Deck 17: Om: Putting It All Together Endnotes

Question 1

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Answer 1

True

Question 2

Over the past 50 years operations managers have realized it is more important to keep waste disposal costs low than it is to worry about being socially responsible.

Answer 2

False

Question 3

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Answer 3

False

Question 4

An assembly line is a production process in which a product moves from one station to another in a fixed sequence, with the machinery and workers at each station performing specialized tasks.

Question 5

When determining the type of process that works the best, and how these processes should be organized, one of the key considerations is the type of material used in that production.

Question 6

Tsehlef ­cceolnlutalainr elda ycoeullts g. roups different kinds of machinery and equipment into

Question 7

The competitive and global nature of markets today requires operation managers to change their views on the production and distribution of goods and services from a cost perspective to a value perspective.

Question 8

A local diner makes milkshakes the old fashioned way: it hand­dips premium ice cream, adds fresh whole milk and other high­quality ingredients, individually mixes the shake when ordered, and puts whipped cream and a cherry on top. The cost of this approach is higher than the cost of producing shakes at most fast food outlets, but the diner is famous among local patrons for having the best shakes in town. This diner clearly focuses more on efficiency than on effectiveness.

Question 9

Ron and Dave are business partners in a small manufacturing firm that makes special types of containers for fragile products. Ron is mainly concerned with product development and works directly with customers to design high­quality containers that meet their specific needs. Dave is more concerned with finding ways to produce the company's products at the lowest possible cost. In this partnership, Ron focuses on effectiveness, while Dave focuses on efficiency.

Question 10

To increase effectiveness in the long term, organizations must sacrifice efficiency.

Question 11

In the long run, a firm must choose to either be effective or efficient, because it is impossible to achieve both objectives consistently within the same organization .

Question 12

Operations management is more concerned with efficiency than with effectiveness.

Question 13

Fifty years ago, a common production strategy was to produce small quantities of customized goods that met the needs of specific customers.

Question 14

The selection of the best type of process for a given type of production is influenced by the volume of production and the degree of standardization of a product.

Question 15

Goods are considered tangible, while services are considered intangible.

Question 16

Operations managers attempt to use effective and efficient methods to produce the right goods and services in the right quantities and distribute them to the right customers at the right time.

Question 17

To create value effectively, operations managers must find a way to give customers more for their money and still make a profit.

Question 18

Adam oversees the activities in creating the right goods and services in the right quantities and distributing them to the right customers. His decisions have a major impact on both the revenue and costs his firm incurs, and therefore on the firm's financial success. This is an example of operations management.

Question 19

To operations managers, efficiency means using resources to create the greatest value.

Question 20

Operations management is concerned with all of the activities involved in creating value by producing goods and services and distributing them to customers.

Question 21

The critical path method is a project management tool that illustrates the relationships among the activities involved in completing a project and enables managers to identify those activities that are most likely to create delays in the completion of the overall project.

Question 22

Immediate predecessors are activities in a project that are independent of the other activities related to a project

Question 23

The Handy Cotton Candy store has a hard time estimating how much cotton candy to make each day. Lately, people have been buying a lot of cotton candy, and the store has run out of stock. Gerald, the owner, must consider making larger quantities of the product and holding the excess inventory to meet the surges in demand.

Question 24

CPM focuses on controlling inventory levels during the production process to ensure that enough parts and materials are available to support production.

Question 25

A value chain is a network of relationships that channels the flow of inputs, information, and financial resources through all of the processes directly or indirectly involved in producing goods and services and distributing them to customers.

Question 26

Complex supply chains exclusively focus on coordinating the flow of materials and physical goods. The corresponding flows of information, financial resources, and other services are coordinated by enterprise resource planning systems that are separate from the supply chain.

Question 27

Foreign outsourcing typically solves coordination problems.

Question 28

An organization's supply chain consists of the organization, activities, and processes involved in the physical flow of goods, from the raw materials stage to the final consumer.

Question 29

Firms that have significantly fluctuating demand, depending on the season may temporarily hold large inventories in order to smooth out their production schedules.

Question 30

Outsourcing is an arrangement with outside organizations to perform value chain functions that were previously performed internally.

Question 31

Activities that aren't on a critical path may add value, but they don't actually have to be performed in order to complete a project.

Question 32

Outsourcing requires vertical integration.

Question 33

Items in inventory don't generate revenue until they're sold.

Question 34

Vertical integration occurs when a firm attempts to gain more control over its value chain by either developing the ability to perform processes previously performed by other organizations in the chain or by acquiring those organizations.

Question 35

In a supply chain, the main focus is on the customer, while the value chain of an organization is more oriented toward traditional production relationships.

Question 36

One weakness of the critical path method is that it does not provide a way to determine the sequence in which the activities involved in a project must be
performed

Question 37

Vertical integration means outsourcing all activities in the value chain with the exception of the very basic things a firm wants to do itself.

