Deck 9: Value-Chain Management: Functional Strategies for Competitive Advantage

Question 1

Higher product quality can increase efficiency and thereby increase operating costs.

Answer 1

False
Explanation: Higher product quality can increase efficiency and thereby lower operating costs and boost profits.

Question 2

Each functional activity along the chain adds value to the product when it lowers costs or gives the product differentiated qualities that increase the price a company can charge for it.

Answer 2

True
Explanation: Each functional activity along the chain adds value to the product when it lowers costs or gives the product differentiated qualities that increase the price a company can charge for it.

Question 3

A high quality,well-designed product will always be successful.

Answer 3

False
Explanation: Even the best-designed product can fail if the marketing function hasn't devised a careful plan to persuade people to buy it and try it out-or to make sure customers really want it.

Question 4

Providing high quality products creates a brand-name reputation for an organization's products.

Question 5

Quality is a concept that can be applied to manufacturing but not to service organizations.

Question 6

Successful innovation gives an organization something different about its products that can strengthen its competitive advantage.

Question 7

The materials management function controls the movement of physical materials from the procurement of inputs through production and to distribution and delivery to the customer.

Question 8

Dianna,a shift supervisor for RST Manufacturing,leads a crew that continually turns out high quality products.This translates into increased efficiency,lower operating costs and ultimately increased profits.

Question 9

Southwest's low-cost operating system focuses value chain management.

Question 10

The fewer the inputs required to produce a given output,the lower is the efficiency and the higher the cost of outputs.

Question 11

Managers know that the more desired product attributes a company's value chain builds into its products,the lower the price charged to the consumer.

Question 12

There are ten steps necessary to make a TQM control system work.

Question 13

Innovation means producing goods and services that have attributes-such as design,styling,performance,and reliability-that customers perceive as being superior to those found in competing products.

Question 14

TQM will do little to improve the performance of an organization unless all employees embrace it.

Question 15

Managers must seek to improve responsiveness to customers by offering a level of responsiveness to customers that causes the operating system to sustain a small loss.

Question 16

The term "value chain" refers to the idea that a company is a chain of functional activities that transforms inputs into an output of goods or services that customers value.

Question 17

The first step in a successful TQM program is to focus on the customer.

Question 18

Each functional activity along the chain adds value to the product by increasing costs that increase the price a company can charge for it.

Question 19

Good value chain management requires that marketing managers focus on defining their company's business in terms of the customer needs it is satisfying and not by the type of products it makes.

Question 20

One functional strategy managers can use to get close to customers and understand their needs is value chain management.

Question 21

Incremental product innovations are relatively rare;most managers' activities focus on quantum product innovations.

Question 22

Process reengineering involves the radical redesign the value chain to achieve dramatic improvements in critical measures of performance such as cost,quality,service,and speed.

Question 23

The goal of Six Sigma is to improve a company's quality to only six defects per million.

Question 24

The greater the input resources required to produce a given volume of output,the higher will be the efficiency of the operating system.

Question 25

By using self-managed teams,organizations can often realize a 30% or more increase in efficiency.

Question 26

A favorable outcome of flexible manufacturing is that a company is able to produce many more varieties of a product than before,in the same amount of time.

Question 27

Product development is the management of the value chain activities involved in bringing new or improved goods and services to the market.

Question 28

Art,the owner of Arts Electronics,calls every customer 10 days after their purchase to ensure they are satisfied with home electronics purchase.Art is using the ______ function which can create a perception of superior value by supporting customers after they have purchased the product.

A)Production
B)Materials management
C)Service
D)Marketing
E)Information systems

Question 29

Fast inventory turnover was not a factor influencing Wal-Mart's competitive advantage in the retailing industry.

Question 30

The more steps required to assemble a product or provide a service,the fewer opportunities there are for making mistakes.

Question 31

Wal-Mart,the US retailing giant,has created the most efficient ________________ function in the retail industry by tightly controlling the flow of goods from its suppliers through its stores into the hands of customers.

A)Production
B)Materials management
C)Service
D)Marketing
E)Information systems

Question 32

All of the following are ways to create a competitive advantage EXCEPT:

A)Improve quality
B)Improve efficiency
C)Improve responsiveness to customers
D)Improve innovation
E)Improve effectiveness

Question 33

Output goals and targets need to only include numbers or quotas.

Question 34

Managers try to develop functional strategies that allow the organization's value chain to deliver to customers:

A)More product attributes at the same price
B)More product attributes at a higher price
C)Fewer product attributes at a lower price
D)Fewer product attributes at the same price
E)Same product attributes at the same price

Question 35

The development of a set of functional-level strategies to increase the performance of the operating system a company uses to transform inputs into finished goods and services is known as:

A)Research and development
B)TQM
C)Value chain management
D)Materials management
E)Efficiency management

Question 36

Through brand positioning and advertising,the __________ function can increase
The value that customers perceive to be contained in a company's product.

