Service Operations Management Practice Exam
Course Introduction
Service Operations Management explores the principles and practices involved in designing, delivering, and improving service processes within various industries. The course examines key topics such as service strategy, process design, capacity and demand management, quality assurance, and the role of technology in service delivery. Students will analyze real-world cases to understand customer expectations, evaluate operational efficiency, and develop solutions for enhancing both customer satisfaction and organizational performance. Emphasis is placed on the unique challenges faced in service environments, teamwork, and effective leadership in managing service operations.
Recommended Textbook
Operations and Supply Chain Management 14th Edition by F. Robert Jacobs
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Page 2
Chapter 1: Introduction
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Q1) Which of the following is a measure of operations and supply management efficiency used by Wall Street?
A)Dividend payout ratio
B)Current ratio
C)Receivable turnover
D)Earnings per share growth
E)Financial leverage
Answer: C
Q2) Effectiveness means doing the right things to create the most value for the company.
A)True
B)False
Answer: True
Q3) Use of systems like point-of-sale, radio-frequency identification tags, bar-code scanners, and automatic recognition has made it more difficult to understand what all the information is saying.
A)True
B)False
Answer: False
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Page 3
Chapter 2: Strategy
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Q1) When a company seeks to match the benefits of a successful position while maintaining its existing position in offering customers a variety of differing services, what is this process called?
A)Operations capability analysis
B)Straddling
C)Order qualifying
D)Order winning
E)Inter-functional analysis
Answer: B
Q2) An operations and supply chain strategy must be integrated with the organization's corporate strategy.
A)True
B)False
Answer: True
Q3) A firm's business practices toward its labor force pertain mainly to the economic aspect of the triple bottom line concept.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Design of Products and Services
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Q1) The conclusion of the product development process is when the product is withdrawn from the market.
A)True
B)False
Answer: False
Q2) Value analysis/value engineering has as its objective to increase product quality and reduce costs.
A)True
B)False
Answer: False
Q3) Advocates of financial modeling of product design projects argue that:
A)Financial analysis focuses on measurable quantities only.
B)Financial analysis brings discipline and control to the product development process.
C)Sufficiently rigorous financial analysis can accurately forecast the product's profit potential.
D)Financial analysis is as solid as the assumptions that go into the model.
E)Financial analysis nurtures innovation and creativity.
Answer: B
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Chapter 4: Project Management
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Q1) For an activity in a CPM analysis, the early finish time is 20 and the late finish time is 20.Which of the following statements is true?
A)The activity's late start must happen before its early start.
B)The activity is on the critical path.
C)The slack for this activity is 20.
D)The duration of this task is zero.
E)The duration of this task is 20.
Q2) Describe how CPM handles the trade-offs between time and cost in the scheduling of a project.
Q3) The activity direct costs associated with a project might include giving workers overtime to complete a project in less than the expected time.
A)True
B)False
Q4) The Gantt chart is an example of a project control chart.
A)True
B)False
Q5) What is the most basic requirement of an EVM system?
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Chapter 5: Strategic Capacity Management
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Q1) At a decision point in a decision tree, which machine would you select when trying to maximize payoff when the anticipated benefit of selecting machine A is $45,000, with a probability of 90%; the expected benefit of selecting machine B is $80,000, with a probability of 50%; and the expected benefit of selecting machine C is $60,000, with a probability of 75%?
A) Machine A
B) Machine B
C) Machine C
D) You would be indifferent between machines A and C.
E) You would be indifferent between machines A and B.
Q2) A chance node on a decision tree has four possible outcomes worth $10,000, $20,000, $30,000, and -$100,000, respectively.The probabilities of these outcomes occurring are assessed as 10%, 25%, 50%, and 15%, correspondingly.What is the expected value of this chance node? _________________________
Q3) In practice, achieving a perfectly balanced plant is usually desirable but impossible. A)True
B)False
Q4) What is a capacity cushion, and why would a firm have one?
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Page 7
Chapter 6: Learning Curves
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Q1) With an 80 percent unit improvement factor learning curve and an initial time of 100 minutes to do a job, at what number of repetitions will the job take less than 50 minutes?
A)5 repetitions of the job
B)6 repetitions of the job
C)7 repetitions of the job
D)8 repetitions of the job
E)9 repetitions of the job
Q2) You have determined that a 60 percent learning curve is appropriate for a task.If your initial timing of person performing that task was 35 minutes and if you need the task performed 1,000 times, how many minutes of work will be required?
