a.
the availability of factors of production
b.
autocratic management
c.
a high degree of centralization
d.
how well employees are treated
e.
market size
58. Wacker Corp., one of the leading light construction equipment suppliers to the rental industry, has
purchased new software, which will allow its employees to extend its electronic support capabilities
and parts-ordering efficiencies for its customers. Wacker’s improved _____ should lead to improved
employee satisfaction.
a.
service capability
b.
lean manufacturing
c.
service benchmarking
d.
service empowerment
e.
customer empathy
59. Which of the following is a specific component of internal service quality?
a.
MBO
b.
high value service
c.
delegation
d.
autonomy
e.
span of management
60. According to the Doing the Right Thing box “Protect Your Frontline Staff: The Customer Isn’t
Always Right,” companies should ask customers to leave when which of the following occurs?
a.
the customer uses foul language
b.
the customer makes threats to employees
c.
the customer demands illegal services
d.
the customer is belligerent
e.
all of the above
61. The term __________ refers to restoring customer satisfaction to strongly dissatisfied customers.
a.
service recovery
b.
service enhancement
c.
customer focus
d.
customer reengineering
e.
relationship marketing
62. The United Kingdom’s Royal Mail (that country’s equivalent of the USPS) needed to transform the
image its customers had of the organization. A key part of the transformation was to permanently
pass decision-making authority and responsibility to its workforce and allow them to develop and
implement their ideas on how to improve performance and service to customers. According to one
manager, “We understand now that people who work here care as much as managers do about the
business.” The Royal Mail used _____ to improve service.
a.
downsizing
b.
a taller organizational structure
c.
synergy
d.
empowerment
e.
bureaucratic techniques
63. Which of the following statements about service recovery is true?
a.
Service recovery refers to restoring customer satisfaction to strongly dissatisfied
customers.
b.
Service recovery sometimes requires not only that mistakes be fixed, but also that heroic
service be performed that far surpasses the expectations dissatisfied customers have
regarding fair treatment.
c.
The purpose of empowering service employees is zero customer defections.
d.
Service recovery increases the cost of selecting and hiring service workers who are
capable of solving problems and dealing with irate customers.
e.
All of these statements about service recovery are true.
64. Which of the following is NOT one of the benefits that companies gain by empowering service
workers for service recovery?
a.
Employees are able to make quicker responses to customer complaints and problems.
b.
Employees feel better about their jobs and themselves.
c.
Employee interaction with customers will be warm and enthusiastic.
d.
Higher customer satisfaction allows companies to pay lower wages to attract and keep
talented service workers.
e.
Employees are more likely to offer ideas for improving service or preventing problems.
65. The highest degree of processing occurs in __________ operations.
a.
assemble-to-order
b.
make-to-order
c.
make-to-stock
d.
batch
e.
real-time
66. Classifying manufacturing operations in terms of the amount of assembly that occurs after an order is
received from customers is the same as classifying those operations in terms of:
a.
processing
b.
flexibility
c.
production
d.
operations
e.
technical skills
67. _______ refers to a manufacturing operation that divides manufacturing processes into separate parts
or modules that are combined to create semi-customized products.
a.
Assemble-to-stock
b.
Assemble-to-order
c.
Make-to-order
d.
Make-to-stock
e.
Batch processing
68. The lowest degree of processing occurs in __________operations, where a company orders parts and
assembles standardized products before receiving customer orders.
a.
assemble-to-stock
b.
buy–to-sell
c.
make-to-order
d.
make-to-stock
e.
assemble-to-order
69. There is a relatively large Swiss population living in northern London, England. For three years, the
Swiss newspaper Neue Zurucher Zeitung daily shipped in 800 copies of the newspaper. Only about
40 percent sold because the papers did not arrive until almost lunchtime, and its potential readers
perceived the news it contained to already be old. In terms of the amount of processing, what type of
operation did the newspaper publisher operate?
a.
buy–to-sell operation
b.
make-to-assemble operation
c.
make-to-stock operation
d.
assemble-to-stock operation
e.
assemble-to-order operation
70. Which of the following types of operations are most dependent on the accuracy of sales forecasts?
a.
project manufacturing
b.
assemble-to-order operations
c.
make-to-order operations
d.
buy–to-sell operations
e.
make-to-stock operations
71. There is a relatively large Swiss population living in northern London, England. The Swiss
newspaper Neue Zurucher Zeitung has recently begun publishing the paper in London (instead of
having copies flown in from Zurich). The paper contains many of the items that are in the
Swiss-published paper as well as information that is important to the Swiss living in England. In
terms of the amount of processing, what type of operation does the newspaper publisher operate?
a.
buy–to-sell operation
b.
make-to-assemble operation
c.
make-to-stock operation
d.
assemble-to-stock operation
e.
assemble-to-order operation
72. __________ refers to the degree to which manufacturing operations can easily and quickly change the
number, kind, and characteristics of products they produce.
a.
