14 PDF

Preview

Summary

Supporting Material...

Description

1) The goal of operations management is to manage the process of turning labor and raw materials into goods and services of some type. Answer: TRUE Explanation: Operations management is the act of controlling and managing the process that turns inputs, such as raw materials, labor, and equipment into products that customers buy. Diff: 1 Page Ref: 374 Objective: 14.1 2) Operations management is part of the transformation process. Answer: FALSE Explanation: The opposite is true—the transformation process is part of operations management. Operations management is how you manage, control, and apply the transformation process. Diff: 2 Page Ref: 374 Objective: 14.1 3) The three inputs in the transformation process are people, equipment, and materials. Answer: FALSE Explanation: In addition to people, equipment, and materials, the inputs include capital, technology, and information. Diff: 2 Page Ref: 374 Objective: 14.1 4) Operations management includes service industries but not manufacturing firms. Answer: FALSE Explanation: Operations management includes both service and manufacturing industries. Diff: 1 Page Ref: 374 Objective: 14.1 5) When inputs are turned into goods and services, value is created. Answer: TRUE Explanation: By definition, the transformation process creates value when it transforms inputs into goods and services that customers want to buy. Diff: 2 Page Ref: 375 Objective: 14.1 6) Manufacturing organizations produce both physical and nonphysical outputs. Answer: FALSE Explanation: Manufacturing organizations produce physical outputs only. A car company, for example, produces cars. Diff: 2 Page Ref: 375 Objective: 14.1

7) The majority of U.S. companies in 2010 still produce goods rather than services. Answer: FALSE Explanation: Currently, 79 percent of U.S. economic activity is directed toward producing services. Diff: 2 Page Ref: 375 Objective: 14.1 8) For most U.S. companies, high productivity is a matter of survival. Answer: TRUE Explanation: Productivity not only increases profits for companies, in most cases it makes the difference between surviving and not surviving. Highly productive companies thrive; others usually fall by the wayside. Diff: 2 Page Ref: 375 Objective: 14.1 9) According to W. Edwards Deming, managers should emphasize short-term rather than long-term planning. Answer: FALSE Explanation: Deming prescribed the opposite—all planning should keep the long-term future in mind. Diff: 2 Page Ref: 376 Objective: 14.1 10) Deming advocated an approach in which managers never get complacent about the quality of their product. Answer: TRUE Explanation: Deming claimed that the effort to attain quality was never-ending. No matter how good your product is, you always need to be on the lookout for improvements. Diff: 2 Page Ref: 376 Objective: 14.1 11) Productivity goals, according to Deming, should be strictly numerical to avoid ambiguity. Answer: FALSE Explanation: Though non-numerical goals can sometimes be subject to misinterpretation, Deming thought that they were necessary for a productive organization. Diff: 2 Page Ref: 376 Objective: 14.1 12) Deming's 14 points were useful in their time but are now largely considered to be obsolete. Answer: FALSE Explanation: Deming's 14 points have withstood the test of time and are still followed by managers today. Diff: 2 Page Ref: 376 Objective: 14.1

13) Beginning in the 1950s U.S. firms began to focus on manufacturing rather than finance and marketing. Answer: FALSE Explanation: The opposite is true—after World War II U.S. managers felt that they had solved all production problems and began to focus on finance and marketing rather than manufacturing. Diff: 2 Page Ref: 377 Objective: 14.1 14) Companies in Japan and Germany in the 1960s and 1970s began to catch up with U.S. firms by focusing on quality. Answer: TRUE Explanation: Japanese and German firms built modern manufacturing facilities and began focusing on quality. Their efforts eventually met with great success. Diff: 2 Page Ref: 377 AACSB: Globalizations Objective: 14.1 15) Operations management is likely to play a key role in American firms regaining their preeminence among world companies. Answer: TRUE Explanation: Operations management, the control of the process that transforms inputs into goods and services, is key to success in today's competitive business world. So if American companies regain dominance, operations management is likely to contribute substantially to their success. Diff: 2 Page Ref: 377 AACSB: Globalizations Objective: 14.1 16) Value in a value chain management system is determined by managers. Answer: FALSE Explanation: Value is determined by customers, not managers. Any feature of a product that customers are willing to pay to have is considered value. If customers are willing to pay more for a red bicycle than an identical blue bicycle then the color red, in this case, has value. Diff: 2 Page Ref: 378 Objective: 14.2 17) Each link in a value chain adds an equal amount of value to a product. Answer: FALSE Explanation: Different steps can add different amounts of value. Cutting a diamond adds an enormous amount of value to the diamond. Mounting the diamond also adds value, but not as much as cutting. Putting the diamond in a nice box adds even less value. Diff: 2 Page Ref: 378 Objective: 14.2

