Archive for October 2018

Which of the following is FALSE concerning enterprise resource planning (ERP)?

Which of the following is FALSE concerning enterprise resource planning (ERP)?



A) It attempts to automate and integrate the majority of business processes.
B) It shares common data and practices across the enterprise.
C) It is inexpensive to implement.
D) It provides and accesses information in a real-time environment.
E) ERP software promises reduced transaction costs.


Answer: C

Enterprise resource planning (ERP):

Enterprise resource planning (ERP):



A) seldom requires software upgrade or enhancement.
B) does not integrate well with functional areas other than operations.
C) is inexpensive to implement.
D) automates and integrates the majority of business processes.
E) all of the above


Answer: D

Distribution resource planning (DRP) is:

Distribution resource planning (DRP) is:



A) a transportation plan to ship materials to warehouses.
B) a time-phased stock replenishment plan for all levels of a distribution network.
C) a shipping plan from a central warehouse to retail warehouses.
D) material requirements planning with a feedback loop from distribution centers.
E) a material requirements planning package used exclusively by warehouses.


Answer: B

Which of the following statements regarding MRP in services is TRUE?

Which of the following statements regarding MRP in services is TRUE?



A) MRP is for manufacturing only, and it is not applicable to services.
B) MRP can be used in services, but only in those that offer very limited customization.
C) MRP only works in services for demand that is independent.
D) Services such as restaurant meals illustrate dependent demand, and they require product structure trees, bills-of-material, and scheduling.
E) None of the above is true.


Answer: D

MRP II is accurately described as:

MRP II is accurately described as:



A) MRP software designed for services.
B) MRP with a new set of computer programs that execute on microcomputers.
C) material resource planning.
D) an enhancement of MRP that plans for all levels of the supply chain.
E) a new generation of MRP software that extends MRP to planning and scheduling functions.


Answer: C

If a load report (resource requirements profile) shows a work center scheduled beyond capacity:

If a load report (resource requirements profile) shows a work center scheduled beyond capacity:



A) the company must add capacity by enlarging the facility.
B) the company must add capacity by such tactics as overtime and subcontracting.
C) the work center's load may be smoothed by such tactics as operations splitting or lot splitting.
D) the aggregate plan must be revised.
E) the Wagner-Whitin algorithm should be used to rebalance the load.


Answer: C

Capacity planning in closed-loop MRP:

Capacity planning in closed-loop MRP:



A) utilizes feedback about workload from each work center.
B) may make use of resource requirements profiles (load reports).
C) may smooth work center loads with such tactics as overlapping and lot splitting.
D) does not add capacity, but rather seeks effective use of existing capacity.
E) All of the above are true.


Answer: E

Which of the following is TRUE regarding the POQ lot-sizing method?

Which of the following is TRUE regarding the POQ lot-sizing method?



A) Each POQ interval is recalculated at the time of the order release.
B) Each order quantity and POQ interval are recalculated at the time of the order release.
C) The POQ interval and all order quantities remain fixed throughout the planning horizon.
D) Each order quantity is recalculated at the time of the order release.
E) POQ lot sizes are always at least as large as the EOQ lot sizes would be.


Answer: D

What does the POQ interval equal?

What does the POQ interval equal?



A) the number of periods of average demand covered by the safety stock
B) the same number of periods that are on the "not to be rescheduled" side of the time fence
C) EOQ / maximum gross requirement
D) the number of periods until the incoming projected on hand runs out
E) EOQ / average demand per period


Answer: E

Which of the following statements regarding lot-sizing is TRUE?

Which of the following statements regarding lot-sizing is TRUE?



A) EOQ principles should be followed whenever economical.
B) Too much concern with lot-sizing results in false accuracy.
C) Lot-for-lot cannot be modified for scrap allowance or process constraints.
D) The Wagner-Whitin algorithm simplifies lot size calculations.
E) All of the above are true.


Answer: B

For the lot-sizing technique known as lot-for-lot to be appropriate:

For the lot-sizing technique known as lot-for-lot to be appropriate:



A) future demand should be known for several weeks.
B) setup cost should be relatively small.
C) annual volume should be rather low.
D) item unit cost should be relatively small.
E) the independent demand rate should be very stable.


Answer: B

Which of the following statements is TRUE about the MRP plan when using lot-for-lot ordering?

Which of the following statements is TRUE about the MRP plan when using lot-for-lot ordering?



A) The quantity of gross requirements for a child item is always equal to the quantity of planned order releases for its parent.
B) The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly.
C) The quantity of gross requirements for a child item is always equal to the quantity of gross requirements for its parent.
D) The quantity and gross requirements for a child item is always equal to the quantity of net requirements for its parent.
E) All of the above are true.


Answer: B

In MRP, system nervousness is caused by:

In MRP, system nervousness is caused by:



A) management's attempt to continually respond to minor changes in production requirements.
B) the use of the lot-for-lot approach.
C) management's marking part of the master production schedule as "not to be rescheduled".
D) the use of phantom bills of material.
E) management's attempt to evaluate alternative plans before making a decision.


Answer: A

An order for 110 units of Product A has been placed. There are currently 60 units of Product A on hand. Each A requires 4 units of Part B. There are 20 units of B available. What are the net requirements for B?

An order for 110 units of Product A has been placed. There are currently 60 units of Product A on hand. Each A requires 4 units of Part B. There are 20 units of B available. What are the net requirements for B?



A) 20
B) 120
C) 180
D) 240
E) 440


Answer: C

An order for 50 units of Product A and 60 of B has been placed. There are currently 25 units of Product B on hand. Each A requires 2 units of Part C; each B requires 5 units of C. There are 160 units of C available. What are the net requirements for C?

