ch1
Student: ___________________________________________________________________________
1. Operations managers are responsible for assessing consumer wants and needs and selling and promoting the organization's goods or services. 
True    False
 
2. Often, the collective success or failure of companies' operations functions will impact the ability of a nation to compete with other nations. 
True    False
 
3. Companies are either producing goods or delivering services. This means that only one of the two types of operations management strategies are used. 
True    False
 
4. Operations, marketing, and finance function independently of each other in most organizations. 
True    False
 
5. The greater the degree of customer involvement, the more challenging the design and management of operations. 
True    False
 
6. Goods producing organizations are not involved in service activities. 
True    False
 
7. Service operations require additional inventory because of the unpredictability of consumer demand. 
True    False
 
8. The value of outputs is measured by the prices customers are willing to pay for goods or services. 
True    False
 
9. The use of models will guarantee the best possible decisions. 
True    False
 
10. People who work in the field of operations should have skills that include both knowledge and people skills. 
True    False
 
11. Assembly lines achieved productivity but at the expense of standard of living. 
True    False
 
12. The operations manager has primary responsibility for making operations system design decisions, such as system capacity and location of facilities. 
True    False
 
13. The word "technology" is used only to refer to "information technology". 
True    False
 
14. ‘Value added' by definition is always a positive number since 'added' implies increases. 
True    False
 
15. Service often requires greater labor content, whereas manufacturing is more capital intensive. 
True    False
 
16. Measurement of productivity in service is more straightforward than in manufacturing since it is not necessary to take into account the cost of materials. 
True    False
 
17. Special-purpose technology is a common way of offering increased customization in manufacturing or services without taking on additional labor costs. 
True    False
 
18. One concern in the design of production systems is the degree of standardization. 
True    False
 
19. Most people encounter operations only in profit-making organizations. 
True    False
 
20. Service involves a much higher degree of customer contact than manufacturing. 
True    False
 
21. A systems approach emphasizes interrelationships among subsystems, but its main theme is that the whole is greater than the sum of its individual parts. 
True    False
 
22. The Pareto phenomenon is one of the most important and pervasive concepts that can be applied at all levels of management. 
True    False
 
23. Operations managers, who usually use quantitative approaches, are not really concerned with ethical decision-making. 
True    False
 
24. The optimal solutions produced by quantitative techniques should always be evaluated in terms of the larger framework. 
True    False
 
25. Managers should most often rely on quantitative techniques for important decisions since quantitative approaches result in more accurate decisions. 
True    False
 
26. Many operations management decisions can be described as tradeoffs. 
True    False
 
27. A systems approach means that we concentrate on efficiency within a subsystem and thereby assure overall efficiency. 
True    False
 
28. Prior to the Industrial Revolution, goods were produced primarily by craftsmen or their apprentices using custom made parts. 
True    False
 
29. Elton Mayo's "Hawthorne Experiment" was the focal point of the Human Relations Movement, which emphasized the importance of the human element in job design. 
True    False
 
30. Among Ford's many contributions was the introduction of mass production, using the concept of interchangeable parts and division of labor. 
 
True    False
 
31. 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. 
True    False
 
32. Lean production systems incorporate the advantages of both mass production and craft production. 
True    False
 
33. As an abstraction of reality, a model is a simplified version of a real phenomenon. 
True    False
 
34. Lean production systems use a highly skilled work force and flexible equipment. 
 
True    False
 
35. The lean production philosophy has been slow to be adopted in service industries. 
True    False
 
36. Operations Management activities will be less important in the future because many firms are becoming service-oriented operations rather than goods producing operations. 
True    False
 
37. A modern firm has two supply chain considerations - external links with suppliers and customers, and an internal network of flows to and between the operations function itself. 
True    False
 
38. Operations management involves continuous decision-making; hopefully most decisions made will be: 
A. redundant
B. minor in nature
C. informed
D. quantitative
E. none of the above
 
39. A 'product package' consists of: 
A. the exterior wrapping
B. the shipping container
C. a combination of goods and services
D. goods if a manufacturing organization
E. customer relations if a service organization
 
40. Business organizations consist of three major functions which, ideally: 
A. support one another
B. are mutually exclusive
C. exist independently of each other
D. function independently of each other
E. do not interface with each other
 
