OM3080 - Final Exam PDF

Preview

Summary

OM3080 - Final Exam...

Description

1 1.) The creation of goods and services is referred to as: Answer: production 2.) How does management describe the "strategy" of Hard Rock Cafe Answer: experience strategy 3.) Which of the 10 OM decisions applied at Hard Rock Cafe focuses on maximizing the customer experience and driving customers toward revenue-gathering activities Answer: layout design 4.) Each Hard rock Cafe goes through a complete change of __________ every 5-7 years Answer: memorabilia 5.) For each 1% downtime due to a breakdown in equipment, how much of a loss is incurred at Frito-Lay's Orlando plant? Answer: $200,000 6.) The Frito-Lay plant applies a product focus strategy, which is appropriate for what type of producer Answer: high volume, low variety 7.) What drives plant location decisions at Frito-Lay Answer: proximity to raw materials or markets 8.) Which of the following is NOT considered to be one of the three primary functions that all organizations perform? Answer: research and development 9.) A global network of organizations and activities that supply a firm with goods and services is referred to as a Answer: supply chain 10.) A large percentage of the revenue of most firms is spent on which function Answer: operations 11.) Which of the following is NOT one of the four reasons that we study OM Answer: We want to understand what marketing managers do 12.) Which of these is NOT one of the 10 strategic OM decisions Answer: marketing 13.) Which of the following OM decisions determines how a good or service is produced and commits management to specific technology , quality, human resources, and capital investment Answer: process and capacity design 14.) The person who believed that management must do more to improve the work environment and processes so that quality can be improved was Answer: W. Edwards Deming 15.) The economic activities that typically produce an intangible product are referred to as

1

2

Answer: services 16.) Chuck Sox makes wooden boxes in which to ship motorcycles. Chuck and his three employees invest a total of 30 hours per day making the 400 boxes Answer: a) Their productivity= 13.33 boxes/hour b) Their new productivity = 16.67 boxes/hour c) The unit increase in productivity is 3.34 boxes/hour d) The percentage increase in productivity is 25% Check: Productivity = units produced/ input used Percent increase= unit increase/oldproductivity 17.) Hokey Min's Kleen Karpet cleaned 65 rugs in October, consuming the following resources Labor 525@15 Solvent 100@5 Machine Rental 22@60 Answer: a) Labor productivity per dollar = .0083 rugs/dollar b) Multifactor productivity = .0067 rugs/dollar 18.) Productivity increases when Answer: inputs decrease while outputs remain the same 19.) The ratio of all resources to goods and services produced is referred as Answer: multifactor productivity 20.) Which of these statements accurately captures a current trend in operations? Answer: Rapid product development 21.) Which of the following is Not a reason why domestic business operations decide to change to some form of international operation Answer: attract and retain local talent 22.) A strategy is Answer: the action plan to achieve a mission 23.) Which of the following statement is incorrect about the mission Answer: Each functional area within the firm may develop its own strategy, but not its own supporting mission 24.) Which of the following is the purpose or rationale for an organization's existence Answer: mission 25.) Choose the correct example of differentiation and its explanation below Choose the correct example of cost leadership and its explanation below Choose the correct example of response and its explanation below Answer: Fine dining restaurants, as they are full service restaurants with specific dedicated meal courses Institutional food services, such as Sodexho, as they get their contracts by being low bidder to provide service Catering firms, as customers pick the menu, time and date 26.) Competing on differentiation is

2

3 Answer: concerned with uniqueness 27.) Competing on cost is Answer: achieving maximum value, as perceived by the customer 28.) Which of the following does not represent competing on response Answer: based on providing uniqueness 29.) How does Hard Rock use experience differentiation Answer: All of the above 30.) Which of the following is NOT one of the 10 strategic OM decisions listed in the text? Answer: finance/accounting 31.) A set of skills, talents, and capabilities in which a firm is particularly strong is referred to as Answer: core competencies 32.) Why does Southwest have a standardized fleet of Boeing​ 737's? Why did Delta choose the operations strategy described​ above? Why does Delta prefer to​ purchase, rather than​ lease, its​ planes? What are the potential dangers of​ Delta's operations​ strategy? Answer: All of the above It sough to cost savings in any area possible Delta believes it can maintain its older fleet efficiently and at a low cost All of the above 33.) Which of these is NOT an advantage of outsourcing Answer: potential creation of future competition 34.) Which of these is NOT a disadvantage of outsourcing Answer: decreased logistics and inventory costs 35.) Which of the following is NOT an OM​ strategy/issue during the introduction stage of the product life​ cycle? Answer: long production runs 36.) Which of the following does NOT contribute to OM Answer: unsystematic processing of data 37.) Which of the following tasks would NOT typically represent an operations management activity at hard rock cafe Answer: filing a tax return 38.) Choose a correct example of differentiation and its explanation below Choose the correct example of cost leadership and its explanation below Choose the correct example of response and its explanation below Answer: Safeskin Corporation, as it's number one in latex exam gloves that were designed to prevent allergic reactions Wal-Mart, as it has the low overhead and huge buying power to pressure its suppliers into concessions Johnson Electric, as it competes on speed-speed in design, production, and delivery

