm achieving "journeyman" competitive status, the back-office function is considered an activity that plays an important role in service delivery.

Answer: FALSE Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

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24) In a world-class service firm, the front-line management controls the process.

Answer: FALSE Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 25) The job design premise in a world-class service organization is division of labor.

Answer: FALSE Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 26) Porter's five forces analysis is used at the industry level to determine competitive intensity.

Answer: TRUE Difficulty: 1 Easy Topic: Strategic Analysis Learning Objective: 02-03 Perform a SWOT and Five Forces Analysis.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 27) SWOT analysis is objective with easily agreed upon results.

Answer: FALSE Difficulty: 1 Easy Topic: Strategic Analysis Learning Objective: 02-03 Perform a SWOT and Five Forces Analysis.

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28) Scalability is a measure of how unit variable cost relates to transaction volume.

Answer: TRUE Difficulty: 1 Easy Topic: Economics of Scalability Learning Objective: 02-08 Explain what features of a service firm lead to economics of scalability.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 29) Infinite scalability can occur only when the variable cost is zero.

Answer: TRUE Difficulty: 2 Medium Topic: Economics of Scalability Learning Objective: 02-08 Explain what features of a service firm lead to economics of scalability.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 30) Healthcare is an example of a service that exhibits high scalability.

Answer: FALSE Difficulty: 2 Medium Topic: Economics of Scalability Learning Objective: 02-08 Explain what features of a service firm lead to economics of scalability.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 31) A highly scalable firm such as Kelly Blue Book (kkb.com) requires a call center.

Answer: FALSE Difficulty: 2 Medium Topic: Economics of Scalability Learning Objective: 02-08 Explain what features of a service firm lead to economics of scalability.

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32) Scalability is enhanced with self-service.

Answer: TRUE Difficulty: 1 Easy Topic: Economics of Scalability Learning Objective: 02-08 Explain what features of a service firm lead to economics of scalability.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 33) Customers seldom take note of firms that are leaders in the sustainability movement.

Answer: FALSE Difficulty: 2 Medium Topic: Sustainability in Services Learning Objective: 02-07 Discuss service firm sustainability and the triple bottom line impact.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 34) Recycling paper and reducing energy usage often is the first step towards sustainability.

Answer: TRUE Difficulty: 1 Easy Topic: Sustainability in Services Learning Objective: 02-07 Discuss service firm sustainability and the triple bottom line impact.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 35) Data analytics and big data are associated terms.

Answer: TRUE Difficulty: 1 Easy Topic: The Virtual Value Chain Learning Objective: 02-06 Explain the concept of the virtual value chain and its role in service innovation.

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36) Wisdom is the last layer of the five layer data analytic model.

Answer: FALSE Difficulty: 1 Easy Topic: The Virtual Value Chain Learning Objective: 02-06 Explain the concept of the virtual value chain and its role in service innovation.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 37) The idea of IoT is to create "swarm intelligence".

Answer: TRUE Difficulty: 1 Easy Topic: The Virtual Value Chain Learning Objective: 02-06 Explain the concept of the virtual value chain and its role in service innovation.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 38) Adopting IoT raises privacy concerns.

Answer: TRUE Difficulty: 1 Easy Topic: The Virtual Value Chain Learning Objective: 02-06 Explain the concept of the virtual value chain and its role in service innovation.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 39) The qualifier for an airline offering short commuter flights is ________.

A) quality of the meals B) safety record C) politeness of the crew D) on-time performance Answer: B Difficulty: 2 Medium Topic: Winning Customers in the Marketplace Learning Objective: 02-04 Explain what is meant by qualifiers, service winners, and service losers.

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40) Place the McDonald's fast food chain within the following matrix.

A) (a) B) (b) C) (c) D) (d) Answer: A Difficulty: 2 Medium Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 41) A difficult economic environment exists for service industries for all but one of the following reasons.

A) Relatively high overall entry barriers.

B) Product substitution.

C) Minimal opportunities for economies of scale.

D) Exit barriers.

Answer: A Difficulty: 2 Medium Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

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42) A personal training facility that is located in the exclusive Beverly Hills area with only one other competitor could adopt a service strategy that emphasizes ________.

A) overall cost leadership B) differentiation C) focus D) personalization Answer: B Difficulty: 2 Medium Topic: Economics of Scalability Learning Objective: 02-08 Explain what features of a service firm lead to economics of scalability.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 43) Of the nine dimensions of service competition, three are regarded as most likely to become service losers. Which of the following is not one of those three vulnerable dimensions?

A) Speed B) Price C) Dependability D) Personalization Answer: B Difficulty: 2 Medium Topic: Winning Customers in the Marketplace Learning Objective: 02-04 Explain what is meant by qualifiers, service winners, and service losers.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 44) Which of the following is not identified as a strategy common to many successful service providers?

A) Close coordination between the marketing and operations.

B) The exploitation of information to generate new business.

C) A project-oriented organizational structure.

D) Redirection of the strategic service vision inward to focus on employees.

Answer: C Difficulty: 2 Medium Topic: Winning Customers in the Marketplace Learning Objective: 02-04 Explain what is meant by qualifiers, service winners, and service losers.

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45) Which of the following usually is not a good idea with respect to an overall cost leadership strategy?

A) Offer as many different services as possible to spread overhead costs.

B) Concentrate on routine/standardized services.

C) Replace labor with capital where possible.

D) Perform some service activities off-line at a centralized site.

Answer: A Difficulty: 2 Medium Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 46) The nature of the service act depends on to whom or to what the service is directed and the degree of "tangibility" of the service provided. An example of a tangible service directed to the possessions of a customer would be ________.

A) a stay in a hotel B) an investment advising session C) a fortune telling session D) a full-service car wash Answer: D Difficulty: 2 Medium Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

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47) Which one of the following is not a key characteristic that leads to a difficult competitive environment for service industries?

A) Low barriers to entry.

B) Lack of sustainable competitive advantage.

C) Lack of government regulation and oversight.

D) Low switching costs for customers.

Answer: C Difficulty: 2 Medium Topic: Competitive Service Strategies Learning Objective: 02-02 Describe how a service competes using the three generic service strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 48) In which of the following cases does the use of information raise ethical issues?

A) Yield management.

B) Selling information.

C) Micromarketing.

D) All of the above.

Answer: D Difficulty: 2 Medium Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 49) American Airlines' SABRE reservation system fills the following strategic role of information ________.

A) revenue generation B) productivity enhancement C) creation of barriers to entry D) data base asset Answer: C Difficulty: 2 Medium Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

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50) Services can create barriers to entry by______.

A) using economies of scale B) creating switching costs C) using databases and information technology D) all of the above Answer: D Difficulty: 2 Medium Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 51) Which of the following is an example of the competitive use of information in generating revenue?

A) Reservation systems.

B) Data envelopment analysis.

C) Micromarketing.

D) Expert systems.

Answer: C Difficulty: 2 Medium Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 52) Which of the following is not a role of information technology?

A) Creating a barrier to entry for competitors.

B) Generating revenues.

C) Displacing workers.

D) Managing multisite operations.

Answer: C Difficulty: 2 Medium Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

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53) Using the dimensions of strategic focus and competitive use of information can identify four strategic roles of information. Which of the following is not a strategic role of information?

A) Create barriers to entry.

B) Generate revenue.

C) Create a data base asset.

D) Provide global communications.

Answer: D Difficulty: 2 Medium Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 54) Real-time information technologies that have a focus on internal operations can play a competitive role in increasing revenue opportunities. Which one of the following uses of information does not play a role in generating revenue?

A) Yield management.

B) Point of sale.

C) Expert systems.

D) Sale of information.

Answer: C Difficulty: 2 Medium Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 55) Bar coding and checkout scanner technology have created a wealth of consumer buying information that can be used to target customers with precision. This process is an example of ________.

A) service development B) micromarketing C) data envelopment analysis D) point of sale Answer: B Difficulty: 1 Easy Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

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56) ________ is not a component of big data.

A) Value B) Volume C) Velocity D) Variety Answer: A Difficulty: 2 Medium Topic: The Virtual Value Chain Learning Objective: 02-06 Explain the concept of the virtual value chain and its role in service innovation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 57) Which one the following is not a subordinate area of data analytics?

A) Descriptive analytics.

B) Diagnostic analytics.

C) Predictive analytics.

D) Disruptive analytics.

Answer: D Difficulty: 2 Medium Topic: The Virtual Value Chain Learning Objective: 02-06 Explain the concept of the virtual value chain and its role in service innovation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 58) The Internet of Things (IoT) trajectory begins with ________.

A) surveillance B) RFID tags C) monitoring D) location Answer: B Difficulty: 2 Medium Topic: The Virtual Value Chain Learning Objective: 02-06 Explain the concept of the virtual value chain and its role in service innovation.

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59) Internet of Things (IoT) involves a convergence of multiple technologies but not ________.

A) GPS positioning B) wireless communications C) commodity sensors D) machine learning Answer: A Difficulty: 2 Medium Topic: The Virtual Value Chain Learning Objective: 02-06 Explain the concept of the virtual value chain and its role in service innovation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 60) Kraft targeted its cream cheese flavors to match the tastes of a store's customers using off-line analysis of POS (point-of-sale) data. This is an example of ________.

A) yield management B) expert systems C) data envelopment analysis D) micromarketing Answer: D Difficulty: 1 Easy Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

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61) Service firms use information technology to create barriers to entry, generate revenue, enhance productivity, and serve as data base assets. Which cell in the matrix below is productivity enhancement?

A) (a) B) (b) C) (c) D) (d) Answer: D Difficulty: 1 Easy Topic: Competitive Role of Information in Services Learning Objective: 02-05 Discuss the competitive role of information in services and its limits.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 62) Which of the following service quality descriptions would be considered "World Class"?

A) It raises the customer's expectations and improves continuously.

B) It exceeds the customer's expectations and is consistent on many dimensions.

C) It is less important than cost and is highly variable.

D) It contributes to service and plays an important role in total service.

Answer: A Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

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63) Not satisfied with just meeting customer expectations, this category of service firms expands upon the expectations to levels that competitors find difficult to meet.

A) Available-for-service.

B) Journeyman.

C) Distinctive competence achieved.

D) World class service delivery.

Answer: D Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 64) The innovation of moving from a "country" store where the proprietor fills the shopper's list with items from behind the counter to a self-service supermarket where the shopper fills a cart with items represents a move between which of the following pairs of competitive stages?

A) From available-for-service to journeyman.

B) From available-for-service to distinctive competence achieved.

C) From journeyman to distinctive competence achieved.

D) From distinctive competence achieved to world class service delivery.

Answer: B Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 65) Which of the following stages of a firm's competitiveness describes customers who seek out a firm based upon its sustained reputation for meeting customer expectations?

A) Available-for-service.

B) Journeyman.

C) Distinctive competence achieved.

D) World class service delivery.

Answer: C Difficulty: 2 Medium Topic: Stages in Service Firm Competitiveness Learning Objective: 02-09 Categorize a service firm according to its stage of competitiveness.

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66) Which one of the following does SWOT analysis not have as its aim?

A) Reveal competitive advantages.

B) Determine the competitive intensity.

C) Analyze prospects.

D) Development of contingency plans.

Answer: B Difficulty: 2 Medium Topic: Strategic Analysis Learning Objective: 02-03 Perform a SWOT and Five Forces Analysis.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 67) Porter's five forces analysis does not include which one of the following considerations?

A) Pricing power.

B) Potential new entrants.

C) Threat of substitutes.

D) Bargaining power of suppliers.

Answer: A Difficulty: 2 Medium Topic: Strategic Analysis Learning Objective: 02-03 Perform a SWOT and Five Forces Analysis.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 68) Which one of the following is not a dimension of scalability?

A) Information vs. goods content.

B) Degree of self-service.

C) Cost of after-sales service.

D) Shipping and handling costs.

Answer: B Difficulty: 2 Medium Topic: Economics of Scalability Learning Objective: 02-08 Explain what features of a service firm lead to economics of scalability.

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69) Which of the following is not considered a criterion for evaluating the triple bottom line?

A) Social progress.

B) Economic growth.

C) Environmental stewardship.

D) Market share.

Answer: D Difficulty: 2 Medium Topic: Sustainability in Services Learning Objective: 02-07 Discuss service firm sustainability and the triple bottom line impact.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 70) Service innovation is driven by which factor listed below?

A) New product technology.

B) Customer needs.

C) Observant contact employee.

D) All of the above.

Answer: D Difficulty: 2 Medium Topic: The Virtual Value Chain Learning Objective: 02-06 Explain the concept of the virtual value chain and its role in service innovation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation SService Management: Operations, Strategy, Information Technology, 9e (Bordoloi) Chapter 4 The Service Encounter 1) The corporate culture of a firm does not significantly influence the quality of the service it provides because the culture is internal and, therefore, not perceived by the customer.

Answer: FALSE Difficulty: 2 Medium Topic: The Service Organization Learning Objective: 04-03 Differentiate four organizational control systems for employee empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 2) Flexibility in meeting customer needs is the main reason that some service firms have empowered contact personnel.

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Answer: TRUE Difficulty: 1 Easy Topic: The Service Organization Learning Objective: 04-03 Differentiate four organizational control systems for employee empowerment.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 3) A self-service gasoline station that is equipped with a credit card reader is an example of a customer-dominated service encounter.

Answer: TRUE Difficulty: 2 Medium Topic: The Service Encounter Triad Learning Objective: 04-02 Use the service encounter triad to describe a service firm's delivery process.

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4) Conducting a pre-employment interview that requires the applicant to answer a question regarding a specific episode is called a situational vignette.

Answer: TRUE Difficulty: 1 Easy Topic: Contact Personnel Learning Objective: 04-04 Prepare abstract questions and write situational vignettes to screen service recruits.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 5) The majority of difficulties in customer/employee interactions are caused by unrealistic expectations of the customers.

Answer: TRUE Difficulty: 2 Medium Topic: Contact Personnel Learning Objective: 04-04 Prepare abstract questions and write situational vignettes to screen service recruits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 6) In the service encounter triad, the potential conflict between the service organization and its contact personnel is one of efficiency versus satisfaction.

Answer: FALSE Difficulty: 2 Medium Topic: The Service Encounter Triad Learning Objective: 04-02 Use the service encounter triad to describe a service firm's delivery process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 7) The effectiveness of an online encounter can be measured using E-S-QUAL. Answer: TRUE Difficulty: 1 Easy Topic: The Service Encounter Triad Learning Objective: 04-02 Use the service encounter triad to describe a service firm's delivery process.

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8) The Disney organization refers to its employees as cast members in order to promote its organizational culture.

Answer: TRUE Difficulty: 1 Easy Topic: The Service Organization Learning Objective: 04-03 Differentiate four organizational control systems for employee empowerment.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 9) When the customer's role is built into the service delivery system, he or she is said to be a coproducer.

Answer: TRUE Difficulty: 1 Easy Topic: The Customer Learning Objective: 04-07 Discuss the role of scripts in customer coproduction.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 10) Informal ethical controls are necessary to set boundaries for what is considered acceptable behavior.

Answer: FALSE Difficulty: 2 Medium Topic: Contact Personnel Learning Objective: 04-06 Describe how the creation of an ethical climate leads to job satisfaction and service quality.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 11) The service profit chain argues that internal quality drives leads to profitability and growth.

Answer: TRUE Difficulty: 2 Medium Topic: The Service Profit Chain Learning Objective: 04-08 Describe how the elements of the service profit chain lead to revenue growth and profitability.

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12) An organization can standardize service delivery by effecting strict operating procedures in order to follow a cost leadership strategy.

Answer: TRUE Difficulty: 2 Medium Topic: The Service Encounter Triad Learning Objective: 04-02 Use the service encounter triad to describe a service firm's delivery process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 13) Situational vignette, role playing, and direct questioning all have been used in evaluating potential front-line employees.

Answer: FALSE Difficulty: 2 Medium Topic: Contact Personnel Learning Objective: 04-04 Prepare abstract questions and write situational vignettes to screen service recruits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 14) Internet banking is a service that would appeal to the economizing customer, the personalizing customer, and the convenience customer.

Answer: FALSE Difficulty: 2 Medium Topic: The Customer Learning Objective: 04-05 Describe the classification of customers into four groups based on their attitudes and expectations.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 15) Efficiency vs satisfaction is the possible source of conflict in the relationship between the customer and the service organization.

Answer: TRUE Difficulty: 2 Medium Topic: The Service Encounter Triad Learning Objective: 04-02 Use the service encounter triad to describe a service firm's delivery process.

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16) A customer who does not clear his or her table at a fast-food restaurant has violated his or her script.

Answer: TRUE Difficulty: 1 Easy Topic: The Customer Learning Objective: 04-07 Discuss the role of scripts in customer coproduction.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 17) Easy access is a success factor that is common to both human-to-human service encounters as well as machine-to-machine service encounters.

Answer: FALSE Difficulty: 2 Medium Topic: The Service Encounter Triad Learning Objective: 04-02 Use the service encounter triad to describe a service firm's delivery process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 18) Southwest Airlines delivered high service value because of employee retention and productivity.

Answer: TRUE Difficulty: 1 Easy Topic: The Service Profit Chain Learning Objective: 04-08 Describe how the elements of the service profit chain lead to revenue growth and profitability.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 19) Acceptance of new technology by customers is hampered because a new script must be learned.

Answer: FALSE Difficulty: 2 Medium Topic: The Customer Learning Objective: 04-05 Describe the classification of customers into four groups based on their attitudes and expectations.

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20) Empowerment begins with delegation.

Answer: FALSE Difficulty: 1 Easy Topic: The Service Organization Learning Objective: 04-03 Differentiate four organizational control systems for employee empowerment.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 21) Delegation is acting on another's behalf.

Answer: TRUE Difficulty: 1 Easy Topic: The Service Organization Learning Objective: 04-03 Differentiate four organizational control systems for employee empowerment.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 22) Serving a disabled person is an example of an unreasonable demand.

Answer: FALSE Difficulty: 2 Medium Topic: Contact Personnel Learning Objective: 04-06 Describe how the creation of an ethical climate leads to job satisfaction and service quality.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 23) A visit to a psychiatrist represents a technology-free service encounter.

Answer: TRUE Difficulty: 2 Medium Topic: Technology in the Service Encounter Learning Objective: 04-01 Describe the five roles of technology in the service encounter.

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24) Some organizations use a website for internal communications only.

Answer: TRUE Difficulty: 2 Medium Topic: Technology in the Service Encounter Learning Objective: 04-01 Describe the five roles of technology in the service encounter.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 25) Self-service has evolved from machine-assisted to Internet-facilitated.

Answer: TRUE Difficulty: 2 Medium Topic: The Service Encounter Triad Learning Objective: 04-02 Use the service encounter triad to describe a service firm's delivery process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 26) Customer and server interact face-to-face in technology-mediated service encounters.

Answer: FALSE Difficulty: 2 Medium Topic: Technology in the Service Encounter Learning Objective: 04-01 Describe the five roles of technology in the service encounter.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 27) A customer who is interested in the self-service option would find which of the following dimensions of service most important?

A) Risk involvement.

B) Customer's control of the situation.

C) Amount of time involved.

D) Efficiency of the service process.

Answer: B Difficulty: 2 Medium Topic: The Customer Learning Objective: 04-05 Describe the classification of customers into four groups based on their attitudes and expectations.

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28) Which interviewing technique would be appropriate to determine how a potential employee would react in a service encounter?

A) Situational vignette.

B) Abstract questioning.

C) Direct questioning.

D) Acting as a customer.

Answer: A Difficulty: 2 Medium Topic: Contact Personnel Learning Objective: 04-04 Prepare abstract questions and write situational vignettes to screen service recruits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 29) The most common reason for difficulties during the interaction of customers and contact personnel is ________.

A) unreasonable demands B) a technical breakdown in service delivery C) incompetent contact personnel D) a lack of attention to detail by contact personnel Answer: A Difficulty: 2 Medium Topic: Contact Personnel Learning Objective: 04-06 Describe how the creation of an ethical climate leads to job satisfaction and service quality.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 30) All of the following are characteristics of a service organization with an inverted T structure, except ________.

A) the layers of supervision are reduced B) contact personnel are trained, motivated, and supplied with timely computer-based information C) the service encounter is managed at the point of delivery D) limiting discretion of contact personnel Answer: D Difficulty: 2 Medium Topic: The Service Organization Learning Objective: 04-03 Differentiate four organizational control systems for employee empowerment.

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31) A person who drives 100 miles to a factory outlet once a month to buy clothing for the family is ________.

A) an economizing customer B) an ethical customer C) a personalizing customer D) a convenience customer Answer: A Difficulty: 2 Medium Topic: The Customer Learning Objective: 04-05 Describe the classification of customers into four groups based on their attitudes and expectations.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 32) A "moment of truth" is not ________.

A) an opportunity to influence a customer's perception of the service quality B) critical in achieving a reputation for superior quality C) when the customer is forming an opinion about the efficiency of the service D) an interaction between a customer and a service provider Answer: C Difficulty: 2 Medium Topic: The Service Encounter Triad Learning Objective: 04-02 Use the service encounter triad to describe a service firm's delivery process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 33) The most important attribute of customer-contact personnel is ________.

