30) The break-even graph shown below represents the cost structure associated with a flexible production
process and one that is fixed (less flexible). Using the information displayed in the graph, determine the
cost structures associated with the two alternative production methods.
31) An entrepreneur considers three possibilities for the production of her new product. One alternative,
a job process, would have fixed costs of $22,000 and a per unit cost of $11.63. The large batch option
would have a fixed cost of $54,000 and a per unit cost of $8.82. The line process would have a fixed cost of
$85,000 and a per unit cost of $7.33. Graph the total cost lines and determine over what range of output
each production alternative is superior.
32) ________ is the ease with which employees and equipment can handle a wide variety of products,
output levels, duties, and functions.
33) ________ reflects the ways in which customers become part of the process and the extent of their
participation.
34) ________ is the mix of equipment and human skills in a process.
35) ________ automation produces only one type of product or part in a sequence of simple operations.
36) ________ automation can handle various products through programmability.
37) Provide examples of three different processes that rely on the customer for approximately 100% of the
process; about 50%; and about 0%. What unique challenges exist for operations and supply chain
managers and process designer in each one of these scenarios?
38) Comment on the need for flexibility in both the workforce and capital equipment. What process types
and production situations require greater flexibility?
39) Define economies of scope, and identify how they relate to flexible automation.
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2.4 Strategic Fit
1) Front offices generally emphasize top quality and customization.
2) When volume is higher, automation and capital intensity are more likely.
3) Which one of the following statements on the concept of focused factories is best?
A) emphasizes economies of scale, rather than diseconomies of scale
B) prefers larger facilities producing all of the products or services the company offers
C) reduces the range of demands placed on an operation so management can concentrate on fewer tasks
D) emphasizes flexibility rather than cost
4) One method for a factory to gain operational focus is to:
A) build large enough factories to produce all products and services the company offers.
B) hire more specialists and supervisors to control the operations.
C) reorganize existing facilities to the plant-within-plant (PWP) approach.
D) remodel stores to create the effect of many small boutiques under one roof.
5) A firm that chooses to compete based on delivery speed and variety would most likely have:
A) a make-to-order production and inventory strategy.
B) an assemble-to-order production and inventory strategy.
C) a make-to-stock production and inventory strategy.
D) an engineer-to-order production and inventory strategy.
6) Which one of the following statements on the concept of gaining focus is best?
A) Focused factories maximize the amount of customization.
B) Small sizes of many focused factories make it difficult to compete on the basis of shorter lead times.
C) Plants within plants are different operations within a facility that can have individualized competitive
priorities and processes.
D) Focused factories are large factories producing all the products that the company offers.
7) ________ are different operations within a facility with individualized competitive priorities, processes,
and workforces under the same roof.
8) Is an executive MBA program at your school a plant within a plant? Explain your reasoning.
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2.5 Strategies for Change
1) Reengineering is the fundamental rethinking and radical redesign of processes to improve
performance dramatically.
2) With a dramatic flourish, the team leader tore the employee orientation guidelines into pieces. He then
distributed blank pieces of paper to the team and asked them to envision the perfect orientation process
without regard to how it has always been done. This team is probably engaging in process reengineering.
3) More often than not, process improvement takes place whether or not a process is reengineered.
4) Process analysis is the documentation and detailed understanding of how work is performed and how
it can be redesigned.
5) Process improvement teams that focus on processes that cut across departmental boundaries have the
silo mentality.
6) Which one of the following statements concerning the role of process reengineering is best?
A) Reengineering is the fundamental rethinking and radical redesign of business processes.
B) Reengineering efforts should focus on one functional department at a time.
C) Information technology should be kept separate from reengineering initiatives.
D) Reengineering requires an attitude of incremental improvement.
7) Which of these tools is considered a primary enabler of process reengineering?
A) supply chain partners
B) information technology
C) logistics
D) infrastructure
8) A team consisting of members from each functional area affected by the process change is referred to
as a(n):
A) reengineering team.
B) cross-functional team.
C) process team.
D) improvement team.
9) A process selected for reengineering should be a:
A) core process.
B) front-office process.
C) hybrid office.
D) back office process.
10) Process analysis focuses on:
A) how work is actually done.
B) who is responsible for the customer.
C) the customer‘s needs.
D) the number of steps in between supplier and customer.
11) A systematic approach to process analysis includes the step:
A) reengineering.
B) integration.
C) order fulfillment.
D) define scope.
12) Performance measures such as average response times, repair times, and percent defective are
referred to as:
A) benchmarks.
B) metrics.
C) targets.
D) tactics.
13) Widespread participation in process analysis is essential not only because of the work involved but
also because:
A) employees tend to neglect their regular work duties, thus no one falls too far behind.
B) it builds commitment.
C) no one can analyze a process by himself.
D) a silo mentality should prevail and this requires large numbers of workers.
14) ________ is the documentation and detailed understanding of how work is performed and how it can
be redesigned.
15) The first step of the systematic approach to process analysis is ________.
16) The “Define” step of the Six Sigma Process Improvement Model entails establishing the ________ and
boundaries of the process to be analyzed.
17) ________ are performance measures that are established for a process and the steps within it.
18) Gaps between actual and desired performance are called ________.
19) A(n) ________ means that a department focuses on its own tasks without understanding the role and
processes of departments outside its own organizational boundaries.
20) The authors list six key elements of reengineering. Pick any three and describe their contribution to
the reengineering effort.
1) Flowcharts, service blueprints, and process charts are effective for defining and measuring processes.
