Deck 8: Producing Quality Goods and Services

Question 1

Automation is characterized by low initial costs and high operating costs.

Answer 1

False

Question 2

Purchasing personnel should check the reliability of potential suppliers as well as suppliers' ability to meet delivery schedules.

Answer 2

True

Question 3

A service economy is one in which more effort is devoted to the production of goods than to the production of services.

Answer 3

False

Question 4

Since ISO 9000 quality standards were developed in Switzerland and affect only European firms, they don't apply to firms in the United States doing business in Europe.

Question 5

The major objective of quality control is to see that the organization produces no imperfect products.

Question 6

Capacity to a service business means something completely different from capacity to a production business.

Question 7

After World War II, the United States became the most productive country in the world.

Question 8

Purchasing personnel need not worry about a tiny difference in price when a large quantity is being bought.

Question 9

Productivity is a measure of output per unit of time per worker.

Question 10

Development and implementation are research activities undertaken to put new or existing knowledge to use in producing goods and services.

Question 11

Materials that will become part of a product during the conversion process are called raw materials.

Question 12

The goal of applied research is scientific advancement, without regard for its potential uses in the development of goods and services.

Question 13

The process of managing inventories to minimize both holding costs and potential stock-out costs is called inventory control.

Question 14

Form utility is created by converting raw materials, people, finances, and information into finished products.

Question 15

An assembly line at a Rubbermaid production facility is an example of a product layout.

Question 16

When a company successfully applies the just-in-time system, it minimizes its inventory storage costs.

Question 17

The major resource or resources that comprise the major input for a conversion process is often referred to as the focus.

Question 18

Quality control is the process of ensuring that materials are at the right place at the right time.

Question 19

Operations managers refer to the development of a plan for converting a product idea into an actual product as design planning.

Question 20

Robots are especially effective in carrying out creative tasks and assignments.

Question 21

Deciding on the product line involves balancing customer preferences and production requirements.

Question 22

Texaco uses a synthetic process when it refines crude oil.

Question 23

In supplier selection, the main idea is to find the highest-quality materials available.

Question 24

An analytical process breaks raw materials into different component parts.

Question 25

All the activities managers engage in to produce goods and services are called operations management.

Question 26

Quality circles have been used successfully to solve product defect problems in U.S. firms.

Question 27

The cost of running out of inventory is referred to as a holding cost.

Question 28

The objective of purchasing is to ensure that required materials are available when they are needed, in the proper amounts, and at minimum cost.

Question 29

A synthetic process combines raw materials or components to create a finished product.

Question 30

To regain market share, many American firms have lowered quality standards.

Question 31

A common planning horizon for operational plans is one year.

Question 32

A labor-intensive technology is one in which people must do most of the work.

Question 33

CAD stands for "computer-assisted development programs."

Question 34

A process layout is used when all products undergo the same operations in the same sequence.

Question 35

When compared to total quality management, Six Sigma often has more top-level support, more training for employees, and more teamwork.

Question 36

The responsibility for monitoring schedules to ensure that the work flows according to schedule is called follow-up.

Question 37

Product extension and refinement are expected results of a firm's development and implementation effort.

Question 38

According to management experts, increased government regulations have increased productivity among American workers.

Question 39

In order to compete in the global economy, U.S. firms have focused on increasing prices and improving the bottom-line profit amount.

Question 40

Since computers have been invented, materials requirements planning (MRP) is an outdated method of controlling inventory.

Question 41

When machines and equipment do most of the work in a manufacturing plant, it is referred to as a mechanical-intensive process.

Question 42

FMS (an abbreviation from this chapter) stands for Ford Motor Systems.

Question 43

When firms use inspection to monitor quality, only the finished product is examined for defects or potential problems.

Question 44

The term magnitude is used to describe the number of production processes that are used to produce products or services.

Question 45

Ford produces a wide variety of vehicles for individuals, businesses, manufacturers, and even schools. It also operates its own financing division, Ford Motor Acceptance Corp. It seems as if Ford

A)focuses on financial resources.
B)has a small magnitude.
C)has few production processes.
D)has many production processes.
E)is a service business.

Question 46

R&D activities aimed at disclosing new knowledge that has some potential use are known as

A)development and implementation.
B)applied research.
C)basic research.
D)product design.
E)design planning.