A) education B) sales related knowledge C) intelligence D) empathy for the customer Answer: D Difficulty: 2 Medium Topic: Contact Personnel Learning Objective: 04-06 Describe how the creation of an ethical climate leads to job satisfaction and service quality.

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34) In an organization that has empowered its front-line employees, the middle managers become ________.

A) obsolete B) facilitators C) inspectors D) supervisors Answer: B Difficulty: 2 Medium Topic: The Service Organization Learning Objective: 04-03 Differentiate four organizational control systems for employee empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 35) Consider the following vignette. Aboard the cruise ship Royal Majesty, a breakfast diner complains to the waiter that the meal is cold. The waiter sends the meal back to the kitchen and returns shortly with a plate of steaming eggs and bacon. The customer refuses the meal. Rattled, the waiter expresses his confusion to the maitre d'. This breakdown in customer interaction can best be described as ________.

A) unacceptable service B) slow performance C) unacceptable treatment of employees D) unreasonable demands Answer: D Difficulty: 3 Hard Topic: Contact Personnel Learning Objective: 04-06 Describe how the creation of an ethical climate leads to job satisfaction and service quality.

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36) A service organization's culture is communicated by all but one of the following methods?

A) Choice of language.

B) Use of stories.

C) Motto.

D) Manual.

Answer: D Difficulty: 2 Medium Topic: The Service Organization Learning Objective: 04-03 Differentiate four organizational control systems for employee empowerment.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 37) Which of the following is not a classification of shopping attitude for a service customer?

A) Personalizing customer.

B) Convenience customer.

C) Goal-seeking customer.

D) Ethical customer.

Answer: C Difficulty: 1 Easy Topic: The Customer Learning Objective: 04-05 Describe the classification of customers into four groups based on their attitudes and expectations.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 38) Jiffy Lube, a franchised oil change and lubrication service, is an example of a service encounter dominated by ________.

A) the organization B) contact personnel C) the customer D) corporate culture Answer: A Difficulty: 2 Medium Topic: The Service Encounter Triad Learning Objective: 04-02 Use the service encounter triad to describe a service firm's delivery process.

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39) Three elements (the service organization, the contact personnel and the customer) interact in the service encounter triad shown below. Which position represents the customer?

A) (a) B) (b) C) (c) D) (d) Answer: C Difficulty: 1 Easy Topic: The Service Encounter Triad Learning Objective: 04-02 Use the service encounter triad to describe a service firm's delivery process.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 40) Employee empowered service companies have committed to all but one of the following.

A) Investment in people.

B) Use of information technology.

C) Linking compensation to performance.

D) Development of training programs for employees.

Answer: C Difficulty: 2 Medium Topic: The Service Organization Learning Objective: 04-03 Differentiate four organizational control systems for employee empowerment.

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41) Which of the following occurrences would be considered a "moment of truth" in a restaurant setting?

A) A diner considering the amount of tip to leave.

B) A child telling his parent what item on the menu looks good.

C) A waiter telling the cook what he really thinks of the manager.

D) A receptionist assigning a table to a customer.

Answer: D Difficulty: 2 Medium Topic: The Service Encounter Triad Learning Objective: 04-02 Use the service encounter triad to describe a service firm's delivery process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 42) Which of the following is the least likely source of difficulty with interactions between customers and contact personnel?

A) Poor employee selection and training.

B) Customers not understanding their role in the process.

C) Customers having no money to pay the bill.

D) Unrealistic customer expectations.

Answer: C Difficulty: 2 Medium Topic: Contact Personnel Learning Objective: 04-06 Describe how the creation of an ethical climate leads to job satisfaction and service quality.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 43) In the context of the service encounter triad, the trade-off between the service organization and the contact personnel is one of ________.

A) efficiency versus satisfaction B) efficiency versus autonomy C) perceived control D) autonomy versus satisfaction Answer: B Difficulty: 2 Medium Topic: The Service Encounter Triad Learning Objective: 04-02 Use the service encounter triad to describe a service firm's delivery process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 85 Copyright © 2019 McGraw-Hill

44) Which one of the following is not a factor for success in a machine-to-machine service encounter?

A) Easy access.

B) Automatic verification.

C) Transaction security.

D) Fail-safe operation.

Answer: A Difficulty: 2 Medium Topic: The Service Encounter Triad Learning Objective: 04-02 Use the service encounter triad to describe a service firm's delivery process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 45) In the service profit-chain model, which one of the following was not listed as a component of the internal service delivery system?

A) Job design/decision-making attitude.

B) Selection and training.

C) Pay and compensation.

D) Information and communication.

Answer: C Difficulty: 1 Easy Topic: The Service Profit Chain Learning Objective: 04-08 Describe how the elements of the service profit chain lead to revenue growth and profitability.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 46) Which of the following firms has an encounter not dominated by the service organization?

A) Enterprise Rent-A-Car. B) H & R Block.

C) McDonald's.

D) Jiffy Lube.

Answer: A Difficulty: 2 Medium Topic: The Service Encounter Triad Learning Objective: 04-02 Use the service encounter triad to describe a service firm's delivery process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 86 Copyright © 2019 McGraw-Hill

47) ________ is not one of the dimensions of the E-S-QUAL Website survey instrument.

A) Fulfillment B) System availability C) Navigation D) Privacy Answer: C Difficulty: 1 Easy Topic: The Service Encounter Triad Learning Objective: 04-02 Use the service encounter triad to describe a service firm's delivery process.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 48) A customers who becomes intoxicated and disruptive is an example of ________.

A) unreasonable demands B) abusive or hostile attitude C) inappropriate behavior D) demands contrary to policies Answer: C Difficulty: 2 Medium Topic: Contact Personnel Learning Objective: 04-06 Describe how the creation of an ethical climate leads to job satisfaction and service quality.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 49) ________ is not an example of unethical customer-contact behavior.

A) Creating a need for service B) Performing unnecessary services C) Sharing customer information with third parties D) Giving away a guaranteed reservation Answer: A Difficulty: 2 Medium Topic: Contact Personnel Learning Objective: 04-06 Describe how the creation of an ethical climate leads to job satisfaction and service quality.

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50) Self-service falls into the technology-________ service encounter category.

A) assisted B) generated C) facilitated D) mediated Answer: B Difficulty: 1 Easy Topic: Technology in the Service Encounter Learning Objective: 04-01 Describe the five roles of technology in the service encounter.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation Service Management: Operations, Strategy, Information Technology, 9e (Bordoloi) Chapter 5 Supporting Facility and Process Flows 1) The servicescape can influence perceived quality.

Answer: TRUE Difficulty: 2 Medium Topic: Servicescapes Learning Objective: 05-01 Describe the impact of the "servicescape" on the behavior of customers and employees.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 2) The design of facilities is dependent entirely on the construction and operating costs of the facilities.

Answer: FALSE Difficulty: 2 Medium Topic: Facility Design Learning Objective: 05-03 Identify the six critical design features of a service supporting facility.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 3) A well-conceived servicescape can communicate desired customer behavior.

Answer: TRUE Difficulty: 1 Easy Topic: Servicescapes Learning Objective: 05-01 Describe the impact of the "servicescape" on the behavior of customers and employees.

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AACSB: Communication Accessibility: Keyboard Navigation 4) Heuristic algorithms are not only appealing intuitively, but they also guarantee optimal solutions.

Answer: FALSE Difficulty: 1 Easy Topic: Facility Layout Learning Objective: 05-07 Use operations sequence analysis to determine the relative locations of departments in a process layout that minimize total flow-distance.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 5) Servicescapes are most important in their effect on customers.

Answer: FALSE Difficulty: 1 Easy Topic: Facility Layout Learning Objective: 05-02 Identify and discuss the three environmental dimensions of servicescapes.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 6) In a product layout, the bottleneck operation defines the capacity of the service.

Answer: TRUE Difficulty: 1 Easy Topic: Facility Layout Learning Objective: 05-06 Identify the bottleneck operation in a product layout, and regroup activities to create new jobs that will increase the overall service capacity.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 7) The product layout often requires special equipment and special skills to deal with high volume of demand for service that is anticipated. These factors create a very inflexible layout.

Answer: TRUE Difficulty: 2 Medium Topic: Facility Layout Learning Objective: 05-06 Identify the bottleneck operation in a product layout, and regroup activities to create new jobs that will increase the overall service capacity.

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Accessibility: Keyboard Navigation 8) The line-balancing problem attempts to resolve the inconsistencies in the capacities at various stages in a product layout.

Answer: TRUE Difficulty: 2 Medium Topic: Servicescapes Learning Objective: 05-06 Identify the bottleneck operation in a product layout, and regroup activities to create new jobs that will increase the overall service capacity.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 9) A process layout, done correctly, promotes standardized service.

Answer: FALSE Difficulty: 2 Medium Topic: Facility Layout Learning Objective: 05-07 Use operations sequence analysis to determine the relative locations of departments in a process layout that minimize total flow-distance.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 10) The relative location problem deals with the problem of allocating n departments to n locations. Complete enumeration is time consuming because there are a total of n! possible arrangements.

Answer: TRUE Difficulty: 1 Easy Topic: Facility Layout Learning Objective: 05-07 Use operations sequence analysis to determine the relative locations of departments in a process layout that minimize total flow-distance.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 11) A well-balanced line would have all jobs of nearly equal duration to avoid unnecessary idleness in work assignments.

Answer: TRUE Difficulty: 2 Medium Topic: Facility Layout Learning Objective: 05-07 Use operations sequence analysis to determine the relative locations of departments in a process layout that minimize total flow-distance.

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AACSB: Communication Accessibility: Keyboard Navigation 12) The physical complexity of the servicescape for L.L. Bean is categorized as lean.

Answer: FALSE Difficulty: 2 Medium Topic: Servicescapes Learning Objective: 05-01 Describe the impact of the "servicescape" on the behavior of customers and employees.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 13) A fixed sequence of steps that all customers must experience is characteristic of process layouts.

Answer: FALSE Difficulty: 1 Easy Topic: Facility Layout Learning Objective: 05-06 Identify the bottleneck operation in a product layout, and regroup activities to create new jobs that will increase the overall service capacity.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 14) The procedure to improve flow distance in a process layout by arranging the relative location of departments is known as operations sequence analysis.

Answer: TRUE Difficulty: 1 Easy Topic: Facility Layout Learning Objective: 05-07 Use operations sequence analysis to determine the relative locations of departments in a process layout that minimize total flow-distance.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 15) A product layout affords some degree of customization.

Answer: FALSE Difficulty: 2 Medium Topic: Facility Layout Learning Objective: 05-06 Identify the bottleneck operation in a product layout, and regroup activities to create new jobs that will increase the overall service capacity.

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Accessibility: Keyboard Navigation 16) Mid-Columbia Medical Center has a special employee-only entrance to enhance security.

Answer: FALSE Difficulty: 1 Easy Topic: Servicescapes Learning Objective: 05-02 Identify and discuss the three environmental dimensions of servicescapes.

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17) The automobile driver's license office is an example of a product layout.

Answer: TRUE Difficulty: 2 Medium Topic: Facility Layout Learning Objective: 05-06 Identify the bottleneck operation in a product layout, and regroup activities to create new jobs that will increase the overall service capacity.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 18) At a roadside snake farm, both customer and employee perform within the servicescape.

Answer: TRUE Difficulty: 2 Medium Topic: Servicescapes Learning Objective: 05-01 Describe the impact of the "servicescape" on the behavior of customers and employees.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 19) Signage is not an environmental dimension of the servicescape.

Answer: FALSE Difficulty: 1 Easy Topic: Servicescapes Learning Objective: 05-02 Identify and discuss the three environmental dimensions of servicescapes.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 20) Bottlenecks usually are associated with process layouts.

Answer: FALSE Difficulty: 2 Medium Topic: Facility Layout Learning Objective: 05-06 Identify the bottleneck operation in a product layout, and regroup activities to create new jobs that will increase the overall service capacity.

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21) Rush order flow time and throughput time are identical when the system is empty.

Answer: TRUE Difficulty: 2 Medium Topic: Process Analysis Learning Objective: 05-05 Calculate performance metrics such as throughput time and direct labor utilization.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 22) Capacity utilization of individual operations is a dangerous performance metric.

Answer: TRUE Difficulty: 2 Medium Topic: Process Analysis Learning Objective: 05-05 Calculate performance metrics such as throughput time and direct labor utilization.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 23) The entire system capacity is measured by the inverse of the bottleneck cycle time.

Answer: TRUE Difficulty: 2 Medium Topic: Process Analysis Learning Objective: 05-05 Calculate performance metrics such as throughput time and direct labor utilization.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 24) Cycle time is the average time to complete a service operation.

Answer: FALSE Difficulty: 1 Easy Topic: Process Analysis Learning Objective: 05-04 Draw a swim lane flowchart, process flow diagram, and a Gantt chart of a service process.

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25) The swim lane flowchart highlights the handoffs between functional activities.

Answer: TRUE Difficulty: 1 Easy Topic: Process Analysis Learning Objective: 05-04 Draw a swim lane flowchart, process flow diagram, and a Gantt chart of a service process.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 26) The bottleneck activity of a process is shown as an unbroken bar in a Gantt chart.

Answer: TRUE Difficulty: 1 Easy Topic: Process Analysis Learning Objective: 05-04 Draw a swim lane flowchart, process flow diagram, and a Gantt chart of a service process.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 27) Which one of the following is not a major factor that could influence facility design?

A) Objectives and nature of the service.

B) Flexibility in operations.

C) Availability of land.

D) Site location.

Answer: D Difficulty: 1 Easy Topic: Facility Design Learning Objective: 05-03 Identify the six critical design features of a service supporting facility.

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28) A product layout would facilitate the concept of ________.

A) service in series B) service in parallel C) a first come, first served policy D) balanced flow Answer: A Difficulty: 2 Medium Topic: Facility Layout Learning Objective: 05-07 Use operations sequence analysis to determine the relative locations of departments in a process layout that minimize total flow-distance.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 29) Which of the following is not a method service facilities use to provide orientation for customers?

A) Signs and color codes to indicate direction.

B) Use of walled cubicles to ensure privacy.

C) Use of artifacts.

D) Franchised services that use formula facilities.

Answer: B Difficulty: 2 Medium Topic: Servicescapes Learning Objective: 05-02 Identify and discuss the three environmental dimensions of servicescapes.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 30) The line balancing problem arises because of ________.

A) mismatched capacities of the various operations B) mismatched labor inputs required at various operations C) large waiting lines D) inflexibility of the line Answer: A Difficulty: 2 Medium Topic: Process Analysis Learning Objective: 05-04 Draw a swim lane flowchart, process flow diagram, and a Gantt chart of a service process.

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31) The CRAFT program for facility layout uses an initial solution to ________.

A) be tested for improvement B) arrive at a feasible solution C) provide an analytical solution D) define the layout problem Answer: A Difficulty: 1 Easy Topic: Facility Layout Learning Objective: 05-07 Use operations sequence analysis to determine the relative locations of departments in a process layout that minimize total flow-distance.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 32) One of the advantages of a product layout approach to service design is ________.

A) the elimination of bottlenecks B) achieving equal division of labor C) the ease of customization D) increased flexibility Answer: B Difficulty: 1 Easy Topic: Facility Layout Learning Objective: 05-07 Use operations sequence analysis to determine the relative locations of departments in a process layout that minimize total flow-distance.

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33) Identify the bottleneck operation in the following exclusive hairdressing salon.

a. b. c. d.

Activity Pre-counseling Shampoo Haircut Manicure

Average time, min.

15 10 30 20

A) Option A B) Option B C) Option C D) Option D Answer: C Difficulty: 3 Hard Topic: Process Analysis Learning Objective: 05-05 Calculate performance metrics such as throughput time and direct labor utilization.

Bloom's: Apply AACSB: Communication Accessibility: Keyboard Navigation 34) The inability of a jewelry store to expand its current operations to include, for example, an in-store repair and manufacturing facility in response to customer demands, is neglecting which factor of service facility design?

A) Land availability and space requirements.

B) Flexibility.

C) The nature and objectives of the service organization.

D) Community and environment.

Answer: A Difficulty: 2 Medium Topic: Facility Design Learning Objective: 05-03 Identify the six critical design features of a service supporting facility.

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35) A batch type of service process has the characteristic of ________.

A) many specialized departments B) a group of customers treated simultaneously C) uninterrupted delivery D) a one-of-a-kind engagement Answer: B Difficulty: 2 Medium Topic: Process Analysis Learning Objective: 05-04 Draw a swim lane flowchart, process flow diagram, and a Gantt chart of a service process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 36) The customer is a(n) ________ in the service process and his/her impression of the service quality is influenced by many ________.

A) observer; perceptions B) observer; observations C) participant; perceptions D) participant; observations Answer: C Difficulty: 1 Easy Topic: Servicescapes Learning Objective: 05-01 Describe the impact of the "servicescape" on the behavior of customers and employees.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 37) What defines the capacity of a service product layout?

A) The activity requiring the most time per customer.

B) The size of the queue.

C) How tasks are allocated among servers.

D) Ability of workers to change the process speed.

Answer: A Difficulty: 1 Easy Topic: Facility Layout Learning Objective: 05-06 Identify the bottleneck operation in a product layout, and regroup activities to create new jobs that will increase the overall service capacity.

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38) In the design of a fitness center, where would be the most advantageous location of a juice bar?

Consider such factors as traffic flow, impulse buying, and orientation/visibility.

A) At the back of the gym near the aerobic equipment.

B) Near the entrance/exit of the gym.

C) In a small alcove set to one side of the gym.

D) Upstairs in a separate enclosed room marked by a sign.

Answer: B Difficulty: 3 Hard Topic: Servicescapes Learning Objective: 05-02 Identify and discuss the three environmental dimensions of servicescapes.

Bloom's: Apply AACSB: Communication Accessibility: Keyboard Navigation 39) Which of the following retail servicescapes would support an upscale store image best?

A) Stark tile floors.

B) Exposed, bright lighting.

C) Store personnel waiting at cash registers.

D) Well-spaced, lightly stocked shelving.

Answer: D Difficulty: 3 Hard Topic: Servicescapes Learning Objective: 05-02 Identify and discuss the three environmental dimensions of servicescapes.

Bloom's: Apply AACSB: Communication Accessibility: Keyboard Navigation 40) In order to reduce disorientation, Richard Wener argues that the following features should be incorporated into a facility design: previous experience, design legibility, and which one of the following?

A) A formula design.

B) Orientation aids.

C) Adequate lighting.

D) An entry atrium.

Answer: B Difficulty: 2 Medium Topic: Servicescapes Learning Objective: 05-02 Identify and discuss the three environmental dimensions of servicescapes.

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41) Facility layout is discussed with attention to traffic flow, space planning, and which one of the following?

A) Need to avoid unnecessary travel.

B) Eliminating bottlenecks.

C) Aesthetic factors.

D) Cost of providing service.

Answer: A Difficulty: 1 Easy Topic: Facility Layout Learning Objective: 05-06 Identify the bottleneck operation in a product layout, and regroup activities to create new jobs that will increase the overall service capacity.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 42) Which one of the following is an example of a process layout?

A) Fast-food restaurant.

B) Cafeteria.

C) Hospital.

D) None of the above.

Answer: C Difficulty: 2 Medium Topic: Facility Layout Learning Objective: 05-07 Use operations sequence analysis to determine the relative locations of departments in a process layout that minimize total flow-distance.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 43) The advent of the "hub and spoke" airline network following deregulation is an example of ________.

A) nature and objectives of service organizations B) flexibility C) aesthetic factors D) land availability and space requirements Answer: B Difficulty: 2 Medium Topic: Facility Design Learning Objective: 05-03 Identify the six critical design features of a service supporting facility.

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44) All but one of the following impacts the user friendliness of the facility and the ability to serve customers effectively.

A) Floorplan.

B) Layout of equipment.

C) Equipment design.

D) Time of day.

Answer: D Difficulty: 2 Medium Topic: Servicescapes Learning Objective: 05-02 Identify and discuss the three environmental dimensions of servicescapes.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 45) Which among the following choices might not be representative of security measures taken by retail stores?

A) Reducing the number of extremely valuable items sold.

B) A row of bollards outside the entrance.

C) Doing away with big windows.

D) None of the above.

Answer: A Difficulty: 2 Medium Topic: Facility Design Learning Objective: 05-03 Identify the six critical design features of a service supporting facility.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 46) ________ is the time it takes to complete a process from time of arrival to time of departure.

A) Rush order flow time B) Cycle time C) Throughput time D) Direct labor time Answer: C Difficulty: 2 Medium Topic: Process Analysis Learning Objective: 05-05 Calculate performance metrics such as throughput time and direct labor utilization.

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Chapter 6

Service Quality

1) The concept of quality service deployment is based on the belief that services should be designed to reflect customer requirements.

Answer: TRUE Difficulty: 2 Medium Topic: Achieving Service Quality Learning Objective: 06-06 Describe the features of an unconditional service guarantee and its managerial benefits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 2) Being meaningful and easy to invoke are important elements of a good unconditional service guarantee.

Answer: TRUE Difficulty: 2 Medium Topic: Service Recovery Learning Objective: 06-06 Describe the features of an unconditional service guarantee and its managerial benefits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 3) A process is said to be in control when all the variation that is noticed can be assigned to specific causes.

