Chapter 09 – Production and Operations Management
Experts in operations management for service industry type businesses stress:
A. using records from accounting to determine what business to go after.
B. relying on one’s individual operation as opposed to developing partnerships.
C. training employees on quality management.
D. training employees to always adhere to only one way of doing things.
197. The basic reason the term production management has been replaced by the term
operations management is that:
A. the U.S. economy has moved toward a more socialist approach with government
controlling a greater share of the production process.
B. a much larger share of total output is being produced by nonprofit organizations.
C. the United States is now a service economy.
D. the United States now exports more than it imports.
Feedback: Production management has been the term used to refer to the creation of goods
(tangible products). In recent years, the service sector has become the dominant area of the
economy. This has led to the use of the term operations management in order to reflect the
production of both goods and services.
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198. Aaron is a freshman in college who has not yet decided on his major. He is thinking
about majoring in operations management and is exploring job opportunities in this field.
Which of the following statements about jobs for operations management majors is most
accurate? If he majors in operations management, Aaron will:
A. have limited job opportunities because operations management positions are only
available in the slowly growing manufacturing sector.
B. acquire skills and knowledge that are valuable to firms in both the manufacturing and
service sectors.
C. have plenty of job offers, but they will mainly be in low wage positions in the service
sector.
D. find plenty of employment opportunities in the government and education, but not very
many in the private sector.
Feedback: Operations management is a specialized area in management that involves
converting or transforming resources into goods and services. Operations managers provide
knowledge and skills that can be used in either the manufacturing or services sector.
199.
Chapter 09 – Production and Operations Management
Which of the following statements best describes the distinction between production
management and operations management? Production management involves:
A. activities managers perform to help create services while operations management
involves the activities managers perform to produce goods.
B. activities managers perform to obtain physical resources while operations management
involves the activities managers perform to obtain the financial resources.
C. activities managers perform to help create goods while operations management is a
broader term that involves the activities involved in producing services as well as goods.
D. activities managers perform to help create intangible products while operations
management involves the activities managers perform to produce tangible products.
Feedback: In the past, the term production management was used to describe all the activities
managers do to help their firms create goods (tangible products). However, now that the
service sector has become dominant in the U.S. economy, a newer term, operations
management, is used instead of production management to reflect the fact managers perform
these activities to help firms create services (intangible products) as well as goods.
200. Which of the following statements about operations management in the service sector
is most accurate? Operations management in the service sector:
A. is all about providing the service at the lowest cost.
B. should focus on providing customers with a good experience.
C. has less flexibility than operations management in the manufacturing sector, because
services are not technology driven.
D. has done a good job of increasing output, but a poor job of improving quality.
Feedback: The text discussion of operations management in the hotel industry shows how
service companies succeed by providing a good experience for their customers.
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211. Most new manufacturing facilities use:
A. continuous processes.
B. intermittent processes.
C. traditional processes.
D. synthetic processes.
212. In the past, the idea behind mass production was to:
A. produce goods of the highest possible quality.
B. give producers the maximum flexibility to respond to customer preferences.
C. make large quantities of a limited variety of products at very low cost.
D. give workers more control over their work environment.
213. ____________ uses computers to help design products.
A. PERT
B. QPC
C. DPA
D. CAD
214.
Chapter 09 – Production and Operations Management
__________ involves computers directly in the production process.
A. CAD
B. CAM
C. AMDA
D. AMCAP
215. CAD/CAM makes it possible to custom-design products to meet the needs of
__________ with __________.
A. small markets; a decrease in cost
B. very large markets; no increase in cost
C. small markets; very little increase in cost
D. international markets; products that are complex
216. CAD has __________ productivity in many firms.
A. unfortunately had no effect on
B. actually decreased
C. increased
D. splintered
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225. A basic characteristic of flexible manufacturing is that it:
A. relies heavily on labor, since humans are more adaptable than machines.
B. uses machines designed to perform multiple tasks so they can be used to produce a
variety of products.
C. achieves its flexibility at the cost of much slower rates of production than mass
production techniques.
D. is only possible when using mass production processes.
Feedback: Flexible manufacturing uses machines designed to perform multiple tasks so that
they can produce a variety of products.
226. A company becomes lean by _________ its capacity to produce high-quality goods,
while ___________ its need for resources.
A. investigating; planning
B. increasing; decreasing
C. decreasing; increasing
D. planning; investigating
Feedback: A company becomes lean by continuously increasing its capacity to produce high-
quality goods while decreasing its need for resources.
227.
Chapter 09 – Production and Operations Management
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Lean manufacturing ___________ productivity.
A. increases
B. decreases
C. has no effect on
D. removes the need for added
Feedback: A company becomes lean by continuously increasing its capacity to produce high-
quality goods while decreasing its need for resources.
228. The main objective of lean manufacturing is to:
A. keep labor costs as low as possible by expanding the use of other resources.
B. produce products that have fewer frills and options in order to simplify the production
process and keep costs as low as possible.
C. produce goods using less of all types of resources.
D. get state and local governments to handle many of the tasks currently performed by the
firm.
Feedback: Lean manufacturing refers to efforts to produce goods by using less of everything,
including materials, labor, and production.
229.
Chapter 09 – Production and Operations Management
A benefit of CAD (Computer Aided Design) and CAM (Computer Assisted
Manufacturing) is:
A. it basically eliminates the need for human intervention.
B. it saves on materials costs.
C. it permits customization without a significant increase in price.
D. it produces a higher quality product which allows the manufacturer to charge more.
Feedback: Computer Aided Design permits customization due to the ease of changing a
design to satisfy individual tastes.
230. SitRite Furniture Company uses labor and machinery to transform wood, plastic, metal
and cloth into comfortable chairs, sofas, and love seats. This process creates:
A. form utility.
B. place utility.
C. use facility.
D. intangible productivity.
Feedback: Production is the creation of finished goods and services from inputs such as land,
labor, capital, entrepreneurship and knowledge. Production creates form utility, which is the
value added by the creation of finished goods and services.
231. Wild Bill’s Cap Emporium offers to produce hats and caps according to customers’
requests. Wild Bill’s utilizes a(n):
A. analytic system.
B. just-in-time system.
C. intermittent process.
D. continuous process.
Feedback: Custom made items produced in small quantities would require an intermittent
process rather than a continuous process.
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232. The National Bicycle Company of Japan makes 18 bicycle models in more than 2
million combinations, with each combination designed to fit the needs of a specific
customer. The customer chooses the model, size, color, and design. An analysis of this
company’s operation would indicate that it uses:
A. lean manufacturing.
B. flexible production.
C. mass customization.
D. continuous production.
Feedback: Mass customization means tailoring products to meet the needs of a large number
of individual customers. Because this firm makes bicycles in more than 2 million
combinations and each customer can choose the model, size, color, and design that they want
National Bicycle Industrial Company is using mass customization.
233. Marilyn’s Travel Inc. is a medium-sized travel agency that specializes in vacation
packages. It has packages available around the globe—everything from cruises, to beach
resort vacations, to historical tours. The customer chooses the amount they would like to
pay, the area of the world they would like to visit and what they would like to do. Based
on this information Marilyn’s Travel uses __________ to delight the customers.
A. excellent human resources management
B. the Internet
C. mass customization
D. lean manufacturing
Feedback: Mass customization means tailoring products and services to meet and exceed the
needs of a large number of individual customers.