An order for 50 units of Product A and 60 of B has been placed. There are currently 25 units of Product B on hand. Each A requires 2 units of Part C; each B requires 5 units of C. There are 160 units of C available. What are the net requirements for C?



A) 115
B) 175
C) 240
D) 690
E) 700


Answer: A

An order for 110 units of Product M has been placed. There are currently 30 units of Product M on hand. Each M requires 4 units of Component N. There are 20 units of N on hand. What are the net requirements for N?

An order for 110 units of Product M has been placed. There are currently 30 units of Product M on hand. Each M requires 4 units of Component N. There are 20 units of N on hand. What are the net requirements for N?



A) 150
B) 170
C) 300
D) 320
E) 440


Answer: C

Which of the following statements regarding the gross material requirements plan is TRUE?

Which of the following statements regarding the gross material requirements plan is TRUE?



A) It shows total demand for an item.
B) It shows when an item must be ordered from a supplier or when production must be started.
C) It combines a master production schedule with the time-phased schedule.
D) It requires several inputs, including an accurate bill of material.
E) All of the above are true.


Answer: E

Which of the following best describes a gross material requirements plan?

Which of the following best describes a gross material requirements plan?



A) a schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started
B) an intermediate range plan for the scheduling of families of products
C) a chart illustrating whether capacity has been exceeded
D) a table that corrects scheduled quantities for inventory on hand
E) a schedule showing which products are to be manufactured and in what quantities


Answer: A

A material requirements plan contains information with regard to all of the following EXCEPT:

A material requirements plan contains information with regard to all of the following EXCEPT:




A) quantities and required delivery dates of all subassemblies.
B) quantities and required delivery dates of final products.
C) the capacity needed to provide the projected output rate.
D) inventory on hand for each final product.
E) inventory on hand for each subassembly.


Answer: C

It is week 1 and there are currently 20 As in stock. We need 300 As at the start of week 5. If there are scheduled receipts planned for week 3 and week 4 of 120 As each and A has a lead time of 1 week, when and how large of an order should be placed to meet the requirement of 300 As?

It is week 1 and there are currently 20 As in stock. We need 300 As at the start of week 5. If there are scheduled receipts planned for week 3 and week 4 of 120 As each and A has a lead time of 1 week, when and how large of an order should be placed to meet the requirement of 300 As?



A) Week 1, 300 As
B) Week 1, 40 As
C) Week 5, 40 As
D) Week 4, 40 As
E) Week 4, 300 As


Answer: D

Low-level coding means that:

Low-level coding means that:



A) a final item has only a few levels in the BOM structure.
B) the code being used is the code for the lowest level in the BOM structure.
C) a component item is coded at the lowest level at which it appears in the BOM structure.
D) the top level of the BOM is below level zero and that BOMs are not organized around the finished product.
E) the lowest-paid staff member in the production department performs the coding.


Answer: C

A paint company mixes ten different base colors into 3,000 different color options. If production scheduling is organized around the ten different base colors , then the bills of material are classified as which of the following?

A paint company mixes ten different base colors into 3,000 different color options. If production scheduling is organized around the ten different base colors , then the bills of material are classified as which of the following?



A) phantom
B) planning
C) modular
D) low-level
E) A and B


Answer: C

Which of the following statements best compares modular bills and phantom bills?

Which of the following statements best compares modular bills and phantom bills?



A) Both pertain to assemblies that are not inventoried.
B) There is no difference between the two.
C) Both pertain to assemblies that are inventoried.
D) Modular bills are used for assemblies that are not inventoried, unlike phantom bills.
E) Modular bills represent subassemblies that actually exist and are inventoried, while phantom bills represent subassemblies that exist only temporarily and are not inventoried.


Answer: E

Which of the following is NOT a key benefit of MRP?

Which of the following is NOT a key benefit of MRP?



A) increased quality
B) better response to customer orders
C) faster response to market changes
D) improved utilization of facilities and labor
E) reduced inventory levels


Answer: A

Dependent demand and independent demand items differ in that:

Dependent demand and independent demand items differ in that:



A) for any product, all components are dependent-demand items.
B) the need for independent-demand items is forecast.
C) the need for dependent-demand items is calculated.
D) All of the above are true.
E) None of the above is true.


Answer: D

Demand for a given item is said to be dependent if:

Demand for a given item is said to be dependent if:



A) it originates from the external customer.
B) there is a deep bill of material.
C) the finished products are mostly services (rather than goods).
D) there is a clearly identifiable parent.
E) the item has several children.


Answer: D

Which of the following is NOT one of the four key tasks that Wheeled Coach insists are necessary for successful MRP implementation?

Which of the following is NOT one of the four key tasks that Wheeled Coach insists are necessary for successful MRP implementation?



A) The material plan must meet both schedule requirements and facility capabilities.
B) The plan must be executed as designed.
C) Inventory investment must be minimized.
D) Excellent record integrity must be maintained.
E) The process must adhere to stringent quality control standards.


Answer: E

Which of the following statements regarding Wheeled Coach is FALSE?

Which of the following statements regarding Wheeled Coach is FALSE?



A) Wheeled Coach has found competitive advantage through MRP.
B) Wheeled Coach builds ambulances in a repetitive process.
C) Wheeled Coach's MRP system allowed the company to meet tight schedules, but caused inventory to rise.
D) Wheeled Coach's MRP system maintains excellent record integrity.
E) Low inventory and high quality are two positive outcomes of Wheeled Coach's use of MRP.


