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2) A knowledge society is one that has migrated from work based on knowledge to one based on manual
work.
3) Productivity is the total value of all inputs to the transformation process divided by the total value of
the outputs produced.
4) Illiteracy and poor diets have been known to cost countries up to what percent of their productivity?
A) 2%
B) 5%
C) 10%
D) 20%
E) 50%
5) A foundry produces circular utility access hatches (manhole covers). If 120 covers are produced in a 10-
hour shift, the productivity of the line is:
A) 1.2 covers/hr.
B) 2 covers/hr.
C) 12 covers/hr.
D) 1200 covers/hr.
E) 120 covers/hr.
6) A foundry produces circular utility access hatches (manhole covers). Currently, 120 covers are
produced in a 10-hour shift. If labor productivity can be increased by 20%, it would then be:
A) 14.4 covers/hr.
B) 24 covers/hr.
C) 240 covers/hr.
D) 1200 covers/hr.
E) 10 covers/hr.
7) Gibson Valves produces cast bronze valves on an assembly line. If 1600 valves are produced in an 8-
hour shift, the productivity of the line is:
A) 2 valves/hr.
B) 40 valves/hr.
C) 80 valves/hr.
D) 200 valves/hr.
E) 1600 valves/hr.
8) Gibson Valves produces cast bronze valves on an assembly line, currently producing 1600 valves each
8-hour shift. If the productivity is increased by 10%, it would then be:
A) 180 valves/hr.
B) 200 valves/hr.
C) 220 valves/hr.
D) 880 valves/hr.
E) 1760 valves/hr.
9) Gibson Valves produces cast bronze valves on an assembly line, currently producing 1600 valves per
shift. If the production is increased to 2000 valves per shift, labor productivity will increase by:
A) 10%.
B) 20%.
C) 25%.
D) 40%.
E) 50%.
10) The Dulac Box plant produces 500 cypress packing boxes in two 10-hour shifts. What is the
productivity of the plant?
A) 25 boxes/hr.
B) 50 boxes/hr.
C) 5000 boxes/hr.
D) 0.04 boxes/hr.
E) 250 boxes/hr.
11) The Dulac Box plant works two 8-hour shifts each day. In the past, 500 cypress packing boxes were
produced by the end of each day. The use of new technology has enabled them to increase productivity
by 30%. Productivity is now approximately:
A) 32.5 boxes/hr.
B) 40.6 boxes/hr.
C) 62.5 boxes/hr.
D) 81.25 boxes/hr.
E) 300 boxes/hr.
12) The Dulac Box plant produces 500 cypress packing boxes in two 10-hour shifts. Due to higher
demand, they have decided to operate three 8-hour shifts instead. They are now able to produce 600
boxes per day. What has happened to productivity?
A) It has not changed.
B) It has increased by 37.5 boxes/hr.
C) It has increased by 20%.
D) It has decreased by 8.3%.
E) It has decreased by 9.1%.
13) Productivity measurement is complicated by:
A) the competition's output.
B) the fact that precise units of measure are often unavailable.
C) stable quality.
D) the workforce size.
E) the type of equipment used.
14) The total of all outputs produced by the transformation process divided by the total of the inputs is:
A) utilization.
B) greater in manufacturing than in services.
C) defined only for manufacturing firms.
D) multifactor productivity.
E) single-factor productivity.
15) Which productivity variable has the greatest potential to increase productivity?
A) labor
B) globalization
C) management
D) capital
E) energy
16) Which of the following nets the largest productivity improvement?
A) increase output 15%
B) decrease input 15%
C) increase both output and input by 5%
D) increase output 10%, decrease input 3%
E) decrease input 10%, increase output 3%
17) Productivity can be improved by:
A) increasing inputs while holding outputs steady.
B) decreasing outputs while holding inputs steady.
C) increasing inputs and outputs in the same proportion.
D) decreasing inputs while holding outputs steady.
E) none of the above.
