52) Kirstin is thinking about opening a Chinese restaurant and needs to buy a rice cooker. Machine A has
fixed costs of $100 and variable costs of $1/pound. Machine B has fixed costs of $500 and variable costs of
$.1/pound. If Kirstin plans to sell 100 pounds of rice, which machine should she choose? What is the
cross-over point?
53) Bridget is considering how to get to work over the summer. She has two options. Option A is to buy a
seasonal bus pass for $100. Option B is to pay $.25 for each ride. Identify the fixed and variable costs for
each option. If she has to ride both to and from work, how many days of work would it take for the
seasonal pass to cost the same amount as Option B?
54) Karla’s candle factory is considering two different manufacturing options. Option A is highly
automated with fixed costs of $25,000 and variable costs of $.1/candle. Option B uses hand labor with
fixed costs of $10,000 and variable costs of $.5/candle. If demand for Karla‘s candles is 25,000, which
option should she pick?
55) Mary is considering purchasing a machine from one of two suppliers. Supplier A’s machine has an
annual fixed cost of $10,000 and a unit variable cost of $2.10. Supplier B’s machine has an annual fixed
cost of $16,000 and a unit variable cost of $3.00. How large should Mary’s annual demand be in order to
make Supplier B’s machine the better choice?
Section 2 Selection of Equipment
1) When selecting new equipment and technology, decision makers look for flexibility—the ability to
respond with little penalty in time, cost, or customer value.
2) What have restaurants such as Steakhouses and Stacked Restaurants replaced their traditional paper
menus with?
A) spoken descriptions
B) singing descriptions
C) menus painted on the walls
D) index cards containing a picture of each item
E) iPad menus
3) Which of the following is true regarding the concept of flexibility?
A) It is the ability to respond with little penalty in time, cost, or customer value.
B) It may be accomplished with digitally controlled equipment.
C) It may involve modular or movable equipment.
D) All of the above are true.
E) None of the above is true.
4) ________ involves the ability to respond with little penalty in time, cost, or customer value.
5) Why do modern operations managers look for flexibility in their equipment?
Section 3 Process Analysis and Design
1) A value-stream map includes both (1) inventory quantities, and (2) symbols for customers and
suppliers.
2) Service blueprinting is a process analysis technique that focuses on the customer and the provider’s
interaction with the customer.
3) Activity times should not be included in a service blueprint.
4) A flowchart with the addition of a time axis becomes a process chart.
5) Time-function mapping is a flowchart with time added to the horizontal axis.
6) Flowcharts use distance, but not time, to show the movement of material, product, or people through a
process.
7) Value-stream mapping:
A) is a variation of time-function mapping.
B) examines the supply chain to determine where value is added.
C) extends time function mapping back to the supplier.
D) starts with the customer and works backwards.
E) All of the above are true.
8) One fundamental difference between a process chart and a flowchart is that:
A) the process chart adds a time dimension to the horizontal axis, while a flowchart is not time-oriented.
B) the process chart includes the supply chain, while the flowchart stays within an organization.
C) the process chart is more like a table, while the flowchart is more like a schematic diagram.
D) the process chart focuses on the customer and on the provider’s interaction with the customer, while
the flowchart does not deal directly with the customer.
E) None of these is true, because a process chart and a flowchart are the same thing.
9) Service blueprinting:
A) provides the basis to negotiate prices with suppliers.
B) mimics the way people communicate.
C) determines the best time for each step in the process.
D) focuses on the provider’s interaction with the customer.
E) uses the schematic of a house to diagram a service process.
10) What is a drawing of the movement of material, product, or people?
A) flowchart
B) process chart
C) service blueprint
D) process map
E) vision system
11) A(n) ________ uses symbols to analyze the movement of people or material.
12) A special form of time-function mapping, which goes beyond the organization into its supply chain, is
________.
13) ________ is a process analysis technique that focuses on the customer and the producer’s interaction
with the customer.
14) Describe Value-stream mapping. Explain how it is different from process mapping.
15) Identify the five major tools of process analysis and design. Describe them in a sentence or two each.
Section 4 Special Considerations for Service Process Design
1) Professional services typically require low levels of labor intensity.
2) An example of the postponement strategy for improving service productivity is having the customer
wait until you have sufficient time to serve the customer.
3) Which of the following are all strategies for improving productivity in services?
