Operations and Supply Chain Management
Question Bank
Course Introduction
Operations and Supply Chain Management explores the strategies, processes, and techniques involved in the effective production and distribution of goods and services. This course examines key concepts such as process analysis, inventory management, logistics, demand forecasting, quality control, and supplier relationship management. Students will learn how organizations design, operate, and improve systems for optimal efficiency and customer satisfaction, while considering global trends, sustainability, and technology in supply chain operations. Through real-world examples and case studies, the course prepares students to address complex challenges and make strategic decisions that drive value in both manufacturing and service environments.
Recommended Textbook
OM 4th Edition by David
Alan Collier
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Chapter 1: Goods, Services, and Operations Management
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Sample Questions
Q1) Which of the following is not true regarding the differences between goods and services?
A)Demand for services is easier to forecast.
B)Customers participate in many services.
C)Services cannot be stored as physical inventory.
D)Patents do not protect services.
Answer: A
Q2) Which one of the following statements is false?
A)Service that do not involve significant interaction with customers can be managed much the same as goods in a factory.
B)A service is any primary or complementary activity that does not directly produce a physical product.
C)Some very significant differences exist between goods and services that create different demands on the operations function.
D)Designing and managing operations in a goods-producing firm is quite similar to that in a service-providing organization.
Answer: D
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3
Chapter 2: Value Chains
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Sample Questions
Q1) Which of the following is not normally considered a variable cost?
A)labor
B)transportation
C)equipment lease
D)material
Answer: C
Q2) "The perception of the benefits associated with a good, service, or bundle of goods and services in relation to what buyers are willing to pay for them" is the definition of A)proportionality
B)competitiveness
C)value
D)equity
Answer: C
Q3) While cultural differences are important in managing operations in different countries, they have little impact in designing the overall value chain.
A)True
B)False
Answer: False
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4
Chapter 3: Measuring Performance in Operations
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Sample Questions
Q1) Which one of the following statements is true with regard to the case study BankUSA: Credit Card Division?
A)Service upsets represented 17 percent of total transactions.
B)Current performance reports indicate that the credit card division is meeting 99.2 percent of its service requirements.
C)The correlation between customer satisfaction and operating costs was negatively correlated.
D)The ultimate (real) service level for this organization is internal performance metrics.
Answer: B
Q2) Dell's ability to provide a wide range of customized computer hardware to accommodate customers' needs best describes
A)volume flexibility
B)design flexibility
C)cycle time
D)queue time
Answer: B
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Page 5
Chapter 4: Operations Strategy
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Sample Questions
Q1) Regarding quality, which statement is not true?
A)Businesses offering premium quality goods usually have larger market share and are early entrants into their market.
B)Quality is positively and significantly related to higher return on investment for almost all kinds of market situations.
C)A strategy of quality improvement usually leads to increased market share but at a cost in terms of reduced short-run profits.
D)High goods quality producers can usually excel by charging low prices.
Q2) Which one of the following statements is true with respect to McDonald's operations and strategy?
A)The #1 competitive priority is demand flexibility.
B)Prof.Terry Hill's strategy framework cannot be applied to services such as McDonald's.
C)There is only one standardized way (process) to make French fries in over 30,000 stores worldwide.
D)McDonald's vision is to produce the world's best hamburger.
Q3) What is the difference between corporate, business and functional strategy?
Q4) Explain the concept of search, experience, and credence attributes.
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6
Chapter 5: Technology and Operations Management
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Sample Questions
Q1) Discuss the components, hardware and software of a Computer-Integrated Manufacturing System (CIMS).
Q2) Scalability is a phenomenon by which the same or an increased quality and quantity of goods and/or services are created using fewer natural resources.
A)True
B)False
Q3) Describe the three stages of the technology development and adoption process.
Q4) A principal advantage of numerical control (NC) is that an operator has only to load and unload parts and push a button to begin processing, and thus can tend several NC machines at one work center.
A)True
B)False
Q5) An integrated operating system can readily be transferred among different industries.
A)True
B)False
Q6) Differentiate between hard technology and soft technology.
Q7) Explain the concept of ERP - Enterprise Resource Planning Systems.
Q8) List some of the key issues that organizations face in using technology.
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Chapter 6: Goods and Service Design
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Sample Questions
Q1) Explain the concept of Design Failure-Mode-and-Effect analysis.
Q2) Discuss the concept of servicescape.
Q3) Suppose that a manufacturing specification of a dimension is 1.0 \(\pm\) 0.05.The permissible range of variation from 0.95 to 1.05 is called the tolerance.
A)True
B)False
Q4) The fundamental planning tool used to implement Quality Function Deployment is the
A)Voice of the customer
B)Technical requirement relationship matrix
C)House of Quality
D)Market and competitive evaluation rating matrix
Q5) Define reliability.Include the four major elements.