A)3,500.0 minutes
B)1,062.5 minutes
C)705.25 minutes
D)450.5 minutes
E)220.3 minutes
Q3) What is a learning curve?
Q4) Why are learning curves useful in business?
Q5) What are some of the factors that stimulate learning?
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Chapter 7: Manufacturing Processes
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Q1) A make-to-order firm will work with the customer to design the product and then make it from purchased materials, parts, and components.
A)True
B)False
Q2) The focus in the make-to-stock environment is on providing finished goods where and when the customers want them.
A)True
B)False
Q3) The volume requirements for the product are one determinant of the choice of which process structure to select.
A)True
B)False
Q4) The placement of which of the following is not determined by production process organization decisions?
A)Departments
B)Work groups
C)Workstations
D)Machines
E)Emergency exits
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Chapter 8: Facility Layout
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Q1) An assembly-line layout is similar to the basic production layout format of flow-shop layout.
A)True
B)False
Q2) A straight-line flow pattern is considered a good layout design for back-office service operations.
A)True
B)False
Q3) A workcenter is a basic production layout format in which similar equipment or functions are grouped together.
A)True
B)False
Q4) Assembly lines are a special case of product layout.
A)True
B)False
Q5) In a good layout design for a manufacturing facility, it is acceptable to have backtracking by personnel in the delivery of a customer's product.
A)True
B)False
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Chapter 9: Service Processes
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Q1) Which of the following is one of the three contrasting approaches to delivering on-site service?
A)Quality approach
B)Stock market approach
C)Production-line approach
D)Retail approach
E)Professional approach
Q2) Which of the following is not an element of a good service guarantee?
A)Unconditional (no small print)
B)The customer controls the process
C)Easy to understand
D)Easy to communicate
E)Meaningful to the customer
Q3) A service system with a high degree of customer contact is less difficult to control than a low degree of customer contact service system.
A)True
B)False
Q4) The service-system design matrix identifies six forms of service encounters.
A)True
B)False
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Chapter 10: Waiting Line Analysis and Simulation
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Q1) Which of the following is a suggestion for managing queues presented in the textbook?
A)Train your servers to be friendly.
B)Tell customers that the line should encourage them to come during slack periods.
C)Give each customer a number.
D)Periodically close the service channel to temporarily disperse the line.
E)Use humor to defuse a potentially irritating situation.
Q2) When arrivals occur in a purely random fashion at a service facility, the distribution of the number of arrivals per unit of time forms which kind of distribution?
Q3) Best customer last is a queue discipline discussed in the textbook.
A)True
B)False
Q4) Highest-profit customer first is a queue discipline discussed in the textbook.
A)True
B)False
Q5) In finite queuing theory, the average waiting time in line is denoted by what symbol?
Q6) In what ways can management influence the arrival patterns of waiting lines?
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Chapter 11: Process Design and Analysis
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Q1) What are the four basic methods for measuring work and setting standards?
Q2) If you want to reduce process flow time, it has been suggested that you can reduce interruptions in the production process.
A)True
B)False
Q3) One way to categorize a process is to determine whether it is a multiple-stage or a single-stage process.
A)True
B)False
Q4) Little's law says there is a long-term relationship among the inventory, throughput, and flow time of a production system in steady state.
A)True
B)False
Q5) When you compare the metrics of your company to another you are
Q6) The ratio of output to input is called ____________.
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Chapter 12: Six Sigma Quality
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Q1) One of the definitions for the cost of quality is that it represents the costs attributable to the production of quality that is not 100 percent perfect.
A)True
B)False
Q2) Philip Crosby states that the correct cost for a well-run quality management program should be under 2.5 percent of sales.
A)True
B)False
Q3) What are expenditures related to achieving product or service quality, including the costs of appraisal and prevention of defects, called?
Q4) The Malcolm Baldrige National Quality Award is given to organizations that have done which of the following?
A)Instituted a Six-Sigma approach to total quality control.
B)Demonstrated a high level of product quality.
C)Demonstrated outstanding quality in their products and processes.
D)Have a world-class quality control function.
E)Most significantly improved their product quality levels.
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Chapter 13: Statistical Quality Control
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Q1) You are going to develop an R-chart based on range statistics, and you are using a sample size of 15 for your charting purposes.Which of the following is the upper control limit D4 factor for the chart?
