Operations Management Prelims Reviewer

WEEK 1

1. Budgeting, analysis of investment proposals, and provision of funds are activities associated with the
_______ function.
> Finance
2. Operations Management activities will be less important in the future because many firms are
becoming service-oriented operations rather than goods producing operations.
> True
3. ‘Value added' by definition is always a positive number since 'added' implies increases.
> False
4. The operations manager has primary responsibility for making operations system design decisions,
such as system capacity and location of facilities.
> False
5. Often, the collective success or failure of companies' operations functions will impact the
ability of a nation to compete with other nations.
> True
6. As an abstraction of reality, a model is a simplified version of a real phenomenon .
> True
7. Production systems with customized outputs typically have relatively:
> skilled workers
8. Dealing with the fact that certain aspects of any management situation are more important
than others is called:
> recognition of priorities
9. Companies are either producing goods or delivering services. This means that only one of the two
types of operations management strategies are used.
> False
10. The word "technology" is used only to refer to 'information technology'.
> False

11. Relocate the restaurant

12. Build Large Plant

13. P 3,400,000

14. Relocate the Restaurant

15. Build large plant

16. An example of a tactical operations management decision is determining employment levels.
> True
17. Competitiveness doesn't include:
> Profitability
18. Which of the following is true?
> Functional strategies are shaped by corporate strategy.
19. Productivity is defined as the ratio of output to input
> True
20. The ratio of good output to quantity of raw material input is called
> Process yield
21. Which of the following is not a factor that affects productivity?
> Wireless cellular phone
22. Which of the following is not a key step toward improving productivity?
> establishing unreasonable goals for improvement
23. In the 1970's and 1980's in the USA, organizations concentrated on:
> marketing and financial strategies
24. Product design and choice of location are examples of _______ decisions.
> strategic
25. The fundamental purpose for the existence of any organization is described by its:
> Mission statement
26. The greater the degree of customer involvement, the more challenging the design and management
of operations.
> True
27. Which of the following is not a characteristic of service operations?
> easy measurement of productivity
28. Companies are either producing goods or delivering services. This means that only one of the two
types of operations management strategies are used.
> False
29. Product design and process selection are examples of decisions that are:
> system design
30. Operations, marketing, and finance function independently of each other in most organizations.
> False
31. Which of the following is not true about systems approach?
> A systems approach concentrates on efficiency within subsystems.
32. Among Ford's many contributions was the introduction of mass production, using the concept of
interchangeable parts and division of labor.
> True
33. Operations Management activities will be less important in the future because many firms are
becoming service-oriented operations rather than goods producing operations.
> False
34.Build large plant

35. P750,000
36. An example of an operational operations management decision is inventory level management.
> True
37. Productivity is defined as the ratio of output to input
> True
38. An example of a strategic operations management decision is the choice of where to locate.
> True
39. Which of these factors affects productivity?
> all of these
40. Scheduling personnel is an example of an operations management:
> operational decision
41. Operations management and marketing are the two functional areas that exist to support
activities in other functions such as accounting, finance, IT and human resources.
> False
42. The process of comparing outputs to previously established standards to determine if
corrective action is needed is called:
> controlling
43. Manufacturing work sent to other countries is called:
> outsourced
44. Operations management involves continuous decision-making; hopefully most decisions
made will be:
> informed
45. Which of the following is not a type of operations?
> all these involve operations
46. Operations managers are responsible for assessing consumer wants and needs and
selling and promoting the organization’s goods or services.
> False
47. Build small
plant

48. A productivity
increase in one operation that doesn’t improve overall productivity of the business isn’t
> worthwhile
49. An example of a tactical operations management decision is whether to build a new
facility or to expand an existing one.
> False
50. Which of the following is a recent trend in business?
> supply chain management

51. Determine the best alternative using the Maximin.

> No new plant

52. A significant reason why U.S. productivity is the highest in the world is high:
> agricultural productivity
53. For an organization to grow its market share, it must:
> meet minimum standards of acceptability for its product or services

