TEST BANK for Operations and Supply Chain Management, 2nd Edition, David Alan Collier, James R. Evan

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Chap 01_2e Indicate whether the statement is true or false.

1. The intangible nature of a service makes it difficult to keep a competitor from copying a service encounter design. a. True b. False 2. The higher the customer participation in service processes, the more certainty a firm has with respect to service time and capacity. a. True b. False 3. A pair of running shoes is an example of a durable good. a. True b. False 4. Proportional increases or decreases in the perceived benefits and the price of a product result in no net change in the value of the product. a. True b. False 5. A process invariably resides within a department or traditional management function. a. True b. False 6. Preproduction services of a value chain include warranty and claim services. a. True b. False 7. Vehicles, furniture, and dishwashers are examples of nondurable goods. a. True b. False 8. If the value ratio for a good or service is high, the good or service is perceived favorably by customers. a. True b. False 9. Big data analytics is intended to support service businesses such as virtual banking. a. True b. False

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Chap 01_2e Indicate the answer choice that best completes the statement or answers the question.

10. Jason and his friend went to a coffee shop. They ordered two cappuccinos and received a complimentary chocolate waffle and cookie along with their order. In the context of a customer benefit package (CBP), the chocolate waffle and the cookie are _____. a. intangible products b. core offerings c. peripheral goods d. primary goods 11. Which of the following statements is true of sustainability? a. Sustainability practices lead to better public perception. b. Sustainability practices are limited to service-providing firms. c. The use of sustainable technology reduces short-term operational costs. d. The application of sustainable technology is limited to the agriculture industry.

12. North Zone Bank gives all its customers a complimentary credit card along with a custom-made wallet when they open an account with the bank. The credit card and the wallet are examples of _____ offered by the bank. a. peripheral goods b. core offerings c. intangible products d. primary goods 13. A _____ good is one that does not quickly wear out and typically lasts at least three years a. durable b. soft c. consumer packaged d. fast-moving consumer 14. Which of the following statements is true of service facilities? a. They need to be in close proximity to customers. b. They store their services as physical inventory. c. They require employees with stronger technical skills than behavioral skills. d. They rely more on hard technology than soft technology to perform work.

15. A gracious welcome by an employee at the hotel check-in counter is an example of: a. social sustainability. b. predictive analytics. c. a service blueprint. d. a moment of truth.

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Chap 01_2e 16. A _____ is a customer benefit package (CBP) feature that departs from the standard CBP and is normally location specific or firm specific. a. bottleneck b. peripheral product c. core product d. variant 17. _____ is an example of a nondurable good. a. An airplane b. Software c. Furniture d. A dishwasher 18. Which of the following statements is true of goods? a. Goods-producing industries rely on machines and hard technology to perform work. b. Goods-producing employees require stronger behavioral skills than physical skills. c. The demand for goods is more difficult to predict than the demand for services. d. Durable goods are those that are no longer useful once they are used.

19. Service encounter design is a key activity performed by operations managers that involves: a. managing the flow of materials, information, people, and money from suppliers to customers. b. ensuring that the right amount of resources is available when needed. c. predicting the future demand for raw materials, finished goods, and services. d. determining how to recover from service upsets.

20. Ensuring consumer safety in using goods and services is an example of _____ sustainability. a. social b. economic c. political d. environmental 21. _____ refers to raw materials, work-in-process, or finished goods that are maintained to support production or satisfy customer demand. a. Throughput b. A variant c. A subsidy d. Inventory 22. Which of the following can be classified as a support process in a business? a. Product manufacturing b. Technology acquisition c. Human resource management d. Order shipment Copyright Cengage Learning. Powered by Cognero.

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Chap 01_2e 23. When business analytics is used to understand past and current performance, it is called _____ analytics. a. decision b. descriptive c. predictive d. prescriptive 24. _____ management is defined as the science and art of ensuring that goods and services are created and delivered successfully to customers. a. Operations b. Communications c. Network d. Security 25. A _____ good is one that is no longer useful once it's used, or lasts for less than three years. a. heavy-duty b. nondurable c. hard d. slow-moving consumer 26. In the context of the pre- and postproduction services perspective of a value chain, which of the following statements is true of preproduction services? a. They focus on gaining a customer. b. They include on-site installation and application services. c. They focus solely on keeping an existing customer. d. They include recycling and remanufacturing initiatives.

27. _____ sustainability is an organization's commitment to maintain healthy communities and improve the quality of life. a. Environmental b. Economic c. Social d. Political 28. Predictive analytics is used by organizations to: a. analyze business policies through visual representations. b. identify the best decisions for a particular situation. c. understand past and current performance. d. envisage the future by detecting patterns and relationships in data.

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Chap 01_2e 29. _____ is defined as the perception of the benefits associated with a good, service, or bundle of goods and services in relation to what buyers are willing to pay for them. a. Value b. Equity c. Turnover d. Revenue 30. Which of the following statements is true of service employees? a. They require good human interaction skills and strong cross-selling skills. b. They perform mechanized and rigid processes. c. They have little or no interaction with customers. d. They rely more on hard technology than soft technology to perform work.

31. _____ centers are warehouses that act as intermediaries between factories and customers, shipping directly to customers or to retail stores where products are made available to customers. a. Production b. Distribution c. Cost d. Business recovery 32. In order to increase value, an organization must: a. increase perceived benefits while decreasing actual benefits. b. increase both perceived benefits and price or cost proportionally. c. decrease both perceived benefits and price or cost proportionally. d. decrease price or cost while holding perceived benefits constant.

33. Jane is planning to go on a camping trip. She purchases a bottle of mineral water, a pack of biscuits, a small tube of toothpaste, and a toothbrush from the supermarket near her house. The items that Jane has purchased from the supermarket are _____ goods. a. hard b. durable c. nondurable d. intangible 34. Which of the following statements is true of a value chain? a. The pre- and postservice framework of a value chain emphasizes that service is a critical component of traditional manufacturing processes. b. The input-output framework of a value chain suggests that the value chain begins with inputs from customers. c. A value chain solely focuses on the operations function of an organization. d. A value chain is narrower in scope than a supply chain.

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Chap 01_2e 35. A _____ is a network of facilities and processes that describes the flow of materials, finished goods, services, information, and financial transactions from suppliers, through the facilities and processes that create goods and services, and those that deliver them to the customer. a. product-process matrix b. product life cycle c. value chain d. business cycle 36. Purchasing is a key activity performed by operations managers that involves: a. determining when resources such as employees and equipment should be assigned to work. b. using technology to improve productivity and respond faster to customers. c. coordinating the acquisition of materials, supplies, and services. d. ensuring that goods, services, and processes will meet customer expectations and requirements.

37. Which of the following is an example of a primary service? a. The cooling provided by an air conditioner b. The customer service hotline of an electronics company c. A pen drive given along with a laptop d. An antivirus program given along with a smartphone 38. Which of the following statements is true of operations management (OM)? a. The application of the concepts and methods of OM is limited to the technology industry. b. OM is the only function by which managers can directly affect the value provided to all stakeholders. c. The activities involved in OM focus on creating value solely for external customers. d. OM and its principles are exclusively applicable to firms that produce tangible products.

39. _____ refers to an organization's ability to strategically address current business needs and successfully develop a long-term strategy that embraces opportunities and manages risk for all products, systems, supply chains, and processes to preserve resources for future generations. a. Sustainability b. Scalability c. Scheduling d. Forecasting 40. Which of the following statements is true of goods-producing processes? a. They use employees as a substitute for physical inventory. b. They require extensive customer participation in service creation and delivery. c. They require more flexibility and adaptation to special circumstances than service processes. d. They are mechanistic and controllable because of the lack of customer participation.

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Chap 01_2e 41. Which of the following is a similarity between goods and services? a. Both can be standardized for the mass market or customized to individual needs. b. Both use physical inventory as a buffer for fluctuations in demand. c. Both require customers to participate extensively in the creation and delivery processes. d. Both can be protected by patents owing to their tangible nature.

42. _____ is a key activity performed by operations managers that involves deciding the best way to assign people to work tasks and responsibilities. a. Forecasting b. Process design c. Job design d. Reengineering 43. In the context of the pre- and postproduction services perspective of a value chain, which of the following statements is true of postproduction services? a. They focus solely on gaining new customers. b. They include contract negotiations. c. They focus on keeping existing customers. d. They include good and service guarantees.

44. Identify a difference between goods and services. a. Goods can be stored as physical inventory, whereas services cannot be stored as physical inventory. b. Goods-producing firms rely solely on soft technology, whereas service-providing firms rely solely on hard technology. c. The demand for goods cannot be predicted, whereas the demand for services can be easily predicted. d. Customers directly participate in goods-producing activities, whereas customers do not participate in service-providing activities.

45. In the context of the pre- and postproduction services perspective of a value chain, which of the following are postproduction services of a value chain? a. Purchasing services b. Recycling and remanufacturing initiatives c. Contract negotiations d. Product and service guarantees 46. Which of the following is an example of a general management process in a business? a. Research and development b. Inventory management c. Technology acquisition d. Human resource management

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Chap 01_2e 47. A _____ is a sequence of activities that is intended to create a certain result, such as a physical good, a service, or information. a. process b. matrix c. variant d. task 48. One of the key activities that operations managers perform is _____ management: ensure that the right amount of resources (labor, equipment, materials, and information) is available when needed. a. quality b. supply chain c. network d. resource and capacity 49. Building a high-performing organization with a capable leadership and workforce is an example of _____ sustainability. a. economic b. technological c. political d. environmental 50. In the context of customer benefit packages, _____ services are those that are not essential to the primary service, but enhance it. a. core b. tertiary c. peripheral d. central

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Chap 01_2e Answer Key 1. True 2. False 3. False 4. True 5. False 6. False 7. False 8. True 9. True 10. c 11. a 12. a 13. a 14. a 15. d 16. d 17. b 18. a 19. d 20. a 21. d 22. b 23. b 24. a 25. b 26. a

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Chap 01_2e 27. c 28. d 29. a 30. a 31. b 32. d 33. c 34. a 35. c 36. c 37. a 38. b 39. a 40. d 41. a 42. c 43. c 44. a 45. b 46. d 47. a 48. d 49. a 50. c

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Chap 02_2e Indicate whether the statement is true or false.

1. With interlinking models, managers can objectively make internal decisions that impact external outcomes. a. True b. False 2. Performance measures should support customer requirements. a. True b. False 3. In the context of the value chain model, fewer resources are needed to achieve performance goals when "information replaces assets." a. True b. False 4. Actionable measures are not bound by time. a. True b. False 5. Quality measures the degree to which the output of a process conforms to the management's expectations and requirements. a. True b. False 6. In the context of the value chain model, when "information replaces assets," the costs increase. a. True b. False 7. Actionable performance measures should be meaningful to a company's management and should provide the basis for decisions at the strategic level in an organization. a. True b. False 8. In the context of the analytics in operations management, it costs three to five times more to keep an existing customer than acquire a new customer. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

9. Airline revenue per passenger mile and hotel revenue per full-time employee are examples of _____ measures. a. reliability b. flexibility c. sustainability d. productivity

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Chap 02_2e 10. _____ is the ability to provide goods and services to customers with minimum waste and maximum utilization of resources. a. Operational efficiency b. Volume flexibility c. Reliability d. Sustainability 11. The innovation and learning perspective in the balanced scorecard model includes measures such as: a. return on investment, economic value added, and shareholder value. b. number of cooperative customer–company design initiatives and percent of sale from new services. c. training hours per employee, hiring process effectiveness, and revenue per employee. d. service-quality levels, design and demand flexibility, and asset utilization.

12. The _____ is based on a set of cause-and-effect linkages between internal and external performance, and in this fashion, defines the key performance measurements on which service-based firms should focus. a. Service-Profit Chain model b. value chain model c. balanced scorecard d. Malcolm Baldrige Performance Excellence program 13. The ability of an organization to respond quickly to changes in the quantity and type of demand is called _____. a. utility b. reliability c. demand variability d. volume flexibility 14. Which of the following performance perspectives in the balanced scorecard model includes the percent of sale from new goods and services? a. The financial perspective b. The innovation perspective c. The learning perspective d. The customer perspective 15. Dextron, a privately owned computer technology company, provides a wide range of customized laptops to suit the needs of students, corporate professionals, and small business owners. In this case, Dextron's ability to provide a wide range of customized laptops to suit its customers' needs best describes _____. a. volume flexibility b. design flexibility c. budget variance d. manufacturing yield

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Chap 02_2e 16. The time required to ramp up to an increased production output level in response to a surge in the sales of a product is a measure of _____. a. budget variance b. volume flexibility c. product recalls d. service upset 17. In the context of the scope of business and operations performance measurement, which of the following measures is an example of an innovation and learning performance measure? a. Employee satisfaction b. Flow processing or cycle time c. Manufacturing yield d. Product-related litigation 18. Key measures of innovation and learning include _____. a. supply-chain performance b. processing time c. percentage of new products developed d. the variance around the average time 19. A paint manufacturing company has three factories located in France, Germany, and Spain. The productivity data of the factories are as follows: Amount of Paint Produced(US Factory Location Total Input Cost (USD) Gallons) Spain 4,600,000,000 $5,250,000 Germany 5,500,000,000 $5,250,000 France 4,000,000,000 $3,500,000 Based on the productivity analysis of all the factories, the productivity of the factory in: a. Germany is lower than that of the factory in Spain. b. Spain is higher than that of the factory in France. c. France is higher than that of the factory in Spain. d. France is lower than that of the factory in Germany.

20. In the context of the types of performance measures, which of the following is a measure of innovation and learning? a. Patent applications b. Employee retention c. Product recalls d. Labor productivity

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Chap 02_2e 21. Which of the following is a financial performance measure at an organizational level? a. Cost of quality b. Revenue and profit c. Budget variance d. Labor and material costs 22. Which of the following performance perspectives in the balanced scorecard model includes measures such as productivity, flow time, and asset utilization? a. The financial perspective b. The customer perspective c. The innovation and learning perspective d. The internal perspective 23. In the context of the triple bottom line (TBL), which of the following measures includes the number of ethical violations? a. Responsiveness b. Service quality c. Social sustainability d. Customer retention rate 24. _____ is the willingness to help customers and provide prompt recovery to service upsets. a. Responsiveness b. Empathy c. Assurance d. Reliability 25. The quantitative modeling of cause-and-effect relationships between external and internal performance criteria is called _____. a. productivity b. operational efficiency c. interlinking d. sustainability 26. Which of the following performance perspectives in the balanced scorecard model measures the ultimate value that a business provides to its shareholders? a. The financial perspective b. The internal perspective c. The learning perspective d. The customer perspective

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Chap 02_2e 27. _____ is the act of quantifying the performance of organizational units, goods and services, processes, people, and other business activities. a. Measurement b. Forecasting c. Fulfillment d. Litigating 28. In the context of the triple bottom line _____ sustainability measures include corporate ethics and governance. a. environmental b. social c. economic d. political 29. Which of the following is a quality performance measure at an operational level? a. Customer ratings of goods and services b. Customer retention c. Service representative courtesy d. Product recalls 30. In the context of the triple bottom line (TBL), which of the following is a performance measure of economic sustainability? a. Fines for environmental violations b. Corporate ethics and governance c. Revenue from new goods and services d. Measures of perceived value 31. _____ is the ratio of the output of a process to the input. a. Productivity b. Flexibility c. Variability d. Reliability 32. According to research, which of the following is a key dimension that customers use to assess service quality? a. Operational efficiency b. Flexibility c. Empathy d. Queue time 33. _____ measures the degree to which the output of a process meets customer requirements. a. Learning b. Innovation c. Variability d. Quality Copyright Cengage Learning. Powered by Cognero.

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Chap 02_2e 34. Measures of _____ focus on an organization's people and infrastructure. a. goods and service design flexibility b. customer and market c. service quality d. innovation and learning 35. In an assembly line of a factory that makes gears, it takes fifteen minutes to complete a drilling operation using a lathe. The duration of this operation is called _____ time. a. delay b. queue c. processing d. standard 36. _____ measures include environmental measures such as energy consumption and recycling and other resource conservation activities. a. Operation efficiency b. Innovation and learning c. Sustainability d. Financial 37. The table below shows the data for the number of pair of shoes produced and the cost incurred by Fancy Trends Inc. for the year 2020.

Pair of Shoes Produced 150,000 Cost Incurred Direct Labor Cost $60,000 Energy Cost $5,800 Raw Material Cost $42,000 Based on the given data, the productivity of Fancy Trends Inc. for the year 2020 is _____. a. 1 pair/USD b. 1.39 pairs/USD c. 2 pairs/USD d. 2.46 pairs/USD

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Chap 02_2e Answer Key 1. True 2. True 3. True 4. False 5. False 6. False 7. False 8. False 9. d 10. a 11. c 12. a 13. d 14. d 15. b 16. b 17. a 18. c 19. c 20. a 21. b 22. d 23. c 24. a 25. c 26. a

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Chap 02_2e 27. a 28. b 29. c 30. a 31. a 32. c 33. d 34. d 35. c 36. c 37. b

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Chap 03_2e Indicate whether the statement is true or false.

1. A small change in a firm's targeted markets or strategic direction usually has little impact on the value chain. a. True b. False 2. Professor Terry Hill's operations strategy framework cannot be applied to service-providing firms. a. True b. False 3. A strategy of quality improvement often leads to increased short-run profitability. a. True b. False 4. The core competencies of an organization are the strengths that are unique to that organization. a. True b. False 5. Customer segments cannot be based on sales volume and profitability. a. True b. False 6. For firms that adopt innovation as a core component of their strategy, price, not product performance, is the major selling feature. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

7. Which of the following statements is true of sustainability? a. Sustainability is not an organizational strategy. b. Environmental sustainability is driven by stakeholders such as the community, green advocacy groups, and the government. c. Sustainability is narrower than a competitive priority. d. Economic sustainability is driven by ethics and human ideals of protecting the planet and its people for the well-being of future generations.

8. _____ attributes are those that a customer can determine prior to purchasing goods or services. a. Search b. Experience c. Credence d. Variant

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Chap 03_2e 9. According to Professor Terry Hill's generic strategy framework, which of the following statements is true of the first loop? a. It ties together an organization's corporate strategy and marketing strategy. b. It describes how operations evaluate the implications of competitive priorities in terms of process choice. c. It determines if process choice decisions are consistent with infrastructure decisions. d. It represents operations' input into the corporate and marketing strategy.

10. Which of the following is considered an order winner in an automobile? a. A comfortable seating arrangement that is similar to other automobiles b. A driver-side air bag that most high-end automobiles have c. A good-quality radio particular to that brand of automobile d. A collision avoidance system particular to that design of automobile 11. _____ are the decisions management must make as to what type of process structure is best suited to produce goods or create services. a. Operations design choices b. Competitive priorities c. Core competencies d. Credence attributes 12. Sustainability is best described as a(n) _____. a. idea that differs from existing norms b. pattern that integrates an organization's major goals c. organizational strategy d. competitive priority 13. Which of the following statements is true of quality as a key competitive priority? a. It has evolved over the years and now is generally considered an order qualifier. b. It is usually improved by businesses to increase short-run profitability. c. It is negatively related to a higher return on investment for almost all kinds of market situations. d. It suffers increasingly with time reductions in a supply chain.

