Part One: Multiple-Choice Questions
Choose the correct answer.
A reason for studying operations and supply management (OSM) is which one of the following?
OSM is essential for understanding organizational behavior
Most business graduates do OSM work regardless of their job title
The concepts and tools of OSM are used in managing other business functions
OSM is a required course in all business degree programs
OSM is the most rigorous business discipline
In viewing a department store as a transformation process, shoppers are considered a primary input into the process. A primary transformation function of the same system is which one of the following?
Stock pickers
Well-prepared food
Storage bins
Storage and redistribution
Promoting products
One of the characteristics that distinguish a manufactured product from a service product is which one of the following?
Customers are always directly involved in creating the output.
Customers often directly interact with manufacturing workers.
A manufactured product is a tangible, physical item.
Customers can purchase the identical service product from a number of outlets.
A service product is superficial.
In the manufacturing strategy paradigm developed in the 1970s, which one of the following is suggested?
Manufacturing can be a competitive weapon but requires trade-offs on all performance measures.
Manufacturing should focus on an unlimited set of tasks.
Management should create a highly flexible factory.
Manufacturing facilities can achieve the lowest possible cost.
Manufacturing management is best done by people with engineering degrees.
Which of the following is not a way that operations and supply processes are categorized?
Planning
Return
Delivery
Selecting
Making
Which of the following are defined as core goods?
Chemicals
Airlines
Data storage systems
Hotels
None of these
Which one of the following is not one of the major strategic operations and supply competitive dimensions that form a company’s competitive position?
Cost or price
Delivery speed
Delivery reliability
Management acumen
Coping with changes in demand
In developing an operations and supply strategy, which one of the following would be an important product-specific criteria to consider?
Focused factory
Production lot-size
Supplier after-sale support
Learning curve
Total quality management
When a company seeks to match the benefits of a successful position while maintaining its existing position in offering customers a variety of differing services, what is this process called?
Operations capability analysis
Straddling
Order qualifier
Order winners
Inter-functional analysis
An activity-based map is which one of the following?
A network guide to route airlines
A listing of activities that make up a project
A network that shows how a company’s strategy is delivered to customers
A facility layout schematic noting what is done where
A timeline displaying major planned events
Which is not an essential difference between services and goods?
Service is an intangible process that cannot be weighed or measured.
Services are inherently heterogeneous.
Services are perishable and time dependent, and unlike goods, they can’t be stored.
Services are inherently homogeneous.
Services require some degree of interaction with the customer.
Which of the following risk mitigation strategies is most appropriate for the risk of a loss of customers?
Use multiple suppliers
Multisource, commodity hedging
Service/product innovation
Contingency planning, insurance
Support redundant digital networks
Which one of the following is a partial measure of productivity?
Output/Materials
Output/(Labor + Capital + Energy)
Output/All resources used
Output/Inputs
All of the above
Which one of the following is a multifactor measure of productivity?
Output/(Materials + Labor)
Output/(Labor + Capital + Energy)
Output/All resources used
Output/Inputs
All of the above
If all you knew about a production system was that total daily output was 400 units and the total labor necessary to produce the 400 units was 350 hours, what kind of productivity measure could you use to compute productivity?
Partial measure
Multifactor measure
Total measure
Global measure
All of the above
The total output from a production system in one day is 500 units and the total labor necessary to produce the 500 units is 350 hours. Using the appropriate productivity measure, which one of the following numbers represents the resulting productivity ratio?
000
428
700
411
None of the above
Larry’s Auto Body Repair Shop had revenues that averaged $60,000 per week in April and $50,000 per week in May. During both months, the shop employed 6 full-time (40 hours/week) workers. In April the firm also had 4 part-time workers working 25 hours per week but in May there were only 2 part-time workers and they only worked 10 hours per week. What is the percentage change in labor productivity from April to May for Larry’s Auto Body Repair?
65
84
97
76
23
Various financial data for SunPath Manufacturing for 2008 & 2009 follow.
| 2008 | 2009 | ||
| Output: | Sales | $300,000 | $330,000 |
| Inputs: | Labor | $40,000 | $43,000 |
| Raw Materials: | $45,000 | $51,000 | |
| Energy: | $10,000 | $9,000 | |
| Capital Employed: | $250,000 | $262,000 | |
| Other: | $2,000 | $6,000 |
What is the percentage change in SunPath’s total productivity measure between 2008 & 2009?
22
33
53
88
39
Various financial data for SunPath Manufacturing for 2008 & 2009 follow.
| 2008 | 2009 | ||
| Output: | Sales | $300,000 | $330,000 |
| Inputs: | Labor | $40,000 | $43,000 |
| Raw Materials: | $45,000 | $51,000 | |
| Energy: | $10,000 | $9,000 | |
| Capital Employed: | $250,000 | $262,000 | |
| Other: | $2,000 | $6,000 |
What is the percentage change in the labor partial productivity measure for SunPath between 2008 & 2009?
