Service Operations Management
Study Guide Questions
Course Introduction
Service Operations Management explores the principles, strategies, and techniques involved in designing, delivering, and improving services across various industries. The course covers topics such as service process design, capacity planning, quality management, demand forecasting, service innovation, and technology integration. Emphasis is placed on understanding customer expectations, managing service encounters, and employing performance measurement tools to optimize operational efficiency and enhance service quality. Through case studies and practical exercises, students learn to address the unique challenges of managing service operations and develop skills to create value for both service providers and customers.
Recommended Textbook
OM 5 5th Edition by David Alan Collier
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Page 2
Chapter 1: Goods, Services, and Operations Management
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Sample Questions
Q1) The three issues that are at the core of operations management include all of the following EXCEPT _____.
A) cost
B) quality
C) tangibility
D) efficiency
Answer: C
Q2) Every job entails some aspect of operations management.
A)True
B)False
Answer: True
Q3) Which of the following statements about goods and services is TRUE?
A) The demand for services is independent of time.
B) A durable good is a product that typically lasts for less than three years.
C) A good example of a nondurable good is furniture.
D) A service encounter can consist of one or more moments of truth.
Answer: D
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Chapter 2: Value Chains
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Sample Questions
Q1) 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
Q2) The first, second, and third waves of outsourcing experienced by the United States involve _____ respectively.
A) goods-producing jobs, simple service work, and skilled knowledge work
B) simple service work, goods-producing jobs, and skilled knowledge work
C) simple service work, skilled knowledge work, and goods-producing jobs
D) skilled knowledge work, simple service work, and goods-producing jobs
Answer: A
Q3) _____ is the process of having suppliers provide goods and services that were previously provided internally.
A) Outsourcing
B) Horizontal integration
C) Reshoring
D) Vertical integration
Answer: A
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Page 4
Chapter 3: Measuring Performance in Operations
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Q1) The leadership category of the Baldrige Performance Excellence criteria includes how an organization addresses its public and community responsibilities.
A)True
B)False
Answer: True
Q2) _____ have the primary responsibility to design and manage the processes and associated resources that create value for customers.
A) Operations managers
B) Testers
C) First-line supervisors
D) End users
Answer: A
Q3) Airline revenue per passenger mile and hotel revenue per full-time employee are examples of _____.
A) reliability
B) value of a loyal customer
C) sustainability
D) productivity
Answer: D
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Page 5
Chapter 4: Operations Strategy
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Sample Questions
Q1) The _____ of a firm are the strengths that are unique to that organization.
A) strategy developments
B) strategic missions
C) vision statements
D) core competencies
Q2) Identify a TRUE statement about the Lawn Care Company (LCC) case study.
A) The LCC already had experience and capabilities in the residential lawn application service and market segment, and was considering using this expertise to enter the golf and park market segment.
B) The gross margin on grass seed and fertilizer was higher than on the lawn application service.
C) Service management skills play a major role in the LCC current strategy and vision of the business at the time of the case.
D) The application service for parks and golf courses provided by a competitor of Lawn Care can be considered the competitor's competitive advantage.
Q3) What do managers need to understand in order to create a sustainable competitive advantage?
Q4) Explain the concepts of search, experience, and credence attributes.
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Chapter 5: Technology and Operations Management
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Sample Questions
Q1) One of the major benefits of technology has been its impact on sustainability.
A)True
B)False
Q2) Which of the following is NOT a major characteristic of a customer relationship management (CRM) system?
A) Predicts various Web characteristics that would be most attractive to customers
B) Identifies the possible fraudulent transactions
C) Monitors the quality levels of products
D) Forecasts customer retention
Q3) 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
Q4) MySQL database system is an example of soft technology.
A)True
B)False
Q5) What are the benefits and challenges of technology?
Q6) 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 design specification 25 ± 1.5, the value 25 is called the _____???, while ± 1.5 is called the _____.
A) nominal; reliability
B) average; tolerance
C) average; nominal
D) nominal; tolerance
Q2) Which of the following statements is TRUE of the LensCrafters case study?
A) LensCrafters's peripheral product is an eyewear.
B) Each store has very different layout and servicescape.
C) The fitting stations are in a high-contact area.
D) Low cost makes a long drive to a LensCrafters store worthwhile.
Q3) Customer-contact requirements might be either technical or behavioral in nature.
A)True
B)False
Q4) In a two-component parallel system, the overall reliability is 0.9984. If the reliability of the first component is 0.9880, determine the reliability of the second component.
Q5) Explain the concept of Design for Manufacturability (DFM).
Q6) Explain the concept of quality function deployment (QFD). What is the final step in building a House of Quality?