A) separation, self-service, automation, and scheduling
B) lean production, strategy-driven investments, automation, and process focus
C) reduce inventory, reduce waste, reduce inspection, and reduce rework
D) high interaction, mass customization, service factory, and just–in-time
E) process focus, repetitive focus, product focus, and mass customization focus
4) Which of the following is not one of the strategies for improving service productivity?
A) self-service
B) automation
C) scheduling
D) separation
E) mass customization
5) In mass service and professional service, the operations manager should focus extensively on:
A) automation.
B) equipment maintenance.
C) sophisticated scheduling.
D) human resources.
E) cost-cutting initiatives.
6) In the mass service and service factory quadrants of the service process matrix, the operations manager
could focus on all of the following except:
A) automation.
B) standardization.
C) tight quality control.
D) removing some services.
E) customization.
7) The strategy for improving service productivity that customizes at delivery, rather than at production,
is ________.
8) Provide an example of the focus strategy for improving service productivity.
9) Provide an example of the postponement strategy for improving service productivity.
10) Identify the techniques for improving service productivity. For any two techniques, describe in a
short paragraph, and include an example.
1) Process control is the use of information technology to monitor and control a physical process.
2) One use of camera-and-computer-based vision systems is to replace humans doing tedious and error–
prone visual inspection activities.
3) Automated storage and retrieval systems are commonly used in distribution facilities of retailers.
4) Flexible manufacturing systems, because of easily changed control programs, are able to perform such
tasks as manufacturing one-of-a-kind parts economically.
5) Which of the following is TRUE regarding vision systems?
A) They are consistently accurate.
B) They are modest in cost.
C) They do not become bored.
D) All of the above are true.
E) None of the above is true.
6) The use of information technology to monitor and control a physical process is known as:
A) process control.
B) computer-aided design.
C) information numeric control.
D) numeric control.
E) IT oversight.
7) Which of the following technologies could enable a cashier to scan the entire contents of a shopping
cart in seconds?
A) ASRS
B) AGV
C) CAD/CAM
D) RFID
E) FMS
8) Which of the following provides automatic placement and withdrawal of parts and products into and
from designated places in a warehouse?
A) AGV
B) CAD/CAM
C) CIM
D) ASRS
E) FMS
9) Computer-integrated manufacturing (CIM) includes manufacturing systems that have:
A) computer-aided design, a flexible manufacturing system, inventory control, warehousing and
shipping integrated.
B) transaction processing, management information systems, and decision support systems integrated.
C) automated guided vehicles, robots, and process control integrated.
D) robots, automated guided vehicles, and transfer equipment integrated.
E) all of their computers integrated with the marketing department.
10) Which one of the following technologies is used ONLY for material handling, NOT actual production
or assembly?
A) robots
B) CNC
C) CAD
D) AGVs
E) FMS
11) A system using an automated work cell controlled by electronic signals from a common centralized
computer facility is called:
A) an adaptive control system.
B) robotics.
C) a flexible manufacturing system.
D) an automatic guided vehicle (AGV) system.
E) a manufacturing cell.
12) “Operators simply load new programs, as necessary, to produce different products” describes:
A) CAD.
B) automated guided vehicles.
C) flexible manufacturing systems.
D) vision systems.
E) process control.
13) ________ is the use of information technology to control a physical process.
14) ________ is a computer-controlled warehouse that provides for the automatic placement of parts into
and from designated places within the warehouse.
15) A(n) ________ uses an automated work cell controlled by electronic signals from a common
centralized computer facility.
16) Identify the typical elements in a process control system.
17) Identify nine areas of technology that enhance production and productivity.
Section 6 Technology in Services
1) Production technology has had a major impact on services, but as yet there has been little reduction in
service labor requirements.
2) Optical checkout scanners and ATMs are examples of technology’s impact on services.
3) Advances in technology:
A) have impacted the manufacturing sector only.
B) have had only a limited impact on services.
C) have failed to change the level of customer interaction with an organization.
D) have had a dramatic impact on customer interaction with services and with products.
E) have dramatically changed health care, but have not changed retailing.
Section 7 Process Redesign
1) Successful process redesign focuses on departmental areas where small, continuous improvements can
be made.
2) Process redesign:
A) is the fundamental rethinking of business processes.
B) is sometimes called process reengineering.
C) tries to bring about dramatic improvements in performance.
D) often focuses on activities that cross functional lines.
E) all of the above
3) ________ is the fundamental rethinking of business processes to bring about dramatic improvements in
performance.