Production and Operations Management
Exam Solutions
Course Introduction
Production and Operations Management explores the principles, strategies, and techniques involved in the efficient transformation of resources into goods and services. The course covers key topics such as process design, capacity planning, inventory management, quality control, supply chain management, and scheduling. Emphasis is placed on analytical decision-making and problem-solving skills to optimize operations in manufacturing and service organizations, aiming to improve productivity, reduce costs, and enhance customer satisfaction.
Recommended Textbook
OM 4th Edition by David Alan Collier
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23 Chapters
1572 Verified Questions
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Chapter 1: Goods, Services, and Operations Management
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Sample Questions
Q1) Time-based competition means providing new and innovative products that surprise and delight customers.
A)True
B)False
Answer: False
Q2) As manufacturers sought to customize products for global markets and increase goods and service variety, they were able to leverage the mass production methods that are very efficient and cost-effective.
A)True
B)False Answer: False
Q3) Moments of truth consist of one or more service encounters.
A)True
B)False Answer: False
Q4) Services always involve direct customer contact.
A)True
B)False Answer: False
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Chapter 2: Value Chains
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Sample Questions
Q1) A reason for globalization includes shifting work closer to customers for fast delivery and customization.
A)True
B)False
Answer: True
Q2) A value chain can be considered a "cradle-to-grave" model of the operations function.
A)True
B)False
Answer: True
Q3) Nearly all value chains are managed from a centralized operational structure because of the inherent inefficiencies that are found in decentralized operational structures.
A)True
B)False
Answer: False
Q4) Backward integration refers to acquiring capabilities toward distribution.
A)True
B)False
Answer: False
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Chapter 3: Measuring Performance in Operations
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Sample Questions
Q1) When Bill Gates stated that "Microsoft is always two years away from failure," he was emphasizing the importance of
A)innovation and learning
B)productivity
C)design flexibility
D)speed
Answer: A
Q2) Quality measures the degree to which the output of a process conforms to management's expectations and requirements.
A)True
B)False
Answer: False
Q3) The number of patent applications and the number of improvement suggestions implemented relate best to which operational performance measure category?
A)financial
B)customer and market
C)innovation and learning
D)productivity
Answer: C
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Page 5
Chapter 4: Operations Strategy
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Sample Questions
Q1) ____ attributes are most likely to be experienced by the customer when using estate planning services.
A)Search attributes
B)Experience attributes
C)Credence attributes
D)Order winners
Q2) Of the three types of attributes customers use to evaluate goods and services, goods are high in search attributes while services are high in experience and credence attributes.
A)True
B)False
Q3) Explain the difference between an order qualifier and an order winner.Provide some examples.
Q4) Professor Terry Hill's operations strategy framework provides a systems perspective of how operations is linked to corporate and marketing strategies.
A)True
B)False
Q5) What do managers need to understand in order to create a sustainable competitive advantage?
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Chapter 5: Technology and Operations Management
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Sample Questions
Q1) Computer-Aided Manufacturing (CAM) has advantages over conventional manufacturing approaches under many conditions.Which of the following is not such a condition?
A)when homogeneous parts are manufactured
B)when frequent design changes are made
C)when the manufacturing process is complex
D)when expert operator skills and close control are required
Q2) An intermediary specializes in handling all aspects of customers' returning a manufactured good or invoking service guarantees.
A)True
B)False
Q3) Janice Smith is an expert at calligraphy.However, it is found that a specialized robot can imitate Janice's work perfectly.Variable costs are 75% of selling price and fixed costs are $190,000 for the robot system.
a.How many pieces must be produced to break even assuming she sells each piece for $200?
b.How many pieces must be produced to break even if she sells them for $250 and variable costs drop to 70% of selling price?
Q4) Differentiate between hard technology and soft technology.
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Chapter 6: Goods and Service Design
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Sample Questions
Q1) In a two-component parallel system, the overall reliability is 0.9994.If the reliability of the first component is 0.9890, determine the reliability of the second component.
Q2) A service encounter design focuses on the interaction, directly and indirectly, between the service provider(s) and the customer.
