True / False
1. Entrepreneurs need to start thinking about the cost of operations when their products and services have become
commoditized.
a.
True
b.
False
False
1
2. Offshore manufacturing is appropriate for all products.
a.
True
b.
False
3. Management processes, business processes, and support processes are the three major processes that must be aligned in
a company if quality is going to be the outcome.
a.
True
b.
False
True
1
4. Product-focused organizations generally are highly decentralized so that they can respond better to market demands.
a.
True
b.
False
True
1
5. ISO 9001 is a series of international quality standards with a certification process.
a.
True
b.
False
True
1
6. Good SCM enables your company to forecast demand, match supply with demand, and fulfill the demand through
optimal distribution channels.
a.
True
b.
False
True
1
7. Identifying all the tasks in the production process makes it easier to determine what equipment and supplies are needed
for completing the task.
a.
True
b.
False
True
1
12.3 Production and Manufacturing
8. The best way for manufacturers to control quality is by arranging for products to be inspected at the end of the
production process.
a.
True
b.
False
False
1
12.2 Supply Chain Management
9. The primary reason to outsource manufacturing is to improve quality.
a.
True
b.
False
10. Today, product/service warranties are not a competitive marketing tool.
a.
True
b.
False
False
1
12.3 Production and Manufacturing
Multiple Choice
11. Production is managing the ____ of material and information from raw materials to finished goods.
a.
financing
b.
inventory
c.
outsourcing
d.
flow
e.
None of these choices
d
1
12.1 Producing Products and Services
12. The virtual ownership model is similar to the Japanese keiretsu in the automobile industry with the exception of ____.
a.
financing
b.
ownership
c.
outsourcing
d.
suppliers
e.
None of these choices
b
1
12.1 Producing Products and Services
13. The goal in ____ is to provide the exact service the customer wants at minimal cost.
a.
logistics
b.
supply chain management
c.
outsourcing
d.
human resources
e.
purchasing
b
1
12.2 Supply Chain Management
14. Any business that purchases raw materials or parts for production of goods for resale must carefully consider the
quality, quantity, and ____ of those purchases.
a.
logistics
b.
pricing
c.
outsourcing
d.
staffing
e.
timing
e
1
12.2 Supply Chain Management
15. The quantity of raw materials or parts that are purchased is a function of ____, manufacturing capability, and storage
capability.
a.
logistics
b.
cost
c.
customer demand
d.
market size
e.
suppliers
c
1
12.2 Supply Chain Management
16. To guard against contingencies, it is wise for a startup to use one supplier for about ____ percent of its needs and one
or more additional suppliers for the rest.
a.
50
b.
50 to 60
c.
60 to 70
d.
70 to 80
e.
80
d
1
12.2 Supply Chain Management
17. Inventory is defined as the stocks of items used to support production, associated activities, and ____.
a.
logistics
b.
customer service
c.
customer demand
d.
packaging
e.
outsourcing
1
12.2 Supply Chain Management
18. Product- or project-focused organizations generally are highly ____ so that they can respond better to market
demands.
a.
functional
b.
decentralized
c.
centralized
d.
mobile
e.
None of these choices
a
1
12.2 Supply Chain Management
19. The ____ process consists of a series of inputs, such as raw materials, labor, and machinery, which are then
transformed through a series of processes into new products and services.
a.
logistics
b.
production
c.
inventory
d.
quality control
e.
outsourcing
b
1
12.1 Producing Products and Services
20. In general, manufacturing and production firms are organized as ____-focused or ____-focused organizations.
a.
product / service
b.
input / output
c.
product / process
d.
product / project
e.
insourcing / outsourcing
c
1
12.3 Production and Manufacturing
21. ____ organizations are common among manufacturers with capital-intensive processes and among service companies.
a.
Service-focused
b.
Project-focused
c.
Product-focused
d.
Process-focused
e.
None of these choices
d
1
12.3 Production and Manufacturing
22. A manufacturing firm is likely to use process-focused manufacturing if:
a.
They are highly decentralized
b.
They are distributed so that they can respond better to market demands
c.
Manufacturing is capital-intensive
d.
They act as separate company or profit centers
e.
None of these choices
c
1
12.3 Production and Manufacturing
23. The real success or failure of the quality control effort is dependent on the ____ in the process.
a.
logistics
b.
benchmarking
c.
technology element
d.
continuous improvement
e.
human element
e
1
12.3 Production and Manufacturing
24. ____ relies on statistical tools and specific processes to achieve the measureable goals of fewer defects, increased
productivity, reduced waste, and superior products and processes.
a.
Logistics
b.
Benchmarking
c.
Total quality improvement
d.
Six Sigma
e.