41. Which of the following is not a type of operations? 
A. goods production
B. storage/transportation
C. entertainment
D. communication
E. all the above involve operations
 
42. Technology choices seldom affect: 
A. costs.
B. productivity.
C. union activity.
D. quality.
E. flexibility.
 
43. Measurements taken at various points in the transformation process for control purposes are called: 
A. plans
B. directions
C. controls
D. feedback
E. budgets
 
44. Budgeting, analysis of investment proposals, and provision of funds are activities associated with the _______ function. 
A. operation
B. marketing
C. purchasing
D. finance
E. internal audit
 
45. Which one of the following would not generally be classified under the heading of transformation? 
A. assembling
B. teaching
C. staffing
D. farming
E. consulting
 
46. Manufacturing work sent to other countries is called: 
A. downsized
B. outsourced
C. internationalization
D. vertical integration
E. entrepreneurial ship
 
47. Product design and process selection are examples of _______ decisions. 
A. financial
B. tactical
C. system design
D. system operation
E. forecasting
 
48. The responsibilities of the operations manager are: 
A. planning, organizing, staffing, procuring, and reviewing
B. planning, organizing, staffing, directing, and controlling
C. forecasting, designing, planning, organizing, and controlling
D. forecasting, designing, operating, procuring, and reviewing
E. designing and operating
 
49. Knowledge skills usually don't include: 
A. process knowledge
B. accounting skills
C. communication skills
D. global knowledge
E. all of the above
 
50. Which of the following is not true about systems approach? 
A. A systems viewpoint is almost always beneficial in decision making.
B. A systems approach emphasizes interrelationships among subsystems.
C. A systems approach concentrates on efficiency within subsystems.
D. A systems approach is essential whenever something is being redesigned or improved.
E. All of the above are true.
 
51. What is credited with gains in industrial productivity, increased standards of living and affordable products? 
A. personal computers
B. the internet
C. mass transportation
D. assembly lines
E. multi-level marketing
 
52. Production systems with customized outputs typically have relatively: 
A. high volumes of output
B. low unit costs
C. high amount of specialized equipment
D. fast work movement
E. skilled workers
 
53. Which is not a significant difference between manufacturing and service operations? 
A. cost per unit
B. uniformity of output
C. labor content of jobs
D. customer contact
E. measurement of productivity
 
54. Which of the following is not a characteristic of service operations? 
A. intangible output
B. high customer contact
C. high labor content
D. easy measurement of productivity
E. low uniformity of output
 
55. Which of the following is a recent trend in business? 
A. pollution control
B. total quality management
C. supply chain management
D. competition from foreign manufacturers
E. technological change
 
56. Farming is an example of: 
A. an obsolete activity
B. a virtual organization
C. non-manufactured goods
D. a growth industry
E. customized manufacturing
 
57. Dealing with the fact that certain aspects of any management situation are more important than others is called: 
A. analysis of tradeoffs
B. sensitivity analysis
C. recognition of priorities
D. analysis of variance
E. decision table analysis
 
58. The fact that a few improvements in a few key areas of operations will have more impact than many improvements in many other areas is consistent with the: 
A. Irwin phenomenon
B. Pareto phenomenon
C. Stevenson phenomenon
D. Tellier phenomenon
E. Adam Smith phenomenon
 
59. The process of comparing outputs to previously established standards to determine if corrective action is needed is called: 
A. planning
B. directing
C. controlling
D. budgeting
E. disciplining
 
60. Which of the following does not relate to system design? 
A. altering the system capacity
B. location of facilities
C. inventory management
D. selection and acquisition of equipment
E. physical arrangement of departments
 
61. Taking a systems viewpoint with regard to operations in today's environment increasingly leads decision-makers to consider ______________ in response to the ___________. 
A. flexibility; pressure to be more efficient
B. offshoring; need to promote domestic production
C. sustainability; threat of global warming
D. technology; impact of random variation
E. forecasting; stabilization of demand
 
62. Some companies attempt to maximize the revenue they receive from fixed operating capacity by influencing demands through price manipulation. This is an example of __________________: 
A. Illegal price discrimination
B. Collusion
C. Volume analysis
D. Revenue management
E. Outsourcing
 
63. Which of the following is not an ongoing trend in manufacturing? 
A. globalization
B. quality improvement
C. flexibility and agility
D. mass production for greater economies of scale
E. technological advances
 
64. Which of the following is not a benefit of using models in decision making? 
A. They provide a standardized format for analyzing a problem.
B. They serve as a consistent tool for evaluation.
C. They are easy to use and less expensive than dealing with the actual situation.
D. All of the above are benefits.
E. None of the above is a benefit.
 
