Deck 5: Technology and Operations Management

Question 1

According to the National Research Council, companies with computer-integrated manufacturing system experience have been able to _____.

A) improve quality by a factor of ten
B) increase equipment utilization to 100 percent
C) decrease engineering design costs by up to 30 percent
D) reduce work-in-process time by 80 percent

Answer 1

C

Question 2

Computer-aided manufacturing (CAM) has advantages over conventional manufacturing approaches under many conditions. Which of the following is NOT such a condition?

A) When homogeneous parts are manufactured
B) When frequent design changes are made
C) When the manufacturing process is complex
D) When expert operator skills and close control are required

Answer 2

A

Question 3

A manufacturing firm is considering three alternatives for automation. They anticipate the annual production volume to be 75,000 units. The costs for each alternative are as shown: $\begin{array}{|l|c|c|c|}\hline &&{\text { Alternative }} \\\hline & 1 & 2 & 3 \\\hline \text { Annual Fixed Costs } & 60,000 & \$ 180,000 & \$ 300,000 \\\hline \text { Variable Cost/Unit } & \$ 0.65 & \$ 0.55 & \$ 0.40 \\\hline\end{array}$ What sales price must be charged for Alternative 1 to break even?

A) Less than or equal to $2.00
B) More than $2.00 but less than or equal to $3.00
C) More than $3.00 but less than or equal to $4.00
D) More than $4.00 but less than or equal to $5.00

Answer 3

Less than or equal to $2.00

Question 4

If the forecast volume is less than 600 units, which technology alternative should the company choose?

A) Technology alternative A
B) Technology alternative B

Question 5

Database systems, artificial intelligence programs, and voice-recognition software are examples of _____.

A) hard technology
B) soft technology
C) computer numerical software
D) integrated operating software

Question 6

A company is investigating two automated approaches for its production process. It has collected the following cost information about each:
$\begin{array}{|l|c|c|}\hline \text { Alternative } & \text { Fixed Cost } & \text { Variable Cost } \\\hline \text { CNC } & \$ 80,000 & \$ 2.75 \\\hline \text { FMS } & \$ 190,000 & \$ 1.25 \\\hline\end{array}$

-The breakeven volume is _____.

A) less than or equal to 20,000 units
B) more than 20,000 but less than or equal to 40,00 units
C) more than 40,000 but less than or equal to 60,000 units
D) more than 60,000 but less than or equal to 80,000 units

Question 7

Which of the following statements is TRUE about enterprise resource planning (ERP) systems?

A) It is a business strategy designed to learn more about customers' wants, needs, and behaviors.
B) It gives each function or department the ability to set up its own database.
C) Customer ordering and production scheduling are its real-time transaction processing systems.
D) It consists of a single module.

Question 8

What sales price must be charged for Alternative 2 to break even?

A) Less than or equal to $2.00
B) More than $2.00 but less than or equal to $3.00
C) More than $3.00 but less than or equal to $4.00
D) More than $4.00 but less than or equal to $5.00

Question 9

Which of the following enables engineers to design, analyze, test, simulate, and manufacture products before they physically exist?

A) Computer numerical control (CNC) machines
B) Computer-aided design/computer-aided engineering (CAD/CAE) systems
C) Computer-integrated manufacturing systems (CIMs)
D) Computer-aided manufacturing (CAM) systems

Question 10

_____ consist of two or more computer-controlled machines or robots linked by automated handling devices such as transfer machines, conveyors, and transport systems.

A) Computer-aided design/computer-aided engineering (CAD/CAE) systems
B) Computer-aided manufacturing (CAM) systems
C) Enterprise planning systems (EPSs)
D) Flexible manufacturing systems (FMSs)

Question 11

What sales price must be charged for Alternative 3 to break even?

A) Less than or equal to $2.00
B) More than $2.00 but less than or equal to $3.00
C) More than $3.00 but less than or equal to $4.00
D) More than $4.00 but less than or equal to $5.00

Question 12

A company is considering two alternative technologies for manufacturing a product. The cost data are shown below. $\begin{array}{|l|c|c|}\hline & \text { A } & \text { B } \\\hline \text { Fixed Cost } & \$ 10,000 & \$ 25,000 \\\hline \text { Variable Cost } & \$ 30 / \text { unit } & \$ 5 / \text { unit } \\\hline\end{array}$ The breakeven volume is _____.

A) less than or equal to 200 units
B) more than 200 but less than or equal to 300 units
C) more than 300 but less than or equal to 400 units
D) more than 400 units

Question 13

If the forecast annual production volume is 5,000 units, which technology alternative should the firm choose?

A) Manual
B) Semi-automatic

Question 14

A company is investigating two automated approaches for its production process. It has collected the following cost information about each:
$\begin{array}{|l|c|c|}\hline \text { Alternative } & \text { Fixed Cost } & \text { Variable Cost } \\\hline \text { CNC } & \$ 80,000 & \$ 2.75 \\\hline \text { FMS } & \$ 190,000 & \$ 1.25 \\\hline\end{array}$

-If the forecast annual production volume is 50,000 units, which technology alternative should the company choose?