A)True
B)False
Q3) The customer benefit package at LensCrafters is weighted more toward the primary good, which is eyewear.
A)True
B)False
Q4) Which of the following is not an important element of reliability definition?
A)probability
B)time
C)redundancy
D)operating conditions
Q5) Product simplicity encourages the use of standard parts and components.
A)True
B)False
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Page 8
Chapter 7: Process Selection, Design, and Analysis
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Sample Questions
Q1) Little's Law states that Throughput = Flow Time x Work-In-Process.
A)True
B)False
Q2) Little's Law
A)Removes process bottlenecks
B)Is a form of simulation
C)Focuses on finished goods inventory
D)Evaluates average process performance
Q3) Which of the following is not a major activity in designing a goods-producing or service-providing process?
A)Utilize reengineering
B)Flowchart the current process
C)Flowchart future state
D)Define appropriate performance measures
Q4) A bottleneck is the work activity that effectively limits throughput of a process.
A)True
B)False
Q5) Compare and contrast a product-process matrix with a service positioning matrix.
Q6) Explain Little's Law and how it can be used.
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Chapter 8: Facility and Work Design
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Sample Questions
Q1) CRAFT is a process layout technique that tries to improve on a current solution by exchanging two or three departments at a time to determine if total materials handling costs have been reduced.
A)True
B)False
Q2) The predominant layout type used in hospitals is the fixed-position layout.
A)True
B)False
Q3) Facility layout is not only concerned with the arrangement of physical facilities, but also the material handling capabilities within the facility.
A)True
B)False
Q4) The objective of assembly line balancing is to group tasks among workstations so that the amount of work assigned to each workstation is highly variable, thus maximizing flexibility.
A)True
B)False
Q5) Explain the socio-technical approach to job design and some ways to implement it.
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Page 10
Chapter 9: Supply Chain Design
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Sample Questions
Q1) An automobile company that installs satellite radio at the dealership instead of at the factory is applying a postponement strategy.
A)True
B)False
Q2) A(n) ____ seeks to balance capacity and demand, might use only a few large distribution centers, and minimize costs of routing products from factories to retail stores and customers.
A)Responsive supply chain
B)Efficient supply chain
C)Push system
D)Pull system
Q3) A push system
A)can adjust easily to poor forecasts
B)is more appropriate for make-to-order items
C)can reduce transportation costs by using full-truckload shipments
D)works best with variable sales patterns
Q4) What are the key functions of a supply chain?
Q5) Define the concept of Vendor-Managed Inventory (VMI).How does VMI improve supply chain performance?
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Chapter 10: Capacity Management
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Sample Questions
Q1) Complementary goods and services are those that require different resources than the organization's other goods and services.
A)True
B)False
Q2) The Theory of Constraints is focused on eliminating all bottlenecks in a process.
A)True
B)False
Q3) Define the Theory of Constraints (TOC).How does TOC view throughput differently from the traditional OM perspective?
Q4) An assembly line normally operates two shifts a day, five days per week.Each shift can produce 475 assemblies.What is the weekly capacity?
Q5) 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 (%)
Q6) What is safety capacity? Discuss reasons for using it.
Q7) What are complementary goods and services and why do firms have them?
Page 12
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Chapter 11: Forecasting and Demand Planning
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Sample Questions
Q1) A major difference between MSE and MAD is that MAD is influenced much more by large forecast errors than by small errors.
A)True
B)False
Q2) Single exponential smoothing is a forecasting technique that uses a weighted average of past time-series values to forecast the value of the time series in the next period.
A)True
B)False
Q3) Regular patterns in a data series that take place over long periods of time are called
A)Trends
B)Seasonal patterns
C)Cyclical patterns
D)Irregular variation
Q4) Repeatable periods of ups and downs over short periods of time are called ____.
A)Trends
B)Seasonal patterns
C)Cyclical patterns
D)Irregular variation
Page 13
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Chapter 12: Managing Inventories
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Sample Questions
Q1) In a fixed quantity inventory system with certain demand, the reorder point is chosen to be the average demand during the lead time.
