Deck 12: Operations Management and Control Systems

Question 1

Purchasing constitutes a key part of operations management for most small businesses.

Answer 1

True

Question 2

The operations process may be described as a conversion or transformation process.

Answer 2

True

Question 3

Good relationships with suppliers are important in any business,but their importance increases as business size increases.

Answer 3

False

Question 4

Outsourcing means combining purchase orders with those of other buyers to get a lower price.

Question 5

One hundred percent inspection of products prior to shipment to customers seldom eliminates all defective items.

Question 6

The decision to make or buy components is normally easy to reverse and should therefore be reviewed at least annually.

Question 7

Michael Hammer and James Champy are noted for their advocacy of reengineering.

Question 8

It is important that reengineering efforts take on the whole business at once to ensure efforts are coordinated.

Question 9

Measuring the weight of boxes of candy during a production process is an example of attribute inspection.

Question 10

Job shops in manufacturing typically have long production runs of unique items.

Question 11

Money is an input into the operations process.

Question 12

A small manufacturer's idle capacity is one argument for buying rather than making component parts.

Question 13

ISO 9000 was developed by the International Organization for Standardization in Geneva,Switzerland.

Question 14

The kanban and just-in-time inventory systems are similar in nature.

Question 15

The ultimate key factor to consider in selecting a supplier is the supplier's location.

Question 16

Attribute inspection is the determination of product acceptability on the basis of whether it will work.

Question 17

If management expertise is limited,a small firm should make rather than buy component parts.

Question 18

The economic order quantity is the purchase quantity that minimizes inventory carrying costs but maximizes order costs.

Question 19

Variable inspection is the determination of product acceptability on the basis of a variable such as weight or length.

Question 20

Acceptance sampling is the determination of product acceptability on the basis of a variable such as weight or length.

Question 21

Statistical process control is the use of statistical methods to assess quality during the operations process.

Question 22

In operations,outputs must always by tangible.

Question 23

Benchmarking is a quality system that requires each worker to maintain a quality record at his or her workplace.

Question 24

Companies using a perpetual inventory system shut down operations for a short period of time each year and count stock in order to know how much inventory is on hand.

Question 25

Lean manufacturing is a system of techniques designed to eliminate waste,ensure quality,and involve employees in designing and managing their work.

Question 26

Service establishments are exempt from setting quality standards because their product is intangible and thus cannot be measured.

Question 27

Employees within a quality circle meet on company time to identify and analyze work-related problems.

Question 28

Inventory management has the same general objective as purchasing: to have the right goods in the right quantities at the right time and place.

Question 29

Even a service firm has an operations process.

Question 30

Total quality management (TQM)refers specifically to management of the process of manufacturing.

Question 31

Outside experts are essential to the success of a reengineering effort.

Question 32

A quality circle is a group of inspectors who use statistical quality control methods.

Question 33

The ABC method of inventory analysis classifies inventory items into categories according to their value.

Question 34

In order to achieve quality in every area,commitment is required by everyone in the organization,from the top leadership to the assembly-line worker.

Question 35

The term quality may be defined as the manufacture of products that are free of defects.

Question 36

Poka-yoke is a reactive approach to quality management.

Question 37

Synchronous management focuses on improving one department at a time within an organization.

Question 38

Reengineering involves a radical change of business processes.

Question 39

One of the objectives of controlling inventory is to maximize sales by ensuring that there is a sufficient assortment of merchandise for display or delivery.

Question 40

In order to achieve total quality,each item must be inspected at each step of production.

Question 41

The three main considerations in deciding which supplier to use on a continuing basis are price,quality,and service.

Question 42

Having attended a management seminar,the owner of a small manufacturing firm is considering using a just-in-time inventory system.Which of the following may be a source of difficulty?

A) a lack of clout in dealing with suppliers
B) the absence of a retail inventory valuation method
C) allocating freed up inventory space
D) the small variety of products that are manufactured

Question 43

A control chart illustrates the limits for the process being controlled.

