Deck 16: Operations Management: Putting It All Together

Question 1

Goods are produced independently of the consumer.

Answer 1

True

Question 2

Operations management is more concerned with efficiency than with effectiveness.

Answer 2

False

Question 3

Job shops are particularly well-suited for the mass production of highly standardized products.

Answer 3

False

Question 4

Many firms offer products that are combinations of goods and services.

Question 5

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 6

Goods are considered tangible,while services are considered intangible.

Question 7

A process is a set of activities or steps that combine inputs (such as labour,machinery,and equipment)to create a good or service.

Question 8

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

Question 9

Efficiency refers to the goal of using resources to create the greatest value.

Question 10

A local diner makes milkshakes the old-fashioned way: it hand-dips premium ice cream,adds fresh whole milk and other high-quality 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 effectiveness than on efficiency.

Question 11

Teddy 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 12

A job shop process is a production process designed to produce goods or services in relatively small batches using general-purpose machinery and equipment.

Question 13

Flow shop process is a production process that uses specialized machinery and equipment to produce a large quantity of a specific good very efficiently.

Question 14

Over 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 15

General Motors is an example of a manufacturer that produces only tangible goods.

Question 16

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 high-quality 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 is more concerned with effectiveness while Dave is more concerned with efficiency.

Question 17

Unlike manufactured goods which can be stored,services must be consumed when they are produced.

Question 18

Assembly lines are associated with the production of goods in large quantities.The goods are produced by using standardized methods.

Question 19

Effectiveness means producing output or achieving a goal at the lowest cost.

Question 20

Workers in job shops,using job shop processes,must be more versatile than workers in flow shops.

Question 21

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

Question 22

Immediate predecessors are activities in a project that are independent of any other project activities,and thus have no effect on when these other activities are performed.

Question 23

Manufacturing firms always find it desirable to hold large inventories of raw materials,components and parts,work-in-process,and finished goods.The goal is to always have these items available for immediate needs.

Question 24

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

Question 25

The Critical Path Method may illustrate several different paths that must be completed in order to complete the entire project.

Question 26

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

Question 27

Gantt charts are used to illustrate the mix of product lines a firm includes in its overall product mix.

Question 28

Although workers in less wealthy nations earn lower wages than Canadian workers,they also may have less education and experience,resulting in much lower productivity.

Question 29

A continuous flow process is most useful when a firm produces a variety of products in small batches and wants to switch quickly from the production of one good to another.

Question 30

The funds tied up in holding large inventories may have more profitable uses elsewhere in an organization.

Question 31

A project is usually inexpensive and involves the production of a standardized product in high volumes.

Question 32

One weakness of the Critical Path Method is that it doesn't provide a way to determine the sequence in which the activities involved in a project must be performed.

Question 33

The selection of the best type of process for a given type of production is influenced by the volume of production and the degree to which the output is standardized.

Question 34

Inventory consists of the stocks of finished items,works-in-process,parts,materials,or other resources held by an organization.

Question 35

A main difference between a continuous flow process activity and a project would include the fact that a project is usually very complex and the good or service is produced in very low volumes,whereas a continuous flow process activity is generally more standardized and the good or service is usually produced in high volumes.

Question 36

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 37

In a critical path network,those activities that aren't on the critical path typically have some slack,meaning that a delay in their completion is unlikely to create a delay in the completion of the overall project-as long as the delay isn't too great.

Question 38

A major reason Canadian businesses outsource operational activities overseas is to take advantage of the low cost of labour and other resources.

Question 39

The critical path in a project is the sequence of activities expected to take the longest to complete.Any delay in an activity on the critical path is likely to create a delay in completing the project.

Question 40

Wages earned by workers in the nation of Ruritania are only a third as high as the wages paid to Canadian workers.This clearly means that Canadian firms that outsource production to Ruritania will enjoy much lower costs of production.

Question 41

Automation replaces the direct human operation of machinery,but it has no impact on human control.

Question 42

Computer-integrated manufacturing (CIM)takes the electronic design for a product and creates the programmed instructions that robots must follow to produce that product as efficiently as possible.

Question 43

Computer-aided design/computer-aided manufacturing (CAD/CAM)is a combination of software that is used to design output and send instructions to automated equipment to perform the steps needed to produce this output.

Question 44

Outsourcing is essentially the opposite of vertical integration.

Question 45

Vertical integration means performing functions in a supply chain internally rather than having them outsourced.

Question 46

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

Question 47

The Stock N Stuffer company produces small,inexpensive toys and novelties that are often used as stocking stuffers during the Christmas season.Almost half of all of the company's sales come 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 48

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

Question 49

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

Question 50

Computer-aided manufacturing (CAM)is software that enables users to test,analyze,and optimize their designs.This type of software frequently allows engineers to catch design flaws before production.

Question 51

John Stevens is a design engineer who uses 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 computer-integrated manufacturing software.

Question 52

Computer-aided engineering (CAE)software enables users to test,analyze,and optimize their designs.

Question 53

Enterprise resource planning (ERP)is a software-based approach to integrating an organization's systems in order to improve communication and coordination among all departments and operating units.The newest versions of ERP extend this coordination to other organizations within the supply chain.

Question 54

In recent years the trend has been to rely less on outsourcing.

Question 55

Computer-aided design (CAD)software provides powerful drawing and drafting tools that enable users to create and edit blueprints and design drawings quickly and easily.

Question 56

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

Question 57

Some hospitals now use robots to allow doctors to make rounds when they are geographically distant from the hospital and unable to see the patient in person.

Question 58

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

Question 59

The supply chain involves the flow of materials and physical goods through all the organizations involved in the production and distribution of a product,as well as the services,financial resources,and information that may be involved with the process.

Question 60

The most common use of Gantt charts is to track the production progress of goods as they move along an assembly line.

Question 61

Value stream mapping is a project scheduling tool that illustrates all of the "paths" that represent sequences of activities that must be carried out in order for a project to be completed.

Question 62

Total quality management (TQM)is based on customer focus,building quality throughout the organization,empowering employees,pursuing a strategy of preventing mistakes,and demonstrating a long-term commitment to continuous improvement.

Question 63

Just-in-time production is a production system that emphasizes the production of goods to meet actual current demand,thus minimizing the need to hold inventories of finished goods and work-in-process at each stage of the supply chain.

Question 64

W.Edwards Deming taught that improving quality was a key to business success.

Question 65

The Deming Chain Reaction refers to the compounding of interest that explains why a dollar today is worth more than a dollar tomorrow.

Question 66

Value stream mapping is a tool that enables firms that want to implement lean production methods to identify sources of waste.

Question 67

Japanese firms embraced the ideas of quality experts such as W.Edwards Deming and revolutionized their manufacturing by adopting a strategy of a continuous quality improvement.

Question 68

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

Question 69

Factors that contribute to the cost and challenge of implementing ERP systems include the complexity of the software itself,the need to transfer data and information into the new system,and the challenge of training employees to use the system.

Question 70

Just-in-time production is called a pull system because actual orders "pull" the goods through the production process.

Question 71

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

Question 72

Although enterprise resource planning 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 73

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

Question 74

Total quality management (TQM)relies on a small cadre of quality experts to exert complete control over the organization's quality assurance efforts.

Question 75

The Baldrige National Quality Program is an international program to promote operational procedure guidelines for all business practices.

Question 76

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

Question 77

WestJet Airlines has been very successful at applying lean thinking to its operations.

Question 78

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

Question 79

Even though the implementation of a new ERP system can be daunting,most firms that adopt this type of system view the end result as a success.

Question 80

Lean production emphasizes the elimination of waste in all aspects of production processes.