Answer: C

Process redesign:

Process redesign:



A) is the fundamental rethinking of business processes.
B) is sometimes called process reengineering.
C) tries to bring about dramatic improvements in performance.
D) often focuses on activities that cross functional lines.
E) all of the above


Answer: E

Advances in technology:

Advances in technology:



A) have impacted the manufacturing sector only.
B) have had only a limited impact on services.
C) have failed to change the level of customer interaction with an organization.
D) have had a dramatic impact on customer interaction with services and with products.
E) have dramatically changed health care, but have not changed retailing.


Answer: D

Computer-integrated manufacturing (CIM) includes manufacturing systems that have:

Computer-integrated manufacturing (CIM) includes manufacturing systems that have:



A) computer-aided design, a flexible manufacturing system, inventory control, warehousing and shipping integrated.
B) transaction processing, management information systems, and decision support systems integrated.
C) automated guided vehicles, robots, and process control integrated.
D) robots, automated guided vehicles, and transfer equipment integrated.
E) all of their computers integrated with the marketing department.


Answer: A

Which of the following is TRUE regarding vision systems?

Which of the following is TRUE regarding vision systems?



A) They are consistently accurate.
B) They are modest in cost.
C) They do not become bored.
D) All of the above are true.
E) None of the above is true.


Answer: D

Which of the following are all strategies for improving productivity in services?

Which of the following are all strategies for improving productivity in services?



A) separation, self-service, automation, and scheduling
B) lean production, strategy-driven investments, automation, and process focus
C) reduce inventory, reduce waste, reduce inspection, and reduce rework
D) high interaction, mass customization, service factory, and just-in-time
E) process focus, repetitive focus, product focus, and mass customization focus



Answer: A

Service blueprinting:

Service blueprinting:



A) provides the basis to negotiate prices with suppliers.
B) mimics the way people communicate.
C) determines the best time for each step in the process.
D) focuses on the provider's interaction with the customer.
E) uses the schematic of a house to diagram a service process.


Answer: D

One fundamental difference between a process chart and a flowchart is that:

One fundamental difference between a process chart and a flowchart is that:




A) the process chart adds a time dimension to the horizontal axis, while a flowchart is not time-oriented.
B) the process chart includes the supply chain, while the flowchart stays within an organization.
C) the process chart is more like a table, while the flowchart is more like a schematic diagram.
D) the process chart focuses on the customer and on the provider's interaction with the customer, while the flowchart does not deal directly with the customer.
E) None of these is true, because a process chart and a flowchart are the same thing.


Answer: C

Value-stream mapping:

Value-stream mapping:



A) is a variation of time-function mapping.
B) examines the supply chain to determine where value is added.
C) extends time function mapping back to the supplier.
D) starts with the customer and works backwards.
E) All of the above are true.


Answer: E

Which of the following is true regarding the concept of flexibility?

Which of the following is true regarding the concept of flexibility?



A) It is the ability to respond with little penalty in time, cost, or customer value.
B) It may be accomplished with digitally controlled equipment.
C) It may involve modular or movable equipment.
D) All of the above are true.
E) None of the above is true.


Answer: D

Product focused processes:

Product focused processes:



A) allow more customization, but are not very efficient.
B) are desirable because resource needs increase slowly with the complexity of a process.
C) are processes that are specialized for relatively few products or customer groups.
D) apply only to service firms, not to manufacturers.
E) are profitable because customers demand flexibility, not specialization.


Answer: C

The crossover point is that production quantity where:

The crossover point is that production quantity where:



A) variable costs of one process equal the variable costs of another process.
B) fixed costs of a process are equal to its variable costs.
C) total costs equal total revenues for a process.
D) total costs for one process equal total costs for another process.
E) the process no longer loses money.


Answer: D

Process X has fixed costs of $10,000 and variable costs of $2.40 per unit. Process Y has fixed costs of $9,000 and variable costs of $2.25 per unit. Which of the following statements is TRUE?

Process X has fixed costs of $10,000 and variable costs of $2.40 per unit. Process Y has fixed costs of $9,000 and variable costs of $2.25 per unit. Which of the following statements is TRUE?



A) The crossover point is approximately 6667 units.
B) It is impossible for one process to have both of its costs lower than those of another process.
C) Process Y is cheaper than process X at all volumes.
D) Process X should be selected for very large production volumes.
E) Process X is more profitable than process Y and should be selected.


Answer: C

Process A has fixed costs of $1000 and variable costs of $5 per unit. Process B has fixed costs of $500 and variable costs of $15 per unit. What is the crossover point between process A and process B?

Process A has fixed costs of $1000 and variable costs of $5 per unit. Process B has fixed costs of $500 and variable costs of $15 per unit. What is the crossover point between process A and process B?




A) 50 units
B) 200 units
C) $2,500
D) $5,000
E) $9,500


Answer: A

A quasi-custom product:

A quasi-custom product:



A) gets its apparent customization from the combinations available from a small number of modules.
B) is often the output of repetitive focus facilities.
C) is a valid description of a fast food sandwich.
D) only applies in services.
E) All but D are true.


Answer: E

Which of the following characteristics best describes repetitive focus?

Which of the following characteristics best describes repetitive focus?



A) It uses sophisticated scheduling to accommodate custom orders.
B) Its output is a standardized product produced from modules.
C) Operators are broadly skilled.
D) It is widely used for the manufacture of steel.
E) low volume, high variety


Answer: B

Which of the following phrases best describes process focus?

Which of the following phrases best describes process focus?



A) low volume, high variety
B) Finished goods are usually made to a forecast and stored.
C) Operators are less broadly skilled.
D) high fixed costs, low variable costs
E) low inventory


Answer: A

Which of the following phrases best describes product focus?