A)1.65
B)1.70
C)1.76
D)1.87
E)1.92
Q2) Quality control charts usually have a central line and upper and lower control limit lines.Which of the following is a reason that the process being monitored with the chart should be investigated?
A)A single plot falls above or below the control limits.
B)Behavior is normal.
C)A large number of plots are on or near the central line.
D)There is no real trend in any direction.
E)There is a change in raw materials or operators.
Q3) AQL stands for accepting questionable lots in production quality management.
A)True
B)False
Q4) What does it mean when we say that a process is capable?
Page 15
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Chapter 14: Lean Supply Chains
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Q1) You have been called in as a consultant to set up a Kanban control system.The first thing to do is to determine the number of Kanban card sets needed.Your research shows that the expected demand during lead time for a particular component is 150 per hour.You estimate the safety stock should be set at 25 percent of the demand during lead time.The tote trays used as containers can hold 8 units of stock, and the lead time it takes to replenish an order is 2 hours.Which of the following is the number of Kanban card sets necessary to support this situation?
A)42
B)47
C)68
D)89
E)94
Q2) The term "freeze window" refers to the practice of building quality into the process and not identifying quality by inspection.
A)True
B)False
Q3) Kanban means "symbol" or "box" in Japanese.
A)True
B)False
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Chapter 15: Logistics Distribution, and Transportation
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Q1) Which of the following is a criterion that influences manufacturing plant or warehouse facility location decisions?
A)Proximity to customers
B)Corporate policy
C)Competitor's locations
D)Competitive advantage
E)Host-community politics
Q2) One of the objectives of facility location analysis is to select a site with the lowest total cost.Which of the following costs should not be included in the analysis?
A)Outbound distribution costs
B)Incidental costs
C)Energy costs
D)Hidden costs
E)Taxes
Q3) Facility location analysis considers the competitive imperative of lowest total cost.
A)True
B)False
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Chapter 16: Global Sourcing and Procurement
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Q1) Name the four types of supply chain in Hau Lee's uncertainty framework for classifying supply chains.(1) ________________________ (2) ________________________ (3) ________________________ (4) ________________________
Q2) Functional products include staples that people buy in a wide range of retail outlets, such as grocery stores and gas stations.
A)True
B)False
Q3) A financially driven reason for outsourcing is that it can help gain access to new markets, especially in developing countries.
A)True
B)False
Q4) A stable supply process is one where product volumes are high, demand is predictable, and there is a long product life.
A)True
B)False
Q5) The acronym RFP stands for: ________________________
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Chapter 17: Enterprise Resource Planning Systems
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Q1) What information is necessary to calculate the cash-to-cash cycle time?
A)Inventory, lead time, accounts receivable, sales
B)Accounts payable, lead time, accounts receivable, inventory
C)Accounts payable, cost of sales, accounts receivable, inventory
D)Accounts payable, lead time, accounts receivable, assets
Q2) Defects often occur during changeovers.
A)True
B)False
Q3) What are some ways in which ERP can be used to link functional areas of a firm?
Q4) Asset turns is a measure of cash flow.
A)True
B)False
Q5) Only manufacturing affects the inventory account.
A)True
B)False
Q6) An important point to keep in mind is that ____________ not software, make decisions.ERP systems simply _________________________ better decision making.
Q7) One of the weaknesses of SAP is the inability to link with most mobile devices. A)True
B)False
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Chapter 18: Forecasting
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Q1) If a firm produced a product that was experiencing growth in demand, the smoothing constant alpha (reaction rate to differences) used in an exponential smoothing forecasting model would tend to be which of the following?
A)Close to zero
B)A very low percentage, less than 10 percent
C)The more rapid the growth, the higher the percentage
D)The more rapid the growth, the lower the percentage
E)50 percent or more
Q2) When forecast errors occur in a normally distributed pattern, the ratio of the mean absolute deviation to the standard deviation is 2 to 1, or 2 x MAD = 1 standard deviation.
A)True
B)False
Q3) A tracking signal (TS) can be calculated using the arithmetic sum of forecast deviations divided by the MAD.
A)True
B)False
Q4) Distinguish between strategic and tactical forecasts.
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Chapter 19: Sales and Operations Planning
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Q1) Aggregate sales and operations planning occur in a company about every 3 to 18 months.
A)True B)False
Q2) What are the five conditions named in the text that support yield management from an operational perspective?
(1) ____________________________
(2) ____________________________
(3) ____________________________
(4) ____________________________
(5) ____________________________
Q3) What are the four main categories of cost relevant to aggregate operations planning?