Service recovery
b.
Process integration
c.
Manufacturing flexibility
d.
Just-in-time manufacturing
e.
Process changeover
73. Stanton Clarke carves wooden bowls and sells them at arts and crafts festivals. He has a machine that
will roughly carve a block of wood into a bowl, and then he hand finishes each one. Given that the
production of each bowl is a linear process, and the machine cannot do anything else besides bowls,
you would most likely describe Clarke’s manufacturing operations as __________ even though his
output is relatively small.
a.
project manufacturing
b.
batch production
c.
job shops
d.
line-flow production
e.
continuous-flow production
74. DirectBuild is a consulting company that provides advice and information for people who are building
their own homes. Each hopeful home-owner has his or her own ideas about how a house should be
built, is often unaware of building codes, and sometimes forgets that most houses should be built so
that they have resale value. The service provided by this company is most like which of the following
manufacturing operations?
a.
assemble-to-order
b.
job shop
c.
make-to-stock
d.
batch
e.
real-time
75. Why did GM have a plant in Kentucky that just manufactures Corvettes and one in Tennessee that
only produces Saturn?
a.
to gain the benefits of project manufacturing
b.
to create a job shop production simulation
c.
to achieve some of the benefits of line-flow production
d.
to increase the synergy of its manufacturing process
e.
to achieve the highest level of flexibility possible in the production of automobiles
76. _____ are typically small manufacturing operations that handle special custom orders or small batch
jobs.
a.
Job shops
b.
Job specialization operations
c.
Project shops
d.
Process manufacturers
e.
Customized shops
77. K-M-S Industries in Ohio specializes in making one-of-a-kind precision parts for performance racing,
energy, transportation, and aerospace applications. This _____ is in a low-volume but lucrative
business.
a.
continuous-flow production
b.
project manufacturing
c.
job shop
d.
line-flow production
e.
intermittent production
78. Graniterock is a California-based supplier of construction materials such as rock, gravel, and sand.
Each product is mined and transformed into usable material separately in large quantities. What type
of manufacturing operation does Graniterock use?
a.
continuous-flow production
b.
project manufacturing
c.
job shop
d.
line-flow production
e.
batch production
79. Which of the following is the LEAST flexible type of manufacturing operation?
a.
project manufacturing
b.
job shops
c.
line-flow production
d.
batch production
e.
continuous-flow production
80. Hattie Cao operates Peachy Keen and sells her products through catalog orders. The small company
has three employees. It produces and sells seven kinds of peach pies, three kinds of peach cake, two
kinds of peach cookies, and a peach salsa. There is a steady demand for its products. What type of
manufacturing operation would you expect this company to have?
a.
line-flow production
b.
continuous flow production
c.
job shops
d.
batch production
e.
project manufacturing
81. Which of the following is the most flexible manufacturing operation?
a.
project manufacturing
b.
continuous-flow production
c.
line-flow production
d.
batch production
e.
job shops
82. Stake Technology Ltd. sold a StakeTech Steam Explosion Pulping System in China for $4 million.
The client is a paper company located in the Yangzi River Delta. The system will be used to produce
pulp for paper from straw. Which manufacturing process was used to produce this pulping machine?
a.
line-flow production
b.
batch production
c.
job shops
d.
project manufacturing
e.
sporadic-flow production
83. Pamela Katian makes cloth dolls, which she sells to friends and relatives. Her __________ would
include over 200 yards of fabric, 100 yards of ribbon, a box of 500 wiggle eyes, stuffing, 20 dolls in
various stages of completing, and 15 completed dolls.
a.
raw materials
b.
component materials
c.
finished products
d.
inventory
e.
SKUs
84. __________ inventories include the basic inputs in a manufacturing process.
a.
Finished goods
b.
Work-in-process
c.
Component parts
d.
Raw materials
e.
Recyclable
85. Texas Instruments Inc. (TI) announced in June 2007 that weaker than expected demand for calculators
meant that it had greater than anticipated supply of calculators in stock. In other words, TI had a larger
than expected inventory of:
a.
finished goods
b.
work-in-process
c.
component parts
d.
raw materials
e.
recyclables
86. Pamela Katian makes cloth dolls, which she sells to friends and relatives. Her total inventory includes
over 200 yards of fabric, 100 yards of ribbon, a box of 500 eyes, stuffing, 20 dolls in various stages of
completing, and 15 completed dolls. How many items are in Katian’s work–in-process inventory?
a.
100
b.
200
c.
15
d.