3

4 39.) Chuck SOX makes wooden boxes in which to ship motorcycles. Chuck and his three employees invest a total of 40 hours per day making the 400 boxes Answer: a) Their productivity= 10 boxes/hour b) Their new productivity= 12.5 boxes/hour c) The unit increase in productivity =2.5 boxes/hour d) The percentage increase in productivity =25% Check: Productivity = units produced/ input used Percent increase= unit increase/oldproductivity 40.) SWOT analysis refers to Answer: strengths, opportunities, weaknesses, and threats 41.) Which of the following activities at a commercial bank is NOT an operations activity Answer: auditing 42.) Which one of the following statements is incorrect regarding globalization and globalization strategies Answer: Globalization strategies could simplify the operations manager's job 43.) Borges Machine​ Shop, Inc., has a​ 1-year contract for the production of 200,000 gear housings for a new​ off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are​ general-purpose equipment​ (GPE), flexible manufacturing system​ (FMS), and​ expensive, but​ efficient, dedicated machine​ (DM). The cost data​ follow: Based on the cost, the process that is best suited for the current contracted volume is Answer: FMS Check: 44.) If the contract for the second and third years is​ pending, for demand below 25,000 ​units, option ______ is the best alternative for Luis. For demand above 275,000 option ____ is the best alternative for Luis Answer: GPE DM 45.) Tim​ Urban, owner/manager of​ Urban's Motor Court in Key​ West, is considering outsourcing the daily room cleanup for his motel to​ Duffy's Maid Service. Tim rents an average of 50 rooms for each of 365 nights​ (365 × 50 equals the total rooms rented for the​ year). Tim's cost to clean a room is $13.00. The​ Duffy's Maid Service quote is $18.50 per room plus a fixed cost of $26,000 for sundry items such as uniforms with the​ motel's name.​ Tim's annual fixed cost for​ space, equipment, and supplies is $60,000. Answer: Based on the given information related to costs for each of the​ options, the crossover point for Tim​ = 6182 room nights ​ If the number of room nights is less than the crossover​ point, then outsourcing is the best option available to Tim. Based on the given room nights that Tim expects to rent ​(18,250​), the best option is not outsourcing 46.) Low-volume, high-variety production is best suited for which of the following process strategies?

4

5 Answer: process focus 47.) High-volume, low-variety production is best suited for which of the following process strategies? Answer: product focus 48.) A process focus is Answer: a production facility organized around specific activities 49.) A large quantity and large variety of products are produced in Answer: mass customization 50.) What is the ability to respond with little penalty in time, cost, or customer value Answer: flexibility 51.) Which of the following statements is NOT true? Answer: Adding flexibility to the production process can be a major competitive advantage. Building flexibility into a production process is usually​ inexpensive, but difficult. 52.) For a shoe shine​ process, the following functions have been​ identified: A Clean​ / Brush Shoes B Obtain Polish C Open and Apply Polish D Buff E Inspect F Collect Payment If one was to prepare a process chart for the above identified functions​ then: Select the functions that will be represented as an operations using a circle in the process chart Answer: Clean/Brush shoes Collect Payment Open + Apply Polish Buff Function​ "Obtain Polish" in the process chart will be represented by Transportation (arrow). Function​ "Inspect" in the process chart will be represented by Inspection (square). 53.) What is a drawing of the movement of material, product or people Answer: flowchart 54.) What is a flowchart with time added on the horizontal axis Answer: process mapping 55.) Which of the following is NOT a tool for process analysis and design Answer: Pareto chart