Question 47

When demand exceeds capacity, all of the following are reasonable options for the firm except

A)operating overtime hours to meet the demand.
B)starting a second or third shift.
C)subcontracting part of the work to other producers.
D)turning away some long-time customers.
E)expanding the capacity of the current facility.

Question 48

When different sequences of operations are required for creating small batches of different products, the type of design or layout used is the

A)product design.
B)product layout.
C)process layout.
D)quota layout.
E)output layout.

Question 49

When manufacturing a product like a computer or an automobile, planning takes place both before anything is produced and during the production process.

Question 50

All of the following options are available to a firm when capacity exceeds demand except to

A)lay off workers and shut down a portion of the facility.
B)operate on a shorter work week.
C)produce other goods or services.
D)sell unused facilities.
E)give away some of the products to selected customers.

Question 51

A team of engineers at General Motors is in charge of discovering new knowledge that can be used to make automobiles safer and more economical. These engineers are conducting

A)basic research.
B)research and development.
C)applied research.
D)product development.
E)research and implementation.

Question 52

The process of checking and testing products to ensure that they meet specifications is called

A)inventory control.
B)quality control.
C)quality inspection.
D)assurance.
E)check pointing.

Question 53

Chase is excited because he has just signed an agreement to purchase steel frames from a company at an excellent price and of very high quality. Once the contract begins, Chase eagerly awaits the first shipment, but it arrives a month behind the agreed-upon schedule, which slows down production at Chase's plant. Chase is furious because he realizes too late that this supplier

A)produces poor quality.
B)has bad credit terms.
C)is unreliable.
D)is not as inexpensive as he thought.
E)is unscheduled.

Question 54

In a shoe manufacturing plant, all shoes undergo the same operations in the same sequence. The shoes flow from one workstation to the next. This is a(n) ____ layout.

A)output
B)fixed-position
C)product
D)process
E)work-cell

Question 55

____ consist(s) of goods that are awaiting shipment to customers.

A)Raw-materials inventory
B)Work-in-process inventory
C)Finished-goods inventory
D)Supplies
E)Controlled inventory

Question 56

A business will usually choose to produce a new product in an existing facility if the cost is less than the cost of building a new one and the

A)type of technology needed for the new product is the same as the technology used by the existing products.
B)new product is an extension of an existing product line already produced in the factory.
C)human resources requirement for the new product and existing products can be satisfied with the facility's current employees.
D)product design is already completed.
E)existing factory has enough capacity to handle demand for the new product as well as the existing products.

Question 57

An auto repair shop is an example of a fixed-position layout.

Question 58

The amount of products or services an organization can produce in a given time is known as its capacity.

Question 59

Increased business investment in facilities and equipment usually results in lower employee productivity.

Question 60

FMS allows a company to combine ____ into a single system.

A)people and robotics
B)robots and digital personal computers
C)robotics and computer-integrated manufacturing
D)people and materials
E)robots and materials

Question 61

Companies that emphasize the importance of output inspection and quality circles are making an effort to improve

A)production standards.
B)operations control.
C)inventory control.
D)preventive maintenance.
E)quality control.

Question 62

A product layout is often referred to as a(n)

A)fixed-position layout.
B)output layout.
C)fixed capacity.
D)work-cell formation.
E)assembly line.

Question 63

A group of athletic shoes in a shoe factory are partially completed but still lack their innersoles and shoestrings. These shoes are classified as

A)work-in-process inventory.
B)materials inventory.
C)partially-controlled inventory.
D)finished-goods inventory.
E)ready for sale.

Question 64

____ is the arrangement of machinery, equipment, and personnel within a production facility.

A)Process layout
B)Product layout
C)Resource design
D)Plant layout
E)Design planning

Question 65

The number of customers that an Outback Steakhouse can serve at one time is the restaurant's

A)capacity.
B)product line.
C)scope.
D)size.
E)service refinement.

Question 66

An Illinois-based firm crushes materials to make gravel, its only product. The gravel company has

A)few production processes.
B)a focus on human resources.
C)very little utility.
D)many production processes.
E)a focus on financial resources.

Question 67

The executives and operations specialists for Hyster, an industrial equipment manufacturer, meet and determine the operational plan for the next two years. Two years is Hyster's

A)planning time frame.
B)goal outlook.
C)operational time plan.
D)span of operational management.
E)planning horizon.

