97. (p. 245) Facility layout is the function of operations management that considers the physical arrangement of
resources (including people) in the production process.
98. (p. 245) For services, facility layout is usually designed to centralize the decision-making process.
99. (p. 245–246) The assembly line layout remains the most efficient layout for most manufacturing processes.
100. (p. 246) The production of a bridge, ship, or large airplane usually involves a variable-position facility
layout.
101. (p. 246) The process layout simplifies production by using the same sequence of processes regardless of the
design of the item being produced.
102. (p. 245) In an assembly line manufacturing layout workers do only a few tasks at a time.
103. (p. 245) In a modular manufacturing layout teams of workers combine to produce more complex units.
104. (p. 246, figure 9.2) A product manufacturing layout is used to produce large quantities of a few types of
products.
105. (p. 246, figure 9.2) A process manufacturing layout is frequently used in operations that serve different
customers’ different needs.
106. (p. 246, figure 9.2) A module manufacturing layout can accommodate changes in design or customer demand.
107. (p. 246) Materials requirement planning (MRP) enables a firm to make sure that the right amount of each
material or component is available at the right time to satisfy its production needs.
108. (p. 246) Materials requirement planning relies on the firm’s balance sheet to make sure that the right
quantities of finished goods are produced.
109. (p. 246) One limitation of MRP is that it is not a computer-based approach.
110. (p. 246-247) Enterprise resource planning (ERP) is simpler and less sophisticated than manufacturing resource
planning (MRP).
111. (p. 246-247) Enterprise resource planning (ERP) can be used to link multiple firms into one integrated
production unit.
112. (p. 246-247) One valid criticism of modern production planning methods such as ERP and MRP is that there is
no way to use recent advances in information technology (IT) with these systems.
113. (p. 247) ERP software enables multiple firms to manage all of their operations on the basis of a single,
114. (p. 247) The purchasing function involves searching for quality resources and finding the best suppliers as
well as negotiating the best price for the needed items.
115. (p. 247) Over the past few years, Internet-based companies have emerged to help businesses find the best
supplies at the best prices.
116. (p. 247) Modern companies tend to deal with many different suppliers in order to avoid problems that can
arise when one supplier is unable to provide needed parts or materials.
117. (p. 247) Today, rather than purchase goods and services from a large number of firms, manufacturers often
try to develop a close relationship with one or two key suppliers.
118. (p. 247) The cost to firms of purchasing items has been reduced tremendously due to the use of the Internet.
119. (p. 247) The primary characteristic of a just-in-time inventory system is that suppliers deliver parts and
materials “just in time” to go on the assembly line.
120. (p. 247) In a just-in-time inventory system, the producer maintains a large inventory of finished products so
that they are available at the moment the customer demands them.
121. (p. 247) In a just-in-time inventory system, the producer holds large quantities of the materials and
components used in the production process in its inventory to ensure that it always has enough on hand.
122. (p. 248) American firms that have tried to use just-in-time inventory systems generally have been very
disappointed with the results.
123. (p. 247) In JIT inventory systems a manufacturer normally communicates its production plans to suppliers so
that they can deliver needed parts and materials just in time for the manufacturer to use them.
124. (p. 248) One drawback of new quality control methods is that they require an expensive quality inspection of
each item at the end of the production process.
125. (p. 248) Today’s view on quality standards is based on the idea that customers ultimately determine the
appropriate level of quality.
126. (p. 248) Under the six sigma quality standard the idea is to detect potential problems to prevent their
occurrence.
127. (p. 248) 4 defects per million opportunities.
128. (p. 248) A key element of the statistical quality control process is the reliance on quality control experts to
inspect at the end of the production line to make sure that no defective products are shipped to final customers.
129. (p. 248) Statistical quality control (SQC) is the process some managers use to continually monitor all phases
of the production process to assure that quality is being built into the product from the beginning.
