Question 1

Which of the following is NOT a key dimension of service quality?

Accepted Answer

A)  Conformance 
B)  Tangibles 
C)  Empathy 
D)  Reliability 
A)  Conformance 
B)  Tangibles 
C)  Empathy 
D)  Reliability

Question 2

A retail store sells a popular cosmetic called Rochelle and the store manager is given $100,000 by the corporate office to improve store performance any way she thinks best. The "base case" information is a price of $30 per bottle, a contribution margin of 0.50, a customer defection rate of 17%, and a repurchase frequency of 3 times a year. If these improvement funds could be used to either (a) increase the contribution margin to 0.58 or (b) reduce the customer defection rate to 15% or (c) increase the repurchase frequency to 4 times per year, what is the best way to spend these improvement funds by answering the next two questions? (Assume all other variables remain at the base case level for each of the three improvement options.) VLC = P*CM*RF*BLC
You may want to use the table below to help organize your computations and answer.
 $\begin{array}{|c|c|c|c|c|}\hline \begin{array}{c}
\text { Price \& } \
\text { Improvement } \
\text { Option }
\end{array} & \begin{array}{c}
\text { Contribution } \
\text { Margin }
\end{array} & \begin{array}{c}
\text { Repurchase } \
\text { Frequency }
\end{array} & \text { Defection Rate }&\text { VLV in } \$ \
\hline \$ 30 \text { (base case) } & 0.50 & 3 & 17 \%& \
\hline \$ 30 \text { (option a) } & & & \
\hline \$ 30 \text { (option b) } & & & \
\hline \$ 30 \text { (option c) } & & &\\hline
\end{array}$
-The value of a loyal customer (VLC) for improvement option (a) is _____.

Accepted Answer

A)  less than or equal to $100 
B)  more than $100 and less than or equal to $200 
C)  more than $200 and less than or equal to $300 
D)  more than $300 and less than or equal to $400 
A)  less than or equal to $100 
B)  more than $100 and less than or equal to $200 
C)  more than $200 and less than or equal to $300 
D)  more than $300 and less than or equal to $400

Question 3

In the Service-Profit Chain model, which of the following is viewed as an external performance?

Accepted Answer

A)  Customer satisfaction 
B)  Volume flexibility 
C)  Cycle time 
D)  Employee productivity 
A)  Customer satisfaction 
B)  Volume flexibility 
C)  Cycle time 
D)  Employee productivity

Question 4

A retail store sells a popular cosmetic called Krypton, and the store manager is given $300,000 by the corporate office to improve store performance any way she thinks best. The "base case" information is a price of $30 per bottle, a contribution margin of 0.50, a customer defection rate of 20%, and a repurchase frequency of 4 times a year. If these improvement funds could be used to either (a) increase the contribution margin to 0.60 or (b) reduce the customer defection rate to 15% or (c) increase the repurchase frequency to 5 times per year, please answer the questions listed below. (Assume all other variables remain at the base case level for each of the three improvement options.)
a.What is the value of a loyal customer (VLC) for improvement option (a)?
b.What is the best way to use the $300,000 in improvement funds?

Accepted Answer

@#IMG-DLM& a.$360 (as seen in the table

Question 5

The value chain model is probably the dominant model for operations managers.

Accepted Answer

A) True 
 B)False

Question 6

A coffee shop's average transaction price is $4 and its contribution margin is 60 percent. A typical customer makes a purchase once a week or 52 times per year, and the management estimates the value of the loyal customer over the buying life cycle as $720. The customer defection rate is _____.

Accepted Answer

A)  less than or equal to 0.10 
B)  more than 0.10 and less than or equal to 0.15 
C)  more than 0.15 and less than or equal to 0.20 
D)  more than 0.20 and less than or equal to 0.25 
A)  less than or equal to 0.10 
B)  more than 0.10 and less than or equal to 0.15 
C)  more than 0.15 and less than or equal to 0.20 
D)  more than 0.20 and less than or equal to 0.25

Question 7

A coffee shop's average transaction price is $4, and the contribution margin is 60 percent. A typical customer makes a purchase once a week or 52 weeks per year, and the management estimates the value of the loyal customer over the buying life cycle as $520. The customer defection rate is _____.

Accepted Answer

A)  less than or equal to 0.10 
B)  more than 0.10 and less than or equal to 0.15 
C)  more than 0.15 and less than or equal to 0.20 
D)  more than 0.20 and less than or equal to 0.25 
A)  less than or equal to 0.10 
B)  more than 0.10 and less than or equal to 0.15 
C)  more than 0.15 and less than or equal to 0.20 
D)  more than 0.20 and less than or equal to 0.25

Question 8

Which of the following is an example of innovation and learning performance measure?