65. Modern firms increasingly rely on other firms to supply goods and services instead of doing these tasks themselves. This increased level of _____________ is leading to increased emphasis on ____________ management. 
A. outsourcing; supply chain
B. offshoring; lean
C. downsizing; total quality
D. optimizing; inventory
E. internationalization; intercultural
 
66. Operations and sales are the two ________ functions in businesses. 
A. strategic
B. tactical
C. support
D. value-adding
E. line
 
67. Marketing depends on operations for information regarding ___________. 
A. productivity
B. lead time
C. cash flow
D. budgeting
E. corporate intelligence
 
68. Two widely used metrics of variation are the __________ and the _________. 
A. mean; standard deviation
B. productivity ratio; correlation
C. standardized mean; assignable deviation
D. randomized mean; standardized deviation
E. normal distribution; random variation
 
69. Which of the following statements about variation is FALSE? 
A. Variation prevents a production process from being as efficient as it can be.
B. Some variation can be prevented.
C. Variation can either be assignable or random.
D. Any variation makes a production process less productive.
E. Random variation generally cannot be influenced by managers.
 
70. Which of the following is essential to consider with respect to managing a process to meet demand? 
A. strategy
B. demand forecasts
C. capacity
D. random variability
E. all of the above

ch1 Key
 
1. Operations managers are responsible for assessing consumer wants and needs and selling and promoting the organization's goods or services. 
FALSE
Operation managers are not responsible for promoting goods/services.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job.
Stevenson - Chapter 01 #1
Topic Area: The Scope of Operations Management
 
2. Often, the collective success or failure of companies' operations functions will impact the ability of a nation to compete with other nations. 
TRUE
A nation is often only as competitive as its companies.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Define the term operations management.
Stevenson - Chapter 01 #2
Topic Area: Operations Today
 
3. Companies are either producing goods or delivering services. This means that only one of the two types of operations management strategies are used. 
FALSE
Most systems involve a blend of goods and services.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-03 Identify similarities and differences between production and service operations.
Stevenson - Chapter 01 #3
Topic Area: Introduction
 
4. Operations, marketing, and finance function independently of each other in most organizations. 
FALSE
Operations, marketing and finance are naturally dependent upon one another.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Identify the three major functional areas of organizations and describe how they interrelate.
Stevenson - Chapter 01 #4
Topic Area: Introduction
 
5. The greater the degree of customer involvement, the more challenging the design and management of operations. 
TRUE
Greater customer involvement leads to more complexity in the design and management of operations.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job.
Stevenson - Chapter 01 #5
Topic Area: Introduction
 
6. Goods producing organizations are not involved in service activities. 
FALSE
Most systems involve a blend of goods and services.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-03 Identify similarities and differences between production and service operations.
Stevenson - Chapter 01 #6
Topic Area: Introduction
 
7. Service operations require additional inventory because of the unpredictability of consumer demand. 
FALSE
Service operations cannot use inventory as a hedge against unpredictable demand.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Easy
Learning Objective: 01-03 Identify similarities and differences between production and service operations.
Stevenson - Chapter 01 #7
Topic Area: Introduction
 
8. The value of outputs is measured by the prices customers are willing to pay for goods or services. 
TRUE
Customers' willingness to pay for goods or services sets the value of these outputs.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job.
Stevenson - Chapter 01 #8
Topic Area: Introduction
 
9. The use of models will guarantee the best possible decisions. 
FALSE
Models are useful, but their use does not guarantee the best decisions.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-06 Explain the key aspects of operations management decision making.
Stevenson - Chapter 01 #9
Topic Area: Operations Management and Decision Making
 
10. People who work in the field of operations should have skills that include both knowledge and people skills. 
TRUE
Operations management requires a blend of knowledge and people skills.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job.
Stevenson - Chapter 01 #10
Topic Area: The Scope of Operations Management
 
11. Assembly lines achieved productivity but at the expense of standard of living. 
FALSE
Productivity and standard of living go hand in hand.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Hard
Learning Objective: 01-07 Briefly describe the historical evolution of operations management.
Stevenson - Chapter 01 #11
Topic Area: The Historical Evolution of Operations Management
 