Question 44

Despite their differences,all operations processes are similar in that they change inputs into outputs.

Question 45

What is the primary purpose of reengineering and methods improvement?

A) to find the proper time required for each work activity
B) to establish the standard cost for each work activity
C) to increase the quality level of products
D) to improve a firm's productivity and competitive strength

Question 46

What approach to management was popularized by Michael Hammer and James Champy?

A) TQM
B) reengineering
C) continuous quality improvement
D) work sampling

Question 47

Mitzie finds that competition in the printing industry is at an all-time high.She feels that she must improve the quality inspection process in her plant.Ultimately,who will judge the quality of work from Mitzie's plant?

A) the customer
B) competitors
C) the business owner
D) quality standards organizations

Question 48

Martin purchased a four-colour press to transition his printing brokerage from a service to a manufacturing operation.What will the ink be classified as in the production process?

A) input
B) throughput
C) output
D) process

Question 49

Reengineering consists of work analysis through time and motion study.

Question 50

Amritpal is negotiating the cost of pink roses with her floral supplier.The demand for pink roses has increased and Amritpal wants a better price.What activity is Amritpal fulfilling in her business?

A) finance
B) administration
C) sales
D) operations

Question 51

Repetitive manufacturing is used for very short runs of the same custom items.

Question 52

Which of the following includes cleaning and lubricating equipment?

A) production control
B) supervising and follow-up
C) scheduling and dispatching
D) preventive maintenance

Question 53

Johnny's company supplies most Caribbean countries with Styrofoam cups and plates.He receives very large orders for the same size cups and plates.What type of manufacturing operation does Johnny have?

A) job shop
B) repetitive manufacturing
C) project manufacturing
D) flow processing

Question 54

What is the definition of quality?

A) the features and characteristics of a product or service that enable it to satisfy the needs of customers
B) a series of activities designed to create excellence in a product or service
C) a special rank designated for manufactured products that have fewer than one defect per hundred
D) the features of a manufactured product that enable it to satisfy the needs of customers

Question 55

Tracee is comparing actual results from production to targets to determine if corrective action is required.What is Tracee engaged in?

A) the operations plans
B) organizing production
C) the control cycle
D) the budgeting process

Question 56

Which statement best describes a company that uses the just-in-time inventory system?

A) It uses a two-bin inventory system.
B) It attempts to earn speculative profits on inventory.
C) It cuts inventory to the minimum.
D) It calculates the economic order quantity for each type of item.

Question 57

Concentration of purchases with one supplier has the advantage of facilitating prompt treatment of rush orders.

Question 58

Charanjit's company makes wooden window shutters.He receives a large order for vinyl shutters and outsources the work to another supplier.Why would Charangit buy these shutters rather than making them?

A) Buying them uses otherwise idle capacity.
B) Buying them requires less diversified managerial experience and skills.
C) Buying them protects a secret design.
D) Buying them permits closer coordination and control of total production operations.

Question 59

A small electrical wholesaler is attempting to reduce inventory levels and provide for rapid delivery of purchased items.To which supplier area should the wholesaler give special attention?

A) product quality
B) location
C) credit terms
D) price

Question 60

What is the advantage of diversifying sources of supply?

A) providing insurance against temporary disruption in supply
B) increasing savings through quantity discounts
C) facilitating prompt treatment of rush orders
D) enabling a firm to get financial aid from suppliers during times of financial stress

Question 61

The owner of a small printing plant wishes to begin a preventive maintenance program.What should she plan for?

A) contract with an outside firm for major repair services
B) hire millwrights
C) schedule lubrication of equipment
D) install process control charts

Question 62

An owner wants to always know the number of units in inventory.What inventory system should the owner use?

A) ABC
B) perpetual
C) physical
D) just-in-time

Question 63

What does the just-in-time inventory system attempt to accomplish?

A) improved product quality
B) minimized order returns
C) maximized purchase discounts
D) reduced inventory

Question 64

The owner of a motorcycle assembly company hires a consulting firm to implement a process that focuses on specifically eliminating waste in every facet of operations.What will the consulting firm implement?

