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OM5 C1
Test Bank
1
Chapter 1 – Goods, Services, and Operations Management
Multiple Choice
1. The three issues that are at the core of operations management include all of the following
EXCEPT _____.
a.
cost
b.
quality
c.
tangibility
d.
efficiency
2. Which of the following key activities is NOT performed by operations managers?
a. Purchasing
b. Cost accounting
c. Forecasting
d. Service encounter design
3. An operations manager is expected to perform several key activities EXCEPT:
a.
coordinating the acquisition of materials, supplies, and services.
b.
determining when resources should be assigned to work.
c.
managing cash flow and strategic investments.
d.
making use of technology to improve productivity.
4. Which of the following statements is NOT true of goods and services?
a. Service encounters can be between a customer and a service provider.
b. Services cannot be stored as inventory for future sale.
c. A shoe is a durable good that provides a service.
d. Normally, patents do not protect services.
5. Computer software is an example of a _____.
a.
tangible product
b.
nondurable good
c.
service
d.
value creation process
6. Identify the statement about goods and services that is NOT true?
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a.
Services that do not involve significant interaction with customers can be managed much
the same as goods in a factory.
b.
A service is any primary or complementary activity that does not directly produce a
physical product.
c.
Some very significant differences exist between goods and services that create different
demands on the operations function.
d.
Designing and managing operations in a goods-producing firm is quite similar to that in a
service-providing organization.
7. Which of the following statements about goods and services is TRUE?
a.
The demand for services is independent of time.
b.
A durable good is a product that typically lasts for less than three years.
c.
A good example of a nondurable good is furniture.
d.
A service encounter can consist of one or more moments of truth.
8. Identify a FALSE statement about goods and services.
a.
Service encounters can be between a customer and a service provider.
b.
The demand for services is time-dependent, especially over the short term.
c.
There is no way to recapture the lost revenue from a hotel room.
d.
A moment of truth is a feature a customer recognizes, pays for, or uses.
9. Which of the following jobs requires the most service management skills and knowledge?
a.
Airplane mechanic
b.
Usher at sports stadium
c.
Restaurant cook
d.
Airline Flight attendant
10. Which of the following statements about goods and services is FALSE?
a. Service encounters can be between a customer and a service provider.
b. Demand for physical goods is more difficult to predict than demand for services.
c. Services cannot be stored as physical inventory for future sale.
d. Normally, patents do not protect services.
11. Which of the following statements is NOT true regarding the differences between goods and
services?
a. Demand for services is easier to forecast.
b. Customers participate in many services.
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Test Bank
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c. Services cannot be stored as physical inventory.
d. Patents do not protect service processes.
12. Which of the following statements about goods and services is FALSE?
a. Service encounters are interactions between customers and service providers.
b. Services can be stored as physical inventory for future sale.
c. Goods are tangible, while services are intangible.
d. The demand for service is more difficult to predict than the demand for goods.
13. Service management skills include all of the following EXCEPT _____.
a.
accounting and finance
b.
knowledge and technical expertise about operations
c.
marketing and cross-selling skills
d.
human interaction skills
14. Which of the following statements is TRUE of service facilities?
a.
They are in close proximity to customers.
b.
They rely on physical inventory.
c.
They take advantage of patents.
d.
They are located close to raw materials, suppliers, and labor.
15. Which of the following statements is TRUE of goods and services?
a.
A variant is always a durable good with new features.
b.
An automobile is a nondurable good.
c.
Demand for goods is more difficult to predict than demand for services.
d.
Normally, patents do not protect services.
16. A customer benefit package (CBP) includes _____.
a.
only core offerings
b.
only peripheral offerings
c.
either core or peripheral offerings but not both
d.
both core offerings as well as peripheral offerings
17. Which one of the following statements is TRUE regarding a customer benefit package (CBP)?
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Test Bank
a.
A CBP consists of a primary good and a primary service coupled together.
b.
A variant is a CBP feature that strictly adheres to the standard CBP.
c.
The size of the circles in the CBP framework can signify the relative importance of each
good and service.
d.
When defining a CBP, the features determined by management accurately describe
customers’ wants and needs.
18. Which of the following has the highest goods content?
a.
Buying furniture
b.
Computer repair service
c.
Automobile loans
d.
Symphony performance
19. Which one of the following has the lowest goods content?
a.
Automobile muffler replacement
b.
Computer diagnosis and repair
c.