12. The operations manager has primary responsibility for making operations system design decisions, such as system capacity and location of facilities. 
FALSE
The operations manager plays a role in these decisions but is not primarily responsible for them.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Hard
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job.
Stevenson - Chapter 01 #12
Topic Area: The Scope of Operations Management
 
13. The word "technology" is used only to refer to "information technology". 
FALSE
Technology also refers to the technology involved in resource transformations.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-08 Characterize current trends in business that impact operations management.
Stevenson - Chapter 01 #13
Topic Area: Operations Today
 
14. ‘Value added' by definition is always a positive number since 'added' implies increases. 
FALSE
Some transformations result in the output being worth less than the inputs.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job.
Stevenson - Chapter 01 #14
Topic Area: Introduction
 
15. Service often requires greater labor content, whereas manufacturing is more capital intensive. 
TRUE
Service operations tend to be more labor-intensive than manufacturing.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-03 Identify similarities and differences between production and service operations.
Stevenson - Chapter 01 #15
Topic Area: Introduction
 
16. Measurement of productivity in service is more straightforward than in manufacturing since it is not necessary to take into account the cost of materials. 
FALSE
Materials cost must be considered in services as well.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-03 Identify similarities and differences between production and service operations.
Stevenson - Chapter 01 #16
Topic Area: Introduction
 
17. Special-purpose technology is a common way of offering increased customization in manufacturing or services without taking on additional labor costs. 
FALSE
Special-purpose technology typically reduces costs through standardization.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Hard
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job.
Stevenson - Chapter 01 #17
Topic Area: Operations Today
 
18. One concern in the design of production systems is the degree of standardization. 
TRUE
How standardized outputs will be is a critical consideration in the system design question.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job.
Stevenson - Chapter 01 #18
Topic Area: Operations Management and Decision Making
 
19. Most people encounter operations only in profit-making organizations. 
FALSE
Operations are also relevant to not-for-profit organizations such as the Red Cross.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job.
Stevenson - Chapter 01 #19
Topic Area: Introduction
 
20. Service involves a much higher degree of customer contact than manufacturing. 
TRUE
Customer contact tends to be much higher in services.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-03 Identify similarities and differences between production and service operations.
Stevenson - Chapter 01 #20
Topic Area: Introduction
 
21. A systems approach emphasizes interrelationships among subsystems, but its main theme is that the whole is greater than the sum of its individual parts. 
TRUE
Optimizing the performance of individual subsystems does not guarantee optimal performance from the overall system.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-06 Explain the key aspects of operations management decision making.
Stevenson - Chapter 01 #21
Topic Area: Operations Management and Decision Making
 
22. The Pareto phenomenon is one of the most important and pervasive concepts that can be applied at all levels of management. 
TRUE
Pareto phenomena can be observed in a wide variety of organization situations.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-06 Explain the key aspects of operations management decision making.
Stevenson - Chapter 01 #22
Topic Area: Operations Management and Decision Making
 
23. Operations managers, who usually use quantitative approaches, are not really concerned with ethical decision-making. 
FALSE
Ethics issues are touching on all areas of management, including operations.

AACSB: Ethics
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job.
Stevenson - Chapter 01 #23
Topic Area: Key Issues for Todays Business Operations
 
24. The optimal solutions produced by quantitative techniques should always be evaluated in terms of the larger framework. 
TRUE
Quantitative techniques have limitations that must be considered.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-06 Explain the key aspects of operations management decision making.
Stevenson - Chapter 01 #24
Topic Area: Operations Management and Decision Making
 
25. Managers should most often rely on quantitative techniques for important decisions since quantitative approaches result in more accurate decisions. 
FALSE
Just as other techniques do, quantitative techniques have limitations.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Hard
Learning Objective: 01-06 Explain the key aspects of operations management decision making.
Stevenson - Chapter 01 #25
Topic Area: Operations Management and Decision Making
 
26. Many operations management decisions can be described as tradeoffs. 
TRUE
Managing tradeoffs is the essence of operations management.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-06 Explain the key aspects of operations management decision making.
Stevenson - Chapter 01 #26
Topic Area: Operations Management and Decision Making
 