Page 8
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Chapter 7: Process Selection, Design, and Analysis
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Sample Questions
Q1) What is the implied service rate at a bank teller's window if demand is 26 customers per hour and the bank staffs are 3 tellers with an average utilization of 80%?
A) Less than 5 customers per hour
B) More than 5 but less than or equal to 10 customers per hour
C) More than 10 but less than or equal to 15 customers per hour
D) More than 15 but less than or equal to 20 customers per hour
Q2) Little's Law states that Throughput = Flow Time × Work-In-Process.
A)True
B)False
Q3) Which of the following statements is TRUE about Little's Law?
A) It explains the relationship between waiting time and throughput.
B) It takes into account any randomness in arrivals or service times.
C) It focuses on finished goods inventory.
D) It evaluates average process performance.
Q4) The average number of hotel rooms occupied per day during the month of March is 275. Rooms are booked on average for 2.5 days. On average, how many new bookings occur each day?
Q5) Define reengineering. How does it differ from other approaches to process improvement?
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Chapter 8: Facility and Work Designs
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Sample Questions
Q1) 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
Q2) Because of precedence relationships in a network, assembly-line efficiencies will generally be very high.
A)True
B)False
Q3) In designing _____ layouts, one is concerned with the arrangement of departments or work centers relative to each other.
A) product
B) cellular
C) process
D) fixed-position
Q4) In a product layout, flow-blocking delay occurs whenever one stage completes work and no units from the previous stage are awaiting processing.
A)True
B)False
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Chapter 9: Supply Chain Design
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Sample Questions
Q1) _____ is the process of delaying product customization until the product is closer to the customer at the end of a supply chain.
A) Postponement
B) Sourcing
C) Deferral
D) Multisite management
Q2) In the supply chain operations reference (SCOR) model, the "plan" step involves identifying and selecting suppliers.
A)True
B)False
Q3) Distribution centers are warehouses that act as intermediaries between suppliers and factories.
A)True
B)False
Q4) Contract manufacturers can provide the benefit of reducing the total costs resulting from economies of scale.
A)True
B)False
Q5) 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) Complementary goods and services are those that require different resources than the organization's other goods and services.
A)True
B)False
Q2) The ideas and methods surrounding nonbottleneck work activity are often called yield management.
A)True
B)False
Q3) The total process (throughput) capacity in units per hour for the four-stage process
A to D assuming 3 administrative clerks, 3 coding specialist, and 3 assistant managers on duty is:
A) less than 10 units per hour.
B) more than 10 units but less than or equal to 20 units.
C) more than 20 units but less than or equal to 30 units.
D) more than 30 units but less than or equal to 40 units.
Q4) An example of safety capacity would be planning additional capacity to account for employee summer vacations.
A)True
B)False
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Chapter 11: Forecasting and Demand Planning
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Sample Questions
Q1) The mean absolute deviation (MAD) for forecast 2 is:
A) less than or equal to 2.0.
B) more than 2.0 but less than or equal to 2.5.
C) more than 2.5 but less than or equal to 3.0.
D) more than 3.0 but less than or equal to 3.5.
Q2) In forecasting, irregular variation that is explainable can normally be discarded.
A)True
B)False
Q3) In practice, managers rely almost exclusively on statistical forecasts.
A)True
B)False
Q4) Statistical forecasting is based upon the assumption that the future will be an extrapolation of the past.
A)True
B)False
Q5) A single moving average is most appropriate for data with identifiable trends.
A)True
B)False
Q6) Explain the difference between statistical forecasting and judgment forecasting.
Page 13
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Chapter 12: Managing Inventories
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Sample Questions
Q1) A stock-keeping unit is the same no matter at which location the item is found.
A)True
B)False
Q2) Illustrate the single-period inventory model with an example.
Q3) If Zainab decides to use a fixed-period system (FPS), the fixed-order interval based on store economics is:
A) less than 5 weeks.
B) more than 5 but less than or equal to 10 weeks.
C) more than 10 but less than or equal to 15 weeks.
D) more than 15 but less than or equal to 20 weeks.
Q4) The optimal replenishment level for the given fixed-period system (FPS) is:
A) less than 300 boxes.
B) more than or equal to 300 but less than 400 boxes.
C) more than or equal to 400 but less than 500 boxes.
D) more than or equal to 500 boxes.
Q5) Lead time is the time it takes to prepare an order for shipping to a customer.
A)True
B)False
Q6) What are the four categories of inventory costs?
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Q7) Explain the different types of inventories maintained throughout a value chain.
Chapter 13: Resource Management
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Sample Questions
Q1) Describe the options that managers have for developing aggregate plans to respond to fluctuating demand.