18) The largest contributor to productivity increases is ________, estimated to be responsible for ________
of the annual increase.
A) management; over one-half
B) Mr. Deming; one-half
C) marketing and sales; two-thirds
D) capital; 90%
E) technology; over one-half
19) The factor responsible for the largest portion of productivity increase in the United States is:
A) labor.
B) management.
C) capital.
D) All three combined; it is impossible to determine the contribution of individual factors.
E) none of these.
20) Which of the following is NOT true when explaining why productivity tends to be lower in the
service sector than in the manufacturing sector?
A) Services are typically labor-intensive.
B) Services are often difficult to evaluate for quality.
C) Services are often an intellectual task performed by professionals.
D) Services are difficult to automate.
E) Service operations are typically capital intensive.
21) Three commonly used productivity variables are:
A) quality, external elements, and precise units of measure.
B) labor, capital, and management.
C) technology, raw materials, and labor.
D) education, diet, and social overhead.
E) quality, efficiency, and low cost.
22) The service sector has lower productivity improvements than the manufacturing sector because:
A) the service sector uses less skilled labor than manufacturing.
B) the quality of output is lower in services than manufacturing.
C) services usually are labor-intensive.
D) service sector productivity is hard to measure.
E) the service sector is often easy to mechanize and automate.
23) Productivity tends to be more difficult to improve in the service sector because the work is:
A) often difficult to automate.
B) typically labor-intensive.
C) frequently processed individually.
D) often an intellectual task performed by professionals.
E) All of the above make service productivity more difficult.
24) A small metal shop operates 10 hours each day, producing 100 parts/hour. If productivity were
increased 20%, how many hours would the plant have to work to produce 1000 parts?
A) less than 2 hours
B) between 9 and 10 hours
C) between 2 and 6 hours
D) between 6 and 8 hours
E) between 8 and 9 hours
25) A cleaning company uses 10 lbs each of chemicals A, B and C for each house it cleans. After some
quality complaints, the company has decided to increase its use of chemical A by an additional 10 lbs for
each house. By what % has productivity (houses per pound of chemical) fallen?
A) 0%
B) 10%
C) 15%
D) 25%
E) 33%
26) A cleaning company uses $10 of chemicals, $40 of labor, and $5 of misc. expenses for each house it
cleans. After some quality complaints, the company has decided to increase its use of chemicals by 50%.
By what percentage has multifactor productivity fallen?
A) 0%
B) 8.3%
C) 25%
D) 50%
E) 16.7%
27) Starbucks stopped requiring signatures on credit-card purchases under $25 in an attempt to reduce
________.
28) ________ is the total of all outputs produced by the transformation process divided by the total of the
inputs.
29) Productivity is the ratio of ________ to ________. Using this relationship, productivity can be
improved by ________ or ________.
30) Identify the three productivity variables used in the text.
31) What is a knowledge society?
32) As the administrative manager in a law office, you have been asked to develop a system for
evaluating the productivity of the 15 lawyers in the office. What difficulties are you going to have in
doing this, and how are you going to overcome them?
33) Susan has a part-time business producing seasonal plywood yard ornaments for resale at local craft
fairs and bazaars. She currently works 8 hours per day to produce 16 ornaments.
a. What is her productivity?
b. She thinks that by redesigning the ornaments and switching from use of a wood glue to a hot-glue gun
she can increase her total production to 20 ornaments per day. What is her new productivity?
c. What is her percentage increase in productivity?
34) A firm cleans chemical tank cars in the Bay St. Louis area. With standard equipment, the firm
typically cleaned 70 chemical tank cars per month. They utilized 10 gallons of solvent, and two
employees worked 20 days per month, 8 hours a day. The company decided to switch to a larger cleaning
machine. Last April, they cleaned 60 tank cars in only 15 days. They utilized 12 gallons of solvent, and the
two employees worked 6 hours a day.
(a) What was their raw material and their labor productivity with the standard equipment?
