Deck 8: Production and Operations Management and Supply Chain Management

Question 1

Production and operations management is only applicable in the manufacturing sector.

Answer 1

False

Question 2

Production and operations management helps the creation of goods and services.

Answer 2

True

Question 3

Manufacturing involves transforming materials and components to finished goods.

Answer 3

True

Question 4

Value added concept in POM is the difference between the input costs and the marketing costs.

Question 5

The four major characteristics of services are intangibility, inseparability, uniqueness, and variability.

Question 6

The service characteristic of inseparability implies that services are produced and consumed simultaneously.

Question 7

Globalization of POM has created a network of operations that is borderless.

Question 8

One of the key decisions to be made in international POM is selection of the president heading a company's international operations.

Question 9

Location of manufacturing plants is always closer to the upstream distribution process.

Question 10

Input cost such as wages and salaries is one of the factors that go in the selection of a location to put up a manufacturing facility.

Question 11

Government incentives offered to international companies to locate their facilities in their country include bonuses to foreign executives.

Question 12

Quality-of-life issues include cost of living, educational facilities, and crime rate.

Question 13

Process function within POM brings people, material, machines, and technology together.

Question 14

In vertical integration, a company acquires other companies to add to its product line.

Question 15

Result of adopting total quality management principles is obtaining 3.4 defects per million.

Question 16

TQM can be defined as an organization-wide approach to continuously improving the quality of an organization's product and processes that are important to the customers.

Question 17

Six Sigma is a disciplined methodology that uses data and statistical analysis to measure and improve a company's operational performance by identifying and eliminating defects.

Question 18

Layouts are arrangements of computer hardware and software to improve efficiency.

Question 19

The objective of lean manufacturing is to use inexpensive raw materials.

Question 20

Flexible manufacturing is a system that allows production facilities to respond more quickly to varying demand patterns.

Question 21

Manufacturing involves transformation of

A) Materials into various services
B) Data into information
C) Output into economic activity
D) Materials and components into tangible products

Question 22

The perishability characteristic of services implies that

A) They need to be stored before they perish
B) They have a short shelf life
C) They cannot be stored
D) They can be consumed at a much later date

Question 23

Some of the key functions in POM are

A) Process and layout
B) Distribution and selling
C) Legal and purchasing
D) Accounting and finance

Question 24

Locations for manufacturing facilities are selected on the basis of

A) Distance from the parent company
B) Worker productivity rates and local tax rates
C) The availability of food
D) The availability of hotel rooms for expatriates

Question 25

Host government incentives to attract foreign investments include

A) Tax relief
B) Low cost land
C) Lower utility rates
D) All of the above

Question 26

In selecting locations, international companies conduct various analytical studies such as

A) Television viewer studies
B) Environmental studies
C) Feasibility studies
D) Magazine readership studies

Question 27

A key decision to be made in process management is

A) Where to place the plant manager's office?
B) Where to place the cafeteria?
C) Where to place the storage area?
D) Where to place the machines?

Question 28

The process most often used by companies include

A) Batch based
B) Lot based
C) Inventory based
D) Capital based

Question 29

Outsourcing is used by companies to

A) Create jobs in developing countries
B) Reduce costs
C) Improve infrastructure facilities of developing countries
D) To win the favor of the host government

Question 30

Critical elements of TQM approach are

A) It is customer driven
B) It is employee driven
C) It focuses on continuous improvement
D) All of the above

Question 31

Six Sigma attempts to reduce defects to a maximum of

A) Six items per hundred
B) Six items per thousand
C) Approximately three items per ten thousand
D) Approximately three items per million

Question 32

The reason companies decide to make parts rather than buy them is to

A) Lower production cost and ensures adequate supply
B) Avoid supplier collusion and reduces distribution conflicts
C) Protect intellectual property rights and reduces labor strikes
D) None of the above

Question 33

To achieve lean manufacturing, companies have to

A) Invest in computers and buy new software
B) Hire skilled workers and produce smaller lot sizes
C) Invest in latest communication technology
D) Acquire one of their suppliers

Question 34

Maintaining inventories helps companies to

A) Sell at a lower price
B) Offer incentives to retailers
C) Offer sales promotions to customers
D) Balance the fluctuating demand patterns in the marketplace

Question 35

International companies maintain inventory to

A) Take advantage of volume discounts
B) Protect against bad weather conditions
C) Hedge against inflation
D) To fill the warehouse space

Question 36

Some of the costs associated with maintaining inventory include

A) Labor costs
B) Holding costs
C) Packaging costs
D) Distribution costs

Question 37

Opportunity cost is defined as

A) The cost of capital in a mix of loans and stocks
B) Interest costs for obtaining additional loans
C) Required returns that is foregone by choosing one investment over the other
D) None of the above

Question 38

Just-in-time system of inventory is defined as

A) Inventory systems in which orders for parts and materials are placed in advance
B) A system in which assembly workers transport parts and materials from storage
C) Transportation network in which all modes of shipment of goods are coordinated
D) Is a balanced system in which no inventory is maintained but materials and parts are brought in as required

Question 39

Just-in-time inventory systems assumes

A) The design of the product is optimal and that the machines are in good shape
B) The company has a large warehouse
C) The infrastructure in the country is efficient
D) The suppliers compete with each other on costs and quality

Question 40

The goals of JIT are

A) To increase sales
B) To increase profits
C) Avoid disruptions along the production process
D) None of the above

Question 41

Identify the key differences between the manufacturing sector and the service sector.

Question 42

Why is manufacturing of goods and services shifting to less industrialized countries?

Question 43

What are the critical factors used by international companies in deciding on a location?

Question 44

What is process management?

Question 45

Discuss vertical integration.

Question 46

What is TQM, and how is it applied?

Question 47

Why is the Six Sigma approach to quality useful to companies?

Question 48

Discuss make-or-buy decisions.

Question 49

What are some of the newer developments in manufacturing?

Question 50

Explain the just-in-time (JIT) system of inventory management.