14. Rues and West Inc. manufactures various electronic goods. It uses mass-customization strategies to make its products available to all consumers at any place in the world. It also manufactures various electronic goods in the same assembly line. Given this information, Rues and West Inc.'s operations are aligned around _____. a. sustainability b. flexibility c. reliability d. durability

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Chap 03_2e 15. Which of the following companies is most likely to have a true understanding of customer wants and needs? a. Harlose Suits, where customer benefit packages include more order qualifiers than order winners b. Magnira Jewelry, where all customers are provided with the same type of jewelry c. Blyrie Apparels, where customers are segmented into groups based on buying behavior and demographics d. Scorla Automobiles, where customers are provided with low quality products at prices slightly lower than the standard prices 16. Eric is admitted to a hospital to undergo a surgery for hernia. He is unable to discern the expertise of his surgeon before the surgery nor evaluate the quality of the service after the surgery. In this case, the expertise of Eric's surgeon is an example of a(n) _____ attribute. a. search b. experience c. credence d. variant 17. The style and fit of a jacket can be classified as a(n) _____ attribute. a. search b. experience c. credence d. variant 18. Credence attributes stem from _____. a. the design of products b. the nature of services c. drive key operational controls d. operations design choices 19. Goods and service features and performance characteristics that differentiate one customer benefit package from another and win the customer's business are called _____. a. order qualifiers b. credence attributes c. experience attributes d. order winners 20. Which of the following companies is most likely to have a competitive advantage in its market? a. Porthis Inc., a sports good manufacturer that treats the market as a single segment b. Singletone Corp., a stationery manufacturer that reduces mass customization c. Huran Co., a clothing manufacturer that focuses on the organization's capability rather than customers' needs or wants d. Greyon Inc., a computer manufacturer that builds and leverage operational capabilities to support desired priorities

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Chap 03_2e 21. Families of goods or services having similar characteristics or methods of creation are called _____. a. core competencies b. order qualifiers c. strategic business units d. customer benefit packages 22. An operations strategy can be defined as: a. the set of decisions across the value chain that supports the implementation of higher-level business strategies. b. a strategy necessary to define the businesses in which a corporation will participate. c. a strategy necessary to develop plans for the acquisition and allocation of resources among businesses. d. the decisions management must make as to what type of process structure is best suited to produce goods or create services.

23. Identify a true statement about corporate strategy of large organizations. a. It defines the focus for strategic business units of an organization. b. It provides the means by which business strategies are accomplished. c. It is necessary to define the businesses in which an organization will participate. d. It defines how an organization's processes are designed and organized.

24. Applying Professor Terry Hill's generic strategy framework to McDonald's, the operating design choices of resource scheduling, inventory placement and control, and standardized operational and job procedures best relate to the corporate objective of _____. a. profitable growth b. operational excellence c. operational sustainability d. operational diversity 25. Brenda is planning a vacation to an exotic island. Though she has pre-planned her accommodation and itinerary, she is unsure of how the vacation will turn out. In this case, Brenda's vacation is high in _____ attributes. a. search b. experience c. credence d. variant 26. Competitive advantage can be defined as: a. the ability of customers to properly perform and co-produce their part of a service. b. a firm's ability to achieve market and financial superiority over its competitors. c. a pattern or plan that integrates an organization's major goals, policies, and action sequences into a cohesive whole. d. a firm's ability to commercialize a device, method, or idea that differs from existing norms.

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Chap 03_2e 27. Basic customer expectations are generally considered the minimum performance level required to stay in business and are often called _____. a. order qualifiers b. credence attributes c. experience attributes d. order winners 28. A(n) _____ enterprise is an organization that sources, markets, and produces its goods and services in several countries to minimize costs, and to maximize profit, customer satisfaction, and social welfare. a. external distribution b. complex c. sustainable d. multinational 29. _____ is the discovery and practical application or commercialization of a device, method, or idea that differs from existing norms. a. Measurement b. Learning c. Innovation d. Diversity 30. _____ often drive simultaneous improvements in quality, cost, and productivity. a. Credence attributes b. Time reductions c. Corporate strategies d. Mass standardization 31. At Ritufa Food Corp., flexibility is the key competitive priority. Food products are manufactured according to customers' requirements, at any volume and globally delivered at any time. Given this information, Ritufa Food Corp.'s operations strategy is based on _____. a. compensation b. mass customization c. mass standardization d. cost reduction 32. _____ sustainability is driven by ethics and human ideals of protecting the planet and its people for the well-being of future generations. a. Environmental b. Social c. Economic d. Political

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Chap 03_2e 33. Which of the following is one of the key areas that is addressed by operations design choices? a. Functional plans and control systems b. Learning and innovation systems c. Value chain integration and outsourcing d. Quality control and mass customization 34. _____ is an example of innovation in services. a. Optical fibers b. Internet banking c. Customer satisfaction surveys d. Smart tags 35. _____ attributes are any aspects of a good or service that a customer must believe in but cannot personally evaluate even after purchase and consumption. a. Search b. Experience c. Credence d. Variant 36. _____ represent the strategic emphasis that a firm places on certain performance measures and operational capabilities within a value chain. a. Competitive priorities b. Order satisfiers c. Search attributes d. Order winners 37. Which of the following statements is true of mass customization? a. It involves the commercialization of a device, method, or idea that differs from existing norms. b. Flexibility is manifested in mass-customization strategies that are becoming increasingly prevalent today. c. It requires companies to align their operations around quality. d. Goods and services produced by a firm through mass customization are available only in the country where the firm is located.

38. Which of the following is a difference between the evaluation of goods and the evaluation of services by customers? a. Customers rely more on information from nonpersonal sources when evaluating services, whereas they rely more on information from personal sources when evaluating goods. b. Customers perceive lesser risks when buying services, whereas they perceive greater risks when buying goods. c. Customers cannot look at or touch services prior to the purchase decision, whereas they can feel a product prior to purchase. d. Customers adopt innovations in services faster, whereas they resist adopting innovations in products.

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Chap 03_2e 39. According to several research studies, which of the following findings is true of the role of quality in gaining competitive advantage? a. Quality is negatively related to return on investment for almost all kinds of market situations. b. A strategy of quality improvement is usually accompanied by increased short-run profitability. c. Quality has a trivial effect on returns in most kinds of market situations. d. Businesses offering premium-quality goods usually have large market shares.

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Chap 03_2e Answer Key 1. False 2. False 3. False 4. True 5. False 6. False 7. b 8. a 9. a 10. d 11. a 12. c 13. a 14. b 15. c 16. c 17. a 18. b 19. d 20. d 21. c 22. a 23. c 24. b 25. b 26. b

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Chap 03_2e 27. a 28. d 29. c 30. b 31. b 32. b 33. c 34. b 35. c 36. a 37. b 38. c 39. d

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Chap 04_2e Indicate whether the statement is true or false.

1. Low scalability implies that serving additional customers requires low incremental variable costs. a. True b. False 2. The use of technology has increased opportunities for employee creativity and empowerment. a. True b. False 3. Scalability is a key issue in e-commerce. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

4. In the context of technology in value chains, customer relationship management (CRM): a. enables small firms to make counterfeit knock-offs of genuine products. b. prohibits firms from bundling goods and services together. c. encourages firms to produce standardized goods for all consumers to reduce manufacturing costs. d. exploits the vast amount of data that can be collected from consumers.

5. _____ are the modern successor to bar codes. a. Optical switches b. Artificial intelligence programs c. Electro-optical sensors d. Radio-frequency identification tags 6. The fixed costs of WeBuy&Sell.com, an e-commerce website, make up about 90 percent of the total costs incurred by the company. However, since its primary means of communication is web advertising, WeBuy&Sell.com has variable costs as low as 10 percent of its total costs. This allows WeBuy&Sell.com to earn high profits at a very low cost. According to the given scenario, WeBuy&Sell.com has _____ scalability. a. zero b. low c. infinite d. high 7. _____ machine tools enable the machinist's skills to be duplicated by a programmable device that controls the movements of a tool used to make complex shapes. a. Virtual control (VC) b. Numerical control (NC) c. Revision control (RC) d. Movement control (MC)

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Chap 04_2e 8. _____ refers to using the Internet and technology to provide facilities that create and deliver time, place, information, entertainment, and exchange value to customers and support the sale of goods. a. Outsourcing b. Offshoring c. E-service d. E-readiness 9. Which of the following is a difference between firms that have high scalability and firms that have low scalability? a. Firms with high scalability incur extremely low fixed costs, whereas firms with low scalability incur extremely high fixed costs. b. Firms with high scalability have variable costs as 80 to 85 percent of total costs, whereas firms with low scalability have variable costs as zero to five percent of total costs. c. Firms with high scalability serve additional customers at extremely low incremental costs, whereas firms with low scalability serve additional customers at high incremental variable costs. d. Firms with high scalability have a low contribution margin, whereas firms with low scalability have a high contribution margin.

10. _____ can be attached to objects and used to track and manage inventory and assets. a. Proximity cards b. Nanofountain probes c. Resistance-temperature detectors d. Radio-frequency identification tags 11. Identify a benefit of adopting technology. a. Technology helps restructure old and less productive industries. b. The use of technology increases opportunities for employee empowerment. c. Technology increases opportunities for employee creativity. d. The use of technology does not require adherence to any laws or regulations.

12. Which of the following is a challenge of adopting technology? a. Technology leads to job shift and displacement. b. The use of technology reduces product quality. c. Technology deteriorates the standard of living of the world. d. The use of technology disintegrates supply and value chain players.

13. Which of the following is a benefit of using technology? a. It increases the number of human service providers in firms. b. It increases quality and productivity of firms. c. It increases opportunities for employee empowerment. d. It makes it easy for customers to change decisions and return goods.

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Chap 04_2e 14. Customer relationship management (CRM) helps firms gain and maintain competitive advantage by: a. encouraging them to produce standardized goods. b. merging all demographic-based and behavior-based segments of markets. c. studying which goods and services are purchased together. d. prohibiting them from bundling goods and services together.

15. _____ allows all parts of the value chain to immediately recognize and react to changes in demand and supply. a. Super-precision manufacturing b. Rapid prototyping c. Descriptive analytics d. Electronic transaction capability 16. We Create Inc. is an electronics company. It designs, produces, and assembles desktop gadgets. The entire process is controlled by programmable robots, which are in turn linked to computers. These computers direct the robots to the appropriate task. In this context, We Create Inc. uses a(n) _____ system to produce its goods. a. partner relationship management b. enterprise resource planning c. employee experience management d. flexible manufacturing 17. _____ is a measure of the contribution margin required to deliver a good or service as the business grows and volumes increase. a. Scalability b. Process capability c. Sustainability d. Operability 18. Which of the following is true of customer relationship management (CRM)? a. A typical CRM system includes market segmentation and analysis. b. It helps firms gain competitive advantage by making counterfeit knock-offs of genuine products. c. It encourages the production of standardized goods for all customers to reduce manufacturing costs. d. A CRM system prohibits firms from bundling goods and services together.

19. _____ consist of two or more computer-controlled machines or robots linked by automated handling devices such as transfer machines, conveyors, and transport systems. a. Computer-aided engineering (CAE) systems b. Computer-aided design (CAD) systems c. Enterprise planning systems (EPSs) d. Flexible manufacturing systems (FMSs)

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Chap 04_2e 20. _____ refers to equipment and devices that perform a variety of tasks in the creation and delivery of goods and services. a. Hard technology b. Soft technology c. A database system d. A neural network 21. A(n) _____ is an example of soft technology. a. database system b. bar-code scanner c. image sensor d. radio-frequency identification tag 22. Which of the following is true of radio-frequency identification (RFID) tags? a. They can bring visibility and enhanced security to the handling and transportation of products. b. They are used to segment markets based on demographic and behavioral characteristics. c. They are used to create customized goods and services and deliver them faster at lower prices. d. They can help small companies create counterfeit knock-offs of genuine products.

23. _____ technology refers to the application of the Internet, computer programs, and information systems to provide data, information, and analysis to facilitate the creation and delivery of goods and services. a. Hard b. Soft c. Assistive d. Adaptive 24. Valuetronics, an electronics company, is currently in the preproduction stage of launching one of its new stereo systems. In order to analyze the feasibility of the product, Valuetronics adopts an integrated system that allows it to manufacture the product before it physically exists, that is, the system allows Valuetronics to finalize the design of the stereo, analyze it, and do a test-run. In this context, Valuetronics is using a(n) _____. a. enterprise resource planning (ERP) system b. flexible manufacturing system (FMS) c. computer-aided engineering (CAE) system d. computer-aided manufacturing (CAM) system 25. _____ are tiny computer chips that can be placed on shipping containers, individual products, credit cards, prescription medicines, passports, livestock, and even people. a. Bar codes b. Radio-frequency identification tags c. Thermocouples d. Voice-recognition modules

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Chap 04_2e Answer Key 1. False 2. False 3. True 4. d 5. d 6. d 7. b 8. c 9. c 10. d 11. a 12. a 13. b 14. c 15. d 16. d 17. a 18. a 19. d 20. a 21. a 22. a 23. b 24. c 25. b

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Chap 05_2e Indicate whether the statement is true or false.

1. Service-delivery systems with high customer contact can be treated much like an assembly line. a. True b. False 2. Location is an important competitive priority in a service business. a. True b. False 3. An Energy Star dishwasher results in increased release of carbon dioxide to the air. a. True b. False 4. In the context of service-encounter design, free trips and extra vacation days is not considered a form of recognition. a. True b. False 5. Customer contact is measured by the percentage of time the customer must be in the service-delivery system relative to the total time it takes to provide the service. a. True b. False 6. Ambient conditions are the explicit signals that communicate an image about a firm and include examples such as mission statements and diplomas on a wall. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

7. Linda is the owner of Souvenirstop, a chain of souvenir shops. One of the shops is located at the City Centre Mall. Though the shop is popular, she does not get many tourists in the City Centre Mall branch. She is considering opening another store near a popular tourist attraction to attract more tourists to her shop. Which of the following elements of service-delivery system design is Linda addressing? a. The servicescape b. Service process design c. Facility location and layout d. The voice of the customer 8. Jones and Johnson, a law firm, is expanding to incorporate three conference rooms and two executive waiting lounges in its office. Which of the following dimensions of servicescape is the firm addressing? a. Ambient conditions b. Market deployment and evaluation c. Spatial layout and functionality d. Signs, symbols, and artifacts Copyright Cengage Learning. Powered by Cognero.

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Chap 05_2e 9. _____ is the process by which a model (real or simulated) is constructed to assess a product's performance under actual operating conditions, as well as consumer reactions to the model. a. Quality function deployment b. Value engineering c. Detailed product design d. Prototype testing 10. The specifications for a refrigerator part (in cm) are 5.00 ± 0.10, and the Taguchi loss function is estimated to be L(x) = 5,500 (x – T) 2. Determine the estimated loss per part if the quality characteristic (i.e., actual process performance) under study takes on a value of 4.91 cm. a. More than $30 but less than or equal to $50 b. More than $50 but less than or equal to $70 c. More than $70 but less than or equal to $90 d. More than $90 11. The specifications for an automobile part (in inches) are 10.00 ± 0.15, and the Taguchi loss function is estimated to be L(x) = 9,300 (x – T)2. Determine the estimated loss per part if the concerned quality feature has an actual value of 10.20 inches. a. $37200 b. $93000 c. $372 d. $93 12. Which of the following requirements is an example of customer-contact requirements? a. Convenient facility location b. Ambient conditions c. Cross-selling d. Prominently displayed company logo 13. For manufactured goods, design blueprints specify a nominal dimension which is the: a. dimension with the least manufacturing cost. b. dimension with the greatest variation from the target dimension. c. range of permissible variation in the target dimension of the goods. d. specified target dimension of the goods.

14. The critical differences between the designs of goods and services lie in the: a. detailed product and process design phases. b. research and analysis phases. c. customer benefit package design and configuration phases. d. market introduction and deployment phases.

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Chap 05_2e 15. _____ is the explicit consideration of ecological concerns during the design of goods, services, and processes, and includes such practices as designing for recycling and disassembly. a. Quality function deployment b. Service-encounter design c. Environmental intervention d. Design for Environment 16. For manufactured goods, design blueprints specify a target dimension, along with a range of permissible variation called the _____. a. nominal b. buffer c. tolerance d. leeway 17. The _____ of the House of Quality shows the interrelationships between any pair of technical features. a. bottom b. left c. center d. roof 18. The bottom of a House of Quality identifies the technical features that: a. are interrelated to each other. b. have the highest competitive performance. c. are the weakest selling points. d. have the strongest relationships to customer requirements.

19. A quality characteristic has a specification (in cm) of 0.40 ± 0.03. If the value of the quality characteristic exceeds 0.40 by the tolerance of 0.030 on either side, the product will require a $180.00 repair. In the given scenario, the Taguchi loss function is correctly represented by which of the following equations? a. L(x) = 200 (x − 0.03) 2 b. L(x) = 2,000 (x − 0.43) 2 c. L(x) = 200,00 (x − 0.37) 2 d. L(x) = 200,000 (x − 0.40) 2 20. In the context of the servicescape, in the service-delivery system design, building footprints are examples of: a. ambient conditions. b. artifacts. c. spatial layout and functionality. d. signs and symbols.

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Chap 05_2e 21. The _____ provides the behavioral setting where service encounters take place. a. facility location b. service process and job design c. servicescape d. value chain model 22. Mitch is the owner of GameOn, a popular sports bar. He personally trains his servers and then gives them autonomy to make on-the-spot decisions to resolve any customer complaints and issues. This is a form of _____. a. service guarantee b. assurance c. flexibility d. empowerment 23. Unlike the customer benefit package design and configuration stage of designing goods and services, the detailed goods, services, and process design: a. is more conceptual in nature. b. is more strategic in nature. c. focuses on implementation. d. focuses on the evaluation of quality.

24. In the context of quality function deployment, one of the first steps to build the House of Quality is to: a. advertise, market, and offer the product to customers. b. evaluate the marketplace. c. identify the technical features of the design of the product. d. conduct prototype testing.

25. Which of the following is true of Energy Star-certified products? a. They cannot be salvaged for reuse. b. They exert less demand on electrical power plants. c. They have a higher carbon footprint in the environment. d. They cannot be repaired easily since they use advanced technology.

26. Which of the following is true of the House of Quality? a. It contains supplier estimations. b. It fails to incorporate customer requirements. c. It contains key selling points and features. d. It does not incorporate competitive evaluations.

27. Which of the following is one of the principal elements of service-encounter design? a. Customer benefit package design b. Market introduction c. Recognition and reward d. Quality function deployment Copyright Cengage Learning. Powered by Cognero.