5

6

56.) Which of the quadrants in the service process matrix has high lab or intensity and high customization Answer: professional service 57.) Which of the quadrants in the service process matrix has low labor intensity and low customization Answer: service factory 58.) What is the fundamental rethinking of business processes to bring about dramatic improvements in performance? Answer: process redesign 59.) Borges Machine​ Shop, Inc., has a​ 1-year contract for the production of 250,000 gear housings for a new​ off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are​ general-purpose equipment​ (GPE), flexible manufacturing system​ (FMS), and​ expensive, but​ efficient, dedicated machine​ (DM). The cost data​ follow: Based on the cost, the process that is best suited for the current contracted volume is: Answer: DM 60.) What is the ability to respond with little penalty in time, cost or customer value? Answer: flexibility 61.) A fast food restaurant is an example of Answer: low customization and low degree of labor 62.) Which of the following is NOT true regarding process redesign Answer: Process redesign is also called process reinvention 63.) A firm's prcoess strategy is its approach to transforming resources into goods and services Answer: TRUE 64.) The assembly line is a classic example of a repetitive process Answer: TRUE 65.) Three of the four types of processes are Answer: process focus, repetitive focus, and product focus 66.) A product-focused process is commonly used to produce Answer: high-volume, low-variety 67.) Which one of the following products is most likely made in a job shop environment Answer: custom furniture 68.) High fixed costs and low variable costs are typical of which approach Answer: Both A and C (Product and mass customization) 69.) Goods made to order are typical of​ ________ and​ ________ approaches while goods made to forecast are typical of​ ________ and​ ________ approaches.

6

7

Answer: process, mass customization, repetitive, product 70.) Process X has fixed costs of​ $10,000 and variable costs of​ $2.40 per unit. Process Y has fixed costs of​ $9,000 and variable costs of​ $2.25 per unit. Which of the following statements is​ TRUE? Answer: Process Y is cheaper than process X at all volumes 71.) Value-stream mapping Answer: All of the above are true 72.) Service blueprinting Answer: focuses on the provider's interaction with the customer 73.) A firm must decide whether to make or buy​ 378,000 items used in their production line. The costs for making the item are​ $164,000 annual cost and a​ $17 cost per item. The costs for buying the item are​ $14 per item. Based on these​ numbers, what should the company​ do? Answer: Buy the item 74.) What must be considered for a make vs buy decision Answer: All of these 75.) A supply chain ends with Answer: a satisfied customer 76.) Prior to embarking on supply chain design, operations managers must first consider Answer: "make-or-buy" and outsourcing decisions 77.) What is transferring a firm's activities that have traditionally been internal to external suppliers Answer: outsourcing 78.) The advantage of having few suppliers is to Answer: form a long-term relationship 79.) What major events, discussed in the above article, have disrupted global supply chains Answer: The tsunami in Japan and floods in Thailand 80.) Disk drive makers are heading to Malaysia Answer: to spread the risk of placing all their manufacturing in one country 81.) Why will some production never return to Thailand Answer: To protect from flooding 82.) How can firms avoid supply disruptions Answer: They can have alternative sites or countries to provide backup

7

8 83.) Which of the following statements is NOT true regarding the bullwhip effect Answer: The bullwhip effect occurs as order are relayed from retails, to distributors, to wholesalers, to manufacturers, with fluctuations decreasing at each step in the sequence 84.) Supply chain managers outsource logistics to meet three goals Answer: drive down inventory investment, lower delivery costs, and improve delivery reliability and speed 85.) Disney's decision to leave these 5 countries vs. staying and trying to improve conditions Answer: relied on a third party evaluation 86.) The building collapse in Bangladesh was Answer: not the first safety violation Disney observed 87.) Disney left Bangladesh Answer: after a phase-out period 88.) Major companies can protect their reputations when global supply chains are so complex by Answer: carefully examining each and every supplier 89.) Baker Mfg Inc. wishes to compare its inventory turnover to those of industry​ leaders, who have turnover of about 13 times per year and 8​% of their assets invested in inventory. Answer: a) Baker's inventory turnover= 16.70 CHECK: inventory turnover = Cost of goods sold/ average inventory investment b) Baker's percentage of assets committed to inventory= 7.02% CHECK: Percentage of assets = inventory/ total assets (*100) c) How does Baker's performance compare to the industry leaders= Better 90.) The grocery industry has an annual inventory turnover of about 15 times. Organic​ Grocers, Inc., had a cost of goods sold last year of ​$10,590,000​; its average inventory was ​$1,017,960. What was Organic​ Grocers' inventory​ turnover, and how does that performance compare with that of the​ industry? Answer: a) OG's inventory turnover= 10.4 b) OG's performance compare with that of the industry= Worse than 91.) Baker Mfg Inc. wishes to compare its inventory turnover to those of industry​ leaders, who have turnover of about 13 times per year and 8​% of their assets invested in inventory. Answer: a) 15.88 b) 7.62% c) better (depends on Baker Mfg. Inc. table) 92.) Mattress​ Wholesalers, Inc. is constantly trying to reduce inventory in its supply chain. Last​ year, cost of goods sold was ​$7.54 million and inventory was

