Deck 1: Introduction to Operations and Supply Chain Management

Question 1

Quantitative methods are tools available to operations managers to help make a decision but not a recommendation.

Answer 1

False

Question 2

In a decision making situation, the events that may occur in the future are known as states of nature.

Answer 2

True

Question 3

When probabilities are assigned to states of nature, the situation is referred to as decision making under uncertainty.

Answer 3

False

Question 4

A sequential decision tree is a graphical method for analyzing decision situations that require a sequence of decisions over time.

Question 5

A family business is considering making an investment in its manufacturing operation. Three decisions are under consideration: (1) a large investment; (2) a medium investment; and (3) a small investment. The business believes that there are three possible future outcomes for its product: (1) increasing demand; (2) stable demand; and (3) decreasing demand. The following payoff table describes the decision situation: The best decision for the business using the maximax criterion would be to

A) make the large investment.
B) make the medium investment.
C) make the small investment.
D) choose increasing demand.

Question 6

The LaPlace criterion is a decision criterion in which each state of nature is weighted equally.

Question 7

A decision criterion that results in the maximum of the minimum payoffs is called a maximin criterion.

Question 8

Decision analysis is a quantitative technique supporting decision making with uncertainty.

Question 9

A family business is considering making an investment in its manufacturing operation. Three decisions are under consideration: (1) a large investment; (2) a medium investment; and (3) a small investment. The business believes that there are three possible future outcomes for its product: (1) increasing demand; (2) stable demand; and (3) decreasing demand. The following payoff table describes the decision situation: The best decision for the business using the Hurwicz criterion with a coefficient of optimism equal to 0.80 would be to

A) make the large investment.
B) make the medium investment.
C) make the small investment.
D) choose stable demand.

Question 10

The maximum value of perfect information to the decision maker is known as

A) the expected value of perfect information.
B) the expected value of imperfect information.
C) the minimum of the minimax regret.
D) none of the above.

Question 11

When probabilities can be assigned to the occurrence of states of nature in the future, the situation is referred to as

A) decision making under risk.
B) decision making under certainty.
C) decision making under uncertainty.
D) none of the above.

Question 12

A family business is considering making an investment in its manufacturing operation. Three decisions are under consideration: (1) a large investment; (2) a medium investment; and (3) a small investment. The business believes that there are three possible future outcomes for its product: (1) increasing demand; (2) stable demand; and (3) decreasing demand. The following payoff table describes the decision situation: The best decision for the business using the maximin criterion would be to

A) make the large investment.
B) make the medium investment.
C) make the small investment.
D) choose stable demand.

Question 13

Which of the following techniques is the most widely used decision-making criterion under risk?

A) maximax criterion
B) minimax regret criterion
C) expected value criterion
D) Hurwicz criterion

Question 14

The outcome of a decision in referred to as a payoff.

Question 15

A family business is considering making an investment in its manufacturing operation. Three decisions are under consideration: (1) a large investment; (2) a medium investment; and (3) a small investment. The business believes that there are three possible future outcomes for its product: (1) increasing demand; (2) stable demand; and (3) decreasing demand. The following payoff table describes the decision situation: The best decision for the business using the minimax regret decision criterion would be to

A) make the large investment.
B) make the medium investment.
C) make the small investment.
D) choose decreasing demand.

Question 16

The most widely used decision-making criterion for situations with risk is expected value.

Question 17

A family business is considering making an investment in its manufacturing operation. Three decisions are under consideration: (1) a large investment; (2) a medium investment; and (3) a small investment. The business believes that there are three possible future outcomes for its product: (1) increasing demand; (2) stable demand; and (3) decreasing demand. The following payoff table describes the decision situation: The best decision for the business using the equal likelihood criterion would be to

A) make the large investment.
B) make the medium investment.
C) make the small investment.
D) choose increasing demand.

Question 18

A decision criterion in which the decision payoffs are weighted by a coefficient of optimism is known as the Hurwicz criterion.

Question 19

Quantitative methods are tools available to operations managers to help make a decision or recommendation.

Question 20

A payoff table is a quantitative technique supporting decision making under uncertainty.

Question 21

A family business is considering making an investment in its manufacturing operation. Three decisions are under consideration: (1) a large investment; (2) a medium investment; and (3) a small investment. The business believes that there are three possible future outcomes for its product: (1) increasing demand; (2) stable demand; and (3) decreasing demand. The business believes that the probability for increasing, stable and decreasing product demand are 0.4, 0.5, and 0.1, respectively. The following payoff table describes the decision situation: The expected value for the small investment decision is

A) $540,000.
B) $400,000.
C) $330,000.
D) $165,000.

