Question 1

Explain the notion of value chain integration.

Accepted Answer

Value chain integration is the process o

Question 2

A company has two alternatives for meeting a customer requirement for 5,000 units of a specialty molding. If done in-house, fixed cost would be $350,000 and variable cost is $20 per unit. Alternative two is to outsource for a total cost of $40 per unit. Determine the break-even quantity and determine if they should make the item in-house or outsource it.

Accepted Answer

VC₁ = $20 VC₂ = $40 FC = $350,000 Break-ev

Question 3

The operational structure of a value chain deals with the _____.

Accepted Answer

A)  management hierarchies 
B)  customer services and returns 
C)  configuration of resources 
D)  order tracking reports 
A)  management hierarchies 
B)  customer services and returns 
C)  configuration of resources 
D)  order tracking reports

Question 4

In break-even analysis, whenever the anticipated volume is greater than the break-even quantity, the firm should not outsource.

Accepted Answer

A) True 
 B)False

Question 5

A U.S. motorcycle manufacturer has the option of either making the gas tank in their newly designed motorcycle, or subcontracting it to a manufacturer from Sinagpore. The manufacturer expects to produce 1,000 units per year. Costs for the two options are:
 $\begin{array}{|l|c|c|}
\hline \text { Source } & \text { Fixed Cost } & \text { Variable Cost } \
\hline \text { Make in-house } & \$ 15,000 & \$ 21.50 \
\hline \text { Buy from Singapore } & \$ 0 & \$ 29.00 \
\hline
\end{array}$
-The volume they are indifferent regarding the decision to make or buy is _____ units.

Accepted Answer

A)  less than or equal to 2,000 
B)  more than 2,000 but less than or equal to 4,000 
C)  more than 4,000 but less than or equal to 6,000 
D)  more than 6,000 but less than or equal to 8,000 
E)  more than 8,000. 
A)  less than or equal to 2,000 
B)  more than 2,000 but less than or equal to 4,000 
C)  more than 4,000 but less than or equal to 6,000 
D)  more than 6,000 but less than or equal to 8,000 
E)  more than 8,000.

Question 6

_____ is the process of managing information, physical goods, and services to ensure their availability at the right place, at the right time, at the right cost, at the right quantity, and with the highest attention to quality.

Accepted Answer

A)  Offshoring 
B)  Value proposition 
C)  Operational structure 
D)  Value chain integration 
A)  Offshoring 
B)  Value proposition 
C)  Operational structure 
D)  Value chain integration

Question 7

The success of the entire value chain depends on how it is designed and managed.

Accepted Answer

A) True 
 B)False

Question 8

The focus of preproduction services is on gaining a customer while that of postproduction services is on keeping the customer.

Accepted Answer

A) True 
 B)False

Question 9

Proportional increases or decreases in perceived benefits as well as price or cost result in no net change in value.

Accepted Answer

A) True 
 B)False

Question 10

Explain a value proposition. Relate this to a customer benefits package of goods and services.

Accepted Answer

A competitively dominant customer experi

Question 11

A manufacturing company needs to know whether to make in-house or buy a roller gear assembly for its production of a new fax machine. The company expects to produce 9,000 units per year. The following estimates have been made:
 $\begin{array}{|l|c|c|}
\hline & \text { Make } & \text { Buy } \
\hline \text { Fixed cost per year } & \$ 8,000 & \$ 0 \
\hline \text { Variable cost per part } & \$ 5.45 & \$ 6.93 \
\hline
\end{array}$
-The annual cost to buy the roller gear assembly is _____.

Accepted Answer

A)  more than $30,000 but less than or equal to $40,000 
B)  more than $40,000 but less than or equal to $50,000 
C)  more than $50,000 but less than or equal to $60,000 
D)  more than $60,000 
A)  more than $30,000 but less than or equal to $40,000 
B)  more than $40,000 but less than or equal to $50,000 
C)  more than $50,000 but less than or equal to $60,000 
D)  more than $60,000

Question 12

A competitively dominant customer experience is often called a _____.

Accepted Answer

A)  perceived benefit 
B)  preemptive strike 
C)  moment of truth 
D)  value proposition 
A)  perceived benefit 
B)  preemptive strike 
C)  moment of truth 
D)  value proposition

Question 13

_____ 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.

Accepted Answer

A)  Proportionality 
B)  Competitiveness 
C)  Value 
D)  Equity 
A)  Proportionality 
B)  Competitiveness 
C)  Value 
D)  Equity

Question 14

When break-even analysis is applied to an outsourcing decision, the break-even quantity is _____.