8

9 ​$1.54 million. This​ year, costs of goods sold is ​$8.62 million and inventory investment is ​$1.58 million. Answer: a) weeks of supply last year= 10.62 b) weeks of supply this year= 9.53 CHECK: Average inventory investment/(Annual cost of goods sold/52 weeks) c) Is Mattress Wholesalers making progress in its inventory reduction​ effort? Since the number of weeks that cover the supply has decreased​, Mattress Wholesalers is making progress in its​ inventoryreduction effort. 93.) Three common measures of supply chain performance are Answer: percentage invested in​ inventory, inventory​ turnover, and weeks of supply. 94.) Inventory turnover is equal to Answer: cost of goods sold/ inventory investment 95.) Which of the following statements is NOT true? Answer: An increased sales effort may help a firm reach its profit goals more easily than would effective cost cutting. 96.) What is developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor Answer: vertical intergration 97.) Which of the following mitigation tactics could reduce economic risk Answer: purchasing contracts that address price fluctuations 98.) Which of the following statements is true regarding cross-sourcing Answer: Cross-sourcing uses one supplier for a component and a second supplier for another​ component, where each supplier acts as a backup for the other. 99.) Which of the following statements is not true regarding the bullwhip effect Answer: The bullwhip effect occurs as order are relayed from​ retails, to​ distributors, to​ wholesalers, to​ manufacturers, with fluctuations decreasing at each step in the sequence. 100.) Which of the following is the first stage of supplier selection Answer: supplier evaluation 101.) Supply chain mangers outsource logistics to meet three goals Answer: drive down inventory​ investment, lower delivery​ costs, and improve delivery reliability and speed. 102.) Arrow Distributing Corp. likes to track inventory by using weeks of supply as well as by inventory turnover. Answer: a) weeks of supply= 4.04 b) Percentage of Arrow's assets committed to inventory =12.16% c) inventory turnover d) Suppose a manufacturer has an inventory turnover of 13.5 times per year.​ Arrow's supply chain performance relative to the​ manufacturer's, as measured by inventory​ turnover, is

9

10 worse. 103.) Mattress​ Wholesalers, Inc. is constantly trying to reduce inventory in its supply chain. Last​ year, cost of goods sold was ​$7.47 million and inventory was ​$1.48 million. This​ year, costs of goods sold is ​$8.58 million and inventory investment is ​$1.63 million. Answer: ​a) What was its weeks of supply last​ year? 10.3010.30 weeks ​ ​b) What is its weeks of supply this​ year? 9.889.88 weeks ​ ​c) Is Mattress Wholesalers making progress in its inventory reduction​ effort Since the number of weeks that cover the supply has decreased​, Mattress Wholesalers is making progress in its​ inventoryreduction effort. 104.) Which one of the following is NOT one of the six sourcing strategies Answer: short-term relationships with few suppliers 105.) A disadvantage of the "few suppliers" sourcing strategy is Answer: the high cost of changing partners 106.) Which of the following is NOT an advantage of the​ "few suppliers" sourcing​ strategy? Answer: less vulnerable trade secrets 107.) A fried chicken fast-food chain that acquired feed mills and poultry farms has performed which of the following Answer: backward integration 108.) Which of the following is NOT an advantage of a virtual company Answer: total control over every aspect of the organization 109.) The bullwhip effect: Answer: All of the above are true. 110.) What are the four stag...