Question 1

For a restaurant, order taking, bill payment, and home delivery would be considered as _____.

Accepted Answer

A)  services 
B)  inputs 
C)  processes 
D)  outputs 
A)  services 
B)  inputs 
C)  processes 
D)  outputs C

Question 2

Backward integration refers to acquiring capabilities toward distribution.

Accepted Answer

A) True 
 B)False  False

Question 3

General Electric would be considered a multinational enterprise because it sources, markets, and produces its goods in several countries.

Accepted Answer

A) True 
 B)False  True

Question 4

According to the input-output perspective, a value chain begins with _____.

Accepted Answer

A)  feedback 
B)  processes 
C)  inputs 
D)  suppliers 
A)  feedback 
B)  processes 
C)  inputs 
D)  suppliers

Question 5

A value chain can be considered a "cradle-to-grave" input-output model of the operations function.

Accepted Answer

A) True 
 B)False

Question 6

Explain the input-output perspective of a value chain.

Accepted Answer

According to the input-output perspectiv

Question 7

In the value chain model for a hospital, patients, drugs, and staff would be considered as _____.

Accepted Answer

A)  suppliers 
B)  inputs 
C)  transformation processes 
D)  outputs 
A)  suppliers 
B)  inputs 
C)  transformation processes 
D)  outputs

Question 8

One approach to increasing value is to maintain perceived benefits while increasing price or cost.

Accepted Answer

A) True 
 B)False

Question 9

Decentralizing value chain activities lessens the control that a firm has over cost, quality, and other important business metrics, and often leads to higher levels of risk.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following constitutes a postproduction service in a value chain?

Accepted Answer

A)  Customized and team-oriented product design 
B)  Recycling and remanufacturing initiatives 
C)  Product and service guarantees 
D)  Purchasing and supplier services 
A)  Customized and team-oriented product design 
B)  Recycling and remanufacturing initiatives 
C)  Product and service guarantees 
D)  Purchasing and supplier services

Question 11

A manufacturing company needs to know whether to make in-house or buy an injection molding machine for its new fax machine production. The company expects to produce 9,000 units per year. The following estimates have been made:
 $\begin{array}{|l|c|c|}
\hline & \text { Make } & \text { Buy } \
\hline \text { Fixed cost per year } & \$ 9,000 & \$ 0 \
\hline \text { Variable cost per part } & \$ 6.45 & \$ 7.20 \
\hline
\end{array}$ 
a.What is the annual cost to make an injection molding machine?
b.What is the annual cost to buy an injection molding machine?
c.At what volume are they indifferent regarding the decision to make or buy?

Accepted Answer

a.Cost to make: $9,000 + $6.45

Question 12

A hospital is evaluating whether to outsource or perform in-house a large set of blood and urine laboratory tests. The fixed cost of the laboratory located in the hospital is $800,000, and the weighted average variable cost per test if performed in-house is $28.75. A third-party lab located one city block from the hospital will perform the same tests and distribute the results electronically to the hospital at a price of $32.00. If the annual volume last year was 250,000 tests, the hospital should:

Accepted Answer

A)  outsource these lab tests to this third-party lab. 
B)  offshore these lab tests to this third-party lab. 
C)  perform these lab tests in-house at the hospital. 
D)  reduce fixed costs $200,000 and then outsource. 
A)  outsource these lab tests to this third-party lab. 
B)  offshore these lab tests to this third-party lab. 
C)  perform these lab tests in-house at the hospital. 
D)  reduce fixed costs $200,000 and then outsource.

Question 13

In the value chain model for a hospital, pharmaceutical companies and organ donors would be considered as _____.

Accepted Answer

A)  suppliers 
B)  inputs 
C)  processes 
D)  outputs 
A)  suppliers 
B)  inputs 
C)  processes 
D)  outputs

Question 14

Global purchasing can be a difficult process to manage when sources of supply, regional economies, and even governments remain constant over time.

Accepted Answer

A) True 
 B)False

Question 15

A company has two alternatives for meeting a customer requirement for 9,000 units of a specialty molding. If done in-house, fixed cost would be $350,000, with variable cost at $30 per unit. If outsourced, the cost is $80 per unit. Determine the break-even point and determine if they should make the item in-house or outsource it.

Accepted Answer

A)  break-even point = 7,000 units; outsource it 
B)  break-even point = 7,000 units; make it in-house 
C)  break-even point = 11,667 units; outsource it 
D)  break-even point = 11,667 units; make it in-house 
A)  break-even point = 7,000 units; outsource it 
B)  break-even point = 7,000 units; make it in-house 
C)  break-even point = 11,667 units; outsource it 
D)  break-even point = 11,667 units; make it in-house

Question 16

Third-party "system integrators" are often used for vertical integration strategies.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following costs is NOT considered a variable cost?