Question 38

The Stock N Stuffer company produces small, inexpensive toys and novelties that are often used as stocking stuffers during Christmas season. Almost half of all of the company's sales comes between November 1st and December 24th. Stock N Stuffer is likely to find that it makes sense to build up relatively large inventories of goods over the summer and fall months.

Question 39

Manufacturing firms do not normally hold work in process or raw materials, but they do hold inventories of the finished goods they sell as well as basic supplies that they need.

Question 40

A common reason for offshoring by U.S. firms is to take advantage of the low cost of labor and other resources.

Question 41

Every year around Christmas time, Rebecca's fruit cake company finds it hard to keep up with customer orders. Rebecca's employees make plenty of fruit cakes, but they cannot package them fast enough for shipment. To increase production and meet her customers' demands, Rebecca can consider using some form of automation to package the fruit cakes.

Question 42

When selling intangible products, quality is based mainly on customer perceptions.

Question 43

Katy's clients have been complaining to her that it is difficult for them to find their way from one station to another in her allergy clinic. They find it hard to locate where they need to go next for testing, allergy shots, and medication refills. From a servicescape perspective, Katy should improve the functionality of her clinic.

Question 44

Jeremy's Burger Palace is usually packed around lunch and dinner. The customers have to wait for their turn to come and this leads to much frustration. One way Jeremy could better manage its peak hours is by increasing its business in the off­peak times by offering an early bird special for customers that visit during the hours of 2:00 and 4:00 p.m.

Question 45

Ashley, a marriage and family counselor, has decided to display her custom­ framed diploma prominently in her office. In a servicescape environment, this would be considered a functionality factor.

Question 46

Robots often perform tedious, dangerous, or dirty work that otherwise would be performed by reluctant employees.

Question 47

Although ERP software is very easy to implement, once it is in place, many organizations find it difficult to use because it makes data entry much more complex.

Question 48

Goods are produced independently of the consumer.

Question 49

Automation replaces human operation and control of machinery and equipment with some form of programmed control.

Question 50

A servicescape environment should take into consideration the following three factors: ambience; functionality; and signs, symbols, and artifacts.

Question 51

Intangible products must be consumed when they are produced.

Question 52

The use of web­based ERP services is an example of a relatively new trend in information technology known as cloud computing.

Question 53

Enterprise resource planning is a common information system that makes it easier for organizations throughout a value chain to communicate and coordinate their activities.

Question 54

A servicescape is an environment in which a customer and a raw material supplier interact with each other.

Question 55

A servicescape's ambience factor refers to the atmosphere a service provider creates for its customers.

Question 56

Enterprise resource planning is a type of supply chain management software.

Question 57

Enterprise resource planning is a software­based approach to integrating an organization's systems in order to improve communication and coordination among all departments and operating units.

Question 58

The use of robots in the manufacturing process has been slow since robots are inflexible and cannot be reprogrammed.

Question 59

ERP systems are complex, expensive, and difficult to implement.

Question 60

A benefit of implementing an enterprise resource planning system is that it is relatively simple to create and install.

Question 61

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Question 62

TQM relies on a small cadre of quality experts to exert complete control over an organization's quality assurance efforts.

Question 63

To participate in the Baldrige National Quality Program, firms are required to incorporate the Six Sigma quality program

Question 64

The type of process that integrates computer software with automated systems is known as CAD/CAM.

Question 65

ISO 9000 is a set of generic standards for quality management systems established by the International Organization for Standardization.

Question 66

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Question 67

Total quality management is based on customer focus, building quality throughout an organization, empowering employees, pursuing a strategy of preventing mistakes, and demonstrating a long­term commitment to continuous improvement.

Question 68

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Question 69

Computer­aided manufacturing is software that is primarily used by to test, analyze, and optimize designs. This type of software frequently allows engineers to catch design flaws before production.

Question 70

One advantage of computer­aided engineering is that it often allows engineers to catch design flaws before production occurs.

Question 71

CAE software enables users to test, analyze, and optimize their designs.

Question 72

The only standard in the ISO 9000 family that organizations can be certified for is ISO 9001.

Question 73

The costs of poor quality can include the possibility of a lawsuit.

Question 74

Computer­aided manufacturing takes an electronic design for a product and creates the programmed instructions that robots must follow to produce that product as efficiently as possible.

Question 75

John Stevens is a design engineer who uses a powerful software to test and analyze his designs before the company goes to the expense of producing any real prototypes. The kind of software John is using is called computer­aided engineering (CAE).

Question 76

One benefit of the Baldrige National Quality Program is that all participants receive between $1,000 and $6,000 to implement a company wide program to minimize harm to the environment.

Question 77

TQM focuses on correction rather than prevention.

Question 78

Six Sigma shares some characteristics with TQM, such as an organization­ wide focus on quality and a long­term commitment to continuous quality improvement.

Question 79

"Poka­yoke" is a Japanese term that refers to simple procedures built into the production process that prevent workers from making mistakes or allow them to catch and correct mistakes quickly if they do occur.

Question 80

CAD/CAM is software that is used to design output and send instructions to automated equipment to perform the steps needed to produce this output.