Question 22

A small parts manufacturer has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand, with probabilities of 0.6 and 0.4, respectively. The following payoff table describes the company's decision situation: The expected value for the expand facilities decision is

A) $250,000.
B) $160,000.
C) $700,000.
D) $1,200,000.

Question 23

A family business is considering making an investment in its manufacturing operation. Three decisions are under consideration: (1) a large investment; (2) a medium investment; and (3) a small investment. The business believes that there are three possible future outcomes for its product: (1) increasing demand; (2) stable demand; and (3) decreasing demand. The business believes that the probability for increasing, stable and decreasing product demand are 0.4, 0.5, and 0.1, respectively. The following payoff table describes the decision situation: The expected value for the large investment decision is

A) $700,000.
B) $540,000.
C) $330,000.
D) $165,000.

Question 24

A family business is considering making an investment in its manufacturing operation. Three decisions are under consideration: (1) a large investment; (2) a medium investment; and (3) a small investment. The business believes that there are three possible future outcomes for its product: (1) increasing demand; (2) stable demand; and (3) decreasing demand. The business believes that the probability for increasing, stable and decreasing product demand are 0.4, 0.5, and 0.1, respectively. The following payoff table describes the decision situation: The expected value of perfect information for the family business is

A) $602,500.
B) $540,000.
C) $62,500.
D) $25,000.

Question 25

If payoffs are costs rather than profits, then

A) using any quantitative decision making tools is not possible at all.
B) it is necessary to find more financial data of the company to determine the profits.
C) the tools have to be adjusted so that a profit maximization method becomes a cost minimization method, for example.
D) none of the above.

Question 26

A small parts manufacturer has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand. The following payoff table describes the company's decision situation: The value of the Hurwicz decision criterion for subcontract production when the coefficient of optimism is 0.30 is

A) $92,500.
B) $182,500.
C) $250,000.
D) $275,000.

Question 27

A small parts manufacturer has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand. The following payoff table describes the company's decision situation: The best decision for the manufacturer using the equal likelihood criterion is to

A) expand facilities.
B) acquire competitor.
C) subcontract production.
D) select high demand.

Question 28

What is decision analysis?

Question 29

A small parts manufacturer has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand. The following payoff table describes the company's decision situation: The regret that is associated with the decision to acquire competitor when demand is low is

A) $0.
B) $525,000.
C) $1,250,000.
D) $1,275,000.

Question 30

A small parts manufacturer has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand, with probabilities of 0.6 and 0.4, respectively. The following payoff table describes the company's decision situation: The best decision according to the expected value criterion is

A) acquire competitor.
B) expand facilities.
C) subcontract production.
D) high demand.

Question 31

A small parts manufacturer has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand, with probabilities of 0.6 and 0.4, respectively. The following payoff table describes the company's decision situation: The expected value of perfect information for the small parts manufacturer is

A) $1,210,000.
B) $700,000.
C) $510,000.
D) $312,500.

Question 32

A small parts manufacturer has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand, with probabilities of 0.6 and 0.4, respectively. The following payoff table describes the company's decision situation: The expected value for the subcontract production decision is

A) $250,000.
B) $160,000.
C) $700,000.
D) $1,200,000.

Question 33

A small parts manufacturer has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand. The following payoff table describes the company's decision situation: The best decision for the manufacturer using the maximin decision criterion is to

A) expand facilities.
B) acquire competitor.
C) subcontract production.
D) select high demand.

Question 34

Describe what the operations function is and how it relates to other business functions.

Question 35

A small parts manufacturer has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand, with probabilities of 0.6 and 0.4, respectively. The following payoff table describes the company's decision situation: The expected value for the acquire competitor decision is

A) $250,000.
B) $160,000.
C) $700,000.
D) $1,200,000.

Question 36

A small parts manufacturer has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand. The following payoff table describes the company's decision situation: The best decision for the manufacturer using the maximax decision criterion is to

A) expand facilities.
B) acquire competitor.
C) subcontract production.
D) select high demand.

