Question 1

The service-profit chain model is based on understanding cause-and-effect linkages among performance measures.

Accepted Answer

A) True 
 B)False  True

Question 2

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 D

Question 3

Productivity is the

Accepted Answer

A) quality of output/quantity of input 
B) quality of input/quantity of output 
C) quantity of output/quantity of input 
D) quantity of input/quantity of output 
A) quality of output/quantity of input 
B) quality of input/quantity of output 
C) quantity of output/quantity of input 
D) quantity of input/quantity of output C

Question 4

Define interlinking. Why is this concept significant?

Accepted Answer

The quantitative modeling of cause-and-e

Question 5

A retail store sells a popular cosmetic called Devine and the store manager was 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 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 } 
 \underline{\text { Price } }&  \underline{\text { Contribution Marpin }} &  \underline{\text { Repwchase Frequency }} &  \underline{\text { Defection Rate }} &  \underline{\text { VLV in \$ }} \
 \$ 30 & 0.50 & 3 & 17 \% & \$ 264.69 \
 \$ 30 & 0.58 & 3 & 17 \% & \text { \$307.00 } \
\$30 & 0.50 & 3 & 15 \% & \text { \$300.00 } \
\$ 50 & 0.50 & 4 & 17 \% & \$ 352.92 \

\end{array}$$ Note: BLC is 1/.17 = 5.882 years and 1/.15 = 6.67 years.

Accepted Answer

Spend improvement do

Question 6

Explain the difference between design flexibility and volume flexibility.

Accepted Answer

Design flexibility is the ability to dev

Question 7

It costs 3 to 5 times more to keep an existing customer than to acquire a new customer.

Accepted Answer

A) True 
 B)False

Question 8

The number of patent applications and the number of improvement suggestions implemented relate best to which operational performance measure category?

Accepted Answer

A) financial 
B) customer and market 
C) innovation and learning 
D) productivity 
A) financial 
B) customer and market 
C) innovation and learning 
D) productivity

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Which one of the following statements is true with regard to the case study BankUSA: Credit Card Division?

Accepted Answer

A) Service upsets represented 17 percent of total transactions. 
B) Current performance reports indicate that the credit card division is meeting 99.2 percent of its service requirements. 
C) The correlation between customer satisfaction and operating costs was negatively correlated. 
D) The ultimate real) service level for this organization is internal performance metrics. 
A) Service upsets represented 17 percent of total transactions. 
B) Current performance reports indicate that the credit card division is meeting 99.2 percent of its service requirements. 
C) The correlation between customer satisfaction and operating costs was negatively correlated. 
D) The ultimate real) service level for this organization is internal performance metrics.

Question 11

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

\end{array}$$

Accepted Answer

Total inputs for 2009 = $296,000; total

Question 12

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} { c c  c  } 
 & \begin{array} { c } 
\text { Gallons of Paint } \
 \underline{\text { Produced in } 1,000s}\text { ) }
\end{array} & \begin{array} { l } 
\text { Resource Cost } \
 \underline{\text { per Gallon }}
\end{array} \
 \text { Factory France) } & 4,600 & \$ 4.25 \
 \text { Factory Spain) } & 3,900 & \$ 4.00 \

\end{array}$$

Accepted Answer

France: Productivity = .235 ga

Question 13

The quote "Happy employees create happy customers" best characterizes the Service-Profit Chain SPC) model.

Accepted Answer

A) True 
 B)False

Question 14

Explain the concepts underlying the service-profit chain model.

Accepted Answer

The model is based on a set of cause-and

Question 15

Why is measurement important?

Accepted Answer

Measurement provides an objective basis

Question 16

Speed is usually measured in clock time, whereas reliability of a time-based measure is usually measured in quantifying the variances in average performances or targets.

Accepted Answer

A) True 
 B)False

Question 17

The service-profit chain model

Accepted Answer

A) is based on a set of cause-and-effect linkages 
B) is only focused on internal performance 
C) was designed first for manufacturing organizations 
D) is focused on equipment utilization 
A) is based on a set of cause-and-effect linkages 
B) is only focused on internal performance 
C) was designed first for manufacturing organizations 
D) is focused on equipment utilization

Question 18

Of the seven categories of the Malcolm Baldrige National Quality Award criteria, which is least relevant to an operations manager?

Accepted Answer

A) Leadership 
B) Workforce Focus 
C) Customer Focus 
D) Measurement, Analysis and Knowledge Management 
A) Leadership 
B) Workforce Focus 
C) Customer Focus 
D) Measurement, Analysis and Knowledge Management

Question 19

Productivity is more closely related to effectiveness than efficiency.

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 3: Measuring Performance in Operations

The service-profit chain model is based on understanding cause-and-effect linkages among performance measures.

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

Productivity is the

Define interlinking. Why is this concept significant?

Explain the difference between design flexibility and volume flexibility.

It costs 3 to 5 times more to keep an existing customer than to acquire a new customer.

The number of patent applications and the number of improvement suggestions implemented relate best to which operational performance measure category?

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

Which one of the following statements is true with regard to the case study BankUSA: Credit Card Division?

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

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: Gallons of Paint ) Resource Cost Factory France) 4,600 \ 4.25 Factory Spain) 3,900 \ 4.00

The quote "Happy employees create happy customers" best characterizes the Service-Profit Chain SPC) model.

Explain the concepts underlying the service-profit chain model.

Why is measurement important?

Speed is usually measured in clock time, whereas reliability of a time-based measure is usually measured in quantifying the variances in average performances or targets.

The service-profit chain model

Of the seven categories of the Malcolm Baldrige National Quality Award criteria, which is least relevant to an operations manager?

Productivity is more closely related to effectiveness than efficiency.

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

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 Design

Supply Chain Design

Capacity Management

Forecasting and Demand Planning

Managing Inventories

Resource Management

Operations Scheduling and Sequencing

Quality Management

Quality Control and Spc

Lean Operating Systems

Project Management

Work Measurement, Learning Curves, and Standards

Queuing Analysis

Modeling Using Linear Programming

Simulation

Work Measurement, Learning Curves, and Standards

Filters