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Chap 05_2e 28. In the context of service-encounter design, high-contact systems would most commonly be found in: a. distribution systems. b. process designs. c. front office operations. d. construction services.

29. In the context of designing manufactured goods, socially responsible designs are the ones that follow the concept of: a. Design for Environment b. Design for Reliability c. Design for Manufacturability d. Design for Accuracy 30. In the context of quality function deployment, building a House of Quality begins by identifying the: a. competitive priorities. b. voice of the customer. c. marketplace dynamics. d. service provider requirements.

31. A critical part has a manufacturing specification (in cm) of 0.325 ± 0.010. Based on this information, if this measurement is larger than 0.335 or smaller than 0.315, the product fails at a cost of $120. Determine the Taguchi loss function in the given scenario. a. L(x) = 1,200,000 (x – 0.335) 2 b. L(x) = 1,200,000 (x – 0.325) 2 c. L(x) = 1,200 (x – 0.315) 2 d. L(x) = 1,200 (x – 0.010) 2 32. In the context of the sevicescape, in the service-delivery system design, which of the following facilities is a part of the spatial layout and functionality? a. Room temperature b. Company logo on company vehicles c. Building facade d. Free soft drinks instead of vending machines 33. In the context of service-encounter design, giving discounts to employees is a form of _____. a. recognition b. guarantee c. assurance d. compensation

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Chap 05_2e 34. _____ should begin immediately after a service upset occurs and when the customer is visibly upset. a. Service guarantee b. Servicescape design c. Service recovery d. Service process design 35. David runs a bed and breakfast in the outskirts of a big city. His employees are allowed to spend up to $200 to resolve any customer complaints, with no questions asked. This is an example of: a. service guarantee. b. assurance. c. flexibility. d. empowerment.

36. Prior to designing and configuring a customer benefit package, a firm should understand and develop its: a. goods, services, and process design in detail. b. processes and service encounter design. c. strategic mission and competitive priorities. d. marketplace deployment techniques.

37. Which of the following elements is included in the service-delivery system design? a. Prototype testing b. Service guarantees and recovery c. Company mission d. Facility location and layout 38. _____ design focuses on the interaction, directly or indirectly, between the service provider(s) and the customer. a. Service process b. Service-encounter c. Lean servicescape d. Customer benefit package 39. In the context of service-delivery system design, which of the following establishments depends on good location decisions? a. A health club b. An ice-cream factory c. An insurance claim processing center d. A distribution center 40. At which of the following stages are the perceptions of a firm and its goods and services created? a. The process design stage b. The service-encounter design stage c. The customer benefit package configuration stage d. The market introduction and evaluation stage Copyright Cengage Learning. Powered by Cognero.

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Chap 05_2e Answer Key 1. False 2. True 3. False 4. False 5. True 6. False 7. c 8. c 9. d 10. a 11. c 12. c 13. d 14. a 15. d 16. c 17. d 18. d 19. d 20. c 21. c 22. d 23. c 24. c 25. b 26. c

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Chap 05_2e 27. c 28. c 29. a 30. b 31. b 32. c 33. a 34. c 35. d 36. c 37. d 38. b 39. a 40. b

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Chap 06_2e Indicate whether the statement is true or false.

1. The center-of-gravity method increases the weighted distance between the facility to be located and its supply and demand points. a. True b. False 2. Supply chain optimization includes minimizing the total costs of manufacturing and transportation, which might consider sourcing, distribution, and placement of inventory throughout the supply chain. a. True b. False 3. Third-party logistics providers can leverage business intelligence and analytics to create efficiencies and economies of scale in the supply chain. a. True b. False 4. In the context of sourcing, a single supplier often provides economies of scale and the ability to form close partnerships. a. True b. False 5. In the context of intellectual property of multinational enterprises, patents protect services. a. True b. False 6. Supply chain optimization includes minimizing the total costs of manufacturing and transportation. a. True b. False 7. Zara's value chain model focuses on two basic rules: "Give customers what they want, and get it to them faster than anyone else." a. True b. False Indicate the answer choice that best completes the statement or answers the question.

8. Which of the following is considered economic factors in location decisions? a. Community attitudes b. Operating costs c. Transportation services d. Climatic conditions

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Chap 06_2e 9. Rues and West Inc. is an automobile manufacturing firm. It produces and assembles all the parts of automobiles in its factory and, later, ships the finished products to its storehouses. The managers at the storehouses distribute the goods to wholesalers. Customers then buy the products from the wholesalers. In this scenario, the push–pull boundary for Rues and West Inc. is at the _____. a. factory b. wholesalers c. storehouses d. assembly section 10. A _____ produces only what is needed at upstream stages in the supply chain in response to customer demand signals from downstream stages. a. third-party logistics provider b. push system c. pull system d. distribution center 11. At Blyrie Apparels, the apparel stocks in the firm's outlets are changed every week. This is based on the changing fashion preferences of its customers. Its managers also coordinate in real-time among its other stores and satisfy its customers' requirements. In this case, Blyrie Apparels most likely uses _____. a. the center-of-gravity method b. the push-pull boundary c. an efficient supply chain d. a responsive supply chain 12. Which of the following statements is true of a responsive supply chain? a. It works best when demand is stable and predictable. b. It works best when product life cycles are short and change often because of innovation. c. It works best when customers require standardization rather than customization. d. It works best when contribution margins are low.

13. _____ is a noneconomic factor in location decisions. a. Construction b. Availability of labor c. Depreciation and maintenance d. Insurance 14. _____ refers to acquiring capabilities toward distribution, or even customers. a. Contract manufacturing b. Outsourcing c. Backward integration d. Forward integration

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Chap 06_2e 15. Unlike firms that outsource, firms engaged in offshoring: a. manage to reduce travel expenses. b. are able to enforce intellectual property rights easily. c. maintain ownership of the facility in another country. d. have better control on quality.

16. White & Checker is releasing a new power drill that requires the manufacturing of a new part. They are considering whether they should manufacture the part in-house or outsource it from a supplier. The demand forecast is 1,355 units. They calculate the break-even quantity as 1,750 parts. What decision should White & Checker make? a. The product should not be released, as the demand is not high enough. b. A percentage of the product should be manufactured in-house, and the rest should be outsourced. c. The part should be outsourced. d. The part should be manufactured in-house.

17. Fourlotts Corp. provide integrated services that include storing manufactured goods, packaging, and delivering it to the dealers or customers. Given this information, Fourlotts Corp. is most likely a _____. a. third-party logistics provider b. contract manufacturer c. distribution center d. supplier 18. In the context of sourcing, multiple suppliers: a. often provide the ability to form close partnerships. b. often provide economies of scale. c. lower the risk of supply disruption. d. lower the chances of using a push or pull system.

19. Which of the following statements is true of outsourcing decisions? a. Break-even analysis can be used to provide insight into outsourcing decisions. b. The simplest outsourcing decision is a single supplier versus multiple suppliers. c. If a company decides to make a part in-house, it does not incur any fixed costs. d. If a company outsources its work to external supplier, the variable cost per unit will be low.

20. Greyon Suits, a company that specializes in making hand-made suits, moved its sourcing and operations from Lumeria back to its home country. This led to easier management and decreased carbon footprint. In this case, Greyon Suits is involved in _____. a. offshoring b. reshoring c. insourcing d. outsourcing

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Chap 06_2e 21. Which of the following is an advantage of pull systems? a. They are efficient even when schedules are missed. b. They minimize inventory and production costs. c. They forecast changes in customer demand. d. They reduce transportation costs.

22. In location decision process, community location decision involves: a. evaluating international monetary policies and cultural practices. b. coping with issues such as tariffs, customs, and trade restrictions. c. choosing a general region of a country. d. selecting a specific city in which to locate.

23. The center-of-gravity method is often used to locate _____. a. availability of raw materials b. demand markets c. site locations d. service facilities 24. Identify a true statement about responsive supply chains. a. They use only a few, large distribution centers to generate economies of scale. b. They use optimization models that minimize costs of routing products from factory through distribution centers to retail stores and customers. c. They are designed for efficiency and low cost by minimizing inventory and maximizing efficiencies in process flow. d. They are supported by information technology that provides real-time information to managers across the supply chain.

25. _____ is the process of having suppliers provide goods and services that were previously provided internally. a. Insourcing b. Outsourcing c. Backward integration d. Forward integration 26. One advantage of a distributive system, such as blockchain technology, is that: a. accountability among value chain participants are dependent on a single supplier. b. transactions cannot be traced back to the original source. c. control of information is in the hands of one individual, rather than multiple people. d. no single individual or organization has total control of the information.

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Chap 06_2e 27. A difference between efficient supply chains and responsive supply chains is that responsive supply chains _____. a. focus on flexibility and responsive service b. focus on maximizing efficiencies in process flow c. seek to balance capacity and demand, resulting in low levels of inventory d. seek to minimize cost of routing products from factory to customers 28. In the context of supply chain design trade-offs, which of the following is true of a push system? a. It works best when there are a large number of distribution centers. b. It is more appropriate for make-to-order items. c. It has an advantage of immediate availability of goods to consumers. d. It works best with variable sales patterns.

29. The "Wi" typically used in the numerator and denominator of the center-of-gravity equations represents the _____ location i. a. quality of goods or services moved to or from b. x coordinate of c. volume of goods or services moved to or from d. y coordinate of 30. A firm that specializes in certain types of goods-producing activities, such as customized design, manufacturing, assembly, and packaging, and works under contract for end users is called a _____. a. third-party logistics provider b. contract manufacturer c. distribution center d. vendor-managed inventory supplier 31. Which of the following is a disadvantage of push systems? a. They are not effective when sales patterns are consistent. b. They are not effective when there are few distribution centers and products. c. They increase transportation costs in a supply chain. d. They result in higher costs when forecasting sales is difficult.

32. Which of the following statements is true of Inditex's supply chain? a. It can deliver most goods in 24 hours in Europe and the United States. b. It can be viewed as a push system. c. It is efficient rather than responsive. d. It avoids proximity sourcing as its products are expensive.

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Chap 06_2e 33. In location decision process, which of the following factors are considered in local site location decision? a. International monetary policy b. Time zones c. Sustainability issues d. Foreign languages

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Chap 06_2e Answer Key 1. False 2. True 3. True 4. True 5. False 6. True 7. True 8. b 9. b 10. c 11. d 12. b 13. b 14. d 15. c 16. c 17. a 18. c 19. a 20. b 21. b 22. d 23. d 24. d 25. b 26. d

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Chap 06_2e 27. a 28. c 29. c 30. b 31. d 32. a 33. c

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Chap 07_2e Indicate whether the statement is true or false.

1. In a process design, an activity refers to a group of tasks needed to create and deliver an intermediate or final output. a. True b. False 2. All processes and functional areas participate in the reengineering efforts of a firm. a. True b. False 3. Continuous flow processes are used to create custom goods and services. a. True b. False 4. The most appropriate match between type of product and type of process occurs as one moves away from the diagonal in the product-process matrix. a. True b. False 5. Utilization is the average time taken to complete one cycle of a process. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

6. In the context of process design, _____ is defined as the ability to produce the right types and amounts of products as customer demand or preferences change. a. flexibility b. outsourcing c. throughput d. utilization 7. Which of the following is true of flow shop processes? a. They produce low volumes of custom goods and services. b. They are large-scale, customized initiatives with wide variations in tasks. c. They have high setup or changeover time. d. They are organized around a fixed sequence of activities and process steps.

8. Which of the following is a difference between flow shops and job shops? a. Unlike flow shops, job shops require little or no setup time. b. Unlike flow shops, job shops are organized around a fixed sequence of process steps. c. Unlike flow shops, job shops require frequent machine changeovers and delays. d. Unlike flow shops, job shops produce many large-volume goods and services.

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Chap 07_2e 9. A _____ is a symbol used in process maps to denote an input or arrival into a process. a. diamond b. bold-dashed line c. double-headed arrow d. rectangle 10. The average number of hotel rooms occupied per day during the month of March is 225. On average, each room is booked for 2.5 days. What is the average number of new bookings that occur per day? a. More than 50 but less than or equal to 100 rooms per day b. More than 150 but less than or equal to 300 rooms per day c. More than 350 but less than or equal to 500 rooms per day d. More than 500 rooms per day 11. Which of the following is true of reengineering? a. Reengineering increases the number of non-value-added activities in a process design. b. Reengineering decreases throughput by adding process bottlenecks. c. The goal of reengineering is to achieve quantum leaps in performance. d. The aim of reengineering is to focus on quality by adding multiple approval requirements for all transactions.

12. _____ goods are generally produced and delivered as one of a kind or in small quantities, and are designed to meet specific customers' specifications. a. Fixed b. Make-to-order c. Make-to-stock d. Standard 13. A _____ is a characterization of product growth, maturity, and decline over time. a. product life cycle b. service blueprint c. value stream map d. product-process matrix 14. Which of the following statements is true of the service-positioning matrix (SPM)? a. The horizontal axis of the SPM reflects the number of pathways built into a service system design by management. b. The SPM mainly focuses on the alignment of process choice with the characteristics of the manufactured good. c. The SPM helps management design a service system that best meets the technical and behavioral needs of customers. d. The vertical axis of the SPM denotes the repeatability of a customer's service-encounter activity sequence.

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Chap 07_2e 15. An automobile emissions testing center has three inspectors and tests 35 vehicles per hour. What should the service rate be in order to achieve a target utilization of 95 percent? a. More than 1 but less than or equal to 5 vehicles per hour b. More than 5 but less than or equal to 10 vehicles per hour c. More than 10 but less than or equal to 15 vehicles per hour d. More than 15 but less than or equal to 20 vehicles per hour 16. A car rental company at a major airport on an average rents 70 percent of its fleet of 200 cars per day. The cars are rented for an average of 4 days. What is the average number of rentals processed per day? a. More than 10 but less than or equal to 50 cars per day b. More than 50 but less than or equal to 100 cars per day c. More than 100 but less than or equal to 150 cars per day d. More than 150 but less than or equal to 200 cars per day 17. Which of the following statements is true of a process map? a. It distorts the boundaries of a process. b. Including non-value-added activities in a process map is one of the important responsibilities of operations managers. c. It documents how work either is or should be accomplished. d. Adding multiple approval requirements for all transactions in a process map is a crucial part in the creation of the process map.

18. What is the implied service rate per service counter employee at an airport automobile rental counter if customer demand is 36 customers per hour, two service counter employees are on duty, and the labor utilization is 75 percent? a. 18 customers per hour b. 26 customers per hour c. 20 customers per hour d. 24 customers per hour 19. A wealth management company is able to process 300 customer statements per day. The average processing time per statement is two days. What is the average number of statements the company has in process at any time? a. 150 b. 200 c. 450 d. 600 20. Which of the following is true of custom goods? a. They are usually available as they are stocked in inventory. b. They are produced on demand. c. They are made in anticipation of customer demand. d. They are made according to a fixed design.

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Chap 07_2e 21. A process _____ is the beginning or end of a process. a. design b. map c. boundary d. bottleneck 22. In a process design, a _____ is a specific unit of work required to create an output. a. task b. matrix c. value chain d. portfolio 23. Management strategies to improve process designs of services focus on: a. decreasing process costs by adding multiple approval requirements for all transactions. b. decreasing process bottlenecks by adding non-value-added activities to a process. c. increasing product and service quality by reducing defects and service upsets. d. increasing agility by making service processes mechanistic and controlled.

24. _____ are large-scale, customized initiatives that consist of many smaller tasks and activities that must be coordinated and completed to finish on time and within budget. a. Projects b. Flow shops c. Continuous flow processes d. Assembly line processes 25. _____ goods are configurations of standard parts, subassemblies, or services that can be selected by customers from a limited set. a. Fixed b. Custom c. Option d. Standard 26. An accounting firm is capable of processing 20 income tax forms per day. The average number of forms in various stages of processing at any one time in the firm is 64. What is the average processing time per income tax form? a. More than 2 but less than or equal to 3 days b. More than 3 but less than or equal to 4 days c. More than 4 but less than or equal to 5 days d. More than 5 days

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Chap 07_2e 27. Non-value-added activities in a process design can be eliminated by: a. using value stream mapping. b. limiting the throughput of all processes. c. adding multiple approval requirements for all transactions. d. increasing process boundaries.

28. An automobile emissions testing center has six inspectors and tests 50 vehicles per hour. Each inspector can inspect 12 vehicles per hour. How many inspectors would the center require to have a target utilization of 90 percent? a. Two b. Three c. Seven d. Five 29. _____ are organized around particular types of general-purpose equipment that are flexible and capable of customizing work for individual customers. a. Assembly line processes b. Flow shop processes c. Continuous flow processes d. Job shop processes 30. A manufacturer's average work-in-process inventory for Part #1234 of a particular car model is 1,250 parts. The workstation produces parts at the rate of 150 parts per day. What is the average time a part spends at the workstation? a. More than 4 but less than or equal to 6 days b. More than 6 but less than or equal to 8 days c. More than 8 but less than or equal to 10 days d. More than 10 days

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Chap 07_2e Answer Key 1. True 2. True 3. False 4. False 5. False 6. a 7. d 8. c 9. c 10. a 11. c 12. b 13. a 14. c 15. c 16. a 17. c 18. d 19. d 20. b 21. c 22. a 23. c 24. a 25. c 26. b

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Chap 07_2e 27. a 28. d 29. d 30. c

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Chap 08_2e Indicate whether the statement is true or false.

1. A Gallup study showed that there is no significant difference found in the productivities among workers who are allowed to personalize their workplaces and those who are not. a. True b. False 2. In a cellular layout, additional floor space is required because machines are not very closely linked within a cell. a. True b. False 3. The design of service facilities requires the clever integration of layout with the servicescape and process design to support service encounters. a. True b. False 4. Process layouts require simple planning and control systems. a. True b. False 5. Research has shown that bringing the outdoor environment into the workplace lowers stress. a. True b. False 6. Facility layout does not enhance sustainability in service-producing organizations. a. True b. False 7. According to a study conducted by Software Advice, the likelihood of consumers buying a particular product remains unaffected even when the production of that product causes reduced environmental impact. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

8. _____ is a technique to group tasks among workstations so that each workstation has—in the ideal case—the same amount of work. a. Job enlargement b. Assembly-line balancing c. Cellular manufacturing d. Job enrichment

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Chap 08_2e 9. Which of the following is a limitation of a process layout? a. It affects the entire system if any equipment in the layout fails. b. It has higher worker skill requirements. c. It has highly specialized equipment requirements. d. It generally requires a low investment for the production of machines.

10. The first approach to designing process layouts is used when it is difficult to obtain data on costs or volumes moved between departments. The second approach focuses on the costs associated with moving materials.

