Archives: Quiz

In an ideal selling situation, products that generate a maximum dollar profit with a minimum amount of risk should be: A. harvested or divested. B. developed and marketed. C. produced only for the local market. D. shelved for future use. […]

Which of the following is critical to providing an atmosphere that stimulates new product activity at the idea generation stage of the new product development process? A. Filtering of ideas from unusual sources B. Avoiding radical new product ideas C. […]

For which of the following products is a retailer most likely to use prestige pricing? A. Plastic storage containers B. Fresh fruits C. Frozen desserts D. Crystal wine glasses Answer: _____ is a variation of cost-oriented pricing which is commonly […]

A producer of alcoholic beverages produces four different brands of beer: BlackStar, BlueStar, Grandeur, and Holmes. BlackStar is a standard brew, while BlueStar has low alcohol content. Grandeur is low in calories, and Holmes has high alcohol content. In this […]

Which one of the following statements related to stock buybacks is correct? A. Stock buybacks are a means of obtaining shares for employee stock option grants. B. Stock buybacks are becoming rare and may soon disappear totally. C. In 2007 […]

The daily financial operations of a firm are primarily controlled by managing the: A. total debt level. B. working capital. C. capital structure. D. capital budget. E. long-term liabilities. Answer: Which one of the following is the most ethical practice […]

Which one of the following terms applies to the costs incurred by a firm that is trying to avoid filing for bankruptcy? A. Indirect bankruptcy costs B. Direct bankruptcy costs C. Static theory cost D. Optimal capital structure cost E. […]

Last year, Isaac earned 10.6 percent on her investments while U.S. Treasury bills yielded 3.8 percent and the inflation rate was 3.1 percent. What real rate of return did she earn on her investments last year? A. 6.63 percent B. […]

Which of the following will tend to increase the credit period? I. Increase in the buyer’s inventory period II. Decrease in the buyer’s inventory period III. Increase in the buyer’s operating cycle IV. Decrease in the buyer’s operating cycle A. […]

New Century Products is a company that was founded last year. While the outlook for the company is positive, it currently has negative earnings. If you wanted to measure the progress of this firm, which one of the following ratios […]

Which one of the following represents the amount of compensation an investor should expect to receive for accepting the unsystematic risk associated with an individual security? A. Security beta multiplied by the market rate of return B. Market risk premium […]

Madison Corner writes 20 checks a day for an average amount of $630 each. These checks generally clear the bank 2.5 days after they are written. In addition, the firm generally receives an average of $18,400 a day in checks. […]

The economic life of a machine is the period over which it provides the best method for performing its task. Answer: SAP modules are updated twice each year. Answer: TRUE When stocked items are sold, the optimal inventory decision using […]

MRP provides the schedule specifying when each part and component of an end item should be ordered or produced. Answer: Independent demand is the demand for a product or service caused by the demand for other products or services. Answer: […]

Aggregation in sales and operations planning is by groups of customers on the supply side and by product families on the demand side of the firm’s supply chain. Answer: A key decision point in the generic development process during “Phase […]

Activity-based costing is sometimes referred to as transaction costing. Answer: One of the assumptions made using CPM is that project activities can be identified with clear beginning and ending points. Answer: TRUE A key use of a customer survey used […]

One of the implementation tools from the operations consulting tool kit is the responsibility chart. Answer: Process control is concerned with monitoring quality after the product or service has been produced. Answer: FALSE The smaller the capacity cushion the better. […]

You are managing a project and need to cut the cost of the project. You decide to transfer workers to another job to cut the project’s costs. Costs associated with transferring the workers are an example of project indirect costs. […]

Once an operations and supply strategy is adopted and articulated, the primary emphasis becomes perfecting the system of activities that make up the strategy through detailed refinements over a long period of time. Answer: Managing global supplier, production and distribution […]

One of the basic purposes of inventory analysis in manufacturing and stockkeeping services is to specify when items should be ordered. Answer: At some point, the size of a growing plant can become too large and diseconomies of scale become […]

TQM is an acronym meaning “total quality measurement”. Answer: The least unit cost method (LUC) of lot-sizing technique adds ordering and inventory carrying cost for each trial lot size and divides by the number of units in each lot size, […]

Compared with a service operation, which of these statements isTRUE for a manufacturing operation’s capacity? A.Manufacturing is more dependent on time and location B.manufacturing is subject to more volatile demand fluctuations C.Utilization more directly impacts quality D.Demand can be smoothed […]

The Poisson probability distribution is used in waiting line management when we are interested in the number of arrivals to a queue during some fixed time period. Answer: In order to develop the random number intervals for a simulation study […]

When work is scheduled in detail using the setup and run time required for each order, then theoretically all schedules will be feasible. Answer: Avoidable costs can reduce the cost of a new investment. Answer: TRUE Finding the optimal product […]

Economies of scope exist when multiple products can be produced at a lower cost in combination than they can separately. Answer: A mathematical technique that is only used in aggregate planning for service operations is the transportation method of linear […]