Accepted Answer

A)  Employee satisfaction 
B)  Earnings per share 
C)  Design flexibility 
D)  Product-related litigation 
A)  Employee satisfaction 
B)  Earnings per share 
C)  Design flexibility 
D)  Product-related litigation

Question 9

It takes fifteen minutes to complete a drilling operation using a lathe. The duration of this operation is known as _____ time.

Accepted Answer

A)  delay 
B)  queue 
C)  processing 
D)  standard 
A)  delay 
B)  queue 
C)  processing 
D)  standard

Question 10

A manufacturer of paint has two factories located in France and Spain and due to economic conditions must close one of them. The factory productivity data is as follows: $\begin{array}{lcc}&\text { Gallons of Paint } & \text { Total Costs } \
&\text { Produced }(1,000 \mathrm{~s}) & \text { (millions \$) }\
\text { Factory (Spain) } & 4,600,000 & \$ 5,250,000 \
\text { Factory (France) } & 4,000,000 & \$ 3,500,000
\end{array}$
Based on the productivity analysis of both the factories, which of the following statements is true?

Accepted Answer

A)  The factory in Spain is more productive than the factory in France. 
B)  Based solely on this productivity analysis, the factory in Spain must be closed. 
C)  Based solely on this productivity analysis, the factory in France must be closed. 
D)  Both factories have identical productivity levels. So, other criteria must be used to make this decision. 
A)  The factory in Spain is more productive than the factory in France. 
B)  Based solely on this productivity analysis, the factory in Spain must be closed. 
C)  Based solely on this productivity analysis, the factory in France must be closed. 
D)  Both factories have identical productivity levels. So, other criteria must be used to make this decision.

Question 11

Customer ratings of goods and services are quality performance measurements at an operational level.

Accepted Answer

A) True 
 B)False

Question 12

The triple bottom line (TBL or 3BL) refers to the measurement of sustainability in all of the following areas EXCEPT:

Accepted Answer

A)  economic area. 
B)  social area. 
C)  technological area. 
D)  environmental area. 
A)  economic area. 
B)  social area. 
C)  technological area. 
D)  environmental area.

Question 13

A retail store sells a popular cosmetic called Anya, and the store manager is given $100,000 by the corporate office to improve store performance any way she thinks best. The "base case" information is a price of $50 per bottle, a contribution margin of 0.50, a customer defection rate of 25%, and a repurchase frequency of 3 times a year. If these improvement funds could be used to either increase the contribution margin to 0.58 or reduce the customer defection rate to 15% or increase the repurchase frequency to 4 times per year, what is the best way to spend these funds? (Assume all other variables remain at the base case level for each improvement option.)
You may want to use the table below to help organize your computations and answer. $\begin{array}{|c|c|c|c|c|c|}\hline&&\text { Contribution }&\text { Repurchase }\
\text { Option } & \underline{\text { Price }}&\text { Margin }&\text { Frequency }& \text { Defection Rate } &\underline{\text { VLC in } \$}\
\hline \begin{array}{l}
\text { Base } \
\text { case }
\end{array} & \$ 50 & 0.50 & 3 & 25 \% \
\hline \text { (a) } & \$ 50 & 0.58 & 3 & 25 \% & \
\hline \text { (b) } & \$ 50 & 0.50 & 3 & 15 \% & \
\hline \text { (c) } & \$ 50 & 0.50 & 4 & 25 \% & \
\hline
\end{array}$ Note: BLC is 1/0.25 = 4 years and 1/0.15 = 6.67 years.

Accepted Answer

Value of a loyal customer = Revenue per

Question 14

_____ is the act of quantifying the performance of organizational units, goods and services, processes, people, and other business activities.

Accepted Answer

A)  Measurement 
B)  Forecasting 
C)  Fulfillment 
D)  Deployment 
A)  Measurement 
B)  Forecasting 
C)  Fulfillment 
D)  Deployment

Question 15

A guest at Raphael's Italian Restaurant generally spends $250 on a meal. Most of Raphael's customers are locals and eat at the restaurant twice a month. If the restaurant's margin is 50 percent, and a loyal customer is estimated to be worth $4000, determine the average defection rate.

Accepted Answer

VLC = P × CM × RF × BLC
4000 =

Question 16

Order fulfillment time is an example of productivity and operational efficiency measurement.

Accepted Answer

A) True 
 B)False

Question 17

Reliability is the ability to perform a service dependably and accurately.

Accepted Answer

A) True 
 B)False

Question 18

A manufacturer of business copier workstations has a 75 percent customer retention rate. Their accounting department estimates the incremental contribution to profit and overhead as 40 percent. Customers purchase the workstations every three years at an average cost of $1,500. The average value of a loyal customer is _____.