Which of the following phrases best describes product focus?



A) low volume, high variety
B) Finished goods are usually made to order.
C) Processes are designed to perform a wide variety of activities.
D) high fixed costs, low variable costs
E) high inventory


Answer: D

Which of the following is FALSE regarding repetitive processes?

Which of the following is FALSE regarding repetitive processes?



A) They use modules.
B) They allow easy switching from one product to the other.
C) They are the classic assembly lines.
D) They have more structure and less flexibility than a job shop layout.
E) They include the assembly of basically all automobiles.


Answer: B

Harley Davidson:

Harley Davidson:



A) utilizes job shops to make each of its modules.
B) uses product focused manufacturing.
C) uses a large number of modules to build a small number of different bikes.
D) uses work cells to feed its assembly line.
E) All of the above are true.


Answer: D

Arnold Palmer Hospital uses which focus?

Arnold Palmer Hospital uses which focus?



A) process
B) repetitive
C) product
D) mass customization
E) A and D


Answer: A

An assembly line is an example of a:

An assembly line is an example of a:



A) product-focused process.
B) process-focused process.
C) repetitive process.
D) line process.
E) specialized process


Answer: C

A product-focused process is commonly used to produce:

A product-focused process is commonly used to produce:



A) high-volume, high-variety products.
B) low-volume, high-variety products.
C) high-volume, low-variety products.
D) low-variety products at either high- or low-volume.
E) high-volume products of either high- or low-variety.


Answer: C

Three of the four types of processes are:

Three of the four types of processes are:



A) goods, services, and hybrids.
B) manual, automated, and service.
C) process focus, repetitive focus, and product focus.
D) modular, continuous, and technological.
E) input, transformation, and output.


Answer: C

A job shop is an example of a(n):

A job shop is an example of a(n):




A) repetitive process.
B) continuous process.
C) line process.
D) intermittent process.
E) specialized process


Answer: D

Marketing issues such as advertising, image, and promotion are important to quality because:

Marketing issues such as advertising, image, and promotion are important to quality because:



A) they define for consumers the tangible elements of a service.
B) the intangible attributes of a product (including any accompanying service) may not be defined by the consumer.
C) they educate consumers on how to use the product.
D) they make the product seem more valuable than it really is.
E) they raise expenses and therefore decrease profitability.


Answer: B

A recent consumer survey conducted for a car dealership indicates that, when buying a car, customers are primarily concerned with the salesperson's ability to explain the car's features, the salesperson's friendliness, and the dealer's honesty. The dealership should be ESPECIALLY concerned with which determinants of service quality?

A recent consumer survey conducted for a car dealership indicates that, when buying a car, customers are primarily concerned with the salesperson's ability to explain the car's features, the salesperson's friendliness, and the dealer's honesty. The dealership should be ESPECIALLY concerned with which determinants of service quality?



A) communication, courtesy, and credibility
B) competence, courtesy, and security
C) competence, responsiveness, and reliability
D) communication, responsiveness, and reliability
E) understanding/knowing customer, responsiveness, and reliability


Answer: A

A checklist is a type of:

A checklist is a type of:



A) poka-yoke.
B) kaizen.
C) kanban.
D) Pareto chart
E) flowchart


Answer: A

Poka-yoke is the Japanese term for:

Poka-yoke is the Japanese term for:



A) card.
B) foolproof.
C) continuous improvement.
D) fishbone diagram.
E) just-in-time production.


Answer: B

A good description of source inspection is inspecting:

A good description of source inspection is inspecting:



A) materials upon delivery by the supplier.
B) the goods at the production facility before they reach the customer.
C) the design specifications.
D) goods at the supplier's plant.
E) one's own work.


Answer: E

Which of the following is not a typical inspection point?

Which of the following is not a typical inspection point?



A) upon receipt of goods from your supplier
B) when production or service is complete
C) before the product is shipped to the customer
D) at the supplier's plant while the supplier is producing
E) after a costly process


Answer: E

The goal of inspection is to:

The goal of inspection is to:



A) detect a bad process immediately.
B) add value to a product or service.
C) correct deficiencies in products.
D) correct system deficiencies.
E) all of the above


Answer: A

Which of the following is FALSE regarding control charts?

Which of the following is FALSE regarding control charts?



A) Values above the upper control limits imply that the product's quality is exceeding expectations.
B) Control charts are built so that new data can be quickly compared to past performance data.
C) Control charts graphically present data.
D) Control charts plot data over time.
E) None of the above is false.


Answer: A

When sample measurements falls inside the control limits, it means that:

When sample measurements falls inside the control limits, it means that:



A) each unit manufactured is good enough to sell.
B) the process limits cannot be determined statistically.
C) the process output exceeds the requirements.
D) if there is no other pattern in the samples, the process is in control.
E) the process output does not fulfill the requirements.


Answer: D

A quality circle holds a brainstorming session and attempts to identify the factors responsible for flaws in a product. Which tool do you suggest they use to organize their findings?

A quality circle holds a brainstorming session and attempts to identify the factors responsible for flaws in a product. Which tool do you suggest they use to organize their findings?




A) Ishikawa diagram
B) Pareto chart
C) flowchart
D) control charts
E) activity chart


Answer: A

If a sample of parts is measured and the mean of the measurements is outside the control limits, the process is:

If a sample of parts is measured and the mean of the measurements is outside the control limits, the process is:



A) in control, but not capable of producing within the established control limits.
B) out of control and the process should be investigated for assignable variation.
C) within the established control limits with only natural causes of variation.
D) monitored closely to see if the next sample mean will also fall outside the control limits.
E) none of the above.