A) CNC
B) FMS

Question 15

A firm must make a choice between a manual and a semi-automatic production process for a new product line. The following are the costs for each process: $\begin{array}{|l|c|c|}\hline \text { Alternative } & \text { Fixed Cost } & \text { Variable Cost } \\\hline \text { Manual } & \$ 100,000 & \$ 75.00 \\\hline \text { Semi-Automatic } & \$ 300,000 & \$ 50.00 \\\hline\end{array}$ The breakeven volume is _____.

A) less than or equal to 2000 units
B) more than 2000 but less than or equal to 4000 units
C) more than 4000 but less than or equal to 6000 units
D) more than 6000 but less than or equal to 8000 units

Question 16

A company is investigating two automated approaches for its production process. It has collected the following cost information about each:
$\begin{array}{|l|c|c|}\hline \text { Alternative } & \text { Fixed Cost } & \text { Variable Cost } \\\hline \text { CNC } & \$ 80,000 & \$ 2.75 \\\hline \text { FMS } & \$ 190,000 & \$ 1.25 \\\hline\end{array}$

-If the forecast annual production volume is 100,000 units, which technology alternative should the company choose?

A) FMS
B) CNC

Question 17

Customer relationship management (CRM) helps firms gain competitive advantage by all of the following EXCEPT:

A) by providing real-time transaction processing.
B) by segmenting markets based on demographic and behavioral characteristics
C) by tracking sales trends and advertising effectiveness.
D) by identifying which customers should be the focus of targeted marketing initiatives.

Question 18

_____ involves computer control of a manufacturing process, such as determining tool movements and cutting speeds.

A) Computer-aided design/computer-aided engineering (CAD/CAE) systems
B) Computer-aided manufacturing (CAM) systems
C) Enterprise resource planning (ERP) systems
D) Flexible manufacturing systems (FMSs)

Question 19

If the forecast annual production volume is 10,000 units, which technology alternative should you choose?

A) Manual
B) Semi-automatic

Question 20

Which of the following would NOT be included in a typical customer relationship management (CRM) system?

A) Market segmentation and analysis
B) Effective complaint resolution
C) Cross-selling goods and services
D) Supply chain inventory management

Question 21

Integrated operating systems (IOSs) include various hard and soft technologies.

Question 22

Computer-integrated manufacturing systems combine hardware, software, database management, and communications to automate and control a broad range of production activities.

Question 23

Enterprise resource planning (ERP) systems consist of a single module that is implemented to maintain the level of autonomy.

Question 24

MySQL database system is an example of soft technology.

Question 25

E-service refers to using the Internet and technology to provide services that create and deliver time, place, information, entertainment, and exchange value to customers and/or support the sale of goods.

Question 26

Procter & Gamble use bricks-and-mortar intermediaries.

Question 27

Which of the following is NOT an activity handled by a return facilitator?

A) Recommending a new supplier
B) Repairing the manufactured good
C) Requesting money back for a customer
D) Invoking the service guarantee

Question 28

Which of the following is NOT a major characteristic of a customer relationship management (CRM) system?

A) Predicts various Web characteristics that would be most attractive to customers
B) Identifies the possible fraudulent transactions
C) Monitors the quality levels of products
D) Forecasts customer retention

Question 29

Industrial robots automate the skills that most humans can readily perform.

Question 30

Information technology has significantly affected health care. Which of the following is NOT an outcome?

A) Cost reduction
B) Revenue enhancement
C) Faster exchange of handwritten charts between physicians and nurses
D) Improved clinical efficiency and patient care

Question 31

Computer chips and microprocessors are examples of hard technology.

Question 32

High scalability is most related to _____.

A) low incremental cost
B) high fixed cost
C) sales revenue
D) diseconomies of scale

Question 33

Numerical control (NC) machine tools enable the machinist's skills to be duplicated by a programmable device (originally punched paper tape) that controls the movements of a tool used to make complex shapes.

Question 34

Which of the following activities is NOT a part of a return facilitator's activities?

A) Being an Internet enabler
B) Returning a manufactured good or delivered service
C) Requesting money back for a customer
D) Invoking the service guarantee

Question 35

General Electric (GE) would best be described as what type of company?

A) Business to business (B2B)
B) Business to customer (B2C)
C) Customer to customer (C2C)
D) Government to customer (G2C)

Question 36

Apple computer would best be described as what type of company?

A) Business to business (B2B)
B) Business to customer (B2C)
C) Customer to customer (C2C)
D) Government to customer (G2C)

Question 37

Flexible manufacturing systems integrate machines or robots with automated handling devices to route work, load tools, and control operations.

Question 38

Bar codes are the modern successor to RFID tags.

Question 39

Infinite scalability is most related to _____.

A) high variable cost
B) high fixed cost
C) high scalability
D) low scalability

Question 40

Filing individual federal tax returns would best be described as what type of value chain?

A) Business to business (B2B)
B) Business to customer (B2C)
C) Customer to customer (C2C)
D) Government to customer (G2C)

Question 41

One of the major benefits of technology has been its impact on sustainability.

Question 42

Scalability is a phenomenon by which the same or an increased quality and quantity of goods and/or services are created using fewer natural resources.