Movie presentation
d.
Fast-food restaurant
20. Which of the following is lowest in goods content and highest in service content?
a.
Dining at a fast-food restaurant
b.
Attending a theater production
c.
Getting an oil change for your car
d.
Filling a medical prescription
21. In relating operations management and the customer benefit package (CBP), which is the
correct timing sequence?
a.
Operating system processes lead to customer needs and expectations, which lead to
customer benefit package.
b.
Customer benefit package leads to customer needs and expectations, which lead to
operating system processes.
c.
Customer needs and expectations lead to customer benefit package, which leads to
operating system processes.
d.
Customer needs and expectations lead to operating system processes, which lead to
customer benefit package.
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22. A(n) _____ is a sequence of activities that is intended to create a certain result.
a.
process
b.
service
c.
variant
d.
inventory
23. A support process could be any of the following EXCEPT _____.
a.
assembling automobiles
b.
purchasing materials and supplies
c.
managing inventory
d.
installing a product
24. Support processes typically include all of the following EXCEPT _____.
a.
inventory management
b.
day care on-site services
c.
research and development
d.
manufacturing and assembly
25. Which of the following activities is NOT included in the general management process in
businesses?
a.
Accounting and information system
b.
Purchasing and installation
c.
Marketing
d.
Human resource management
26. A network of processes that creates value for customers is known as a _____.
a.
process network
b.
value network
c.
customer value
d.
value chain
27. When evaluating golf clubs in a retail store, a golf simulator (i.e., a person hits the balls into a
big video golf course screen and sees where it lands) is an example of _____.
a. nondurable goods replacing services
b. a primary good
c. low goods content
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Test Bank
d. biztainment
28. Which one of the following is NOT an example of biztainment?
a.
iPhone applications
b.
Automobile leasing
c.
Virtual product demonstrations
d.
Virtual factory tours
29. Which of the following is the correct sequence describing the evolution of operations
management?
a.
Efficiency, customization, quality, service, sustainability, and time-based competition
b.
Quality, efficiency, time-based competition, sustainability, customization, and service
c.
Efficiency, quality, customization, time-based competition, service, and sustainability
d.
Quality, service, customization, time-based competition, efficiency, and sustainability
30. Which one of the following statements about the scope and direction of operations
management is FALSE?
a. Service-providing processes are the dominant type of processes in the U.S. economy.
b. Business analytics includes predictive and prescriptive data analytics.
c. Today, sustainability is placing increased pressure on all goods-producing and service-
providing organizations worldwide.
d. Goods-producing industries account for over 80 percent of the jobs in the U.S.
31. Which one of the following statements about the structure of the U.S. economy is TRUE?
a.
About 90 percent of all U.S. jobs are in service-providing processes.
b.
All goods-producing jobs account for 25 percent of total U.S. jobs.
c.
All service-providing jobs account for 65 percent of total U.S. jobs.
d.
The largest U.S. industry with respect to U.S. jobs is manufacturing.
32. Identify a TRUE statement about sustainability.
a.
Sustainability is always a variant in the customer benefit package framework.
b.
The goal of economic sustainability is to reduce time-based competition.
c.
Sustainability includes the global perspective.
d.
Sustainability includes the idea of preserving resources for future generations.
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33. Which of the following is NOT one of the three major perspectives (dimensions) of
sustainability?
a.
Global sustainability
b.
Environmental sustainability
c.
Economic sustainability
d.
Social sustainability
34. All of the following are perspectives of sustainability EXCEPT:
a.
economic sustainability.
b.
social sustainability.
c.
technological sustainability.
d.
environmental sustainability.
35. Which of the following statements is TRUE of social sustainability?
a. It includes customization and financial management.
b. It includes ethics and governance.
c. It includes sustainable product design.
d. It includes energy optimization.
36. Which one of the following statements is TRUE of sustainability?
a.
Environmental sustainability applies only to goods-producing firms.
b.
Resource management is a component of social sustainability.
c.
The three dimensions of sustainability are often referred to as the “triple bottom line.”
d.
Sustainability includes the idea of preserving resources for three years.
37. Which one of the following statements about sustainability is TRUE?
a. The three dimensions of sustainability are environmental, social, and technological.
b. Economic sustainability focuses solely on the quality levels of physical goods.
c. Sustainability applies to goods-producing organizations only.
d. Sustainability practices can improve productivity and eliminate waste.