Q6) Which of the following steps is not the same for both goods and services?
A)detailed goods, services and process design
B)Customer Benefit Package design and configuration
C)market introduction/deployment
D)marketplace evaluation
Q7) Explain the importance of service recovery and service guarantees.
Q8) Explain the concept of Design for Manufacturability (DFM).
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Chapter 7: Process Selection, Design, and Analysis
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Sample Questions
Q1) In service applications, flowcharts generally highlight the points of contact with the customer.
A)True
B)False
Q2) Because services cannot inventory their output, they must forecast demand more accurately and better manage the resources needed to provide the service.
A)True
B)False
Q3) Give three examples of goods or services associated with each of the process types: project, job shop, flow shop and continuous flow.
Q4) A Department of Motor Vehicle (DMV) testing center has ten (10) testers who test 75 drivers per day.Each tester can test eight (8) drivers per day.What would the service rate need to be in order to achieve 85% utilization?
Q5) Service facilities have a greater range of resource utilization than manufacturing. A)True B)False
Q6) What are some management strategies to improve process designs?
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Page 9
Chapter 8: Facility and Work Design
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Sample Questions
Q1) ____ is vertical expansion of job duties to give the worker more responsibility.
A)Job enlargement
B)Job rotation
C)Job enrichment
D)Job design
Q2) Teams are a way of accomplishing job enrichment.
A)True
B)False
Q3) For a given cycle time in line balancing, assembly-line efficiency can be increased by
A)Speeding the line
B)Slowing the line
C)Decreasing the number of work stations
D)Increasing the number of work stations
Q4) A fixed position layout is based on the sequence of operations that is performed during the manufacturing of a good or delivery of a service.
A)True
B)False
Q5) Discuss the advantages and disadvantages of utilizing virtual teams.
Q6) Describe approaches used for process layout design.
Page 10
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Chapter 9: Supply Chain Design
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Sample Questions
Q1) The Supply Chain Operations Reference (SCOR) Model function that entails all order management activities from processing customer orders to routing shipments, managing goods at distribution centers and invoicing the customer is called ____.
A)Return
B)Source
C)Make
D)Deliver
Q2) Large order sizes and frequent price changes will reduce the bullwhip effect in a supply chain.
A)True
B)False
Q3) A(n) ____ produces goods in advance of customer demand using a forecast of sales and moves them to points of sale where they are stored as finished goods inventory.
A)Responsive supply chain
B)Efficient supply chain
C)Push system
D)Pull system
Q4) Explain the concept of postponement and provide an example of it.
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Chapter 10: Capacity Management
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Sample Questions
Q1) Discuss the following:
a.Approaches to adjust short-term capacity
b.Approaches for shifting and stimulating demand
Q2) Average safety capacity (%) is computed as
A)Average resource utilization (%) - 100%
B)100% - average resource utilization (%)
C)[maximum safety capacity (%) + minimum safety capacity (%)]/2
D)100% - maximum resource utilization (%)
Q3) An unsold broadcast advertising space is an example of a perishable asset.
A)True
B)False
Q4) Define capacity including the two ways it can be viewed.Provide an example of each way.
Q5) A focused factory is least likely to focus on
A)A few key products
B)A specific technology
C)A certain process design and capability
D)A seasonal demand good
Q6) What is safety capacity? Discuss reasons for using it.
Q7) What are complementary goods and services and why do firms have them?
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Chapter 11: Forecasting and Demand Planning
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Q1) Explain the difference between statistical forecasting and judgment forecasting.
Q2) Statistical forecasting is based upon the assumption that the future will be an extrapolation of the past.
A)True
B)False
Q3) A single moving average is most appropriate for data with identifiable trends.
A)True
B)False
Q4) For single exponential smoothing,
A)Large values of alpha (\(\alpha\)) place more emphasis on recent data
B)Small values of alpha (\(\alpha\)) place more emphasis on recent data
C)Very volatile time series with substantial random variability should use a large value for alpha (\(\alpha\))
D)Very stable time series with little random variability should use small values for alpha (\(\alpha\))
Q5) Explain the difference between a moving average and single exponential smoothing forecasting model.
Q6) Explain how forecasting is used at different levels of an organization.
Q7) Define regression analysis and explain how it is an approach to forecasting.
Page 13
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Chapter 12: Managing Inventories
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Sample Questions
Q1) Because the fixed quantity system orders the same amount each time, time between orders will be constant, even with variable demand.
A)True
B)False
Q2) Explain the difference between independent demand and dependent demand.
Q3) Safety stock inventory is an additional amount of inventory kept over and above the average amount required to meet demand during the lead time.
