Chapter 3 Operations Strategy PDF

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Operations Management and TQM Solutions manual...

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Chapter 3 - Operations Strategy True / False 1. Professor Terry Hill's operations strategy framework cannot be applied to service-providing firms. a. True b. Fals e ANSWER: False 2. Customer segments cannot be based on sales volume and profitability. a. True b. Fals e ANSWER: False 3. The core competencies of an organization are the strengths that are unique to that organization. a. True b. Fals e ANSWER: True 4. For firms that adopt innovation as a core component of their strategy, price, not product performance, is the major selling feature. a. True b. Fals e ANSWER: False 5. A strategy of quality improvement often leads to increased short-run profitability. a. True b. Fals e ANSWER: False 6. A small change in a firm's targeted markets or strategic direction usually has little impact on the value chain. a. True b. Fals e ANSWER: False Multiple Choice 7. _____ represent the strategic emphasis that a firm places on certain performance measures and operational capabilities within a value chain. a. Competitive priorities b. Order satisfiers Copyright Cengage Learning. Powered by Cognero.

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Chapter 3 - Operations Strategy c. Search attributes d. Order winners ANSWER: a 8. The style and fit of a jacket can be classified as a(n) _____. a. search attribute b. experience attribute c. credence attribute d. variant attribute ANSWER: a 9. Eric is admitted to a hospital to undergo a surgery for hernia. He is unable to discern the expertise of his surgeon before the surgery nor evaluate the quality of the service after the surgery. In this case, the expertise of Eric's surgeon is an example of a(n) _____. a. search attribute b. experience attribute c. credence attribute d. variant attribute ANSWER: c 10. Which of the following is a difference between the evaluation of goods and the evaluation of services by customers? a. Customers rely more on information from nonpersonal sources when evaluating services, whereas they rely more on information from personal sources when evaluating goods. b.Customers perceive lesser risks when buying services, whereas they perceive greater risks when buying goods. c. Customers cannot look at or touch services prior to the purchase decision, whereas they can feel a product prior to purchase. d.Customers adopt innovations in services faster, whereas they resist adopting innovations in products. ANSWER: c 11. _____ is the discovery and practical application or commercialization of a device, method, or idea that differs from existing norms. a. Measuremen t b. Learning c. Innovation d. Diversity ANSWER: c 12. _____ is driven by ethics and human ideals of protecting the planet and its people for the well-being of future generations. Copyright Cengage Learning. Powered by Cognero.

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Chapter 3 - Operations Strategy a. Environmental sustainability b. Social sustainability c. Economic sustainability d. Political sustainability ANSWER: b 13. Credence attributes stem from__________. a. the design of products b. the nature of services c. drive key operational controls d. operations design choices ANSWER: b 14. Applying Professor Terry Hill's generic strategy framework to McDonald's, the operating design choices of resource scheduling, inventory placement and control, and standardized operational and job procedures best relate to the corporate objective of _____. a. profitable growth b. operational excellence c. operational sustainability d. operational diversity ANSWER: b 15. Brenda is planning a vacation to an exotic island. Though she has pre-planned her accommodation and itinerary, she is unsure of how the vacation will turn out. In this case, Brenda's vacation is high in _____. a. search attributes b. experience attributes c. credence attributes d. variant attributes ANSWER: b 16. Which of the following is considered an order winner in an automobile? a. A comfortable seating arrangement that is similar to other automobiles b. A driver-side air bag that most high-end automobiles have c. A good-quality radio particular to that brand of automobile d. A collision avoidance system particular to that design of automobile ANSWER: d 17. __________often drive simultaneous improvements in quality, cost, and productivity. a. Credence attributes b. Time reductions Copyright Cengage Learning. Powered by Cognero.

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Chapter 3 - Operations Strategy c. Corporate strategies d. Mass standardization ANSWER: b 18. Basic customer expectations are generally considered the minimum performance level required to stay in business and are often called__________. a. order qualifiers b. credence attributes c. experience attributes d. order winners ANSWER: a 19. According to several research studies, which of the following findings is true of the role of quality in gaining competitive advantage? a. Quality is negatively related to return on investment for almost all kinds of market situations. b. A strategy of quality improvement is usually accompanied by increased short-run profitability. c. Quality has a trivial effect on returns in most kinds of market situations. d. Businesses offering premium-quality goods usually have large market shares. ANSWER: d 20. Rues and West Inc. manufactures various electronic goods. It uses mass-customization strategies to make its products available to all consumers at any place in the world. It also manufactures various electronic goods in the same assembly line. Given this information, Rues and West Inc.'s operations are aligned around _____. a. sustainabilit y b. flexibility c. reliability d. durability ANSWER: b 21. __________is an example of innovation in services. a. Optical fibers b. Internet banking c. Customer satisfaction surveys d. Smart tags ANSWER: b 22. Which of the following is one of the key areas that is addressed by operations design choices? a. Functional plans and control systems b. Learning and innovation systems Copyright Cengage Learning. Powered by Cognero.

