84. When Company Tech decides to produce a new product line and determines the desired capacity and use of
technology, the next step is to
a. decide how big to build the new factory.
b. hire new workers for the facility.
c. decide whether to build a new plant or refurbish an existing plant.
d. determine which of the company’s existing plants is best suited to produce the new product.
e. determine what the magnitude of the conversion process will be.
85. A business will usually choose to produce a new product in an existing facility if the cost is less than the cost of
building a new one and the
a. type of technology needed for the new product is the same as the technology used by the existing products.
b. new product is an extension of an existing product line already produced in the factory.
c. human resources requirement for the new product and existing products can be satisfied with the facility’s
current employees.
d. product design is already completed.
e. existing factory has enough capacity to handle demand for the new product as well as the existing products.
86. Abbot Laboratory is embarking on a sophisticated technology that requires special skills. To address this problem,
the company has decided to recruit employees with the appropriate skills rather than train the existing employees.
This decision affects the work of the manager.
a. financial
b. human resources
c. personnel
d. operations
e. marketing
87. A software manufacturer may seriously consider locating its facility in Silicon Valley because
a. the great amounts of electricity that it will need will be readily available.
b. the costs of construction and buildings are low in California.
c. a highly skilled labor force with technology experience will be available.
d. labor rates are likely to be lower in this part of the world than in any other.
e. California is renowned for the exceptional tax benefits packages that it offers.
88. is the arrangement of machinery, equipment, and personnel within a production facility.
a. Process layout
b. Product layout
c. Resource design
d. Plant layout
e. Design planning
89. When different sequences of operations are required for creating small batches of different products, the type of
design or layout used is the
a. product design.
b. product layout.
c. process layout.
d. quota layout.
e. output layout.
90. Phil Johnson is the owner of a small firm that manufactures customized oil-drilling equipment. The company’s
manufacturing facility is organized into a fabrication section, a heat treatment section, a welding section, and a
quality control section. This type of plant layout is referred to as a(n) layout.
a. product
b. pooled manufacturing
c. assembly-line
d. group manufacturing
e. process
91. A product layout is often referred to as a(n)
a. fixed–position layout.
b. output layout.
c. fixed capacity.
d. work-cell formation.
e. assembly line.
92. When all products undergo the same operations in the same sequence, a(n) is used.
a. product design
b. product layout
c. process layout
d. output layout
e. fixed layout
93. In a shoe manufacturing plant, all shoes undergo the same operations in the same sequence. The shoes flow from
one workstation to the next. This is a(n) layout.
a. output
b. fixed-position
c. product
d. process
e. work-cell
94. When a very large product that is hard to move is produced, a(n) is used.
a. product design
b. product layout
c. process layout
d. output layout
e. fixed–position layout
95. A Boeing factory in Everett, Washington, manufactures 787 Dreamliner jet aircrafts. What type of layout is most
likely in this factory?
a. Output
b. Fixed-position
c. Product
d. Process
e. Cell-rotation
96. Which of the following products is most likely to require a fixed-position layout?
a. Automobile
b. Canoe
c. Clothing
d. Ship
e. Computer
97. The objective of is to decide on the amount of products or services each facility will produce during a
specified period of time.
a. design planning
b. strategic planning
c. operational planning
d. capacity planning
e. output specification
98. The period of time over which an operational plan will be in effect is known as a
a. planning horizon.
b. fiscal period.
c. quality circle.
d. process layout.
e. research period.
99. Generally, a planning horizon lasts for one
a. week.
b. month.
c. quarter.
d. year.
e. decade.
100. The executives and operations specialists for Hyster, an industrial equipment manufacturer, meet and determine the
operational plan for the next two years. Two years is Hyster’s
a. planning time frame.
b. goal outlook.
c. operational time plan.
d. span of operational management.
e. planning horizon.
101. Which of the following is not one of the steps in operational planning?
a. Adjusting products or services to meet demand
b. Designing new products or services
c. Selecting a planning horizon
d. Comparing market demand with capacity
e. Estimating market demand
102. The quantity that customers will purchase at the going price is called the
a. economic demand.
b. market demand.
c. capacity.
d. consumer need.
e. inventory.
103. Marketing managers at Hasbro estimate that they will be able to sell 250,000 units of their Trivial Pursuit board
game in the upcoming year if the price is kept the same. In this situation, 250,000 is the
games.
a. capacity
b. consumer demand
c. market demand
d. required supply
e. level of production
for Trivial Pursuit
104. During the process of operational planning, management must compare market demand with
a. market supply.
b. consumer demand.
c. planned supply.
d. available human resources.
e. capacity.
105. All of the following options are available to a firm when capacity exceeds demand except to
a. lay off workers and shut down a portion of the facility.
b. operate on a shorter work week.
c. produce other goods or services.
d. sell unused facilities.
e. give away some of the products to selected customers.
106. When demand exceeds capacity, all of the following are reasonable options for the firm except
a. operating overtime hours to meet the demand.
b. starting a second or third shift.
c. subcontracting part of the work to other producers.
d. turning away some long-time customers.
e. expanding the capacity of the current facility.