Answer: B

A fishbone chart is also known as a:

A fishbone chart is also known as a:



A) cause-and-effect diagram.
B) poka-yoke diagram.
C) Kaizen diagram.
D) Kanban diagram.
E) Taguchi diagram.


Answer: A

A customer service manager at a retail clothing store has collected numerous customer complaints from the forms they fill out on merchandise returns. To analyze trends or patterns in these returns, she has organized these complaints into a small number of sources or factors. This is most closely related to the ________ tool of TQM.

A customer service manager at a retail clothing store has collected numerous customer complaints from the forms they fill out on merchandise returns. To analyze trends or patterns in these returns, she has organized these complaints into a small number of sources or factors. This is most closely related to the ________ tool of TQM.




A) quality loss function
B) cause-and-effect diagram
C) scatter diagram
D) histogram
E) process control chart


Answer: B

A production manager at a pottery factory has noticed that about 70 percent of defects result from impurities in raw materials, 15 percent result from human error, 10 percent from machine malfunctions, and 5 percent from a variety of other causes. This manager is most likely using:

A production manager at a pottery factory has noticed that about 70 percent of defects result from impurities in raw materials, 15 percent result from human error, 10 percent from machine malfunctions, and 5 percent from a variety of other causes. This manager is most likely using:



A) a Pareto chart.
B) a scatter diagram.
C) a quality loss function.
D) a cause-and-effect diagram.
E) a flowchart.


Answer: A

The "four Ms" of cause-and-effect diagrams are:

The "four Ms" of cause-and-effect diagrams are:



A) material, machinery/equipment, manpower, and methods.
B) material, methods, men, and mental attitude.
C) named after four quality experts.
D) material, management, manpower, and motivation.
E) mentality, motivation, management, and manpower.


Answer: A

Pareto charts are used to:

Pareto charts are used to:



A) identify inspection points in a process.
B) outline production schedules.
C) organize errors, problems, or defects.
D) show material flow.
E) show the range of values of a measurement and the frequency with which each value occurs.


Answer: C

A manager tells her production employees, "It's no longer good enough that your work falls anywhere within the specification limits. I need your work to be as close to the target value as possible." Her thinking is reflective of:

A manager tells her production employees, "It's no longer good enough that your work falls anywhere within the specification limits. I need your work to be as close to the target value as possible." Her thinking is reflective of:



A) internal benchmarking.
B) Six Sigma.
C) ISO 9000.
D) Taguchi concepts.
E) process control charts.


Answer: D

A quality loss function includes all of the following costs EXCEPT:

A quality loss function includes all of the following costs EXCEPT:



A) the cost of scrap and repair.
B) the cost of customer dissatisfaction.
C) inspection, warranty, and service costs.
D) sales costs.
E) costs to society


Answer: D

Techniques for building employee empowerment include:

Techniques for building employee empowerment include:



A) building communication networks that include employees.
B) developing open, supportive supervisors.
C) moving responsibility from both managers and staff to production employees.
D) building high-morale organizations.
E) All of the above are techniques for employee empowerment.


Answer: E

Members of quality circles are:

Members of quality circles are:



A) paid according to their contribution to quality.
B) external consultants designed to provide training in the use of quality tools.
C) always machine operators.
D) all trained to be facilitators.
E) None of the above; all of the statements are false.


Answer: E

Which of the following statements regarding "Six Sigma" is TRUE?

Which of the following statements regarding "Six Sigma" is TRUE?



A) The term has two distinct meanings-one is statistical; the other is a comprehensive quality system.
B) Six Sigma means that about 94 percent of a firm's output is free of defects.
C) The Six Sigma program was developed by Toyota in the 1970s.
D) The Six Sigma program is for manufacturing firms and is not applicable to services.
E) Six Sigma certification is granted by the International Standards Organization (ISO).


Answer: A

Kaizen is a Japanese term meaning:

Kaizen is a Japanese term meaning:



A) a foolproof mechanism.
B) just-in-time (JIT).
C) a fishbone diagram.
D) setting standards.
E) continuous improvement.


Answer: E

Total quality management emphasizes:

Total quality management emphasizes:



A) the responsibility of the quality control staff to identify and solve all quality-related problems.
B) a commitment to quality that goes beyond internal company issues to suppliers and customers.
C) a system where strong managers are the only decision makers.
D) a process where mostly statisticians get involved.
E) ISO 14000 certification.


Answer: B

Suppose that a firm has historically been achieving "Three Sigma" quality. If the firm later changes its quality management practices such that it begins to achieve "Six Sigma" quality, which of the following phenomena will result?

Suppose that a firm has historically been achieving "Three Sigma" quality. If the firm later changes its quality management practices such that it begins to achieve "Six Sigma" quality, which of the following phenomena will result?



A) The average number of defects will be cut in half.
B) The specification limits will be moved twice as far from the mean.
C) The average number of defects will be cut by 99.9997%.
D) The average number of defects will be cut by 99.87%.
E) The average number of defects will be cut by 99.73%.


Answer: D

If 1 million passengers pass through the St. Louis Airport with checked baggage each month, a successful Six Sigma program for baggage handling would result in how many passengers with misplaced luggage?

If 1 million passengers pass through the St. Louis Airport with checked baggage each month, a successful Six Sigma program for baggage handling would result in how many passengers with misplaced luggage?




A) 3.4
B) 6.0
C) 34
D) 2700
E) 6 times the monthly standard deviation of passengers


Answer: A

A hospital benchmarked against Ferrari Racing in an effort to:

A hospital benchmarked against Ferrari Racing in an effort to:



A) improve patient handoff quality.
B) increase surgery prep time.
C) lengthen surgery duration.
D) reduce the number of doctors.
E) all of the above


Answer: A

PDCA, developed by Shewhart, stands for which of the following?