18) Value chain management is externally oriented. Answer: TRUE Explanation: Value chain management focuses on both incoming resources to the organization, but also outgoing products. This contrasts with supply chain management, which focuses on incoming resources only. Diff: 2 Page Ref: 378 Objective: 14.2 19) Value chain management is efficiency oriented. Answer: FALSE Explanation: Value chain management is effectiveness oriented, not efficiency oriented. The priority in value chain management is to get the right product that customers want, not the most efficiently made product. Diff: 2 Page Ref: 379 Objective: 14.2 20) Productivity is not important to value chain management. Answer: FALSE Explanation: Though value chain management is more effectiveness than efficiency oriented, productivity is still important. For example, customers may want a great pair of sneakers, but they also want the sneakers to have a reasonable price. So steps along the value chain that can increase productivity and therefore keep the price low add value—a selling point—to the customer. Diff: 2 Page Ref: 379 Objective: 14.2 21) Customers played a role in IKEA's success by being willing to pay higher prices for high quality furniture. Answer: FALSE Explanation: IKEA customers were not willing to pay higher prices. They defrayed some of the cost of the furniture by transporting it and putting it together themselves. Diff: 2 Page Ref: 380 Objective: 14.3 22) Sharing information is part of the coordination and collaboration requirement for successful value chain management. Answer: TRUE Explanation: Coordination and collaboration requires members of the value chain to be flexible and share information. Diff: 2 Page Ref: 380 Objective: 14.3 23) The customer is part of the value chain in value chain management. Answer: TRUE Explanation: The customer is the most important part of the value chain because it is the customer who ultimately determines value for every part of the chain. Diff: 2 Page Ref: 382 Objective: 14.3

24) Organizational processes in value chain management refer to how work is done. Answer: TRUE Explanation: Organizational processes describe the steps that make up the entire value chain, from the first input to the final product. Diff: 2 Page Ref: 382 Objective: 14.3 25) In value chain management activities are eliminated from the organizational process if they do not add value to the process. Answer: TRUE Explanation: At each step of the organizational process managers ask, "How is value being added here?" If value is not being added, the step is eliminated. Diff: 2 Page Ref: 382 Objective: 14.3 26) The goal of value chain management is to meet, but never to exceed the needs and desires of customers. Answer: FALSE Explanation: The goal of value chain management is both to meet and to exceed the needs and desires of customers. Diff: 1 Page Ref: 382 Objective: 14.3 27) Value in value chain management is driven exclusively from the top down. Answer: FALSE Explanation: Value is thought to be driven from two directions—from the top down and from the bottom up. Diff: 2 Page Ref: 382 Objective: 14.3 28) Being rigorous about expectations is a key part of leadership in value chain management. Answer: TRUE Explanation: Leaders in value chain management must communicate to all parts of the chain that expectations are key. For example, managers at American Standard ended up eliminating many of its suppliers when it found they couldn't meet ambitious expectations. Diff: 2 Page Ref: 383 Objective: 14.3 29) Employees in a value chain management organization must be flexible. Answer: TRUE Explanation: Flexibility is the key to job performance in a value chain management system. Employees need to learn to let go of rigid ideas that define their jobs and learn to do whatever adds value to the product. Diff: 2 Page Ref: 383 Objective: 14.3

