Chapter 1

1- Which of the following tasks would NOT typically represent an operations

management activity at Hard Rock Cafe?
Answer: filing a tax return

2- The creation of goods and services is referred to as:

Answer: production

3- The production process at Hard Rock Cafe does NOT include which of the
following activities?
Answer: advertising

4- Which of the following is NOT considered to be one of the three primary

functions that all organizations perform?
Answer: research and development

5- Which of the following activities at a commercial bank is NOT an operations

activity?
Answer: auditing

6- Which of the following activities at an airline is NOT an operations activity?

Answer: sales

7- A global network of organizations and activities that supply a firm with goods
and services is referred to as ________.
Answer: a supply chain

8- In general, the supply chain starts with

Answer: the provider of basic raw materials.

9- A large percentage of the revenue of most firms is spent on which function?

Answer: operations

10- Which of the following is NOT one of the four reasons that we study OM?
Answer: We want to understand what marketing managers do

11- Which of these is NOT one of the basic functions of the management
process?
Answer: inspecting
12- Which of these is NOT one of the 10 strategic OM decisions?
Answer: marketing

13- The father of scientific management is

Answer: Frederick W. Taylor.

14- The person who introduced standardized, interchangeable parts was

Answer: Eli Whitney.

15- 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

16- The service sector constitutes what percentage of employment in the United
States?
Answer: between 80% to 90%

17- The economic activities that typically produce an intangible product are
referred to as
Answer: services.

18- Which of the following is NOT a characteristic of services?

Answer: standardized product

19- a) 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 120 boxes.
Answer: Their productivity = 4 boxes/hour

b) Chuck and his employees have discussed redesigning the process to improve
efficiency. Suppose they can increase the rate to 320 boxes per day.
Answer: Their new productivity = 10.67 boxes/hour

c) The unit increase in productivity is 6.67 boxes/hour

d) The percentage increase in productivity is 166.75%

20- a) Carbondale Casting produces cast bronze valves on a 12-person
assembly line. On a recent day, 200 valves were produced during aa 4-hour shift.
Answer: Labor productivity of the line = 4.17 valves/labor hour

b) John Goodale, the manager at Carbondale, changed the layout and was able
to increase production to 220 units per 4-hour shift. The new labor
productivityequals = 4.58 valves/labor hour

c) The percentage of productivity increase = 9.83%

21- a) Lori Cook produces Final Exam Care Packages for resale by her sorority.
She is currently working a total of 8 hours per day to produce 160 care packages.
Answer: Lori's productivity = 20 packages/hour

b) Lori thinks that by redesigning the package she can increase her total
productivity to 200 care packages per day.
Answer: Lori's new productivity = 25 packages/hour

c) If Lori redesigns the package, the productivity increases by 25%

22- George Kyparisis makes bowling balls in his Miami plant. With recent
increases in his costs, he has a newfound interest in efficiency. George is
interested in determining the productivity of his organization. He would like to
know if his organization is maintaining the manufacturing average of a 3%
increase in productivity. He has the following data representing a month from last
year and an equivalent month this year:
Last Year Now
Units Produced 1,000 1,000
Labor (hours) 300 260
Resin (pounds) 60 45
Capital Invested ($) 9,000 11,000
Energy (BTU) 3,000 2,750

The productivity change for each of the inputs (Labor, Resin, Capital, and
Energy) is:
a) Answer: Labor Productivity Change = 15.62%
b) Resin Productivity Change = 33.29%
c) Capital Invested Productivity Change = -18.18%
d) Energy Productivity Change = 9.09%
23- George Kyparisis makes bowling balls in his Miami plant. With recent
increases in his costs, he has a newfound interest in efficiency. George is
interested in determining the productivity of his organization. He would like to
know if his organization is maintaining the manufacturing average of a 3%
increase in productivity. He has the following data representing a month from last
year and an equivalent month this year:

Last Year Now Cost Per Input Unit

Units Produced 1,000 1,000
Labor (hours) 280 255 $12 per hour
Resin (pounds) 48 43 $5 per pound
Capital Invested ($) 10,000 11,000 2% per month
Energy (BTU) 2,900 2,750 $0.60 per BTU

Answer: The percent change in productivity for one month last year versus
one month this year on a multifactor basis with dollars as the common
denominator = 7.68%
Total
Labor Cost + Material Cost + Capital Cost + Energy Cost
Cost =

24- Hokey Min's Kleen Karpet cleaned 75 rugs in October, consuming the
following resources:
Labor: 520 hours at $13 per hour
Solvent: 120 gallons at $8 per gallon
Machine Rental: 22 days at $60 per day

Answer:
a) Labor productivity per dollar = 0.0111 rugs/dollar
b) Multifactor productivity = 0.0083 rugs/dollar
25- Brown's, a local bakery, is worried about increased costs particularly energy.
Last year's records can provide a fairly good estimate of the parameters for this
year. Wende Brown, the owner, does not believe things have changed much, but
she did invest an additional $3,000 for modifications to the bakery's ovens to
make them more energy efficient. The modifications were supposed to make the
ovens at least 15% more efficient. Brown has asked you to check the energy
savings of the new ovens and also to look over other measures of the bakery's
productivity to see if the modifications were beneficial. You have the following
data to work with:

Last Year Now

Production (dozen) 1,600 1,600
Labor (hours) 340 320
Capital Investment ($) 16,000 19,000
Energy (BTU) 3,000 2,750

Answer:
a) Energy productivity increase = 9.09%
b) Capital productivity increase = -15.79%
c) Labor productivity increase = 6.25%

26- In December, General Motors produced 6,600 customized vans at its plant in
Detroit. The labor productivity at this plant is known to have been 0.10 vans per
labor hour during that month. 340 laborers were employed at the plant that
month.