WEEK 2
1. Using the table what will be Mean Absolute Deviation (MAD) if α= 0.20?
> 32.67
2. Using the table what will be Mean Absolute Deviation (MAD) if α= 0.50?
> hindi 21.63, hindi 13.50
Using the table what will be Mean Squared Error (MSE) if α= 0.20?
> hindi 32.67, hindi 94.59,
3. One step that isn't part of service blueprinting is:
> Eliminate boundaries for the service and decide on the level of interaction needed
4. Incorporating design for disassembly (DFD) principles in product design helps firms
with___________ design issues.
> Re-use
5. The advantages of standardization include which of the following?
I. The opportunity to freeze design at a very early stage

II. Fewer parts to deal with in inventory

III. Reduced training cost and time

IV. Purchasing is more routine

> II, III, IV

6. When considering re-use issues for a given product, an important factor to take into
account is that product's _________.
> None of these

7. Designing for recycling helps facilitate ________.

> Compliance with regulatory environments
8. The research and development activity which starts after positive research results are
available and attempts to turn these results into useful commercial applications is:
> development
9. "Must have", "expected" and "excitement" characteristics are categories in the ____model.
> Kano
10. The goal of value analysis is to find ways of _________.
I. Reducing the cost of parts and materials

II. Improving the performance of the product or service

III. Incorporating multiple cultural values in global system design

> I only
11. Products or services with a high degree of similarity of features and components are
called:
> Product Families
12. A ‘House of Quality' is achieved when no department in a single location has more than
15% rejects.
> False
13. One of the main advantages of standardization is that it increases the potential variety of
products.
> False
14. One way to increase reliability is to:
> improve preventive maintenance procedures
> improve component design
15. The ratio of actual output to effective capacity is:
> efficiency
16. Capacity decisions are usually one-time decisions; once they have been made, we know
the limits of our operations.
> False
17. The impact that a significant change in capacity will have on a key vendor is a:
> Supply chain factor
18. Given the following information, what would efficiency be?
Effective capacity = 80 units per day
Design capacity = 100 units per day
Utilization = 48%
> 60%
19. The term capacity refers to the maximum quantity an operating unit can process.
> True
20. Which of these factors wouldn't be subtracted from design capacity when calculating
effective capacity?
> all of these would be subtracted in the calculation
21. Unbalanced systems are evidenced by_______________.
> Rate of output
22. A reason for the importance of capacity decisions is that capacity:
> all of these
23. If the unit cost to buy something is less than the variable cost to make it, the decision to
make or buy is based solely on the fixed costs.
> False
24. Utilization is defined as the ratio of:
> actual output to design capacity
25. Which of the following is a tactic that helps service capacity management?
> all of these
Which of the following is not a reason for redesigning a product or service?
> to increase employee satisfaction
The maximum possible output given a product mix, scheduling difficulties, quality factors, and
so on, is
> effective capacity
Productivity is expressed as:
output divided by input
“Must have", "expected" and "excitement" characteristics are categories in the ____model.
> Kano
Unbalanced systems are evidenced by_______________.
> Rate of output
Business organizations consist of three major functions which, ideally:
> support one another
Efficiency is defined as the ratio of:
> actual output to effective capacity
Technology choices seldom affect:
> union activity.
A basic question in capacity planning is:
> all of these
Measurements taken at various points in the transformation process for control purposes are
called:
> feedback
Outsourcing some production is a means of _________ a capacity constraint.
> supporting
A disadvantage of global teams for product design is that:
> Ease of face to face meetings is absent since members are located everywhere
Ease of face to face meetings is absent since members are located everywhere
> all of these restaurant hospital theater
A 'product package' consists of:
> a combination of goods and services
Value added can be calculated by:
> outputs minus inputs
The stage in a product or service life cycle where some firms adopt a defensive research
posture is:
> decline
The research and development activity which starts after positive research results are
available and attempts to turn these results into useful commercial applications is:
> development
A disadvantage of standardization is the possibility of standardizing designs too early, which
may make it difficult to modify in the future.
> True
Global teams provide diversity while eliminating conflicts and miscommunication.
> False
Concurrent Engineering is another term for sequential development.
> False
Which of the following is a factor that affects service capacity planning?
> all of these the degree of volatility of demand , the inability to store services , the need to
be near customers
The ratio of actual output to design capacity is:
> utilization
Stating capacity in dollar amounts generally results in a consistent measure of capacity
regardless of the actual units of measure.
> False
Utilization is defined as the ratio of:
> actual output to design capacity
Capacity decisions are usually one-time decisions; once they have been made, we know the
limits of our operations.
> False