Accepted Answer

A)  more than $200 and less than or equal to $300 
B)  more than $300 and less than or equal to $400 
C)  more than $400 and less than or equal to $500 
D)  more than $500 
A)  more than $200 and less than or equal to $300 
B)  more than $300 and less than or equal to $400 
C)  more than $400 and less than or equal to $500 
D)  more than $500

Question 19

A guest at Raphael's Four-Star Italian Restaurant generally spends $150 on a meal. Most of Raphael's customers are from nearby localities and eat at the restaurant twice a month. If the restaurant's margin is 60 percent, and a loyal customer is estimated to be worth $4,000, determine the average defection rate.

Accepted Answer

A)  Less than or equal to 0.15 
B)  More than 0.15 and less than or equal to 0.20 
C)  More than 0.20 and less than or equal to 0.25 
D)  More than 0.25 
A)  Less than or equal to 0.15 
B)  More than 0.15 and less than or equal to 0.20 
C)  More than 0.20 and less than or equal to 0.25 
D)  More than 0.25

Question 20

Which one of the following statements is true of the models of organizational performance?

Accepted Answer

A)  The theory of the Service-Profit Chain model is that employees, through the service delivery system, create customer value and drive profitability. 
B)  The five performance perspectives of the balanced scorecard model are cost, time, quality, flexibility, and innovation. 
C)  The external perspective in the balanced scorecard model includes value-creation and support processes. 
D)  The strategic planning category of Baldrige model focuses on reviewing data and using the results to improve the performance of an organization. 
A)  The theory of the Service-Profit Chain model is that employees, through the service delivery system, create customer value and drive profitability. 
B)  The five performance perspectives of the balanced scorecard model are cost, time, quality, flexibility, and innovation. 
C)  The external perspective in the balanced scorecard model includes value-creation and support processes. 
D)  The strategic planning category of Baldrige model focuses on reviewing data and using the results to improve the performance of an organization.

Which of the following is NOT a key dimension of service quality?

In the Service-Profit Chain model, which of the following is viewed as an external performance?

The value chain model is probably the dominant model for operations managers.

A coffee shop's average transaction price is $4 and its contribution margin is 60 percent. A typical customer makes a purchase once a week or 52 times per year, and the management estimates the value of the loyal customer over the buying life cycle as $720. The customer defection rate is _____.

A coffee shop's average transaction price is $4, and the contribution margin is 60 percent. A typical customer makes a purchase once a week or 52 weeks per year, and the management estimates the value of the loyal customer over the buying life cycle as $520. The customer defection rate is _____.

Which of the following is an example of innovation and learning performance measure?

It takes fifteen minutes to complete a drilling operation using a lathe. The duration of this operation is known as _____ time.

Customer ratings of goods and services are quality performance measurements at an operational level.

The triple bottom line (TBL or 3BL) refers to the measurement of sustainability in all of the following areas EXCEPT:

_____ is the act of quantifying the performance of organizational units, goods and services, processes, people, and other business activities.

A guest at Raphael's Italian Restaurant generally spends $250 on a meal. Most of Raphael's customers are locals and eat at the restaurant twice a month. If the restaurant's margin is 50 percent, and a loyal customer is estimated to be worth $4000, determine the average defection rate.

Order fulfillment time is an example of productivity and operational efficiency measurement.

Reliability is the ability to perform a service dependably and accurately.

Which one of the following statements is true of the models of organizational performance?

Goods, Services, and Operations Management

Value Chains

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 3: Measuring Performance in Operations

Which of the following is NOT a key dimension of service quality?

In the Service-Profit Chain model, which of the following is viewed as an external performance?

The value chain model is probably the dominant model for operations managers.

A coffee shop's average transaction price is $4 and its contribution margin is 60 percent. A typical customer makes a purchase once a week or 52 times per year, and the management estimates the value of the loyal customer over the buying life cycle as $720. The customer defection rate is _____.

A coffee shop's average transaction price is $4, and the contribution margin is 60 percent. A typical customer makes a purchase once a week or 52 weeks per year, and the management estimates the value of the loyal customer over the buying life cycle as $520. The customer defection rate is _____.

Which of the following is an example of innovation and learning performance measure?

It takes fifteen minutes to complete a drilling operation using a lathe. The duration of this operation is known as _____ time.

Customer ratings of goods and services are quality performance measurements at an operational level.

The triple bottom line (TBL or 3BL) refers to the measurement of sustainability in all of the following areas EXCEPT:

_____ is the act of quantifying the performance of organizational units, goods and services, processes, people, and other business activities.

A guest at Raphael's Italian Restaurant generally spends $250 on a meal. Most of Raphael's customers are locals and eat at the restaurant twice a month. If the restaurant's margin is 50 percent, and a loyal customer is estimated to be worth $4000, determine the average defection rate.

Order fulfillment time is an example of productivity and operational efficiency measurement.

Reliability is the ability to perform a service dependably and accurately.

Which one of the following statements is true of the models of organizational performance?

Goods, Services, and Operations Management

Value Chains

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