(b) What is their raw material and their labor productivity with the larger machine?
(c) What is the change in each productivity measure?
35) The Dulac Box plant produces wooden packing boxes to be used in the local seafood industry.
Current operations allow the company to make 500 boxes per day, in two 8-hour shifts (250 boxes per
shift). The company has introduced some small changes in equipment, and conducted appropriate job
training, so that production levels have risen to 300 boxes per shift. These changes did not require any
change in the amount of capital spending or energy use. What is the firm's new labor productivity?
36) Mark's Ceramics spent $4000 on a new kiln last year in the belief that it would cut annual energy
usage 25% over the old kiln. This kiln is an oven that turns "greenware" into finished pottery. Mark is
concerned that the new kiln requires extra labor hours for its operation. Mark wants to check the energy
savings of the new oven, and also to look over other measures of their productivity to see if the change
really was beneficial. Mark has the following data to work with:
Last Year
This Year
Production (finished units)
4000
4000
Greenware (pounds)
5000
5000
Labor (hrs)
350
375
Capital ($)
15000
19000
Energy (kWh)
3000
2600
Were the modifications beneficial?
37) Martin Manufacturing has implemented several programs to improve its productivity. They have
asked you to evaluate the firm's productivity by comparing this year's performance with last year's. The
following data are available:
Last Year
This Year
Output
10,500 units
12,100 units
Labor Hours
12,000
13,200
Utilities
$7,600
$8,250
Capital
$83,000
$88,000
Has Martin Manufacturing improved its productivity during the past year?
38) Felicien grows mirlitons (that's Cajun for Chayote squash) in his 100 by 100-foot garden. He then sells
the crop at the local farmers' market. Two summers ago, he was able to produce and sell 1200 pounds of
mirlitons. Last summer, he tried a new fertilizer that promised a 50% increase in yield. He harvested 1900
pounds. Did the fertilizer live up to its promise?
39) The Dulac Box plant produces wooden packing boxes to be used in the local seafood industry.
Current operations allow the company to make 500 boxes per day, in two 8-hour shifts (250 boxes per
shift). The company has introduced some moderate changes in equipment, and conducted appropriate
job training, so that production levels have risen to 300 boxes per shift. Labor costs average $10 per hour
for each of the 5 full-time workers on each shift. Capital costs were previously $3,000 per day, and rose to
$3,200 per day with the equipment modifications. Energy costs were unchanged by the modifications, at
$400 per day. What is the firm's multifactor productivity before and after the changes?
40) Gibson Products produces cast bronze valves for use in offshore oil platforms. Currently, Gibson
produces 1600 valves per day. The 20 workers at Gibson work from 7 a.m. until 4 p.m., with 30 minutes
off for lunch and a 15-minute break during the morning work session and another at the afternoon work
session. Gibson is in a competitive industry, and needs to increase productivity to stay competitive. They
feel that a 20 percent increase is needed.
Gibson's management believes that the 20 percent increase will not be possible without a change in
working conditions, so they change work hours. The new schedule calls on workers to work from 7:30
a.m. until 4:30 p.m., during which workers can take one hour off at any time of their choosing. Obviously,
the number of paid hours is the same as before, but production increases, perhaps because workers are
given a bit more control over their workday. After this change, valve production increased to 1800 units
per day.
a. Calculate labor productivity for the initial situation
b. Calculate labor productivity for the hypothetical 20 percent increase
c. What is the productivity after the change in work rules?
d. Write a short paragraph analyzing these results.
41) A local university is considering changes to its class structure in an effort to increase professor
productivity. The old schedule had each professor teaching 5 classes per week, with each class meeting an
hour per day on Monday, Wednesday, and Friday. Each class contained 20 students. The new schedule
has each professor teaching only 3 classes, but each class meets daily (Mon.-Fri.) for an hour. New classes
contain 50 students.
a. Calculate the labor productivity for the initial situation (students/hour).
b. Calculate the labor productivity for the schedule change (students/hour).
c. Are there any ethical considerations that should be accounted for?
d. Suppose that each teacher also is required to have 2 hours of Office Hours each day he/she taught
class. Is the schedule change a productivity increase?