Question 68

​_____ programs are used to develop products.

A)​Computer-aided design (CAD)
B)​Computer-aided manufacturing (CAM)
C)​Computer-integrated manufacturing (CIM)
D)​Computer-generated mistakes (CGM)

Question 69

A group of design engineers for Ford Motor Company spends two months of summer in the Arizona desert researching fuel performance at extreme temperatures. Ford uses the results of these tests to improve the quality of its automobiles. The group of engineers is engaging in

A)applied research.
B)product design.
C)basic research.
D)design planning.
E)horizon planning.

Question 70

Chevron and other refiners emphasize material resources in the conversion process. This implies that the material resources are the ____ of the conversion process.

A)catalyst
B)technology
C)output
D)impetus
E)focus

Question 71

Abbot Laboratory is embarking on a sophisticated technology that requires special skills. To address this problem, the company has decided to recruit employees with the appropriate skills rather than train the existing employees. This decision affects the work of the ____ manager.

A)financial
B)human resources
C)personnel
D)operations
E)marketing

Question 72

Which of the following statements is true?

A)ISO is Greek for "unacceptable."
B)ISO 9000 sets guidelines for quality management procedures.
C)ISO 9000 is accepted more in Japan than in the United States or Europe.
D)ISO 14000 is a system used to notify customers who have purchased unsafe products from manufacturers in foreign nations.
E)Although ISO 9000 was popular in the early 1990s, it has been replaced with ISO 20000.

Question 73

Jasper Electronics, Inc. (JEI)
Jasper Electronics, Inc., is an electronics manufacturer that creates circuits for various electronic products. Currently, the company has eight locations. It prides itself on its fast production process.
Ross is the newly appointed head operations manager of the company-and he is hoping to contribute to the company in a meaningful way. Ross has decided that there are several aspects of the production process that need to be changed or improved. One such aspect is quality control. He also wants to do some research to decide whether the company is moving in the right direction. In addition, he wishes to learn what other successful firms focus on so he can implement this knowledge at JEI.
Refer to Jasper Electronics, Inc. The plant layout at Jasper Electronics is mostly likely a

A)fixed position layout.
B)process layout.
C)product layout.
D)circular layout.
E)capacity layout.

Question 74

To ensure that work flows according to schedules, operations managers use a procedure called

A)cycle control.
B)equilibrium control.
C)inspection.
D)monitoring and evaluation.
E)follow-up.

Question 75

Which of the following is the objective of purchasing?

A)Routinely replenish the stock.
B)Ensure that required materials are available when they are needed, in the proper amounts, and at minimum cost.
C)Select suppliers.
D)Determine the facility's level of output.
E)Control inventory and product quality.

Question 76

The period of time over which an operational plan will be in effect is known as a

A)planning horizon.
B)fiscal period.
C)quality circle.
D)process layout.
E)research period.

Question 77

One primary difference between services and the production of goods is that services are consumed ____ whereas goods can be ____.

A)one at a time; consumed more than one at a time
B)immediately; stored
C)intangibly; tangible or intangible
D)later; consumed now
E)as they are produced; special ordered

Question 78

ABC Company
ABC Company is dedicated to operations control. It holds its suppliers to the highest standards, believing there is one best way to complete their tasks. ABC has even gone so far as to incorporate the Malcolm Baldrige National Quality Award criteria into its business. Following these criteria has allowed the company to grow from a small business to a large corporation. ABC plans on going international in the next couple of years to broaden its scop
Refer to ABC Company. Based on the information provided, what type of computer system is ABC Company using?

A)PERT
B)Continuous
C)CAD
D)CID
E)CPM

Question 79

Which of the following statements is false?

A)Quality and productivity have often been viewed as conflicting goals.
B)Over the years, a number of managers have realized that quality is an essential ingredient of the good or service being manufactured.
C)Quality has become an overall approach to doing business.
D)For most businesses, quality costs too much money.
E)Making products right the first time reduces many of the rejects and much of the rework.

Question 80

When Panasonic improves the sound, clarity, and ease of operation offered by its DVD player, it is

A)shortening its product life cycle.
B)extending its basic research.
C)redistributing its product.
D)refining its existing product.
E)reducing the DVD player's functionality.