PDCA, developed by Shewhart, stands for which of the following?



A) Plan-Do-Check-Act
B) Plan-Develop-Check-Accept
C) Problem-Develop Solution-Check-Act
D) Problem-Do-Continue-Act
E) Prepare-Develop-Create-Assess


Answer: A

Based on his 14 Points, Deming is a strong proponent of:

Based on his 14 Points, Deming is a strong proponent of:



A) inspection at the end of the production process.
B) an increase in numerical quotas to boost productivity.
C) looking for the cheapest supplier.
D) training and knowledge.
E) all of the above.


Answer: D

The philosophy of zero defects is:

The philosophy of zero defects is:



A) the result of Deming's research.
B) unrealistic.
C) prohibitively costly.
D) an ultimate goal; in practice, 1 to 2% defects is acceptable.
E) consistent with the commitment to continuous improvement.


Answer: E

To become ISO 9000 certified, organizations must:

To become ISO 9000 certified, organizations must:



A) document quality procedures.
B) have an onsite assessment.
C) have an ongoing series of audits of their products or service.
D) all of the above
E) none of the above


Answer: D

Regarding the quality of design, production, and distribution of products, an ethical requirement for management is to:

Regarding the quality of design, production, and distribution of products, an ethical requirement for management is to:



A) determine whether any of the organization's stakeholders are being wronged by poor quality products.
B) gain ISO 9000 certification for the organization.
C) obtain a product safety certificate from the Consumer Product Safety Commission.
D) have the organization's legal staff write disclaimers in the product instruction booklets.
E) compare the cost of product liability to the external failure cost.


Answer: A

Stakeholders who are affected by the production and marketing of poor quality products include:

Stakeholders who are affected by the production and marketing of poor quality products include:



A) stockholders, employees, and customers.
B) suppliers and creditors, but not distributors.
C) only stockholders, creditors, and owners.
D) suppliers and distributors, but not customers.
E) only stockholders and organizational executives and managers


Answer: A

Which of the following statements is NOT true?

Which of the following statements is NOT true?



A) Self-promotion is not a substitute for quality products.
B) Inferior products harm a firm's profitability and a nation's balance of payments.
C) Product liability transfers from the manufacturer to the retailer once the retailer accepts delivery of the product.
D) Quality-be it good or bad-will show up in perceptions about a firm's new products, employment practices, and supplier relations.
E) Legislation such as the Consumer Product Safety Act sets and enforces product standards by banning products that do not reach those standards.


Answer: C

According to the manufacturing-based definition of quality:

According to the manufacturing-based definition of quality:



A) quality is the degree of excellence at an acceptable price and the control of variability at an acceptable cost.
B) quality depends on how well the product fits patterns of consumer preferences.
C) even though quality cannot be defined, you know what it is.
D) quality is the degree to which a specific product conforms to standards.
E) quality lies in the eyes of the beholder.


Answer: D

Three broad categories of definitions of quality are:

Three broad categories of definitions of quality are:



A) product quality, service quality, and organizational quality.
B) user based, manufacturing based, and product based.
C) internal, external, and prevention.
D) low-cost, response, and differentiation.
E) Pareto, Shewhart, and Deming.


Answer: B

"Making it right the first time" is:

"Making it right the first time" is:



A) an unrealistic definition of quality.
B) a user-based definition of quality.
C) a manufacturing-based definition of quality.
D) a product-based definition of quality.
E) the definition of quality proposed by the American Society for Quality


Answer: C

"Quality lies in the eyes of the beholder" is:

"Quality lies in the eyes of the beholder" is:



A) an unrealistic definition of quality.
B) a user-based definition of quality.
C) a manufacturing-based definition of quality.
D) a product-based definition of quality.
E) the definition of quality proposed by the American Society for Quality.



Answer: B

Quality can improve profitability by reducing costs. Which of the following is not an aspect of reduced costs by quality improvements?

Quality can improve profitability by reducing costs. Which of the following is not an aspect of reduced costs by quality improvements?



A) flexible pricing
B) increased productivity
C) lower rework and scrap costs
D) lower warranty costs
E) All of the above are aspects of reduced costs by quality improvements.


Answer: A

A successful quality strategy features which of the following elements?

A successful quality strategy features which of the following elements?



A) an organizational culture that fosters quality
B) an understanding of the principles of quality
C) engaging employees in the necessary activities to implement quality
D) A and C
E) A, B, and C


Answer: E

Which of the following statements regarding Arnold Palmer Hospital is FALSE?

Which of the following statements regarding Arnold Palmer Hospital is FALSE?



A) The hospital uses a wide range of quality management techniques.
B) The culture of quality at the hospital includes employees at all levels.
C) The hospital scores very highly in national studies of patient satisfaction.
D) The hospital's high quality is measured by low readmission rates, not patient satisfaction.
E) The design of patient rooms, even wall colors, reflects the hospital's culture of quality.


Answer: D

Which of the following is true about ISO 14000 certification?

Which of the following is true about ISO 14000 certification?



A) It can reduce exposure to liability.
B) It deals with environmental management.
C) It offers a good systematic approach to pollution prevention.
D) One of its core elements is life cycle assessment.
E) All of the above are true.


Answer: E

What does UNFCCC stand for?

What does UNFCCC stand for?



A) United National Federation Council on Climate Change
B) UN Federation for Climate Change Cooperation
C) Uniform National Framework Climate Change Code
D) UN Framework Convention on Climate Change
E) UN Foundation for the Consequences of Climate Change


Answer: D

What does ISO stand for?