A)Production
B)Materials management
C)Service
D)Marketing
E)Information systems

Question 37

People often respond poorly to being given greater autonomy and responsibility,so the use of empowered self-managed teams often decreases productivity and efficiency.

Question 38

Incremental product innovation results in the development of new,often radically different,kinds of goods and services because of fundamental shifts in technology brought about by pioneering discoveries.

Question 39

Dan,the president of Missouri Bank,originates a loan for a customer.Dan is carrying out the ______ function.

A)Production
B)Materials management
C)Service
D)Marketing
E)Sales

Question 40

A(n)_________________ is the coordinated series or sequence of functional activities needed to transform inputs into finished goods or services.

A)Operating system
B)Factory layout
C)Organizational hierarchy
D)Value chain
E)Production function

Question 41

The goal of Six Sigma is to improve a company's quality to only ______ defects per million by systematically altering the way all the processes involved in value chain activities are performed.

A)Zero
B)Three
C)Six
D)Ten
E)Sixty

Question 42

In the TQM process,once a measure has been set for comparison,the next step is to:

A)Begin production
B)Focus on the customer
C)Design a marketing strategy
D)Set a challenging quality goal and create incentives for reaching that goal
E)Identify defects and trace them to their source

Question 43

According to TQM philosophy,the ________,not the ________,define what quality is.

A)Managers;customers
B)Customers;managers
C)Employees;managers
D)Managers;employees
E)Employees;customers

Question 44

Which of the following is NOT a reason to try to boost product quality?

A)To increase efficiency
B)To provide a higher quality product,for the same price,as the competition
C)To become more responsive to customers
D)To charge a higher price
E)To increase operating costs

Question 45

Managers must work with suppliers to get them to adopt a Total Quality Management system as well as __________ system.

A)CRM
B)A Six Sigma
C)Flexible manufacturing
D)JIT
E)MRP

Question 46

Apex Construction has teams of expert change agents known as green belts and black belts,to control problem-solving and train other employees.They are engaged in:

A)TQM
B)CRM
C)Six Sigma
D)JIT
E)Flexible manufacturing

Question 47

What is a major source of information about the causes of poor quality?

A)Quality reports
B)The customer
C)Employees
D)Managers
E)Stock prices

Question 48

One reason for Southwest's success is that it has pursued strategies that produce services that are:

A)Complex and require extensive employee training.
B)Universally accepted among all airlines in operation.
C)Uniquely tailored to satisfy the demands of its customers.
D)Continually in need of updating and upgrading.
E)Southwest's success has nothing to do with their strategies.

Question 49

The first step in a TQM control system is to:

A)Build organizational commitment to quality
B)Find ways to measure quality
C)Solicit input from employees
D)Focus on the customer
E)Design for ease of production

Question 50

To decrease product defects,materials managers must work closely with ______ to improve the quality of the parts.

A)Suppliers
B)The customer
C)Employees
D)Stockholders
E)Distributors

Question 51

Successful implementation of TQM requires substantial cooperation between:

A)Regulators and the organization
B)Customers and suppliers
C)Many different functions of an organization
D)The accounting and marketing functions
E)The production and service functions

Question 52

The stock of raw materials,inputs,and component parts that an organization has on hand at a particular time is called:

A)Storage
B)Inventory
C)Products
D)Stored components
E)Holdings

Question 53

Six Sigma shares with TQM its focus on improving value chain processes to increase:

A)Productivity
B)Quality
C)Innovation
D)Efficiency
E)Effectiveness

Question 54

Which of the following is NOT a challenge when focusing on the customer?

A)To identify what customers want from the good or service
B)To identify what the company actually provides
C)To identify the gap between what customers want and what they actually get
D)To formulate a plan for closing the quality gap
E)Identify what the employee contributes

Question 55

After adopting a TQM process,Gayle found ways to simplify the financial services her company offered which led to:

A)Less customer satisfaction
B)Fewer customer complaints
C)More employee satisfaction
D)More customer complaints
E)More employee complaints

Question 56

__________ means producing goods and services with superior design,features,reliability,and after-sales support.

A)Efficiency
B)Quality
C)Innovation
D)Flexibility
E)Responsiveness

Question 57

Managers try to develop functional strategies that allow the organization's value chain to deliver to customers:

A)Fewer product attributes at the same price
B)More product attributes at a higher price
C)Fewer product attributes at a lower price
D)Same product attributes at the same price
E)Same product attributes at a lower price

Question 58

Southwest's convenience comes from:

A)It has the quickest aircraft turnaround time in the industry
B)Its baggage handling process
C)Its large first class section
D)Its boarding procedure
E)Its scheduling multiple flights every day between its popular locations

Question 59

Higher product quality can:

A)Increase efficiency only
B)Lower operating costs only
C)Boost profits only
D)Increase efficiency,lower operating costs but not boost profits
E)Increase efficiency,lower operating costs and boost profits

Question 60

Total Quality Management (TQM)will do little to improve the performance of an organization unless ______ embrace it.