Accepted Answer

A)  the ratio of fixed costs to the difference between variable outsourcing cost and variable in-house production cost 
B)  the ratio of the difference between variable outsourcing cost and variable in-house production cost to fixed costs 
C)  the product of the variable costs and the fixed costs 
D)  the product of the variable costs and the production quantity 
A)  the ratio of fixed costs to the difference between variable outsourcing cost and variable in-house production cost 
B)  the ratio of the difference between variable outsourcing cost and variable in-house production cost to fixed costs 
C)  the product of the variable costs and the fixed costs 
D)  the product of the variable costs and the production quantity

Question 15

_____ refers to the process of acquiring and consolidating elements of a value chain to achieve more control.

Accepted Answer

A)  Vertical integration 
B)  Horizontal integration 
C)  Outsourcing 
D)  Offshoring 
A)  Vertical integration 
B)  Horizontal integration 
C)  Outsourcing 
D)  Offshoring

Question 16

In the context of the perspectives of a value chain, training and transportation delivery services for customers would be considered as _____.

Accepted Answer

A)  preproduction services 
B)  production processes 
C)  postproduction services 
D)  packaging services 
A)  preproduction services 
B)  production processes 
C)  postproduction services 
D)  packaging services

Question 17

_____ refers to acquiring capabilities toward suppliers.

Accepted Answer

A)  Advancing integration 
B)  Horizontal integration 
C)  Forward integration 
D)  Backward integration 
A)  Advancing integration 
B)  Horizontal integration 
C)  Forward integration 
D)  Backward integration

Question 18

Outsourcing is _____.

Accepted Answer

A)  the same as offshoring 
B)  the opposite of vertical integration 
C)  the opposite of backward integration 
D)  the same as diversifying 
A)  the same as offshoring 
B)  the opposite of vertical integration 
C)  the opposite of backward integration 
D)  the same as diversifying

Question 19

A large hotel and casino in Las Vegas is currently under construction. There will be an Italian restaurant in the hotel that will serve pizza. Management is trying to decide whether to make the pizza themselves or buy it frozen and simply heat it to customer order. There are two major sources of commercial-grade frozen pizza: Ma Ma's Products and the Chun-Yee Corporation. If they make the pizza themselves, a substantial amount of preparation equipment will be required, along with skilled personnel. Frozen pizza needs either a conventional oven (Ma Ma's) or a microwave (Chun-Yee). Financial data is as shown below (variable costs are estimated based on an average pizza purchase):
 $\begin{array}{|l|c|c|}
\hline \text { Source } & \text { Fixed Cost/year } & \text { Variable Cost } \
\hline \text { Make in-house } & \$ 7,870 & \$ 3.20 \
\hline \text { Ma Ma's } & \$ 860 & \$ 5.60 \
\hline \text { Chun-Yee } & \$ 2,460 & \$ 4.50 \
\hline
\end{array}$ 
a.At what volume is either Ma Ma's or Chun-Yee acceptable?
b.At what volume is the company indifferent to either Chun-Yee or make in-house?

Accepted Answer

a.Ma Ma's-Chun-Yee:
$860 + $5.

Question 20

Discuss six issues that make global value chains more difficult to manage than small domestic value chains.

Accepted Answer

Complex global value chains ar

Explain the notion of value chain integration.

The operational structure of a value chain deals with the _____.

In break-even analysis, whenever the anticipated volume is greater than the break-even quantity, the firm should not outsource.

_____ is the process of managing information, physical goods, and services to ensure their availability at the right place, at the right time, at the right cost, at the right quantity, and with the highest attention to quality.

The success of the entire value chain depends on how it is designed and managed.

The focus of preproduction services is on gaining a customer while that of postproduction services is on keeping the customer.

Proportional increases or decreases in perceived benefits as well as price or cost result in no net change in value.

Explain a value proposition. Relate this to a customer benefits package of goods and services.

A competitively dominant customer experience is often called a _____.

_____ 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.

When break-even analysis is applied to an outsourcing decision, the break-even quantity is _____.

_____ refers to the process of acquiring and consolidating elements of a value chain to achieve more control.

In the context of the perspectives of a value chain, training and transportation delivery services for customers would be considered as _____.

_____ refers to acquiring capabilities toward suppliers.

Outsourcing is _____.

Discuss six issues that make global value chains more difficult to manage than small domestic value chains.

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

Explain the notion of value chain integration.

The operational structure of a value chain deals with the _____.

In break-even analysis, whenever the anticipated volume is greater than the break-even quantity, the firm should not outsource.

_____ is the process of managing information, physical goods, and services to ensure their availability at the right place, at the right time, at the right cost, at the right quantity, and with the highest attention to quality.

The success of the entire value chain depends on how it is designed and managed.

The focus of preproduction services is on gaining a customer while that of postproduction services is on keeping the customer.

Proportional increases or decreases in perceived benefits as well as price or cost result in no net change in value.

Explain a value proposition. Relate this to a customer benefits package of goods and services.

A competitively dominant customer experience is often called a _____.

_____ 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.

When break-even analysis is applied to an outsourcing decision, the break-even quantity is _____.

_____ refers to the process of acquiring and consolidating elements of a value chain to achieve more control.

In the context of the perspectives of a value chain, training and transportation delivery services for customers would be considered as _____.

_____ refers to acquiring capabilities toward suppliers.

Outsourcing is _____.

Discuss six issues that make global value chains more difficult to manage than small domestic value chains.

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