30) Trust is so important in value chain management that proponents of the system say you can never have too much trust. Answer: FALSE Explanation: In fact, trusting too much can be a big problem in value chain management when it allows intellectual property to be appropriated. Employees in a shared environment must learn to protect their assets. Diff: 2 Page Ref: 385 Objective: 14.3 31) Partners in a value chain management system need to be able to both learn from and educate other partners in the value chain. Answer: TRUE Explanation: Partners in the value chain often switch roles. They may learn from one partner and turn around and play the role of teacher with a second partner. Those roles could also switch at a later date in time. Diff: 2 Page Ref: 385 Objective: 14.3 32) One place in which technology has little impact is the fast-food restaurant business. Answer: FALSE Explanation: Companies are using technology to do all sorts of things to improve productivity in fast-food restaurants. For example, one company used computers to count cars in drive-through lanes and subsequently use the information to anticipate demand from the cars in line. Diff: 2 Page Ref: 386 AACSB: Technology Objective: 14.4 33) Aesthetics may improve how a product looks but they do not contribute to the actual quality of the product. Answer: FALSE Explanation: Aesthetics are considered one of the eight defining characteristics of product quality. Diff: 2 Page Ref: 387 Objective: 14.4 34) Product quality and service quality are two different things. Answer: TRUE Explanation: The two types of quality are evaluated differently. Product quality has eight different dimensions. Service quality has six different dimensions. Diff: 2 Page Ref: 387 Objective: 14.4 35) ISO 9000 certification provides proof that a quality operations system is in place in a facility. Answer: TRUE Explanation: ISO certification has been awarded in 175 different countries and is recognized the world over as a measure of quality. Diff: 1 Page Ref: 388 Objective: 14.4

36) In the Six Sigma system, the higher the sigma value, the greater number of defects you would expect from a product. Answer: FALSE Explanation: The opposite is true—a high sigma value signifies a low, not a high, number of defects. Diff: 2 Page Ref: 389 Objective: 14.4 37) To find the planned duration of a project on a Gantt chart, simply look at the width of the bar that represents actual progress. Answer: FALSE Explanation: The width of the bar that represents the goal shows the planned duration of the project, not the actual progress bar. Diff: 3 Page Ref: 390 AACSB: Analytic Skills Objective: 14.4 38) A load chart can tell you how many workers are busy at a given point in time. Answer: TRUE Explanation: Reading down on the sample load chart on page 391, for example, shows times when all workers are occupied—at the end of month 4—and when fewest workers are occupied—during week 3. Diff: 2 Page Ref: 391 Objective: 14.4 39) The critical path in a PERT network is the least time-consuming sequence required to complete a project in the shortest period of time. Answer: FALSE Explanation: The critical path in a PERT network is the most, not least, time-consuming sequence required to complete a project in the shortest period of time. Diff: 2 Page Ref: 392 Objective: 14.4 40) ________ management oversees the transformation process that converts resources such as labor and raw materials into finished goods and services. A) Control B) Operations C) Systems D) Planning Answer: B Explanation: B) Operations management is defined as the process that oversees every step of the transformation process, making operations the correct response and ruling out all other responses. The transformation process is what turns material and non-material inputs into goods and services, so operations management is the management of this process that converts raw inputs into finished product outputs. Diff: 1 Page Ref: 374 Objective: 14.1

41) The purpose of operations management is to manage ________. A) inputs B) outputs C) the transformation process D) the manufacturing process Answer: C Explanation: C) Operations management is the management of the transformation process, the process that turns inputs, such as people and materials, into outputs, such as goods and services. Since inputs and outputs are part of the transformation process, they are only partial answers for this question. Similarly, the manufacturing process is part of the the transformation process, so it is not a correct response for this question. Diff: 2 Page Ref: 374 Objective: 14.1 42) The transformation process transforms ________. A) goods and services into products B) inputs into services only C) materials into goods only D) inputs into goods and services Answer: D Explanation: D) The transformation process takes inputs of various types, including materials, equipment, people, technology, capital, and information and turns them into products, that is, goods and services, making "inputs into goods and services" the correct response for this question. The process clearly ends rather than begins with goods and services, making "goods and services into products" an incorrect choice. The remaining two choices are both incorrect because the transformation process includes both goods and services and is not limited to either output. Diff: 2 Page Ref: 374 Objective: 14.1 43) Value is created during the process of ________. A) inputs being converted into outputs B) inputs being stored C) outputs being measured D) operations being controlled Answer: A Explanation: A) During the transformation process, value is created when inputs—such things as knowledge, capital, and raw materials—are turned into finished products, or outputs, making "inputs being converted into outputs" the correct response for this question and ruling out all other choices. A raw material such as petroleum, for example, gains value after it has been transformed into gasoline. Value itself is defined as something that customers will pay for, or give up some other resource for. Diff: 2 Page Ref: 374 Objective: 14.1