What does ISO stand for?



A) Industry Standards Organization
B) International Safety Organization
C) Industrial Safety Organization
D) International Standards for Oxygen
E) International Organization for Standardization


Answer: E

Products are more "environmentally friendly" when they are made:

Products are more "environmentally friendly" when they are made:



A) using cheaper materials.
B) using less energy.
C) according to OSHA standards.
D) where environmental regulations are lax.
E) more difficult to disassemble.


Answer: B

A firm is considering five different product designs. Data concerning the design for disassembly for each of the designs are provided in the table below. Which design appears to be the best environmental design based on revenue retrieval opportunity?

A firm is considering five different product designs. Data concerning the design for disassembly for each of the designs are provided in the table below. Which design appears to be the best environmental design based on revenue retrieval opportunity?


Product Design
Resale Revenue per Unit
Recycling Revenue per Unit
Processing Cost per Unit
Disposal Cost per Unit
1
$30.00
$12.00
$15.00
$40.00
2
$10.00
$10.00
$3.00
$1.00
3
$5.00
$55.00
$48.00
$10.00
4
$4.00
$2.00
$1.00
$0.50
5
$42.00
$3.00
$8.00
$32.00

A) Design 1
B) Design 2
C) Design 3
D) Design 4
E) Design 5


Answer: B

What are the 3 Rs for sustainability?

What are the 3 Rs for sustainability?



A) reduce, reuse, and reclaim
B) reduce, reproduce, and recycle
C) reproduce, reuse, and recycle
D) reduce, reuse, and recycle
E) reduce, reclaim, and recycle


Answer: D

What refers to how companies remain in business?

What refers to how companies remain in business?



A) corporate social responsibility
B) economic sustainability
C) carbon footprint
D) sustainability
E) closed-loop supply chains


Answer: B

The carbon footprint is defined as a measure of total greenhouse gas emissions caused directly or indirectly by what four things?

The carbon footprint is defined as a measure of total greenhouse gas emissions caused directly or indirectly by what four things?



A) a factory, an office building, a warehouse, or a truck
B) an organization, a product, an event, or a person
C) an organization, a product, an animal, or a person
D) an organization, a government, a product, or a person
E) a product, an event, a person, or an animal


Answer: B

Companies can improve the triple bottom line with sustainability by minimizing what four things?

Companies can improve the triple bottom line with sustainability by minimizing what four things?



A) raw material, energy, water, and waste
B) raw material, transport, manufacture, and disposal
C) people, planet, profit, and pollution
D) pollution, carbon footprint, profit, and people
E) lawsuits, advertisements, coupons, and layoffs


Answer: A

What does CSR stand for?

What does CSR stand for?



A) consumer sustainability requirements
B) critical sustainability ratio
C) corporate social responsibility
D) corporate sustainability record
E) corporate society ratio


Answer: C

The acronym MNC stands for

The acronym MNC stands for



A) Mexican National Committee (for international trade)
B) Maquiladora Negates Competition
C) Maytag-Nestlé Corporation
D) Multinational Corporation
E) Maritime Navigation Company


Answer: D

Advantages of outsourcing do NOT include:

Advantages of outsourcing do NOT include:



A) cost savings.
B) gaining outside expertise.
C) maintaining a focus on core competencies.
D) accessing outside technology.
E) potential creation of future competition.


Answer: E

Which of the following is not an advantage of outsourcing?

Which of the following is not an advantage of outsourcing?



A) cost savings
B) gaining outside expertise
C) improving operations and service
D) outsourcing core competencies
E) accessing outside technology


Answer: D

Which of the following statements is most accurate?

Which of the following statements is most accurate?



A) Nearly all outsourcing relationships do not last beyond two years.
B) Nearly all U.S. firms that outsourced processes to India have backsourced them.
C) Approximately half of all outsourcing agreements fail.
D) Outsourcing is a relatively risk-free activity.
E) More than 90% of outsourcing agreements succeed.


Answer: C

What theory implies that you should allow another firm to perform work activities for your company if that company can do it more productively than you can?

What theory implies that you should allow another firm to perform work activities for your company if that company can do it more productively than you can?



A) theory of competitive advantage
B) theory of core competencies
C) theory of comparative advantage
D) theory of outsourcing
E) theory of offshoring


Answer: C

Outsourcing manufacturing is also known as:

Outsourcing manufacturing is also known as:



A) license manufacturing.
B) sublease manufacturing.
C) concurrent manufacturing.
D) hollow manufacturing.
E) contract manufacturing.


Answer: E

Which of the following statements is most correct?

Which of the following statements is most correct?



A) KSFs are often necessary, but not sufficient for competitive advantage.
B) KSFs are often sufficient, but not necessary for competitive advantage.
C) KSFs are neither necessary nor sufficient for competitive advantage.
D) KSFs are both necessary and sufficient for competitive advantage.
E) None of the above statements is correct.


Answer: A

Given the position of the 3D printer in the growth stage of its life cycle, which of the following OM Strategy/Issues should the makers of 3D printers be least concerned with at the current time?

Given the position of the 3D printer in the growth stage of its life cycle, which of the following OM Strategy/Issues should the makers of 3D printers be least concerned with at the current time?



A) forecasting
B) cost cutting
C) increasing capacity
D) product and process reliability
E) enhancing distribution


Answer: B

Porter's Five Forces Model is used to evaluate competition based on which 5 aspects?

Porter's Five Forces Model is used to evaluate competition based on which 5 aspects?