A)True
B)False
Q2) Maintaining large stocks of inventory is a requirement in today's supply chains in order to improve profitability.
A)True
B)False
Q3) Explain the different types of inventories maintained throughout a value chain.
Q4) An example of stochastic demand might be: "The daily demand for milk is normally distributed with a mean of 150 gallons and a standard deviation of 15 gallons."
A)True
B)False
Q5) The Economic Order Quantity model (EOQ) allows for variable lead-time.
A)True
B)False
Q6) Discuss two types of stockouts.
Q7) Provide some examples of when the single period inventory model is applicable.
Page 14
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Chapter 13: Resource Management
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Sample Questions
Q1) Lot sizing rules on a parent item do not affect the gross requirements of all lower level component items.
A)True
B)False
Q2) A hardware company is interested in developing a net requirement schedule for one of its products, a claw hammer.The beginning inventory for the product is 1500 units and the safety stock is 300 units.The weekly demand over a six-week planning horizon is 400, 850, 560, 900, 600, and 700 units.
a.What would the net requirements be for week 2?
b.What is the ending inventory in week 4?
Q3) End items in a master production schedule or final assembly schedule must be forecast.
A)True
B)False
Q4) Work center load reports are used in capacity requirements planning.
A)True
B)False
Q5) Define Material Requirements Planning (MRP) and how it can benefit an organization.
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Chapter 14: Operations Scheduling and Sequencing
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Sample Questions
Q1) In sequencing a set of jobs on a single processor, different sequences will have different makespans but the same average flow times.
A)True
B)False
Q2) Short-term capacity fluctuations necessitate changes in schedules.List at least five factors affecting short-term capacity.
Q3) Scheduling applies to all aspects of the value chain.
A)True
B)False
Q4) Appointments can be viewed as a reservation of service time and capacity.
A)True
B)False
Q5) The time needed to process a given set of jobs is called
A)Flow time
B)Ready time
C)Makespan
D)Due date
Q6) Staff scheduling attempts to match available personnel with the needs of the organization by performing what four steps?
Page 16
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Chapter 15: Quality Management
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Sample Questions
Q1) Joseph Juran preached the "14 Points" for management in his quality philosophy.
A)True
B)False
Q2) List the three principles of total quality and why they are important.
Q3) Machine down time and downgrading costs are examples of which type of quality cost?
A)Prevention
B)Appraisal
C)Internal-failure
D)External-failure
Q4) The seven QC tools are designed to be simple so that workers at all levels can use them.
A)True
B)False
Q5) The most relevant definition of quality for an operations manager is "conformance to specifications."
A)True
B)False
Q6) What are the 7 QC Tools and what value are they for quality improvement? Briefly explain how each tool is used.
Page 17
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Chapter 16: Quality Control and Spc
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Sample Questions
Q1) Process capability quantifies the variation that results from common causes.
A)True
B)False
Q2) Larger sample sizes allow smaller changes in process characteristics to be detected with higher probability.
A)True
B)False
Q3) Jim is a quality control manager at a clothing manufacturer.He is studying a quality problem where zippers are purchased from an outside supplier and have been discovered to be poorly constructed.When the zipper is manufactured correctly, it should have a mean length of 15 inches and a range of .5 inches.Jamie proposes that 25 samples of five observations each should be collected on a daily basis.He plans to prepare control charts to monitor the progress of the supplier's quality performance on the zippers.
a.What are the upper and lower control limits and center line for an R chart?
b.What are the upper and lower control limits and center line for an X-bar chart?
Q4) Define "quality at the source."
Q5) What is the purpose of a process-capability study and what is a process capability index?
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Chapter 17: Lean Operating Systems
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Q1) The 5Ss focus on improving waste generated by inefficient transportation.
A)True
B)False
Q2) Production Kanbans trigger the movement of parts.
A)True
B)False
Q3) Toyota classified waste into seven major categories.Those categories include all of the following except
A)Motion
B)Ordering
C)Inventory
D)Waiting
Q4) Which of the following is least related to a pull system?
A)Building inventory
B)Final assembly schedule
C)Real time information
D)Sales rate
Q5) Explain the purpose of visual controls and give examples.
