OM 300 Test 1 – Flashcards
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Which of the following tasks would NOT typically represent an operations management activity at Hard Rock? Cafe?
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Filing a tax return
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The creation of goods and services is referred to? as:
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production
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Which of the following is an example of a? "hidden" production? function?
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Transplanting a liver
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The production process at Hard Rock Cafe does NOT include which of the following? activities?
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advertising
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A global network of organizations and activities that supply a firm with goods and services is referred to as
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a supply chain
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Which of the following is NOT one of the factors that fosters specialization and worldwide supply? chains?
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marketing
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Competition in the 21st century is no longer between? companies; it is between
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supply chains
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In? general, the supply chain starts with
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the provider of basic raw materials
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A large percentage of the revenue of most firms is spent on which? function?
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operations
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Which of the following is NOT one of the four reasons that we study? OM?
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We want to understand what marketing managers do.
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Which of these is NOT one of the basic functions of the management? process?
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inspecting
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Which of these is NOT one of the 10 strategic OM? decisions?
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marketing
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Which of the following OM decisions determines how a good or service is produced and commits management to specific? technology, quality, human? resources, and capital? investment?
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process and capacity design
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Which of the following best defines? scheduling?
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determines and implements? intermediate- and? short-term schedules that effectively and efficiently utilize both personnel and facilities while meeting customer demands.
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Which of the following is NOT considered to be one of the three primary functions that all organizations? perform?
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research and devlopment
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Which of the following activities at a commercial bank is NOT an operations? activity?
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auditing
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Which of the following activities at an airline is NOT an operations? activity?
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sales
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Which operations function at a manufacturing facility strives for the efficient use of? machines, space, and? personnel?
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industrial engineering
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Which of the following countries is NOT a memebr of the? EU?
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Uruguay
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The stated purposed of NAFTA is to
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seeks to phase out all trade and tariff barriers among? Canada, Mexico, and the U.S.
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Which of the following is NOT a reason why domestic business operations decide to change to some form of international? operation?
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attract and retain local talent
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Which one of the following statements is incorrect regarding globalization and globalization? strategies?
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Globalization strategies could simplify the operations? manager's job
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A strategy is A. established prior to establishing a mission. B. a functional area of the firm. C. the purpose for which an organization is established. D. an action plan to achieve a mission.
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an action plan to achieve a mission.
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Which of the following statement is incorrect about the? mission? A. The mission statement provides the concept around which the firm can rally. B. The mission states the rationale for the? organization's existence. C. The mission statement provides boundaries and focus for organizations. D. Each functional area within the firm may develop its own? strategy, but not its own supporting mission.
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Each functional area within the firm may develop its own? strategy, but not its own supporting mission.
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Which of the following is NOT one of the three strategic approaches to competitive? advantage? A. cost leadership B. innovation C. differentiation D. response
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innovation
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Which of the following is the purpose or rationale for an? organization's existence? A. charter B. articles of incorporation C. mission D. strategy
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mission
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Choose the correct example of differentiation and its explanation below
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Starbucks, as it provides the special atmosphere and aroma of fresh coffee
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Choose the correct example of cost leadership and its explanation below.
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Wal-Mart, as it has the low overhead and huge buying power to pressure its suppliers into concessions
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Choose the correct example of response and its explanation below.
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HP, as it demonstrates flexibility in both design and volume changes in the volatile world of PC
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Competing on differentiation is A. based upon flexibility. B. concerned with reliability of scheduling. C. based upon? low-cost leadership. D. concerned with uniqueness.
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concerned with uniqueness
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Competing on cost is A. based upon flexibility. B. concerned with reliability of scheduling. C. concerned with uniqueness. D. achieving maximum value as perceived by the customer.
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achieving maximum value as perceived by the customer.
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Which of the following does not represent competing on? response? A. based on providing uniqueness B. based on quickness C. concerned with reliability of scheduling D. based on flexibility
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based on providing uniqueness
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The creation of a unique advantage over competitors is referred as A. experience differentiation. B. response. C. competitive advantage. D. differentiation.
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competitive advantage
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Which of the following is NOT one of the 10 strategic OM decisions listed in the? text? A. location B. quality C. layout D. ?finance/accounting
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finance/accounting
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Which of the following is NOT an OM? strategy/issue during the introduction stage of the product life? cycle? A. frequent product and process design changes B. high production costs C. long production runs D. limited models
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long production runs
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Which of the following is NOT an OM? strategy/issue during the growth stage of the product life? cycle? A. shift towards product focus B. forecasting critical C. enhance distribution D. reduce capacity
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reduce capacity
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A method managers use to evaluate the resources at their disposal and manage or alter them to achieve competitive advantage is referred as A. resources view. B. ?value-chain analysis. C. competitive advantage. D. five forces analysis.