Answer: FALSE Difficulty: 2 Medium Topic: Achieving Service Quality Learning Objective: 06-05 Construct a statistical process control chart for a service operation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 4) The first stage or rung of the service quality ladder is cost of quality.

Answer: FALSE Difficulty: 1 Easy Topic: Service Recovery Learning Objective: 06-08 Explain what service recovery is and why it's important.

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5) The average business hears only from 10 percent of its dissatisfied customers.

Answer: FALSE Difficulty: 1 Easy Topic: Service Recovery Learning Objective: 06-08 Explain what service recovery is and why it's important.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 6) The systematic-response approach to service recovery uses a protocol to handle customer complaints.

Answer: TRUE Difficulty: 1 Easy Topic: Service Recovery Learning Objective: 06-08 Explain what service recovery is and why it's important.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 7) The term "producer's risk" refers to the probability that a sample will indicate an acceptable quality incorrectly.

Answer: FALSE Difficulty: 2 Medium Topic: Achieving Service Quality Learning Objective: 06-05 Construct a statistical process control chart for a service operation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 8) A service guarantee becomes a service winner when it covers all aspects of the service.

Answer: TRUE Difficulty: 2 Medium Topic: Achieving Service Quality Learning Objective: 06-05 Construct a statistical process control chart for a service operation.

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9) When customer expectations are confirmed by perceptions, service quality is considered satisfactory.

Answer: TRUE Difficulty: 2 Medium Topic: Quality Service by Design Learning Objective: 06-04 Construct a "house of quality" as part of a quality function deployment project.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 10) According to the SERVQUAL quality assessment instrument, responsiveness is the most important dimension of service quality.

Answer: FALSE Difficulty: 2 Medium Topic: Measuring Service Quality Learning Objective: 06-07 Perform a walk-through audit (WtA).

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 11) Serving complimentary drinks on a delayed flight is an example of empathy being shown by the service personnel to the irate customer.

Answer: FALSE Difficulty: 2 Medium Topic: Defining Service Quality Learning Objective: 06-01 Describe and illustrate the five dimensions of service quality.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 12) In the service quality gap model, GAP 1 arises because of the management's lack of understanding about how customers formulate their expectations.

Answer: TRUE Difficulty: 2 Medium Topic: Defining Service Quality Learning Objective: 06-02 Use the service quality gap model to diagnose quality problems.

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13) Setting goals and standardizing service delivery tasks will help close GAP 3, the service performance gap.

Answer: FALSE Difficulty: 2 Medium Topic: Defining Service Quality Learning Objective: 06-02 Use the service quality gap model to diagnose quality problems.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 14) The most important function of SERVQUAL is to keep a record of service quality trends through periodic customer surveys.

Answer: TRUE Difficulty: 2 Medium Topic: Measuring Service Quality Learning Objective: 06-07 Perform a walk-through audit (WtA).

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 15) Managing evidence of information is the key to closing the gap between customer perception and service delivery.

Answer: TRUE Difficulty: 2 Medium Topic: Defining Service Quality Learning Objective: 06-02 Use the service quality gap model to diagnose quality problems.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 16) Severity of failure, speed of recovery, service guarantee and perceived service quality are all factors governing service recovery expectations.

Answer: FALSE Difficulty: 1 Easy Topic: Service Recovery Learning Objective: 06-08 Explain what service recovery is and why it's important.

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17) A customer's failure to remember the process steps is an error that falls in the preparation category.

Answer: FALSE Difficulty: 1 Easy Topic: Quality Service by Design Learning Objective: 06-03 Apply poka-yoke methods to a service.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 18) Joseph M. Juran identified internal failure costs, external failure costs, detection costs, and prevention costs.

Answer: TRUE Difficulty: 2 Medium Topic: Achieving Service Quality Learning Objective: 06-06 Describe the features of an unconditional service guarantee and its managerial benefits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 19) Fixing service-process problems before they affect the customer could be classified as another component to the systematic-response approach.

Answer: TRUE Difficulty: 1 Easy Topic: Service Recovery Learning Objective: 06-08 Explain what service recovery is and why it's important.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 20) The walk-through audit (WtA) focuses on the effectiveness of each stage in the service delivery process.

Answer: TRUE Difficulty: 2 Medium Topic: Measuring Service Quality Learning Objective: 06-07 Perform a walk-through audit (WtA).

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21) The Club Med example illustrated the creative initiative by staff to implement a pre-recovery.

Answer: FALSE Difficulty: 2 Medium Topic: Defining Service Quality Learning Objective: 06-02 Use the service quality gap model to diagnose quality problems.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 22) Which of the following dimensions of service quality is most important to customers?

A) Empathy.

B) Assurance.

C) Reliability.

D) Tangibles.

Answer: C Difficulty: 1 Easy Topic: Defining Service Quality Learning Objective: 06-01 Describe and illustrate the five dimensions of service quality.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 23) Which of the following is not an advantage of offering a service guarantee?

A) It acts as a mechanism to differentiate the firm from its competitors.

B) It advertises the firm's commitment to quality.

C) It allows employees to interpret broadly the firm's service standards.

D) It acts as a means of receiving feedback from customers.

Answer: C Difficulty: 2 Medium Topic: Service Recovery Learning Objective: 06-06 Describe the features of an unconditional service guarantee and its managerial benefits.

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24) Which of the following is a poka-yoke method?

A) Adopting a checklist to help an employee avoid making a mistake.

B) Designing a service to reflect the customers' needs and requirements.

C) Designing a service in a robust manner that can withstand abuse by customers.

D) Comparing a firm's quality performance to the performance of others that are considered "best in class."

Answer: A Difficulty: 1 Easy Topic: Quality Service by Design Learning Objective: 06-03 Apply poka-yoke methods to a service.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 25) Which one of the following is not an approach to service recovery?

A) Case-by-case.

B) Systematic-response.

C) Unconditional guarantee.

D) Early intervention.

Answer: C Difficulty: 1 Easy Topic: Service Recovery Learning Objective: 06-08 Explain what service recovery is and why it's important.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 26) The costs of quality for services include all of the following except ________.

A) failure costs B) prevention costs C) control costs D) detection costs Answer: C Difficulty: 2 Medium Topic: Achieving Service Quality Learning Objective: 06-06 Describe the features of an unconditional service guarantee and its managerial benefits.

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27) A gap in service quality is not the difference between ________.

A) customer expectations and management's perceptions of customer expectations B) the service delivery and the results that are communicated externally to the customer C) customer expectations and management's perception of the delivered service D) the perceptions of the delivered service that are translated into service quality specifications and the actual service delivery Answer: C Difficulty: 2 Medium Topic: Defining Service Quality Learning Objective: 06-02 Use the service quality gap model to diagnose quality problems.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 28) Which one of the following is not an example of detection costs?

A) Rework.

B) Collecting quality data.

C) Process control.

D) Periodic inspection.

Answer: A Difficulty: 2 Medium Topic: Achieving Service Quality Learning Objective: 06-06 Describe the features of an unconditional service guarantee and its managerial benefits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 29) Which of the following is not considered effective in achieving and maintaining service quality?

A) Encouraging service providers to be highly visible in dealing with customers.

B) Establishing peer groups among service providers to foster teamwork and a sense of pride.

C) Installing a system of incentives that emphasizes quality.

D) Increasing supervision of service providers.

Answer: D Difficulty: 2 Medium Topic: Achieving Service Quality Learning Objective: 06-06 Describe the features of an unconditional service guarantee and its managerial benefits.

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30) Which of the following is not part of a good service guarantee?

A) It is unconditional.

B) It is easy for the customer to understand.

C) It is meaningful to the customer.

D) It is difficult for the customer to invoke.

Answer: D Difficulty: 2 Medium Topic: Achieving Service Quality Learning Objective: 06-06 Describe the features of an unconditional service guarantee and its managerial benefits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 31) All of the following are examples of "detection costs" of quality except ________.

A) quality planning B) periodic inspection C) process control D) collecting quality data Answer: A Difficulty: 2 Medium Topic: Achieving Service Quality Learning Objective: 06-06 Describe the features of an unconditional service guarantee and its managerial benefits.

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32) Which quadrant in the matrix below represents attributes of a good service guarantee?

A) (a) B) (b) C) (c) D) (d) Answer: C Difficulty: 2 Medium Topic: Achieving Service Quality Learning Objective: 06-06 Describe the features of an unconditional service guarantee and its managerial benefits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 33) Which of the following is a strategy for closing the gap between customer expectations and management perceptions of customer's expectations (GAP 1)?

A) Standardization of service delivery.

B) Improved market research.

C) Employee empowerment.

D) Investment in training.

Answer: B Difficulty: 1 Easy Topic: Defining Service Quality Learning Objective: 06-02 Use the service quality gap model to diagnose quality problems.

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34) Which of the following statements is not true concerning a service guarantee?

A) A well designed and implemented service guarantee can help a firm gain control over its operation.

B) Fear of customer cheating inhibits some mangers from adopting a service guarantee.

C) Managers are likely to worry about the costs of a service guarantee, but for the wrong reasons.

D) Managers who seek control over the financial consequences of a service guarantee should require customers to meet various conditions.

Answer: D Difficulty: 2 Medium Topic: Achieving Service Quality Learning Objective: 06-06 Describe the features of an unconditional service guarantee and its managerial benefits.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 35) There are five dimensions that customers use to judge service quality. The willingness to help customers and to provide prompt service is ________.

A) assurance B) empathy C) reliability D) responsiveness Answer: D Difficulty: 1 Easy Topic: Defining Service Quality Learning Objective: 06-01 Describe and illustrate the five dimensions of service quality.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 36) Shigeo Shingo is credited with which of the following quality ideas?

A) Robustness.

B) Quality is free.

C) Poka-yoke.

D) Quality function deployment.

Answer: C Difficulty: 1 Easy Topic: Quality Service by Design Learning Objective: 06-03 Apply poka-yoke methods to a service.

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37) When a process appears to be functioning properly when, in fact, it is out of control, the type of error and injured party are identified as ________.

A) Type I error and producer's risk B) Type II error and consumer's risk C) Type I error and consumer's risk D) Type II error and producer's risk Answer: B Difficulty: 2 Medium Topic: Achieving Service Quality Learning Objective: 06-05 Construct a statistical process control chart for a service operation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 38) The difference between a customer's ________ of a service and the ________ of the service delivered is called GAP 5.

A) perceptions; perceptions B) perceptions; expectations C) expectations; perceptions D) expectations; expectations Answer: C Difficulty: 1 Easy Topic: Defining Service Quality Learning Objective: 06-02 Use the service quality gap model to diagnose quality problems.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 39) Which of the following is not a reason that a service guarantee works?

A) Encourages individual employees to set their own standards.

B) Generates reliable data on poor performance.

C) Builds customer loyalty.

D) Forces a firm to identify failure points.

Answer: A Difficulty: 2 Medium Topic: Achieving Service Quality Learning Objective: 06-06 Describe the features of an unconditional service guarantee and its managerial benefits.

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40) Which of the following is not true of a Customer Satisfaction Survey?

A) Survey can be completed at customer convenience.

B) Survey usually is conducted by operations personnel.

C) Primary focus of survey is on overall impression of service.

D) Survey is designed around common service dimensions.

Answer: B Difficulty: 2 Medium Topic: Measuring Service Quality Learning Objective: 06-07 Perform a walk-through audit (WtA).

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 41) Which of the following is not possible using SERVQUAL? A) Record customer expectations.

B) Track service quality trends.

C) Measure the quality of competitors.

D) Identify dimensions of service quality.

Answer: D Difficulty: 2 Medium Topic: Measuring Service Quality Learning Objective: 06-07 Perform a walk-through audit (WtA).

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 42) Which of the following is not true of a walk-through audit (WtA)?

A) Focuses on five dimensions of service package.

B) Emphasis is on evaluation of each stage of service delivery.

C) Survey is completed at customer convenience.

D) Survey usually conducted by operations personnel.

Answer: C Difficulty: 2 Medium Topic: Measuring Service Quality Learning Objective: 06-07 Perform a walk-through audit (WtA).

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation Service Management: Operations, Strategy, Information Technology, 9e (Bordoloi) Chapter 7 Process Improvement 1) DEA circumvents the need to develop standard costs for each service when comparing the efficiency of multiple service units that provide similar services.

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Answer: TRUE Difficulty: 2 Medium Topic: Measuring Service Productivity (Ch. 7 Supplement) Learning Objective: 07-07 Conduct a data envelopment analysis (DEA) Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 2) Data envelopment analysis (DEA) is best used in an environment of low divergence and high complexity.

Answer: FALSE Difficulty: 2 Medium Topic: Measuring Service Productivity (Ch. 7 Supplement) Learning Objective: 07-07 Conduct a data envelopment analysis (DEA) Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 3) Data Envelopment Analysis (DEA), when used repeatedly, can facilitate the competitive strategy of cost leadership.

Answer: TRUE Difficulty: 2 Medium Topic: Measuring Service Productivity (Ch. 7 Supplement) Learning Objective: 07-07 Conduct a data envelopment analysis (DEA) Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 4) Continuous improvement is a valuable concept, but it lacks measurement techniques.

Answer: FALSE Difficulty: 2 Medium Topic: Quality and Productivity Improvement Process Learning Objective: 07-03 Lead a team in a process improvement initiative.

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5) The Malcolm Baldrige Quality Award measures the quality of products manufactured or services delivered.

Answer: FALSE Difficulty: 2 Medium Topic: Quality and Productivity Improvement Process Learning Objective: 07-03 Lead a team in a process improvement initiative.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 6) Benchmarking measures a firm's quality performance by comparing it to the performance of other companies that are known for being "best in class."

Answer: TRUE Difficulty: 2 Medium Topic: Improvement Programs Learning Objective: 07-04 Measure the capability of a process.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 7) Pareto chart is an arrangement of data where the causes of a problem are arranged in ascending frequency of occurrence in order to highlight the most likely cause.

Answer: FALSE Difficulty: 1 Easy Topic: Quality Tools for Analysis and Problem Solving Learning Objective: 07-01 Use quality tools for process analysis and problem solving.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 8) ISO 9002 does not apply to organizations that perform design and service activities.

Answer: TRUE Difficulty: 1 Easy Topic: Improvement Programs Learning Objective: 07-02 Describe and contrast corporate quality improvement programs.

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9) The fishbone chart offers a structured approach for a team to identify, explore, and display graphically all of the possible causes of a problem.

Answer: TRUE Difficulty: 1 Easy Topic: Quality Tools for Analysis and Problem Solving Learning Objective: 07-01 Use quality tools for process analysis and problem solving.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 10) The Deming wheel is a repetitive cycle where quality improvements result from continuous incremental turns of the wheel.

Answer: TRUE Difficulty: 2 Medium Topic: Quality and Productivity Improvement Process Learning Objective: 07-03 Lead a team in a process improvement initiative.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 11) The objective of Six Sigma is to eliminate variation in process performance.

Answer: FALSE Difficulty: 2 Medium Topic: Improvement Programs Learning Objective: 07-05 Conduct a Six Sigma process analysis.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 12) Process capability index measures the variability in a process.

Answer: FALSE Difficulty: 2 Medium Topic: Improvement Programs Learning Objective: 07-05 Conduct a Six Sigma process analysis.

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13) A process capability index of two centered on the mean just meets Six Sigma standards.

Answer: TRUE Difficulty: 2 Medium Topic: Improvement Programs Learning Objective: 07-05 Conduct a Six Sigma process analysis.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 14) Lean service is based upon the Toyota Production System.

Answer: TRUE Difficulty: 2 Medium Topic: Improvement Programs Learning Objective: 07-06 Describe the philosophy of lean service.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 15) The objective of lean service is a purposeful flow of satisfied customers.

Answer: FALSE Difficulty: 2 Medium Topic: Improvement Programs Learning Objective: 07-06 Describe the philosophy of lean service.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 16) Data Envelopment Analysis (DEA) is a method for ________.

A) measuring a firm's quality performance by comparing it with other companies that are recognized as "best in class" B) determining the feasibility of technological innovations in service operations C) analyzing the gap between the service customer's expectations and perceptions D) comparing the efficiency of multiple service units that provide similar services Answer: D Difficulty: 1 Easy Topic: Measuring Service Productivity (Ch. 7 Supplement) Learning Objective: 07-07 Conduct a data envelopment analysis (DEA) Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

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17) What are the two dimensions in the DEA strategic matrix?

A) Efficiency and profit.

B) Efficiency and quality.

C) Profit and quality.

D) Profit and location.

Answer: A Difficulty: 1 Easy Topic: Measuring Service Productivity (Ch. 7 Supplement) Learning Objective: 07-07 Conduct a data envelopment analysis (DEA) Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 18) Which pair of parameters describes the "candidates for divestiture" quadrant in the DEA strategic matrix?

A) Low efficiency and low profit.

B) Low efficiency and high profit.

C) High efficiency and high profit.

D) High efficiency and low profit.

Answer: D Difficulty: 1 Easy Topic: Measuring Service Productivity (Ch. 7 Supplement) Learning Objective: 07-07 Conduct a data envelopment analysis (DEA) Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 19) Which of the following is not an element of a Quality Improvement Program?

A) Emphasizing subjective data over difficult-to-analyze objective data.

B) Maintaining SOPs for routine and crisis situations.

C) Assuming employees are self-motivated and innovative.

D) Focusing on customer satisfaction.

Answer: A Difficulty: 2 Medium Topic: Quality and Productivity Improvement Process Learning Objective: 07-03 Lead a team in a process improvement initiative.

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20) Because customers participate directly in the service process, the success of technological innovation is dependent upon ________.

A) the user-friendliness of the innovation B) the ability of customers to pay for the service C) customer acceptance D) market research Answer: C Difficulty: 2 Medium Topic: Improvement Programs Learning Objective: 07-02 Describe and contrast corporate quality improvement programs.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 21) Which of the following categories carries the highest point value on the examination paper for the Malcolm Baldrige National Quality Award?

A) Leadership.

B) Strategic quality planning.

C) Management of process quality.

D) Customer focus and satisfaction.

Answer: D Difficulty: 1 Easy Topic: Improvement Programs Learning Objective: 07-02 Describe and contrast corporate quality improvement programs.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 22) Which of the following statements is not part of Deming's 14-point philosophy?

A) Create constancy of purpose for improvements of product and service.

B) Promote numerical goals for the workforce.

C) Constantly and forever improve the system of production and service.

D) Cease dependence on mass inspection.

Answer: B Difficulty: 1 Easy Topic: Quality and Productivity Improvement Process Learning Objective: 07-03 Lead a team in a process improvement initiative.

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23) Which one of the following is not a principle of Deming's philosophy?

A) Customer satisfaction.

B) Management by facts.

C) Employee loyalty.

D) Respect for people.

Answer: C Difficulty: 1 Easy Topic: Quality and Productivity Improvement Process Learning Objective: 07-03 Lead a team in a process improvement initiative.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 24) Which among the following is not a category that is eligible for the Malcolm Baldrige National Quality award?

A) Manufacturing companies.

B) Service firms.

C) Small businesses.

D) Government agencies.

Answer: D Difficulty: 1 Easy Topic: Improvement Programs Learning Objective: 07-02 Describe and contrast corporate quality improvement programs.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 25) Planning, control, and ________ are the three-component cycles required for ISO 9001 implementation.

A) reporting B) documentation C) testing D) budgeting Answer: B Difficulty: 1 Easy Topic: Improvement Programs Learning Objective: 07-02 Describe and contrast corporate quality improvement programs.

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26) All but one of the following are quality tools for analysis and problem solving.

A) Run chart.

B) Control chart.

C) Flow chart.

D) Bar chart.

Answer: D Difficulty: 1 Easy Topic: Quality Tools for Analysis and Problem Solving Learning Objective: 07-01 Use quality tools for process analysis and problem solving.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 27) Which one the following is not a guiding principle of lean philosophy?

A) Satisfy the needs of customers by doing only value-added activities.

B) Be flexible in response to customer demands.

C) Define the value stream by flowcharting the process.

D) Eliminate waste.

Answer: B Difficulty: 2 Medium Topic: Improvement Programs Learning Objective: 07-06 Describe the philosophy of lean service.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation Service Management: Operations, Strategy, Information Technology, 9e (Bordoloi) Chapter 8 Service Facility Location 1) Finding a unique set of sites in a multi-location problem is a simple extension of the methods used for single facility location.

Answer: FALSE Difficulty: 2 Medium Topic: Facility Location Modeling Considerations Learning Objective: 08-04 Differentiate between a Euclidian and metropolitan metric approach to measuring travel distance.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 2) When a customer travels to the service facility, the direct cost that is incurred is the decrease in potential customer demand that occurs as a result of the distance traveled.

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Difficulty: 2 Medium Topic: Facility Location Modeling Considerations Learning Objective: 08-04 Differentiate between a Euclidian and metropolitan metric approach to measuring travel distance.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 3) The metropolitan metric method of measuring distance is described as travel "as the crow flies."

Answer: FALSE Difficulty: 1 Easy Topic: Facility Location Modeling Considerations Learning Objective: 08-04 Differentiate between a Euclidian and metropolitan metric approach to measuring travel distance.

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4) Locating a public service facility in an area that contains a large number of individuals for whom distance would be a strong barrier will maximize facility utilization.

