Question 1

The leadership category of the Baldrige Performance Excellence criteria includes how an organization addresses its public and community responsibilities.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following categories of the Malcolm Baldrige National Quality Award Program examines how an organization fulfills its ethical, legal, and societal responsibilities, and supports its key communities?

Accepted Answer

A)  Leadership 
B)  Strategic planning 
C)  Customer focus 
D)  Results 
A)  Leadership 
B)  Strategic planning 
C)  Customer focus 
D)  Results

Question 3

Productivity is the ratio of the input of a process to the output.

Accepted Answer

A) True 
 B)False

Question 4

A retail store sells a popular cosmetic called Devine 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 3 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 12% or (c) increase the repurchase frequency to 4 times per year, what is the best way to spend these improvement funds? (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 worksheet below to help organize your computations and answer of the question(s).
 $\begin{array}{|c|c|c|c|c|c|}\hline \begin{array}{c}
\text { Improvement } \
\text { Option }
\end{array} & \text { Price } & \begin{array}{c}
\text { Contribution } \
\text { Margin }
\end{array} & \begin{array}{l}
\text { Repurchase } \
\text { Frequency }
\end{array} & \begin{array}{l}
\text { Defection } \
\text { Rate }
\end{array} &\text { VLC in } \$\
\hline \text { Base case } & \$ 30 & 0.50 & 3 & 20 \%& \
\hline(\mathrm{a}) & \$ 30 & & & \
\hline \text { (b) } & \$ 30 & & & \
\hline \text { (c) } & \$ 30 & & & \
\hline
\end{array}$
-Which of the following is the best way to use the $300,000 in improvement funds?

Accepted Answer

A)  Do nothing (stay with base case). 
B)  Improve option (a). 
C)  Improve option (b). 
D)  Improve option (c). 
A)  Do nothing (stay with base case). 
B)  Improve option (a). 
C)  Improve option (b). 
D)  Improve option (c).

Question 5

Return on assets is normally classified as a productivity measure at an organizational level.

Accepted Answer

A) True 
 B)False

Question 6

Employee satisfaction and employee turnover are examples of flexibility measures at an organizational level.

Accepted Answer

A) True 
 B)False

Question 7

_____ measures the degree to which the output of a process meets customer requirements.

Accepted Answer

A)  Frequency 
B)  Depreciation 
C)  Variability 
D)  Quality 
A)  Frequency 
B)  Depreciation 
C)  Variability 
D)  Quality

Question 8

Design flexibility is the ability to respond quickly to changes in the volume and type of demand.

Accepted Answer

A) True 
 B)False

Question 9

A Pelton turbine manufacturer currently has a 20 percent customer defection rate. Their accounting department estimates the incremental contribution to profit and overhead as 40 percent. Customers purchase computers every four years at an average cost of $2,000. In an effort to reduce the defection rate, the company is improving both the quality of its computers and its post-sale service. Determine the increase in the average value of a loyal customer if the defection rate drops to 10 percent.

Accepted Answer

Current VLC = P × CM × RF × BLC
VLC = (2

Question 10

Which of the following statements on organizational performance measures is FALSE?

Accepted Answer

A)  The five dimensions to assess service quality are empathy, assurance, responsiveness, reliability, and tangibles. 
B)  Learning refers to the ability to create new and unique goods and services that delight customers and create competitive advantage. 
C)  The two types of performance measures related to time are the speed of doing something and the variability of a process. 
D)  Flexibility is the ability to adapt quickly and effectively to changing requirements. 
A)  The five dimensions to assess service quality are empathy, assurance, responsiveness, reliability, and tangibles. 
B)  Learning refers to the ability to create new and unique goods and services that delight customers and create competitive advantage. 
C)  The two types of performance measures related to time are the speed of doing something and the variability of a process. 
D)  Flexibility is the ability to adapt quickly and effectively to changing requirements.

Question 11

The customer defection rate is expressed as 1/customer retention rate.

Accepted Answer

A) True 
 B)False

Question 12

Dell's ability to provide a wide range of customized computer hardware to accommodate customers' needs best describes _____.

Accepted Answer

A)  volume flexibility 
B)  design flexibility 
C)  cycle time 
D)  queue time 
A)  volume flexibility 
B)  design flexibility 
C)  cycle time 
D)  queue time

Question 13

The five dimensions of service quality measurement pertain to behavioral characteristics, which are easier to measure than physical and technical characteristics.

Accepted Answer

A) True 
 B)False

Question 14

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.
 $\begin{array}{|c|c|c|c|c|}\hline \begin{array}{c}
\text { Price \& } \
\text { Improvement } \
\text { Option }
\end{array} & \begin{array}{c}
\text { Contribution } \
\text { Margin }
\end{array} & \begin{array}{c}
\text { Repurchase } \
\text { Frequency }
\end{array} & \text { Defection Rate }&\text { VLV in } \$ \
\hline \$ 30 \text { (base case) } & 0.50 & 3 & 17 \%& \
\hline \$ 30 \text { (option a) } & & & \
\hline \$ 30 \text { (option b) } & & & \
\hline \$ 30 \text { (option c) } & & &\\hline
\end{array}$
-Which of the following is the best way to use the $100,000 in improvement funds?