Q2) Given the information below, complete the materials requirements planning (MRP) record and explain what it tells the inventory analyst to do. \(\begin{array}{|l|l|}
\hline \text { Lot Size Rule: Fixed Q }=200 \text { units } & \text { Safety Stock: 0 units } \\
\hline \text { Lead Time }=2 \text { weeks } & \text { Current On-Hand Quantity }=100 \text { units } \\
\hline \end{array}\) \(\begin{array}{|l|l|l|l|l|l|l|l|l|}
\hline \text { Week } & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 \\
\hline \text { Gross Requirement } & 50 & 100 & 60 & 0 & 0 & 50 & 90 & 200 \\
\hline \text { Scheduled Receipts } & & 200 & & & & & & \\
\hline \text { Projected On Hand 100 } & & & & & & & & \\
\hline \text { Planned Receipts } & & & & & & & & \\
\hline \text { Planned Order Release } & & & & & & & &\\\hline \end{array}\)
Q3) Define resource management and list its key objectives.
Q4) Differentiate between a level production strategy and a chase demand strategy.
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Chapter 14: Operations Scheduling and Sequencing
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Sample Questions
Q1) For a single processor, a first come, first served (FCFS) rule minimizes the average flow time because it considers both the job and customer criterion.
A)True
B)False
Q2) Which one of the following statements about the Balloons Aloha case study on scheduling and sequencing is TRUE?
A) The sequencing rule used did not impact average flow time but it did change tardiness.
B) The earliest due date (EDD) rule was the best sequencing rule to use for this case situation.
C) The shortest processing time (SPT) rule was the best sequencing rule to use for this case situation.
D) Johnson's rule was the best sequencing rule to use for this case situation.
Q3) Telling an umpire crew to work baseball games in Chicago, then Milwaukee, and then Cleveland is an example of a sequence.
A)True
B)False
Q4) Differentiate between scheduling and sequencing.
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Page 16
Chapter 15: Appendix: Quality Management
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Sample Questions
Q1) Which of the following is NOT a practical issue when using learning curves?
A) Incentive systems and bonus plans may increase learning.
B) Complex, intellectual learning will be faster than learning simple tasks.
C) A contract phaseout may result in a lengthening of process times.
D) Keeping groups of employees together reaps a productivity benefit.
Q2) Explain the concept of learning curves using an 80 percent learning curve as an example.
Q3) Which of the following is NOT part of the general approach to time study?
A) Define and evaluate each task and activity.
B) Measure and record the time needed to perform each activity over a number of cycles.
C) Randomly observe work over a period of time to obtain a distribution of activities.
D) Determine the allowance factor for the work activity.
Q4) Define work sampling. Give examples of both manufacturing and service applications.
Q5) How are predetermined time standards useful?
Q6) Discuss the two different sides of the debate over work standards.
Q7) Explain the use of regression analysis in establishing standard times with an example.
Page 17
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Chapter 15: Quality Management
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Sample Questions
Q1) The dpmo or epmo for a three-sigma process is _____.
A) 66,807
B) 6,210
C) 233
D) 3.4
Q2) What are the Seven Quality Control (QC) Tools and what is their significance in quality improvement? Briefly explain how each tool is used.
Q3) All of the following are components of the GAP model EXCEPT:
A) the difference between the customer's expectations and perceptions.
B) the discrepancy between delighting or pleasing customers and total customer service and satisfaction.
C) the discrepancy between management's perceptions of what features constitute a target level of quality and the task of translating these perceptions into executable specifications.
D) the discrepancy between quality specifications documented in operating and training manuals and plans and their implementation.
Q4) List the three principles of total quality.
Q5) Discuss Kaizen and how it differs from a kaizen event.
Q6) Describe the rationale underlying ISO 9000:2000.
Page 18
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Chapter 16: Quality Control and Spc
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Sample Questions
Q1) Quality at the source focuses on supplier quality at the beginning of a value chain.
A)True
B)False
Q2) To monitor the fraction of printed circuit boards that do not pass a functional test, a(n) _____ is used.
A) k-chart
B) p-chart
C) c-chart
D) R-chart
Q3) Given the previous results and analysis for the R-chart, one would:
A) conclude that the R-chart is in statistical process control, and proceed to develop the x-bar chart.
B) conclude that the R-chart is not in statistical process control, and search for common causes of the problem (i.e., the root cause).
C) conclude that the R-chart is not in statistical process control, and proceed to develop the x-bar chart.
D) plot the sample means first to see if they are randomly distributed.
Q4) Explain and give the significance of the 1:10:100 Rule.
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Chapter 16: Appendix: Queuing Analysis
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Sample Questions
Q1) Many analytical queuing models exist, each based upon unique assumptions about the nature of arrivals.