44) Inputs in the transformation process include ________. A) physical, material substances only B) both material and non-material items C) non-material items only D) equipment and materials only Answer: B Explanation: B) Inputs can include any material or non-material item that contributes to the transformation process, making "both material and non-material items" the correct response for this question. "Physical substances only" and "equipment and materials only" are wrong because they are limited to material items, while "non-material items only" makes the opposite mistake, failing to include any material items. Diff: 2 Page Ref: 374 Objective: 14.1 45) All organizations produce goods or services through the ________ process. A) transformation B) service C) manufacturing D) operations Answer: A Explanation: A) The transformation process includes sequences that produce both material goods and non-material services, making transformation the correct response. Service and manufacturing are limited to either one or the other, the manufacturing or service process, so they are not correct responses since they don't include all organizations. Operations is incorrect because the operations process is not a recognized process in this context. Diff: 2 Page Ref: 374 Objective: 14.1 46) As a product, piano lessons are ________. A) a good because you can purchase them B) a service because they are non-material C) a good because they can be divided into discrete lessons D) a service because someone needs to give them Answer: B Explanation: B) Goods are physical, material objects and services are non-material, nonphysical objects. Being able to purchase or subdivide piano instruction into individual lessons does not make them physical, material objects. Being "given" also does not make piano lessons a service because plenty of non-material things are given. The correct response for this question is "a service because they are non-material" because it identifies piano lessons as being a non-material service. Diff: 2 Page Ref: 374 Objective: 14.1

47) In a transformation process people are inputs because they ________. A) are material beings B) are costly C) perform tasks that are needed to create outputs D) have knowledge and information Answer: C Explanation: C) What makes people qualify as inputs in the transformation process is not that they are costly or are material beings. Some inputs, such as information, for example, are non-material, so being material is not a necessary characteristic of an input. The fact that people have knowledge and information also does not qualify them as inputs. People are inputs only because they use that knowledge and information to perform tasks that turn goods and services into outputs, making "performing tasks needed to create outputs" the correct response. People are inputs because they help the transformation process transform raw inputs into finished products. Diff: 2 Page Ref: 374 Objective: 14.1 48) It is easier to see the transformation process at work in manufacturing organizations than in service organizations because manufacturing organizations ________. A) produce goods and services B) turn inputs into outputs C) turn inputs into physical and nonphysical products D) produce physical goods Answer: D Explanation: D) Producing goods and services and turning inputs into physical and nonphysical products are both untrue because manufacturing organizations produce tangible, physical goods only, not services or nonphysical products. All organizations that carry out transformation processes turn inputs into outputs, so turning inputs into outputs is not a correct response. Producing physical goods is the correct response because it identifies the key characteristic of manufacturing organizations—they produce material, physical products that are easy to identify as outputs. Diff: 2 Page Ref: 375 Objective: 14.1 49) Service organizations ________. A) produce physical and nonphysical outputs B) produce physical outputs only C) require nonphysical inputs only D) produce nonphysical outputs only Answer: D Explanation: D) Service organizations produce service, a nonphysical product or output, making "producing nonphysical outputs only" the correct response. Manufacturing organizations are the organizations that produce physical, material products, which rules out "producing both physical and nonphysical outputs" as well as "producing physical outputs only." While service organizations produce nonphysical products, they do not necessarily require nonphysical inputs. Such things as information and effort are inputs that are routinely used to create service as an output, for example. Diff: 2 Page Ref: 375 Objective: 14.1...