Accepted Answer

A)  Do nothing (stay with base case). 
B)  Improve option (a)-increase the contribution margin to 0.58. 
C)  Improve option (b)-reduce the defection rate to 15%. 
D)  Improve option (c)-increase the repurchase frequency to 4. 
E)  Two improvement options have equal VLC dollars, so split the funds between the two tied improvement options. 
A)  Do nothing (stay with base case). 
B)  Improve option (a)-increase the contribution margin to 0.58. 
C)  Improve option (b)-reduce the defection rate to 15%. 
D)  Improve option (c)-increase the repurchase frequency to 4. 
E)  Two improvement options have equal VLC dollars, so split the funds between the two tied improvement options.

Question 15

Airline revenue per passenger mile and hotel revenue per full-time employee are examples of _____.

Accepted Answer

A)  reliability 
B)  value of a loyal customer 
C)  sustainability 
D)  productivity 
A)  reliability 
B)  value of a loyal customer 
C)  sustainability 
D)  productivity

Question 16

Quality measures the degree to which the output of a process conforms to the management's expectations and requirements.

Accepted Answer

A) True 
 B)False

Question 17

Using the information provided in the table below, the percentage change in productivity from 2009 to 2010 is _____. $\begin{array}{|l|l|l|l|}\hline & & \underline{2009} & \underline{2010} \
\hline \text { OUTPUTS } & & & \
\hline & \text { Units } & 110,000 & 150,000 \
\hline \text { INPUTS } & & & \
\hline & \text { Direct Labor Costs } & \$ 250,000 & \$ 310,000 \
\hline & \text { Energy Cost } & \$ 6,000 & \$ 5,800 \
\hline & \text { Raw Material Cost } & \$ 40,000 & \$ 42,000\\hline 
\end{array}$

Accepted Answer

A)  less than or equal to 10% 
B)  more than 10% and less than or equal to 15% 
C)  more than 15% and less than or equal to 20% 
D)  more than 20% and less than or equal to 25% 
A)  less than or equal to 10% 
B)  more than 10% and less than or equal to 15% 
C)  more than 15% and less than or equal to 20% 
D)  more than 20% and less than or equal to 25%

Question 18

Queue time is a fancy term for service time variance.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is a quality performance measure at an operational level?

Accepted Answer

A)  Customer ratings of goods and services 
B)  Customer retention 
C)  Service representative courtesy 
D)  Product recalls 
A)  Customer ratings of goods and services 
B)  Customer retention 
C)  Service representative courtesy 
D)  Product recalls

Question 20

Service measures should be closely linked to customer satisfaction so that they can form the basis for improvement efforts.

Accepted Answer

A) True 
 B)False

The leadership category of the Baldrige Performance Excellence criteria includes how an organization addresses its public and community responsibilities.

Which of the following categories of the Malcolm Baldrige National Quality Award Program examines how an organization fulfills its ethical, legal, and societal responsibilities, and supports its key communities?

Productivity is the ratio of the input of a process to the output.

Return on assets is normally classified as a productivity measure at an organizational level.

Employee satisfaction and employee turnover are examples of flexibility measures at an organizational level.

_____ measures the degree to which the output of a process meets customer requirements.

Design flexibility is the ability to respond quickly to changes in the volume and type of demand.

Which of the following statements on organizational performance measures is FALSE?

The customer defection rate is expressed as 1/customer retention rate.

Dell's ability to provide a wide range of customized computer hardware to accommodate customers' needs best describes _____.

The five dimensions of service quality measurement pertain to behavioral characteristics, which are easier to measure than physical and technical characteristics.

Airline revenue per passenger mile and hotel revenue per full-time employee are examples of _____.

Quality measures the degree to which the output of a process conforms to the management's expectations and requirements.

Using the information provided in the table below, the percentage change in productivity from 2009 to 2010 is _____. OUTPUTS Units 110,000 150,000 INPUTS Direct Labor Costs \ 250,000 \ 310,000 Energy Cost \ 6,000 \ 5,800 Raw Material Cost \ 40,000 \ 42,000

Queue time is a fancy term for service time variance.

Which of the following is a quality performance measure at an operational level?

Service measures should be closely linked to customer satisfaction so that they can form the basis for improvement efforts.

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

The leadership category of the Baldrige Performance Excellence criteria includes how an organization addresses its public and community responsibilities.

Which of the following categories of the Malcolm Baldrige National Quality Award Program examines how an organization fulfills its ethical, legal, and societal responsibilities, and supports its key communities?

Productivity is the ratio of the input of a process to the output.

Return on assets is normally classified as a productivity measure at an organizational level.

Employee satisfaction and employee turnover are examples of flexibility measures at an organizational level.

_____ measures the degree to which the output of a process meets customer requirements.

Design flexibility is the ability to respond quickly to changes in the volume and type of demand.

Which of the following statements on organizational performance measures is FALSE?

The customer defection rate is expressed as 1/customer retention rate.

Dell's ability to provide a wide range of customized computer hardware to accommodate customers' needs best describes _____.

The five dimensions of service quality measurement pertain to behavioral characteristics, which are easier to measure than physical and technical characteristics.

Airline revenue per passenger mile and hotel revenue per full-time employee are examples of _____.

Quality measures the degree to which the output of a process conforms to the management's expectations and requirements.

Using the information provided in the table below, the percentage change in productivity from 2009 to 2010 is _____. OUTPUTS Units 110,000 150,000 INPUTS Direct Labor Costs \ 250,000 \ 310,000 Energy Cost \ 6,000 \ 5,800 Raw Material Cost \ 40,000 \ 42,000

Queue time is a fancy term for service time variance.

Which of the following is a quality performance measure at an operational level?

Service measures should be closely linked to customer satisfaction so that they can form the basis for improvement efforts.

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