Operations Strategy
Question Bank
Course Introduction
Operations Strategy focuses on the long-term planning and decision-making processes that shape the capabilities, resources, and competitive positioning of an organization's operations function. This course examines the alignment between operational activities and overall business strategy, exploring how companies can achieve and sustain operational excellence. Key topics include capacity planning, supply chain management, process design, technology adoption, quality management, innovation, and the integration of sustainability into operations decisions. Through case studies and analytical frameworks, students learn to formulate, implement, and evaluate operations strategies that drive organizational success in dynamic markets.
Recommended Textbook
Foundations of Operations Management 3rd Canadian Edition by Larry P. Ritzman
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Page 2
Chapter 1: Creating Customer Value through Operations
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Sample Questions
Q1) As a percentage of total employment within the Canadian economy,jobs in the service sector have declined over the past 40 years.
A)True
B)False
Answer: False
Q2) Multifactor productivity measures are determined by measuring more than one of the input resources used to produce outputs.
A)True
B)False
Answer: True
Q3) Labour productivity is an index of the output per person or hour worked. A)True
B)False Answer: True
Q4) Order qualifier refers to the criterion customers use to differentiate the services or goods of one firm from those of another.
A)True
B)False Answer: False
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Chapter 2: Supply Chain Management
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Sample Questions
Q1) ________ are inventories needed for the production of goods and services; they are considered the inputs to the transformation process.
Answer: Raw materials
Q2) Responsive supply chains would be preferred when A) product variety is low. B) demand is predictable.
C) contribution margins are low. D) product variety is high.
Answer: D
Q3) ________ consists of items such as components or assemblies needed for a final product in manufacturing.
Answer: Work-in-process WIP
Q4) The new service/product development process begins with ________ and ends with the ________ of the new offering.
Answer: design ,launch
Q5) What is the purpose of carrying safety stock?
Answer: Additional inventory is carried to smooth uses during periods of erratic demand.
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Page 4
Chapter 3: Process Configuration
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Sample Questions
Q1) What is the meaning of process reengineering and how can it be applied to a major process with which you are familiar? Be as complete as time permits.
Answer: Process reengineering is the fundamental rethinking and radical redesign of processes to improve performance dramatically in terms of cost,quality,service,and speed.Applications will vary.
Q2) ________ automation can handle various products through programmability.
Answer: Flexible
Q3) Backward integration means that the firm acquires more channels of distribution.
A)True
B)False
Answer: False
Q4) A ________ is a group of two or more dissimilar workstations located close to each other that process a limited number of parts or models with similar process requirements.
Answer: cell
Q5) Develop a process chart for a manual car wash.
Answer: Answers will vary.A typical answer might look like the following: 11ea2242_5d86_7490_a568_dbc9a5126629_TB2786_00
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Chapter 4: Capacity
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Sample Questions
Q1) Which one of the following statements concerning capacity cushions is best?
A) Large-capacity cushions are utilized more often when future demand is level and known.
B) Small-capacity cushions are used extensively in capital-intensive firms.
C) Capacity cushions are used primarily in manufacturing organizations, not in service organizations.
D) Small cushions are used in organizations where the products and services produced often change.
Q2) What information would managers use to choose the best cost-effective capacity to balance customer service with the cost of adding capacity?
A) decision trees
B) economies of scale
C) capacity cushion
D) waiting line models
Q3) Within a process,what is a bottleneck?
Q4) Wait time is not part of the throughput time for a specific item as it moves through a process.
A)True
B)False
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Chapter 5: Inventory Management
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Sample Questions
Q1) Which one of the following statements is best?
A) A P system requires more safety stock than a Q system.
B) A P system lends itself more to quantity discounts than does a Q system.
C) A P system requires more administrative control and computer support than does a Q system.
D) In a periodic review system, the value of Q is kept the same from one cycle to another.
Q2) How do the characteristics of the product being produced and process structure influence the relative allocation of inventory across a process,that is whether inventories are more likely to be held as raw materials,work-in-process,or finished goods.
Q3) How does the ABC method of analysis for managing inventory work?
Q4) ________ inventory is the inventory moving from point to point in the materials flow system.
Q5) Holding inventory towards the finished goods level supports lower costs but also results in longer delivery times.
A)True
B)False
Q6) What assumptions are made in calculating the economic order quantity?
Q7) The ________ determines the frequency and quantity to order.
Page 7
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Chapter 6: Quality and Process Improvement
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Sample
Questions
Q1) A telephone customer service center has experienced several problems.They have begun to analyze the data from customer complaints.Their first step was to construct the table below.
\[\begin{array} { l c }
\ { \text { Problem Type } } & \text { Total } \\
\hline \text { Person not available } & 5 \\
\text { Incorrect information given } & 12 \\
\text { Phone line busy } & 7 \\
\text { Long delay } & 39 \\
\text { Phone tree confusing } & 20 \\
\text { People friendly } & 17
\end{array}\]
Use this data to build a Pareto chart to help identify the "vital few" problems.