A)True
B)False
Q2) A sandwich shop near a college has a special counter, open from 11 am to 1 pm, which is used exclusively for selling pre-made sandwiches. This is much faster than making sandwiches-to-order at lunch time. The clerk can handle a customer in about one minute. Customers arrive at a rate of 40 per hour on average.
a. How long (in minutes) does a customer have to wait?
b. What percentage of the time is the employee working?
c. What is the average number of customers waiting in line?
d. What is the probability of there being 3 or more customers in the system?
Q3) What are five key assumptions for the basic, single-channel waiting line model?
Q4) Since most service times follow an exponential distribution, there is no need to collect data on actual service times.
A)True
B)False
Q5) Discuss three categories of information necessary to develop a queuing model.
Q6) What are the seven key assumptions for the multiple-server waiting line model?
Page 20
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Chapter 17: Appendix: Modeling Using Linear Programming
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Q1) A company manufactures 50-inch and 75-inch rear projection television sets. Each 50-inch set contributes $200 to profits and each 75-inch set contributes $475 to profits. The company has purchase commitments for 500 50-inch sets and 200 75-inch sets for the next month, so they want to make at least that many television sets. Although they think they can sell all the 50-inch sets that they could currently make, they do not think they can sell more than 375 75-inch sets. Their production capacity allows them to make only 975 sets in total including both types of television sets. They want to know how many of each type to make so as to maximize profits.
a. What is the objective function for this LP problem?
b. What are the constraints involving x<sub>1</sub>, assuming that x<sub>1</sub> corresponds to 50-inch TV sets?
c. What is the optimal solution point for this problem?
d. What is the optimal value of the objective function?
Q2) Since price is usually set by market conditions, the blending problem's use of linear programming attempts to meet the demand at a minimum cost.
A)True
B)False
Q3) Discuss the concept of optimization models with examples.
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Chapter 17: Lean Operating Systems
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Sample Questions
Q1) Principles of lean operating systems include all of the following EXCEPT _____.
A) eliminating waste
B) improving information technology
C) increasing speed and response
D) reducing costs
Q2) ABC Manufacturing Inc. uses a Kanban system for a component. The daily demand is 800 units. Each container has a combined waiting and processing time of 0.34 days. If the container size is 50 and efficiency (safety) factor is 9 percent, how many Kanban card sets should be authorized?
A) 5 sets
B) 6 sets
C) 7 sets
D) 8 sets
Q3) Production Kanbans trigger the movement of parts.
A)True
B)False
Q4) Kanban is the Japanese term for elimination of waste.
A)True
B)False
Q5) Explain the 5Ss.
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Chapter 18: Appendix: Simulation
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Q1) In general, as the number of probabilistic components of a system increases, the more likely it is that simulation will be the best analysis approach.
A)True
B)False
Q2) With regard to a simulation model for inventory management, all of the following are correct EXCEPT:
A) it 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) it assumes that a specific reorder point and order quantity have been selected.
Q3) With a fixed-time-increment simulation model, detailed information is lost.
A)True
B)False
Q4) A simulator is a general-purpose simulation model.
A)True
B)False
Q5) Explain the major differences between a fixed-time and a next-event simulation model.
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Chapter 18: Project Management
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Sample Questions
Q1) The expected variance of Activity A is _____.
A) less than or equal to 0.5 days
B) greater than 0.5 but less than or equal to 1.0 day
C) greater than 1.0 but less than or equal to 1.5 days
D) greater than 1.5 days
Q2) Explain the stages of the project life cycle and what types of decisions are normally made at each stage.
Q3) What is the critical path
A) A-B-E
B) A-C-F
C) A-C-D-F
D) A-B-D-F
Q4) List at least six principal factors (contributors) to project success.
Q5) The largest amount of slack that any activity has in this project is:
A) 1 week.
B) 2 weeks.
C) 3 weeks.
D) 4 weeks.
Q6) Define a project. Give some non-manufacturing or non-construction examples.
Q7) Explain the role of project managers and some principles for success.
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Chapter 19: Appendix: Decision Analysis
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Q1) Which of the following statements is TRUE of expected value of perfect information (EVPI)?
A) EVPI mostly applies to situations that require one-time decisions.
B) EVPI is a numerical value associated with a decision coupled with some event.
C) EVPI is calculated by adding the expected payoff under perfect information to the expected payoff of the optimal decision without perfect information.
D) EVPI can be computed by determining the best decision and payoff if each event occurs.
Q2) List the four elements of a decision problem.
Q3) The minimax-regret approach to one-time decisions without event probabilities is neither aggressive nor conservative.
A)True
B)False
Q4) Explain the concept of expected value of perfect information (EVPI). How does it help a decision maker?
Q5) Explain the structure and purpose of a decision tree.
Q6) Discuss the five characteristics of management decisions when decision analysis techniques should be utilized.
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