Exam 21: Managing Operations

A firm should decide to buy components from a supplier (as opposed to making them)

One of the essential elements of successful quality management is

You Make the Call-Situation 2 Derek Dilworth, owner of a small manufacturing firm, is trying to rectify the firm's thin working capital situation by carefully managing payments to major suppliers. These suppliers extend credit for 30 days and customers are expected to pay within that time period. However, the suppliers do not automatically refuse subsequent orders when a payment is a few days late. Dilworth's strategy is to delay payment of most invoices for 10 to 15 days beyond the due date. Although he is not meeting the "letter of the law," he believes that the suppliers will go along with him rather than lose future sales. This practice enables Dilworth's firm to operate with sufficient inventory, avoid costly interruptions in production, and reduce the likelihood of an overdraft at the bank.

Because manufacturing firms are so closely tied to their customers, they are limited in their ability to hold over their product in the form of inventory.

A manager of a small plumbing company is thinking about installing a total quality management (TQM) program. If TQM is installed, the manager should be aware that

The most significant factors to consider when selecting a supplier are price and quality.

A small company might prefer to concentrate purchases with one supplier for which the following reasons?

According to the text, experts recommend that firms work hard to involve and empower quality control experts in efforts to control quality

Total quality management refers specifically to management of the process of manufacturing.

In a printing plant's production process, ink constitutes

Quality is defined by the American Society for Quality Control as

The type of manufacturing that is used to create unique but similar products is

Reasons for buying products rather than making them include the following except

The simplest method of inventory record-keeping is called the perpetual inventory system.

Making components is preferable to buying them from an outside vendor when using idle plant capacity would boost production efficiency, in-house production would protect a secret design, or the firm can reduce the cost of investment by purchasing equipment that will soon be obsolete.

A "C" class item in a system that uses the ABC method of inventory management is

A firm engages in outsourcing only when it procures components from outside the home country.

Any point in an operations system where limited capacity reduces the production capacity of an entire chain of activities is called a

You Make the Call-Situation 3 The owner of a small food products company was confronted with an inventory control problem involving differences of opinion among his subordinates. His accountant, with the concurrence of his general manager, had decided to "put some teeth" into the inventory control system by deducting inventory shortages from the pay of route drivers who distributed the firm's products to stores in their respective territories. Each driver was considered responsible for the inventory on his or her truck. When the first "short" paychecks arrived, drivers were angry. Sharing their concern, their immediate supervisor, the regional manager, first went to the general manager and then, getting no satisfaction there, appealed to the owner. The regional manager argued that there was no question about the honesty of the drivers. He said that he personally had created the inventory control system the company was using, and he admitted that the system was complicated and susceptible to clerical mistakes by the driver and by the office. He pointed out that the system had never been studied by the general manager or the accountant, and he maintained that it was ethically wrong to make deductions from the small salaries of honest drivers for simple record-keeping errors.

Briefly describe the difference between inspection vs. poka-yoke as a quality assurance method.