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resources view
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SWOT analysis refers to
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strengths, opportunities,? weaknesses, and threats.
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What is a graphical link of competitive? advantage, KSFs, and supporting? activities?
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activity map
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A set of? skills, talents, and capabilities in which a firm is particularly strong is referred to as
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core competencies
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Which of the following is the core competence for? Honda? A. advertising B. ?gas-powered engines C. sustainable design D. product flexibility
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gas-powered engines
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How to find total weighted score:
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Weighted score is the result of multiplying the Criteria Weight with the country score; lower the score, lower the risk, the better. Weighted averages do not change, therefore, conclusions do not change.
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Does Boeing practice a multinational operations? strategy, a global operations? strategy, or a transnational operations? strategy? Support your choice with specific references to? Boeing's operations and the characteristics of each type of organization. A. Transnational. Its? material, people, and ideas transgress national boundaries. It combines the benefits of? global-scale efficiencies with the benefits of local responsiveness. It is not global because the core competence does not reside in just the? "home" country but can exist anywhere in the organization. B. Multinational. Its level of integration is not enough to be global. Also it buys? resources, creates goods and? services, and sell goods and services in a variety of countries. C. Global. Its level of integration goes beyond multinational. The collection of parts and subassemblies coming from other countries is carefully orchestrated. It is not transnational because its? "home" is clearly the? U.S., and there is little sense of? "local responsiveness."
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Global. Its level of integration goes beyond multinational. The collection of parts and subassemblies coming from other countries is carefully orchestrated. It is not transnational because its? "home" is clearly the? U.S., and there is little sense of? "local responsiveness."
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An international business is a firm that
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engages in international trade or investment
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What is the difference between a multinational corporation? (MNC) and an international? business?
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For the multinational firm, the business done outside the country is especially significant.
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Which of the following international operations strategies involves a high degree of? centralization? A. international B. multidomestic C. global D. transnational
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global
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Which of the following international operations strategies uses decentralized authority with substantial autonomy at each? business? A. global B. transnational C. international D. multidomestic
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multidomestic
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The three phases involved in the management of large projects are
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planning, scheduling, and controlling
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Which of the following does NOT belong to the planning phase of project? management? A. team organization B. defining the project C. monitoring resources D. goal setting
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monitoring resources
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Which of the following is NOT a technique that allows managers to? plan, schedule, and control? projects? A. ?Factor-rating method B. PERT C. CPM D. Gantt charts
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factor-rating method
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Which of the following activities does NOT belong to the controlling phase of project? management? A. define the project B. revise plans C. shift resources D. monitor? resources, costs,? quality, and budgets
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define the project
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The project organization may be LESS helpful when A. the work contains complex interrelated tasks requiring specialized skills. B. work tasks can be defined with a specific goal and deadline. C. the project cuts across organizational lines. D. the job is familiar to the existing organization.
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the job is familiar to the existing organization.
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Which of the following is a direct responsibility of the project? manager? A. performing all of the activities in the project B. making sure that the people assigned to the project receive the? motivation, direction, and information needed to do their jobs C. drawing the network diagram D. calculating completion probabilities for all tasks in the project
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Making sure that the people assigned to the project receive the? motivation, direction, and information needed to do their jobs.
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Which of the following is the THIRD level in work breakdown structure? (WBS)? A. subtasks in major tasks B. activities to be completed C. major tasks in the project D. project
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subtasks in major tasks
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Gantt charts are
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planning charts used to schedule resources and allocate time
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Which of the following is NOT true about Gantt? charts? A. Gantt charts also can be used for scheduling repetitive operations. B. Gantt charts adequately illustrate the interrelationships between the activities and the resources. C. Gantt charts are planning charts used to schedule resources and allocate time. D. Gantt charts are? low-cost means of helping managers make sure that activities are planned.
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Gantt charts adequately illustrate the interrelationships between the activities and the resources.
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Which of these statements is NOT true about project? scheduling? A. Project scheduling encourages the setting of realistic time and cost estimates for each activity. B. Project scheduling shows the relationship of each activity to others. C. Project scheduling identifies the precedence relationships among activities. D. Project scheduling helps make better use of resources by identifying the? non-critical paths through the network.
