Deck 2: Process Strategy and Analysis

Question 1

Back offices typically emphasize:

A)low cost operations and on-time delivery.
B)top quality and customization.
C)on-time delivery and customization.
D)top quality and low cost operations.

Answer 1

A

Question 2

Field service representatives are classified as a:

A)back office.
B)hybrid office.
C)front office.
D)mid office.

Answer 2

C

Question 3

Divergence is the extent to which the process is customized with considerable latitude on how the tasks are performed.

Answer 3

True

Question 4

Back office work is typically routine,with many steps having considerable divergence.

Question 5

Service providers with a line process tend to move customers,materials,or information in a fixed sequence from one operation to the next.

Question 6

Processes,by their nature,are found only in the operations function of an organization.

Question 7

A politician conducting a town hall meeting is an example of:

A)back office.
B)passive contact.
C)active contact.
D)hybrid office.

Question 8

A back office operation most closely resembles a:

A)continuous flow process.
B)batch process.
C)job process.
D)line process.

Question 9

Supply chain processes are simply business processes that have either external customers or external suppliers.

Question 10

Customer involvement reflects the ways in which customers become part of the process and the extent of their participation.

Question 11

Customer,materials,or information move in diverse ways in processes that have ________.

Question 12

A process that is primarily back office is:

A)a taxi driver.
B)loan officer at a bank.
C)the payroll clerk that calculates your paycheck.
D)the hostess at a restaurant.

Question 13

A moment of truth or service encounter is face-to-face interaction between the customer and a service provider.

Question 14

People processing services require:

A)a high degree of process structure.
B)high capital intensity.
C)physical presence.
D)hybrid low volume-capital intensive operations.

Question 15

Front offices typically emphasize:

A)low cost operations and on-time delivery.
B)top quality and customization.
C)on-time delivery and standardization.
D)top quality and low cost operations.

Question 16

No process can exist without at least one product or service.

Question 17

Process decisions are strategic in nature.

Question 18

The process structure that best describes a waiter's position at a restaurant would be classified as:

A)front office.
B)back office.
C)hybrid office.
D)inner office.

Question 19

A yacht maker produces customized yachts for a clientele that wants a one-of-a-kind watercraft.This process can be described as:

A)divergent.
B)complex.
C)specialized.
D)hybrid.

Question 20

A front office structure features high levels of customer contact where the service provider interacts directly with the internal or external customer.

Question 21

A manufacturer that produces standard products in large volumes is likely to be using a(n):

A)make-to-stock strategy.
B)make-to-order strategy.
C)assemble-to-order strategy.
D)engineer-to-order strategy.

Question 22

Job processes generally have higher volumes than batch processes.

Question 23

In a line process,there is little variability in the products manufactured,and production and material handling equipment are often specialized.

Question 24

The principle of postponement is modeled by the worker that has known his assignment for several weeks,but waits until the day before the product is to be delivered to begin production.

Question 25

Petroleum refineries typically use continuous flow processes.

Question 26

A job process should be preferred when:

A)workforce and equipment are specialized.
B)products are made to stock type.
C)customization is high and volume is low.
D)customization is low and volume is high.

Question 27

A continuous flow process is characterized by a high degree of job customization.

Question 28

The product-process matrix used to analyze manufacturing operations brings together the elements of:

A)volume,process,and intensity.
B)process,intensity,and product design.
C)intensity,volume,and process.
D)customization,volume,and process.

Question 29

A make-to-stock strategy involves holding items in stock for immediate delivery and is feasible for standardized products with high volumes and reasonably accurate forecasts.

Question 30

The degree of process divergence is what keeps a large batch process from being economically produced using a line process.

Question 31

What are the different dimensions of customer contact in service processes? Provide an example of a service that has high levels of customer contact and one that has very low levels of customer contact.

Question 32

Describe and highlight differences among the three process structures in services.

Question 33

Assemble-to-order strategy produces a wide variety of products from relatively few assemblies and components after orders are received.

Question 34

What are three principles of process strategy that should govern choices that process designers make? Provide examples of well-conceived process strategy choices to illustrate each of your three principles.

Question 35

Which of the following statements about process choice is BEST?

A)A batch process typically has a standard sequence of operations through the facility.
B)Automobiles and appliances are examples of products created using a continuous flow process.
C)Continuous flow processes are very capital intensive.
D)A custom cake operation is an example of a batch process.

Question 36

The product-process matrix brings together the elements of volume,process,and quality.

Question 37

An off-diagonal position in the product-process matrix is typically more profitable than a position on the diagonal.

Question 38

Which one of the following statements about process management is BEST?

A)When customization must be high,equipment should be general purpose,and employees need to perform a broader range of duties.
B)The traditional relationship between capital intensity and resource flexibility is that if one is high,so is the other.
C)Creating a more capital-intensive process tends to reduce the fixed cost and raise the variable unit cost.
D)Economies of scope mean that a process should be devoted to a single product or service to achieve high volumes.