In inventory models, high holding costs tend to favor high inventory Levels. Answer: The equation for exponential smoothing states that the new forecast is equal to the old forecast plus the error of the old forecast. Answer: FALSE You time […]

Mental fatigue is a reason workers should be given some extra time to do their jobs. Answer: Most services contain a mix of tangible and intangible attributes known as the service package which is the major output of the development […]

The “Z” value used to calculate the probabilities in CPM analysis is based on the Beta probability distribution. Answer: Attributes are those quality characteristics that are classified as either conforming or not conforming to specifications. Answer: TRUE Implementing ERP may […]

Generally, determining lot sizes in MRP systems is simple. Answer: CAPP stands for computer aided purchasing program. Answer: FALSE Sociotechnical systems is an approach to job design that focuses on the interaction between technology and the work group. Answer: TRUE […]

Services often take the form of cycles of encounters involving face-to-face interactions. Answer: Depreciation is a method for allocating costs of capital equipment to future time periods when it will continue to be used. Answer: TRUE Computing the quantity of […]

Company unions in Japan exist to foster a cooperative relationship with management. Answer: mySAP.com is an internet interface that allows users to have the full functionality of the SAP software without requiring the deployment of any special software. Answer: TRUE […]

Maximum practical capacity is defined by the federal Bureau of Economic Analysis as “That output obtained within the normal operating schedule of shifts per day and days per week excluding the use of high-cost and inefficient facilities”. Answer: The most […]

The synchronous manufacturing approach uses backward scheduling. Answer: The fixed-order quantity inventory model favors less expensive items because average inventory is lower. Answer: FALSE The “Z” distribution used to calculate the probability of completing a project on time is only […]

While business organizations can seek to achieve the Baldrige National Quality Award educational institutions, like universities, can’t. Answer: CAE and CAD software systems are both used in the evaluation of products. Answer: TRUE The most common production management tools used […]

Variation that is inherent in a production process itself is called assignable variation. Answer: DHL and United Parcel Service are transportation companies which are prohibited from functioning as a third-party logistics company the way Federal Express does. Answer: FALSE Inventory […]

A responsibility chart is used in operations consulting in planning the task responsibilities for a project. Answer: Breakthrough projects are those that provide fundamental improvements to existing products. Answer: FALSE Computer aided manufacturing has not been widely adopted because newer […]

It is not necessary that a well-designed service system be robust. Answer: From an operations standpoint, one of the goals of the firm under the theory of constraints is to increase throughput while simultaneously reducing inventory and reducing operating expense. […]

TQM was defined in the textbook as managing the entire organization so that it excels on all dimensions of products and services that are important to the customer. Answer: One of the principles of work center scheduling is that the […]

The standard fixed-time period model assumes that inventory is never counted but determined by EOQ measures. Answer: Capacity can be defined as the amount of available resource inputs relative to requirements for output over a particular period of time. Answer: […]

A tracking signal (TS) can be calculated using the arithmetic sum of forecast deviations divided by the MAD. Answer: The activity direct costs associated with a project might include giving workers overtime to complete a project in less-than the expected […]

Central to the concept of operations and supply strategy is the notion of operations focus and trade-offs. Answer: A doctor completes a surgical procedure on a patient without error. The patient dies anyway. In operations management terms, we could refer […]

The aggregate operations plan differs in virtually every aspect in service operations as contrasted with manufacturing operations. Answer: Expected value is the anticipated selling price of a fixed asset, like corporate real estate. Answer: FALSE Activity-system maps are useful in […]

The demand on a hospital’s emergency medical services is considered an uncontrollable arrival pattern of the calling population. Answer: A synchronous manufacturing system does not have excess capacity throughout the system, except for a bottleneck. Answer: FALSE A department of […]

One of the tools of a quality control department that is used in a TQM program is process sampling. Answer: Requiring little or no education is one of the advantages for management in adopting specialization of labor as a job […]

The Shingo system approach to quality is totally compatible with statistically based approaches to quality control. Answer: A variable arrival rate is more common in waiting line management than a constant arrival rate. Answer: TRUE The “dollar days” inventory measurement […]

The master production schedule states the number of items to be produced during specific time periods. Answer: A traveler is an input to an airline’s transformation system. Answer: TRUE Focus forecasting is the most accurate of all forecasting models. Answer: […]

When we have performed a simulation run of a model another simulation experiment might be called for that requires a change in parameters or variables. Answer: One of the assumptions of CPM is that project activity times can be estimated […]

A good forecaster is one who develops special skills and experience at one forecasting technique and is capable of applying it to widely diverse situations. Answer: The fixed-order quantity inventory model requires more time to maintain because every addition or […]

One of the basic purposes of inventory analysis in manufacturing and stockkeeping services is to determine the Level of quality to specify. Answer: Fixed cost includes variable overhead expenses such as utility bills. Answer: FALSE We assume in CPM analysis […]

A capacity cushion is the amount of capacity less than expected demand. Answer: Facility location analysis considers the competitive imperative of locating near the appropriate labor pool to take advantage of high technical skills. Answer: TRUE The ‘sawtooth effect”, named […]