Question 1

Which of the following best describes the difference between a 'process' and an 'operation' in operations management?

Accepted Answer

A process is any activity that takes one or more inputs, transforms them, and provides outputs, while an operation is a group of resources performing all or part of one or more processes.

Question 2

A company wants to improve productivity. If last year the company produced 10,000 units using inputs worth $$50,000, what was its productivity? Use the formula $$Productivity = \frac{Output}{Input}$.

Accepted Answer

$$Productivity = \frac{10,000}{50,000} = 0.2$$

Question 3

Which of the following is a key characteristic of a service process compared to a manufacturing process?

Accepted Answer

Service processes are labor intensive and have high customer contact.

Question 4

A bakery produces several types of cookies in batches. Which process structure does this best represent?

Accepted Answer

Batch process

Question 5

Which of the following is an example of a 'make-to-stock' production and inventory strategy?

Accepted Answer

Mobile homes produced in advance and stored in inventory

Question 6

A company wants to reduce the number of defects in its process. According to the study materials, which cost category should it focus on to be most cost-effective?

Accepted Answer

Prevention costs

Question 7

Which of the following best describes the 'Plan-Do-Check-Act' (PDCA) cycle?

Accepted Answer

A continuous improvement cycle for process management

Question 8

A hospital uses a process where patients interact directly with doctors and nurses, and each treatment is tailored to the patient. According to the Service Process Structuring, this is an example of:

Accepted Answer

Front office

Question 9

Which of the following is a disadvantage of high customer involvement in a process?

Accepted Answer

It can be disruptive and make managing timing and volume challenging.

Question 10

A company is considering automating its manufacturing process. Which of the following is a disadvantage of automation for low-volume operations?

Accepted Answer

Automation requires high investment costs that may not be justified by low utilization.

Question 11

Which of the following best describes 'economies of scope'?

Accepted Answer

Producing multiple products more cheaply in combination than separately.

Question 12

A company uses a control chart to monitor its process. If the process data points are within the upper and lower control limits and are evenly distributed around the center line, what should the company do?

Accepted Answer

Continue monitoring, as the process is in control.

Question 13

Which of the following is NOT a principle of Total Quality Management (TQM)?

Accepted Answer

Maximizing inventory levels

Question 14

A company wants to benchmark its processes. Which of the following best describes benchmarking?

Accepted Answer

Measuring a firm's processes, services, and products against those of industry leaders.

Question 15

Which of the following is an example of a 'special-purpose' equipment?

Accepted Answer

A conveyor belt designed only for moving soda bottles in a bottling plant

Question 16

A company is using the Six Sigma approach. What is the goal for the number of defects per million opportunities?

Accepted Answer

3.4 defects per million

Question 17

Which of the following is a key advantage of using general-purpose equipment in a manufacturing process?

Accepted Answer

It is less expensive and better for low volumes and high divergence.

Question 18

Which of the following best describes the 'assemble-to-order' strategy?

Accepted Answer

Products are assembled from standard components after receiving a customer order.

Question 19

Which of the following is an example of an 'external failure cost'?

Accepted Answer

Warranty replacements after the customer receives the product

Question 20

A company is considering splitting a large plant into several specialized smaller plants, each with individualized competitive priorities. This is an example of:

Accepted Answer

Focused Factories

Operations Management and Process Strategy: Study Notes for Microeconomics Students

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