27. A systems approach means that we concentrate on efficiency within a subsystem and thereby assure overall efficiency. 
FALSE
Subsystem efficiency doesn't necessarily translate into overall efficiency.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-06 Explain the key aspects of operations management decision making.
Stevenson - Chapter 01 #27
Topic Area: Operations Management and Decision Making
 
28. Prior to the Industrial Revolution, goods were produced primarily by craftsmen or their apprentices using custom made parts. 
TRUE
After the Industrial Revolution, more standardized approaches became common.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-07 Briefly describe the historical evolution of operations management.
Stevenson - Chapter 01 #28
Topic Area: The Historical Evolution of Operations Management
 
29. Elton Mayo's "Hawthorne Experiment" was the focal point of the Human Relations Movement, which emphasized the importance of the human element in job design. 
TRUE
The Hawthorne Experiments were the beginning of the Human Relations Movement.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-07 Briefly describe the historical evolution of operations management.
Stevenson - Chapter 01 #29
Topic Area: The Historical Evolution of Operations Management
 
30. Among Ford's many contributions was the introduction of mass production, using the concept of interchangeable parts and division of labor. 
 
TRUE
Ford made mass production a practical success.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-07 Briefly describe the historical evolution of operations management.
Stevenson - Chapter 01 #30
Topic Area: The Historical Evolution of Operations Management
 
31. 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
Operations management and marketing are supported by these functions.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-02 Identify the three major functional areas of organizations and describe how they interrelate.
Stevenson - Chapter 01 #31
Topic Area: Introduction
 
32. Lean production systems incorporate the advantages of both mass production and craft production. 
TRUE
Lean production blends the best of both worlds.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-08 Characterize current trends in business that impact operations management.
Stevenson - Chapter 01 #32
Topic Area: The Historical Evolution of Operations Management
 
33. As an abstraction of reality, a model is a simplified version of a real phenomenon. 
TRUE
Models are valuable abstractions and simplifications of real, complex phenomena.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-06 Explain the key aspects of operations management decision making.
Stevenson - Chapter 01 #33
Topic Area: Operations Management and Decision Making
 
34. Lean production systems use a highly skilled work force and flexible equipment. 
 
TRUE
Lean depends on a skilled workforce.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-08 Characterize current trends in business that impact operations management.
Stevenson - Chapter 01 #34
Topic Area: The Historical Evolution of Operations Management
 
35. The lean production philosophy has been slow to be adopted in service industries. 
FALSE
Lean concepts apply very well in service industries.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-08 Characterize current trends in business that impact operations management.
Stevenson - Chapter 01 #35
Topic Area: The Historical Evolution of Operations Management
 
36. Operations Management activities will be less important in the future because many firms are becoming service-oriented operations rather than goods producing operations. 
FALSE
Operations management is just as important for service firms.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-08 Characterize current trends in business that impact operations management.
Stevenson - Chapter 01 #36
Topic Area: Key Issues for Todays Business Operations
 
37. A modern firm has two supply chain considerations - external links with suppliers and customers, and an internal network of flows to and between the operations function itself. 
TRUE
Supply chain considerations are at play both in and beyond the modern firm.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job.
Stevenson - Chapter 01 #37
Topic Area: Key Issues for Todays Business Operations
 
38. Operations management involves continuous decision-making; hopefully most decisions made will be: 
A. redundant
B. minor in nature
C. informed
D. quantitative
E. none of the above
Informed decisions incorporate all relevant issues.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-06 Explain the key aspects of operations management decision making.
Stevenson - Chapter 01 #38
Topic Area: Operations Management and Decision Making
 
39. A 'product package' consists of: 
A. the exterior wrapping
B. the shipping container
C. a combination of goods and services
D. goods if a manufacturing organization
E. customer relations if a service organization
Most firms are not pure service or manufacturing firms; they produce combinations of goods and services.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-03 Identify similarities and differences between production and service operations.
Stevenson - Chapter 01 #39
Topic Area: Introduction
 
40. Business organizations consist of three major functions which, ideally: 
A. support one another
B. are mutually exclusive
C. exist independently of each other
D. function independently of each other
E. do not interface with each other
Finance, Marketing and Operations are these major functions.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Identify the three major functional areas of organizations and describe how they interrelate.
Stevenson - Chapter 01 #40
Topic Area: Introduction
 