Identify a major difference between these two approaches. a. The first approach relies on materials-handling costs as the primary criterion while the second approach relies on a preference table that specifies the importance of two departments being close to one another. b. The first approach relies on materials-handling costs as the primary criterion while the second approach uses the geometric centroid of each department. c. The first approach uses the geometric centroid of each department while the second approach relies on materials-handling costs as the primary criterion. d. The first approach relies on a preference table that specifies the importance of two departments being close to one another while the second approach relies on materials-handling costs as the primary criterion.

11. One of the differences between product layouts and process layouts is that unlike product layouts, process layouts: a. require highly specialized equipment. b. provide more flexibility. c. have higher automation potential. d. have less materials-handling costs.

12. Which of the following is an objective of ergonomics? a. To increase the cost of doing a job while reducing fatigue b. To reduce energy requirements while increasing accuracy c. To increase the possibility of human errors while decreasing the cost of training d. To reduce the flexibility in an operation while increasing speed 13. A _____ layout is an arrangement based on the sequence of operations that is performed during the manufacturing of a good or delivery of a service. a. product b. process c. cellular d. fixed-position 14. Which of the following is true of fixed-position layouts? a. The changeover requirements are low. b. The automation potential is moderate. c. The volume of product demand is high. d. The equipment utilization is high.

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Chap 08_2e 15. A _____ is a reasonable estimate of the amount of time needed to perform a task based on an analysis of the work by an operations expert. a. standard time b. time study c. standard measurement d. work measurement 16. The objective of assembly-line balancing is to: a. minimize the imbalance among workstations while trying to achieve a desired output rate. b. maximize the cost of operations while trying to reduce the cycle time. c. maximize the cycle time while trying to minimize the cost of operations. d. minimize the imbalance among workstations while trying to maximize the cycle time.

17. _____ is concerned with improving productivity and safety by designing workplaces, equipment, instruments, computers, workstations, and so on that take into account the physical capabilities of people. a. Ergonomics b. Employee motivation c. Job design d. Job enrichment 18. Compared to product layouts, process layouts: a. require a lower investment in equipment. b. provide less flexibility. c. have high equipment utilization. d. have less materials-handling costs.

19. The production of large goods such as ships is best accomplished using a _____ layout. a. product b. process c. cellular d. fixed-position 20. In a cellular layout, the procedure of classifying parts with similar processing requirements into families is called _____. a. group technology b. traits analysis c. batch processing d. commonality identification

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Chap 08_2e 21. In the context of assembly-line balancing, _____ is the difference between total time available and the sum of the actual times for productive tasks. a. blocking delay b. lack-of-work delay c. idle time d. cycle time 22. Which of the following is true of a cellular layout? a. It remains stationary rather than moving work-in-process from one work center to another. b. Its workflow is not standardized. c. It is not designed according to the functional characteristics of equipment. d. Its quality problems are not addressed timely.

23. Three work study analysts are rating an employee. Work study analyst 1 rates the employee at performance rating factor = 1.0 and an observed time of 2.8 minutes per unit. Work study analyst 2 rates the employee at PRF = 1.1 and an OT of 3.1 minutes per unit. Work study analyst 3 rates the employee at PRF = 0.8 and an OT of 3.0 minutes per unit. What should the standard time be, assuming an allowance factor of 20%? a. 3.560 minutes per unit b. 3.339 minutes per unit c. 3.444 minutes per unit d. 3.667 minutes per unit 24. FancyTrends Inc., a handbag manufacturing company, assembles handbags in an assembly line using 10 workstations. The target output for an 8 hour workday is 120 bags. The sum of the task times is 30 minutes/bag.

The cycle time is 4 minutes/bag. The assembly-line efficiency is _____. a. 65% b. 70% c. 75% d. 80% 25. An assembly line with 30 activities is to be balanced. The total amount of time required for all 30 activities is 45 minutes. The line will operate for 360 minutes per day. Which of the following must be the cycle time to achieve an output rate of 200 units/day? a. 0.66 minutes b. 1.5 minutes c. 1.8 minutes d. 4.5 minutes 26. _____ is the interval between successive outputs coming off the assembly line. a. Idle time b. Cycle time c. Lack-of-work delay d. Blocking delay

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Chap 08_2e 27. Identify the most suitable layout for a facility that handles a wide variety of customized orders. a. A fixed-position layout b. A cellular layout c. A product layout d. A process layout 28. One of the advantages of a product layout is that it: a. can easily accommodate a change in product design. b. has low work-in-process inventories. c. does not usually require highly specialized equipment. d. can easily accommodate new products.

29. Organizations that need the ability to provide a wide variety of services to customers with differing requirements usually use a _____ layout. a. cellular b. process c. fixed-position d. product 30. _____ is vertical expansion of job duties to give the worker more responsibility. a. Employee empowerment b. Job enlargement c. Employee recognition d. Job enrichment 31. _____ layouts usually require a high level of planning and control compared with other types of facility layouts. a. Product b. Process c. Cellular d. Fixed-position 32. Which of the following types of facility layouts is best suited for a heavy machine tools factory? a. A product layout b. A process layout c. A cellular layout d. A fixed-position layout

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Chap 08_2e 33. Megan plans the facility layout of her new shop that would sell a variety of healthcare industry machines. She arranges the machines in a way that the machines are grouped according to their functions. Which of the following types of facility layouts has Megan used in her shop? a. A process layout b. A product layout c. A cellular layout d. A fixed-position layout 34. One of the disadvantages of a product layout is that it has: a. high materials handling. b. high work-in-progress inventory. c. low flexibility. d. low labor utilization.

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Chap 08_2e Answer Key 1. False 2. False 3. True 4. False 5. True 6. False 7. False 8. b 9. b 10. d 11. b 12. b 13. a 14. b 15. a 16. a 17. a 18. a 19. d 20. a 21. c 22. c 23. c 24. c 25. c 26. b

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Chap 08_2e 27. d 28. b 29. b 30. d 31. d 32. d 33. a 34. c

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Chap 09_2e Indicate whether the statement is true or false.

1. Judgmental forecasting relies upon historical data in developing forecasts. a. True b. False 2. A moving average (MA) method is most appropriate for data with major identifiable trends. a. True b. False 3. Call center service training is a preproduction service that requires forecasts to create value in a value chain. a. True b. False 4. In the context of demand planning, customers' wants and needs define the customer benefit package. a. True b. False 5. Forecasting is a key component in customer relationship management. a. True b. False 6. In the context of causal forecasting models with multiple regression, an R-squared (R2) value of 0.70 means that 30 percent of the variation in the dependent variable is explained by the independent variable. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

7. _____ are used by operations managers to plan production schedules and assign workers to jobs. a. Balanced scorecards b. Intermediate-range forecasts c. Short-range forecasts d. Credit scorecards 8. In the context of forecasting, the term _____ refers to the tendency of forecasts to consistently be larger or smaller than the actual values of the time series. a. trend b. bias c. fad d. variability

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Chap 09_2e 9. The mean absolute deviation (MAD) for the forecasts shown in the following table is: Month Forecast Demand Actual Demand April 190 180 May 175 200 June 190 200 July 240 220 August 225 195 a. more than 10 but less than or equal to 20. b. more than 20 but less than or equal to 30. c. more than 30 but less than or equal to 40. d. more than 40 but less than or equal to 50.

10. _____ are needed to plan workforce levels, allocate budgets among divisions, and schedule jobs and resources. a. Make-to-order operations b. Intermediate-range forecasts c. Short-range forecasts d. Make-to-stock operations 11. In the context of forecasting errors, _____ eliminates the measurement scale factor. a. normalized mean signed deviation b. mean absolute deviation c. normalized root mean square error d. mean absolute percentage error 12. If the time series in an exponential smoothing model exhibits a negative trend, the _____. a. mean square error will be negative b. value of smoothing constant will either be less than zero or greater than one c. forecast will overshoot the actual values d. future forecasts will rely solely upon expertise of people in developing forecasts 13. Moving average (MA) methods work best when: a. a long planning horizon is involved. b. a cyclical pattern is observed in a time series. c. demand is relatively stable and consistent. d. there is a major trend in a time series.

14. _____ 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. A moving average forecast b. Single exponential smoothing c. A grassroots forecast d. Regression analysis

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Chap 09_2e 15. In the Delphi method of judgmental forecasting, _____. a. predictions are based on the assumption that the future will be an extrapolation of the past b. predictions are based on one or more independent variables, all of which are numerical c. people from outside an organization are not eligible to make predictions d. experts are not consulted as a group to make predictions 16. A tracking signal provides a method for monitoring a forecast by quantifying _____. a. bias b. throughput c. probability d. validity 17. In the context of data patterns in a time series, regular patterns in a data series that take place over long periods of time are called _____ patterns. a. orthographic b. seasonal c. cyclical d. parallel patterns 18. When no historical data are available, _____ is the sole basis for predicting future demands. a. statistical forecasting b. regression analysis c. judgmental forecasting d. exponential smoothing 19. The mean absolute percentage error (MAPE) for the forecasts shown in the following table is: Month Forecast Demand Actual Demand April 110 100 May 150 125 June 160 170 July 110 130 August 150 180 a. less than or equal to 5 percent. b. more than 5 percent but less than or equal to 10 percent. c. more than 10 percent but less than or equal to 15 percent. d. more than 15 percent.

20. _____ is a method for building a statistical model that defines a relationship between a single dependent variable and one or more independent variables, all of which are numerical. a. The Delphi method b. Regression analysis c. Judgmental forecasting d. The Cooke method Copyright Cengage Learning. Powered by Cognero.

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Chap 09_2e 21. An exponential smoothing model must have a smoothing constant (α) _____ to be roughly equivalent to a moving average model with a seven-month moving average. a. less than or equal to 0.10 b. more than 0.10 but less than or equal to 0.15 c. more than 0.15 but less than or equal to 0.20 d. more than 0.20 22. In the context of data patterns in a time series, a(n) _____ variation is a one-time variation that is explainable. a. cyclical b. random c. irregular d. seasonal 23. _____ are necessary to plan for facility expansion. a. Long-range forecasts b. Intermediate-range forecasts c. Make-to-order operations d. Make-to-stock operations 24. The following table shows the sales data of server computers of Ziffcore Inc. for the past 5 years. The management plotted the data on a chart. The chart suggested that the sales appear to be increasing in a fairly predictable linear fashion and that the sales are related to time by a linear function Yt =240+340t. Using simple linear regression, calculate the forecast for sales in year 6.

Year Sales 1 580 2 920 3 1260 4 1600 5 1940 a. The forecast for sales in year 6 is more than 1800 but less than or equal to 2000. b. The forecast for sales in year 6 is more than 2000 but less than or equal to 2200. c. The forecast for sales in year 6 is more than 2200 but less than or equal to 2400. d. The forecast for sales in year 6 is more than 2400 but less than or equal to 2600.

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Chap 09_2e 25. The mean square error (MSE) for the forecasts shown in the following table is: Month Forecast Demand Actual Demand April 170 180 May 225 200 June 210 200 July 260 240 August 200 230 a. more than 250 but less than or equal to 300. b. more than 300 but less than or equal to 350. c. more than 350 but less than or equal to 400. d. more than 400 but less than or equal to 450.

26. _____ is a common approach to gather data for judgmental forecasts. a. A moving average model b. Regression analysis c. A survey questionnaire d. Single exponential smoothing 27. The following table shows the data for the sales of tennis rackets at a store for 4 consecutive months. Find the forecast error in month 4 using a 3-month moving average.

Month 1 2 3 4 Sales 80 95 125 110 a. The forecast error in month 4 is less than or equal to 5. b. The forecast error in month 4 is more than 5 but less than or equal to 10. c. The forecast error in month 4 is more than 10 but less than or equal to 15. d. The forecast error in month 4 is more than 15.

28. Forecast _____ is the difference between the observed value of the time series and the forecast. a. error b. consumption c. precision d. density 29. A _____ is the underlying pattern of growth or decline in a time series. a. trend b. planning horizon c. forecast error d. bias

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Chap 09_2e 30. _____ is based on the assumption that the future will be an extrapolation of the past. a. Judgmental forecasting b. Statistical forecasting c. The Delphi method d. The Cooke method 31. In the context of data patterns in a time series, _____ are characterized by repeatable periods of ups and downs over short periods of time. a. random variations b. seasonal patterns c. cyclical patterns d. irregular variations 32. The following table shows the data for the sales of a new music album at a store for 4 consecutive months. Find the forecast for the next month using a 3-month moving average.

Month 1 2 3 4 Sales 112 105 125 118 a. The forecast for the next month is more than 90 but less than or equal to 100. b. The forecast for the next month is more than 100 but less than or equal to 110. c. The forecast for the next month is more than 110 but less than or equal to 120. d. The forecast for the next month is more than 120 but less than or equal to 130.

33. In the context of a fairly stable time series with relatively little random variability, which of the following statements is true of single exponential smoothing (SES)? a. Values of the smoothing constant larger than 0.5 place more emphasis on recent data. b. Exponential smoothing models completely forget past data if the smoothing constant is strictly between 0 and 1. c. Typical values for the smoothing constant are in the range of 1 to 1.5. d. Values of the smoothing constant smaller than 0.1 allow a forecast to react faster to changing conditions.

34. Alex, a manager at Symbic Inc., plotted the company's total energy costs of 1 billion dollars over the past 10 years on a chart. The chart suggested that the energy costs appear to be increasing in a fairly predictable linear fashion and that the energy costs are related to time by a linear function Yt =3+5t, where Yt represents the estimate of the energy cost in year t. Given the equation, which of the following is the value of the intercept of the straight line that best fits the time series? a. 1 b. 3 c. 5 d. 10

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Chap 09_2e 35. The following table shows the sales data of a particular model of a DVD player. If the forecast sales for May is 36.25, calculate the sales forecast for July using the simple exponential smoothing (SES) model with a smoothing constant of 0.40.

Month Sales Jan 35 Feb 29 Mar 39 Apr 42 May 51 Jun 56 a. The sales forecast for July is more than 30 but less than or equal to 35. b. The sales forecast for July is more than 35 but less than or equal to 40. c. The sales forecast for July is more than 40 but less than or equal to 50. d. The sales forecast for July is more than 50 but less than or equal to 55.

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Chap 09_2e Answer Key 1. False 2. False 3. False 4. True 5. True 6. False 7. c 8. b 9. a 10. b 11. d 12. c 13. c 14. b 15. d 16. a 17. c 18. c 19. c 20. b 21. d 22. c 23. a 24. c 25. d 26. c

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Chap 09_2e 27. b 28. a 29. a 30. b 31. b 32. c 33. a 34. b 35. c

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Chap 10_2e Indicate whether the statement is true or false.

1. The ideas and methods surrounding a revenue management system are often called yield management. a. True b. False 2. A work order is a specification of work to be performed for a customer or a client. a. True b. False 3. Diseconomies of scale are known as the capacity cushion. a. True b. False 4. Offering complementary goods or services is an example of a short-term capacity strategy. a. True b. False 5. In the Theory of Constraints, constraints determine the throughput of a facility. a. True b. False 6. Long-term capacity decisions usually involve adjusting schedules or staffing levels. a. True b. False 7. The Theory of Constraints focuses on eliminating all bottleneck activities in a process. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

8. Harlose Suits owns more equipment than required for manufacturing goods during periods of regular demand in order to tackle sudden demand surges. It also has a certain reserve of produced goods to tackle material shortages. In this case, the reserve of equipment and produced goods are examples of _____. a. a physical constraint b. the capacity cushion c. overbooking d. capacity straddle

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Chap 10_2e 9. Lumeris Inc., an automobile manufacturer, has an inflexible work schedule and requires its workers to work nine hours a day and six days a week. Its laborers do not have adequate skills to perform their job efficiently. The inflexible work schedule and inadequate labor skills are examples of _____. a. physical constraints b. nonphysical constraints c. bottleneck activities d. work orders 10. A capacity _____ strategy is a strategy for expanding capacity that waits until demand has increased to a point where additional capacity is necessary. a. lag b. lead c. reduction d. match 11. In the Theory of Constraints, a _____ activity is one that effectively limits the capacity of the entire process. a. nonbottleneck b. bottleneck work c. nonphysical d. core process 12. Which of the following statements is true of a work order? a. It is also called the capacity cushion. b. It includes processing requirements for a type of work. c. It cannot be defined for services. d. It does not include resources needed for a type of work.

13. Nonbottleneck management principles differ from bottleneck management principles because according to nonbottleneck management principles, _____. a. idle time is acceptable if there is no work to do b. an hour lost at a nonbottleneck resource is an hour lost for the entire process or factory output c. large order sizes should be used to minimize setup time and maximize resource utilization d. the input should always exceed the capacity 14. A _____ consists of dynamic methods to forecast demand, allocate perishable assets across market segments, decide when to overbook and by how much, and determine what price to charge different customer classes. a. focused factory b. work order c. revenue management system d. nonbottleneck work activity

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Chap 10_2e 15. _____ are achieved when the average unit cost of a good or service decreases as the capacity and/or volume of throughput increases. a. Unfocused factories b. Safety capacities c. Diseconomies of scale d. Economies of scale 16. Blyrie Inc., a sports goods manufacturing company, follows a policy that involves manufacturing only when the demand exceeds the amount of goods already manufactured. Given this information, Blyrie Inc. most likely uses a capacity _____ strategy to expand its capacity. a. lead b. reduction c. straddle d. lag 17. Unlike a focused factory, an unfocused factory is characterized by: a. a few key products. b. particular market segments. c. identical people skills. d. dissimilar product lines.

18. Scorla Corp. is an apparel manufacturing factory. Its average resource utilization per year is calculated as 70%.

The average safety capacity of Scorla Corp. is _____. a. 20% b. 30% c. 40% d. 50% 19. A _____ matches capacity additions with demand as closely as possible. a. lag b. straddle c. lead d. reduction 20. Which of the following is a way to manage capacity by adjusting short-term capacity levels? a. Varying the price of goods or services b. Adding peripheral goods and/or services c. Providing reservations d. Shifting work to slack periods

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Chap 10_2e 21. Which of the following is a way to manage capacity by shifting and stimulating demand? a. Adding peripheral goods and/or services b. Adding or sharing equipment c. Changing labor schedules d. Changing labor skill mix 22. The earliest revenue management systems focused solely on _____. a. forecasting b. overbooking c. allocation d. pricing 23. At Rues and West Bros., a spare parts manufacturing company, the most important competitive priority is quality.