Answer: TRUE Difficulty: 2 Medium Topic: Facility Location Modeling Considerations Learning Objective: 08-04 Differentiate between a Euclidian and metropolitan metric approach to measuring travel distance.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 5) The choice of location criterion has little effect on the site selected.

Answer: FALSE Difficulty: 2 Medium Topic: Facility Location Modeling Considerations Learning Objective: 08-04 Differentiate between a Euclidian and metropolitan metric approach to measuring travel distance.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 6) Saturation clustering occurs when service firms locate their business near their competitors because they expect a high level of customer traffic.

Answer: FALSE Difficulty: 1 Easy Topic: Strategic Location Considerations Learning Objective: 08-01 Explain the difference between competitive clustering and saturation marketing.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 7) The Huff model for retail outlet location postulates an inverse relationship between the attractiveness of a location and the travel time to that location for a particular customer.

Answer: TRUE Difficulty: 2 Medium Topic: Facility Location Techniques Learning Objective: 08-06 Use the Huff retail location model to estimate revenue and market share for a potential site.

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8) The location set covering problem locates facilities to minimize the distance that the most distant customer would travel to reach a facility (known as maximal service distance).

Answer: TRUE Difficulty: 2 Medium Topic: Facility Location Techniques Learning Objective: 08-07 Locate multiple facilities using the set covering model.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 9) The advantage of substituting communication for travel becomes possible when face-to-face interaction between server and customer is not necessary.

Answer: TRUE Difficulty: 2 Medium Topic: Strategic Location Considerations Learning Objective: 08-02 Explain the impact of the Internet on location decisions.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 10) The absence of quantifiable criteria considerably diminishes the importance of facility location methods in the public sector.

Answer: FALSE Difficulty: 2 Medium Topic: Facility Location Techniques Learning Objective: 08-07 Locate multiple facilities using the set covering model.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 11) Geographic information systems are a visual method of displaying data.

Answer: TRUE Difficulty: 1 Easy Topic: Geographic Information System Learning Objective: 08-03 Describe how a geographic information system is used in service location decisions.

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12) Cross-median is an approach to the location of a single facility using the metropolitan metric to maximize the total distance traveled.

Answer: FALSE Difficulty: 2 Medium Topic: Facility Location Techniques Learning Objective: 08-05 Locate a single facility using the cross-median approach.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 13) Marketing intermediaries are business entities in the channel of distribution between the final customer and the service provider.

Answer: TRUE Difficulty: 2 Medium Topic: Strategic Location Considerations Learning Objective: 08-01 Explain the difference between competitive clustering and saturation marketing.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 14) Use of center of gravity formulas for solving the single-location problem is incorrect.

Answer: TRUE Difficulty: 2 Medium Topic: Facility Location Techniques Learning Objective: 08-06 Use the Huff retail location model to estimate revenue and market share for a potential site.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 15) The greedy algorithm is a solution procedure that is used for measuring the attraction of a customer to a facility.

Answer: FALSE Difficulty: 2 Medium Topic: Facility Location Techniques Learning Objective: 08-06 Use the Huff retail location model to estimate revenue and market share for a potential site.

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16) The Euclidian metric is used for locating a facility in an urban area.

Answer: FALSE Difficulty: 1 Easy Topic: Facility Location Modeling Considerations Learning Objective: 08-04 Differentiate between a Euclidian and metropolitan metric approach to measuring travel distance.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 17) For a multisite location problem, the services to provide at each site might vary.

Answer: TRUE Difficulty: 2 Medium Topic: Facility Location Modeling Considerations Learning Objective: 08-04 Differentiate between a Euclidian and metropolitan metric approach to measuring travel distance.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 18) The median has the property of minimizing the sum of absolute deviations from it.

Answer: TRUE Difficulty: 2 Medium Topic: Facility Location Techniques Learning Objective: 08-05 Locate a single facility using the cross-median approach.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 19) The Euclidian location model is used when vector travel is involved.

Answer: TRUE Difficulty: 2 Medium Topic: Facility Location Modeling Considerations Learning Objective: 08-04 Differentiate between a Euclidian and metropolitan metric approach to measuring travel distance.

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20) The success of L.L. Bean questioned the necessity of always finding a location that is convenient for customers' physical access.

Answer: TRUE Difficulty: 2 Medium Topic: Strategic Location Considerations Learning Objective: 08-02 Explain the impact of the Internet on location decisions.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 21) A strategy that can be used by urban retailers to locate multiple sites close to each other in high-density areas despite the potential for cannibalization is called ________.

A) competitive clustering B) marketing intermediaries C) saturation marketing D) saturation clustering Answer: C Difficulty: 1 Easy Topic: Strategic Location Considerations Learning Objective: 08-01 Explain the difference between competitive clustering and saturation marketing.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 22) The optimization criteria governing the location of a service facility is determined mainly by the ________.

A) ownership of the service, i.e., public or private B) kind of service, e.g. food, banking, or postal C) number of facilities to be located D) average size of the facilities to be located Answer: A Difficulty: 2 Medium Topic: Facility Location Techniques Learning Objective: 08-07 Locate multiple facilities using the set covering model.

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23) A strategy defying the curse of cannibalization is called ________.

A) competitive clustering B) customized marketing C) saturation marketing D) relationship marketing Answer: C Difficulty: 1 Easy Topic: Strategic Location Considerations Learning Objective: 08-01 Explain the difference between competitive clustering and saturation marketing.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 24) If you are going to open four facilities and have identified six candidate locations, how many different combinations of site selections are there?

A) 4 B) 6 C) 15 D) 24 Answer: D Difficulty: 1 Easy Topic: Strategic Location Considerations Learning Objective: 08-01 Explain the difference between competitive clustering and saturation marketing.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 25) The following marketing phenomenon occurs when there exists within two city blocks the following hamburger outlets: McDonald's, Burger King, Sonic, and Wendy's: ________.

A) competitive clustering B) customized marketing C) saturation marketing D) relationship marketing Answer: A Difficulty: 2 Medium Topic: Strategic Location Considerations Learning Objective: 08-01 Explain the difference between competitive clustering and saturation marketing.

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26) A cruise line has the option of locating its dock in Miami or Pensacola because both cities have adequate port facilities. Which of the following considerations would seem to be the most germane?

A) Adequate parking.

B) Location of competitors.

C) Freeway access to the port.

D) City served by major airport.

Answer: D Difficulty: 2 Medium Topic: Strategic Location Considerations Learning Objective: 08-01 Explain the difference between competitive clustering and saturation marketing.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 27) Which of the following items does the Huff retail location model not consider?

A) The degree of accessibility.

B) Travel time from the customer's location to the facility.

C) Facility size.

D) A parameter reflecting the importance of travel time by customers.

Answer: A Difficulty: 2 Medium Topic: Facility Location Techniques Learning Objective: 08-06 Use the Huff retail location model to estimate revenue and market share for a potential site.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 28) The following are important in estimating spatial demand except ________.

A) defining the target population B) selecting a unit of area C) developing a visual representation or map D) distance traveled Answer: D Difficulty: 2 Medium Topic: Geographic Information System Learning Objective: 08-03 Describe how a geographic information system is used in service location decisions.

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29) With respect to service facility location, it is not prudent to open ________.

A) a new facility next to one's competitors B) multiple facilities within the same area, thus cannibalizing one's own business C) an information-based service in a downtown area with high real estate prices D) All of the above Answer: C Difficulty: 2 Medium Topic: Facility Location Techniques Learning Objective: 08-07 Locate multiple facilities using the set covering model.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 30) A strategy of locating sites in a number of states (or countries) can reduce the overall risk of financial crisis from a regional economic downturn. This strategic approach to facility location is known as ________.

A) competitive positioning B) flexibility C) demand management D) focus Answer: B Difficulty: 1 Easy Topic: Strategic Location Considerations Learning Objective: 08-01 Explain the difference between competitive clustering and saturation marketing.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 31) In the Huff retail location model, the value of λ estimates______.

A) amount of travel time to reach a service facility B) the importance of convenience in attracting customers C) the importance of travel time in attracting customers D) the cost of transportation for a customer Answer: C Difficulty: 2 Medium Topic: Facility Location Techniques Learning Objective: 08-06 Use the Huff retail location model to estimate revenue and market share for a potential site.

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32) In the decision to locate a public health clinic, which one of the following criteria is not appropriate?

A) Maximize utilization.

B) Minimize distance per capita.

C) Minimize distance per visit.

D) Minimize cost.

Answer: D Difficulty: 1 Easy Topic: Facility Location Modeling Considerations Learning Objective: 08-04 Differentiate between a Euclidian and metropolitan metric approach to measuring travel distance.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 33) Car dealerships often are located near one another along a "motor mile" to allow customers to make comparisons. This location strategy is known as ________.

A) competitive clustering B) saturation marketing C) marketing intermediaries D) competitive positioning Answer: A Difficulty: 1 Easy Topic: Strategic Location Considerations Learning Objective: 08-01 Explain the difference between competitive clustering and saturation marketing.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 34) The concept of focus in location decisions considers all but one of the following issues: ________.

A) cannibalization B) multisite locations C) formula facility D) competitive changes Answer: D Difficulty: 2 Medium Topic: Strategic Location Considerations Learning Objective: 08-01 Explain the difference between competitive clustering and saturation marketing.

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35) Site selection considerations include all but one of the following: ________.

A) access B) environment C) government D) weather Answer: D Difficulty: 2 Medium Topic: Facility Location Modeling Considerations Learning Objective: 08-04 Differentiate between a Euclidian and metropolitan metric approach to measuring travel distance.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 36) The disadvantage of saturation marketing lies in which of the following areas?

A) Increased advertising costs.

B) Cannibalization.

C) Increased requirement for supervision.

D) Reduction in customer awareness.

Answer: B Difficulty: 2 Medium Topic: Strategic Location Considerations Learning Objective: 08-01 Explain the difference between competitive clustering and saturation marketing.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 37) The ________ is a variation on the location set-covering problem.

A) Huff model B) Greedy algorithm C) maximal covering algorithm D) shortest-path tree Answer: C Difficulty: 2 Medium Topic: Facility Location Techniques Learning Objective: 08-07 Locate multiple facilities using the set covering model.

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38) Cross-median approach is used for ________ location.

A) single facility B) multiple facility C) single facility and multiple facility D) none of the above Answer: A Difficulty: 1 Easy Topic: Facility Location Techniques Learning Objective: 08-05 Locate a single facility using the cross-median approach.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 39) Competitive clustering is common to the ________ industry.

A) healthcare B) lodging C) communications D) banking Answer: B Difficulty: 2 Medium Topic: Strategic Location Considerations Learning Objective: 08-01 Explain the difference between competitive clustering and saturation marketing.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 40) ArcGIS, a GIS for business applications, finds applications in all but one of the following: ________.

A) mapping customer databases B) determining site locations C) forecasting demand D) improving delivery service Answer: C Difficulty: 1 Easy Topic: Geographic Information System Learning Objective: 08-03 Describe how a geographic information system is used in service location decisions.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation Service Management: Operations, Strategy, Information Technology, 9e (Bordoloi) Chapter 9 Service Supply Relationships 135 Copyright © 2019 McGraw-Hill

1) In the physical goods supply chain, information moves to the left and material to the right.

Answer: TRUE Difficulty: 1 Easy Topic: Supply Chain Management Learning Objective: 09-01 Contrast the supply chain for physical goods with service supply relationships.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 2) Customer demand variability is the most difficult factor to determine in a goods supply chain.

Answer: TRUE Difficulty: 2 Medium Topic: Supply Chain Management Learning Objective: 09-01 Contrast the supply chain for physical goods with service supply relationships.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 3) In the past, the flow of goods in a physical supply chain was described as a pull system.

Answer: FALSE Difficulty: 1 Easy Topic: Supply Chain Management Learning Objective: 09-01 Contrast the supply chain for physical goods with service supply relationships.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 4) Information moves in both directions in the service chain for mobile workers.

Answer: TRUE Difficulty: 2 Medium Topic: Managing Service Relationships Learning Objective: 09-04 Discuss the managerial implications of bidirectional relationships.

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5) Knowledge management is a strategy to retain skilled workers.

Answer: FALSE Difficulty: 1 Easy Topic: Managing Service Relationships Learning Objective: 09-04 Discuss the managerial implications of bidirectional relationships.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 6) Bidirectional optimization could be considered an example of a win-win outcome.

Answer: TRUE Difficulty: 2 Medium Topic: Managing Service Relationships Learning Objective: 09-04 Discuss the managerial implications of bidirectional relationships.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 7) The service inventory-hedging strategy benefits the firm by directing skill-enhancing activities into idle time slots.

Answer: TRUE Difficulty: 2 Medium Topic: Managing Service Relationships Learning Objective: 09-04 Discuss the managerial implications of bidirectional relationships.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 8) Service tangibility increases as the focus of the service moves from property to people to process.

Answer: FALSE Difficulty: 2 Medium Topic: Outsourcing Services Learning Objective: 09-06 Classify a business service based on the focus of the service and its importance to the buyer.

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9) Product postponement is the strategy of stocking a product in generic form for later customization.

Answer: TRUE Difficulty: 1 Easy Topic: Supply Chain Management Learning Objective: 09-01 Contrast the supply chain for physical goods with service supply relationships.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 10) The "bullwhip effect" is a phenomenon in the physical supply chain that describes the inventory stocking levels at various stages.

Answer: FALSE Difficulty: 1 Easy Topic: Supply Chain Management Learning Objective: 09-01 Contrast the supply chain for physical goods with service supply relationships.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 11) A good supply chain management strategy places a strong emphasis on promotional pricing.

Answer: FALSE Difficulty: 2 Medium Topic: Supply Chain Management Learning Objective: 09-01 Contrast the supply chain for physical goods with service supply relationships.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 12) Reactive forecasting was used for capacity planning before the implementation of physical goods supply chain management.

Answer: TRUE Difficulty: 1 Easy Topic: Supply Chain Management Learning Objective: 09-01 Contrast the supply chain for physical goods with service supply relationships.

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13) Conversion is a primary value component of service chain management.

Answer: FALSE Difficulty: 1 Easy Topic: Professional Service Firms Learning Objective: 09-05 Identify the three factors that drive profitability for a professional service firm.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 14) Customer-supplier duality acknowledges the customer inputs in a service relationship.

Answer: TRUE Difficulty: 2 Medium Topic: Service Supply Relationships Learning Objective: 09-03 Identify the sources of value in a service supply relationship.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 15) A bank is an example of a service provider with a single-level bi-directional service supply relationship.

Answer: TRUE Difficulty: 2 Medium Topic: Service Supply Relationships Learning Objective: 09-03 Identify the sources of value in a service supply relationship.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 16) Transfer enhances productive capacity by enabling customer self-service.

Answer: FALSE Difficulty: 2 Medium Topic: Managing Service Relationships Learning Objective: 09-04 Discuss the managerial implications of bidirectional relationships.

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17) Need identification is the first step in the outsourcing process model.

Answer: TRUE Difficulty: 1 Easy Topic: Outsourcing Services Learning Objective: 09-07 Discuss the managerial considerations to be addressed in outsourcing services.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 18) The flow of service is activated upon demand as a result of effective service chain management.

Answer: TRUE Difficulty: 1 Easy Topic: Managing Service Relationships Learning Objective: 09-04 Discuss the managerial implications of bidirectional relationships.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 19) Outsourcing can provide access to the latest technology without investment.

Answer: TRUE Difficulty: 1 Easy Topic: Outsourcing Services Learning Objective: 09-07 Discuss the managerial considerations to be addressed in outsourcing services.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 20) Outsourcing can expose a firm to data security and customer privacy issues.

Answer: TRUE Difficulty: 2 Medium Topic: Outsourcing Services Learning Objective: 09-07 Discuss the managerial considerations to be addressed in outsourcing services.

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21) The Walmart and Procter & Gamble experience illustrates the unintended consequences of independent decision making in a goods supply chain.

Answer: TRUE Difficulty: 2 Medium Topic: Supply Chain Management Learning Objective: 09-02 Describe the role played by an omnichannel supply chain in e-commerce.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 22) Profit-per-partner is the multiplication of "margin" and "productivity."

Answer: FALSE Difficulty: 2 Medium Topic: Professional Service Firms Learning Objective: 09-05 Identify the three factors that drive profitability for a professional service firm.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 23) Outsourcing a service incurs transaction costs such as loss of employee loyalty.

Answer: FALSE Difficulty: 2 Medium Topic: Outsourcing Services Learning Objective: 09-06 Classify a business service based on the focus of the service and its importance to the buyer.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 24) Social media blends technology and social interaction for the co-creation of value.

Answer: TRUE Difficulty: 2 Medium Topic: Managing Service Relationships Learning Objective: 09-04 Discuss the managerial implications of bidirectional relationships.

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25) The link between payment histories and risky driving behavior is used to price insurance policies.

Answer: TRUE Difficulty: 2 Medium Topic: Professional Service Firms Learning Objective: 09-05 Identify the three factors that drive profitability for a professional service firm.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 26) The physical goods supply chain contains all but one of the following elements: ________.

A) competitor B) distributor C) retailer D) customer Answer: A Difficulty: 1 Easy Topic: Supply Chain Management Learning Objective: 09-01 Contrast the supply chain for physical goods with service supply relationships.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 27) The impact of the production element on physical goods supply chain management was ________ before and ________ after.

A) push; pull B) inflexible; flexible C) vertical; virtual D) multinational; global Answer: B Difficulty: 1 Easy Topic: Supply Chain Management Learning Objective: 09-01 Contrast the supply chain for physical goods with service supply relationships.

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28) Sources of value in service chain management include all but one of the following: ________.

A) bidirectional optimization B) management of productive capacity C) management of mobile workers D) management of perishability Answer: C Difficulty: 1 Easy Topic: Managing Service Relationships Learning Objective: 09-04 Discuss the managerial implications of bidirectional relationships.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 29) Strategies to improve productive capacity include all but one of the following: ________.

A) embellishment B) transfer C) replacement D) bidirectional optimization Answer: D Difficulty: 1 Easy Topic: Managing Service Relationships Learning Objective: 09-04 Discuss the managerial implications of bidirectional relationships.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 30) The impact of pricing on service chain management was ________ before and ________ after.

A) high; low B) passive; active C) static; dynamic D) fixed; variable Answer: D Difficulty: 2 Medium Topic: Managing Service Relationships Learning Objective: 09-04 Discuss the managerial implications of bidirectional relationships.

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31) All but one of the following is a reason for outsourcing services: ________.

A) avoids coordination expenses and delays B) allows the firm to focus on its core competence C) provides access to latest technology D) leverages benefits from supplier economies of scale Answer: A Difficulty: 1 Easy Topic: Outsourcing Services Learning Objective: 09-07 Discuss the managerial considerations to be addressed in outsourcing services.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 32) The two-way classification for the taxonomy for outsourcing business services contains six cells. Which one of the following is not a descriptive title for one of the cells?

A) Facility support.

B) Professional.

C) Employee.

D) Facilitator.

Answer: C Difficulty: 2 Medium Topic: Outsourcing Services Learning Objective: 09-06 Classify a business service based on the focus of the service and its importance to the buyer.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 33) When outsourcing facilitator services, which one of the following is not a consideration?

A) Knowledge of alternate vendors is important.

B) Involvement of end user in vendor identification.

C) Experience with particular industry is important.

D) Detailed specification written by user.

Answer: C Difficulty: 2 Medium Topic: Outsourcing Services Learning Objective: 09-07 Discuss the managerial considerations to be addressed in outsourcing services.

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34) Making knowledge available to customers at low cost is called ________.

A) embellishment B) transfer C) replacement D) co-production Answer: B Difficulty: 1 Easy Topic: Supply Chain Management Learning Objective: 09-01 Contrast the supply chain for physical goods with service supply relationships.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 35) The cell category titled "employee development" in the taxonomy for outsourcing business services includes all but one of the following services: ________.

A) food service B) training C) education D) medical care Answer: A Difficulty: 2 Medium Topic: Outsourcing Services Learning Objective: 09-06 Classify a business service based on the focus of the service and its importance to the buyer.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 36) Which of the following is not a source of uncertainty in managing a supply chain?

A) Supplier delivery performance.

B) Manufacturing reliability.

C) Customer demand.

D) Quality control.

Answer: D Difficulty: 1 Easy Topic: Supply Chain Management Learning Objective: 09-01 Contrast the supply chain for physical goods with service supply relationships.

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37) Removing the kitchen from Taco Bell outlets to a central location resulted in all of the following benefits, except ________.

A) reduction in waste B) consolidation of demand C) shorter customer wait times D) make-to-order customization Answer: D Difficulty: 2 Medium Topic: Supply Chain Management Learning Objective: 09-01 Contrast the supply chain for physical goods with service supply relationships.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 38) ________ is not part of the service chain concept.

A) Conversion B) Distribution C) Inventory management D) Knowledge management Answer: C Difficulty: 1 Easy Topic: Supply Chain Management Learning Objective: 09-01 Contrast the supply chain for physical goods with service supply relationships.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 39) Which of the following service providers likely would be involved in a single-level bidirectional service supply relationship?

A) Pharmacy.

B) Professor.

C) Garage.

D) Mortgage company.

Answer: B Difficulty: 2 Medium Topic: Managing Service Relationships Learning Objective: 09-04 Discuss the managerial implications of bidirectional relationships.