41. Which of the following is not a type of operations? 
A. goods production
B. storage/transportation
C. entertainment
D. communication
E. all the above involve operations
All of these involve taking inputs and transforming them.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-01 Define the term operations management.
Stevenson - Chapter 01 #41
Topic Area: Introduction
 
42. Technology choices seldom affect: 
A. costs.
B. productivity.
C. union activity.
D. quality.
E. flexibility.
Union activity can affect a firm's technology choices, but not the other way around.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-08 Characterize current trends in business that impact operations management.
Stevenson - Chapter 01 #42
Topic Area: Operations Today
 
43. Measurements taken at various points in the transformation process for control purposes are called: 
A. plans
B. directions
C. controls
D. feedback
E. budgets
Feedback is used to monitor and improve processes.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Hard
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job.
Stevenson - Chapter 01 #43
Topic Area: Introduction
 
44. Budgeting, analysis of investment proposals, and provision of funds are activities associated with the _______ function. 
A. operation
B. marketing
C. purchasing
D. finance
E. internal audit
These are the primary tasks for the finance function.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Identify the three major functional areas of organizations and describe how they interrelate.
Stevenson - Chapter 01 #44
Topic Area: Introduction
 
45. Which one of the following would not generally be classified under the heading of transformation? 
A. assembling
B. teaching
C. staffing
D. farming
E. consulting
Staffing doesn't involve transforming resources so much as it involves acquiring them.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Hard
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job.
Stevenson - Chapter 01 #45
Topic Area: Process Management
 
46. Manufacturing work sent to other countries is called: 
A. downsized
B. outsourced
C. internationalization
D. vertical integration
E. entrepreneurial ship
Outsourcing is increasingly a part of operations management.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-08 Characterize current trends in business that impact operations management.
Stevenson - Chapter 01 #46
Topic Area: The Scope of Operations Management
 
47. Product design and process selection are examples of _______ decisions. 
A. financial
B. tactical
C. system design
D. system operation
E. forecasting
These major decisions affect decisions made at lower levels.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Hard
Learning Objective: 01-05 Summarize the two major aspects of process management.
Stevenson - Chapter 01 #47
Topic Area: The Scope of Operations Management
 
48. The responsibilities of the operations manager are: 
A. planning, organizing, staffing, procuring, and reviewing
B. planning, organizing, staffing, directing, and controlling
C. forecasting, designing, planning, organizing, and controlling
D. forecasting, designing, operating, procuring, and reviewing
E. designing and operating
The scope of operations management ranges across the organization.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job.
Stevenson - Chapter 01 #48
Topic Area: The Scope of Operations Management
 
49. Knowledge skills usually don't include: 
A. process knowledge
B. accounting skills
C. communication skills
D. global knowledge
E. all of the above
Communication skills generally are considered to be people skills.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job.
Stevenson - Chapter 01 #49
Topic Area: The Scope of Operations Management
 
50. Which of the following is not true about systems approach? 
A. A systems viewpoint is almost always beneficial in decision making.
B. A systems approach emphasizes interrelationships among subsystems.
C. A systems approach concentrates on efficiency within subsystems.
D. A systems approach is essential whenever something is being redesigned or improved.
E. All of the above are true.
Subsystem efficiency doesn't necessarily translate into overall system efficiency.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-06 Explain the key aspects of operations management decision making.
Stevenson - Chapter 01 #50
Topic Area: Operations Management and Decision Making
 
51. What is credited with gains in industrial productivity, increased standards of living and affordable products? 
A. personal computers
B. the internet
C. mass transportation
D. assembly lines
E. multi-level marketing
Mass production has played a prominent role in increasing standards of living.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Hard
Learning Objective: 01-08 Characterize current trends in business that impact operations management.
Stevenson - Chapter 01 #51
Topic Area: The Historical Evolution of Operations Management
 
52. Production systems with customized outputs typically have relatively: 
A. high volumes of output
B. low unit costs
C. high amount of specialized equipment
D. fast work movement
E. skilled workers
Skilled workers are necessary to accommodate the variation inherent in customized outputs.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Hard
Learning Objective: 01-06 Explain the key aspects of operations management decision making.
Stevenson - Chapter 01 #52
Topic Area: Operations Management and Decision Making
 