(1) ____________________________
(2) ____________________________
(3) ____________________________
(4) ____________________________
Q4) The essence of yield management is the ability to manage supply. A)True B)False
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Chapter 20: Inventory Management
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Q1) What is the term for there being no relationship between demands for various items?
Q2) Computer inventory systems are often programmed to produce a cycle count notice in which of the following case?
A)When the record shows a near maximum balance on hand
B)When the record shows positive balance but a backorder was written
C)When quality problems have been discovered with the item
D)When the item has become obsolete
E)When the item has been misplaced in the stockroom
Q3) Which of the following is an assumption of the basic fixed-order-quantity inventory model?
A)Lead times are averaged.
B)Ordering costs are variable.
C)Price per unit of product is constant.
D)Back-orders are allowed.
E)Stock-out costs are high.
Q4) Assuming no safety stock, what is the reorder point (R) given an average daily demand of 100 units and a lead time of 5 days?
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Chapter 21: Material Requirements Planning
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Q1) In a net change MRP system, requirements and schedules are considered rigid and never updated.
A)True
B)False
Q2) Which of the following is the net requirement using an MRP program if the gross requirement is 1,250 and the inventory on hand is 50?
A)1,200
B)1,300
C)1,150
D)2,450
E)None of these
Q3) What are periods of time having some specified level of opportunity for the customer to make changes called?
Q4) Which of the following is an input file necessary to run an MRP system?
A)Exception report
B)Computer-aided-design files
C)Inventory records file
D)Personnel files
E)Planned order schedule
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Chapter 22: Workcenter Scheduling
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Q1) The FCFS priority rule used in sequencing production jobs will always result in a better solution than the LCFS rule.
A)True
B)False
Q2) A system that "backward schedules" is designed to determine and report the earliest date an order can be completed.
A)True
B)False
Q3) A machine shop has two machines, A and B. Four jobs need to be processed through machine A first and B second. Job 1 will take one hour on machine A and three hours on machine B. Job 2 will take three hours on A and two hours on B. Job 3, seven on A and three on B. Job 4, five hours on A and one hour on B. Using Johnson's rule, in what order should these jobs be done? ___________________________________.
Q4) MES and SES are acronyms for "manufacturing environment scheduler" and "service environment scheduler" systems, respectively.
A)True B)False
Q5) Distinguish between forward scheduling and backward scheduling.
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Chapter 23: Theory of Constraints
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Q1) Which of the following is a negative aspect of JIT compared to synchronous manufacturing?
A)JIT cannot deal with outside vendors.
B)JIT needs broadly fluctuating production levels.
C)JIT does not allow very much flexibility in the products produced.
D)JIT requires a great deal of workforce computational skills.
E)JIT does not deal well with bottlenecks.
Q2) Describe how cost accounting is sometimes antithetical to TOC?
Q3) The "dollar days" inventory measurement may be used to focus management's attention on where inventory is located.
A)True
B)False
Q4) According to the theory of constraints, which of the following is a kind of time that makes up the cycle time in production?
A)Quality time
B)Break time
C)Research time
D)Just-in-time
E)Idle time
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Chapter 24: Health Care
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Q1) The text mentions several common approaches to use when developing a strategy to close a capacity gap (where utilization of a resource exceeds capacity available).Which of the following is not among the common approaches mentioned?
A)Transferring capacity from other units
B)Increasing capacity through overtime
C)Subcontracting with other hospitals
D)Bottleneck reduction
E)New construction
Q2) Decoupling points are IV and electronic monitoring connections, which are decoupled when a patient is moved from an operating room to recovery.
A)True
B)False
Q3) Performance dashboards are used by hospitals to present detailed day-to-day measures in three major categories: customer service, clinical operations, and billing accuracy.
A)True
B)False
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Chapter 25: Operations Consulting
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Q1) Fishbone diagrams and cause-and-effect diagrams give different information.
A)True
B)False
Q2) Issue trees are used as problem definition tools to structure or map the key problems to be investigated and provide a working initial hypothesis as to the likely solution to the problem.
A)True
B)False
Q3) Which of the following is the stage in the operations consulting process that immediately follows "analyze problem"?
A)Design, develop, and test alternative solutions
B)Develop systematic performance measures
C)Present final report
D)Assure client satisfaction
E)Implement changes
Q4) In a rapid plant assessment tour, a study team of consultants can determine the "leanness" of a plant in 30 minutes.
A)True
B)False
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