Only a few key spare parts are produced using similar process designs. In this scenario, Rues and West Bros. _____. a. is a focused factory b. has no throughput c. is an unfocused factory d. uses a mass customization strategy 24. Avexim Pharmaceutical Laboratories is an international group of companies that manufactures an antiepileptic prescription drug in huge volumes. The setup time for manufacturing the drug is 75 minutes, the processing time is 8 minutes, and the order size is 700 units. In this case, which of the following is the total time required to meet the given production volume? a. 968 minutes b. 1300 minutes c. 4275 minutes d. 5675 minutes 25. A doctor's office charges no-show patients $30 if they do not cancel their appointment 24 hours prior to the appointment. In this scenario, which of the following can be used by the doctor's office to handle the risk of idle service capacity? a. A capacity straddle strategy b. A capacity lag strategy c. A revenue management system d. A pull system 26. In service industries, capacity is often viewed as the _____. a. minimum rate of output per unit time b. units of resource availability c. amount of setup time d. amount of overtime scheduled

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Chap 10_2e 27. Magnira Hotels is a leading chain of hotels. Its managers reserve 30% of the rooms available only to the members of its club. They also provide the rooms at subsidized prices to these members. In this scenario, which of the following components of revenue management system is most likely used by Magnira Hotels? a. Investment b. Allocation c. Capacity expansion d. Capacity sharing 28. The traditional operations management definition of throughput is: a. the average number of goods or services completed per time period by a process. b. anything in an organization that limits it from moving toward its goal. c. associated with the capacity of a resource such as a machine, employee, or workstation. d. a physical activity in which idle capacity exists.

29. _____ occur when the average unit cost of a good or service begins to increase as the capacity and/or volume of throughput increases. a. Economies of scale b. Diseconomies of scale c. Demand lags d. Nonphysical constraints 30. Average safety capacity (%) is computed using the formula: a. Average resource utilization (%) − 100%. b. 100% − Average resource utilization (%). c. [Maximum safety capacity (%) + Minimum safety capacity (%)]/2. d. 100% − Maximum resource utilization (%).

31. Greyon Spinning Mills Inc. owns 600 spinning machines. Out of these, only 500 are used in a given year. Given this information, the utilization of spinning machines at Greyon Spinning Mills Inc. is _____. a. 0.75 b. 0.83 c. 1 d. 1.2 32. In a revenue management system, forecasting, allocation, overbooking, and pricing must work in unison if the objective is to: a. manage a nonperishable asset. b. meet the future demand of goods and services. c. determine the single price that needs to be charged to all customers. d. maximize the revenue generated by a perishable asset.

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Chap 10_2e 33. Which of the following statements is true of setup time? a. It is independent of order size for manufacturing work orders. b. It varies with the volume of work orders. c. It is the most insignificant part of total system capacity. d. It is usually the same for manufacturing and service-providing applications.

34. In the context of strategies for expanding capacity, which of the following statements is true of one large capacity increase? a. This strategy aims to match capacity additions with demand as closely as possible. b. An advantage of using this strategy is that the fixed costs of construction and operating system setup need to be incurred only once. c. This strategy waits until demand has increased to a point where additional capacity is necessary. d. When this strategy is used, there is always excess capacity and safety capacity to meet unexpected demand from large orders is provided.

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Chap 10_2e Answer Key 1. True 2. True 3. False 4. False 5. True 6. False 7. False 8. b 9. b 10. a 11. b 12. b 13. a 14. c 15. d 16. d 17. d 18. b 19. b 20. d 21. a 22. b 23. a 24. d 25. c 26. b

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Chap 10_2e 27. b 28. a 29. b 30. b 31. b 32. d 33. a 34. b

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Chap 11_2e Indicate whether the statement is true or false.

1. Simulation models are not well equipped to capture the dynamic behavior of queues over time. a. True b. False 2. Flow time depends not only on the actual time to perform the tasks required, but also on how many other entities are in the work-in-process stage. a. True b. False 3. When calculating utilization, the dimensions of the denominator must be greater than those of the numerator. a. True b. False 4. Total process output is at the throughput rate of the bottleneck. a. True b. False 5. Little’s Law uses short-term averages to explain relationships. a. True b. False 6. The imputed cost of waiting is the reasonable value that might reflect the potential loss of future revenue or customer dissatisfaction. a. True b. False 7. The philosophy and principles of the TOC are valuable in understanding demand and capacity management. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

8. A(n) _____ is a waiting line. a. queue b. process system c. field d. plot point 9. A(n) _____ is the work activity that effectively limits the throughput of the entire process. a. breakdown b. bottleneck c. blockage d. broadband Copyright Cengage Learning. Powered by Cognero.

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Chap 11_2e 10. Which of the following is NOT an example of a nonphysical constraint? a. low product demand b. Associated with the capacity of a resource c. inefficient management policy d. anything environmental or organizational 11. Analytical queueing models assume a Poisson probability distribution for _____. a. arrivals b. rates c. service times d. departures 12. Which of the following best defines the Theory of Constraints? a. The concept of purposely creating barriers in a process in order to evaluate the impact on the workflow b. Maximizing cash flow by minimizing throughput c. A set of principles that focuses on increasing total process throughput by maximizing the utilization of all bottleneck work activities d. Limiting demand in order to better service remaining customers 13. _____ is the fraction of time a workstation or individual is busy over the long run. a. Computation b. Service Rate c. Utilization d. Efficiency 14. In one method of calculating utilization, _____ divided by Resources Available. a. Resources Used b. Service Rate c. Number of Servers d. Resource Capacity 15. Which of the following is NOT true about simulation models? a. Simulations can be used to analyze processes that cannot be evaluated well analytically. b. A simulation model is used to get estimates; an analytical model provides detailed analysis. c. Simulations can use actual probability rates for both demand and service rates. d. Analytical and simulation models are often used in combination.

16. _____ time is the average time it takes to complete one cycle of a process. a. Flow b. Mean c. Standard d. Elemental

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Chap 11_2e 17. An airline has one employee work the counter. A customer arrives on the average of once every 3 minutes, and it takes on average 2 minutes to process the transaction. What is the probability that a customer must wait for service in the queue? a. 0% b. 33% c. 66% d. 100% 18. Which of the following describes the general process for identifying a bottleneck? a. Measure the number of units completed per unit time. b. Calculate the speed of the process from start to finish. c. Determine the work activity that runs most efficiently. d. Identify the work activity that has the smallest throughput.

19. A scooter rental company in a major beachside city has 70% of its fleet of 200 scooters rented each day on average. Scooter are rented for an average of five days. Which of the following can you use to start figuring out the average process performance? a. (.7)(200 scooters)/R × (5 days) b. (.7)(200 scooters) = R × (5 days) c. (.7)(5 days) / R × (200 scooters) d. (.7)(5 days) = R × (200 scooters) 20. The process for applying for a work permit at the Manchester department of labor is as follows. First, the administrator fills out an application (5 minutes) and takes a picture (1 minute). Then, a clerk enters the information and processes the permit (5 minutes). There are two administrators and three clerks. If the number of licenses per hour for the administrators is 16 and the number of licenses per hour for the clerks is 20.57, what can you conclude? a. The administrators are the bottleneck resources. b. There should be more clerks. c. The clerks are a physical constraint. d. The total process output is the average of the number of licenses per hour of the administrators and clerks.

21. The number of units or tasks that are completed per unit time from a process is the _____. a. endput b. throughput c. input d. output 22. A hotel has 200 rooms. If, on a given day, 150 rooms are occupied, which number represents the utilization of hotel rooms? a. 33% b. 50% c. 66% d. 75% Copyright Cengage Learning. Powered by Cognero.

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Chap 11_2e 23. _____ is the typical queueing system used by banks and airline ticket counters. a. Several parallel servers fed by their own queues b. One or more parallel servers fed by a single queue c. A combination of several queues in a series d. One server, one queue 24. An airline has one employee work the counter. A customer arrives on the average of once every 3 minutes, and it takes on average 2 minutes to process the transaction. What is the probability that the system is empty? a. 0% b. 33% c. 66% d. 100% 25. _____ = Throughput × Flow time. a. Best-in-output b. Efficiency evaluation c. Work-in-process d. Standard Demand 26. A warehouse is capable of processing 600 returns per day, and the average number of returns in the 200. Based on the data in the question, what is being calculated by dividing 600 by 200? a. Work-in process b. Flow time c. Process performance d. Throughput 27. The process for applying for a work permit at the Manchester department of labor is as follows. First, the administrator fills out an application (5 minutes) and takes a picture (1 minute). Then, a clerk enters the information and processes the permit (5 minutes). There are two administrators and three clerks. If the number of licenses per hour for the administrators is 16 and the number of licenses per hour for the clerks is 20.57, what is the hourly service rate for administrators? a. 5 b. 6 c. 10 d. 12 28. What is the average time a bouquet stays in a florist shop if they sell 100 bouquets per day and they maintain an average inventory of 200 bouquets? a. 1 day b. 2 days c. 5 days d. 10 days

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Chap 11_2e 29. In one method of calculating utilization, _____ divided by Service Rate × Number of Servers. a. Resources Available b. Service Rate c. Demand Rate d. Resource Capacity 30. Which of the following is another term for one simulation run? a. Replication b. Redundancy c. Reference d. Reflection 31. The process for applying for a work permit at the Manchester department of labor is as follows. First, the administrator fills out an application (5 minutes) and takes a picture (1 minute). Then, a clerk enters the information and processes the permit (5 minutes). There are two administrators and three clerks. If the number of licenses per hour for the administrators is 16 and the number of licenses per hour for the clerks is 20.57, what is the hourly service rate for clerks? a. 5 b. 6 c. 10 d. 12 32. _____ is the typical queueing system used by supermarkets. a. Several parallel servers fed by their own queues b. One or more parallel servers fed by a single queue c. A combination of several queues in a series d. One server, one queue 33. Which of the following is NOT part of a queueing system? a. A server that provides the service b. A map of processes and functions c. A queue of entities that wait if the server is busy d. Customers that arrive for service 34. In an analytical queueing model, service times measure _____. a. demand b. process components c. completion percentage d. rates

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Chap 11_2e 35. Which of the following is an example of a bottleneck management principle? a. Work-in-process buffer inventory should be place behind bottlenecks to maximize resource utilization. b. At bottleneck workstations, idle time is acceptable if there is no work to do. c. Use large order sizes at bottleneck workstations. d. An hour lost at a bottleneck resource has no effect on total process or factory output.

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Chap 11_2e Answer Key 1. False 2. True 3. False 4. True 5. False 6. True 7. True 8. a 9. b 10. b 11. a 12. c 13. c 14. a 15. b 16. a 17. c 18. d 19. b 20. a 21. b 22. d 23. a 24. b 25. c 26. b

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Chap 11_2e 27. c 28. b 29. c 30. a 31. d 32. b 33. b 34. d 35. c

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Chap 12_2e Indicate whether the statement is true or false.

1. In the Pareto Principle, a vital few control a high percentage of the wealth. a. True b. False 2. In a fixed-order-quantity system, when demand is uncertain, using economic order quantity (EOQ) based only on the average demand will result in a low probability of a stockout. a. True b. False 3. Marketing and operations prefer high inventory levels, whereas finance would prefer small inventories. a. True b. False 4. Setup costs include costs associated with maintaining storage facilities, such as gas and electricity, taxes, and insurance. a. True b. False 5. In the context of using technology to manage inventories, radio-frequency identification (RFID) chips offer an accuracy of less than 70 percent. a. True b. False 6. Single-period inventory models are used in situations involving items that can be carried in inventory and sold in future periods. a. True b. False 7. Radio-frequency identification (RFID) chips allow firms to track individual containers. a. True b. False 8. The single-period inventory model applies to inventory situations where demand is uncertain. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

9. _____ inventory is inventory that results from purchasing or producing in larger lots than are needed for immediate consumption or sale. a. Finished-goods b. Stockout c. Cycle d. Work-in-process Copyright Cengage Learning. Powered by Cognero.

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Chap 12_2e 10. In the context of fixed-quantity systems, _____ is defined as the on-hand quantity (OH) plus any orders placed but which have not arrived minus any backorders (BO). a. inventory position b. the reorder point c. a stock-keeping unit d. work-in-process inventory 11. Jae’s Shoes is considering a change of their current inventory control system for sneakers. The information regarding the neckties is: Demand = 1000 pairs/week; Lead time = 3 weeks; Order cost = $20/order; Holding cost = $10.00/pair/yr; Cycle service level = 95%; Standard deviation of weekly demand = 48; and Number of weeks per year = 52. To calculate the relative frequency use the following values: _____. a. Number of Days and Standard Deviation of Weekly Demand b. Units Sold and Demand c. Units Sold and Number of Days d. Lead Time and Holding Cost 12. Vision Toys uses a fixed-quantity system to manage its inventories. The inventory includes plastic and LED bulbs. It was observed that the company often faces stockout of plastic. The average weekly demand for plastic is 100 pounds, and historical data show that the standard deviation of weekly demand is about 7. The lead time from the plastic supplier is 2 weeks. If the company's acceptable service level is 95 percent and the number of standard deviations necessary to achieve the acceptable service level is 1.645, the reorder point for plastic with safety stock is: a. less than or equal to 125 pounds. b. more than 125 pounds but less than or equal to 175 pounds. c. more than 175 pounds but less than or equal to 225 pounds. d. more than 225 pounds.

13. A buyer for a department store orders sweaters about 6 months before the winter season. The store plans to hold a March clearance sale to sell any surplus goods by February 29. Each piece costs $100 per pair and sells for $120 per pair. At the sale price of $60 per pair, it is expected that any remaining stock can be sold during the March sale. Assume that a uniform probability distribution ranging from 250 to 450 items describes the demand.

The expected demand is 300. In the context of the single period inventory system, the optimal order size Q must satisfy the condition _____. a. P(demand ≤ Q*) = 1/2 b. P(demand ≤ Q*) = 1/3 c. P(demand ≤ Q*) = 1/4 d. P(demand ≤ Q*) = 1/5

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Chap 12_2e 14. Brenda is the owner of a spa store that operates 50 weeks per year. Spair Shampoo is a high margin stock keeping unit (SKU), but the product goes out of stock frequently. She decides to use a fixed-quantity system (FQS) and orders boxes of Spair Shampoo containing 10 bottles per box from a vendor 160 miles away. She collects the following data with respect to the sales of Spair Shampoo.

Demand 10 boxes per week Order Cost $40 per order Item Cost $80 per box per year Inventory-Holding Cost 15 percent per year Lead Time 3 weeks Standard Deviation in Weekly Demand 6 Service Level 96 percent Using the given data, it can be concluded that the economic order quantity (EOQ) of the Spair Shampoo boxes is: a. less than 25 boxes. b. more than 25 but less than or equal to 35 boxes. c. more than 35 but less than or equal to 45 boxes. d. more than 55 boxes.

15. In the context of ABC inventory analysis, which of the following statements is true of class A items? a. They require close control by operations managers. b. They comprise less than 30 percent of the total dollar usage. c. They can be managed using automated computer systems. d. They account for more than 50 percent of inventory items.

16. Which of the following statements is true of a fixed-period system (FPS)? a. It orders a fixed quantity of items when the inventory position reaches or drops below the reorder point (r). b. It orders sufficient stock at the time of review to bring the inventory position up to the replenishment level (M). c. It maintains a constant order quantity every review period. d. It checks the inventory position on a continuous basis.

17. In the context of a fixed-order-quantity system, stockouts occur whenever the lead-time demand _____. a. exceeds the reorder point b. exceeds the work-in-process inventory c. becomes equal to the finished-goods inventory d. becomes equal to the break-even point 18. Stable demand is usually called _____ demand. a. static b. overfull c. unwholesome d. dynamic

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Chap 12_2e 19. Using the data regarding the inventory management of a stock-keeping unit shown in the following table, it can be concluded that the optimal replenishment level without any safety stock for a fixed-period system (FPS) under the model assumptions is: Demand 100 units per week Order Cost $30 per order Inventory-Holding Cost $0.6 per unit per year Lead Time 2 weeks Economic Time Interval 5 weeks a. more than 100 but less than or equal to 200 units. b. more than 200 but less than or equal to 400 units. c. more than 400 but less than or equal to 600 units. d. more than 600 but less than or equal to 800 units.

20. The demand for bread in Ahoma City ranges from 100 to 120 tons per day, every day of the year. The demand is easily satisfied on a daily basis. This demand for bread can be categorized as _____ demand. a. static b. overfull c. unwholesome d. dynamic 21. In the context of inventory costs, _____ costs can reflect backorders or service interruptions for external customers. a. holding b. stockout c. ordering d. setup 22. In the context of ABC inventory analysis, which of the following statements is true of class C items? a. They require close control by operations managers. b. They comprise more than 80 percent of the total dollar usage. c. They can be managed using automated computer systems. d. They make up less than 10 percent of inventory items.

23. The demand for trains between Marshdell and Deepbarrow varies throughout the year. The demand reaches its peak in summer and drops during winter. This demand for trains can be categorized as _____ demand. a. static b. overfull c. unwholesome d. dynamic

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Chap 12_2e 24. Net Steels is a steel manufacturing company. It orders 180 metric tons of raw material per order. It was observed that the company often faces stockout. To tackle this issue, the company incorporated a fixed-quantity system (FQS) and collected the following data.

Demand 11,000 metric tons per year Order Cost $18,000 per order Item Cost $36,000 per year Inventory-Holding Cost 20 percent per year Using the data, Net Steels determined that the economic order quantity (EOQ) should be 235 metric tons. In this scenario, the annual amount that Net Steels can save by ordering as per the EOQ instead of its conventional order is: a. less than $45,000. b. more than $45,000 but less than or equal to $55,000. c. more than $55,000 but less than or equal to $65,000. d. more than $65,000.

25. Jae’s Shoes is considering a change of their current inventory control system for sneakers. The information regarding the neckties is: Demand = 1000 pairs/week; Lead time = 3 weeks; Order cost = $20/order; Holding cost = $10.00/pair/yr; Cycle service level = 95%; Standard deviation of weekly demand = 48; and Number of weeks per year = 52. To calculate the relative frequency use the following values: _____. a. Number of Days and Standard Deviation of Weekly Demand b. Units Sold and Demand c. Units Sold and Number of Days d. Lead Time and Holding Cost 26. In the context of inventory management, a(n) _____ is a single item or asset stored at a particular location. a. stock-keeping unit b. make-to-stock product c. average lead stock d. buffer stock 27. In the context of inventory costs, _____ costs are incurred as a result of the work involved in configuring tools, equipment, and machines within a factory to produce an item. a. setup b. holding c. stockout d. unit 28. _____ applies to inventory situations in which one order is placed for a good in anticipation of a future selling season where demand is uncertain. a. A fixed-period inventory system b. A fixed-quantity inventory system c. The deliver-lag inventory model d. The single-period inventory model

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Chap 12_2e 29. A single-period inventory problem can be solved using a technique called _____ analysis. a. marginal economic b. total cost c. critical value d. reorder point 30. _____ inventory is an additional amount of inventory that is kept over and above the average amount required to meet demand. a. Seasonal b. Work-in-process c. Finished-goods d. Safety stock 31. _____ inventory consists of partially completed products in various stages of completion that are awaiting further processing. a. Raw materials b. Work-in-process c. Finished-goods d. Safety stock 32. Using the data regarding the inventory management of a stock-keeping unit shown in the following table, it can be concluded that the optimal replenishment level with safety stock for a fixed-period system (FPS) under the model assumptions is: Demand 140 units per week Order Cost $30 per order Inventory-Holding Cost $0.4 per unit per year Lead Time 3 weeks Economic Time Interval 7 weeks Standard Deviation in Weekly Demand 8 Acceptable Service Level 95 percent Standard Deviations to Achieve the Acceptable Service 1.645 Level a. more than 1,350 but less than 1,550 units. b. more than 1,550 but less than 1,650 units. c. more than 1,650 but less than 1,750 units. d. more than 1,750 but less than 1,850 units.