53. Which is not a significant difference between manufacturing and service operations? 
A. cost per unit
B. uniformity of output
C. labor content of jobs
D. customer contact
E. measurement of productivity
Manufacturing operations aren't necessarily more or less efficient than service operations.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Hard
Learning Objective: 01-03 Identify similarities and differences between production and service operations.
Stevenson - Chapter 01 #53
Topic Area: Introduction
 
54. Which of the following is not a characteristic of service operations? 
A. intangible output
B. high customer contact
C. high labor content
D. easy measurement of productivity
E. low uniformity of output
The productivity of service operations is often hard to measure.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-03 Identify similarities and differences between production and service operations.
Stevenson - Chapter 01 #54
Topic Area: Introduction
 
55. Which of the following is a recent trend in business? 
A. pollution control
B. total quality management
C. supply chain management
D. competition from foreign manufacturers
E. technological change
Supply chain management involves a broader systemic view of operations.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-08 Characterize current trends in business that impact operations management.
Stevenson - Chapter 01 #55
Topic Area: Key Issues for Todays Business Operations
 
56. Farming is an example of: 
A. an obsolete activity
B. a virtual organization
C. non-manufactured goods
D. a growth industry
E. customized manufacturing
Farm operations are not manufacturing operations.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-03 Identify similarities and differences between production and service operations.
Stevenson - Chapter 01 #56
Topic Area: Introduction
 
57. Dealing with the fact that certain aspects of any management situation are more important than others is called: 
A. analysis of tradeoffs
B. sensitivity analysis
C. recognition of priorities
D. analysis of variance
E. decision table analysis
Solutions tend to be targeted toward higher priority aspects of a situation.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Hard
Learning Objective: 01-06 Explain the key aspects of operations management decision making.
Stevenson - Chapter 01 #57
Topic Area: Operations Management and Decision Making
 
58. The fact that a few improvements in a few key areas of operations will have more impact than many improvements in many other areas is consistent with the: 
A. Irwin phenomenon
B. Pareto phenomenon
C. Stevenson phenomenon
D. Tellier phenomenon
E. Adam Smith phenomenon
Pareto phenomena direct our attention to the difference between the "important few" and the "trivial many."

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-06 Explain the key aspects of operations management decision making.
Stevenson - Chapter 01 #58
Topic Area: Operations Management and Decision Making
 
59. The process of comparing outputs to previously established standards to determine if corrective action is needed is called: 
A. planning
B. directing
C. controlling
D. budgeting
E. disciplining
Controls are used to maintain performance.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Hard
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job.
Stevenson - Chapter 01 #59
Topic Area: The Scope of Operations Management
 
60. Which of the following does not relate to system design? 
A. altering the system capacity
B. location of facilities
C. inventory management
D. selection and acquisition of equipment
E. physical arrangement of departments
Inventory management is a system operation decision area.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-05 Summarize the two major aspects of process management.
Stevenson - Chapter 01 #60
Topic Area: The Scope of Operations Management
 
61. Taking a systems viewpoint with regard to operations in today's environment increasingly leads decision-makers to consider ______________ in response to the ___________. 
A. flexibility; pressure to be more efficient
B. offshoring; need to promote domestic production
C. sustainability; threat of global warming
D. technology; impact of random variation
E. forecasting; stabilization of demand
Sustainability is a relatively recent operations management consideration.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Hard
Learning Objective: 01-06 Explain the key aspects of operations management decision making.
Stevenson - Chapter 01 #61
Topic Area: Operations Management and Decision Making
 
62. Some companies attempt to maximize the revenue they receive from fixed operating capacity by influencing demands through price manipulation. This is an example of __________________: 
A. Illegal price discrimination
B. Collusion
C. Volume analysis
D. Revenue management
E. Outsourcing
Revenue management is used to ensure that as much perishable capacity as possible is sold.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-08 Characterize current trends in business that impact operations management.
Stevenson - Chapter 01 #62
Topic Area: Operations Today
 
63. Which of the following is not an ongoing trend in manufacturing? 
A. globalization
B. quality improvement
C. flexibility and agility
D. mass production for greater economies of scale
E. technological advances
Manufacturers are moving away from mass production for economies of scale.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-08 Characterize current trends in business that impact operations management.
Stevenson - Chapter 01 #63
Topic Area: Key Issues for Todays Business Operations
 