A) JIT
B) lean manufacturing
C) synchronous management
D) reengineering

Question 65

What is used by repetitive operations in manufacturing?

A) general-purpose machines
B) job-order schedules
C) specialized equipment
D) short production runs

Question 66

What costs are calculating the economic order quantity intended to minimize?

A) total inventory
B) inventory order
C) inventory carrying
D) marginal

Question 67

In an attempt to keep inventory fresh,a small retailer is trying to minimize amounts kept in inventory.What is a potential weakness of this practice?

A) an increase in inventory carrying costs
B) stockouts lead to lost sales
C) an increase in the expense of using the retail inventory valuation method
D) an increase in inventory shrinkage through pilferage

Question 68

What is the term for an inspection plan that judges products as acceptable or unacceptable,good or bad?

A) 100 percent inspection plan
B) attribute inspection
C) variable inspection
D) inspection sampling plan

Question 69

Vanessa is the owner of a salon that provides hair styling,pedicures,and manicures for her clients.Which factor will affect Vanessa's customers' perception of her quality?

A) prices compared to the competition
B) speed of her service
C) care and concern
D) availability of hair products to purchase

Question 70

What is an advantage of making,rather than buying,component parts?

A) It uses otherwise idle capacity.
B) It simplifies the need for management expertise.
C) It reduces the risk of technological change and equipment obsolescence.
D) It permits concentration on the firm's specialty-its finished products.

Question 71

An auto restoration company mostly receives custom orders.The operations manager has created a job shop structure for the custom orders.Which of the following best describes this new structure?

A) short production runs
B) long production runs
C) special-purpose equipment
D) standardized products

Question 72

Parys runs a small company that has uncomplicated purchasing requirements.Each manager purchases supplies for their own departments.What kind of business does Parys most likely run?

A) bakery
B) accounting firm
C) used-car dealer
D) dress manufacturer

Question 73

Martin recently converted his printing brokerage company to a manufacturing process by purchasing a large press.What will Martin notice when he compares the manufacturing processes to the service operation?

A) Productivity is harder to measure in manufacturing.
B) It is harder to build inventory in manufacturing.
C) It is harder to establish quality standards in services.
D) Service operations involve less contact with customers.

Question 74

What type of maintenance includes inspections and other activities needed to prevent machine breakdowns?

A) corrective
B) full-scale
C) preventive
D) partial

Question 75

A company makes custom cabinets for large executive homes.The company sources materials from a number of suppliers to offer a wide range of cabinets and fixtures.Which factors are most relevant when the company sources components from suppliers?

A) price,quality,location,and services
B) price,promptness in paying bills,size,and reputation
C) price,market share,and honest sales representatives
D) price,discounts,warranty,and personnel policies

Question 76

An automobile dealer needs to know the number of each model car on hand at any time.What should the dealer use?

A) physical inventory system
B) just-in-time inventory system
C) ABC inventory system
D) perpetual inventory system

Question 77

Which of the following does quality management apply to?

A) manufacturing but not service businesses
B) service but not manufacturing businesses
C) both service and manufacturing businesses
D) neither service nor manufacturing businesses

Question 78

Akbar's company sells roses.It is customary for 20% of his entire annual sales to occur on Valentine's Day.What is most critical to Akbar's business to avoid stocking out on this day?

A) inventory control
B) outsourcing
C) reciprocal buying
D) taking purchase discounts

Question 79

Why must inventory be controlled?

A) to maximize the volume of overstock goods for display and delivery
B) to protect inventory against theft or deterioration
C) to reduce bookkeeping and purchase follow-up costs
D) to raise the level of customer service

Question 80

An artisan supply company's production manager feels that inventory is unbalanced,leading to delayed shipments to their better customers that order higher-end brushes and canvasses.The manager implements an ABC inventory method.How will the supplies be classified under this method?

A) by physical size
B) by value
C) by perishability
D) by age