A) research and development, cost, legal regulations, suppliers, customers
B) immediate rivals, potential entrants, customers, suppliers, and substitute products
C) potential entrants, customers, suppliers, legal regulations, and cost
D) immediate rivals, potential entrants, cost, substitute products, and legal regulations
E) cost, legal regulations, advertising effectiveness, potential entrants, and immediate rivals


Answer: B

Response-based competitive advantage can be:

Response-based competitive advantage can be:



A) flexible response.
B) reliable response.
C) quick response.
D) all of the above.
E) none of the above.


Answer: E

Which of the following is an example of competing on quick response?

Which of the following is an example of competing on quick response?



A) A firm produces its product with less raw material waste than its competitors do.
B) A firm offers more reliable products than its competitors do.
C) A firm's products are introduced into the market faster than its competitors' products.
D) A firm utilizes its capacity more effectively than its competitors do.
E) A firm advertises more than its competitors do.


Answer: C

Franz Colruyt has achieved low-cost leadership through:

Franz Colruyt has achieved low-cost leadership through:



A) effective use of voice mail.
B) plastic, not paper, shopping bags.
C) background music that subtly encourages shoppers to buy more.
D) converting factories, garages, and theaters into retail outlets.
E) exclusive use of the Euro.


Answer: D

Which of the following is the best example of competing on low-cost leadership?

Which of the following is the best example of competing on low-cost leadership?



A) A firm produces its product with less raw material waste than its competitors do.
B) A firm offers more reliable products than its competitors do.
C) A firm's products are introduced into the market faster than its competitors' products are.
D) A firm's research and development department generates many ideas for new products.
E) A firm advertises more than its competitors do.


Answer: A

Experience differentiation:

Experience differentiation:



A) isolates the consumer from the delivery of a service.
B) is an extension of product differentiation in the service sector.
C) uses only the consumer's senses of vision and sound.
D) keeps consumers from becoming active participants in the service.
E) attempts to make the service experience different for every single customer.


Answer: B

Which of the following best describes experience differentiation?

Which of the following best describes experience differentiation?



A) immerses consumers in the delivery of a service
B) uses people's five senses to enhance the service
C) complements physical elements with visual and sound elements
D) consumers may become active participants in the product or service
E) All of the above are elements of experience differentiation.


Answer: E

Which of the following is an example of competing on the basis of differentiation?

Which of the following is an example of competing on the basis of differentiation?



A) A firm manufactures its product with less raw material waste than its competitors do.
B) A firm's products are introduced into the market faster than its competitors' products are.
C) A firm's distribution network routinely delivers its product on time.
D) A firm offers more reliable products than its competitors do.
E) A firm advertises more than its competitors do.


Answer: D

Which of the following statements best characterizes delivery reliability?

Which of the following statements best characterizes delivery reliability?



A) a company that always delivers on the same day of the week
B) a company that always delivers at the promised time
C) a company that delivers more frequently than its competitors
D) a company that delivers faster than its competitors
E) a company that has a computerized delivery scheduling system


Answer: B

A firm can effectively use its operations function to yield competitive advantage through all of the following EXCEPT:

A firm can effectively use its operations function to yield competitive advantage through all of the following EXCEPT:



A) customization of the product.
B) setting equipment utilization goals below the industry average.
C) speed of delivery.
D) constant innovation of new products.
E) maintaining a variety of product options.


Answer: B

A strategy is a(n):

A strategy is a(n):



A) set of opportunities in the marketplace.
B) broad statement of purpose.
C) simulation used to test various product line options.
D) plan for cost reduction.
E) action plan to achieve the mission.


Answer: E

According to the authors, which of the following strategic concepts allow firms to achieve their missions?

According to the authors, which of the following strategic concepts allow firms to achieve their missions?



A) productivity, efficiency, and quality leadership
B) differentiation, cost leadership, and response
C) differentiation, quality leadership, and response
D) distinctive competency, cost leadership, and experience
E) differentiation, distinctive competency, quality leadership, and capacity


Answer: B

Which of the following statements is true?

Which of the following statements is true?



A) Corporate mission is shaped by functional strategies.
B) Corporate strategy is shaped by functional strategies.
C) Functional strategies are shaped by corporate strategy.
D) External conditions are shaped by corporate mission.
E) Functional area missions are merged to become the organizational mission.


Answer: C

The fundamental purpose of an organization's mission statement is to:

The fundamental purpose of an organization's mission statement is to:



A) create a good human relations climate in the organization.
B) define the organization's purpose in society.
C) define the operational structure of the organization.
D) generate good public relations for the organization.
E) define the functional areas required by the organization.


Answer: B

Which of the following statements about organizational missions is FALSE?

Which of the following statements about organizational missions is FALSE?



A) They reflect a company's purpose.
B) They indicate what a company intends to contribute to society.
C) They are formulated after strategies are known.
D) They define a company's reason for existence.
E) They provide guidance for functional area missions.


Answer: C

Which of the following activities takes place most immediately once the mission has been developed?

Which of the following activities takes place most immediately once the mission has been developed?



A) The firm develops alternative or back-up missions in case the original mission fails.
B) The functional areas develop their functional area strategies.
C) The functional areas develop their supporting missions.
D) The ten OM decision areas are prioritized.
E) Operational tactics are developed



Answer: C

With reference to cultural and ethical issues, the World Trade Organization has:

With reference to cultural and ethical issues, the World Trade Organization has:



A) eliminated bribery.
B) made progress in providing equal protection of intellectual property among nations.
C) phased out all trade and tariff barriers between the United States and Mexico.
D) eliminated slave labor and child labor.
E) played little role in addressing cultural and ethical issues among nations.


Answer: B

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