Question 37

A family business is considering making an investment in its manufacturing operation. Three decisions are under consideration: (1) a large investment; (2) a medium investment; and (3) a small investment. The business believes that there are three possible future outcomes for its product: (1) increasing demand; (2) stable demand; and (3) decreasing demand. The business believes that the probability for increasing, stable and decreasing product demand are 0.4, 0.5, and 0.1, respectively. The following payoff table describes the decision situation: The expected value for the medium investment decision is

A) $600,000.
B) $540,000.
C) $330,000.
D) $165,000.

Question 38

A family business is considering making an investment in its manufacturing operation. Three decisions are under consideration: (1) a large investment; (2) a medium investment; and (3) a small investment. The business believes that there are three possible future outcomes for its product: (1) increasing demand; (2) stable demand; and (3) decreasing demand. The business believes that the probability for increasing, stable and decreasing product demand are 0.4, 0.5, and 0.1, respectively. The following payoff table describes the decision situation: If the expected value criterion is used then the best decision would be to

A) make the large investment.
B) make the medium investment.
C) make the small investment.
D) choose the stable demand.

Question 39

A small parts manufacturer has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand. The following payoff table describes the company's decision situation: The best decision for the manufacturer using the Hurwicz decision criterion with a coefficient of optimism equal to 0.3 is to

A) expand facilities.
B) acquire competitor.
C) subcontract production.
D) make no decision.

Question 40

A small parts manufacturer has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand. The following payoff table describes the company's decision situation: The best decision for the manufacturer using the minimax regret decision criterion is to

A) expand facilities.
B) acquire competitor.
C) subcontract production.
D) select high demand.

Question 41

Calculate and interpret productivity measures used for measuring competitiveness.

Question 42

A transformation process is a series of activities from supplier to customer that add value to a product or service.

Question 43

A warehouse operation is an example of a physical transformation process.

Question 44

Operations management is concerned only with the day-to-day operations of a firm's productive systems.

Question 45

The four primary functional areas of a firm are marketing, finance, operations, and human resources.

Question 46

Human resources management provides demand estimates that are used in production decisions.

Question 47

Discuss the key factors that have contributed to the evolution of operations and the initiation of supply chain management.

Question 48

The European Union requires that strict quality and environmental standards be met before companies can do business with member countries.

Question 49

A retail operation is an example of an exchange transformation process.

Question 50

The process of producing high-volume, standardized products for a large market is known as craft production.

Question 51

Globalization has affected both manufacturing and service operations.

Question 52

Operations research is concerned with the systematic analysis of work methods.

Question 53

Discuss the process of developing, deploying, and monitoring the success of an operations strategy.

Question 54

The set of activities that create and deliver products to the customer is known as the supply chain.

Question 55

Mass production refers to high-volume production of a standardized product.

Question 56

Operations management designs, operates, and improves productive systems.

Question 57

To be effective an operations manager needs an integrated view of business organizations.

Question 58

The systematic analysis of work methods is known as scientific management.

Question 59

The adaptation of mass production to emphasize efficiency, rather than quality is known as lean production.

Question 60

Discuss how and why businesses operate globally and the rolesand the roles China and India play in the current global market.

Question 61

Productivity increases enable a nation to raise its standard of living.

Question 62

China is reshaping the way firms compete globally.

Question 63

A major challenge and opportunity for many firms is the globalization of the supply chain.

Question 64

Order winners and order qualifiers change over time in response to the dynamics of changing market conditions.

Question 65

Canadian companies can become globally competitive by emphasizing the strategic importance of operations.

Question 66

A nation's productivity is unrelated to its standard of living.

Question 67

Globalization of the supply chain for many products has many pros and few, if any, cons.

Question 68

Ensuring good quality underlies all operational decisions.

Question 69

Positioning is a step in strategy formulation that compares core competencies and order winners.

Question 70

Core competencies tend to be processes and not products or technologies.

Question 71

Single factor productivity compares output to an individual input.

Question 72

Order qualifiers are the characteristics of a product that have to be satisfied just to be considered for purchase by a customer.

Question 73

Deployment is a step in strategy formulation that evaluates the alignment between core competencies and order winners.

Question 74

Emphasizing the strategic role of operations enhances the competitiveness of Canadian companies.

Question 75

Globalization requires that firms compete on cost and not quality, speed, or flexibility.

Question 76

Productivity is the most common measure of competitiveness.

Question 77

An order qualifier is a customer criterion that wins the order.

Question 78

Strategy formulation starts with determining a firm's order winners and order qualifiers.

Question 79

Two-thirds of today's businesses operate globally.

Question 80

Many companies now find it necessary to have some global presence to remain competitive.