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Project scheduling helps make better use of resources by identifying the? non-critical paths through the network.
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Which of the following activities are NOT part of project? scheduling? A. Decide how long each activity will take. B. Make sure all necessary activities are finished in proper sequence and on time. C. Chart separate schedules for personnel needs by type of skill and materials needs. D. Compute resources needed at each stage of production.
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Make sure all necessary activities are finished in proper sequence and on time.
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Which of the following is NOT part of project? controlling? A. using a feedback loop to revise the project plan B. shifting resources to where they are needed most C. close monitoring of? resources, costs,? quality, and budgets D. sequencing and allotting time to all project activities
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sequencing and allotting time to all project activities
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Computerized? PERT/CPM reports and charts do NOT include A. cost distribution tables. B. variance reports. C. detailed cost breakdowns for each task. D. probability estimates for? on-time completion.
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probability estimates for? on-time completion.
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Which of the following is a limitation of PERT and? CPM? A. They are applicable to only a narrow variety of projects and industries. B. The graphical nature of a network delays comprehension of the activity? list's interrelationships. C. They can be used only to monitor schedules. D. There is the inherent danger of placing too much emphasis on the critical path.
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There is the inherent danger of placing too much emphasis on the critical path.
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Which of the following is an advantage of PERT and? CPM? A. Straightforward concept and not mathematically complex. B. Precedence relationships must be specified and networked together. C. Project activities have to be clearly? defined, independent, and stable in their relationships. D. Useful in monitoring only schedules.
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Straightforward concept and not mathematically complex.
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Among the? following, critical path and slack time analysis MOST help A. managers define the project activities. B. point out who is responsible for various activities. C. pinpoint activities that need to be closely watched. D. highlight relationships among project activities.
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pinpoint activities that need to be closely watched.
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Which of the following is NOT true regarding PERT and? CPM? A. Managers only need to closely monitor the critical path. B. Time estimates are subject to fudging by managers. C. PERT and CPM are useful in monitoring costs. D. PERT and CPM are useful when controlling large projects.
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Managers only need to closely monitor the critical path.
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What is the most popular example of specialized software for managing? projects? A. Microsoft Management Tool B. Project Apple C. Microsoft Project D. ?PERT/CPM+
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Microsoft Project
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Which of the following statements is NOT true regarding? forecasting? A. A forecast is usually classified by the future time horizon that it covers. B. Forecasting may involve taking historical data and projecting them into the future with a mathematical model. C. Forecasting is the art and science of predicting future events. D. Forecasting is exclusively an objective prediction.
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Forecasting is exclusively an objective prediction.
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The forecasting time horizon that would typically be easiest to predict for would be the
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short range
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A forecast that addresses the business cycle by predicting planning indicators is
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an economic forecast
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A forecast that projects a? company's sales is
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a demand forecast
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CPFR is
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collaborative, planning,? forecasting, and replenishment.
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The goal of CPFR is to
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create significantly more accurate information that can power the supply chain.
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Which of the following statements is NOT? true? A. When capacity is? inadequate, customers can be lost. B. When excess capacity? exists, cost can decrease. C. When capacity is? inadequate, market share can shrink. D. When excess capacity? exists, cost can increase.
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When excess capacity? exists, cost can decrease.
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Which of the following is the FIRST step in a forecasting? system? A. Select the forecast? model(s). B. Select the items to be forecasted. C. Determine the use of the forecast. D. Determine the time horizon of the forecast.
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Determine the use of the forecast.
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Which of the following is the FINAL step in a forecasting? system? A. Gather the data needed to make the forecast. B. Validate and implement the results. C. Select the forecast? model(s). D. Make the forecast.
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Validate and implement the results.
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Which of the following is a reality each company faces regarding its forecasting? system? A. Most forecasting techniques assume there is no underlying stability in the system. B. After automating their predictions using computerized forecasting? software, firms closely monitor only the product items whose demand is stable. C. Product family forecast are less accurate than individual product forecasts. D. Outside factors that we cannot predict or control often impact the forecast.
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Outside factors that we cannot predict or control often impact the forecast.
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Which of the following forecasting steps comes directly after determining the time horizon of the? forecast? A. Select the forecasting? model(s). B. Make the forecast. C. Select the items to be forecasted. D. Gather the data.
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Select the forecasting? model(s).