2) In a swim lane flowchart, the line of visibility is used to separate the process steps in view of the
customer from those hidden from view of the customer.
3) A service blueprint is a flowchart of a service process that shows which of its steps has high customer
contact.
4) Formal work measurement techniques estimate average times for each step in a process by relying on
the judgment of skilled observers.
5) Elemental standard time data can help managers develop time standards for new work before
production begins.
6) The predetermined data approach eliminates the need for time studies.
7) A predetermined data approach to time standards can be completed before actual production begins.
8) Work sampling can be used to estimate the proportion of time spent by people or machines on
activities.
9) When using work sampling, the times of day when the analyst collects the sample data should be
selected at random over the length of the study.
10) A learning curve is a line showing the relationship between processing time and the cumulative
quantity of a product or service produced.
11) The learning curve for a process depends on the rate of learning and the actual or estimated time for
the first unit processed.
12) The best data analysis tool for recording which gas pump most customers use would be a checklist.
13) The general principle that 80% of a company’s complaints are generated by 20% of its product or
service issues is known as the Pareto concept.
14) A scatter diagram is a graphical technique that shows whether two variables may be related.
15) A fishbone diagram identifies which category is most frequently observed out of all the categories for
which you have data.
16) A flowchart traces the flow of all except the following:
A) information through a process.
B) customers through a process.
C) equipment through a process.
D) safety regulations through a process.
17) A flowchart created at the strategic level of an organization should show:
A) core processes and their linkages.
B) details of a process as bracketed by its scope.
C) individual steps that may have been aggregated at a higher level of analysis.
D) areas that are seen and unseen by the customer.
18) Cross-functional coordination is at particular risk where:
A) there is low process divergence.
B) there are handoffs in the process.
C) swim lane flowcharts are utilized.
D) it is not possible to create a flowchart.
19) A swim lane flowchart is an appropriate tool to use when:
A) the process features only intangible outputs.
B) the process involves more than one department.
C) the process scope is difficult to define.
D) the process has a person or group of people at a workstation or with a customer.
20) An effective tool for showing steps of a service process with a high level of customer contact is a:
A) Pareto chart.
B) flowchart.
C) service blueprint.
D) check sheet.
21) A process chart activity that changes, creates, or adds something is a(n):
A) operation.
B) transportation.
C) inspection.
D) delay.
22) A process chart activity that checks or verifies something but does not change it is a(n):
A) operation.
B) transportation.
C) inspection.
D) delay.
23) Which one of the following groups of activities is likely to be shown on a process chart?
A) operation, inspection, delay
B) operation, capital intensity, flow strategy
C) transportation, material flow, physical layout
D) storage, delay, personnel involved
24) The five categories of activities (operation, transportation, inspection, delay, and storage) are used in
which of the following methods of process analysis?
A) multiple-activity chart
B) process chart
C) capital budgeting
D) flow diagram
25) A process chart activity that occurs when something is put away until a later time is a(n):
A) storage.
B) transportation.
C) inspection.
D) delay.
26) A professor can grade a quiz in 30 seconds. Over the course of an academic year he has 6 sections of a
course with an average of 30 students with 10 quizzes in each section. If he is paid $40 an hour, how
much is his annual quiz-grading labor cost to the university?
A) $60
B) $100
C) $600
D) $36,000
27) A professor’s graduate assistant can grade a quiz in 40 seconds. Over the course of an academic year
he assists with 6 sections of a course with an average of 30 students with 10 quizzes in each section. If he
is paid $8 an hour, how much is his annual quiz-grading labor cost to the university?
A) $60
B) $160
C) $576
D) $576,000
28) A professor can grade a quiz in 2 minutes. Over the course of an academic year he has 6 sections of a
course with an average of 25 students with 10 quizzes in each section. If he is paid $40 an hour, how
much is his annual quiz-grading labor cost to the university?
A) $250
B) $500
C) $1,000
D) $2,000
29) Highly customized job processes and processes that are highly divergent require the use of:
A) the time study method.
B) the elemental standard data approach.
C) the predetermined data approach.
D) the work sampling method.
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Scenario 2.1
Garman observes a worker assembling peanut valves and records the data displayed in the table.
Time (seconds)
Observations
21
15
25
12
30
12
30) Use the information in Scenario 2.1 to answer this question. What is the average time for this job
element?
A) 15 seconds
B) 20 seconds
C) 25 seconds
D) 30 seconds
31) Use the information in Scenario 2.1. What is the normal time for this job element if the rating factor is
80%?
A) 15 seconds
B) 20 seconds
C) 25 seconds
D) 30 seconds
32) Use the information in Scenario 2.1. What is the standard time for this job element if the allowance for
the process is 25%?
A) 15 seconds
B) 20 seconds
C) 25 seconds
D) 30 seconds
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Scenario 2.2
Garman observes a worker assembling peanut valves and records the data displayed in the table.
Time (seconds)
Observations
10
18
15
25
20
17
33) Use the information in Scenario 2.2. What is the average time for this job element?
A) 15.06 seconds
B) 14.92 seconds
C) 13.42 seconds
D) 11.19 seconds
34) Use the information in Scenario 2.2. What is the normal time for this job element if the rating factor is
75%?
A) 15.06 seconds
B) 14.92 seconds
C) 13.42 seconds
D) 11.19 seconds
35) Use the information in Scenario 2.2. What is the standard time for this job element if the allowance for
the process is 20%?
A) 15.06 seconds
B) 14.92 seconds
C) 13.42 seconds
D) 11.19 seconds