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Chap 12_2e 33. CraftWare Inc., a furniture manufacturer, uses ABC analysis to define its inventory value. The inventory contains wood, cast iron, adhesive, and carbon fiber. If wood accounts for 50 percent of the items and 5 percent of the total dollar value; carbon fiber accounts for 10 percent of the items and 60 percent of the total dollar value; cast iron accounts for 25 percent of the items and 18 percent of the total dollar value; and adhesive accounts for 15 percent of the items and 17 percent of the total dollar value, _____ can be classified as a class C item. a. wood b. carbon fiber c. cast iron d. adhesive 34. Which of the following statements is true of backorders? a. They occur as a result of excessive stock. b. They occur when a customer is unwilling to wait for an ordered item. c. They result in additional costs. d. They force a customer to purchase elsewhere.

35. Based on the constant demand assumption in the economic order quantity (EOQ) model, the average cycle inventory is: a. the order quantity divided by the number of inventory cycles per year. b. the annual demand divided by the number of inventory cycles per year. c. half of the order quantity. d. half of the annual usage.

36. In the context of managing inventories in supply chains, _____ is the time between placement of an order and its receipt. a. the lead time b. a time series c. the changeover time d. a time horizon 37. Which of the following statements is true of the independent demand for a stock-keeping unit (SKU)? a. It needs to be calculated using the forecast of dependent demand. b. It is affected by the demand of other SKUs. c. It is directly related to the demand of raw materials. d. It needs to be forecasted.

38. In the context of inventory costs, _____ costs can reflect lost sales for external customers or costs associated with interruptions to assembly lines for internal customers. a. holding b. stockout c. ordering d. setup

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Chap 12_2e 39. Using the data regarding the inventory management of a stock-keeping unit shown in the following table, it can be concluded that the economic time interval for establishing an optimal policy for a fixed-period system (FPS) under the model assumptions is: Demand 12,000 units per year Order Cost $50 per order Inventory-Holding Cost $0.5 per unit per year Lead Time 2 weeks Standard Deviation in Weekly Demand 7 Service Level 95 percent a. less than or equal to 3 weeks. b. more than 3 weeks but less than or equal to 6 weeks. c. more than 6 weeks but less than or equal to 9 weeks. d. more than 9 weeks.

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Chap 12_2e Answer Key 1. True 2. False 3. True 4. False 5. False 6. False 7. True 8. True 9. c 10. a 11. c 12. c 13. b 14. d 15. a 16. b 17. a 18. a 19. d 20. a 21. b 22. c 23. d 24. c 25. c 26. a

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Chap 12_2e 27. a 28. d 29. a 30. d 31. b 32. a 33. a 34. c 35. c 36. a 37. d 38. b 39. c

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Chap 13_2e Indicate whether the statement is true or false.

1. Electronic data interchange and Internet links decrease the velocity of supply chains. a. True b. False 2. Import tariffs help in preventing the dumping of low-cost products in the domestic economy. a. True b. False 3. A high average inventory value reduces the chances of inventory obsolescence. a. True b. False 4. Air shipments have the lowest transportation cost and can carry unlimited weight. a. True b. False 5. Cash-to-cash conversion cycle is the average time to convert a dollar spent to acquire raw materials into a dollar collected for a finished good. a. True b. False 6. Technology upgrades and backup systems and sites can help mitigate security risks. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

7. Speedex, an automobile company, has an annual sales volume of $3 million, cost of goods sold equal to $2 million, total average on-hand inventory of $600,000, and 150 operating days in a year. What is the daily revenue earned by the company? a. $10,000 b. $20,000 c. $30,000 d. $40,000 8. TekSupply Inc., an automobile parts supplier, held an average automobile parts inventory of $4 million last year.

Its cost of goods sold was $25 million. Therefore, the automobile parts experienced an inventory turnover of _____ turns last year. a. 2.5 b. 4.25 c. 6.25 d. 9.5

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Chap 13_2e 9. Which of the following is true of purchasing? a. It can have a significant impact on total supply chain costs. b. It is critical to satisfy employees' needs and expectations. c. The delivery of goods and services is the responsibility of the purchasing function of a supply chain. d. The principal goal of purchasing is to source products from a single supplier to avoid capacity risks.

10. In the context of the metrics used to identify improvements to the operation of supply chains, financial measures: a. include perfect order fulfillment and perfect delivery fulfillment. b. show how supply chain performance affects the bottom line. c. calculate order fulfillment lead time in supply chains. d. show how quickly goods move through supply chains.

11. ProShopper, a sportswear store, held an average sportswear inventory of $10 million last year and reported an inventory turnover of 5 times per year. What was its cost of goods sold? a. $10 million b. $20 million c. $40 million d. $50 million 12. Which of the following is a disadvantage of vendor-managed inventory (VMI)? a. It often results in higher customer inventories than necessary. b. It does not allow vendors to view inventory needs from the customer's perspective. c. It prohibits the use of customer information, which leads to poor control of inventory and capacity. d. It prevents vendors from making production decisions using downstream customer demand data.

13. If an online retail store has cost of goods sold equal to $2 million, has 200 operating days in a year, and has a total average on-hand inventory of $500,000, the cost of goods sold per day is _____. a. $2,500 b. $15,000 c. $7,500 d. $10,000 14. _____ is the supply chain function responsible for acquiring raw materials, component parts, tools, services, and other items required from external suppliers. a. Procurement b. Scheduling c. Integration d. Job design

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Chap 13_2e 15. The Pharmaceutical Manufacturers Association defines a _____ as one that, after extensive investigation, is found to provide material of such quality that routine testing on each lot received is unnecessary. a. certified supplier b. contract manufacturer c. licensed franchisor d. return facilitator 16. Which of the following is true of order amplification? a. Order amplification in the supply chain leads to the bullwhip effect. b. Large order sizes can help manage order amplification. c. Order amplification decreases as one moves back up the supply chain away from the retail customer. d. Increasing price fluctuations can help manage order amplification.

17. A(n) _____ is any entity—real or virtual—that coordinates and shares information between buyers and sellers. a. manufacturer b. franchisor c. intermediary d. investor 18. Inventory days’ supply (IDS) is calculated as Average total inventory / _____. a. Transportation cost b. Average sold inventory c. Total annual sales of goods d. Cost of goods sold per day 19. In the context of measuring supply chain performance, the goal of sustainability measures is to: a. reduce the order cycle time for all customers. b. have a byproduct-free production process. c. have a carbon-neutral supply chain. d. minimize the time taken to fill a customer's order.

20. _____ specialize in handling all aspects of customers giving back a manufactured good or delivered service and requesting their money back, repairing the manufactured good and giving it to the customer, and/or invoking the service guarantee. a. Certified suppliers b. Process designers c. Demand forecasters d. Return facilitators

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Chap 13_2e 21. _____ inventory is inventory that has been ordered but is in transit. a. Pipeline b. Decoupling c. Buffer d. Anticipation 22. The _____ function of a supply chain is responsible for selecting transportation carriers and managing companyowned fleets of vehicles. a. integration b. procurement c. logistics d. scheduling 23. Josh Smith, the materials manager at a retail store, has determined that a particular product experienced 5 turns last year, with an annual sales volume of $15 million. What was the average inventory value for this product last year? a. $1 million b. $2.5 million c. $3 million d. $4.5 million 24. Managing orders, transportation, and distribution to provide goods and services is part of the _____ function of the Supply Chain Operations Reference (SCOR) model. a. plan b. source c. make d. deliver 25. _____ is the discipline of managing the flow of materials and transportation activities to ensure adequate customer service at reasonable cost. a. Logistics b. Scheduling c. Procurement d. Integration 26. _____ refers to managing the flow of finished goods, materials, or components that may be unusable or discarded through the supply chain from customers toward either suppliers, distributors, or manufacturers for the purpose of reuse, resale, or disposal. a. Reverse logistics b. Response management c. Process design d. Scheduling

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Chap 13_2e 27. Which of the following best defines inventory turnover? a. It is the cost associated with repairs of goods that have been returned. b. It is the time taken to fill a customer's order. c. It is a measure of how quickly goods are moving through the supply chain. d. It is a measure of the number of perfect orders.

28. Which of the following is NOT true about returns of sold goods? a. The key idea of returns is to reduce consumer risk when purchasing items on-line. b. In many situations, moving an item backwards in the supply chain is more costly than moving new products forward in the supply chain. c. Returned items can resold as new, refurbished, repaired, or recycled. d. The cost of returns averages between 7 to 10 percent of the cost of goods sold, but it is decreasing.

29. Based on the following information, how many days of supply of inventory is the firm holding (assume 260 days of operation per year)? Do not round intermediate calculations. Round your answer to one decimal place. $8,300,000 Sales $7,540,000 Cost of goods sold $760,000 Gross profit $600,000 Overhead costs $160,000 Net profit $2,600,000 Total inventory $3,100,000 Fixed assets $2,300,000 Long-term debt a. 89.7 days b. 99.2 days c. 89.2 days d. 95.2 days

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Chap 13_2e Answer Key 1. False 2. True 3. False 4. False 5. True 6. True 7. b 8. c 9. a 10. b 11. d 12. a 13. d 14. a 15. a 16. a 17. c 18. d 19. c 20. d 21. a 22. c 23. c 24. d 25. a 26. a

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Chap 13_2e 27. c 28. d 29. a

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Chap 14_2e Indicate whether the statement is true or false.

1. Resource management for most service-providing organizations generally requires as many intermediate levels of planning as it does for manufacturing. a. True b. False 2. In industries where jobs have low skill requirements, changing workforce levels can be cost effective. a. True b. False 3. Enterprise resource planning (ERP) systems integrate all aspects of a business into a unified information system. a. True b. False 4. The purpose of a master production schedule (MPS) is to break down the aggregate planning decisions into such details as order sizes and schedules for individual subassemblies and resources by week and day. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

5. Which of the following is true of a master production schedule (MPS)? a. Its primary output is a time-phased report for scheduling raw materials purchase. b. It provides a means for evaluating alternative schedules in terms of capacity requirements. c. Its input is obtained from the materials requirements planning. d. It projects the requirements for the individual parts based on the demand for the finished goods.

6. A company currently has no items in inventory. The demand for the next four months is 200, 400, 250, and 350 units. Assuming a level production rate of 350 units per month, determine the ending inventory at the end of the fourth month. a. 100 b. 150 c. 200 d. 250 7. Which of the following lot sizing rules is best applied when setup or order costs are high? a. The fixed-order quantity rule b. The lot-for-lot rule c. The periodic-order quantity rule d. The gross requirements rule

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Chap 14_2e 8. Aggregate planning: a. is not driven by demand forecasts. b. includes detailed staff schedules. c. helps in defining budget allocations and associated resource requirements. d. does not translate forecast into production plans.

9. A company currently has 500 items in inventory. The demand for the next 2 months is 900 and 1200 units.

Assuming a level production rate of 1000 units per month, determine the ending inventory at the end of the second month. a. 300 b. 400 c. 500 d. 600 10. _____ is the process of determining the amount of labor and machine resources required to accomplish the tasks of production on a more detailed level, taking into account all component parts and end items in the materials plan. a. Capacity requirements planning b. Materials requirements planning explosion c. Disaggregation d. Execution 11. _____ models seek to determine quantities of different products to produce and sell in order to maximize contribution to profit. a. Product mix b. Process selection c. Linear optimization d. Linear regression 12. Which of the following is true of a level production strategy? a. Labor schedules are dynamic. b. Equipment schedules are stable. c. There are no capacity restrictions. d. The production rate keeps changing.

13. Which of the following is true of process selection models? a. The objective is usually to minimize cost, and typical constraints are meeting demand requirements and resource limitations. b. The goal is to use machines with identical capabilities. c. They seek to determine quantities of different products to produce and sell in order to maximize contribution to profit. d. Typical constraints include marketing requirements such as minimum and maximum amounts to produce.

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Chap 14_2e 14. The periodic-order quantity (POQ) can be determined using an economic time interval, which is the economic order quantity (EOQ) divided by _____. a. on-hand inventory b. annual demand c. gross requirements d. total required inventory 15. _____ is the process of translating aggregate plans into short-term operational plans that provide the basis for weekly and daily schedules and detailed resource requirements. a. Aggregation b. Execution c. Disaggregation d. Enterprise resource planning 16. _____ are the quantity of a component needed to support production at the next-higher level of assembly. a. Planned order receipts b. Scheduled receipts c. Explosions d. Gross requirements 17. The lot-for-lot (LFL) rule is best applied when: a. inventory-carrying costs are high. b. space constraints are low. c. costs associated with purchase orders are high. d. setup costs are moderate.

18. _____ refers to moving work from one workstation to another, assigning people to tasks, setting priorities for jobs, scheduling equipment, and controlling processes. a. Aggregate planning b. Disaggregation c. Capacity planning d. Execution 19. A company currently has 100 items in inventory. The demand for the next four months is 500, 800, 900, and 300 units. Determine the monthly production rate if a level strategy is selected with the goal of ending the fourth month with 400 units in inventory. a. 500 units/month b. 700 units/month c. 900 units/month d. 1100 units/month

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Chap 14_2e 20. Capacity requirements are computed by multiplying the number of units scheduled for production at a work center by the: a. the unit resource requirements and then adding in the setup time. b. the setup time and then subtracting the unit resource requirements. c. the setup time and then adding in the unit resource requirements. d. the unit resource requirements and then subtracting the setup time.

21. For goods-producing firms, at which of the following levels of resource planning does scheduling for individual subassemblies and resources by week and day take place? a. Aggregate planning b. Disaggregation c. Execution d. Demand forecasting 22. In manufacturing, a _____ is a statement of how many finished items are to be produced and when they are to be produced. a. master production schedule b. capacity requirements plan c. materials requirements plan d. planned order receipt 23. JamTime Music Company manufactures two types of headsets: a basic model and a professional model. In order to manufacture the headsets, they go through two departments: assembly and testing. The assembly department has 9 workers who work 8 hours/day each. The testing department has 3 workers who also work 8 hours/day each. Each basic headset model spends 3 hours in the assembly department and 1.5 hours in the testing department. Each professional headset model spends 5 hours in the assembly department and 3 hours in the testing department. The company makes a net profit of $100 for each basic headset and $175 for each professional headset. JamTime Music Co. predicts that they will sell at least two times as many basic models as professional models. Using this information, determine the objective function to maximize profit. Use the variable B for the number of basic model headsets and P for the number of professional model headsets. a. 5B + 3P b. 3B + 5P c. 100B + 175P d. 175B + 100P 24. Which of the following is true of the lot-for-lot (LFL) rule? a. It minimizes the costs associated with production setups. b. It ignores the costs associated with purchase orders. c. It maximizes the amount of inventory that needs to be carried. d. It masks the true nature of dependent demand.

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Chap 14_2e 25. In a garments factory, a part requires 0.10 hours of labor per unit in Work Center B and 1 hour of setup time.

The planned order release (order size) for a week is 2000 units. Which of the following is the capacity requirement for a week at Work Center B? a. 101 b. 151 c. 201 d. 251 26. In the context of aggregate planning options, which of the following costs are an implication of allowing stockouts? a. Inventory-carrying costs b. Lost sales and customer loyalty costs c. High labor costs and premiums d. Separation costs 27. _____ is the process of using the logic of dependent demand to calculate the quantity and timing of orders for all subassemblies and components that go into and support the production of the end item(s). a. Final assembly schedule b. Materials requirements planning explosion c. Disaggregation d. Capacity requirements planning 28. Which of the following lot sizing rules bases the order quantity on a standard-size container or pallet load? a. The lot-for-lot rule b. The fixed-order quantity rule c. The periodic-order quantity rule d. The gross requirements rule

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Chap 14_2e Answer Key 1. False 2. True 3. True 4. False 5. b 6. c 7. a 8. c 9. b 10. a 11. a 12. b 13. a 14. b 15. c 16. d 17. a 18. d 19. b 20. a 21. b 22. a 23. c 24. b 25. c 26. b

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Chap 14_2e 27. b 28. b

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Chap 15_2e Indicate whether the statement is true or false.

1. Two examples of process-focused performance measures for sequencing rules are tardiness and lateness. a. True b. False 2. Different industries use different software packages for scheduling because every industry has different problem structures. a. True b. False 3. The Clarke-Wright Heuristic Method is used to solve the common scheduling problem in logistics that involves determining routes from a central depot or warehouse to many customers. a. True b. False 4. In priority dispatching rules, the acronym FNO stands for feasible number of operations remaining. a. True b. False 5. Customized scheduling spreadsheets use readily available software such as Microsoft Excel, but may be rather expensive to develop. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

6. There are five jobs in a factory. All these jobs have to go through two workstations for processing. Each job is processed on Workstation #1 and then on Workstation #2. The processing time for each job on each workstation is given below.

Job Time on Workstation #1(minutes) Time on Workstation #2(minutes) A 50 50 B 20 8 C 25 50 D 30 12 E 11 22 F 11 19 Using Johnson's sequencing rule, it can be concluded that the makespan of the sequence is: a. more than 50 but less than or equal to 100 minutes. b. more than 100 but less than or equal to 150 minutes. c. more than 150 but less than or equal to 200 minutes. d. more than 200 but less than or equal to 250 minutes.

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Chap 15_2e 7. Albert’s Printing and Pressing Company is a t-shirt printing shop with four processes: printing (P1), pressing (P2), sealing (S), and finishing (F). The arrival time and processing sequence for three upcoming jobs is shown below.

Job Arrival Time Processing Sequence (Processing Time in minutes) 1 0 P1(10), P2(20), S(15), F(10) 2 10 P1(10), P2(10), S(15) 3 20 P1(20), S(5), F(10) Using the FNO rule, what scheduling decision should the dispatcher make at time 45? a. Job 3 should start on the sealing machine. b. Job 2 should start on the sealing machine. c. Job 1 should start on the pressing machine. d. Job 3 should start on the pressing machine.

8. In the context of sequencing, _____ is the difference between the completion time and the due date of a job. a. flow time b. makespan c. lateness d. tardiness 9. The first step in implementing the Clarke-Wright Method is to compute the savings for all pairs of customers. A local restaurant franchise has four locations in one city. Each week, cases of taco shells must be delivered from the central warehouse to the restaurants. The table below shows the travel time in minutes between the locations (1, 2, 3, 4), as well as to and from the warehouse (0).

i/j 0 0 1 2 3 4

Delivery Time 1 2 3 21 11 3 10 5 9 -

Demand 4 (Cases required) 8 12 10 4 6 13 4 8

Which pair of customers s(i,j) has the largest savings? a. 1, 2 b. 1, 3 c. 2, 3 d. 2, 4 10. In the context of sequencing, the earliest due date (EDD) rule: a. minimizes the maximum jobs past due. b. maximizes average flow time of jobs past due. c. maximizes resource utilization of jobs past due. d. minimizes the average processing time of jobs past due.