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Which of the following is a quantitative forecasting? method? A. market survey B. exponential smoothing C. sales force composite D. jury of executive opinion
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exponential smoothing
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Which of the following is a qualitative forecasting? method? A. linear regression B. trend projection C. Delphi method D. naive approach
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Delphi method
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Which forecasting model is based upon? salespersons' estimates of expected? sales?
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sales force composite
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Which of the following is NOT a? time-series model? A. linear regression B. exponential smoothing C. moving averages D. naive approach
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linear regression
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A tracking signal
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is a measurement of how well a forecast is predicting actual values.
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A forecasting technique consistently produces a negative tracking signal. This means that
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the forecasting technique consistently? over-predicts.
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Forecasting that tries a variety of computer models and selects the best one for a particular application is referred as
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focus forecasting.
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Which one of the following statements is NOT true about the forecasting in the service? sector? A. Demand patterns are often different from those in? non-service sectors. B. Detailed forecasts of demand are not needed. C. Forecasting in the service sector presents some unusual challenges. D. Hourly demand forecasts may be necessary.
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Detailed forecasts of demand are not needed.
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Operations management (OM)
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the set of activities that create value in the form of goods and services by transforming inputs into outputs
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Three essential functions to organizing to produce goods and services
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marketing, production/operations, finance/accounting
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marketing
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generates demand
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production/operations
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creates the product
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finance/accounting
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tracks how well the organization is doing, pays bills, collects the money
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a global network of organizations and activities that supply a firm with goods and services
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the supply chain
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what operations managers do
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planning, organizing, staffing, leading, controlling
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10 strategic decisions!!!
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design of goods and services, managing quality, process and capacity design, location strategy, layout strategy, human resources and job design, supply chain management, inventory management, scheduling, maintenance
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defines what is required of operations; determines quality, sustainability, and human resources
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design of goods and services
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determine the customer's quality expectations, establish policies and procedures to identify and achieve that quality
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managing quality
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how is a good or service produced? commits management to specific technology, quality, resources, and investment
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process and capacity design
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nearness to customers, suppliers, and talent; considering costs, infrastructure, logistics, and government
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location strategy
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integrate capacity needs, personnel levels, technology, and inventory; determine the efficient flow of materials, people, and information
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layout strategy
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recruit, motivate, and retain personnel with the required talent and skills; integral and expensive part of the total system design
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human resources and job design
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integrate supply chain into the firm's strategy; determine what is to be purchased, from whom, and under what conditions
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supply chain management
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inventory ordering and holding decisions, optimize considering customer satisfaction, supplier capability, and production schedules
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inventory management
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determine and implement intermediate- and short-term schedules; utilize personnel and facilities while meeting customer demands
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scheduling
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consider facility capacity, production demands, and personnel; maintain a reliable and stable process
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maintenance
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Economic activities that typically produce an intangible product (such as education, entertainment, lodging, government, financial, and health services)
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services
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is the ratio of outputs (goods and services) divided by the inputs (resources such as labor and capital)
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productivity *Production is a measure of output only and not a measure of efficiency
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the objective is
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to improve productivity
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measure of process improvement; represents output relative to input; only through productivity increases can our standard of living improve
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Productivity (units produced/input used)
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total factor productivity
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multi-factor productivity
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multifactor productivity equation
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output/labor+material+energy+ccapital+miscellaneous
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three measurement problems
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External elements may cause an increase or decrease in productivity Precise units of measure may be lacking Quality may change while the quantity of inputs and outputs remains constant
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productivity variables
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labor, capital, management
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key variables for improved labor productivity
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Basic education appropriate for the labor force Diet of the labor force Social overhead that makes labor available
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ensures labor and capital are effectively used to increase productivity
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management
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current challenges in OM
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Globalization Supply-chain partnering Sustainability Rapid product development Mass customization Lean operations
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reasons to globalize
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improve the supply chain, reduce costs and exchange rate risks, improve operations, understand markets, improve products, attract and retain global talent
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how to improve the supply chain
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locating facilities closer to unique resources
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interacting with foreign customers, suppliers, competition can lead to
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new opportunities
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to improve products you should
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remain open to free flow of ideas
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three strategies for competitive advantage
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differentiation (better, or at least different), cost leadership (cheaper), response (faster, more responsive)
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competing on cost
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provide the maximum value as perceived by customer. does not imply low quality
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competing on response
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flexibility (matching market changes in design innovation and volumes) and reliability (meeting schedules)
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issues in operations strategy
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resources view, value-chain analysis, Porter's Five Forces model, operating in a system with many external factors, constant change
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product life cycle
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introduction, growth, maturity, decline
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best period to increase market share; R&D engineering is critical; frequent product and process design changes; short production runs; high production costs; limited models; attention to quality
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introduction phase
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practice to change price or quality image; strengthen niche; forecasting is critical; product and process reliability; competitive product improvements and options; increase capacity; shift toward product focus; enhance distribution
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growth phase
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poor time to change image, prices, or quality; competitive costs become critical; defend market position; standardization; fewer rapid product changes, more minor changes; optimum capacity; increasing stability of process; long production runs; product improvement and cost cutting
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maturity phase
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cost control is critical in what phase; little product differentiation; cost minimization; overcapacity in the industry; prune line to eliminate items not returning good margin; reduce capacity
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decline phase
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strategy devlopement and implementation
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identify key success factors, integrate OM with other activities, build and (word) the organization
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transferring activities that traditionally been internal to external suppliers
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outsourcing
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when would outsourcing accelerate?