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40) All but one of the following is a managerial implication of bidirectional relationships: ________.

A) vendor selection based on reputation B) service supply relationships are hubs C) service capacity analogous to inventory D) quality variation of customer inputs Answer: A Difficulty: 2 Medium Topic: Managing Service Relationships Learning Objective: 09-04 Discuss the managerial implications of bidirectional relationships.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 41) The "employment support" category in the taxonomy for outsourcing business services falls under ________ importance of service and ________ focus of service.

A) high; people B) low; process C) high; process D) low; people Answer: D Difficulty: 2 Medium Topic: Outsourcing Services Learning Objective: 09-07 Discuss the managerial considerations to be addressed in outsourcing services.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 42) Travel booking is a service that falls in the ________ category of outsourcing business service.

A) facility support B) employee development C) facilitator D) professional Answer: C Difficulty: 2 Medium Topic: Outsourcing Services Learning Objective: 09-07 Discuss the managerial considerations to be addressed in outsourcing services.

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43) All but one of the following is a caution when considering outsourcing services: ________.

A) loss of direct control over quality B) jeopardize employee loyalty because of job-loss fears C) costs might increase D) in-house capability to perform service will atrophy Answer: C Difficulty: 2 Medium Topic: Outsourcing Services Learning Objective: 09-06 Classify a business service based on the focus of the service and its importance to the buyer.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 44) All but one of the following depicts the impact of service chain management: ________.

A) proactive demand management B) variable pricing C) real-time tracking D) pull system for flow of information Answer: D Difficulty: 1 Easy Topic: Supply Chain Management Learning Objective: 09-01 Contrast the supply chain for physical goods with service supply relationships.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 45) Which one of the following depicts the impact of goods supply chain management?

A) EDLP. B) Functional silos.

C) Reactive forecasting.

D) Push system.

Answer: A Difficulty: 1 Easy Topic: Supply Chain Management Learning Objective: 09-01 Contrast the supply chain for physical goods with service supply relationships.

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46) ________ is not a reason for outsourcing services.

A) Leveraging benefits from a supplier B) Allowing the firm to focus on core competence C) Providing access to latest technology D) None of the above Answer: D Difficulty: 2 Medium Topic: Outsourcing Services Learning Objective: 09-07 Discuss the managerial considerations to be addressed in outsourcing services.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 47) ________ is (are) the highest level of professional body of knowledge.

A) Advanced skills B) System understanding C) Self-motivated creativity D) Cognitive knowledge Answer: C Difficulty: 2 Medium Topic: Professional Service Firms Learning Objective: 09-05 Identify the three factors that drive profitability for a professional service firm.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 48) ________ costs are considered a transaction cost associated with outsourcing a service.

A) Search B) Bargaining C) Enforcement D) Training Answer: D Difficulty: 2 Medium Topic: Outsourcing Services Learning Objective: 09-07 Discuss the managerial considerations to be addressed in outsourcing services.

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49) A ________ project is not a project category for a professional firm.

A) routine B) brains C) grey hair D) procedure Answer: A Difficulty: 1 Easy Topic: Professional Service Firms Learning Objective: 09-05 Identify the three factors that drive profitability for a professional service firm.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 50) ________ is a characteristic of social media that is not useful to service firms.

A) Easy access B) Requiring specialized skills C) Immediacy D) Flexibility Answer: B Difficulty: 2 Medium Topic: Professional Service Firms Learning Objective: 09-05 Identify the three factors that drive profitability for a professional service firm.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 51) Social media "netiquettes" includes all but one of the following: ________.

A) disclosure B) discrimination C) honesty D) reciprocation Answer: C Difficulty: 2 Medium Topic: Supply Chain Management Learning Objective: 09-02 Describe the role played by an omnichannel supply chain in e-commerce.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation Service Management: Operations, Strategy, Information Technology, 9e (Bordoloi) Chapter 10 Globalization of Services 150 Copyright © 2019 McGraw-Hill

1) Network development is a consideration in the decision to plan a multinational service.

Answer: TRUE Difficulty: 2 Medium Topic: Global Service Strategies Learning Objective: 10-06 Identify and differentiate the five global service strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 2) When a firm offers multiple services at a single location, it is using a clustered service strategy.

Answer: TRUE Difficulty: 1 Easy Topic: Domestic Growth and Expansion Strategies Learning Objective: 10-01 Identify and differentiate the four domestic growth and expansion strategies.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 3) A franchise is a low risk investment, because the franchiser ensures success.

Answer: FALSE Difficulty: 2 Medium Topic: Franchising Learning Objective: 10-02 Discuss the nature of franchising from the points of view of the franchiser and the franchisee.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 4) Following its initial success, the Kinko copying service employed a diversified network expansion strategy.

Answer: FALSE Difficulty: 2 Medium Topic: Domestic Growth and Expansion Strategies Learning Objective: 10-01 Identify and differentiate the four domestic growth and expansion strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 5) The famous Mayo clinic in Minneapolis is an example of a firm that employs a clustered service strategy.

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Answer: TRUE Difficulty: 2 Medium Topic: Domestic Growth and Expansion Strategies Learning Objective: 10-01 Identify and differentiate the four domestic growth and expansion strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 6) The start-up phase for a franchise business is shorter than that for an independent business, because of the existence of a well-known brand.

Answer: TRUE Difficulty: 2 Medium Topic: Franchising Learning Objective: 10-02 Discuss the nature of franchising from the points of view of the franchiser and the franchisee.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 7) Consumers develop expectations for a low divergent set of products and services from franchises.

Answer: TRUE Difficulty: 2 Medium Topic: Franchising Learning Objective: 10-02 Discuss the nature of franchising from the points of view of the franchiser and the franchisee.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 8) Concentric diversification is a means of ensuring rapid market growth.

Answer: FALSE Difficulty: 2 Medium Topic: Domestic Growth and Expansion Strategies Learning Objective: 10-01 Identify and differentiate the four domestic growth and expansion strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 9) From the standpoint of the franchiser, decision-making autonomy is not a benefit of franchising.

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Answer: FALSE Difficulty: 2 Medium Topic: Franchising Learning Objective: 10-02 Discuss the nature of franchising from the points of view of the franchiser and the franchisee.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 10) A diversified network is not feasible with complex services.

Answer: FALSE Difficulty: 1 Easy Topic: Domestic Growth and Expansion Strategies Learning Objective: 10-01 Identify and differentiate the four domestic growth and expansion strategies.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 11) A diversified network is a situation where many services are offered at a single location.

Answer: FALSE Difficulty: 1 Easy Topic: Domestic Growth and Expansion Strategies Learning Objective: 10-01 Identify and differentiate the four domestic growth and expansion strategies.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 12) Franchising usually is used when developing a focused network.

Answer: TRUE Difficulty: 2 Medium Topic: Franchising Learning Objective: 10-02 Discuss the nature of franchising from the points of view of the franchiser and the franchisee.

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13) A family restaurant is an example of a focused service.

Answer: TRUE Difficulty: 2 Medium Topic: Domestic Growth and Expansion Strategies Learning Objective: 10-01 Identify and differentiate the four domestic growth and expansion strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 14) Communication is included in the five Cs of strategic planning.

Answer: FALSE Difficulty: 1 Easy Topic: Globalization of Services Learning Objective: 10-05 Discuss the five Cs that must be balanced in a borderless world.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 15) One of the advantages of franchising is that a firm can grow without the cost of developing key managers.

Answer: TRUE Difficulty: 2 Medium Topic: Franchising Learning Objective: 10-02 Discuss the nature of franchising from the points of view of the franchiser and the franchisee.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 16) The disadvantage of concentric diversification is that it does not allow for economies of scale.

Answer: FALSE Difficulty: 2 Medium Topic: Domestic Growth and Expansion Strategies Learning Objective: 10-01 Identify and differentiate the four domestic growth and expansion strategies.

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17) American Express is an example of a firm that has a multisite, multiservice expansion strategy.

Answer: TRUE Difficulty: 2 Medium Topic: Domestic Growth and Expansion Strategies Learning Objective: 10-01 Identify and differentiate the four domestic growth and expansion strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 18) Rapid growth with investment capital from franchisers is the main objective of franchising.

Answer: FALSE Difficulty: 2 Medium Topic: Franchising Learning Objective: 10-02 Discuss the nature of franchising from the points of view of the franchiser and the franchisee.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 19) Hedging is a strategy adopted by multinational corporations to neutralize their exposure to fluctuating currency exchange rates.

Answer: TRUE Difficulty: 2 Medium Topic: Globalization of Services Learning Objective: 10-05 Discuss the five Cs that must be balanced in a borderless world.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 20) A company that adopts the concept of importing customers usually is following a multiservice single-site strategy.

Answer: TRUE Difficulty: 2 Medium Topic: Global Service Strategies Learning Objective: 10-06 Identify and differentiate the five global service strategies.

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21) Which of the following is not one of the major considerations in planning multinational operations?

A) Cultural transferability.

B) Technological compatibility.

C) Network development.

D) Host government policy.

Answer: B Difficulty: 1 Easy Topic: Globalization of Services Learning Objective: 10-03 Differentiate between the three generic international strategies.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 22) Multinational expansion by a service firm is ________.

A) often driven by customer demand B) vital for growth C) not recommended for labor intensive operations D) primarily a defense strategy Answer: A Difficulty: 2 Medium Topic: Globalization of Services Learning Objective: 10-03 Differentiate between the three generic international strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 23) Which of the following is not a benefit to the franchisee of a franchise?

A) Brand name.

B) National advertising.

C) Economics of scale.

D) Autonomy.

Answer: D Difficulty: 2 Medium Topic: Franchising Learning Objective: 10-02 Discuss the nature of franchising from the points of view of the franchiser and the franchisee.

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24) Which of the following is not one of Kenichi Ohmae's five Cs of strategic planning in a borderless world economy?

A) Competitors.

B) Creativity.

C) Company.

D) Country.

Answer: B Difficulty: 2 Medium Topic: Globalization of Services Learning Objective: 10-05 Discuss the five Cs that must be balanced in a borderless world.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 25) The 'cookie-cutter' concept best describes which of the following expansion strategies?

A) Focused service.

B) Clustered service.

C) Focused network.

D) Diversified network.

Answer: C Difficulty: 2 Medium Topic: Domestic Growth and Expansion Strategies Learning Objective: 10-01 Identify and differentiate the four domestic growth and expansion strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 26) A relatively recent concept that refers to the movement of new products through existing distribution channels is called ________.

A) economies of scale B) economies of scope C) diversification D) micromarketing Answer: B Difficulty: 2 Medium Topic: Domestic Growth and Expansion Strategies Learning Objective: 10-01 Identify and differentiate the four domestic growth and expansion strategies.

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27) What is the principal reason that service trade receives low priority at WTO meetings?

A) Controlling service trade is difficult.

B) Governments are more concerned with trade in manufactured products.

C) Service trade is an insignificant factor in international trade.

D) Tariffs cannot be applied to services.

Answer: B Difficulty: 2 Medium Topic: Global Service Strategies Learning Objective: 10-06 Identify and differentiate the five global service strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 28) All of the following are benefits of a multisite type of expansion except ________.

A) ability to reach a mass market quickly B) reduced financial risk from local economic downturn C) preemption of competitors by capturing premium locations D) retention of control Answer: D Difficulty: 2 Medium Topic: Domestic Growth and Expansion Strategies Learning Objective: 10-01 Identify and differentiate the four domestic growth and expansion strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 29) American Express, which offers financial and travel services on a global basis, is an example of a ________ A) focused service B) focused network C) clustered service D) diversified network Answer: D Difficulty: 2 Medium Topic: Domestic Growth and Expansion Strategies Learning Objective: 10-01 Identify and differentiate the four domestic growth and expansion strategies.

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30) In what cell of the matrix below would you place the fast food chain McDonald's?

A) a B) b C) c D) d Answer: C Difficulty: 2 Medium Topic: Domestic Growth and Expansion Strategies Learning Objective: 10-01 Identify and differentiate the four domestic growth and expansion strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 31) Global service strategies include all but one of the following: ________.

A) exporting services B) following your customers C) beating-the-clock D) service offshoring Answer: A Difficulty: 1 Easy Topic: Global Service Strategies Learning Objective: 10-06 Identify and differentiate the five global service strategies.

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32) Mayo Clinic is a service firm that would fall under which of the following categories?

A) Single location and single service.

B) Single location and multiservice.

C) Multisite and single service.

D) Multisite and multiservice.

Answer: B Difficulty: 2 Medium Topic: Domestic Growth and Expansion Strategies Learning Objective: 10-01 Identify and differentiate the four domestic growth and expansion strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 33) USAA, which provides financial services to military officers by mail, telephone, and Internet, is an example of a ________.

A) focused service B) focused network C) clustered service D) diversified network Answer: C Difficulty: 2 Medium Topic: Domestic Growth and Expansion Strategies Learning Objective: 10-01 Identify and differentiate the four domestic growth and expansion strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 34) When franchising which one of the following is not a benefit to the franchiser?

A) Proven business.

B) Rapid expansion.

C) Right to dictate conditions.

D) Fees from the franchisee.

Answer: A Difficulty: 2 Medium Topic: Franchising Learning Objective: 10-02 Discuss the nature of franchising from the points of view of the franchiser and the franchisee.

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35) 'Hiring local personnel' addresses the labor intensity factor in the ________ global service strategy.

A) multicountry expansion B) following your customers C) service offshoring D) beating the clock Answer: B Difficulty: 2 Medium Topic: Global Service Strategies Learning Objective: 10-06 Identify and differentiate the five global service strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 36) A 5:00 p.m. pickup for FedEx was not workable in Spain owing to extended business hours.

This is an example of cultural adoption under which of the following global service strategies?

A) Beating the clock.

B) Service offshoring.

C) Following your customers.

D) Multicountry expansion.

Answer: D Difficulty: 2 Medium Topic: Global Service Strategies Learning Objective: 10-06 Identify and differentiate the five global service strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 37) A community hospital is an example of a ________.

A) diversified network B) focused network C) focused service D) clustered service Answer: D Difficulty: 2 Medium Topic: Domestic Growth and Expansion Strategies Learning Objective: 10-01 Identify and differentiate the four domestic growth and expansion strategies.

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38) 'Develop foreign customers' is a consideration for the global service strategy of 'following your customers'. The relevant globalization factor is ________.

A) cultural adoption B) customer contact C) complexity D) customization Answer: B Difficulty: 2 Medium Topic: Global Service Strategies Learning Objective: 10-06 Identify and differentiate the five global service strategies.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 39) When franchising, which of the following is not an issue for the franchisee?

A) Establishing a brand.

B) Franchise contract.

C) Degree of discretion D) Conflict resolution.

Answer: A Difficulty: 2 Medium Topic: Franchising Learning Objective: 10-02 Discuss the nature of franchising from the points of view of the franchiser and the franchisee.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 40) McDonald's includes beer on its menu for German franchises. This is an example of ________.

A) cultural transferability B) network development C) host government policy D) labor norms Answer: A Difficulty: 2 Medium Topic: Globalization of Services Learning Objective: 10-04 Discuss the three factors to be considered in planning transnational operations.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation Service Management: Operations, Strategy, Information Technology, 9e (Bordoloi) Chapter 11 Managing Capacity and Demand 162 Copyright © 2019 McGraw-Hill

1) The use of a ski-resort hotel for business conventions during the summer is an example of using the complementary service strategy.

Answer: FALSE Difficulty: 1 Easy Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 2) Overbooking is a strategy that can be used to smooth demand.

Answer: FALSE Difficulty: 2 Medium Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 3) The strategy of segmenting demand to reduce variation makes use of the fact that demand for a service seldom is derived from a homogeneous source.

Answer: TRUE Difficulty: 2 Medium Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

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4) Differential pricing is an attempt to make peak usage periods unattractive by imposing a penalty on the consumer for using the service during peak periods.

Answer: FALSE Difficulty: 1 Easy Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 5) Yield management is the process of allocating a fixed perishable resource to several market segments in the most profitable manner.

Answer: TRUE Difficulty: 1 Easy Topic: Yield Management Learning Objective: 11-05 Explain what yield management is, when its use is appropriate, and how it can be accomplished using the critical fractile criterion.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 6) The workshift scheduling problem is important in service organizations that face a cyclic demand for their services.

Answer: TRUE Difficulty: 2 Medium Topic: Strategies for Managing Capacity Learning Objective: 11-03 Use a linear programming model to prepare a weekly workshift schedule with two consecutive days off for each employee.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 7) Workshift scheduling attempts to deal with the service utilization problem by controlling the demand for the service and partitioning it so that utilization is uniform.

Answer: FALSE Difficulty: 2 Medium Topic: Strategies for Managing Capacity Learning Objective: 11-03 Use a linear programming model to prepare a weekly workshift schedule with two consecutive days off for each employee.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 164 Copyright © 2019 McGraw-Hill

8) A drawback to increased consumer participation is the fact that service quality is no longer completely under the control of the provider of the service.

Answer: TRUE Difficulty: 2 Medium Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 9) When peaks of activity are persistent and predictable such as meal times for restaurants, off-duty personnel can be placed on standby to supplement regular employees.

Answer: FALSE Difficulty: 2 Medium Topic: Strategies for Managing Capacity Learning Objective: 11-04 Prepare a work schedule for part-time employees.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 10) Cross-training employees as a strategy to increase flexibility is feasible only when there exist tasks, the demands for which peak at different times.

Answer: TRUE Difficulty: 2 Medium Topic: Strategies for Managing Capacity Learning Objective: 11-04 Prepare a work schedule for part-time employees.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 11) Time perishability of service capacity is a challenge for service managers because customers demand immediate service.

Answer: FALSE Difficulty: 2 Medium Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

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12) Yield management is a pricing and capacity allocation system that was developed by American Airlines.

Answer: TRUE Difficulty: 2 Medium Topic: Yield Management Learning Objective: 11-05 Explain what yield management is, when its use is appropriate, and how it can be accomplished using the critical fractile criterion.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 13) Yield management is a strategy that manages both demand and capacity.

Answer: TRUE Difficulty: 1 Easy Topic: Yield Management Learning Objective: 11-05 Explain what yield management is, when its use is appropriate, and how it can be accomplished using the critical fractile criterion.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 14) An example of segmenting demand is seen when movie theaters offer matinee prices before 6:00 p.m.

Answer: FALSE Difficulty: 2 Medium Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 15) Expected loss for an overbooking reservation strategy would be calculated by multiplying the loss for each no-show possibility and its probability of occurrence, and then adding the products.

Answer: TRUE Difficulty: 2 Medium Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

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16) The critical fractile is a cumulative probability of demand.

Answer: TRUE Difficulty: 1 Easy Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 17) Using part-time personnel at fast-food restaurants allows capacity to vary with demand.

Answer: TRUE Difficulty: 2 Medium Topic: Strategies for Managing Capacity Learning Objective: 11-04 Prepare a work schedule for part-time employees.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 18) A disadvantage of yield management is that it cannot be implemented in real time.

Answer: FALSE Difficulty: 1 Easy Topic: Yield Management Learning Objective: 11-05 Explain what yield management is, when its use is appropriate, and how it can be accomplished using the critical fractile criterion.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 19) Some restaurants use tables and chairs instead of booths to create more flexible capacity.

Answer: TRUE Difficulty: 1 Easy Topic: Strategies for Managing Capacity Learning Objective: 11-03 Use a linear programming model to prepare a weekly workshift schedule with two consecutive days off for each employee.

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20) SABRE is the name for American Airlines' yield management system.

Answer: FALSE Difficulty: 2 Medium Topic: Yield Management Learning Objective: 11-05 Explain what yield management is, when its use is appropriate, and how it can be accomplished using the critical fractile criterion.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 21) Service capacity is defined in terms of an achievable level of output per unit time.

Answer: TRUE Difficulty: 1 Easy Topic: Strategies for Managing Capacity Learning Objective: 11-03 Use a linear programming model to prepare a weekly workshift schedule with two consecutive days off for each employee.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 22) Level demand and chase capacity are the two generic strategies for capacity management.

Answer: FALSE Difficulty: 1 Easy Topic: Generic Strategies of Level Capacity or Chase Demand Learning Objective: 11-01 Describe the strategies for matching capacity and demand for services.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 23) The strategy of segmenting demand is feasible only when ________.

A) demand is not from a homogeneous source B) demand is cyclic and predictable C) arrivals for service are random D) making appointments is impossible Answer: A Difficulty: 1 Easy Topic: Yield Management Learning Objective: 11-05 Explain what yield management is, when its use is appropriate, and how it can be accomplished using the critical fractile criterion.

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24) The purpose of differential pricing is to ________.

A) make peak period usage unattractive B) make off-peak usage attractive C) charge customers according to their ability to pay D) adjust capacity to demand Answer: B Difficulty: 1 Easy Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 25) A good overbooking strategy should ________.

A) minimize the expected opportunity cost of idle service capacity B) balance the expected opportunity cost of idle service capacity and expected cost of turning away customers who have reservations C) minimize the expected cost of turning away reservations D) none of the above; services should try to avoid overbooking Answer: B Difficulty: 2 Medium Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 26) Bars that offer happy hours in the afternoon are using the strategy of ________.