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Chap 15_2e 11. An electronic gadgets store requires the following minimum number of employees, each of whom is required to have two consecutive days off.

Day: Mon. Tue. Wed. Thur.

Fri. Sat. Sun. Minimum employees 9 2 8 6 9 1 3 required: If there are no day offs provided on Thursday and Friday, the number of employees required to work on Thursday as per the final employee schedule is _____. a. 9 b. 10 c. 11 d. 12 12. Five jobs are ready for processing at time zero through a workstation. The details of the processing time and the due date of completion is provided in the following table.

Job Processing Time (days) Due Date A 8 12 B 4 9 C 3 6 D 7 7 E 5 20 Using the shortest processing time (SPT) rule, it can be concluded that the average flow time for these five jobs is _____. a. more than 8 but less than or equal to 10 days. b. more than 10 but less than or equal to 12 days. c. more than 12 but less than or equal to 14 days. d. more than 14 but less than or equal to 16 days.

13. In the context of sequencing, _____ is the time needed to process a given set of jobs. a. flow time b. makespan c. lateness d. tardiness 14. Gantt charts are used to: a. develop a factory layout. b. track inventory levels over time. c. monitor planned schedules. d. forecast personnel requirements.

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Chap 15_2e 15. A requirement of two-resource sequencing rule is that: a. all jobs must begin at the same time. b. each job must be processed first on the first resource and then on the second. c. a maximum of two jobs can be processed at a time on each resource. d. total processing time must be minimized.

16. In the context of sequencing, the _____ minimizes the average lateness of a set of jobs. a. shortest processing time rule b. earliest due date rule c. first come, first serve rule d. fewest number of operations remaining rule 17. In the context of operations management, _____ refers to the assignment of start and completion times to particular jobs, people, or equipment. a. scheduling b. appointing c. statistical forecasting d. demand planning 18. In the context of sequencing, the shortest processing time (SPT) rule tends to: a. maximize the number of jobs in the system. b. maximize average flow time. c. minimize resource utilization. d. minimize work-in-process inventory.

19. Five jobs are ready for processing at time zero through a workstation. The details regarding the processing time and the due date of completion is provided in the following table.

Job Processing Time (days) Due Date A 6 10 B 5 17 C 2 13 D 3 9 E 4 15 Using the earliest due date (EDD) rule, the average tardiness of the five jobs is: a. more than 0.1 but less than or equal to 0.3 day. b. more than 0.3 but less than or equal to 0.5 day. c. more than 0.5 but less than or equal to 0.7 day. d. more than 0.7 but less than or equal to 0.9 day.

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Chap 15_2e 20. Five jobs are ready for processing at time zero through a workstation. The details of the processing time and the due date of completion is provided in the following table.

Job Processing Time (days) Due Date A 6 18 B 3 14 C 4 9 D 5 19 E 2 11 Using the earliest due date (EDD) rule, the average flow time for the five jobs is _____. a. more than 8 but less than or equal to 10 days. b. more than 10 but less than or equal to 12 days. c. more than 12 but less than or equal to 14 days. d. more than 14 but less than or equal to 16 days.

21. Five jobs are ready for processing at time zero through a workstation. The details of the processing time and the due date of completion is provided in the following table.

Job Processing Time (days) Due Date A 5 11 B 6 16 C 3 19 D 4 10 E 2 9 Using the earliest due date (EDD) rule, the average lateness for the five jobs is: a. more than -6 but less than or equal to -2 days. b. more than -2 but less than or equal to 2 days. c. more than 2 but less than or equal to 6 days. d. more than 4 but less than or equal to 8 days.

22. The following six jobs are to be scheduled on a single machine: Job

1

2

3

4

5

6

Processing time (min.)

80

130

210

120

150

110

Suppose the jobs are processed in shortest processing time order. Compute the average flowtime after each job is completed. Round your answer to two decimal places. a. 401.67 b. 391.97 c. 416.67 d. 422.67

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Chap 15_2e 23. A movie theater requires the following minimum number of employees, each of whom is required to have two consecutive days off.

Day: Mon. Tue. Wed. Thur.

Fri. Sat. Sun. Minimum Number of Employees 1 1 3 2 5 4 3 Required Using the staff scheduling method, it is determined that the number of employees required as per the final employee schedule is _____. a. 3 b. 4 c. 5 d. 6 24. In the context of operations management, triage nurses deciding on the order in which emergency patients are to be treated is an example of _____. a. appointing b. sequencing c. statistical forecasting d. demand planning 25. In the context of sequencing, _____ is the amount of time by which the completion time exceeds the due date of a job. a. flow time b. makespan c. lateness d. tardiness 26. In a two-resource sequencing problem, _____. a. the processing time for each job on each resource is unknown b. flow time is maximized c. the goal is to minimize makespan d. a job can be processed by either of its resources in any sequence

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Chap 15_2e 27. A new surgical facility called Cut & Sew has opened in the United States. The branches of the facility are spread throughout the country. These are job shops that handle a variety of outpatient surgical procedures. The process of the facility is set up in a way that one doctor will cut and another will sew. The data regarding the patients and the estimated time for cutting and sewing for each patient are given in the following table: Patient Cut Time (hours) Sew Time (hours) A 2.3 2.8 B 2.5 3.0 C 2.0 1.5 D 0.6 1.0 E 3.6 2.6 Using Johnson's sequencing rule, the final sequence of the patients is _____. a. A-B-C-D-E b. B-E-A-C-D c. C-A-B-E-D d. D-A-B-E-C

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Chap 15_2e Answer Key 1. False 2. True 3. True 4. False 5. True 6. c 7. b 8. c 9. a 10. a 11. b 12. c 13. b 14. c 15. b 16. a 17. a 18. d 19. c 20. c 21. b 22. a 23. c 24. b 25. d 26. c

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Chap 15_2e 27. d

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Chap 16_2e Indicate whether the statement is true or false.

1. A kaizen event is an approach for mistake-proofing processes, using automatic devices or methods to avoid simple human error. a. True b. False 2. Six Sigma cannot be applied to service processes. a. True b. False 3. The GAP model helps managers analyze goods and services and the processes that make and deliver them to identify and close the largest gaps and improve performance. a. True b. False 4. Service quality is consistently meeting or exceeding customer expectations (external focus) and service-delivery system performance criteria (internal focus) during all service encounters. a. True b. False 5. The International Organization for Standardization (ISO) is a specialized agency for standardization. The term, ISO, is a scientific term that means equal. a. True b. False 6. Checksheets are special types of data-collection forms in which the results need additional processing in order to be interpreted. a. True b. False 7. The Deming cycle is composed of four stages: prepare, deliver, simplify, and achieve (PDSA). a. True b. False 8. The cost of quality refers specifically to the costs associated with avoiding poor quality or those incurred as a result of poor quality. a. True b. False

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Chap 16_2e Indicate the answer choice that best completes the statement or answers the question.

9. According to Philip B. Crosby's Absolutes of Quality Management philosophy, _____. a. quality means conformance to elegance b. there is no such thing as a quality problem c. there is no such thing as zero defects d. the only performance measurement is the economics of quality 10. _____ are targets and tolerances determined by designers of goods and services. a. Defects b. Specifications c. Units of work d. Costs of quality 11. _____ costs are costs incurred as a result of unsatisfactory quality that is found before the delivery of a good or service to the customer. a. Prevention b. Appraisal c. Internal failure d. External failure 12. Luca, the operations manager a company that produces ground coffee beans, wants to know the sequence of the production process in the company to determine if any process can be combined or eliminated. In this case, a _____ will suit Luca’s requirement. a. run chart b. flow chart c. checksheet d. histogram 13. _____ is a business improvement approach that seeks to find and eliminate causes of defects and errors in manufacturing and service processes by focusing on outputs that are critical to customers, resulting in a clear financial return for the organization. a. Six Sigma b. The GAP model c. Poka-yoke d. A kaizen event 14. Identify a true statement about International Organization for Standardization (ISO) 9000. a. It states that generic management practices can never be standardized. b. Its standards do not apply to services such as health care, banking, and transportation. c. It is the first version of the ISO family of standards. d. Its standards apply to all types of businesses, including electronics and chemicals.

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Chap 16_2e 15. _____ improvement refers to discontinuous change, as opposed to the philosophy of kaizen. a. Dynamic b. Procedural c. Benchmarking d. Breakthrough 16. _____ costs are costs expended to keep nonconforming goods and services from being made and reaching the customer. a. Prevention b. Appraisal c. Internal failure d. External failure 17. Gap 3 in the GAP model is the discrepancy between: a. the customer's expectations and perceptions. b. management's perceptions of what features constitute a target level of quality and the task of translating these perceptions into executable specifications. c. quality specifications documented in operating and training manuals and plans and their implementation. d. customer expectations and management perceptions of those expectations.

18. At Bueller Tractors, a few machines in the assembly section were faulty and had to be shut down till they were repaired. This reduced the output of tractors for the quarter. In this case, the costs incurred by Bueller Tractors for repairing the machines are an example of _____ costs. a. prevention b. appraisal c. internal failure d. external failure 19. Which of the following statements is true of SERVQUAL? a. Quality is simply ensuring that goods and services consistently conform to specifications. b. It is designed to apply to all service industries. c. It uses 15 dimensions of service quality performance. d. Empathy is the ability to provide what was promised, dependably and accurately.

20. Which of the following definitions of quality is proposed by Joseph M. Juran? a. Quality means conformance to requirements. b. Quality is fitness for use. c. A product or a service possesses quality if it helps somebody and enjoys a good and sustainable market. d. A product or a service possesses quality if it consistently exceeds customer expectations.

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Chap 16_2e 21. Identify a true statement about the GAP model. a. It defines quality system standards based on the premise that certain generic characteristics of management practices can be standardized. b. Minimizing gaps 4 and 5 will result in low customer satisfaction. c. Failure to understand and minimize gaps presents the risk of losing customer loyalty. d. It eliminates causes of defects and errors in manufacturing and service processes by focusing on outputs that are critical to customers.

22. Which of the following statements is true of the Deming cycle? a. It institutes a top-down management style, in which the leadership comes from the executives, and all other levels of employees must follow their commands. b. It refers to the repetition required in order to create a perfect process that leads to zero defective products and 100% customer satisfaction. c. It involves a series of trials, after which the best process is selected. d. It guides teams to develop an improvement plan, try it out, examine the results, and institute changes, then repeat the cycle.

23. Identify a true statement about Joseph M. Juran's philosophy of quality management. a. He advocated the use of quality cost measurement to focus attention on quality problems. b. He argued that employees at different levels of an organization speak one common language. c. He proposed a major cultural change in the organization. d. He stated that there is no such thing as a quality problem.

24. A _____ is a basic statistical tool that graphically shows the frequency or number of observations of a particular value or within a specified group. a. flowchart b. histogram c. cause-and-effect diagram d. scatter diagram 25. The _____ concept characterizes quality performance by defects per million opportunities. a. Deming cycle b. ISO 9000 c. Gap model d. Six Sigma

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Chap 16_2e 26. Marin is the manufacturing coordinator of a food and beverage company. Recently, some of the products were rejected by the quality control department because they failed to meet the quality standards. Upon inspection, a number of defects were found at multiple stages of production. Marin wants to identify the defects that have the most impact on the whole production process. In this case, which of the following quality control (QC) tools should she use? a. A flowchart b. A histogram c. A cause-and-effect diagram d. A Pareto diagram 27. Which of the following statements is true of Gap 3 in the GAP model? a. It can be minimized by making senior managers work in frontline jobs a few days every year so that they keep in contact with customers and frontline employees. b. It is where the customer judges quality and makes future purchase decisions. c. It can be minimized by advertising. d. It recognizes that manufacturing and service delivery systems must execute quality specifications well.

28. Isa is head of housekeeping services at the Ashworth Hotel, a luxury hotel and resort. Last week, she received 29 customer complaints. A total of 428 guests had stayed in the hotel that week. Given this information, find out the errors per million opportunities. a. 400 errors per million opportunities b. 23,456 errors per million opportunities c. 67,757 errors per million opportunities d. 14,758,620 errors per million opportunities 29. Identify a true statement about kaizen. a. It is based on the concept of continuous improvement. b. It focuses on short-term impact. c. It is performed on a part-time basis. d. It involves a huge financial investment.

30. In the context of SERVQUAL, _____ is the caring, individual attention a firm provides to its customers. a. responsiveness b. reliability c. assurance d. empathy

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Chap 16_2e 31. The board of directors at Blaine Glassworks want their company's products to be of higher quality than the products of other companies in the market, and think that they are hitting this target. However, a recent survey found that customers rate the company's products as below average due to the inferior process design specifications in the company. This is an example of _____ in the GAP model. a. Gap 2 b. Gap 3 c. Gap 4 d. Gap 5 32. Josephine’s T-Shirts faced a lot of complaints from customers when its recent batch of long-sleeved shirts was dispatched. The employees at Josephine’s T-Shirts, hence, had to rework on the returned items, and in some cases, the company had to even replace the faulty goods. In this case, the costs incurred by Josephine’s T-Shirts are an example of _____ costs. a. prevention b. appraisal c. internal failure d. external failure 33. _____ in the GAP model is the discrepancy between actual manufacturing and service-delivery system performance and external communications to the customers. a. Gap 1 b. Gap 2 c. Gap 3 d. Gap 4 34. The management of Breedlove Communications, a wireless headphone manufacturing company, wants all employees in the organization to contribute to the quality of the firm by setting a long-term goal to make small, gradual, and frequent improvements without a large financial investment. Given this information, Breedlove Communications embraces an approach known as _____. a. the Gap model b. kaizen c. Six Sigma d. the 5-Why Technique 35. Which of the following is a core philosophy of Six Sigma? a. Achieving cycle time reduction b. Increasing non-value-added activities c. Avoiding errors per million opportunities as a standard metric d. Increasing variation in cash flow

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Chap 16_2e 36. The principles of customer focus, leadership, engagement, process approach, improvement, evidence-based decision making, and relationship management support the _____. a. Gap model b. Deming philosophy c. Crosby's Absolutes of Quality Management d. ISO 37. A run chart is a line graph in which _____. a. data are plotted over time b. data are constantly moving forward c. data charted is from a long time period d. data is considered dynamic 38. Huran Co., a food manufacturer, encountered a blown fuse during manufacturing. Although they were able to fix it and resume operations, they used the 5-Why Technique to determine the _____ of the problem. a. poka-yoke b. root cause c. long-term effect d. symptom

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Chap 16_2e Answer Key 1. False 2. False 3. True 4. True 5. True 6. False 7. False 8. True 9. b 10. b 11. c 12. b 13. a 14. d 15. d 16. a 17. c 18. c 19. b 20. b 21. c 22. d 23. a 24. b 25. d 26. d

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Chap 16_2e 27. d 28. c 29. a 30. d 31. a 32. d 33. d 34. b 35. a 36. d 37. a 38. b

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Chap 17_2e Indicate whether the statement is true or false.

1. The 1:10:100 Rule states that if a defect is first detected during the production process, it might cost $1 to fix. a. True b. False 2. Keeping special cause variation from occurring is the essence of statistical quality control. a. True b. False 3. In the context of quality control practices in manufacturing, if supplier documentation is done properly, incoming inspection can be completely eliminated. a. True b. False 4. The control limits represent the range between which all points are expected to fall if the process is in statistical control. a. True b. False 5. A discrete metric is one that is calculated from data that are counted. a. True b. False 6. The value of the process capability index, (Cp ), depends on the mean of the process. a. True b. False 7. Overadjusting a process that is in control will decrease the variation in the output. a. True b. False 8. In-process control is typically performed by people who run the back-end processes. a. True b. False 9. Designing control charts involves two key issues: sample size and sampling frequency. a. True b. False

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Chap 17_2e Indicate the answer choice that best completes the statement or answers the question.

10. The time taken for guests to check out at a hotel front desk was measured over the course of several weeks.

The management believes that the target time for checking out guests should be between 2 and 3 minutes with a target of 2.5 minutes. The data gathered for the actual process had a mean time of 2.75 minutes with a standard deviation of 0.45 minutes. The process capability index will be: a. less than or equal to 1. b. more than 3 but less than or equal to 5. c. more than 4 but less than or equal to 5. d. more than 5.

11. Which of the following is true of special cause variation? a. It cannot be explained or understood. b. It occurs sporadically and can be prevented. c. It cannot be detected using statistical methods. d. It accounts for about 80 to 95 percent of the observed variation in a process.

12. In the context of the net promoter score (NPS), scores of 7 or 8 are associated with _____, customers who are satisfied but may switch to competitors. a. detractors b. passives c. promoters d. proponents 13. Which of the following is not one of the components of a control system? a. A performance standard or goal b. A means of measuring actual performance c. Customer feedback forms and the service people who process and address them d. Comparison of actual performance with the standard to form the basis for corrective action 14. Which of the following is true of common cause variation? a. It can be controlled and described using nonstatistical methods. b. It appears at random, and individual sources cannot be identified or explained. c. It accounts for about 10 to 15 percent of the observed variation in a process. d. It arises from external sources that are not inherent in a process.

15. In the context of the net promoter score (NPS), scores of 6 or below represent _____, unhappy customers who may spread negative comments. a. detractors b. passives c. promoters d. campaigners

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Chap 17_2e 16. In the context of the net promoter score (NPS), which of the following is a difference between promoters and detractors? a. Unlike promoters, detractors are customers who are associated with scores of 7 or 8. b. Unlike promoters, detractors are satisfied customers who may switch to competitors. c. Unlike promoters, detractors defect at higher rates. d. Unlike promoters, detractors are less price sensitive.

17. Which of the following is the upper control limit for a c-chart (UCLc) with the average number of nonconformances per unit equal to 7? a. More than 11 but less than or equal to 12 b. More than 12 but less than or equal to 13 c. More than 13 but less than or equal to 14 d. More than 14 but less than or equal to 15 18. When the _____ is extremely low, standard control charts are not effective. a. efficiency rate b. demand flow c. rate of defects d. perceived value 19. Customer waiting time and order lead time are examples of _____ metrics. a. discrete b. countable c. isolated d. continuous 20. If a process has a process capability index value (Cp ) of less than 1, it means that: a. a significant percentage of output will not conform to the design specifications. b. both the lower and upper specification limits are met. c. the observed variation is the same as the design specification width. d. the process is very capable of meeting the upper specification limit.

21. A hotel chain periodically analyzes its service times to check for variation in service processes. To do this, it uses R-charts. Seven samples, each containing observed checkout time with three different customers, were collected. The average mean and the average range of the service times are found to be 9.924 and 0.957, respectively. If D4 for the R-chart is 1.924, the upper control limit (UCLR) for the R-chart will be: a. less than or equal to 1.0. b. greater than 1.0 but less than or equal to 1.5. c. greater than 1.5 but less than or equal to 2.0. d. greater than 2.0 but less than or equal to 2.5.