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increased technological expertise, more reliable and cheaper transportation, rapid development and deployment of advancements in telecommunications and computers
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contract manufacturing
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subcontracting
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what are some outsourced activities
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legal services, IT services, travel services, payroll, production, surgery
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purchasing firm focuses on
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core competencies
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most common reason for outsourcing failure
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insufficient analysis
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points and weights assigned for each factor to each...
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factor-rating method
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management of projects steps
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planning, scheduling, controlling
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goal setting, defining the project, team organization, determining resources, creating work breakdown structure
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planning
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relate people, money, and supplies to specific activities and activities to each other
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scheduling
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monitor resources, costs, quality, and budgets; revise plans and shift resources to meet time and cost demands
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controlling
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often temporary structure; uses specialists from entire comapany; headed by project manager
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project organization
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coordinates activities; monitors schedule and costs
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project manager
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permanent structure of project organization
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matrix organization
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the role of the project manager
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All necessary activities are finished in order and on time The project comes in within budget The project meets quality goals The people assigned to the project receive motivation, direction & information
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work breakdown structure (WBS)
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project; major tasks in the project; subtasks in the major tasks; activities (or "work packages") to be completed
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purposes of project scheduling
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1. Shows the relationship of each activity to others and to the whole project 2. Identifies the precedence relationships among activities 3. Encourages the setting of realistic time and cost estimates for each activity 4. Helps make better use of people, money, and material resources by identifying critical bottlenecks in the project
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three project management techniques
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gantt chart; critical path method (CPM); program evaluation and review technique (PERT)
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Close monitoring of resources, costs, quality, budgets Feedback enables revising the project plan and shift resources Computerized tools produce extensive reports
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project controlling
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project control reports
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Detailed cost breakdowns for each task Labor requirements Cost and hour summaries Raw materials and expenditure forecasts Variance reports Time analysis reports Work status reports
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Six steps PERT and CPM
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Define the project and prepare the work breakdown structure Develop relationships among the activities - decide which activities must precede and which must follow others Draw the network connecting all of the activities Assign time and/or cost estimates to each activity Compute the longest time path through the network - this is called the critical path Use the network to help plan, schedule, monitor, and control the project
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the longest time path through the network
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critical path
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questions PERT and CPM can answer
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When will the entire project be completed? What are the critical activities or tasks in the project? Which are the noncritical activities? What is the probability the project will be completed by a specific date?Is the project on schedule, behind schedule, or ahead of schedule? Is the money spent equal to, less than, or greater than the budget? Are there enough resources available to finish the project on time? If the project must be finished in a shorter time, what is the way to accomplish this at least cost?