A)True
B)False
Q4) A 4th of July celebration T-shirt for this year will cost festival organizers $12 each and will sell for $25 before and on July 4th.Any unsold T-shirts can usually be disposed of at a discount after the festival for $5 each.If demand is normally distributed with a mean of 1,800 T-shirts and a standard deviation of 75, how many T-shirts should be ordered?
Q5) RFID tags are often used to track stock keeping units in supply chains.
A)True
B)False
Q6) Define the EOQ model and explain its major assumptions.
Q7) What is inventory management and why is it important?
Page 14
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Chapter 13: Resource Management
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Sample Questions
Q1) Explain the three levels of resource planning.
Q2) An inventory item can be
A)Only a parent
B)Only a component
C)Both a parent and a component
D)Either a parent or a component, but not both
Q3) Define Material Requirements Planning (MRP) and how it can benefit an organization.
Q4) The primary output of an MRP system is a time-phased report that gives all of the following except
A)The facilities managers a detailed schedule for acquiring additional factory space
B)The accounting and financial functions production information that drives cash flow, budgets, and financial needs
C)The production managers a detailed schedule for manufacturing the product and controlling manufacturing inventories
D)The purchasing department a schedule for obtaining raw material and purchased items
Q5) Define resource management and list its key objectives.
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Chapter 14: Operations Scheduling and Sequencing
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Sample Questions
Q1) Compare and contrast the advantages and disadvantages of the Shortest Processing Time (SPT) and the Earliest Due Date (EDD) sequencing rules.
Q2) The numerical difference between the completion time and the due date is called
A)Flow time
B)Lateness
C)Makespan
D)Tardiness
Q3) The chief disadvantage of the shortest processing time rule is:
A)average job completion times are excessive
B)average number of jobs in the system is excessive
C)long-duration jobs may have excessive completion times
D)average job lateness is excessive
Q4) ScheduleAnywhere.com on-line software helps clients do all the following except
A)Schedule employees from any computer with Internet access.
B)Decide how much to overbook for each day of the week.
C)See who's scheduled and who's available.
D)Avoid scheduling conflicts.
Q5) Scheduling applies to all aspects of the value chain.
A)True
B)False
Page 16
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Chapter 15: Quality Management
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Sample Questions
Q1) W.Edward Deming believed that higher quality leads to higher costs, but to even higher market share.
A)True
B)False
Q2) All of the following relate to Six Sigma except
A)Clear financial returns
B)Use of PDSA problem solving approach
C)Output critical to customers
D)A stretch goal
Q3) Six Sigma efforts have use all of the following concepts and methods except
A)Process control such as reducing variation
B)Process improvement such as mistake proofing
C)Critical to quality characteristics such as appraisal costs
D)Advanced statistical tools such as multiple regression
Q4) A Pareto diagram helps to understand the relationships between two variables and to verify possible cause and effect hypotheses.
A)True
B)False
Q5) Discuss different ways of defining quality and how these differ for goods and services.
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Chapter 16: Quality Control and Spc
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Q1) Define Statistical Process Control (SPC) and differentiate between common cause and special (or assignable) cause variation.
Q2) Testing whether a computer boots up the first time is an example of
A)Supplier certification and management
B)In-process control
C)Finished goods control
D)Statistical process control
Q3) Which of the following suggests a process that is not in control?
A)Points follow a smooth pattern from the lower control limit to the upper control limit
B)The number of points above and below the center line is about the same
C)Points fall randomly above and below the center line
D)No points are outside the control limits
Q4) A bottling machine fills soft drink bottles with an average of 12.000 ounces with a standard deviation of 0.002 ounces.Determine the process capability index, C<sub>p</sub>, if the design specification for the fill weight of the bottles is 12.000 ounces plus or minus 0.015 ounces.
Q5) Explain the issues associated with selecting the appropriate sample size and sampling frequency for control charts.
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Chapter 17: Lean Operating Systems
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Q1) Lean production is focused on efficiency by reducing waste and improving process flow, while Six Sigma is focused on effectiveness by reducing errors and defects.
A)True
B)False
Q2) Which one of the following statements is true concerning Lean Six Sigma?
A)Lean principles focus on advanced statistical methods.
B)Lean principles have been developed over a sixty year plus period of time.
C)Lean principles include the 5Ss framework and practices.
D)Six Sigma and lean principles are not related -they are separate bodies of knowledge.
Q3) Which of the following is least related to a push system?
A)Maximum customer responsiveness
B)Predefined schedule
C)Finished goods inventory
D)Based on forecast
Q4) Discuss the seven major categories of waste as defined by Toyota.
Q5) Kanban is a Japanese term for elimination of waste.