107. When New Coke was introduced, it failed miserably in the market. After removing it from its product line, what did
Coca-Cola most likely do with the capacity devoted to producing this product?
a. Shift the excess capacity to the production of other soft-drink products
b. Eliminate the excess capacity by selling all New Coke facilities
c. Fire all the employees involved with the production of New Coke
d. Subcontract the production of New Coke to another producer
e. Decrease the work week of its production line employees
108. Like many firms in the electronics industry, Godin Manufacturing experiences ups and downs in the demand for its
high-tech products. To increase capacity during high-demand periods, management would do all of the following
except
a. change from one shift to two shifts a day.
b. lower the prices that customers pay.
c. open a new plant.
d. approve overtime for existing employees.
e. subcontract a portion of the work to other producers.
109. Operations control includes all of the following except
a. scheduling.
b. inventory control.
c. basic research.
d. purchasing.
e. quality control.
110. All of the activities involved in obtaining required materials, supplies, and parts from other firms are called
a. inventory scheduling.
b. purchasing.
c. operational planning.
d. scheduling.
e. product design.
111. Billy is in charge of obtaining the flour, sugar, and other ingredients needed for her employer, Baker‘s Café. Billy is
in charge of
a. procurement.
b. corporate buying.
c. purchasing.
d. inventory control.
e. shopping.
112. Which of the following is the objective of purchasing?
a. Routinely replenish the stock.
b. Ensure that required materials are available when they are needed, in the proper amounts, and at minimum
cost.
c. Select suppliers.
d. Determine the facility’s level of output.
e. Control inventory and product quality.
113. Carol was recently fired from her job as a purchaser for a grocery store. She was told the reason for her dismissal
was the almost continuous rotting of large amounts of produce and meat while in the stockroom awaiting sale in the
store. Which objective of purchasing did Carol fail to accomplish?
a. She failed to make sure the materials needed were in the proper amounts.
b. She failed to secure the needed materials at minimum cost.
c. She failed to obtain the materials needed before they were needed.
d. She ordered the wrong materials for her company.
e. She failed to purchase the best quality of materials available.
114. Chase is excited because he has just signed an agreement to purchase steel frames from a company at an excellent
price and of very high quality. Once the contract begins, Chase eagerly awaits the first shipment, but it arrives a
month behind the agreed-upon schedule, which slows down production at Chase’s plant. Chase is furious because
he realizes too late that this supplier
a. produces poor quality.
b. has bad credit terms.
c. is unreliable.
d. is not as inexpensive as he thought.
e. is unscheduled.
115. Which of the following statements is false in relation to choosing a supplier?
a. Purchasers should consider price, quality, and reliability when choosing a supplier.
b. Purchasers should always be on the lookout for new suppliers.
c. Purchasers should ensure that the credit terms a supplier offers are agreeable to their company.
d. Purchasers should consider the quality of life for employees and management in the proposed location.
e. Purchasers should focus on having only one supplier for each material needed.
116. include(s) stocks of completed goods, work in process, and raw materials.
a. Supplies
b. Holding goods
c. Inventories
d. Processed goods
e. Stock
117. Steinway, a company that produces concert quality grand pianos, has ivory in storage waiting to be made into piano
keys. This ivory is classified as
a. finished–goods inventory.
b. materials requirements planning.
c. raw-materials inventory.
d. work–in-process inventory.
e. raw supplies.
118. Products that have been partially completed but require further processing are known as inventory.
a. raw-materials
b. work-in–process
c. finished-goods
d. component-parts
e. processed-goods
119. A group of athletic shoes in a shoe factory are partially completed but still lack their innersoles and shoestrings.
These shoes are classified as
a. work-in–process inventory.
b. materials inventory.
c. partially-controlled inventory.
d. finished-goods inventory.
e. ready for sale.
120. consist(s) of goods that are awaiting shipment to customers.
a. Raw–materials inventory
b. Work-in-process inventory
c. Finished–goods inventory
d. Supplies
e. Controlled inventory
121. Ford cars and trucks are completed and ready for delivery to customers. Because of this, they are classified as
a. raw materials.
b. finished goods.
c. goods in waiting.
d. production inventory.
e. delivered goods.
122. What are the two types of costs associated with inventory?
a. Holding costs and selling costs
b. Stock-out costs and holding costs
c. Shipping and handling costs and holding costs
d. Overstock costs and stock-out costs
e. Holding costs and tracking costs
123. The Acme Toy Company introduced a new electric train, the Silver Bullet, in its Christmas catalog last year. Within
four days of the catalog’s mailing date, Acme had received phone orders for its entire inventory of trains. Jeff
Murrah, the sales manager responsible for the Silver Bullet, was delighted with the product‘s success. However, his
excitement was overshadowed by the cost resulting from lost sales that his division would suffer.
a. variable
b. stock-out
c. opportunity
d. fixed
e. holding