A) creating adjustable capacity B) developing complementary services C) increasing customer participation D) promoting off-peak demand Answer: D Difficulty: 1 Easy Topic: Generic Strategies of Level Capacity or Chase Demand Learning Objective: 11-01 Describe the strategies for matching capacity and demand for services.

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27) Which of the following is not a strategy for managing capacity?

A) Developing complementary services.

B) Using part-time employees.

C) Forecasting demand.

D) Scheduling shifts.

Answer: A Difficulty: 1 Easy Topic: Generic Strategies of Level Capacity or Chase Demand Learning Objective: 11-01 Describe the strategies for matching capacity and demand for services.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 28) Which of the following strategies is inappropriate for managing capacity and demand?

A) Smooth customer demand by offering price incentives.

B) Scheduling staff to meet variations in forecasted customer demand.

C) Decrease customer participation in the service process.

D) Promoting off-peak use of facilities.

Answer: C Difficulty: 2 Medium Topic: Generic Strategies of Level Capacity or Chase Demand Learning Objective: 11-01 Describe the strategies for matching capacity and demand for services.

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29) A cruise ship has available a certain number of rooms in each of 10 categories of appointments ranging from a two-bunk inside cabin to a suite with an outside patio and indoor sitting area. If a passenger requests a sailing date in which the desired cabin is sold out, which of the following actions would be considered the least viable alternative for the cruise line?

A) Offer an upgraded cabin at a reduced price.

B) Attempt to steer the passenger to an available date.

C) Overbook the cabin.

D) Offer a downgraded cabin with special privileges such as a $100 certificate for use in the casino.

Answer: C Difficulty: 2 Medium Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 30) Which of the following is not a characteristic of yield management?

A) Capacity is relatively fixed.

B) There is one homogeneous customer class.

C) The service is considered a perishable inventory.

D) Demand fluctuates yet is somewhat predictable.

Answer: B Difficulty: 1 Easy Topic: Yield Management Learning Objective: 11-05 Explain what yield management is, when its use is appropriate, and how it can be accomplished using the critical fractile criterion.

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31) Which of the following four steps in 'daily workshift scheduling' is out of order?

A) Forecast demand.

B) Convert to operator requirements.

C) Assign operators to shifts.

D) Schedule shifts.

Answer: C Difficulty: 2 Medium Topic: Strategies for Managing Capacity Learning Objective: 11-03 Use a linear programming model to prepare a weekly workshift schedule with two consecutive days off for each employee.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 32) Which of the following is not a strategy to manage demand?

A) Cross-training employees.

B) Offering price incentives.

C) Developing reservation systems.

D) Partitioning demand.

Answer: A Difficulty: 2 Medium Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 33) Faced with variable demand and a perishable capacity, a service manager can smooth demand by ________.

A) using part-time help during peak hours B) scheduling workshifts to vary workforce needs according to demand C) increasing the customer self-service content of the service D) using reservations and appointments Answer: D Difficulty: 2 Medium Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

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34) A health club's offering a reduced rate membership for students to workout before 4:00 p.m. on weekdays is ________.

A) promoting off-peak demand B) partitioning demand C) using yield management D) offering price incentives Answer: A Difficulty: 2 Medium Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 35) Several approaches to demand management exist, but only ________ seeks to maximize revenue.

A) promoting off-peak demand B) reservation systems C) offering price incentives D) yield management Answer: D Difficulty: 2 Medium Topic: Yield Management Learning Objective: 11-05 Explain what yield management is, when its use is appropriate, and how it can be accomplished using the critical fractile criterion.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 36) Which of the following is not a characteristic of firms using yield management?

A) Ability to segment their market.

B) Perishable inventory.

C) Variable capacity.

D) Product sold in advance.

Answer: C Difficulty: 2 Medium Topic: Yield Management Learning Objective: 11-05 Explain what yield management is, when its use is appropriate, and how it can be accomplished using the critical fractile criterion.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 173 Copyright © 2019 McGraw-Hill

37) Which of the following is not an example of the differential pricing policy?

A) Weekend and night rates for long-distance telephone calls.

B) Difference in hospital fees for walk-in and scheduled services.

C) Peak-load pricing by utility companies.

D) None of the above.

Answer: B Difficulty: 2 Medium Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 38) In using the critical fractile criterion P(d < x) = Cu/(Cu + Co) for overbooking, the 'd' refers to the ________.

A) cost of overestimating demand B) cost of underestimating demand C) number of rooms overbooked D) number of no-shows based on past experience Answer: D Difficulty: 2 Medium Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 39) For a chase demand strategy, which of the following does not have a high trade-off?

A) Employee utilization.

B) Labor-skill level.

C) Labor turnover.

D) Supervision required.

Answer: B Difficulty: 2 Medium Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

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40) A restaurant that features special lunchtime combo meals is providing all of the following benefits, except: ________.

A) promotes off-peak demand B) increases customer satisfaction C) decreases service times D) segment demand Answer: A Difficulty: 2 Medium Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 41) Which of the following is not an example of a yield management application?

A) RyerFirst.

B) SABRE. C) HIRO. D) Restaurant Catering Software.

Answer: B Difficulty: 1 Easy Topic: Yield Management Learning Objective: 11-05 Explain what yield management is, when its use is appropriate, and how it can be accomplished using the critical fractile criterion.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 42) ________ variability is not one of the five sources of customer-induced variability.

A) Arrival B) Capability C) Effort D) Demand Answer: D Difficulty: 1 Easy Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

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43) ________ is not a strategy for reduction of customer-induced variability.

A) Adapt to customer skill levels B) Require reservations C) Limit service breadth D) Target customers based on capability Answer: A Difficulty: 2 Medium Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 44) ________ is not a strategy for accommodating of customer-induced variability.

A) Provide generous staffing B) Cross-train employees C) Reward increased effort D) Do work for customers Answer: C Difficulty: 2 Medium Topic: Strategies for Managing Demand Learning Objective: 11-02 Determine the overbooking strategy for a service that minimizes expected loss.

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45) A medical clinic has two doctors and each can treat 25 patients a day. The doctors see walk-in patients whose arrival times cannot be controlled, and also patients who have made appointments.

Knowing the expected number of walk-ins per day, appointments are scheduled to utilize the doctors fully. The following table gives the expected number of walk-ins for a particular week: Day: Expected Walk-ins:

Mon. 45

Tue. 35

Wed. 40

Th. 45

Fri. 40

What is the total number of appointments that can be scheduled during this week?

A) 30 B) 35 C) 40 D) 45 Answer: D Difficulty: 3 Hard Topic: Strategies for Managing Capacity Learning Objective: 11-03 Use a linear programming model to prepare a weekly workshift schedule with two consecutive days off for each employee.

Bloom's: Apply AACSB: Communication Accessibility: Keyboard Navigation 46) ________ is not a characteristic appropriate for a yield management strategy.

A) Relatively fixed capacity B) Steady demand C) Ability to segment markets D) Products sold in advance Answer: B Difficulty: 2 Medium Topic: Yield Management Learning Objective: 11-05 Explain what yield management is, when its use is appropriate, and how it can be accomplished using the critical fractile criterion.

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47) When yield management is implemented, which one of the following does not result?

A) Consumer surplus increases.

B) Multiple prices are offered.

C) Capacity is more fully utilized.

D) Market for the service is segmented.

Answer: A Difficulty: 2 Medium Topic: Yield Management Learning Objective: 11-05 Explain what yield management is, when its use is appropriate, and how it can be accomplished using the critical fractile criterion.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation Service Management: Operations, Strategy, Information Technology, 9e (Bordoloi) Chapter 12 Managing Waiting Lines 1) Waiting is often seen as psychological punishment because the consumer is aware of the opportunity cost of waiting time and the resulting loss of earnings.

Answer: FALSE Difficulty: 2 Medium Topic: The Economics of Waiting Learning Objective: 12-01 Describe the economics of waiting lines using examples.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 2) The net result of waiting, apart from the boredom and frustration experienced by the consumer and the associated loss of goodwill, is the reduced utilization of capacity of the service.

Answer: FALSE Difficulty: 2 Medium Topic: The Economics of Waiting Learning Objective: 12-01 Describe the economics of waiting lines using examples.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 3) The time a consumer will spend waiting is directly related to the amount of money he is paying for the service. The less the service costs him, the longer he is willing to wait.

Answer: TRUE Difficulty: 2 Medium Topic: The Economics of Waiting Learning Objective: 12-01 Describe the economics of waiting lines using examples.

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Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 4) In analytical queuing models, the calling population mainly determines whether the queue will be finite or infinite.

Answer: FALSE Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 5) The term interarrival time refers to the time elapsed between initiation of service and its completion.

Answer: FALSE Difficulty: 1 Easy Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 6) If the number of arrivals in an interval of time follows an exponential distribution, the interarrival time is known to follow a Poisson distribution.

Answer: FALSE Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-06 Describe the relationship between a negative exponential distribution of time between arrivals and a Poisson distribution of arrival rates.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 7) The term queue configuration refers to the number of queues, their locations, their spatial requirements, and their effect on consumer behavior.

Answer: TRUE Difficulty: 1 Easy Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

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Accessibility: Keyboard Navigation 8) The main advantage of the multiple queue configuration is that it guarantees fairness to all by ensuring that a first-come-first-served rule applies to all arrivals.

Answer: FALSE Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

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9) Concealment of the waiting line or at least part of it is a very effective deterrent against reneging.

Answer: FALSE Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 10) An arrangement of servers in parallel is an insurance against breakdowns of the service in case of absenteeism or equipment failure. It, thus, adds to flexibility at the expense of capacity utilization.

Answer: TRUE Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 11) For a single channel queuing system with finite queue, the value of λ may exceed μ because some potential customers are forced to balk.

Answer: TRUE Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-06 Describe the relationship between a negative exponential distribution of time between arrivals and a Poisson distribution of arrival rates.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 12) For a multiple channel queuing system with multiple queues, allowing customers to jockey will enhance service utilization.

Answer: TRUE Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

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13) Balking is the term used to describe the phenomenon of customers leaving a queue that they have joined before service is rendered.

Answer: FALSE Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 14) Demand smoothing is accomplished by the differential pricing policy of telephone companies.

Answer: TRUE Difficulty: 2 Medium Topic: The Economics of Waiting Learning Objective: 12-01 Describe the economics of waiting lines using examples.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 15) Multiple queue configuration may deter balking behavior.

Answer: TRUE Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 16) The calling population is termed finite when ________.

A) there is restriction on the maximum number in the queue B) only a limited number of people may use the facility in any given period C) the interarrival time is not very large D) there is no queue discipline specified Answer: B Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

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17) For the exponential distribution we have ________.

A) the mean equal to its standard deviation B) the variance equal to the standard deviation C) no specific relationship between mean and variance D) the mean equal to the reciprocal of the variance Answer: A Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-06 Describe the relationship between a negative exponential distribution of time between arrivals and a Poisson distribution of arrival rates.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 18) When the number of arrivals per unit time follows a Poisson distribution, the most important implication is that ________.

A) the arrivals are dependent and non-random B) the time between arrivals is exponentially distributed C) eventually the queue length will stabilize D) the rate of completion of service is also Poisson distributed Answer: B Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-06 Describe the relationship between a negative exponential distribution of time between arrivals and a Poisson distribution of arrival rates.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 19) Which one of the following is not true of multiple queue configurations?

A) Jockeying is eliminated.

B) Division of labor is possible.

C) Service provided can be differentiated.

D) The FCFS rule is not always followed.

Answer: A Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

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20) The FCFS rule is most often used because ________.

A) analytical models depend upon its use B) it represents social justice C) it is viewed as fair D) most other rules are not as easily applied Answer: A Difficulty: 2 Medium Topic: Strategies for Managing Customer Waiting Learning Objective: 12-04 Apply strategies to address the four attributes of waiting.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 21) According to Maister, which of the following statements is not true for waits?

A) Unoccupied time feels longer than occupied time.

B) Anxiety makes waits feel longer.

C) In-process waits feel longer than preprocess waits.

D) Unfair waits feel longer than fair waits.

Answer: C Difficulty: 2 Medium Topic: Strategies for Managing Customer Waiting Learning Objective: 12-03 Describe the psychology behind Maister's two laws of service.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 22) Which of the following is not an effective way to manage the psychology of waiting?

A) Prominently display time with a large analog clock.

B) Inform customers when long waits are anticipated.

C) Use diversions to occupy customer waiting times.

D) Employ a take-a-number system to ensure fairness.

Answer: A Difficulty: 2 Medium Topic: Strategies for Managing Customer Waiting Learning Objective: 12-03 Describe the psychology behind Maister's two laws of service.

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23) The following are all advantages of the single queue system, except ________.

A) the arrangement guarantees fairness by ensuring that the FCFS rule applies B) the anxiety of "Am I in the fastest line?" is eliminated C) the problem of line cutting is reduced D) the customer has the option of selecting a particular server of preference Answer: D Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 24) According to Maister's Second Law of service, ________.

A) perceptions minus expectations equal the level of customer satisfaction B) first impressions can influence the remainder of the service experience C) quality in the service industry is essentially free D) a waiting customer cannot be satisfied Answer: B Difficulty: 1 Easy Topic: Strategies for Managing Customer Waiting Learning Objective: 12-03 Describe the psychology behind Maister's two laws of service.

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25) A single-server food cart competes with several nearby food carts and experiences arrival of customers during an 8-hour period as shown below:

Customers would probably exhibit a high incidence of ________ during the 11 a.m.-1 p.m. and 4 p.m.-5 p.m. periods; to avoid this opportunity cost, the cart owner should ________.

A) balking; offer "2 for 1" specials during slow periods B) reneging; expand the menu C) jockeying; offer price discounts between 2 p.m. and 4 p.m.

D) balking; add another server during peak periods Answer: D Difficulty: 3 Hard Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

Bloom's: Apply AACSB: Communication Accessibility: Keyboard Navigation 26) Which of the following queue configurations permits opportunities for division of labor and service differentiation?

A) Multiple queue.

B) Single queue.

C) Take a number.

D) Self-serve.

Answer: A Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

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27) One advantage of the multiple queue compared to a single queue is that multiple queues ________.

A) minimize wait times B) reduce the average service time C) lead to a perceived shorter service time D) lead to a perceived shorter wait time Answer: D Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 28) After selecting a line in a multiple queue system, a customer is ________ when she or he switches to a different line that is perceived to be moving faster.

A) jockeying B) balking C) reneging D) weaving Answer: A Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 29) Which of the following techniques does not lessen the boredom of waiting customers?

A) Placement of mirrors in elevators.

B) Telling customers how long the wait is at different points in the queue.

C) Installing a television tuned to CNN. D) Displaying time with a large analog clock.

Answer: D Difficulty: 2 Medium Topic: Strategies for Managing Customer Waiting Learning Objective: 12-04 Apply strategies to address the four attributes of waiting.

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30) Which of the following is not an essential feature of a queuing system?

A) Calling population.

B) Queue configuration.

C) Service process.

D) Customer.

Answer: D Difficulty: 1 Easy Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 31) Empirical studies have suggested that the distribution of inter-arrival times is ________.

A) Poisson B) exponential C) uniform D) FCFS Answer: B Difficulty: 1 Easy Topic: Essential Features of Queuing Systems Learning Objective: 12-06 Describe the relationship between a negative exponential distribution of time between arrivals and a Poisson distribution of arrival rates.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 32) Spatial distribution of demand is important to consider in which of the following services?

A) Restaurants.

B) Banking.

C) Emergency ambulance services.

D) Motels.

Answer: C Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

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33) Which of the following is not an advantage of a multiple queue configuration?

A) FCFS rule is guaranteed.

B) Differentiation of service can be provided.

C) Division of labor is possible.

D) Customers have choice of server.

Answer: A Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 34) Supermarkets can be described by which of the following facility arrangement?

A) Self-serve followed by service in parallel.

B) Many service centers in parallel and series.

C) Servers in parallel.

D) Self-service.

Answer: A Difficulty: 2 Medium Topic: Essential Features of Queuing Systems Learning Objective: 12-05 Describe the essential features of a queuing system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation Service Management: Operations, Strategy, Information Technology, 9e (Bordoloi) Chapter 13 Capacity Planning and Queuing Models 1) Capacity planning decisions deal implicitly with decisions on the cost of making consumers wait and the extent to which these costs can be borne.

Answer: TRUE Difficulty: 1 Easy Topic: Capacity Planning Learning Objective: 13-01 Discuss the strategic role of capacity planning.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 2) A system is said to be in a transient state when the values of its governing parameters in this state are expected to change uncontrollably with time.

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Topic: Analytical Queuing Models Learning Objective: 13-04 Describe the relationships between queuing system characteristics.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 3) For a system to reach steady state, the arrival rate must always be greater than the service rate, i.e., the traffic intensity ρ must always be greater than unity.

Answer: FALSE Difficulty: 2 Medium Topic: Analytical Queuing Models Learning Objective: 13-04 Describe the relationships between queuing system characteristics.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 4) Analytical queuing models are classified mainly on the basis of the calling population characteristics and the queue discipline.

Answer: FALSE Difficulty: 2 Medium Topic: Analytical Queuing Models Learning Objective: 13-02 Describe a queuing model using the A/B/C notation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 5) A queue is said to be finite if there is an upper limit on the number of consumers who are allowed to be in it. Consumers who come after the queue is full, either balk or are refused entrance.

Answer: TRUE Difficulty: 2 Medium Topic: Analytical Queuing Models Learning Objective: 13-04 Describe the relationships between queuing system characteristics.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 6) Reducing the variability either in service time or arrival time can reduce most of the waiting involved for the consumers.

Answer: FALSE Difficulty: 2 Medium Topic: Analytical Queuing Models Learning Objective: 13-04 Describe the relationships between queuing system characteristics.

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AACSB: Communication Accessibility: Keyboard Navigation 7) Pooling of services is an approach toward achieving economies of scale in services through better utilization of services.

Answer: TRUE Difficulty: 2 Medium Topic: Capacity Planning Criteria Learning Objective: 13-05 Use queuing models and various decision criteria for capacity planning.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 8) In analytical terms, the modern self-serve supermarket would be approximated best by the M /M /c model, where c is the number of servers.

Answer: FALSE Difficulty: 2 Medium Topic: Analytical Queuing Models Learning Objective: 13-03 Use queuing models to calculate system performance measures.

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9) The main advantage of analytical models is that they can be used almost anywhere regardless of the underlying assumptions. They still will provide good results.

Answer: FALSE Difficulty: 2 Medium Topic: Capacity Planning Criteria Learning Objective: 13-05 Use queuing models and various decision criteria for capacity planning.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 10) Planning for service capacity involves prediction of consumer waiting associated with different levels of capacity.

Answer: TRUE Difficulty: 2 Medium Topic: Capacity Planning Criteria Learning Objective: 13-05 Use queuing models and various decision criteria for capacity planning.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 11) A Poisson process describing the distribution of departures from a busy server with an average rate of 15 per hour is equivalent to the negative exponential distribution of service times with a mean of 5 minutes.

Answer: FALSE Difficulty: 3 Hard Topic: Analytical Queuing Models Learning Objective: 13-03 Use queuing models to calculate system performance measures.

Bloom's: Analyze AACSB: Communication Accessibility: Keyboard Navigation 12) For a standard service system to operate over the long run, the servers must be idle part of the time.

Answer: TRUE Difficulty: 2 Medium Topic: Capacity Planning Criteria Learning Objective: 13-05 Use queuing models and various decision criteria for capacity planning.

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13) The graph depicting the economic trade-off in capacity planning has cost on the x-axis and the capacity to serve on the y-axis.

Answer: FALSE Difficulty: 2 Medium Topic: Capacity Planning Criteria Learning Objective: 13-05 Use queuing models and various decision criteria for capacity planning.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 14) When Xerox Corporation introduced the Model 9200 Duplicating System, the level of service dipped because technical representatives were assigned to territories.

Answer: TRUE Difficulty: 2 Medium Topic: Capacity Planning Learning Objective: 13-01 Discuss the strategic role of capacity planning.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 15) The average time a customer should expect to wait can be calculated using just the mean arrival rate and the mean service rate.

Answer: TRUE Difficulty: 1 Easy Topic: Capacity Planning Learning Objective: 13-01 Discuss the strategic role of capacity planning.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 16) Capacity usually is measured in terms of outputs (e.g., guest nights) rather than inputs (e.g., number of hotel rooms) in service firms.

Answer: FALSE Difficulty: 1 Easy Topic: Capacity Planning Learning Objective: 13-01 Discuss the strategic role of capacity planning.

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17) Excess capacity is required in a service system because variability in customer arrivals and service times creates idle capacity.

Answer: TRUE Difficulty: 1 Easy Topic: Capacity Planning Learning Objective: 13-01 Discuss the strategic role of capacity planning.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 18) In the A/B/C classification of analytical queuing models, the term G refers to a general distribution with mean and variance.

Answer: TRUE Difficulty: 1 Easy Topic: Analytical Queuing Models Learning Objective: 13-02 Describe a queuing model using the A/B/C notation.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 19) A system is said to be in statistical equilibrium when the number in queue assumes a distribution that is independent of the starting condition.

Answer: TRUE Difficulty: 2 Medium Topic: Analytical Queuing Models Learning Objective: 13-02 Describe a queuing model using the A/B/C notation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 20) In the M/M/1 model the calling population is finite.

Answer: FALSE Difficulty: 2 Medium Topic: Analytical Queuing Models Learning Objective: 13-02 Describe a queuing model using the A/B/C notation.