A)True
B)False
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Chapter 18: Project Management
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Q1) The Critical Path Method (CPM) allows for an evaluation of uncertainty in project completion times.
A)True
B)False
Q2) The critical path is the sequence of activities that takes the longest time.
A)True
B)False
Q3) List at least six principal factors (contributors) to project success.
Q4) Which is incorrect regarding the critical path?
A)Shortest time to complete a project
B)Longest time to complete a project
C)Project path with 0 slack
D)Delays in activities will delay the project
Q5) In most organizations, projects cut across organizational boundaries, making it difficult to implement projects exclusively within functional departments.
A)True
B)False
Q6) Explain the role of the project managers and some principles for success.
Q7) Explain the stages of the project life cycle.
Page 20
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Chapter 19: Work Measurement, Learning Curves, and Standards
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Q1) The ____ states that the cost of doing any repetitive task, work activity or project decreases as the accumulated experience of doing the job increases.
A)Learning curve
B)Experience curve
C)Deming philosophy
D)Regression method
Q2) All of following are true regarding learning curves except
A)Not used for a pricing strategy
B)Are affected by a ratio of manual to machine work
C)80% learning curves exhibit a step initial decline and then level off
D)Used in defense industries
Q3) The performance rating factor and allowances are based upon human judgment.
A)True
B)False
Q4) A Performance Rating Factor (PRF) of 1.15 means
A)The worker is working at a pace that is 15% faster than normal
B)The worker is working at a pace that is 15% slower than normal
C)The worker is working at a pace that is 15% faster than standard time
D)The worker needs to add 15% to the standard time
Page 21
Q5) Define and relate normal time and standard time.
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Chapter 20: Queuing Analysis
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Sample Questions
Q1) Many analytical queuing models exist, each based upon unique assumptions.
A)True
B)False
Q2) Triage is a form of preemption.
A)True
B)False
Q3) Discuss the seven key assumptions for the multiple-server waiting line model.
Q4) Which of the following cannot be found by queuing formulas?
A)the average number of units waiting for service
B)the average time a unit spends in the system
C)the probability that the service system is idle
D)the maximum time a unit is in the system
Q5) Since most service times follow an exponential distribution, there is no need to collect data on actual service times.
A)True
B)False
Q6) With a restaurant as an example, discuss the psychological methods used to affect customers' perceptions of waiting (to be seated, to be served, etc.).
Q7) Discuss three categories of information necessary to analyze a waiting line.
Page 22
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Chapter 21: Modeling Using Linear Programming
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Q1) The term 'programming' is used in linear programming because these models find the best 'program' or course of action to follow.
A)True
B)False
Q2) (a month's production) + (beginning inventory) - (ending inventory) - (number of lost sales for the month) =
A)Overtime limits
B)Demand in the month
C)Increase in product
D)Decrease in production
Q3) Differentiate between a feasible solution and an optimal solution.
Q4) If Activity C directly precedes both D and E on a project network and C can be crashed three (3) times in using linear programming,
A)Crash time affects only C
B)Crash time affects only C and D
C)Crash time affects only C and E
D)Crash time affects both D and E
Q5) Discuss the concept of constrained optimization.Include some examples.
Q6) Explain the essence of a blending problem.
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Chapter 22: Simulation
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Q1) In regard to a simulation model for inventory management, all of the following are correct except
A)Results in an optimal solution with a large simulation
B)Many days of simulation run are needed to obtain meaningful results
C)Lead-time can vary
D)Assumes that a specific reorder point and order quantity have been selected
Q2) A computer implementation free from logical errors and bugs refers to
A)Verification
B)Validation
C)Simulation
D)ProcessModel
Q3) Discuss a simulator.How does it differ from simulation software such as ProcessModel?
Q4) Which of the following is not an advantage of simulation?
A)Convenient experimental laboratory
B)Can perform 'what-if' studies
C)Don't have to disturb current process
D)Yields optimal solution
Q5) Define simulation and give some operations management examples.
Q6) Differentiate and explain the importance of verification and validation.
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Chapter 23: Decision Analysis
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Q1) With some modification, the decision rules for one-time decisions without event probabilities can be applied to situations where the payoff is cost.
A)True
B)False
Q2) Regarding the concept of the expected value of perfect information,
A)Expected value of perfect information means knowing in advance what state of nature will occur
B)Perfect information is easy to obtain
C)Expected value of perfect information is calculated by adding the expected payoff under perfect information to the expected payoff of the optimal decision without perfect information
D)It can be calculated without the use of probabilities
Q3) ____ represent a future outcome that can occur after a decision is made that are not under the control of the decision-maker.
A)Decision alternatives
B)Events
C)Payoffs
D)Probabilities
Q4) Explain the structure and purpose of a decision tree.
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