Question 43

Return facilitators specialize to getting reusable packaging/shipping material (containers, crates, and pallets) back to manufacturers.

Question 44

An intermediary specializes in handling all aspects of customers returning a manufactured good or invoking service guarantees.

Question 45

Because of the Internet and e-commerce, all parts of the value chain can immediately know and react to changes in demand and supply. Thus, tight integration of the components of the value chain is no longer required.

Question 46

Customer relationship management (CRM) systems aids in tracking sales trends and advertising effectiveness by customer and market segment.

Question 47

FedEx is an example of a customer-to-customer value chain.

Question 48

The prominent vendors of enterprise resource planning (ERP) software are SAP and Oracle.

Question 49

Enterprise resource planning systems are designed to build customer relationships and loyalty.

Question 50

Technology provides the capability of eliminating many of the traditional components of value chains.

Question 51

Which one of the following statements concerning the Bracket International-The RFID Decision case study is TRUE?

A) Bracket International won back the Wolf Furniture work using RFID systems.
B) Misreads are zero for RFID technology.
C) The maturity phase of the product/firm/technology life cycle is where a "fast follower" executes their adoption of technology.
D) Bar coding took 10 seconds to scan per item, while RFID took zero seconds to scan per item.

Question 52

Which of the following statements regarding Bracket International (BI) case study is TRUE?

A) BI currently uses RFID to monitor 8,850 items per day at its three factories.
B) RFID scan times are at least ten times faster than bar coding scan times.
C) BI lost its big customer, Home Depot, because it could not respond quickly enough to their changes in order size and job specifications.
D) The net present value analysis over five years is positive, based on case data.

Question 53

Information technology has been equally important to business to business, business to customer, and customer to customer interactions.

Question 54

High scalability is the capability to serve additional customers at high incremental variable costs.

Question 55

A sociotechnical system integrates technology, people, and processes.

Question 56

The acronym ICT stands for information and communication technology.

Question 57

E-communication changes the operation, speed, and efficiency of the value chain.

Question 58

Information-intensive businesses have the potential to be infinitely scalable.

Question 59

Offshoring is a phenomenon by which the same or an increased quality and quantity of goods and/or services are created using fewer natural resources.

Question 60

Low scalability was one of the reasons for failure of many early Internet-based companies.

Question 61

A firm must make a choice between a manual and a semi-automatic production process for a new product line. Following are the costs for each process:

a.Above what breakeven production quantity would the semi-automatic alternative be preferred?
b.Which process is more economical for an annual production volume of 5,000 units?
c.Which process is more economical for an annual production volume of 9,000 units?

Question 62

A manufacturing firm is considering three alternatives for automation. They anticipate the annual production volume to be 7,000 units. The costs for each alternative are as shown:

a.What sales price must be charged for Alternative 1 to break even?
b.What sales price must be charged for Alternative 2 to break even?
c.What sales price must be charged for Alternative 3 to break even?

Question 63

Explain the concept of enterprise resource planning (ERP) systems.

Question 64

Highgrove Industries must decide which process technology to adopt given the information below. Which one of the process technologies would you recommend they adopt based on breakeven analysis if they wish to minimize demand risks?

Question 65

Discuss the role of technology in productivity.

Question 66

A company is considering two alternative technologies for manufacturing a product. The cost data are shown below. What is the breakeven volume, and under what circumstances should A be chosen?

Question 67

List some of the key issues that organizations face in using technology.

Question 68

Explain the concept of industrial robots.

Question 69

What are the benefits and challenges of technology?

Question 70

Differentiate between hard technology and soft technology.

Question 71

Janice Smith is an expert at calligraphy. However, it is found that a specialized robot can imitate Janice's work perfectly. Variable costs are 75% of selling price and fixed costs are $190,000 for the robot system.
a.How many pieces must be produced to break even assuming she sells each piece for $200?
b.How many pieces must be produced to break even if she sells them for $250 and variable costs drop to 70% of selling price?

Question 72

Allied Inc. is considering the purchase of a new piece of equipment. Relevant data are shown below.
a.Using this information, determine the breakeven volume.
b.If the anticipated demand for the product is 5,000 units, should Allied purchase the new equipment?

Question 73

Rogers Manufacturing Company makes high quality canvas tents. Their production manager is considering a change from its manual system of stitching to an automated system. The following are the costs for the two systems:

a.What would the savings be if demand is 70,000 tents and the automated system is used?
b.What would the savings be if demand is 20,000 tents and the automated system is used?

Question 74

A key factor that affects technology decisions is scalability. Define scalability. Explain the difference between high scalability, infinite scalability, and low scalability.

Question 75

Discuss the components, hardware, and software of a computer-integrated manufacturing system (CIMS).

Question 76

How does customer relationship management (CRM) help a firm gain competitive advantage?

Question 77

A company is investigating two automated approaches for its production process. It has collected the following cost information about each:

a.At what point of production will the firm be indifferent to which process it wants?
b.Which process is more economical for an annual production volume of 50,000 units?
c.Which process is more economical for an annual production volume of 100,000 units?