Q6) Explain the 5Ss.
Q7) Define a Kanban.Describe how it helps execute a pull system.
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Chapter 18: Project Management
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Sample Questions
Q1) Explain the three time estimates used to characterize uncertainty of activity times in the Program Evaluation and Review Technique (PERT) procedure.
Q2) Which of the following is least related to Program Evaluation and Review Technique (PERT)?
A)Beta distribution
B)Variance
C)Most probable time
D)Crashing
Q3) In a matrix organization, functional managers may be reluctant to provide the resources and employees, and the employees assigned to projects may relegate a project to a lower priority than their daily functional job.
A)True
B)False
Q4) Which step in the project management process would involve determining time estimates for activities?
A)Project definition
B)Resource planning
C)Project scheduling
D)Project control
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Chapter 19: Work Measurement, Learning Curves, and Standards
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Sample Questions
Q1) Define and relate normal time and standard time.
Q2) A job had a normal time of 2.43 minutes, an allowance of 20% and a forecast demand of 120 units per day.How long should it take to produce one day's output?
Q3) When timing a work activity with multiple tasks, the general rule is to take the largest sample size estimate and use it for all activities or tasks.
A)True
B)False
Q4) Determine the sample size for the following time study given a standard deviation of four minutes and a 98% probability that the value of the sample mean is within 1.5 minutes?
Q5) The learning curve does not apply to supervisory personnel, some skilled craftspeople or jobs that have non-repetitive job tasks.
A)True
B)False
Q6) Determine the sample size for the following time study given a standard deviation of three ounces and a 92% probability that the value of the sample mean is within two ounces?
Q7) Discuss the two different sides of the debate over work standards.
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Chapter 20: Queuing Analysis
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Sample Questions
Q1) By using two-servers for airport check-ins instead of one, the imputed cost of waiting goes up.
A)True
B)False
Q2) Which of the following is not a key assumption of the multiple-server queuing model?
A)The waiting line has two or more identical servers
B)The arrivals wait in two or more lines
C)The mean service rate, \(\mu\), is the same for each server
D)No balking or reneging is allowed
Q3) For a single-server queuing model, the utilization factor \(\lambda\) / \(\mu\) has to be
A)less than one
B)equal to one
C)greater than one
D)less than or equal to one
Q4) The multiple-server queuing model assumes jockeying can take place.
A)True
B)False
Q5) 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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Sample Questions
Q1) (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
Q2) Explain the essence of a transportation problem.
Q3) Differentiate between a feasible solution and an optimal solution.
Q4) Which of the following is generally correct regarding the transportation problem of linear programming?
A)Supply = demand
B)Objective is maximizing profit contribution
C)Shipping cost from each source to each destination is the same
D)Exponential loading/unloading distribution is assumed
Q5) The constraint that requires the beginning inventory plus production minus sales to equal the ending inventory is called material-balance equation.
A)True
B)False
Q6) Explain the essence of a blending problem.
23
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Chapter 22: Simulation
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Sample Questions
Q1) Discuss a simulator.How does it differ from simulation software such as ProcessModel?
Q2) Spreadsheets are extremely strong in their ability to conduct dynamic simulation analysis.
A)True
B)False
Q3) ____ trace the detailed logic or actions that occur in the system in a step-by-step fashion over time.
A)Validations
B)Verifications
C)System simulation models
D)Entities
Q4) 'Balking' means a customer finds the wait while in line too long and thus leaves the line.
A)True
B)False
Q5) Define simulation and give some operations management examples.
Q6) A simulator is a general purpose simulation model.
A)True
B)False
Page 24
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Chapter 23: Decision Analysis
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Sample Questions
Q1) The expected value criteria is a good tool if
A)The decision will be made only one time
B)The decision will be made over-and-over again
C)The decision will be made under conditions of certainty
D)The decision has to be made quickly
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) Describe how the following criteria are applied to a decision problem in which the object is maximization.
a.Maximax
b.Maximin
c.Minimax regrets
Q4) Explain the structure and purpose of a decision tree.
Q5) Differentiate between uncertainty and risk.
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