Q2) A product has three components with individual reliabilities of 0.85,0.92,and 0.95.What is the reliability of the product?
A) less than or equal to 0.75
B) greater than 0.75 but less than or equal to 0.80
C) greater than 0.80 but less than or equal to 0.85
D) greater than 0.85
Q3) Explain the distinction between variable and attribute measures of quality.
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Chapter 7: Lean Systems
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Sample Questions
Q1) Use the information in Table 7.3.How many kanban containers would be required if a 5 % efficiency factor is used?
A) 10 or less
B) 11 or 12
C) 13 or 14
D) 15 or more
Q2) The just-in-time (JIT)philosophy is the belief that wastes can be eliminated by cutting inventory and removing non-value-added activities in operations.
A)True
B)False
Q3) A(n)________ is a card used to control the flow of production through a factory.
Q4) The main focus of lean systems in implementing JIT is the reduction of investment in inventory and requires ________ .
Q5) Which of the following will result if the goals of JIT partnerships are met?
A) The number of suppliers increases.
B) Receiving activity and inspection are outsourced for incoming goods.
C) As suppliers are located closer to facilities, in-transit inventory decreases
D) Inventory in transit is replaced by on-site inventory.
Q6) Discuss value stream mapping.
Page 9
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Chapter 8: Managing Projects
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Sample Questions
Q1) Using Table 3.10,which activity has the largest slack,and how large is that slack?
A) Activity C; 5 weeks
B) Activity A; 6 weeks
C) Activity B; 4 weeks
D) Activity E; 3 weeks
Q2) Scope creep is one of the primary causes of project failure.
A)True
B)False
Q3) Using Table 3.8,what is the critical path of the above project?
A) B-C-E-F
B) B-C-F
C) A-D-F
D) A-C-E-F
Q4) ________ is the maximum length of time that an activity can be delayed without delaying the entire project.
Q5) To obtain the latest start and latest finish time,we must work forward through the network.
A)True
B)False
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Chapter 9: Location and Layout
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Sample Questions
Q1) Use the information from Table 9.13.All things equal,which two departments should be located closest together?
A) D and F
B) B and F
C) B and C
D) A and B
Q2) ________ is a key factor in determining how conveniently customers can carry on business with a firm.
Q3) ________ is the straight-line distance,or shortest path,between two points.
Q4) The objective of the load-distance method is to minimize the ________ into and out of the facility.
Q5) Use the information in Table 9.17.The company is planning to operate two shifts per day,eight hours per shift.If the desired output rate of the line is 480 units per day,what is the cycle time?
A) 60 seconds
B) 120 seconds
C) 180 seconds
D) 240 seconds
Q6) A(n)________ allocates space and indicates placement of each department.
Page 11
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Chapter 10: Managing Demand and Forecasting
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Sample Questions
Q1) Repeated observations of demand for a product or service in their order of occurrence form a pattern known as time series.List and briefly describe the five basic patterns of most demand time series.
Q2) What is the value of r = - 1 mean in regression analysis?
Q3) Random variation is an aspect of demand that increases the accuracy of the forecast.
A)True
B)False
Q4) Forecasts will always be below or above the actual demand where a trend is present,unless exponential smoothing with two components is applied.
A)True
B)False
Q5) A causal model,time cannot be used as an independent variable.
A)True
B)False
Q6) List three quantitative forecasting methods.
Q7) Briefly describe what the causal method of forecasting is.
Q8) A(n)________ is a customer order that cannot be filled immediately but is filled as soon as possible.
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Chapter 11: Operations Planning and Scheduling
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Sample Questions
Q1) ________ are products or services having similar resource requirements,but different demand cycles.
Q2) In the manufacturing sector,aggregate planning links strategic goals to a production plant.
A)True
B)False
Q3) ________ is the allocation of resources over time to accomplish specific tasks.
Q4) Yield management is the practice of adjusting prices to maximize the revenue obtained from available capacity that is lost if it is not used.
A)True
B)False
Q5) A TV repair service company has a seasonal demand for its service,and there is a general shortage of skilled TV repair persons.Which one of the following is a capacity production planning alternative suitable for this situation?
A) Hire and lay off workers to match the demand requirements.
B) Increase the backlog for short-term demand surges.
C) Offer reduced prices during the slack season.
D) Build anticipation inventories.
Q6) A(n)________ schedule rotates employees through a series of workdays or hours.
Page 13
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Chapter 12: Resource Planning
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Sample Questions
Q1) In an MRP system,from what sources are an item's gross requirements derived?
Q2) Discussed why lots sizing is important in MRP.