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Chapter 3 - Operations Strategy c. Value chain integration and outsourcing d. Quality control and mass customization ANSWER: c 23. According to Professor Terry Hill's generic strategy framework, which of the following statements is true of the first loop? a. It ties together an organization's corporate strategy and marketing strategy. b. It describes how operations evaluate the implications of competitive priorities in terms of process choice. c. It determines if process choice decisions are consistent with infrastructure decisions. d. It represents operations' input into the corporate and marketing strategy. ANSWER: a 24. At Ritufa Food Corp., flexibility is the key competitive priority. Food products are manufactured according to customers' requirements, at any volume and globally delivered at any time. Given this information, Ritufa Food Corp.'s operations strategy is based on _____. a. compensation b. mass customization c. mass standardization d. cost reduction ANSWER: b 25. Which of the following companies is most likely to have a competitive advantage in its market? a. Porthis Inc., a sports good manufacturer that treats the market as a single segment b.Singletone Corp., a stationery manufacturer that reduces mass customization c. Huran Co., a clothing manufacturer that focuses on the organization's capability rather than customers' needs or wants d.Greyon Inc., a computer manufacturer that builds and leverage operational capabilities to support desired priorities ANSWER: d 26. __________are the decisions management must make as to what type of process structure is best suited to produce goods or create services. a. Operations design choices b. Competitive priorities c. Core competencies d. Credence attributes ANSWER: a 27. Which of the following statements is true of quality as a key competitive priority? a. It has evolved over the years and now is generally considered an order qualifier. b. It is usually improved by businesses to increase short-run profitability. Copyright Cengage Learning. Powered by Cognero.

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Chapter 3 - Operations Strategy c. It is negatively related to a higher return on investment for almost all kinds of market situations. d. It suffers increasingly with time reductions in a supply chain. ANSWER: a 28. Sustainability is best described as a(n) _____. a. idea that differs from existing norms b. pattern that integrates an organization's major goals c. organizational strategy d. competitive priority ANSWER: c 29. Which of the following statements is true of sustainability? a. Sustainability is not an organizational strategy. b.Environmental sustainability is driven by stakeholders such as the community, green advocacy groups, and the government. c. Sustainability is narrower than a competitive priority. d.Economic sustainability is driven by ethics and human ideals of protecting the planet and its people for the well-being of future generations. ANSWER: b 30. Families of goods or services having similar characteristics or methods of creation are called__________. a. core competencies b. order qualifiers c. strategic business units d. customer benefit packages ANSWER: c 31. Goods and service features and performance characteristics that differentiate one customer benefit package from another and win the customer's business are called__________. a. order qualifiers b. credence attributes c. experience attributes d. order winners ANSWER: d 32. Which of the following statements is true of mass customization? a. It involves the commercialization of a device, method, or idea that differs from existing norms. b.Flexibility is manifested in mass-customization strategies that are becoming increasingly prevalent today. c. It requires companies to align their operations around quality. Copyright Cengage Learning. Powered by Cognero.

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Chapter 3 - Operations Strategy d.Goods and services produced by a firm through mass customization are available only in the country where the firm is located. ANSWER: b 33. Which of the following companies is most likely to have a true understanding of customer wants and needs? a. Harlose Suits, where customer benefit packages include more order qualifiers than order winners b.Magnira Jewelry, where all customers are provided with the same type of jewelry c. Blyrie Apparels, where customers are segmented into groups based on buying behavior and demographics d.Scorla Automobiles, where customers are provided with low quality products at prices slightly lower than the standard prices ANSWER: c 34. Identify a true statement about corporate strategy of large organizations. a. It defines the focus for strategic business units of an organization. b. It provides the means by which business strategies are accomplished. c. It is necessary to define the businesses in which an organization will participate. d. It defines how an organization's processes are designed and organized. ANSWER: c 35. Competitive advantage can be defined as: a. the ability of customers to properly perform and co-produce their part of a service. b.a firm's ability to achieve market and financial superiority over its competitors. c. a pattern or plan that integrates an organization's major goals, policies, and action sequences into a cohesive whole. d.a firm's ability to commercialize a device, method, or idea that differs from existing norms. ANSWER: b 36. An operations strategy can be defined as: a. the set of decisions across the value chain that supports the implementation of higherlevel business strategies. b.a strategy necessary to define the businesses in which a corporation will participate. c. a strategy necessary to develop plans for the acquisition and allocation of resources among businesses. d.the decisions management must make as to what type of process structure is best suited to produce goods or create services. ANSWER: a 37. __________are those that a customer can determine prior to purchasing goods or services. a. Search attributes b. Experience attributes c. Credence attributes Copyright Cengage Learning. Powered by Cognero.

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Chapter 3 - Operations Strategy d. Variant attributes ANSWER: a 38. _____ are any aspects of a good or service that a customer must believe in but cannot personally evaluate even after purchase and consumption. a. Search attributes b. Experience attributes c. Credence attributes d. Variant attributes ANSWER: c

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