130. (p. 248) Statistical process control (SPC) is the process of taking statistical samples of product components at
each stage of the production process and plotting those results on a graph. Any variances from quality standards
are recognized and can be corrected if beyond the set standards.
131. (p. 248) The Deming Cycle is designed to catch errors before they happen.
132. (p. 248) The Deming Cycle approach to quality control consists of Plan, Do, Check, Act.
133. (p. 248) Service organizations find it difficult to provide outstanding service every time because the process is
so labor intensive.
134. (p. 249) The Malcolm Baldrige National Quality Award goes to any firm that achieves the six sigma quality
standard in the production of its goods.
135. (p. 249) Only large, well-established manufacturing firms are eligible to win the Malcolm Baldrige National
Quality Award.
136. (p. 249, Spotlight on Small Business box) According to the “Spotlight on Small Business” box in Chapter 9, small
companies not only meet six sigma standards, but also demand those standards of their suppliers.
137. (p. 249, Spotlight on Small Business box) According to the “Spotlight on Small Business” box in Chapter 9, small
companies can solve their problems by finding a solution used in a different situation and adapting it to the
current problem.
138. (p. 250) ISO 9000 refers to a set of international standards for quality management and assurance.
139. (p. 250) ISO 14000 is a new set of product quality standards that has replaced the old ISO 9000 standards.
140. (p. 250) The European Union is demanding that all firms that want to do business with its member nations
must satisfy ISO 9000 standards.
141. (p. 250) ISO 14000 is a collection of the best practices for managing an organization’s impact on the
environment.
142. (p. 250) Firms that satisfy the ISO 9000 and ISO 14000 standards have demonstrated a world-class
management system in both quality and environmental standards.
143. (p. 236) Abdou Ndiaye is currently a manager at a large manufacturing company. However, he has accepted a
management position with a company that provides a service. Both his current job and the one he has accepted
involve operations management responsibilities. Abdou is likely to find that operations management functions
in his new firm are totally different than they are in the manufacturing company.
144. (p. 245) Recent developments in information technology will encourage more firms to locate close to
population centers where labor is readily available.
145. (p. 243-244) Areas with higher than average labor costs are almost always at a major disadvantage when trying
to attract new businesses.
146. (p. 244) Ken Chilton is an outdoorsman whose love of hunting and fishing led him to start a mail order
company specializing in hunting and fishing gear. He decided to locate his business near the Ozarks in
southwestern Missouri, partly because of low labor costs, but mainly because the area offered excellent fishing
and hunting opportunities, a low crime rate, and a pleasant climate. Ken’s location decision was strongly
influenced by quality of life considerations.
147. (p. 242) Sue Baird is an operations manager at a medium sized service firm. Sue is recommending that her
firm use the Internet to make its services more readily available to its customers. Sue’s recommendation reflects
a growing trend in service sector firms.
148. (p. 242-243) Retailing is one area where technology is unlikely to make a big difference in how services are
provided.
149. (p. 246) Solarsys Aeronautics has just been awarded a contract to build a large lab module that will be
attached to a new space station. The module is approximately 48 feet long, 17 feet in diameter, and weighs over
sixty tons. Solarsys should use an assembly line plant layout to produce this module.
150. (p. 246, figure 9.2) Millwell Manufacturing has just redesigned its facility layout to group similar equipment and
functions together, and to allow flexibility in the sequence in which products are produced using these
functions. Millwood’s new layout is an example of the fixed-position layout.
151. (p. 246-247) Mpact Computers wants to set up a planning system that enables it to integrate its production and
operations system with those of its suppliers. The type of planning system it should use is MRP.
152. (p. 246-247) The increased use of enterprise resource planning (ERP) reflects the fact that firms in the
manufacturing sector want to remain independent of their suppliers and distributors in order to protect important
trade secrets.