Accepted Answer

A)  Labor cost 
B)  Transportation cost 
C)  Administrative cost 
D)  Material cost 
A)  Labor cost 
B)  Transportation cost 
C)  Administrative cost 
D)  Material cost

Question 18

John Morton, director of materials management for Computer Products Corporation (CPC) in San Jose, is reviewing next year's plans for the supply of a component that is purchased from Osiega Ltd., a company in Japan. The component is the PS100 power supply assembly that is used in many of CPC's products.CPC pays the supplier more than $7 million per year for these units, and John wonders if money could be saved by developing another supplier for this component or if CPC should gear up to manufacture the power supply assemblies in-house within one of CPC's own production plants.John's purchasing-analysis staff has developed the following estimates:
 $\begin{array}{|l|l|l|l|}
\hline\text { Supply Source } & & \text { Annual } & \text { Variable Cost } \
\hline \text { for PS100 } & \text { Description of Cost } & \text { Fixed Cost } & \text { per Unit } \
\hline \text { Osiega Ltd. } & \text { Annual tooling } & \$ 50,000 & \\hline & \text { Inspection and rework } & & \$ 0.16\
\hline & \text { Shipping } & & \$ 0.95  \
\hline & \text { Purchase price } & & \$11.88\\hline \text { Atlanta Spier } & \text { Annual tooling } & \$ 95,000 & \
\hline & \text { Inspection and rework } & & \$ 1.05 \\hline & \text { Shipping } & & \$ 0.15 \
\hline & \text { Purchase price } & & \$ 10.59 \
\hline \text { In-house } & \text { Annual tooling } & \$ 70,000 & \\hline & \text { Inspection and rework } & & \$ 0.55 \
\hline & \text { Shipping } & & \$ 0.25 \
\hline & \text { Production costs } & \$ 5,000 & \$ 11.50 \
\hline
\end{array}$ The purchasing-analysis group has learned that CPC will need about 550,000 of the PS100 units next year. 
a.Which supply source provides the least cost for next year?
b.How many PS100 units would have to be bought next year for each of the sources to be the least-cost source?

Accepted Answer

a.TC = FC + (VC)Q TC_OL= 50,000 + 12.99(550

Question 19

While cultural differences are important in managing operations in different countries, they have little impact in designing the overall value chain.

Accepted Answer

A) True 
 B)False

Question 20

Forward integration might include acquiring a customer.

Accepted Answer

A) True 
 B)False

For a restaurant, order taking, bill payment, and home delivery would be considered as _____.

Backward integration refers to acquiring capabilities toward distribution.

General Electric would be considered a multinational enterprise because it sources, markets, and produces its goods in several countries.

According to the input-output perspective, a value chain begins with _____.

A value chain can be considered a "cradle-to-grave" input-output model of the operations function.

Explain the input-output perspective of a value chain.

In the value chain model for a hospital, patients, drugs, and staff would be considered as _____.

One approach to increasing value is to maintain perceived benefits while increasing price or cost.

Decentralizing value chain activities lessens the control that a firm has over cost, quality, and other important business metrics, and often leads to higher levels of risk.

Which of the following constitutes a postproduction service in a value chain?

In the value chain model for a hospital, pharmaceutical companies and organ donors would be considered as _____.

Global purchasing can be a difficult process to manage when sources of supply, regional economies, and even governments remain constant over time.

Third-party "system integrators" are often used for vertical integration strategies.

Which of the following costs is NOT considered a variable cost?

While cultural differences are important in managing operations in different countries, they have little impact in designing the overall value chain.

Forward integration might include acquiring a customer.

Goods, Services, and Operations Management

Measuring Performance in Operations

Operations Strategy

Technology and Operations Management

Goods and Service Design

Process Selection, Design, and Analysis

Facility and Work Designs

Supply Chain Design

Capacity Management

Forecasting and Demand Planning

Managing Inventories

Resource Management

Operations Scheduling and Sequencing

Quality Management

Appendix: Quality Management

Quality Control and Spc

Appendix: Queuing Analysis

Appendix: Modeling Using Linear Programming

Lean Operating Systems

Appendix: Simulation

Project Management

Appendix: Decision Analysis

Filters

Exam 2: Value Chains

For a restaurant, order taking, bill payment, and home delivery would be considered as _____.

Backward integration refers to acquiring capabilities toward distribution.

General Electric would be considered a multinational enterprise because it sources, markets, and produces its goods in several countries.

According to the input-output perspective, a value chain begins with _____.

A value chain can be considered a "cradle-to-grave" input-output model of the operations function.

Explain the input-output perspective of a value chain.

In the value chain model for a hospital, patients, drugs, and staff would be considered as _____.

One approach to increasing value is to maintain perceived benefits while increasing price or cost.

Decentralizing value chain activities lessens the control that a firm has over cost, quality, and other important business metrics, and often leads to higher levels of risk.

Which of the following constitutes a postproduction service in a value chain?

In the value chain model for a hospital, pharmaceutical companies and organ donors would be considered as _____.

Global purchasing can be a difficult process to manage when sources of supply, regional economies, and even governments remain constant over time.

Third-party "system integrators" are often used for vertical integration strategies.

Which of the following costs is NOT considered a variable cost?

While cultural differences are important in managing operations in different countries, they have little impact in designing the overall value chain.

Forward integration might include acquiring a customer.

Goods, Services, and Operations Management

Measuring Performance in Operations

Operations Strategy

Technology and Operations Management

Goods and Service Design

Process Selection, Design, and Analysis

Facility and Work Designs

Supply Chain Design

Capacity Management

Forecasting and Demand Planning

Managing Inventories

Resource Management

Operations Scheduling and Sequencing

Quality Management

Appendix: Quality Management

Quality Control and Spc

Appendix: Queuing Analysis

Appendix: Modeling Using Linear Programming

Lean Operating Systems

Appendix: Simulation

Project Management

Appendix: Decision Analysis

Filters