38. Product safety is an example of a(n) _____ sustainability practice.
a.
environmental
b.
social
c.
economic
d.
technological
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39. Which of the following is NOT a current challenge in operations management (OM)?
a.
Globalization
b.
Technology
c.
Quality
d.
Mass production
True/False Questions
1. Operations management is focused primarily on the application of technology in
manufacturing.
2. Operations management is the only function by which managers can directly affect the value
provided to all stakeholders—customers, employees, investors, and society.
3. Every job entails some aspect of operations management.
4. Employees who are involved in the financial and accounting functions of organizations need
little knowledge of operations management.
5. Ensuring that a credit card has accurate customer information and is delivered quickly to the
customer is an example of inventory management in operations management (OM).
6. A product that typically lasts at least three years is called a durable good.
7. A toothbrush is an example of a nondurable good.
8. Both goods and services can be standardized for the mass market or customized to individual
needs.
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9. Services can be moved, stored, and repaired, and generally require physical skills and
expertise during production.
10. Customers and service providers often work together to co-produce a service.
11. Customer participation in manufacturing processes and activities is generally high.
12. The higher the customer participation, the more uncertainty the firm has with respect to
service time.
13. A service encounter is any interaction between a customer and a service provider.
14. Service encounters consist of one or more moments of truth.
15. Customers judge the value of a service and form perceptions through service encounters.
16. The demand for services is usually easier to predict than the demand for goods.
17. Service facilities must always be physically located close to the customer.
18. Many products that appear to be only physical goods often include bundled services.
19. A customer benefit package (CBP) consists of both a primary good and a primary service.
20. The ability to download music onto a cell phone is considered a primary service.
21. Peripheral goods and services are NOT essential to a primary good or service.
22. Many business-to-business manufacturers think of the physical good they produce as
peripheral and their core offering as service.
23. Cell phones are good examples of how goods and services are bundled together for long-
term profits.
24. Each good or service in the customer benefit process requires a process to create and deliver
it to customers.
25. A process can be designed by operations managers independently of the choice of a
customer benefit package, which is chosen exclusively by marketing staff.
26. Taking a customer’s order at a quick service restaurant is generally viewed as a support
process.
27. Quality has been a principal focus of operations management since the industrial revolution.
28. The reason that many Japanese firms captured major shares of world markets in the 1970s
was a result of their focus on quality rather than efficiency.
29. As manufacturers sought to customize their products for global markets and increase the
variety of goods and service, they were able to leverage the mass production methods that are
very efficient and cost-effective.
30. Time-based competition means providing new and innovative products that surprise and
delight customers.
31. Today, almost half of the jobs in the U.S. economy are in goods-producing industries.
Case Study Questions (To reward students who attend class, listen and learn, and take good
class notes on the case discussion and/or student team presentation.)
1. Which of the following statements is FALSE concerning the discussion of the Zappos case
study?
a. An example of a primary process at Zappos is “order entry.”
b. The value of a loyal customer is an important part of Zappos’ strategy because of its emphasis
on more repeat customers through word of mouth.
c. Zappos’ first core value is “Deliver WOW through service.”
d. Zappos’ call center is the gateway to its business and represents a support process.
2. Which of the following statements in the Zappos case discussion is TRUE?
a. High quality shoes are produced in factories owned by Zappos in Asia.
b. The order entry process is a support service.
c. The only type of service encounter design used by Zappos is customer to Web service (i.e.,
human to and from technology).
d. The return process is a primary service.
Problems for Manual Grading, Take-Home Exams and Partial Credit (Also, review the OM
Instructor’s Manual for end-of-chapter questions/problems)
1. Define operations management (OM) and describe its scope. What are the three issues that
are at the core of OM?
2. Define a good and a service. What is the difference between a durable and nondurable good?
Give an example of each.
3. Discuss the significant differences between goods and services.
4. Explain the concept of a service encounter with examples. How does a service encounter
relate to a moment of truth?
5. Explain the concept of a customer benefit package (CBP). Also, differentiate a primary good or
service from a peripheral good or service.
6. Define a process. Also, differentiate among a core process, a support process, and a general
management process.
7. In the last century, operations management saw six major themes. What are they? Briefly
discuss each.
8. Provide examples of business practices that support the three dimensions of sustainability
(environmental, social, and economic).
9. Discuss the six key current challenges in operations management (OM) that managers need to
understand.
