Chapter 09 – Production and Operations Management
292. A firm would be most likely to employ statistical process control (SPC) if it wanted
to:
A. simplify the quality control process by taking samples at the end of the production
process rather than examining every unit of output produced.
B. eliminate the expenses incurred by the Deming Cycle.
C. redefine quality control on the basis of customer needs.
D. make sure products meet quality standards all along the production process.
Feedback: Statistical process control involves examining samples at each stage of the
production process and plotting the results to identify and correct undesirable variances in
quality.
293. A firm that is certified as meeting both ISO 9000 and ISO 14000 standards has
demonstrated:
A. world-class management of both quality and environmental standards.
B. sound financial and marketing practices.
C. ethical treatment of both customers and employees.
D. that its recruitment and training programs for employees protect and promote basic
human rights.
Feedback: ISO 9000 refers to quality management and assurance standards and ISO 14000
refers to standards for managing a firm’s environmental impact.
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294. A small hospital in a suburb of a large metropolitan area wants to further develop its
operations and services in order to compete with other hospitals in the region. In analyzing
the criteria for making this happen, location is a primary concern. If it constructs
additional floors, it could increase the quality of a few services in its present location, but
city regulations would require more parking. As it looks for new property, which of the
following criteria would not be an important consideration for this facility?
A. Access to good roads and interstate system
B. Tax benefits
C. Skilled labor
D. Time to market
Feedback: For service industry businesses, convenience and accessibility are extremely
important considerations. Patients require convenient locations that are easy to access.
Emergency vehicles also need easy access to the hospital’s location. Hospitals require a
variety of skilled labor. Since they are not producing a product, time to market is probably not
a strong consideration in this case.
295.
Chapter 09 – Production and Operations Management
As businesses strive for market expansion, companies add to their sales force, but opt to
eliminate sales offices across the nation and internationally. How are these firms able to
remotely operate a sales force that contributes toward increasing the bottom line?
A. A sensible strategy is to transport sales professionals to the world headquarters on a bi-
weekly basis
B. The business strategically moves manufacturing facilities to low cost areas and
allocates more funds toward the sales professionals to meet face to face with management
C. The operation is maintained with an advanced MRP system
D. The operation is managed with teleconferencing information technology, and
telecommuting
Feedback: With advanced information technology (voicemail, email, cell phones, text
messaging, and teleconferencing), businesses are able to communicate in real time with sales
professionals, technicians, and other employees whose jobs take them out into the field.
Telecommuting – working from home via a computer and modem is a popular alternative
working arrangement for sales professionals and others who do not work close to their
company’s office.
296. Millennium, Inc, a leading producer of environmentally friendly cleaning agents is
looking for a site for a new production facility. The company is mainly focusing on sites
that are close to major highways and rail hubs and are not too far from some major
population centers. This suggests that an important location consideration for Millennium
is:
A. quality of life.
B. access to cheap land.
C. reducing time to market.
D. access to low cost labor.
Feedback: Firms that want to get their goods to the market quickly want to have access to
good transportation. Thus they frequently locate near highways, rail lines or airports.
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306. A bar graph that shows what projects or tasks are in process and how much of each is
completed is called a(n):
A. Grid chart.
B. Gantt chart.
C. Priority chart.
D. Stem chart.
307. Which of the following would be most helpful to a production manager who wanted to
determine the minimum time required to complete a proposed project?
A. TQM
B. CAD/CAM
C. ERP
D. PERT
Feedback: PERT, which stands for program evaluation and review technique, is a method of
analyzing the tasks involved in completing a given project, estimating the time needed to
complete each task, and identifying the minimum time needed to complete the total project.
308.
Chapter 09 – Production and Operations Management
The first step in the development of a PERT chart is:
A. assigning an estimated cost to each task.
B. analyzing the tasks and determining the sequence in which they must be performed.
C. estimating the time needed to complete each task.
D. identifying the probabilities that each step in the project can be successfully completed
without exceeding the estimated cost.
Feedback: PERT consists of four steps: (1) analyzing and sequencing the tasks that need to be
done, (2) estimating the time needed to complete each task, (3) drawing a PERT network to
illustrate the information from the first 2 steps, and (4) identifying the critical path.
309. The purpose of determining the critical path on a PERT network is to:
A. identify the sequence of tasks that takes the longest to complete.
B. estimate a payment schedule so that a budget can be established.
C. find the sequence of events that is the most expensive to complete.
D. establish a delivery schedule for a just-in-time inventory control program.
Feedback: The critical path is the sequence of tasks in a project that takes the longest to
complete.
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312. A PERT network consists of activities linked by arrows. Suppose two of the activities
on the network are labeled “A” and “B”. An arrow from “A” to “B” indicates that:
A. the same resources used to complete “A” are also used to complete “B”.
B. “A” and “B” can be completed at the same time.
C. “A” takes longer to complete than “B”.
D. “A” must be completed before “B” can begin.
Feedback: The arrows in a PERT network indicate the sequence in which activities must be
performed. An arrow from “A” to “B” means “A” must be completed before “B” can begin.
313. Courtney was planning a new product launch. She knew that the art department was
ready to work on the promotional pieces now, but they couldn’t start until the strategy
group established the price point and the purchasing group obtained the paper needed to
make the promotional piece. Establishing price points would take about a week and was
dependent on manufacturing getting the costs to the strategy group. This was expected a
week from today. The purchasing group indicated the paper could be obtained locally the
same day it was requested. Assuming things go as planned and based on this information,
when will the art department be able to begin work on the promotional pieces?
A. Immediately
B. 1 week
C. 2 weeks
D. 1 month
Feedback: A PERT chart could be used to determine the critical path. The art department is
dependent on the strategy group for information that will take 1 week to obtain. The strategy
group is dependent on manufacturing for cost information that will take an additional week.
The purchasing department is not part of the critical path as the paper can be obtained on the
same day. The art department will be able to begin in two weeks.
314.
Chapter 09 – Production and Operations Management
Joel was planning a new product launch. He knew that the art department was ready to
work on the promotional pieces now, but they couldn’t start until the marketing strategy
group established the price point and the purchasing department obtained the paper
needed to design the promotional piece. Establishing price points would take about a week
and was dependent on manufacturing getting the costs to the marketing strategy group.
This was expected a week from today. The purchasing group indicated the paper could be
obtained locally the same day it was requested. Assuming things go as planned and based
on this information, which of the following tasks could be as much as a week late without
jeopardizing the deadline for the entire project?
A. Marketing strategy’s determination of the price point
B. Manufacturing’s determination of the costs
C. Purchasing obtaining the paper
D. The art department taking a month-long vacation
Feedback: A PERT chart could be used to determine the critical path. The art department is
dependent on the strategy group for information that will take 1 week to obtain. The strategy
group is dependent on manufacturing for cost information that will take an additional week.
The purchasing task is not on the critical path of the project and thus is the only one that
would not jeopardize the deadline for the entire project.