20
e.
cannot tell from information given
87. Which of the following is NOT a kind of inventory a manufacturer would keep in stock?
a.
raw materials
b.
nonrenewable materials
c.
component parts
d.
finished goods
e.
work-in-process
88. Pamela Katian makes cloth dolls, which she sells to friends and relatives. Her total inventory includes
over 200 yards of fabric, 100 yards of ribbon, a box of 500 eyes, stuffing, 20 dolls in various stages of
completing, and 15 completed dolls. How many items are in Katian’s finished goods inventory?
a.
100
b.
500
c.
15
d.
20
e.
cannot be determined from the information given
89. In 2003, a national restaurant chain decided to offer an “all–you–can–eat” special on baby back ribs for
$15.95. Unfortunately, the promotion was too successful, and many of the chain’s restaurants had to
inform customers that the baby back ribs were all gone. In other words, many of the restaurants
experienced:
a.
negative turnover
b.
a loss of aggregated inventory
c.
a stockout
d.
a loss of amortization
e.
a lack of inventory customization
90. Which manufacturing operation typically requires the most time for completion?
a.
line-flow production
b.
batch production
c.
job shops
d.
project manufacturing
e.
sporadic-flow production
91. Texas Instruments Inc. (TI) announced in June 2007 that weaker than expected demand for calculators
meant that it had greater than anticipated supply of calculators in stock. Due to concern about the
economy, retailers are delaying the purchase of back–to-school calculators until closer to the start of
school this year. If retailers wait too long to purchase the calculators, they could experience:
a.
a loss of amortization
b.
negative sales
c.
a stockout
d.
aggregated turnover
e.
negative turnover
92. The three basic measures of inventory are inventory turnover, average aggregate inventory, and:
a.
inventory depreciation
b.
inventory amortization
c.
weeks of supply
d.
multifactor inventory
e.
speed of obsolescence
93. Hattie Cao operates Peachy Keen and sells her products through catalog orders. The small company
has three employees. It produces and sells seven kinds of peach pies, three kinds of peach cake, two
kinds of peach cookies, and a peach salsa. She normally keeps 250 jars of salsa in stock, but she
noticed today that she has more than 500 bottles in her inventory. Cao decided to reduce her inventory
by lowering her price. Her plan to get rid of excessive inventory was so successful that she found
herself completely sold out in just a couple of days. In other words, Cao experienced:
a.
a loss of amortization
b.
negative sales
c.
a stockout
d.
aggregated turnover
e.
negative turnover
94. Hattie Cao operates Peachy Keen and sells her products through catalog orders. The small company
has three employees. It produces and sells seven kinds of peach pies, three kinds of peach cake, two
kinds of peach cookies, and a peach salsa. She normally keeps 250 jars of salsa in stock, but she
noticed today that she has more than 500 bottles in her inventory. What does the text recommend this
business owner do with her excess inventory?
a.
cut prices on the salsa to increase its sales
b.
donate the salsa and get a tax write-off
c.
throw the excess away
d.
throw a party
e.
raise prices and sell the salsa as a premium product
95. __________ is the number of times per year that a company sells or replaces its average inventory.
a.
Stock rollover
b.
Average aggregate inventory
c.
The average inventory replacement cycle
d.
Inventory turnover
e.
The ratio of inputs to outputs
96. Mass distributors lowered prices substantially to sell increased volumes of hardware products, and
hardware stores managed the _____ costs of maintaining larger than needed inventories by including
them as overhead.
a.
containment
b.
stockout
c.
holding
d.
amortization
e.
setup
97. Texas Instruments Inc. (TI) announced in June 2007 that weaker than expected demand for calculators
meant that it had greater than anticipated supply of calculators in stock. Due to concern about the
economy, retailers are delaying the purchase of back-to-school calculators until closer to the start of
school this year. When retailers place their orders, their _____ costs will increase, while TI’s _____
costs will decrease.
a.
downtime; setup
b.
holding; setup
c.
stockout; setup
d.
setup; holding
e.
ordering; holding
98. Which of the following is NOT a kind of cost associated with maintaining an inventory?
a.
ordering
b.
stockout
c.
holding
d.
amortization
e.
setup
99. Downtime and lost efficiency are both examples of:
a.
ordering costs
b.
setup costs
c.
holding costs
d.
stockout costs
e.
depreciation costs
100. Transaction costs and loss of customer goodwill are both examples of:
a.
ordering costs
b.
setup costs
c.
holding costs
d.
depreciation costs
e.
stockout costs
101. In 2003, a national restaurant chain decided to offer an “all–you–can–eat” special on baby back ribs for
$15.95. Unfortunately, the promotion was too successful, and many of the chain’s restaurants had to
inform customers that the baby back ribs were all gone. What kind of inventory maintenance costs did
the restaurants experience?
a.
holding costs and loss of customer goodwill
b.
loss of customer goodwill and transaction costs
c.
setup costs and ordering costs
d.
setup costs and stockout costs
e.
downtime costs and stockout costs
102. A company that embroiders t-shirts, baseball caps, and backpacks uses 15,000 plain t-shirts annually.
The optimal order quantity is 500 shirts. The company embroiders approximately 150 shirts daily.