Question 39

A job process has the highest level of customization of the process choices.

Question 40

Which of the following is sometimes called mass production?

A)batch process and make-to-order strategy
B)line process and make-to-stock strategy
C)continuous flow process and assemble-to-order strategy
D)job process and make-to-order strategy

Question 41

Scenario 2.4
A company is considering two options for the production of a part needed downstream in the manufacturing process.Particulars are as follows:

Use Scenario 2.4 to answer this question.What is the monthly break-even quantity for choosing between the two automation approaches?

A)1,000 units
B)2,000 units
C)6,000 units
D)12,000 units

Question 42

Capital intensive automation is appropriate for high and low volume operations.

Question 43

Fixed automation is appropriate for line and continuous flow operations.

Question 44

List and briefly define four different basic types of manufacturing basic processes.

Question 45

A(n)________ process would probably not be used to produce products before a customer has placed a firm order.

Question 46

Scenario 2.4
A company is considering two options for the production of a part needed downstream in the manufacturing process.Particulars are as follows:

Use Scenario 2.4 to answer this burning question.For a monthly volume of 3,000 units,which automation approach should be chosen?

A)specialized automation
B)general automation
C)Either approach is acceptable,because costs are the same for either option at 3,000 units.
D)Can't be determined with information given.

Question 47

Scenario 2.4
A company is considering two options for the production of a part needed downstream in the manufacturing process.Particulars are as follows:

Use Scenario 2.4 to solve this problem.What does the company save each month by selecting this low-cost option (for monthly requirements of 3,000 units)?

A)$1,000
B)$3,000
C)$6,000
D)Can't be determined with information given.

Question 48

A toaster is an example of flexible automation.

Question 49

The principle of postponement is employed by a producer using a(n):

A)make-to-stock strategy.
B)make-to-order strategy.
C)assemble-to-order strategy.
D)engineer-to-order strategy.

Question 50

Which of the following statements about customer involvement is BEST?

A)In service industries,customer contact is of minor importance.
B)High task divergence and flexible process flows require more flexibility of the process's employees,facilities and equipment.
C)A firm that produces standardized products often seeks customer specifications.
D)When customer involvement is highly customized,a process is more likely to use a standardized-services process rather than a customized-services process.

Question 51

The ability to reprogram machines is useful for both low-customization and high-customization processes.

Question 52

Sketch and discuss the product-process matrix for manufacturing.

Question 53

In a service process,capital intensity varies with volume in both front office and back office operations.

Question 54

Scenario 2.6
You currently purchase a part used in your production process from an outside supplier,and have decided to begin making this part in-house.You have two equipment options for moving production in-house: special-purpose equipment and general-purpose equipment.Cost information for these two options is as follows:

Use Scenario 2.6 to find the truth.What are total costs under the Special-Purpose Equipment option for an annual quantity of 40,000 units?

A)$400,000
B)$500,000
C)$800,000
D)$850,000

Question 55

Active customer contact and personalized attention can lower cost to the customer by:

A)increasing the capital intensity.
B)trading fixed costs for an equivalent variable cost.
C)substituting customer efforts for those of the service provider.
D)lowering the level of technology involved.

Question 56

The common denominator for decisions on service processes is primarily customer contact.

Question 57

High customer involvement increases service provider productivity and makes quality measurement easier.

Question 58

Scenario 2.6
You currently purchase a part used in your production process from an outside supplier,and have decided to begin making this part in-house.You have two equipment options for moving production in-house: special-purpose equipment and general-purpose equipment.Cost information for these two options is as follows:

Use Scenario 2.6 to answer this question.What are total costs under the General-Purpose Equipment option for an annual quantity of 40,000 units?

A)$400,000
B)$450,000
C)$800,000
D)$850,000

Question 59

Describe the differences among make-to-order,assemble-to-order,and make-to-stock strategies from the producer's and from the customer's perspective.

Question 60

Scenario 2.6
You currently purchase a part used in your production process from an outside supplier,and have decided to begin making this part in-house.You have two equipment options for moving production in-house: special-purpose equipment and general-purpose equipment.Cost information for these two options is as follows:

Use Scenario 2.6 to answer this question.What is the break even quantity between the two options?

A)30,000 units per year
B)40,000 units per year
C)50,000 units per year
D)60,000 units per year

Question 61

Provide examples of three different processes that rely on the customer for approximately 100% of the process;about 50%;and about 0%.What unique challenges exist for operations and supply chain managers and process designer in each one of these scenarios?