ISO 9000
d
1
12.3 Production and Manufacturing
25. Entrepreneurs who subscribe to ____ will probably wish to provide warranties with products and services.
a.
continuous improvement
b.
benchmarking
c.
total quality management
d.
Six Sigma
e.
ISO 9000
1
12.3 Production and Manufacturing
26. Outsource when all efforts to boost ____ at home have been exhausted.
a.
efficiency and innovation
b.
sales and marketing
c.
quality and efficiency
d.
input and output
e.
All of these choices
27. ____ is/are used to demonstrate that a company stands behind what it produces and the work that it does.
a.
ISO 9000
b.
Warranties
c.
Six Sigma
d.
OEM
e.
None of these choices
b
1
12.3 Production and Manufacturing
28. Identifying all the tasks in the production process makes it easier to determine what equipment and ____ will be
needed for completing the tasks.
a.
financing
b.
employees
c.
supplies
d.
machinery
e.
None of these choices
c
1
12.3 Production and Manufacturing
29. Product- or project-focused organizations generally are highly ____ so that they can respond better to market
demands.
a.
functional
b.
decentralized
c.
centralized
d.
mobile
e.
None of these choices
b
1
12.3 Production and Manufacturing
30. Today, thousands of manufacturers and producers have embraced the philosophy of quality first but have not focused
particularly on:
a.
Equipment
b.
Processes
c.
The human element
d.
logistics
e.
supply chain management
c
1
12.3 Production and Manufacturing
31. Building a complex production system while the company is in startup or later, while it is rapidly growing, is ____.
a.
a recipe for disaster
b.
highly recommended
c.
recommended only for “born-global” companies
d.
likely to be most effective in declining markets
e.
the best way to improve quality
a
1
12.1 Producing Products and Services
32. ____ is/are a strategic issue that is designed to bring about business profitability and positive cash flow.
a.
Manufacturing
b.
Vendor selection
c.
Quality
d.
Production systems
e.
Business processes
c
1
12.2 Supply Chain Management
33. A supply chain differs from a value chain in that:
a.
It consists of upstream business activities
b.
It consists of downstream business activities
c.
It is a cooperative effort
d.
It considers designing the product
e.
It uses a decision tree
c
1
12.2 Supply Chain Management
34. The production process consists of a series of:
a.
Inputs
b.
Outputs
c.
Revisions
d.
Quality control checks
e.
None of these is correct.
a
1
35. The process of reconciling product output with the standards set for that product is ____.
a.
quality control
b.
a just-in-time system
c.
material requirement planning
d.
the economic order quantity
e.
ISO
1
12.3 Production and Manufacturing
36. In some industries, particularly labor-intensive ones, the only way to achieve competitive costs is to manufacture in a
country where ____.
a.
labor costs are level
b.
labor costs are low
c.
labor costs are high
d.
laborers are paid by the hour
e.
None of these choices
37. ____ is the management and control of the flow of goods and resources from the source of production to the
marketplace.
a.
Production
b.
Logistics
c.
Operations
d.
Manufacturing
e.
The just-in-time system
b
1
12.3 Production and Manufacturing
38. Which of the following is not a decision that entrepreneurs must make regarding warranties?
a.
Who executes the warranty
b.
What components of the product or aspects of service will be covered
c.
Product or process scope
d.
Customer satisfaction
e.
How to educate the public
d
1
12.3 Production and Manufacturing
39. One advantage of using an inventory management company is:
One advantage of using an inventory management company is:One advantage of using an inventory management
company is:
a.
They over see storage
b.
They track inventory numbers
c.
They ship devices
d.
They allow inspection and control of inventory from any computer with Internet access
e.
All of these are correct
1
12.3 Production and Manufacturing
40. Outsourced staff typically have a high turnover rate because ____________, so it is important for the entrepreneur to
create a culture that encourages the staff to stay with the business long term.
a.
the average age is 25
b.
of communication issues
c.
there are not enough workers
d.
equipment is too expensive
e.
none of these are correct
Subjective Short Answer
41. Define operations management.
produce and distribute products and services.
1
Planning Startup Operations, Intro
42. Briefly discuss the production process.
the process must be managed, measured, and tested for efficiency and effectiveness.
1
12.1 Producing Products and Services
43. Briefly discuss quality.
aligned: management processes, business processes, and support processes.
1
12.3 Production and Manufacturing
44. Briefly discuss what a new venture will need if it is offering innovative new products?.
consuming, expensive mistakes.
45. How can entrepreneurs address the challenge of managing inventory as they move beyond startup?
46. Why is it important to build a production system prior to launch rather than during the startup phase?
47. What decisions need to be made when considering warranting a product?
48. Briefly discuss the benefits of quality programs.
49. What questions should you ask when considering a specific vendor as a source?
50. Discuss the advantages of utilizing a single vendor.