Using the __________ calculations, the company knows it should place an order approximately every
3 days.
a.
materials requirement planning
b.
just-in-time inventory management
c.
break-even
d.
economic order quantity
e.
independent demand
103. Which of the following is NOT a technique for managing inventory?
a.
progressive inventory management (PIM)
b.
just-in-time inventory (JIT)
c.
materials requirement planning (MRP)
d.
economic order quantity (EOQ)
e.
kanban
104. The maker of Beecham’s barbecue sauces uses 3,000 bottles annually. The optimal order quantity for
bottles is 300. The company fills approximately 150 bottles daily. How often should the manufacturer
place an order for more bottles?
a.
every day
b.
every 2 days
c.
once a week
d.
twice a week
e.
every other month
105. Rhett Butler Trucking is a viable bulk carrier providing just-in-time (JIT) transportation for both
chemical and dry bulk products throughout the United States and into Canada. Companies that use
the transport company:
a.
expect the chemical and dry bulk products to be delivered as they are needed by the
production line
b.
cannot continue operations if a stockout occurs
c.
have high inventory turnover rates
d.
uses a master production schedule to control service recovery costs
e.
spend more on holding costs than on any other form of inventory costs
106. Dr. Samuel Johnson said it best, “Nothing so concentrates the mind as the sight of the gallows.” In
other words, to get stuff done, we humans need a deadline. Which of the following tools best
illustrates the motivational power of deadlines?
a.
progressive inventory management (PIM)
b.
just-in-time inventory (JIT)
c.
materials requirement planning (MRP)
d.
economic order quantity (EOQ)
e.
planned event review timetable (PERT)
107. __________ is a ticket-based system that indicates when to reorder inventory.
a.
An MRP system
b.
A just-in-time system
c.
Kanban
d.
An independent demand system
e.
A dependent demand system
108. In inventory management situations involving independent demand systems, __________ should be
used, whereas with dependent demand systems, __________ should be used.
a.
JIT; MRP and/or EOQ
b.
EOQ; JIT and/or MRP
c.
MRP; JIT and/or EOQ
d.
MRP; JIT or EOQ
e.
EOQ; JIT or MBO
109. How does a company benefit from the use of kanban?
a.
It greatly reduces paperwork and ordering costs.
b.
It creates independent demand systems.
c.
It greatly reduces setup costs.
d.
It supports a continuous-flow production process.
e.
It eliminates holding costs.
110. Materials requirement planning (MRP) is:
a.
a method for inventory mining
b.
used with dependent demand systems
c.
used with tickets that indicate when to reorder various inventory items
d.
used with independent demand systems
e.
not concerned with finished product inventories
111. The three key parts of material requirement planning (MRP) are:
a.
aggregate inventory, suppliers’ invoices, and bills of laden
b.
inventory records, trend analyses, and production schedules
c.
the master production schedule, the bill of materials, and inventory records
d.
suppliers’ invoices, distribution schedules, and inventory records
e.
inventory turnovers, master production schedules, and storage space
RIP
In 2000, Japanese companies such as Mitsubishi, NEC, Fujitsu, and Sony began turning to Americans
to manufacture Japanese products. While Sony, Panasonic, and other Japanese giants still excel at
cranking out high-quality consumer electronics products — such as camcorders and TVs — by the
millions, it’s a different story in industries with short product cycles and factories that must build what
customers order instead of churning out products in anticipation of demand. Japan’s great strength —
repetitive manufacturing — is becoming its greatest weakness. This production–on-demand form of
management cannot depend on JIT. Instead the American companies rely on raw-in-process
inventory, or RIP. RIP calls for keeping a reasonable quantity of varied raw materials or components
on hand to meet changing customer demand.
112. Refer to RIP. In terms of the characteristics of quality service, repetitive Japanese manufacturing
means many of the Japanese firms are weak in which of the following areas?
a.
reliability
b.
empathy
c.
responsiveness
d.
tangibles
e.
assistance
113. Refer to RIP. A company that builds what customers order rather than what it thinks customers
should buy has a strong:
a.
customer focus
b.
product orientation
c.
sales orientation
d.
organizational structure
e.
customer synergy
114. Refer to RIP. What type of manufacturing operation are Americans who manufacture NEC, Fujitsu,
and Sony products using?
a.
stock-to-make
b.
make-to-stock
c.
raw-to-stock
d.
make-to-order
e.
assemble-to-order