Question 62

Two manufacturing processes are being considered for making a new product.Process #1 is less capital intensive,with fixed costs of $50,000 per year and variable costs of $700 per unit.Process #2 has fixed costs of $400,000 annually,with variable costs of $200 per unit.
a.What is the break-even quantity for the two processes?
b.If annual sales are expected to be 600 units,which process should be selected?
c.If lowest overall costs per year is your overall objective,for what range of annual production quantities should you select the first process? the second process?
d.Operations and Engineering have found a way to reduce the cost of the second process,such that the fixed costs for this process decrease from $400,000 to $300,000 annually.All other costs remain the same (1st process fixed = $50,000 / year,1st process variable = $700 / unit,2nd process variable = $200 / unit).What is the new break even quantity between the two processes?
e.Does this change the process selection for the annual sales volume of 600 units? If so,for what range of annual production quantities should you select the first process and the second process?

Question 63

________ is the ease with which employees and equipment can handle a wide variety of products,output levels,duties,and functions.

Question 64

Suppose that competitive priorities call for offering a wide variety of customized services.Which of the following process decisions would be more likely?

A)more capital intensity
B)more resource flexibility
C)more process automation
D)less customer involvement

Question 65

Scenario 2.6
You currently purchase a part used in your production process from an outside supplier,and have decided to begin making this part in-house.You have two equipment options for moving production in-house: special-purpose equipment and general-purpose equipment.Cost information for these two options is as follows:

Use Scenario 2.6 to solve this mystery.At an annual requirement of 40,000 units,what does the company save per year by selecting the low-cost option?

A)$150,000
B)$300,000
C)$50,000
D)$40,000

Question 66

With flexible automation,the ability to reprogram instructions can be useful in:

A)line flow,but not flexible flow,operations.
B)flexible flow,but not line flow,operations.
C)either line flow or flexible flow operations.
D)situations in which top efficiency is mandatory,but only if volumes are high.

Question 67

More fixed automation typically means:

A)decreased labor productivity.
B)longer cycle time.
C)higher demand volumes.
D)lower sales.

Question 68

Which of the following statements concerning resource flexibility is BEST?

A)Flexible equipment is useful to companies with low production volumes and high customization.
B)Investment in general-purpose equipment is warranted if the firm expects to sell more than the break-even amount.
C)Manufacturing efficiency increases with general-purpose equipment.
D)Resource flexibility is crucial for line-flow processing.

Question 69

________ automation produces one type of product or part in a sequence of simple operations.

Question 70

Which one of the following statements about flexible automation is BEST?

A)Investment cost is lower when a transfer machine handles many operations.
B)Chemical processing plants and oil refineries mainly utilize programmable automation.
C)It is an automatic process that can be reprogrammed to handle various products.
D)It achieves top efficiency;accommodating new products is difficult and costly.

Question 71

Scenario 2.6
You currently purchase a part used in your production process from an outside supplier,and have decided to begin making this part in-house.You have two equipment options for moving production in-house: special-purpose equipment and general-purpose equipment.Cost information for these two options is as follows:

Use Scenario 2.6 to solve this riddle.For what range of output is the General-Purpose Equipment the low-cost option?

A)0-30,000 units per year
B)30,000 or more units per year
C)40,000 or more units per year
D)0-40,000 units per year

Question 72

________ is the mix of equipment and human skills in a process.

Question 73

An entrepreneur considers three possibilities for the production of her new product.One alternative,a job process,would have fixed costs of $22,000 and a per unit cost of $11.63.The large batch option would have a fixed cost of $54,000 and a per unit cost of $8.82.The line process would have a fixed cost of $85,000 and a per unit cost of $7.33.Graph the total cost lines and determine over what range of output each production alternative is superior.

Question 74

________ reflects the ways in which customers become part of the process and the extent of their participation.

Question 75

Scenario 2.6
You currently purchase a part used in your production process from an outside supplier,and have decided to begin making this part in-house.You have two equipment options for moving production in-house: special-purpose equipment and general-purpose equipment.Cost information for these two options is as follows:

Use Scenario 2.6 to answer this question.For what range of output is the Special-Purpose Equipment the low-cost option?

A)30,000 or more units per year
B)0 - 30,000 units per year
C)0 - 40,000 units per year
D)40,000 or more units per year

Question 76

Which statement about economies of scope is NOT true?

A)Economies of scope are often attained through programmable automation.
B)Economies of scope bring together two competitive priorities-customization and low price.
C)Economies of scope reflect the ability to produce multiple products more cheaply in combination than separately.
D)Economies of scope reflect low capital intensity and high resource flexibility.

Question 77

________ automation can handle various products through programmability.

Question 78

Higher volume in a process is generally associated with:

A)more resource flexibility.
B)more capital intensity.
C)greater customer involvement.
D)fewer opportunities for standardization.

Question 79

The break-even graph shown below represents the cost structure associated with a flexible production process and one that is fixed (less flexible).Using the information displayed in the graph,determine the cost structures associated with the two alternative production methods.

Question 80

Which of the following statements regarding resource flexibility is BEST?

A)Training is a small part of worker flexibility.
B)Specialization of employees is consistent with worker flexibility.
C)Worker flexibility is not a priority if the process is subject to hourly or seasonal peaks in demand.
D)Resource flexibility requires employees to be able to perform a broad range of duties,and equipment usually must be more general purpose.