153. (p. 247) Childerton Leisure Products currently uses an ERP system to manage all of its operations and
coordinate them with the operations of other companies. The company also wants to implement a just-in-time
(JIT) inventory system. Unfortunately for Childerton, ERP is incompatible with JIT, so if it adopts the new
inventory system it will have to abandon ERP.
154. (p. 247) Mypartz is a major supplier of components used by Utilimax Gaming Systems. Utilimax wants to
implement a just-in-time inventory system. Mypartz should benefit from this approach, since JIT systems
greatly simplify the task of suppliers.
155. (p. 247) A major advantage of a just-in-time inventory system is that it reduces costs and the effort for both
the producer and its suppliers.
156. (p. 248) Recent research suggests that the best way to maintain consistently high quality in the production
process is to give a group of specialists in a separate quality control department the authority to inspect each
product at the end of the production process.
157. (p. 248) Managers who are trying to improve the quality control process at the Bondstock Corporation have
recently discussed the importance of the Deming Cycle. This suggests that these managers are aware of the need
to find potential problems before they occur.
158. (p. 249, Spotlight on Small Business box) When the pharmaceutical industry learned to manage foam in the production
process by studying the beer industry, they were using TRIZ to solve the problem.
159. (p. 248-249) The Bignues Corporation recently received the Baldrige Award. This means that Bignues has
developed a significant technological breakthrough that enables it to lower its costs of production.
160. (p. 250) Lometrica is a successful firm that has just been certified as having met all of the latest ISO 9000
standards. We can conclude that Lometrica is doing a world-class job of managing the environmental impact of
its operations.
161. (p. 250) The European Union is demanding that firms that want to do business with its member countries
must meet these standards.
162. (p. 250) ISO 14000 standards deal with the same quality issues as ISO 9000 standards, but represent an even
higher standard of achievement.
163. (p. 251) SQC is a popular technique for analyzing the tasks involved to complete a given project, estimating
the time required to complete each task, and identifying the minimum time needed to complete the project.
164. (p. 251) A major purpose of the program evaluation and review technique (PERT) is to identify the minimum
time needed to complete a project.
165. (p. 251) The end result of PERT analysis is an estimate of the total cost of completing a project.
166. (p. 251) The critical path identified by PERT analysis is the sequence of tasks that can be completed in the
shortest amount of time.
167. (p. 251) PERT is a control procedure that identifies the sequence of tasks in a project that will take the longest
to complete.
168. (p. 251) An advantage of PERT diagrams is that they are usually so simple to draw that a computer is not
needed.
169. (p. 251) In a PERT network, a critical path is the sequence of tasks that takes the longest time to complete.
170. (p. 251) Compared to PERT networks, Gantt charts provide a more basic way to track progress on a given
project.
171. (p. 251) A Gantt chart is a bar graph showing production managers what projects are being worked on and
what stage they are in at any given time.
172. (p. 251) Brian Murray is a construction manager who wants to determine how long a new project will take to
complete and which tasks in the project have the greatest potential for delaying the project. The PERT method
will help Brian answer these questions.
173. (p. 251, figure 9.4) Casper is in charge of a complex project. He wants to see how all the different activities
involved in completing the project are related to each other. One way to illustrate these relationships would be
to construct a PERT chart.
174. (p. 251) The significance of the critical path on a PERT chart is that it identifies the least costly method of
producing a given product.
175. (p. 251) The first step in the PERT method is to assign a cost to each activity.
176. (p. 251) In order to determine overall progress on her current project, production manager Michelle Hudson
often refers to a bar graph that shows what activities are being worked on, and how much of each task has been
completed on a daily basis. Michelle is using a Gantt chart.
177. (p. 235) Today, U.S. companies in the manufacturing sector:
A. depend on government imposed tariffs on foreign goods to remain competitive.
178. (p. 236) In recent years, the service sector of the U.S. economy has:
C. achieved extremely high productivity gains according to government reports.
D. focused less on quality and more on reducing costs of production.
D. 95