22
33
53
88
39
A project starts out as which one of the following?
Statement of Work (SOW)
Critical Path Method (CPM)
A Series of Milestones (SOM)
A Gantt chart
A latest-start-time estimate
Which one of the following is a reason that project management is important?
Organizations do not allow hastily planned projects.
Organizational hierarchies are becoming more robust.
The firm’s reputation is not a concern since projects are invisible to the outside world.
Projects are a way to promote effective leadership.
It is usually more important to complete a project on time than to complete it correctly.
A series of projects that are organized in such a way that each project utilizes people from different functional areas is using which one of the following organizational structures?
Matrix project
Integrated Task Force
Functional project
Pure project
Cross-functional flexible team
If each activity time is known with certainty in a CPM analysis, which one of the following methodologies can be used to analyze the project?
Single Time Estimate
Three Activity Time Estimates
Expected Activity Time
Probability Analysis
None of the above
You have been placed in charge of a large project. Shortened communication lines are required to insure quick resolution of problems as they arise. You recognize that the project is going to take a lot of time and require a lot of team pride, motivation and commitment by all members. Which project management structure should you use in this situation?
Pure Project
Task force
Matrix Project
Functional Project
PERT
Some of the advantages of a functional project where the project is housed in a functional division include which one of the following?
The project manager has full authority over the project
Team pride, motivation, and commitment are high
A team member can work on several projects
Needs of the client are secondary
None of the above
Part Two: Short Answer Questions
What are the five categories of operations and supply chain processes?
Discuss the role of efficiency and effectiveness in the creation of value.
Describe some of the generic differences between the production of goods and services.
The text mentions a number of major challenges (listed below) to operations management that are expected to develop in the near future. Select one of these and briefly discuss the nature of the challenge. These concepts are discussed in the text under the heading “Current Issues in Operations Management” on page 18.
Coordinate the relationships between mutually supportive but separate organizations
Optimizing global supplier, production and distribution networks
Increased co-production of goods and services
Managing the customer’s touch points
Raising senior management awareness of operations as a competitive weapon
Describe a specific example of the trade-offs between any two of the seven operational competitive dimensions.
Explain the role that “order qualifiers” and “order winners” play as the interface between marketing and operations?
Why might a partial productivity measure be preferred to the more comprehensive total factor measure of productivity?
Describe how CPM handles the trade-offs between time and cost in the scheduling of a project.
What is the criterion for determining whether a project activity is on the “critical path” or not? (3 marks)
Part Three: Solving Problems
You have collected the data for a Time-Cost CPM Scheduling model analysis. The time is in days and the project “direct costs” are given below.
| Immediate | Normal | Crash | Normal | Crash | |
| Activity | Predecessor | Time | Time | Cost (Direct) | Cost (Direct) |
| A | None | 3 | 2 | $300 | $400 |
| B | A | 3 | 3 | $100 | $100 |
| C | A | 1 | 1 | $200 | $200 |
| D | B and C | 3 | 2 | $400 | $550 |
| E | D | 2 | 1 | $500 | $900 |
| F | E | 3 | 3 | $200 | $200 |
| G | F | 2 | 2 | $100 | $100 |
The indirect costs for the project are determined on a daily duration basis. If the project lasts 16 days the total indirect costs are $400, 15 days they will be $250, 14 days they will be $200, and 13 days they will be $100. If you crash this project by one day what is the total (i.e., direct and indirect) project cost?
If the pessimistic duration of an activity is 24, the most likely duration is 15 and the optimistic duration is 6, what is the variance for the activity time when using CPM analysis?
The total output from a production system in one day is 900 units and the total labor necessary to produce the 900 units is 900 hours. Using the appropriate productivity measure, what is the resulting productivity ratio?
Below are the data for a Time-Cost CPM Scheduling analysis. The time is in days and the costs include both direct and indirect costs.
| Immediate | Normal | Crash | Normal | Crash | |
| Activity | Predecessor | Time | Time | Cost | Cost |
| A | None | 3 | 2 | $200 | $400 |
| B | A | 4 | 3 | $300 | $600 |
| C | A | 1 | 1 | $300 | $300 |
| D | B and C | 3 | 2 | $500 | $550 |
| E | D | 2 | 1 | $500 | $900 |
If you crash this project to reduce the total time by four days, what is the total time of the project and total cost?
You have just computed a Z=2.55 in a CPM analysis of a critical path for a project. Based on this Z value what is the probability of completing this project on time?
You have determined the critical path in a CPM analysis. You would like to determine the probability of completing the project is a desired period of time. One of the activities on the critical path has an optimistic time of 5 minutes, a most likely time of 6 and a pessimistic time of 17. What is the variance estimate of this activity?