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the shortest time in which the project can be completed
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critical path
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critical path activities have no
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slack time
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earliest finish time rule
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earliest finish = earliest start + activity time
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three time estimates required for variability in activity times
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optimistic time, pessimistic time, most likely time
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shortening the duration of the project
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project crashing
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advantages of PERT/CPM
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Especially useful when scheduling and controlling large projects Straightforward concept and not mathematically complex Graphical networks help highlight relationships among project activities Critical path and slack time analyses help pinpoint activities that need to be closely watched Project documentation and graphics point out who is responsible for various activities Applicable to a wide variety of projects Useful in monitoring not only schedules but costs as well
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limitations of PERT/CPM
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Project activities have to be clearly defined, independent, and stable in their relationships Precedence relationships must be specified and networked together Time estimates tend to be subjective and are subject to fudging by managers There is an inherent danger of too much emphasis being placed on the longest, or critical, path
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process of predicting of a future event; underlying basis of all business decisions
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forecasting
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up to 1 year, generally less than 3 months; purchasing, job scheduling, workforce levels, job assignments, production levels
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short-range forecast
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3 months to 3 years; sales and production planning, budgeting
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medium-range forecast
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3+ years; new product planning, facility location, research and development
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long-range forecast
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deal with more comprehensive issues and support management decisions regarding planning and products, plants, and processes
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medium/long range forecasts
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usually employs different methodologies than longer-term forecasting
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short-term forecasting
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tend to be more accurate forecasts
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short-term forecasts
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require longer forecasts than other phases
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introduction and growth
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forecasts are useful in projecting
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staffing levels, inventory levels, factory capactiy
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address business cycle - inflation rate, money supply, housing starts, etc.
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economic forecasts
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predict rate of technological progress; impacts development of new products
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technological forecasts
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predict sales of existing products and services
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demand forecasts
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strategic importance of forecasting
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supply chain management, human resources, capacity
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capacity shortages can result in
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undependable delivery, loss of customers, loss of market share
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seven steps in forecasting
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Determine the use of the forecast Select the items to be forecasted Determine the time horizon of the forecast Select the forecasting model(s) Gather the data needed to make the forecast Make the forecast ___________ and implement the results
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most forecasting techniques assume
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an underlying stability in the system
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forecasts are seldom perfect because
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unpredictable outside factors may impact the forecast
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what forecasts are more accurate than individual product forecasts
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product family and aggregated forecasts
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used when situation is vague and little data exists
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qualitative methods (intuition)
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used when situation is stable and historical data exist
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quantitative methods (mathematical)
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pool opinions of high-level experts, sometimes augmented by statistical models; relatively quick; combines managerial experience with statistical models; group estimates by working together
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jury of executive opinion (qualitative)
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panel of experts, queried iteratively; iterative group process, continues until consensus is reach
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delphi method (qualitative)
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estimates from individual salespersons are reviewed for reasonableness, then aggregated; each salesperson projects his or her sales
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sales force composite (qualitative)
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ask the customer; useful for demand and product design and planning; what consumers say and what they actually do may be different; may be overly optimistic
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consumer market survey (qualitative)
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three types of participants in delphi method
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decision makers, staff, respondants
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time-series models
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naive approach, moving averages, exponential smoothing, trend projection
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associative model
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linear regression
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set of evenly spaced numerical data obtained by observing response variable at regular time periods; based only on past values, no other variables important; assumes that factors influencing past and present will continue influence in future
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time-series forecasting (quantitative)
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regular pattern of up and down due to weather, customs, etc. occurs within a single year
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seasonal component
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assumes demand in next period is the same as demand in most recent period; can be a good starting point; sometimes cost effective and efficient
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naive approach (quantitative)
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series of arithmetic means; used if little or no trend; used often for smoothin
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moving averages
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used when some trend might be present; older data usually less important; weights based on experience and intuition
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weighted moving average
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potential problems with moving average
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Increasing n smooths the forecast but makes it less sensitive to changes Does not forecast trends well Requires extensive historical data
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form of weighted moving average; requires smoothing constant
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exponential smoothing
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linear trends can be found using the
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least squares technique
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patterns in the data that occur every several years
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cycles
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most common technique in associative forecasting
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linear-regression analysis
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measures degree of association
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coefficient of correlation, r
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measures the percent of change in y predicted by change in x
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coefficient of determination, r^2
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if more than one independent variable is to be used in the model, linear regression can be extended to
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multiple regression
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measures how well the forecast is predicting actual values; ratio of cumulative forecast errors to mean absolute deviation (MAD)
answer
tracking signal
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good tracking signal has
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low values
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if forecasts are continually high or low, the forecast has a
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bias error
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unusual challenges presented with forecasting in the service sector
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Special need for short term records Needs differ greatly as function of industry and product Holidays and other calendar events Unusual events
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CPFR is
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collaborative, planning,? forecasting, and replenishment.
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The goal of CPFR is to
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create significantly more accurate information that can power the supply chain.
question
Which of the following statements is NOT? true? A. When capacity is? inadequate, customers can be lost. B. When excess capacity? exists, cost can decrease. C. When capacity is? inadequate, market share can shrink. D. When excess capacity? exists, cost can increase.
answer
When excess capacity? exists, cost can decrease.