A)Suppliers
B)Managers
C)All employees
D)Customers
E)Stockholders

Question 61

It follows that if setup times for complex production equipment can be ______,so can setup costs,and efficiency will ______;that is,the time that plant and employees spend in actually producing something will ______.

A)Reduced;fall;decrease
B)Increased;fall;increase
C)Reduced;rise;decrease
D)Increased;rise;increase
E)Reduced;rise;increase

Question 62

The impact of information systems on productivity is ________ and potentially affects ______ aspects of the business.

A)Narrow;few
B)Wide ranging;all other
C)Narrow;all
D)Declining;only certain
E)Wide ranging;only certain

Question 63

The skills,know-how,experience,scientific knowledge,tools,machines,computers,and equipment used in the design,production and distribution of goods and services are called:

A)TQM
B)Innovation
C)Technology
D)Value chain management
E)Creativity

Question 64

The ______ the input resources required to produce a given volume of output,the ______ will be the efficiency of the operating system.

A)Greater;higher
B)Fewer;higher
C)Fewer;lower
D)Greater;lower
E)Larger;higher

Question 65

A strategy based on the use of IT to reduce the costs associated with the way services are delivered to customers is known as:

A)Facilities layout
B)Flexible manufacturing
C)Efficiency
D)Computer Integrated Manufacturing
E)Process layout

Question 66

The typical self-managed team consists of _________.

A)2-3 managers
B)1 manager and 10-12 employees
C)2-10 employees
D)15-30 employees
E)5-15 employees

Question 67

In a __________,machines are organized so that each operation needed to manufacture a product or process is performed at workstations arranged in a fixed sequence.

A)Process layout
B)Fixed-position layout
C)Facilities layout
D)Product layout
E)Flexible manufacturing layout

Question 68

Great cost savings can result from ______ inventory turnover and ______ inventory holding costs.

A)Increasing;reducing
B)Increasing;increasing
C)Decreasing;reducing
D)Decreasing;increasing
E)Stabilizing;raising

Question 69

___________ is a measure of the amount of inputs used to produce a given amount of outputs.

A)Efficiency
B)Quality
C)Labor productivity
D)Flexibility
E)Responsiveness

Question 70

A ___________ is a small-wheeled container used with a just-in-time inventory system to move component parts from suppliers to the assembly line.

A)Ketbull
B)Gurney
C)Conveyor belt
D)Kanban
E)Dolly

Question 71

______________ is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical measures of performance such as cost,quality,service,and speed.

A)Product reengineering
B)Research and development
C)Process reengineering
D)Flexible manufacturing
E)Efficiency monitoring

Question 72

Increasingly,self-managed teams are using ____________,in which different teams assemble each component part and then send those parts to a final assembly team.

A)Process layout
B)Fixed-position layout
C)Facilities layout
D)Product layout
E)Flexible manufacturing layout

Question 73

The use of empowered self-managed teams can increase productivity and efficiency because people often respond well to greater:

A)Authority and management
B)Autonomy and responsibility
C)Direction and control
D)Instruction and control
E)Authority and autonomy

Question 74

The development of new,often radically different kinds of goods and services is called:

A)Quantum process innovation
B)Quantum product innovation
C)Incremental product innovation
D)Incremental process innovation
E)Product development

Question 75

______________ aims at reducing the time required to set up production equipment.

A)Process manufacturing
B)Fixed-position manufacturing
C)Facilities manufacturing
D)Product manufacturing
E)Flexible manufacturing

Question 76

In a manufacturing company,a major source of costs always related to making a product is the costs associated with:

A)Setting up equipment
B)Finding qualified employees
C)Stockholders dividends
D)Small component parts
E)Office supplies

Question 77

Banks and financial service companies are finding that they can substantially reduce costs by moving customer accounts and support functions:

A)Online
B)Overseas
C)To vendors
D)To larger institutions
E)To customer service representatives

Question 78

By utilizing a JIT inventory system,__________ maintains the same service level as its competitors,but at a one-fourth the inventory holding cost,which is their major source of cost savings.

A)Wal-Mart
B)GE
C)Sears
D)Dell
E)Intel

Question 79

A strategy based on the use of IT to reduce the costs associated with the product assembly process is known as:

A)Facilities layout
B)Flexible manufacturing
C)Efficiency
D)Computer Integrated Manufacturing
E)Process layout

Question 80

Bob makes custom made furniture that is tailored to the needs of a different kind of customer.Which layout would best suit Bob's needs?

A)Process layout
B)Permanent-position layout
C)Facilities layout
D)Product layout
E)Flexible manufacturing layout