Q3) The ________ is a record of all components of an item,the parent-component relationships,and usage quantities derived from engineering and process design.
Q4) ________ is a lot-sizing rule that maintains the same order quantity each time an order is issued.
Q5) Use the information from Table 13.7.If a L4L lot-sizing rule is used,how many planned order releases are there for item XYZ?
A) 0 or 1
B) 2 or 3
C) 4 or 5
D) more than 5
Q6) Management wishes to use a POQ lot-sizing rule for an item that experiences an average demand of 30 units per week.If the desired average lot size is 120 units,what should P be?
A) 0 or 1 weeks
B) 2 or 3 weeks
C) 4 or 5 weeks
D) More than 5 weeks
Page 14
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Chapter 13: Decision Making
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Sample Questions
Q1) By definition,the maximax and maximin criteria cannot result in the selection of a common alternative in decision making under uncertainty.
A)True
B)False
Q2) A software company that sells its software pre-installed in personal computers is considering making its own computers instead of purchasing them from the Mega-Chip Company.To assemble their own computers could cost $1,000,000 in fixed costs and $100 per unit in variable costs.The company currently buys PCs for $1200,with no fixed costs.What is the break-even quantity?
A) Greater than or equal to 1800
B) Greater than 900 but fewer than 1800
C) Greater than 450 but fewer than 900
D) Less than 450
Q3) In decision theory,the different courses of action that a decision maker can choose are called ________.
Q4) A chance event that has an impact on the outcome of the choice but is not under the manager's control is called a(n)________.
Q5) Under what conditions can decision trees be useful?
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Chapter 14: Financial Analysis
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Sample Questions
Q1) Which method of analysis does not consider the time value of money?
A) Net present value (NPV)
B) Internal rate of return (IRR)
C) Payback
D) None of the above; they all consider the time value of money.
Q2) Straight-line depreciation is an accelerated depreciation method.
A)True
B)False
Q3) An investor puts $10,000 in an account earning 4 percent compounded interest.At the end of three years,the account will have a value of
A) less than $11,000.
B) between $11,000 and $11,200.
C) between $11,200 and $11,400.
D) more than $11,400.
Q4) What are the problems and advantages of managing by the numbers?
Q5) The net present value (NPV)method must exceed a hurdle rate.
A)True
B)False
Q6) The ________ is the interest rate that is the lowest desired return on an investment.
Page 16
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Chapter 15: Work Measurement
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Sample Questions
Q1) Use the information in Table H.1.Assuming that work element 4 receives a performance-rating factor of 1.2 and is performed once per cycle,what is the normal time for this work element?
A) Fewer than 10 seconds
B) Greater than or equal to 10 seconds but fewer than 11 seconds
C) Greater than or equal to 11 seconds but fewer than 12 seconds
D) Greater than or equal to 12 seconds
Q2) Use the information in Table H.1.Assume that work element 1 receives a performance-rating factor of 1.1 and all other elements receive a rating of 1.2.If work elements 1 and 3 are performed every other cycle,and elements 2 and 4 are performed every cycle,what is the normal time for the complete cycle?
A) Fewer than 45 seconds
B) Greater than or equal to 45 seconds but fewer than 48 seconds
C) Greater than or equal to 48 seconds but fewer than 51 seconds
D) Greater than or equal to 51 seconds
Q3) The key to creating a work standard is defining ________.
Q4) ________ is the process of creating labor standards based on the judgment of skilled observers.
Q5) What are the four steps in a time study?
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Chapter 16: Learning Curve Analysis
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Sample Questions
Q1) How are learning curves useful in financial planning?
Q2) Which of the following statements about learning curves is generally TRUE?
A) Management can decide to achieve a certain rate of learning.
B) Learning curves were first quantified by the U.S. Postal Service.
C) Using the "doubling" model, a learning curve with a rate of learning of 70 percent means the tenth unit takes 70 percent of the time that the twentieth unit will take.
D) Learning curves are recognition of the concept that the time a task takes usually decreases with experience.
Q3) Which one of the following is an assumption of learning curves?
A) The cumulative time of production decreases as production increases.
B) Time reduction per unit increases as cumulative production increases.
C) The same learning curve should be used when a company increases its level of automation.
D) The reduction in time per unit follows an exponential curve.
Q4) The first learning curve was developed by the aircraft industry.
A)True
B)False
Q5) The ________ can be represented by a line called a learning curve.
Q6) What are the three major assumptions of the learning curve?
Page 18
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Chapter 17: Computer-Integrated Manufacturing
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Sample Questions
Q1) What is CIM's ultimate goal?
A) Computerized integration of partial phases of manufacturing
B) Computerized integration from initial customer order to final shipment
C) Computerized integration of inventory control
D) Manufacture of a wide variety of products with frequent human intervention
Q2) ________ are small,driverless,battery-driven trucks that move material between operations,following instructions from either an on-board or central computer.
