Entrepreneurship and Small Business Management, 2e (Mariotti)
Chapter 17 Operating for Success
1) ________, an American economist, argued that business should focus on making quality
products instead of maximizing profits-and that profits would follow.
A) W. Edwards Deming
B) Conrad Hilton
C) Paul Samuelson
D) Jonathan Anderson
E) Jennifer Jewet
Learning Obj.: LO 5
AACSB: Analytical thinking
2) Job shops are useful to manufacturers because they ________.
A) Make a part less expensively
B) Maintain and provide specialized equipment
C) Produce parts of consistent quality
D) All of the above
E) None of the above
Learning Obj.: LO 4
AACSB: Analytical thinking
3) The set of actions that produce goods and services is called ________.
A) Operations
B) Manufacturing
C) Shipping
D) Sales
E) Marketing
Learning Obj.: LO 1
AACSB: Analytical thinking
4) Organizations applying for the Baldrige Award are judged on ________.
A) Customer and market focus
B) Leadership and strategic planning
C) Process management and human resources focus
D) All of the above
E) None of the above
Learning Obj.: LO 5
AACSB: Analytical thinking
1
5) Which of the following is not a step in the production-distribution chain?
A) A consumer wears jewelry to work.
B) A consumer enters a jewelry shop and buys a ring.
C) A goldsmith crafts 10 rings.
D) A wholesaler buys a large number of rings.
E) The jewelry shop owner buys a ring to put in the store.
Learning Obj.: LO 2
AACSB: Analytical thinking
6) What organization administers the Malcolm Baldrige National Quality Award?
A) National Institute of Standards and Technology (NIST)
B) National Aeronautical and Space Administration (NASA)
C) United Nations (UN)
D) European Union (EU)
E) North American Free Trade Agreement (NAFTA)
Learning Obj.: LO 5
AACSB: Analytical thinking
7) Within Six Sigma, the statistical methods are designed to eliminate defects to a failure rate of
________ defects per one million opportunities, or a 99.9997% success rate.
A) 3.4
B) 0.34
C) 34
D) 340
E) None of the above
Learning Obj.: LO 5
AACSB: Analytical thinking
8) A ________ is a model or pattern that serves as an example of how a product would look and
operate if it were manufactured.
A) Prototype
B) Specification
C) Blueprint
D) Description
E) Plan
Learning Obj.: LO 4
AACSB: Analytical thinking
2
9) Lost sales and goodwill are potentially significant costs that may arise from ________.
A) Too little inventory
B) Too much inventory
C) Both A and B
D) Giving too much
E) Caring too much
Learning Obj.: LO 3
AACSB: Analytical thinking
10) Engineers from what company developed Six Sigma in the 1980s?
A) Motorola
B) General Motors
C) Intel
D) Apple
E) Microsoft
Learning Obj.: LO 5
AACSB: Analytical thinking
11) Suppliers may be found through ________.
A) Trade shows, conferences, and catalogs
B) Newspapers
C) Magazines
D) All of the above
E) None of the above
Learning Obj.: LO 3
AACSB: Analytical thinking
12) Competitors can be a good source of information about suppliers because they ________.
A) Have proprietary pricing
B) Buy from them
C) Know the representatives
D) All of the above
E) None of the above
Learning Obj.: LO 3
AACSB: Analytical thinking
3
13) ________ control simply means that you look at the inventory on hand, and when the stock
level of an item appears to be low, you reorder.
A) Visual
B) Standard
C) Audit
D) Loose
E) Planned
Learning Obj.: LO 3
AACSB: Analytical thinking
14) The amount of inventory to order that will total the minimum total ordering and holding
costs is called the ________.
A) Economic Order Quantity (EOQ)
B) Reorder Point (ROP)
C) Economic Reorder Point (ERP)
D) Point of Economic Quantity (PEQ)
E) None of the above
Learning Obj.: LO 3
AACSB: Analytical thinking
15) The family of standards for quality management systems established by the International
Organization for Standardization is ________.
A) ISO9000
B) ISO2008
C) ISO8800
D) ISO7000
E) None of the above
Learning Obj.: LO 5
AACSB: Analytical thinking
16) ________ are three of the eight quality management principles for organizational
improvement.
A) Customer focus, continual improvement, and involvement of people
B) Conflicted supplier relationships, process approach, and leadership
C) Customer focus, leadership, and policy approach
D) All of the above
E) None of the above
Learning Obj.: LO 5
AACSB: Analytical thinking
4
17) If the lead time for garage doors is 2 weeks and you sell 100 doors per week and you always
want at least 20 doors in stock, what is the Reorder Point?
A) 220
B) 320
C) 420
D) 20
E) 40
Learning Obj.: LO 3
AACSB: Application of knowledge
18) ________ follow quality.
A) People
B) Functions
C) Profits
D) Brokers
E) Wholesalers
Learning Obj.: LO 5
AACSB: Analytical thinking
19) One submethodology employed in Six Sigma is DMAIC, which stands for ________.
A) Define, measure, analyze, improve, and control
B) Define, minimize, assess, improve, and collect
C) Describe, measure, assess, improve, and control
D) Discover, maximize, assess, improve, and coordinate
E) Define, measure, acquire, impress, and control
Learning Obj.: LO 5
AACSB: Analytical thinking
20) ________ are the amounts of inventory or raw materials and work-in-process kept to
guarantee service levels.
A) Safety stock levels
B) Sufficiency levels
C) Minimum lots
D) Modicum levels
E) Adequacy levels
Learning Obj.: LO 3
AACSB: Analytical thinking
5
21) Comparing one company’s performance against that of other companies in the same industry
or against best practices, standards, or certification criteria is called ________.
A) Benchmarking
B) Quality comparison
C) Profiling
D) Contrast
E) Appraisal
Learning Obj.: LO 5
AACSB: Analytical thinking
22) The inventory method in which you look at the inventory on hand and you reorder when the
stock level of an item appears to be low is called ________.
A) Visual control
B) Proximal management
C) Estimation
D) Basic control
E) All of the above
Learning Obj.: LO 3
AACSB: Analytical thinking
23) ________ is the process of going forward or backward on the idea-to-market continuum.
A) Vertical integration
B) Horizontal integration
C) Supplier integration
D) Concentric integration
E) None of the above
Learning Obj.: LO 4
AACSB: Analytical thinking
24) ________ is the management of sourcing, procuring, production, and logistics to go from
raw materials to end consumers across multiple intermediate steps.
A) Supply Chain Management
B) Total Quality Management
C) The Production-Distribution chain
D) Operational Management
E) Systems Management
Learning Obj.: LO 3
AACSB: Analytical thinking
6