42) A grocery chain is considering the installation of a set of 4 self-checkout lanes. The new self-checkout
lane setup will replace 2 old cashier lanes that were staffed by a cashier and bagger on each lane. One
cashier mans all 4 self-checkouts (answering questions, checking for un-scanned items, taking coupons,
etc). Checkout on the new lanes takes 2 minutes (customers bag their own orders) while checkout with
the old lanes took only 45 seconds. In addition, the electricity costs for both setups are $0.05 per checkout
while bagging (material) costs are $0.10 per checkout with the old system and $0.15 for the new system.
The new lanes also require $100/shift in capital costs. Assume that the lanes are always in use for 8 hours
per day (1 shift) and that a worker makes $10/hour.
(a) How many checkouts did the old system provide in a shift?
(b) How many checkouts does the new system provide?
(c) What is the multifactor productivity for each system?
43) A swimming pool company has 100,000 labor hours available per summer and with a labor
productivity of 5 pools per 6,000 hours.
a. How many pools can the company install this summer?
b. Suppose the multifactor productivity was one pool per $25,000. How much should the company
expect to spend this summer constructing the pools?
44) An industrial plant needs to make 100,000 parts per month to meet demand. Each month contains 20
working days, each of which allows for 3 separate 8 hour shifts.
(a) If a worker can produce 10 parts/hour, how many workers are needed on each shift?
(b) If each shift has 100 workers, what is the productivity of an individual worker?
(c) If material costs are $10/part, capital costs are $100,000 and labor costs are $10/hour, what is the
multifactor productivity of the plant from part (a)?
45) The local fast food store experienced the following number of customers on the night shift:
Hour----------------Customers
12 AM 23
1 AM 20
2 AM 15
3 AM 5
4 AM 2
5 AM 1
If the store was staffed by two workers, what was the average productivity per worker, in
customers/hour?
Section 9 Current Challenges in Operations Management
1) Current challenges in operations management include all of the following EXCEPT:
A) just-in-time performance.
B) rapid product development.
C) mass customization.
D) empowered employees.
E) None of the above are exceptions, i.e., all are current challenges.
2) Which of the following statements about challenges in operations management is FALSE?
A) Job specialization is giving way to empowered employees.
B) Local or national focus is giving way to global focus.
C) Sustainable production is giving way to a low-cost focus.
D) Rapid product development is partly the result of shorter product cycles.
E) The goal of mass customization is to produce customized products, whenever and wherever needed.
3) ________ is the ability of the organization to be flexible enough to cater to the individual whims of
consumers.
4) ________ is the operations management challenge that moves more decision making to the individual
worker.
5) Why are organizations changing from batch (large) shipments to just-in-time (JIT) shipments?
6) Why are organizations becoming more global?
Section 10 Ethics, Social Responsibility, and Sustainability
1) Ethical and social dilemmas arise because stakeholders of a business have conflicting perspectives.
2) Which of the following is NOT among the ethical and social challenges facing operations managers?
A) honoring stakeholder commitments
B) training, retaining, and motivating employees
C) efficiently developing and producing safe high-quality green products
D) increasing executive pay
E) providing a safe workplace
3) A business's stakeholders, whose conflicting perspectives cause ethical and social dilemmas, include:
A) lenders.
B) suppliers.
C) owners.
D) employees.
E) all of the above.
4) What term is given to those individuals with a vested interest in an organization, including customers,
distributors, suppliers, owners, lenders, employees, and community members?
A) alumni
B) investors
C) vestors
D) stockholders
E) stakeholders
5) Why are operations managers faced with ethical and social challenges?
6) What are some of the ethical and social challenges faced by operations managers?