Q3) Which one of the following statements on an automated guided vehicle (AGV)is NOT true?
A) An AGV is a large, gas-driven truck that allows the operator to move materials efficiently between operations.
B) Some AGVs can now efficiently go anywhere as long as there is aisle space and a relatively smooth floor.
C) The AGV's ability to route around problems such as production bottlenecks and transportation blockages helps avoid expensive, unpredictable shutdowns.
D) AGVs give just-in-time delivery of parts, thus reducing stockpiles of expensive inventories throughout the plant.
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Page 19
Chapter 18: Acceptance Sampling Plans
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Sample Questions
Q1) If the sample size is increased and the acceptance level is unchanged,the OC curve will have a higher consumer's risk.
A)True
B)False
Q2) The average outgoing quality (AOQ)is
A) the proportion of defectives that the sampling plan will allow to pass.
B) the proportion of non-defectives that the sampling plan will allow to pass.
C) the highest proportion of defectives that the sampling plan will allow to pass.
D) the lowest proportion of defectives that the sampling plan will allow to pass.
Q3) An operating characteristic curve is a plot of the probability of accepting the lot against the proportion defectives.
A)True
B)False
Q4) Increasing c while holding n constant decreases the ________ risk and increases the ________ risk.
Q5) The maximum value of the average outgoing quality over all possible values of the proportion defective is called the ________.
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Chapter 19: Simulation
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Sample Questions
Q1) The two approaches to data collection for simulation are ________ and ________.
Q2) Using a simulation model to gather a year of operating data in a few minutes is known as
A) historical search data collection.
B) Monte Carlo optimization.
C) suboptimization.
D) time compression.
Q3) ________ is a feature of simulation models that allows them to obtain operating-characteristic estimates in much less time than is required to gather the same operating data from a real system.
Q4) ________ is the act of reproducing the behaviour of a system using a model that describes the processes of the system.
Q5) Which one of the following statements regarding simulation analysis is FALSE?
A) Simulation analysis is a form of hypothesis testing.
B) Analysis of variance is a commonly used statistical method for simulation analysis.
C) Statistical methods require the replication of simulation runs.
D) Each time a simulation model is run for a given set of decision variables, the same random numbers must be used.
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Chapter 20: Special Inventory Models
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Sample Questions
Q1) Use the information in Scenario D.2..What is the best order quantity?
A) Fewer than or equal to 20 units
B) Greater than 20 units but fewer than or equal to 40 units
C) Greater than 40 units but fewer than or equal to 50 units
D) Greater than 50 units
Q2) Use the information in Scenario D.1.If Jerry chooses to produce the batch size suggested by the economic production lot size (ELS)model,what is the annual cost?
A) Less than or equal to $900
B) Greater than $900 but less than or equal to $950
C) Greater than $950 but less than or equal to $1000
D) Greater than $1000
Q3) Use the information in Scenario D.3.What is the order quantity with the highest expected payoff?
A) 20 units
B) 30 units
C) 40 units
D) 50 units
Q4) Briefly explain why the economic production lot size (ELS)is actually larger than the EOQ when there are noninstantaneous replenishments.
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Chapter 21: Linear Programming
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Sample Questions
Q1) A binding constraint has slack but does not have surplus.
A)True
B)False
Q2) ________ represent choices the decision maker can control.
Q3) The ________ represents all permissible combinations of the decision variables in a linear programming model.
Q4) A parameter is a region that represents all permissible combinations of the decision variables in a linear programming model.
A)True
B)False
Q5) A manager is interested in deciding production quantities for products A,B,and C.He has an inventory of 20 tons each of raw materials 1,2,3,and 4 that are used in the production of products A,B,and C.He can further assume that he can sell all of what he makes.Which of the following statements is correct?
A) The manager has four decision variables.
B) The manager has three constraints.
C) The manager has three decision variables.
D) The manager can solve this problem graphically.
Q6) What are the assumptions of linear programming? Provide examples of each.
Page 23
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Chapter 22: Waiting Lines
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Sample Questions
Q1) Ed Deadbeat races to the Bursar's Office on the first day of class and notes that the line is four students long.Ed figures that the wait will be at least ten minutes and,having better uses of his time,he decides to proceed to the next item on his to-do list.Ed's behaviour is best described as
A) reneging.
B) balking.
C) blocking.
D) queuing.
Q2) Use the information in Scenario C.1.What is the average number of customers in line?
A) 0.33
B) 0.66
C) 1.33
D) 2.00
Q3) Your employer is considering a choice between a single-line and a multiple-line arrangement.The operation involves multiple servers and a single-phase service.When would each arrangement be ideal?
Q4) Explain how waiting lines can develop even when the service time is a constant.
Q5) The ________ is an input that generates potential customers.
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