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21) Simulation can be viewed as a laboratory for experimenting with service systems.

Answer: TRUE Difficulty: 2 Medium Topic: Analytical Queuing Models; System Simulation Learning Objective: 13-03 Use queuing models to calculate system performance measures.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 22) Verification refers to determining whether or not the structure of a simulation model is consistent with the real system.

Answer: FALSE Difficulty: 2 Medium Topic: Analytical Queuing Models; System Simulation Learning Objective: 13-03 Use queuing models to calculate system performance measures.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 23) A shortcoming of simulation is the use of pseudo-random numbers.

Answer: FALSE Difficulty: 2 Medium Topic: Analytical Queuing Models; System Simulation Learning Objective: 13-03 Use queuing models to calculate system performance measures.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 24) Simulation allows time compression, doing in seconds what would otherwise require years of actual observation.

Answer: TRUE Difficulty: 2 Medium Topic: Analytical Queuing Models; System Simulation Learning Objective: 13-03 Use queuing models to calculate system performance measures.

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25) Pseudo-random numbers do not permit an exact replication of experimental conditions.

Answer: FALSE Difficulty: 2 Medium Topic: Analytical Queuing Models; System Simulation Learning Objective: 13-03 Use queuing models to calculate system performance measures.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 26) A queuing system is said to be in a transient condition when ________.

A) its parameters change with time B) its parameters remain constant C) it is still under the influence of the initial state D) it grows beyond bound Answer: C Difficulty: 1 Easy Topic: Analytical Queuing Models Learning Objective: 13-02 Describe a queuing model using the A/B/C notation.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 27) The A/B/C notation classifies queuing systems on the basis of ________.

A) arrival rates and queue discipline B) queue discipline alone C) arrival rates and service rates D) arrival rates, service rates, and number of servers Answer: D Difficulty: 1 Easy Topic: Analytical Queuing Models Learning Objective: 13-02 Describe a queuing model using the A/B/C notation.

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28) For the system to operate satisfactorily over the long run, ________.

A) the capacity to serve must be greater than the average demand B) the expected waiting time for each customer must not exceed average service time C) the arrival rate must be less than the service rate D) the number of servers must equal the average number of arrivals per unit time Answer: A Difficulty: 2 Medium Topic: Analytical Queuing Models Learning Objective: 13-04 Describe the relationships between queuing system characteristics.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 29) Pooling of servers results in reduced waiting time because ________.

A) the mean service time for the pool as a whole is now constant B) servers are utilized better C) multiple queues are replaced by a single queue D) Both the mean service time is now constant and servers are utilized better.

Answer: B Difficulty: 2 Medium Topic: Analytical Queuing Models Learning Objective: 13-04 Describe the relationships between queuing system characteristics.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 30) In general, for infinite queues, the expected number of people in the system is equal to ________.

A) the average arrival rate minus the average service rate B) the expected number in the queue plus the expected number in service C) the expected arrival rate times the expected waiting time D) A and B Answer: B Difficulty: 2 Medium Topic: Analytical Queuing Models Learning Objective: 13-04 Describe the relationships between queuing system characteristics.

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31) Little's Law states that a relationship exists between ________.

A) line length and waiting time B) multiple and single queues C) waiting in queue and waiting in system D) exponential time between arrivals and Poisson arrival rate Answer: A Difficulty: 1 Easy Topic: Analytical Queuing Models Learning Objective: 13-04 Describe the relationships between queuing system characteristics.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 32) A queuing system is described by all of the following, except ________.

A) balking behavior B) calling population C) arrival process D) queue configuration Answer: A Difficulty: 1 Easy Topic: Analytical Queuing Models Learning Objective: 13-04 Describe the relationships between queuing system characteristics.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 33) In the long run, if service capacity is inadequate for the arrival rate, which one of the following will likely occur?

A) Servers will slow down.

B) Customers will demand less.

C) Reneging will occur.

D) Prices will be increased.

Answer: C Difficulty: 2 Medium Topic: Analytical Queuing Models Learning Objective: 13-03 Use queuing models to calculate system performance measures.

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34) Service capacity decisions have all of the following strategic characteristics, except ________.

A) the decision to invest in capacity will attract competitors B) financial investment in capacity must be balanced against the costs of lost sales C) inadequate short-term capacity needs can generate customers for the competition D) hostile customers can result from inadequate capacity following a marketing campaign Answer: A Difficulty: 2 Medium Topic: Analytical Queuing Models Learning Objective: 13-04 Describe the relationships between queuing system characteristics.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 35) The ________ queuing model is often used in situations when little or no waiting occurs.

A) M /M /1 B) M /M /c C) M /G /1 D) M /G /∞ Answer: D Difficulty: 1 Easy Topic: Analytical Queuing Models Learning Objective: 13-02 Describe a queuing model using the A/B/C notation.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 36) The cost of service capacity is determined by ________.

A) the number of customers waiting B) the total number of customers C) waiting time D) the number of servers on duty Answer: D Difficulty: 1 Easy Topic: Capacity Planning Learning Objective: 13-01 Discuss the strategic role of capacity planning.

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37) Queuing models can help explain all of the following, except ________.

A) predicting results of adding servers to a multiple server system B) effect of reducing service time variation on waiting time C) determining the size of a parking lot D) mean arrival rate Answer: D Difficulty: 2 Medium Topic: Capacity Planning Criteria Learning Objective: 13-05 Use queuing models and various decision criteria for capacity planning.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 38) Which of the following does not need to be analyzed for capacity requirements when setting up a "Cookies and Ice Cream" shop?

A) Technology requirements.

B) Facility requirements.

C) Equipment requirements.

D) Labor requirements.

Answer: A Difficulty: 2 Medium Topic: Capacity Planning Learning Objective: 13-01 Discuss the strategic role of capacity planning.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 39) In the A/B/C analytical queuing model classification, M is used to denote ________.

A) exponential inter-arrival time distribution B) deterministic inter-arrival time distribution C) general distribution with mean and variance D) Erland distribution Answer: A Difficulty: 1 Easy Topic: Analytical Queuing Models Learning Objective: 13-02 Describe a queuing model using the A/B/C notation.

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40) Which of the following is not part of the queuing system features?

A) Calling population.

B) Queue configuration.

C) Queue discipline.

D) Departure process.

Answer: D Difficulty: 1 Easy Topic: Analytical Queuing Models Learning Objective: 13-04 Describe the relationships between queuing system characteristics.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 41) The symbol ρ is used to denote which of the following parameters?

A) Number of customers in the system.

B) Number of servers.

C) Traffic intensity.

D) Finite size of queue.

Answer: C Difficulty: 1 Easy Topic: Analytical Queuing Models Learning Objective: 13-03 Use queuing models to calculate system performance measures.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 42) A parking lot is a special variation of the ________ queuing model.

A) infinite queue M /G /∞ B) finite-queue M /M /c C) infinite queue M /M /c D) finite-queue M /G /1 Answer: B Difficulty: 2 Medium Topic: Analytical Queuing Models Learning Objective: 13-04 Describe the relationships between queuing system characteristics.

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43) Which of the following is not an advantage of using one large computer system to serve an entire university community?

A) Short turnaround time.

B) Large memory.

C) Economics of scale in services.

D) Short wait in queue.

Answer: D Difficulty: 2 Medium Topic: Analytical Queuing Models Learning Objective: 13-04 Describe the relationships between queuing system characteristics.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 44) Which of the following is not a criterion for capacity planning?

A) Average customer waiting time.

B) Probability of excessive waiting.

C) The rate of departure.

D) Probability of sales lost because of inadequate waiting area.

Answer: C Difficulty: 2 Medium Topic: Capacity Planning Criteria Learning Objective: 13-05 Use queuing models and various decision criteria for capacity planning.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 45) In the equation Ls = Lq + ρ, ρ refers to ________.

A) number of servers B) traffic density C) mean number of customers being served D) number of customer that have been served Answer: C Difficulty: 2 Medium Topic: Analytical Queuing Models Learning Objective: 13-03 Use queuing models to calculate system performance measures.

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46) Which of the following is not true of pseudo-random numbers?

A) They exhibit the characteristics of true random numbers.

B) They are generated using a mathematical function.

C) They are stored in a computer file.

D) An identical sequence can be replicated with the same seed value.

Answer: C Difficulty: 2 Medium Topic: Analytical Queuing Models; System Simulation Learning Objective: 13-03 Use queuing models to calculate system performance measures.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation Service Management: Operations, Strategy, Information Technology, 9e (Bordoloi) Chapter 14 Forecasting Demand for Services 1) Because of the nontangible nature of service, forecasting does not play as important role in service operations as in manufacturing operations.

Answer: FALSE Difficulty: 2 Medium Topic: The Choice of Forecasting Model Learning Objective: 14-01 Recommend the appropriate forecasting model for a given situation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 2) The trade-off to be made with respect to accuracy is between the costs of inaccurate forecasts and the costs of increasing the accuracy of forecasts.

Answer: TRUE Difficulty: 2 Medium Topic: The Choice of Forecasting Model Learning Objective: 14-01 Recommend the appropriate forecasting model for a given situation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 3) Both measures of forecast accuracy, MAD and MSE, give equal weight to all forecasting errors.

Answer: FALSE Difficulty: 1 Easy Topic: Time Services Models Learning Objective: 14-03 Describe the features of exponential smoothing that make it an attractive model for time series forecasting.

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4) Most forecasting models assume that the underlying pattern of behavior of their data will remain the same. The only component of error is attributable to random fluctuations that are not under the control of anyone.

Answer: TRUE Difficulty: 2 Medium Topic: Casual Models; Time Services Models Learning Objective: 14-03 Describe the features of exponential smoothing that make it an attractive model for time series forecasting.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 5) The main advantage that simple moving-average models have over exponentially-smoothed models is that they can be made to give any desired weight to specific periods in the past.

Answer: FALSE Difficulty: 2 Medium Topic: Time Services Models Learning Objective: 14-03 Describe the features of exponential smoothing that make it an attractive model for time series forecasting.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 6) One reason exponential smoothing is so popular is the ease with which it can be made to accommodate trend and seasonality in its forecasts.

Answer: TRUE Difficulty: 2 Medium Topic: Time Services Models Learning Objective: 14-03 Describe the features of exponential smoothing that make it an attractive model for time series forecasting.

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7) The cost of formulating, developing, and testing regression models, plus the expertise required to interpret results, often dictates the use of this model only for medium-term or long-term forecasting.

Answer: TRUE Difficulty: 2 Medium Topic: Time Services Models Learning Objective: 14-03 Describe the features of exponential smoothing that make it an attractive model for time series forecasting.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 8) In the Delphi method, the opinions of experts are collected, then the analyst resolves differences of opinion to arrive at a consensus.

Answer: FALSE Difficulty: 2 Medium Topic: Subjective Models Learning Objective: 14-02 Conduct a Delphi forecasting exercise.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 9) The greatest advantage of subjective techniques like Delphi method and cross-impact analysis, is that the methods are fairly standardized and do not require much expertise in actual use.

Answer: FALSE Difficulty: 2 Medium Topic: Subjective Models Learning Objective: 14-02 Conduct a Delphi forecasting exercise.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 10) Historical analogy involves comparative analysis of the introduction and growth patterns of new items with similar previously introduced items.

Answer: TRUE Difficulty: 2 Medium Topic: Subjective Models Learning Objective: 14-02 Conduct a Delphi forecasting exercise.

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11) Fast-food restaurants use a causal model to forecast daily demand for menu items.

Answer: FALSE Difficulty: 2 Medium Topic: Casual Models; Time Services Models Learning Objective: 14-03 Describe the features of exponential smoothing that make it an attractive model for time series forecasting.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 12) Subjective models are used to assess the future impact of changing demographics.

Answer: TRUE Difficulty: 1 Easy Topic: Subjective Models Learning Objective: 14-02 Conduct a Delphi forecasting exercise.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 13) Costs for preparing time series forecasts generally are lower than for other models.

Answer: TRUE Difficulty: 1 Easy Topic: Time Services Models Learning Objective: 14-03 Describe the features of exponential smoothing that make it an attractive model for time series forecasting.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 14) The forecast horizon for a cross-impact analysis method is medium-term.

Answer: FALSE Difficulty: 2 Medium Topic: Subjective Models Learning Objective: 14-02 Conduct a Delphi forecasting exercise.

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15) The key feature of the historical analogy method is that it assumes some future event is related to the occurrence of an earlier event.

Answer: FALSE Difficulty: 2 Medium Topic: Subjective Models Learning Objective: 14-02 Conduct a Delphi forecasting exercise.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 16) Econometric models are basically regression models that involve a system of equations.

Answer: TRUE Difficulty: 2 Medium Topic: Casual Models; Time Services Models Learning Objective: 14-03 Describe the features of exponential smoothing that make it an attractive model for time series forecasting.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 17) Exponential smoothing prevents overreaction to extremes in the actual observed values.

Answer: TRUE Difficulty: 2 Medium Topic: Time Services Models Learning Objective: 14-03 Describe the features of exponential smoothing that make it an attractive model for time series forecasting.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 18) Seasonal adjustment involves the deseasonalization of data in a given cycle after smoothing.

Answer: FALSE Difficulty: 1 Easy Topic: Time Services Models Learning Objective: 14-04 Conduct time series forecasting using the exponential smoothing model with trend and seasonal adjustments.

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19) Both trend and seasonal adjustments can augment a single exponential-smoothing model.

Answer: TRUE Difficulty: 1 Easy Topic: Time Services Models Learning Objective: 14-04 Conduct time series forecasting using the exponential smoothing model with trend and seasonal adjustments.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 20) The selection of candidate independent variables for a regression model to forecast motel occupancy requires input from knowledgeable marketing personnel.

Answer: TRUE Difficulty: 2 Medium Topic: Casual Models; Time Services Models Learning Objective: 14-03 Describe the features of exponential smoothing that make it an attractive model for time series forecasting.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 21) Long-term forecasts do not deal with predictions for ________.

A) new services B) changes in mix of services C) overtime or temporary labor requirements D) process technology Answer: C Difficulty: 2 Medium Topic: Subjective Models Learning Objective: 14-02 Conduct a Delphi forecasting exercise.

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22) Subjective forecasting models are best characterized by ________.

A) the use of experts B) the use of opinion as a basis for a forecast C) the absence of data manipulation D) the use of simultaneous equations Answer: B Difficulty: 2 Medium Topic: Subjective Models Learning Objective: 14-02 Conduct a Delphi forecasting exercise.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 23) The accuracy of a time-series model is dependent upon ________.

A) the nature of past data B) the weight given to past data C) the treatment of seasonality and trend D) the assumption that the future is a projection of the past Answer: D Difficulty: 2 Medium Topic: Time Services Models Learning Objective: 14-03 Describe the features of exponential smoothing that make it an attractive model for time series forecasting.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 24) In forecasting, the term 'cycle' refers to repetition of data ________.

A) once a year, if seasonal B) once in a period C) within a week D) during a day Answer: B Difficulty: 1 Easy Topic: Time Services Models Learning Objective: 14-03 Describe the features of exponential smoothing that make it an attractive model for time series forecasting.

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25) In regression models, the variable of interest (being forecast) is called ________.

A) a defining variable B) an independent variable C) a basic variable D) a dependent variable Answer: D Difficulty: 1 Easy Topic: Casual Models; Time Services Models Learning Objective: 14-03 Describe the features of exponential smoothing that make it an attractive model for time series forecasting.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 26) Characteristics of forecasting models include all of the following, except ________.

A) data required B) economic conditions C) relative cost D) forecast horizon Answer: B Difficulty: 2 Medium Topic: The Choice of Forecasting Model Learning Objective: 14-01 Recommend the appropriate forecasting model for a given situation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 27) The Delphi method is best used when forecasting ________.

A) customer demand B) technological change C) correlations between events D) future economic conditions Answer: B Difficulty: 2 Medium Topic: Subjective Models Learning Objective: 14-02 Conduct a Delphi forecasting exercise.

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28) Regression models require all of the following, except ________.

A) numerical data B) subjective data C) independent variables D) dependent variable Answer: B Difficulty: 2 Medium Topic: Casual Models; Time Services Models Learning Objective: 14-03 Describe the features of exponential smoothing that make it an attractive model for time series forecasting.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 29) Exponential smoothing uses a feedback control mechanism because ________.

A) α is less than 1 B) calculations are based on modifying the previous smooth value C) the calculation contains the forecast error D) the weights given to past data are exponentially distributed Answer: C Difficulty: 2 Medium Topic: Time Services Models Learning Objective: 14-03 Describe the features of exponential smoothing that make it an attractive model for time series forecasting.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 30) The ________ forecasting method requires the most computer power.

A) econometric B) cross-impact C) regression D) historical analogy Answer: A Difficulty: 2 Medium Topic: Casual Models; Time Services Models Learning Objective: 14-03 Describe the features of exponential smoothing that make it an attractive model for time series forecasting.

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31) All of the following are forecasting models, except ________ model.

A) subjective B) objective C) causal D) time series Answer: B Difficulty: 1 Easy Topic: The Choice of Forecasting Model Learning Objective: 14-01 Recommend the appropriate forecasting model for a given situation.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 32) Which of the following forecasting models is required for the forecast of the demand for hotel services?

A) Subjective and causal.

B) Subjective and time series.

C) Time series and causal.

D) Only time series.

Answer: C Difficulty: 2 Medium Topic: The Choice of Forecasting Model; Casual Models Learning Objective: 14-01 Recommend the appropriate forecasting model for a given situation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 33) Which of the following methods is an example of a causal model?

A) Delphi method.

B) Moving average.

C) Cross-impact analysis.

D) Regression.

Answer: D Difficulty: 2 Medium Topic: The Choice of Forecasting Model; Casual Models Learning Objective: 14-01 Recommend the appropriate forecasting model for a given situation.

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34) ________ is the best for forecasting demand.

A) Exponential smoothing B) Historical analogy C) Delphi method D) Econometrics Answer: A Difficulty: 2 Medium Topic: The Choice of Forecasting Model Learning Objective: 14-01 Recommend the appropriate forecasting model for a given situation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 35) Which of the following is not an advantage of the simple exponential smoothing model over the N-period moving average model?

A) Old data are never dropped.

B) Older data are given progressively less weight.

C) Calculation is simple.

D) None of these answers are correct.

Answer: D Difficulty: 2 Medium Topic: Time Services Models Learning Objective: 14-03 Describe the features of exponential smoothing that make it an attractive model for time series forecasting.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 36) ________ is the smoothing constant for the trend adjustment in an exponential smoothing forecast.

A) Alpha B) Beta C) Gamma D) Delta Answer: B Difficulty: 1 Easy Topic: Time Services Models Learning Objective: 14-04 Conduct time series forecasting using the exponential smoothing model with trend and seasonal adjustments.

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37) The usual range of the smoothing constant for a simple exponential smoothing forecast is ________.

A) 0.1 - 0.5 B) 0.3 - 0.7 C) 0.5 - 0.7 D) 0.5 - 1.0 Answer: A Difficulty: 1 Easy Topic: Time Services Models Learning Objective: 14-03 Describe the features of exponential smoothing that make it an attractive model for time series forecasting.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 38) Survey results are used in ________.

A) regression B) cross-impact analysis C) econometric models D) Delphi method Answer: D Difficulty: 2 Medium Topic: Subjective Models Learning Objective: 14-02 Conduct a Delphi forecasting exercise.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 39) All of the following are characteristics of the moving-average model, except ________.

A) very low relative cost B) short-term forecast horizon C) uses all past data in forecast D) used for demand forecasting Answer: C Difficulty: 2 Medium Topic: Time Services Models Learning Objective: 14-03 Describe the features of exponential smoothing that make it an attractive model for time series forecasting.

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40) The forecast horizon for regression methods is ________.

A) short term B) medium term C) long term D) medium to long term Answer: B Difficulty: 2 Medium Topic: The Choice of Forecasting Model; Casual Models Learning Objective: 14-01 Recommend the appropriate forecasting model for a given situation.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation Service Management: Operations, Strategy, Information Technology, 9e (Bordoloi) Chapter 15 Managing Service Inventory 1) Point-of-sale scanning became feasible only when industry agreed upon a universal system of bar coding.

Answer: TRUE Difficulty: 1 Easy Topic: Ch. 15 Introduction Learning Objective: 15-01 Discuss the role of information technology in the management of inventory.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 2) One role of holding inventory is to hedge against anticipated increases in the cost of the inventoried items.

Answer: TRUE Difficulty: 2 Medium Topic: Order Quantity Models Learning Objective: 15-03 Determine the order quantity for various inventory applications.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 3) Inventory management is concerned with two basic questions: how much to order and when to place an order.

Answer: FALSE Difficulty: 1 Easy Topic: Inventory Management under Uncertainty Learning Objective: 15-04 Determine the reorder point and safety stock for inventory systems 216 Copyright © 2019 McGraw-Hill

with uncertain demand.

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4) Dependent demand is described by a probability distribution.

Answer: FALSE Difficulty: 2 Medium Topic: Inventory Theory Learning Objective: 15-02 Describe the function, characteristics, and costs of an inventory system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 5) 'Shelf life' can be a constraint on the amount of inventory held.