64. Which of the following is not a benefit of using models in decision making? 
A. They provide a standardized format for analyzing a problem.
B. They serve as a consistent tool for evaluation.
C. They are easy to use and less expensive than dealing with the actual situation.
D. All of the above are benefits.
E. None of the above is a benefit.
Models are useful tools for making decisions without confronting the actual situation with all of its complexity.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Hard
Learning Objective: 01-06 Explain the key aspects of operations management decision making.
Stevenson - Chapter 01 #64
Topic Area: Operations Management and Decision Making
 
65. Modern firms increasingly rely on other firms to supply goods and services instead of doing these tasks themselves. This increased level of _____________ is leading to increased emphasis on ____________ management. 
A. outsourcing; supply chain
B. offshoring; lean
C. downsizing; total quality
D. optimizing; inventory
E. internationalization; intercultural
Supply chain management takes a more systemic view of the firm, its operations, and its suppliers.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-08 Characterize current trends in business that impact operations management.
Stevenson - Chapter 01 #65
Topic Area: Key Issues for Todays Business Operations
 
66. Operations and sales are the two ________ functions in businesses. 
A. strategic
B. tactical
C. support
D. value-adding
E. line
Others are support functions.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Identify the three major functional areas of organizations and describe how they interrelate.
Stevenson - Chapter 01 #66
Topic Area: Why Learn about Operations Management?
 
67. Marketing depends on operations for information regarding ___________. 
A. productivity
B. lead time
C. cash flow
D. budgeting
E. corporate intelligence
Marketing uses lead time information to make promises to customers.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job.
Stevenson - Chapter 01 #67
Topic Area: Why Learn about Operations Management?
 
68. Two widely used metrics of variation are the __________ and the _________. 
A. mean; standard deviation
B. productivity ratio; correlation
C. standardized mean; assignable deviation
D. randomized mean; standardized deviation
E. normal distribution; random variation
The mean and standard deviation summarize important facets regarding the variation in a process.

AACSB: Reflective Thinking
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job.
Stevenson - Chapter 01 #68
Topic Area: Process Management
 
69. Which of the following statements about variation is FALSE? 
A. Variation prevents a production process from being as efficient as it can be.
B. Some variation can be prevented.
C. Variation can either be assignable or random.
D. Any variation makes a production process less productive.
E. Random variation generally cannot be influenced by managers.
The choice to offer customers greater variety might increase variation but increase productivity even more.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Hard
Learning Objective: 01-05 Summarize the two major aspects of process management.
Stevenson - Chapter 01 #69
Topic Area: Process Management
 
70. Which of the following is essential to consider with respect to managing a process to meet demand? 
A. strategy
B. demand forecasts
C. capacity
D. random variability
E. all of the above
All of these play a role in determining whether a process can meet demand.

AACSB: Reflective Thinking
Blooms: Understand
Difficulty: Medium
Learning Objective: 01-05 Summarize the two major aspects of process management.
Stevenson - Chapter 01 #70
Topic Area: Process Management

ch1 Summary
Category	# of Questions	
AACSB: Ethics	1	
AACSB: Reflective Thinking	69	
Blooms: Remember	48	
Blooms: Understand	22	
Difficulty: Easy	17	
Difficulty: Hard	15	
Difficulty: Medium	38	
Learning Objective: 01-01 Define the term operations management.	2	
Learning Objective: 01-02 Identify the three major functional areas of organizations and describe how they interrelate.	5	
Learning Objective: 01-03 Identify similarities and differences between production and service operations.	10	
Learning Objective: 01-04 Describe the operations function and the nature of the operations managers job.	18	
Learning Objective: 01-05 Summarize the two major aspects of process management.	4	
Learning Objective: 01-06 Explain the key aspects of operations management decision making.	15	
Learning Objective: 01-07 Briefly describe the historical evolution of operations management.	4	
Learning Objective: 01-08 Characterize current trends in business that impact operations management.	12	
Stevenson - Chapter 01	70	
Topic Area: Introduction	20	
Topic Area: Key Issues for Todays Business Operations	6	
Topic Area: Operations Management and Decision Making	16	
Topic Area: Operations Today	5	
Topic Area: Process Management	4	
Topic Area: The Historical Evolution of Operations Management	8	
Topic Area: The Scope of Operations Management	9	
Topic Area: Why Learn about Operations Management?	2	
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