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Chap 17_2e 22. The task of _____ is to ensure that a good or service conforms to specifications and meets customer requirements by monitoring and measuring processes and making any necessary adjustments to maintain a specified level of performance. a. job design b. visual control c. quality control d. forecasting 23. Which of the following is true of control charts? a. Control charts can only be used for processes that have a very high sigma level. b. The use of small sample sizes in control charts increases the chances that a process may have changed during the sampling interval. c. Conventional statistical process control charts have the lowest frequency of false alarms. d. Standard control charts are not effective when the rate of defects is extremely low.

24. Vincent, a quality control manager at an apparel manufacturing company, studies and monitors quality using Rcharts. He discovers a quality problem with the construction of zippers. Vincent proposes that 25 samples of eight observations each be collected on a daily basis. He plans to prepare an R-chart to monitor the variation in the size of the zippers. The data collected shows that the mean length of the zippers is 15 inches and the average range is 0.5 inches. If D3 for the R-chart is 0.136, the lower control limit (LCLR) for the R-chart will be: a. less than or equal to 1. b. more than 1 but less than or equal to 2. c. more than 2 but less than or equal to 3. d. more than 4.

25. The relationship between the natural variation and specifications is quantified by a measure known as the _____. a. net promoter score b. process capability index c. net detractor score d. process design index 26. Quality at the _____ means that the people responsible for the work control of their processes by identifying and correcting any defects or errors when the first are recognized or occur. a. conclusion b. workstation c. source d. delivery 27. In determining whether a process is in statistical control, the _____ is always analyzed first. a. R-chart b. p-chart c. x̄-chart d. c-chart Copyright Cengage Learning. Powered by Cognero.

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Chap 17_2e 28. Ratterman and Son, is a custom landscaping company. Data in the table below show results for the question "Would you recommend us to a friend?" from 50 customers who were sampled over the duration of one week.

Customer NPS Customer NPS Customer NPS Customer NPS Customer NPS Number Rating Number Rating Number Rating Number Rating Number Rating 1 6 11 8 21 4 31 1 41 8 2 9 12 9 22 9 32 9 42 9 3 10 13 7 23 9 33 3 43 9 4 9 14 4 24 10 34 9 44 9 5 5 15 1 25 9 35 9 45 2 6 10 16 3 26 10 36 7 46 5 7 6 17 7 27 5 37 4 47 9 8 9 18 6 28 10 38 10 48 10 9 4 19 5 29 10 39 9 49 9 10 7 20 10 30 6 40 5 50 8 Calculate the net promoter score. a. 14% b. 17% c. 24% d. 27% 29. A process capability study is designed to yield specific information about _____. a. the effect of changing one aspect of a system at a time b. the rate of decay of a system as the equipment ages and begins to fail c. the performance of a process under specified operating systems d. how introducing multiple variances in the system at once affect the outcome of a process 30. Which of the following is the upper control limit for a c-chart (UCLc) with the average number of nonconformances per unit equal to 7? a. More than 11 but less than or equal to 12 b. More than 12 but less than or equal to 13 c. More than 13 but less than or equal to 14 d. More than 14 but less than or equal to 15 31. In the context of designing control charts, which of the following is true of a sample size? a. A large sample allows small changes in process characteristics to be detected with higher probability than a small sample size. b. A small sample is used to detect process shifts of two standard deviations or smaller. c. A large sample size is desirable to keep the cost associated with sampling low. d. A small sample size provides greater degrees of statistical accuracy in estimating the true state of control than a large sample size.

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Chap 17_2e 32. The lower and upper specification limits for a toothpaste filling machine are 10.50 and 12.00 ounces, respectively.

The standard deviation is 0.05. The process capability index of the machine will be: a. less than or equal to 3. b. more than 3 but less than or equal to 5. c. more than 4 but less than or equal to 5. d. more than 5.

33. An operator wants to determine the standard deviation for a machine she operates. To do this, she wants to create a p-chart. Over a month's time, she collects 30 samples of 75 observations each and records the number of errors. The average proportion defective is found to be 0.024. Which of the following is the standard deviation (s) of the machine? a. Less than or equal to 0.1 b. More than 0.1 but less than or equal to 0.5 c. More than 0.5 but less than or equal to 1.0 d. More than 1.0 34. In the context of statistical process control and variation, if no special causes affect the output of a process, we say that the process is _____. a. inconsistent b. out of control c. in control d. overadjusted 35. A bottling machine fills soda bottles with an average of 12.000 ounces of soda. The standard deviation is 0.002 ounces. If the design specification for the fill weight of the bottles is 12.000 ounces plus or minus 0.015 ounces, calculate the process capability index of the machine. a. Less than or equal to 1 b. More than 1 but less than or equal to 2 c. More than 2 but less than or equal to 3 d. More than 4

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Chap 17_2e Answer Key 1. False 2. True 3. True 4. True 5. True 6. False 7. False 8. False 9. True 10. a 11. b 12. b 13. c 14. b 15. a 16. c 17. d 18. a 19. d 20. a 21. c 22. c 23. d 24. a 25. b 26. c

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Chap 17_2e 27. a 28. a 29. c 30. d 31. a 32. c 33. a 34. c 35. c

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Chap 18_2e Indicate whether the statement is true or false.

1. In the Timken company’s bootcamp, employees and managers try to solve problems, such as removing nonvalue-added steps from processes to try to eliminate waste. a. True b. False 2. Lean operating systems value idle stock and extra storage because it eliminates wait times to replenish stock. a. True b. False 3. Any activity, material, or operation that does not add value in an organization is considered waste. a. True b. False 4. In the context of Kanban systems, a withdrawal Kanban authorizes the gateway workstation to produce parts. a. True b. False 5. Long setup times enable a manufacturer to have frequent changeovers and move toward single-piece flow, thus achieving high flexibility and product variety. a. True b. False 6. Kanban is a Japanese word that means elimination of waste. a. True b. False 7. Lean Six Sigma focuses on real dollar savings and has the ability to make significant financial impacts on an organization. a. True b. False 8. Total productive maintenance (TPM) seeks to reduce worker ownership of production equipment by excluding employees from maintenance activities. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

9. In the context of the 5S principles, _____ refers to ensuring that each item in a workplace is in its proper place or identified as unnecessary and removed. a. sort b. sustain c. standardize d. set in order Copyright Cengage Learning. Powered by Cognero.

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Chap 18_2e 10. _____ is one in which employees at a given operation go to the source of required parts, such as machining or subassembly, and withdraw the units as they need them. a. A classic base-stock system b. A push system c. A materials requirement planning system d. A pull system 11. Quickly changing tooling and fixtures to reduce setup time and achieve higher flexibility and productivity is the principle of _____. a. Kanban b. andon c. the 5Ss d. SMED 12. In the context of the major categories of waste classified by the Toyota Motor Company, which of the following is true of overproduction? a. It ties up production facilities, and the resulting excess inventory simply sits idle. b. It is waste associated with the expense of idle stock and extra storage. c. It allows queues to build up between operations, resulting in longer lead times. d. It is a result of inefficient workplace design and location of tools and materials.

13. Create & Sell Manufacturing Inc. uses a Kanban system for a component. The daily demand is 175 units. Each container has a combined waiting and processing time of 0.20 days. If the container size is 10 brackets and the safety factor is 11 percent, how many Kanban card sets should be authorized? a. 2 b. 4 c. 6 d. 7 14. A _____ system produces finished-goods inventory in advance of customer demand using a forecast of sales. a. just-in-time b. push c. Kanban d. pull 15. In the context of the Toyota Motor Company’s seven categories of waste, the result of not performing work correctly the first time is an example of _____. a. production defects b. processing c. inventory d. overproduction

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Chap 18_2e 16. A _____ is a flag or a piece of paper that contains all relevant information for an order, such as part number, description, process area used, time of delivery, quantity available, quantity delivered, production quantity, and so on. a. Kaikaku b. Jidoka c. Kaizen d. Kanban 17. Which of the following is a similarity between lean production and Six Sigma? a. Both solely address visible problems in processes. b. Both focus on efficiency by reducing waste and improving process flow. c. Both are driven by customer requirements. d. Both focus on problems related to variation in performance.

18. In the context of the 5S principles, _____ means to keep a process going through training, communication, and organizational structures. a. shine b. sort c. sustain d. standardize 19. _____ is focused on ensuring that operating systems will perform their intended function reliably. a. Total productive maintenance b. A just-in-time system c. An intermittent production system d. Total quality management 20. Which of the following is not true about lean principles? a. Lean manufacturing plants look significantly different from traditional plants. b. They are always transferable to front-office services that involve high customer contact. c. Lean manufacturing plants use multi-skilled workers who perform both direct and indirect work. d. In the airline industry, idle time is the largest form of waste.

21. Which of the following is a difference between lean production and Six Sigma? a. The lean production technique can be used in nonmanufacturing environments, whereas Six Sigma cannot be used in nonmanufacturing environments. b. Lean production addresses less visible problems in processes, whereas Six Sigma is more concerned with visible problems. c. Lean production is focused on effectiveness by reducing errors and defects, whereas Six Sigma is focused on efficiency by reducing waste and improving process flow. d. Lean production tools are more intuitive and easier to apply by anybody in the workplace, whereas many Six Sigma tools require advanced training and expertise of specialists.

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Chap 18_2e 22. A manufacturer of automobile engines is designing a new Kanban system for engine #321. The demand for #321 is 75 parts per day, and the container can hold 8 parts at a time. The total processing and waiting time is 3 days.

The manager wants a safety factor (α) of 2 or 200 percent. How many Kanbans are required in this system? a. 85 b. 90 c. 100 d. 115 23. Which of the following is true of a push manufacturing system? a. It leads to high work-in-process inventories and high levels of indirect labor and overhead. b. In this system, just enough new parts are procured to replace those withdrawn. c. In this system, finished goods are made to coincide with the actual rate of demand. d. It leads to minimal inventories and maximum responsiveness.

24. In the context of lean tools and approaches, _____, one of the components of the 5S principles, refers to a clean work area. a. shine b. standardize c. sort d. sustain 25. A company is using a Kanban system with 2 containers, each holding 50 parts, between a downstream (using) and an upstream (producing) work center. The using work center can handle 250 jobs per day. The average elapsed time for the entire cycle is currently 0.25 days. The company is concerned about the safety factor for the operation. Which of the following is the safety factor (α) of the current operation? a. 20 percent b. 60 percent c. 80 percent d. 40 percent 26. A hinge manufacturing company employs a Kanban system for a component part. The daily demand is 900 hinges. Each container has a waiting time of 0.05 days and a processing time of 0.37 days. The container size is 60 hinges, and the safety factor (α) is 10 percent. Given this data, the number of Kanbans necessary for the system is: a. less than 4 Kanbans. b. more than 4 but less than or equal to 8 Kanbans. c. more than 8 but less than or equal to 12 Kanbans. d. more than 12 but less than or equal to 16 Kanbans.

27. Which of the following is an example of waste in organizations? a. Short order-cycle time b. Routing a job c. Planned product obsolescence d. High product variety Copyright Cengage Learning. Powered by Cognero.

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Chap 18_2e 28. Drive-in-Style Motors follows a traditional manufacturing system. It produces a fixed number of cars every month. It is now planning to switch to a system of manufacturing where workers go to the source of required parts and withdraw them based on requirements. In this scenario, which of the following is most likely to occur if Drive-in-Style Motors implements this plan? a. Its inventory levels will increase significantly when the demand is low. b. Its component parts and subassemblies will be replenished only when needed. c. Its finished goods inventory will decrease, but raw materials and work-in-process inventories will increase. d. Its workers, at any given process, will produce units before they are needed.

29. In the context of the 5S principles, _____ means to arrange materials and equipment so that they are easy to find and use. a. shine b. standardize c. sustain to produce d. set in order 30. In the context of lean tools and approaches, _____ are indicators for operating activities that are placed in plain sight of all employees so that everyone can quickly and easily understand the status and performance of the work system. a. Kanban cards b. push systems c. pull systems d. visual controls 31. In the airline industry, short setup and turnaround time translates into _____. a. idle time b. fewer service encounters c. overproduction d. higher asset utilization 32. The equation used to calculate the number of Kanban cards required in a system is

, where α

denotes _____. a. the demand during lead time b. a form of safety stock c. capacity utilization d. the reorder point

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Chap 18_2e Answer Key 1. True 2. False 3. True 4. False 5. False 6. False 7. True 8. False 9. a 10. d 11. d 12. a 13. b 14. b 15. a 16. d 17. c 18. c 19. a 20. b 21. d 22. a 23. a 24. a 25. b 26. b

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Chap 18_2e 27. c 28. b 29. d 30. d 31. b 32. b

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Chap 19_2e Indicate whether the statement is true or false.

1. The earliest time that an activity can be completed is equal to the latest time it can begin minus the time to perform the activity. a. True b. False 2. A pure project organizational structure eliminates the duplication of resources across the organization. a. True b. False 3. The Critical Path Method (CPM) allows us to investigate the effects of uncertainty of activity times on the project completion time. a. True b. False 4. The only way the project completion time can be reduced is by crashing activities on the critical path. a. True b. False 5. In the context of the Critical Path Method (CPM), latest start (LS) and latest finish (LF) times are computed by making a backward pass through the network, beginning with the ending project activity or activities. a. True b. False 6. The Project Evaluation and Review Technique (PERT) was developed as a means of scheduling and controlling projects with constant activity times. a. True b. False 7. Project managers do not need technical expertise. a. True b. False 8. A key assumption with crashing is that the time can be reduced to any proportion of the crash time at a proportional increase in cost. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

9. In the context of the Critical Path Method (CPM), the slack time (ST) for an activity is computed as: a. the latest start (LS) time minus the earliest finish (EF) time. b. the latest finish (LF) time minus the earliest start (ES) time. c. the latest start (LS) time minus the earliest start (ES) time. d. the earliest finish (EF) time minus the latest start (LS) time.

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Chap 19_2e 10. The activities, their respective immediate predecessors, and activity times for a particular project are given in the table below. Determine the earliest completion time for this project using a Gantt chart.

Activity Immediate Predecessor(s) Activity Time(in weeks) A None 1 B None 1 C A 4 D B 5 E C, D 5 F E 3 G F 2 a. 14 weeks b. 16 weeks c. 18 weeks d. 20 weeks 11. A _____ is a temporary and often customized initiative that consists of many smaller tasks and activities that must be coordinated and completed to finish the entire initiative on time and within budget. a. resource plan b. schedule c. project d. product-process matrix 12. In the context of project management, _____ a project involves releasing and reassigning people. a. closing b. organizing c. defining d. planning 13. If an activity can be completed in 10 weeks at a cost of $3,200 instead of the normal time of 12 weeks at a cost of $2,400, then the crash cost per week for the given activity is _____. a. $200 b. $400 c. $600 d. $800 14. In the context of projects, _____ are discrete tasks that consume resources and time. a. value chains b. activities c. processes d. schedules

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Chap 19_2e 15. In the project management life cycle, the _____ stage involves collecting and assessing status reports, managing changes to baselines, and responding to circumstances that can negatively impact the project participants. a. closing b. planning c. organizing d. controlling 16. Following is the Project Evaluation and Review Technique (PERT) network used to execute a marketing campaign at TeaTime Inc. Calculate the variance for the project. a. 2.5 weeks b. 3.0 weeks c. 3.5 weeks d. 4.0 weeks 17. _____ refers to reducing the total time to complete the project to meet a revised due date. a. Benchmarking b. Crashing a project c. Project resource leveling d. Activity sequencing 18. Implementing a new computer-aided design system is an example of a project in the functional area of _____. a. engineering b. operations c. logistics d. marketing 19. Which of the following is true of crashing a project? a. It involves the removal of resources from selected project activities to reduce costs. b. It increases the total cost of the project. c. It increases the total time taken to complete the project. d. It is a trade-off between project revenue and additional input costs.

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Chap 19_2e 20. Rose is in charge of advertising a new product launched by her company. She has defined the advertising for this product as an individual project that consists of seven activities. Following are the characteristics of these activities: Activity Immediate Predecessor(s) Activity Time(in weeks) A None 2 B None 2 C A 4 D B 5 E C 5 F D 2 G E, F 2 Calculate the earliest completion time for the project using a Gantt chart. a. 10 weeks b. 11 weeks c. 12 weeks d. 13 weeks 21. Which of the following is an example of a project that belongs to the functional area of accounting and finance? a. Market research study b. Planning a firm's initial public offering c. Annual performance and compensation review d. Installing a revenue management system 22. Which of the following is true of the Critical Path Method (CPM)? a. It allows us to investigate the effects of uncertainty of activity times on project completion times. b. It uses the variance in the critical path activities to evaluate the risks associated with project completion times. c. It assumes that activities are independent of one another, with clearly defined start and finish dates. d. It accounts for the interruptions that may affect an activity between the start and the finish times.

23. Which of the following is true of a typical functional organization? a. It eliminates duplication of resources. b. It makes communication across the organization easier and smooth. c. A project cuts across organizational boundaries in a typical functional organization. d. Team members are assigned exclusively to projects in a typical functional organization.

24. In the context of the Project Evaluation and Review Technique (PERT), which of the following is true of the beta probability distribution approach? a. It allows managers to identify the best case, worst case, and most likely case for activity times. b. It describes the inherent similarity in the optimistic, most probable, and pessimistic time estimates. c. It is rigid in characterizing the distribution of times. d. It forces activity times to a symmetric normal probability distribution.

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Chap 19_2e 25. The district magistrate of a city has decided to reconstruct the most frequented street of the city. He plans to block the street for the duration of the work, which will cause considerable inconvenience to the people of the city. The project has three parallel paths defined as the following: Path A-B-C-H will take 16 days.

Path A-D-E-H will take 22 days.

Path A-F-G-H will take 30 days.

In the given scenario, which of the following statements is true? a. The expected duration of the project is 68 days. b. Activities B, D, and F have an earliest starting time of 0. c. Path A-D-E-H has the largest slack time. d. Path A-F-G-H is the critical path.

26. Which of the following stages of the project life cycle entails the scheduling of activities? a. The defining stage b. The planning stage c. The organizing stage d. The controlling stage 27. The calculation (a + 4m + b) / 6 is used to find _____ time. a. optimistic b. expected c. average d. pessimistic 28. Which of the following is an assumption made by the critical path method (CPM)? a. The activity time estimates are accurate and stable. b. Activities are dependent on each other, without clearly defined start and finish times. c. Activities are interrupted many times before completion. d. The project network defines a tentative work sequence that can be changed anytime during the project.

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Chap 19_2e Answer Key 1. False 2. False 3. False 4. True 5. True 6. False 7. False 8. True 9. c 10. b 11. c 12. a 13. b 14. b 15. d 16. c 17. b 18. a 19. b 20. d 21. b 22. c 23. c 24. a 25. d 26. b

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Chap 19_2e 27. b 28. a

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