Answer: TRUE Difficulty: 2 Medium Topic: Inventory Theory Learning Objective: 15-02 Describe the function, characteristics, and costs of an inventory system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 6) Obsolescence is part of shortage costs.

Answer: FALSE Difficulty: 2 Medium Topic: Inventory Theory Learning Objective: 15-02 Describe the function, characteristics, and costs of an inventory system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 7) Equating the annual holding and ordering costs can be used to derive the EOQ formula.

Answer: TRUE Difficulty: 2 Medium Topic: Order Quantity Models Learning Objective: 15-03 Determine the order quantity for various inventory applications.

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8) ABC analysis is an application of the 80-20 rule.

Answer: TRUE Difficulty: 1 Easy Topic: Inventory Control Systems Learning Objective: 15-06 Conduct an ABC analysis of inventory items.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 9) For the planned shortage model, when the cost of backorders approaches zero, the order quantity becomes undefined.

Answer: TRUE Difficulty: 2 Medium Topic: Order Quantity Models Learning Objective: 15-03 Determine the order quantity for various inventory applications.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 10) Radio Frequency Identification (RFID) is replacing bar coding.

Answer: TRUE Difficulty: 1 Easy Topic: Ch. 15 Introduction; Radio Frequency Identification Learning Objective: 15-01 Discuss the role of information technology in the management of inventory.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 11) POS scanning is used to initiate a purchase order to a pre-approved vendor automatically when the stock levels are depleted (or reach a reorder point).

Answer: FALSE Difficulty: 1 Easy Topic: Ch. 15 Introduction Learning Objective: 15-01 Discuss the role of information technology in the management of inventory.

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12) Information management has been the key in allowing services to meet customer demands without incurring the expense of excess inventory.

Answer: TRUE Difficulty: 1 Easy Topic: Ch. 15 Introduction Learning Objective: 15-01 Discuss the role of information technology in the management of inventory.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 13) The strategy of maintaining a speculative inventory is known as forward hedging.

Answer: FALSE Difficulty: 1 Easy Topic: Inventory Theory Learning Objective: 15-02 Describe the function, characteristics, and costs of an inventory system.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 14) Forward buying is used to avoid expensive interruptions of service, as a stock out at any stage of the physical goods distribution system would have far-reaching consequences for the other stages.

Answer: FALSE Difficulty: 1 Easy Topic: Inventory Theory Learning Objective: 15-02 Describe the function, characteristics, and costs of an inventory system.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 15) Lead time inventories are stocks that have been ordered but not yet received.

Answer: FALSE Difficulty: 1 Easy Topic: Inventory Theory Learning Objective: 15-02 Describe the function, characteristics, and costs of an inventory system.

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16) Penalties for late delivery or nondelivery are part of shortage costs.

Answer: TRUE Difficulty: 2 Medium Topic: Inventory Theory Learning Objective: 15-02 Describe the function, characteristics, and costs of an inventory system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 17) Patients waiting for heart transplants are an example of an inventory model that has a backorder cost of zero.

Answer: TRUE Difficulty: 2 Medium Topic: Order Quantity Models Learning Objective: 15-03 Determine the order quantity for various inventory applications.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 18) A continuous review system is generally used for Class C items in the ABC system of classification.

Answer: FALSE Difficulty: 2 Medium Topic: Inventory Control Systems Learning Objective: 15-05 Design a continuous or periodic review inventory-control system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 19) In the critical fractile ratio, the numerator refers to the cost of overestimating demand.

Answer: FALSE Difficulty: 2 Medium Topic: Single-Period Model for Perishable Goods Learning Objective: 15-07 Use either expected value or incremental analysis to determine the order quantity for the single-period inventory model.

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20) In retailing, profit is a function of mark-up multiplied by turnover.

Answer: TRUE Difficulty: 1 Easy Topic: Retail Discounting Model Learning Objective: 15-08 Describe the rationale behind the retail discounting model.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 21) Which of the following is not a role that inventories play in a distribution system?

A) Decoupling.

B) Speculative.

C) Anticipative.

D) Cyclical.

Answer: C Difficulty: 1 Easy Topic: Inventory Theory Learning Objective: 15-02 Describe the function, characteristics, and costs of an inventory system.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 22) In the design of an inventory system all of the following is considered except ________.

A) type of customer demand B) relevant inventory costs C) constraints D) safety stocks Answer: D Difficulty: 1 Easy Topic: Inventory Theory Learning Objective: 15-02 Describe the function, characteristics, and costs of an inventory system.

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23) Inventory management costs include all of the following, except ________.

A) ordering B) purchase C) receiving D) shortage Answer: B Difficulty: 2 Medium Topic: Inventory Theory Learning Objective: 15-02 Describe the function, characteristics, and costs of an inventory system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 24) When a quantity discount is offered, the first step should be to compute ________.

A) EOQ for the highest price per unit B) EOQ for the lowest price per unit C) the total annual cost for the highest quantity discount D) the total annual cost for the lowest quantity discount Answer: B Difficulty: 2 Medium Topic: Order Quantity Models Learning Objective: 15-03 Determine the order quantity for various inventory applications.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 25) Which item below would not be a good candidate for a planned shortage model?

A) Exotic sports car.

B) Donor transplant organ.

C) Sale item.

D) Staple.

Answer: D Difficulty: 2 Medium Topic: Order Quantity Models Learning Objective: 15-03 Determine the order quantity for various inventory applications.

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26) Which one of the following is the most important for a continuous review system?

A) Constant lead time.

B) Fixed order quantity.

C) POS scanning.

D) Normal demand distribution.

Answer: C Difficulty: 2 Medium Topic: Inventory Control Systems Learning Objective: 15-05 Design a continuous or periodic review inventory-control system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 27) Which of the following features is not associated with the periodic review system?

A) Order consolidation.

B) Fixed order quantity.

C) C items.

D) Small safety stocks.

Answer: D Difficulty: 2 Medium Topic: Inventory Control Systems Learning Objective: 15-05 Design a continuous or periodic review inventory-control system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 28) In the ABC inventory classification, C items can best be described as ________.

A) expensive B) among the most numerous C) having a high stockout cost D) requiring close attention Answer: B Difficulty: 2 Medium Topic: Inventory Control Systems Learning Objective: 15-06 Conduct an ABC analysis of inventory items.

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29) Which of the following concepts is not associated with the 'news vendor problem'?

A) Breakeven analysis.

B) Incremental analysis.

C) Expected value analysis.

D) Trade-off analysis.

Answer: A Difficulty: 2 Medium Topic: Single-Period Model for Perishable Goods Learning Objective: 15-07 Use either expected value or incremental analysis to determine the order quantity for the single-period inventory model.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 30) The central idea in the retail discounting model is that ________.

A) money can be made selling below cost B) turnover of stock generates money for future investment C) the percent mark-up over cost is discretionary D) discount pricing generates sales Answer: B Difficulty: 2 Medium Topic: Retail Discounting Model Learning Objective: 15-08 Describe the rationale behind the retail discounting model.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 31) The elimination of paper-based documents between organizations is made possible by ________.

A) ERP B) EDI C) MRP D) POS Answer: B Difficulty: 1 Easy Topic: Ch. 15 Introduction Learning Objective: 15-01 Discuss the role of information technology in the management of inventory.

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32) Service level influences ________.

A) reorder point and safety stock B) reorder point and backorder quantity C) safety stock and backorder quantity D) backorder quantity and lead-time demand Answer: A Difficulty: 2 Medium Topic: Inventory Management under Uncertainty Learning Objective: 15-04 Determine the reorder point and safety stock for inventory systems with uncertain demand.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 33) Taxes and insurance would fall under ________ costs.

A) ordering B) receiving and inspection C) holding or carrying D) shortage Answer: C Difficulty: 2 Medium Topic: Inventory Theory Learning Objective: 15-02 Describe the function, characteristics, and costs of an inventory system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 34) An inventory model with quantity discounts has all of the following features, except ________.

A) savings in manufacture B) savings in transportation C) increased holding costs D) increased ordering costs Answer: D Difficulty: 2 Medium Topic: Inventory Theory Learning Objective: 15-02 Describe the function, characteristics, and costs of an inventory system.

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35) For an electronic super store using the ABC inventory classification system, ________ would fall in class A. A) television sets B) entertainment centers C) stereos D) desktop computers Answer: B Difficulty: 2 Medium Topic: Inventory Control Systems Learning Objective: 15-06 Conduct an ABC analysis of inventory items.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 36) In the 'news vendor problem', the underlying concept is that the news vendor should continue increasing the stock until the expected loss on the last sale ________ the expected revenue on the last unit stocked.

A) equals B) just exceeds C) is just lower than D) greatly exceeds Answer: C Difficulty: 2 Medium Topic: Single-Period Model for Perishable Goods Learning Objective: 15-07 Use either expected value or incremental analysis to determine the order quantity for the single-period inventory model.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 37) For seasonal items a ________ system could be used to manage inventory.

A) continuous review B) periodic review C) retail discounting D) single-period model Answer: D Difficulty: 2 Medium Topic: Single-Period Model for Perishable Goods Learning Objective: 15-07 Use either expected value or incremental analysis to determine the order quantity for the single-period inventory model.

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38) In the annual cost curve for the EOQ model, the ordering cost ________ with the order quantity.

A) increases linearly B) decreases linearly C) increases negative exponentially D) decreases negative exponentially Answer: D Difficulty: 2 Medium Topic: Inventory Theory Learning Objective: 15-02 Describe the function, characteristics, and costs of an inventory system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 39) Which one of the following is most affected by the bullwhip effect?

A) Customer.

B) Retailer.

C) Distributor.

D) Wholesaler.

Answer: D Difficulty: 2 Medium Topic: Inventory Theory Learning Objective: 15-02 Describe the function, characteristics, and costs of an inventory system.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 40) The total inventory for a retailer is comprised of in-transit inventory, safety stock, and ________ inventory.

A) decoupling B) seasonal C) cyclical D) speculative Answer: C Difficulty: 1 Easy Topic: Inventory Theory Learning Objective: 15-02 Describe the function, characteristics, and costs of an inventory system.

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Service Management: Operations, Strategy, Information Technology, 9e (Bordoloi) Chapter 16 Managing Service Projects 1) The critical path for a project with uncertain activity times is not known for certain until after the project is completed.

Answer: TRUE Difficulty: 2 Medium Topic: The Nature of Project Management Learning Objective: 16-04 Perform critical path analysis on a project network.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 2) A project can be defined as a set of complex interrelated tasks with different requirements regarding activity time and resources, but with a high degree of repetitiveness.

Answer: FALSE Difficulty: 1 Easy Topic: Techniques for Project Management Learning Objective: 16-01 Describe the nature of project management.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 3) Gantt charts fail to indicate the interdependence among project activities.

Answer: TRUE Difficulty: 2 Medium Topic: Techniques for Project Management Learning Objective: 16-02 Illustrate the use of a Gantt chart and discuss its limitations.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 4) The critical path refers to the sequence of activities that represent the longest time path through a project network.

Answer: TRUE Difficulty: 1 Easy Topic: Techniques for Project Management Learning Objective: 16-04 Perform critical path analysis on a project network.

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5) The term 'total slack' refers to the amount of time an activity can be delayed without delaying the start of a subsequent activity.

Answer: FALSE Difficulty: 1 Easy Topic: Techniques for Project Management Learning Objective: 16-04 Perform critical path analysis on a project network.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 6) It is possible to delay the start of a non-critical activity and, in the process, make a following activity critical.

Answer: TRUE Difficulty: 2 Medium Topic: Techniques for Project Management Learning Objective: 16-04 Perform critical path analysis on a project network.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 7) Total slack for an activity can be shared with following activities.

Answer: TRUE Difficulty: 2 Medium Topic: Techniques for Project Management Learning Objective: 16-04 Perform critical path analysis on a project network.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 8) The term 'late finish' refers to the latest time an activity can begin without delaying the completion of the project.

Answer: FALSE Difficulty: 1 Easy Topic: Techniques for Project Management Learning Objective: 16-04 Perform critical path analysis on a project network.

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9) A major flaw in critical path analysis with uncertain activity times is the conservative nature of the expected project completion time.

Answer: FALSE Difficulty: 2 Medium Topic: Techniques for Project Management Learning Objective: 16-04 Perform critical path analysis on a project network.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 10) Before calculating a late start time for an activity, the late finish time must be known.

Answer: TRUE Difficulty: 2 Medium Topic: Techniques for Project Management Learning Objective: 16-04 Perform critical path analysis on a project network.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 11) The single important attribute of a project manager is leadership ability.

Answer: FALSE Difficulty: 1 Easy Topic: The Nature of Project Management Learning Objective: 16-04 Perform critical path analysis on a project network.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 12) Schedule variance is the difference between budgeted cost for work performed and actual cost of work performed.

Answer: FALSE Difficulty: 1 Easy Topic: Monitoring Projects Learning Objective: 16-08 Monitor a project for time, cost, and schedule variance using an earned value chart.

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13) The term 'calendar' is used in project management to keep track of the days and hours required for completion of projects.

Answer: FALSE Difficulty: 2 Medium Topic: Techniques for Project Management Learning Objective: 16-02 Illustrate the use of a Gantt chart and discuss its limitations.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 14) Time variance is calculated by subtracting actual time used for work performed from scheduled time for work performed.

Answer: TRUE Difficulty: 1 Easy Topic: Monitoring Projects Learning Objective: 16-08 Monitor a project for time, cost, and schedule variance using an earned value chart.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 15) When delays occur owing to technical difficulties, performance becomes the source of unexpected project management problems.

Answer: FALSE Difficulty: 2 Medium Topic: Monitoring Projects Learning Objective: 16-08 Monitor a project for time, cost, and schedule variance using an earned value chart.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 16) Developing a project network is the only major concern for implementing critical path analysis.

Answer: FALSE Difficulty: 2 Medium Topic: Techniques for Project Management Learning Objective: 16-03 Construct a project network.

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17) Merge node bias occurs where the project network contains non-critical paths with small total slack times.

Answer: TRUE Difficulty: 1 Easy Topic: Incorporating Uncertainty in Activity Times Learning Objective: 16-07 Analyze a project with uncertain activity times to determine the project completion distribution.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 18) Estimates of project expected completion time and variance usually are not biased when based on the single critical path.

Answer: FALSE Difficulty: 2 Medium Topic: Incorporating Uncertainty in Activity Times Learning Objective: 16-07 Analyze a project with uncertain activity times to determine the project completion distribution.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 19) When crashing activities for construction projects, the contractor's minimum cost duration might not coincide with the client's target completion date.

Answer: TRUE Difficulty: 2 Medium Topic: Activity Crashing Learning Objective: 16-06 Crash activities to reduce the project completion time.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 20) A major assumption in project network analysis is that sufficient resources are available to perform many activities concurrently.

Answer: TRUE Difficulty: 2 Medium Topic: Resource Constraints Learning Objective: 16-05 Allocate limited resources to a project.

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21) Which of the following is not true about a critical path in a project network with certain activity times?

A) Activities on the critical path have the least slack.

B) The longest activity in the project must lie on the critical path.

C) There can be several critical paths in a project network.

D) The first activity in the network is always on the critical path.

Answer: B Difficulty: 2 Medium Topic: The Nature of Project Management Learning Objective: 16-04 Perform critical path analysis on a project network.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 22) For a project with uncertain activity times, the probability of project completion exceeding the expected time calculated for the critical path is ________.

A) 25 percent B) 50 percent C) 75 percent D) None of these answers are correct.

Answer: B Difficulty: 2 Medium Topic: The Nature of Project Management Learning Objective: 16-04 Perform critical path analysis on a project network.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 23) A key assumption underlying project networks is: ________.

A) dummy activities take up no time B) the critical path is known with certainty C) an activity begins only after all predecessors are completed D) a project network is cyclic Answer: C Difficulty: 2 Medium Topic: Techniques for Project Management Learning Objective: 16-03 Construct a project network.

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24) The Beta distribution is useful in network analysis because it ________.

A) provides formulas for calculating the activity mean and variance B) can be approximated by a normal distribution C) provides probability estimates for project completion time D) requires only three time estimates to describe uncertain activity duration Answer: A Difficulty: 2 Medium Topic: Incorporating Uncertainty in Activity Times Learning Objective: 16-07 Analyze a project with uncertain activity times to determine the project completion distribution.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 25) A major weakness with project completion time analysis with uncertain activity times is the ________.

A) possibility that more than one critical path might exist B) need to solicit three time estimates for each activity C) assumption that the project completion time is normally distributed D) bias associated with the expected project completion time Answer: D Difficulty: 2 Medium Topic: Incorporating Uncertainty in Activity Times Learning Objective: 16-07 Analyze a project with uncertain activity times to determine the project completion distribution.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 26) Monte Carlo simulation of project networks is not recommended when ________.

A) activity times are deterministic B) more than one critical path exists C) bias in project completion time is important D) activity time distributions are Beta Answer: A Difficulty: 1 Easy Topic: Techniques for Project Management Learning Objective: 16-02 Illustrate the use of a Gantt chart and discuss its limitations.

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27) Gantt project charts are useful for all of the following reasons, except ________.

A) visual presentation is appealing B) they show interdependence of activities C) they are easy to understand D) they assist in planning construction forces Answer: B Difficulty: 2 Medium Topic: Techniques for Project Management Learning Objective: 16-02 Illustrate the use of a Gantt chart and discuss its limitations.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 28) Which one of the following is not an objective of activity crashing?

A) Reduce the total cost of completing a project.

B) Complete a project in less time than normally expected.

C) Create multiple critical paths.

D) Prepare a contract bid.

Answer: C Difficulty: 2 Medium Topic: Activity Crashing Learning Objective: 16-06 Crash activities to reduce the project completion time.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 29) A resource-leveled schedule would have all of the following characteristics except ________.

A) the project duration could be longer than normal B) slack time is used to begin some activities later than their early start time C) the critical path may be changed D) a more balanced use of labor resources would be exhibited Answer: C Difficulty: 2 Medium Topic: Resource Constraints Learning Objective: 16-05 Allocate limited resources to a project.

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30) Implementing critical path analysis is faced with all of the following problems, except ________.

A) availability of project management software B) agreement on the project network C) eliciting time estimates for activities D) introduction of bias in activity time estimates Answer: A Difficulty: 2 Medium Topic: The Nature of Project Management Learning Objective: 16-04 Perform critical path analysis on a project network.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 31) Which of the following attributes is not considered in the selection of a project manager?

A) Credibility.

B) Originality.

C) Sensitivity.

D) Ability to handle stress.

Answer: B Difficulty: 1 Easy Topic: Techniques for Project Management Learning Objective: 16-01 Describe the nature of project management.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 32) The four sequential stages of team development include all of the following, except ________.

A) forming B) storming C) coalescing D) performing Answer: C Difficulty: 1 Easy Topic: Techniques for Project Management Learning Objective: 16-01 Describe the nature of project management.

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33) Which of the following is not considered a source of unexpected project management problems?

A) Cost.

B) Time.

C) Economy.

D) Performance.

Answer: C Difficulty: 1 Easy Topic: Monitoring Projects Learning Objective: 16-09 Discuss reasons why projects fail to meet performance, time, and cost objectives.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 34) Projects are terminated for all of the following reasons, except ________.

A) subtraction B) addition C) integration D) starvation Answer: A Difficulty: 1 Easy Topic: Monitoring Projects Learning Objective: 16-08 Monitor a project for time, cost, and schedule variance using an earned value chart.

Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 35) A project history report should include all of the following items, except ________.

A) project performance B) organization structure C) project success and failures D) project and administrative team Answer: C Difficulty: 2 Medium Topic: Monitoring Projects Learning Objective: 16-08 Monitor a project for time, cost, and schedule variance using an earned value chart.

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36) Which of the following is not considered a source of variance on the earned value chart?

A) Time.

B) Cost.

C) Schedule.

D) None of these answers are correct.

Answer: D Difficulty: 2 Medium Topic: Monitoring Projects Learning Objective: 16-08 Monitor a project for time, cost, and schedule variance using an earned value chart.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 37) Which of the following makes performance a source of unexpected project management problem?

A) Delays owing to technical difficulties.

B) Unexpected technical problems.

C) Unforeseen government regulations.

D) Increase in the scope of work.

Answer: B Difficulty: 2 Medium Topic: Monitoring Projects Learning Objective: 16-09 Discuss reasons why projects fail to meet performance, time, and cost objectives.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 38) Which of the following is not a critical time estimate for a Beta distribution?

A) Optimistic time.

B) Pessimistic time.

C) Most likely time.

D) Expected time.

Answer: D Difficulty: 1 Easy Topic: Incorporating Uncertainty in Activity Times Learning Objective: 16-07 Analyze a project with uncertain activity times to determine the project completion distribution.

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39) Which one of the following allows the manager to make probability statements with regard to meeting project objectives?

A) Gantt chart.

B) CPM. C) PERT. D) Earned-value chart.

Answer: C Difficulty: 2 Medium Topic: Techniques for Project Management Learning Objective: 16-03 Construct a project network.

Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 40) The amount of time an activity can be delayed without delaying the completion of the project is referred to as ________.

A) total slack B) late finish C) late start D) free slack Answer: A Difficulty: 2 Medium Topic: The Nature of Project Management Learning Objective: 16-04 Perform critical path analysis on a project network.

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