Answer:
a) In the month of December the average number of hours worked per
laborer = 194.12 hours/laborer
b) If productivity can be increased to 0.12 vans per hour, the average
number of hours worked per laborer = 161.76 hours/laborer

27- Which of these statements accurately captures a current trend in operations?

Answer: Rapid product development.

28- What is the goal for mass customization?

Answer: The goal is to produce customized products, whenever and
wherever needed.

29- Which of the following is NOT one of the reasons operations managers want
to work with their supply chains to viciously cut inventories at every level?
Answer: Inventory provides safety against higher-than expected demand.
30- Which of the following trends is NOT part of the exciting OM challenges
currently facing operations managers?
Answer: local focus

Chapter 2

1- A strategy is
Answer: an action plan to achieve a mission.

2- 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.

3- Which of the following is NOT one of the three strategic approaches to

competitive advantage?
Answer: innovation

4- Which of the following is the purpose or rationale for an organization's

existence?
Answer: mission

5- Competing on differentiation is
Answer: concerned with uniqueness.
6- Competing on cost is
Answer: achieving maximum value as perceived by the customer.

7- Which of the following does not represent competing on response?

Answer: based on providing uniqueness

8- The creation of a unique advantage over competitors is referred as

Answer: competitive advantage.

9- Which of the following is NOT one of the 10 strategic OM decisions listed in

the text?
Answer: finance/accounting

10- Which of the following is NOT an OM strategy/issue during the introduction

stage of the product life cycle?
Answer: long production runs

11- Which of the following is NOT an OM strategy/issue during the growth stage
of the product life cycle?
Answer: reduce capacity

12- A method managers use to evaluate the resources at their disposal and
manage or alter them to achieve competitive advantage is referred as
Answer: resources view

13- SWOT analysis refers to

Answer: strengths, opportunities, weaknesses, and threats.

14- What is a graphical link of competitive advantage, KSFs, and supporting

activities?
Answer: activity map

15- A set of skills, talents, and capabilities in which a firm is particularly strong is
referred to as
Answer: core competencies.

16- Which of the following is the core competence for Honda?

Answer: gas-powered engines
17- Walker Accounting Software is marketed to small accounting firms
throughout the U.S. and Canada. Owner George
Walker has decided to outsource the company's help desk and is considering
three providers: Manila Call Center (Philippines), Delhi Services (India), and
Moscow Bell (Russia). The following table summarizes the data Walker has
assembled. Which outsourcing firm has the best rating? (Higher weights imply
higher importance and higher ratings imply more desirable providers.)

In the following table, compute the weighted average score for each of the three
providers
Criterion Weight Manila Delhi Moscow
(W) (A) (B) (C)
Flexibility 0.50 5 1 9
Trustworthiness 0.10 8 5 7
Price 0.20 4 3 8
Delivery 0.20 7 7 5
Total weighted score: ---- ----- ----
Answer:
a) 5.5
b) 3
c) 7.8

18- Rao Technologies, a California-based high-tech manufacturer, is considering

outsourcing some of its electronics production. Four firms have responded to its
request for bids, and CEO Mohan Rao has started to perform an analysis on the
scores his OM team has entered in the table below.

Ratings of Outsource
Provider
Selection Criterion Weight A B C D
Labor w 4 4 3 5
Quality Procedures 30 3 3 5 1
Logistics System 5 4 3 3 5
Price 25 3 3 4 4
Trust Worthiness 5 4 3 3 4
Technology in place 15 2 5 4 4
Management Team 15 5 3 2 6
Weights are on a scale from 1 through 30, and the outsourcing provider scores
are on a scale of 1 through 5. The weight for the labor factor is shown as a w
because Rao's OM team cannot agree on a value for this weight.

In the following table, the weighted score is computed for each candidate.

Weighted Score of
Selection Criterion Weight A B C D
Labor w 4w 4w 3w 5w

Quality Procedures 30 90 90 150 30

Logistics System 5 20 15 15 25
Price 25 75 75 100 100
Trustworthiness 5 20 15 15 20
Technology in place 15 30 75 60 60
Management Team 15 75 45 30 90
Total Weighted Score of last 6 criteria 310 315 370 325

Formula = total weighted score + weight of company + w

When w = 0, the highest score is achieved by _______
Answer: weighted score of C 370

When w = 10, the highest score is achieved by _______

Answer: weighted score of C 370

When w = 20, the highest score is achieved by _______

Answer: weighted score of C 370

When w = 30, the highest score is achieved by _______

Answer: weighted score of D 325

19- An international business is a firm that

Answer: engages in international trade or investment.

20- What is the difference between a multinational corporation (MNC) and an

international business?
Answer: For the multinational firm, the business done outside the country
is extensive.

21- Which of the following international operations strategies uses decentralized

authority with substantial autonomy at each business?
Answer: multidomestic