20) Which of the following is not one of the Ten Critical Decisions of Operations Management?

A) location strategy
B) human resources and job design
C) managing quality
D) design of goods and services
E) determining the financial leverage position
Answer: E
Diff: 2
Skill: knowledge
Objective: LO1 Define operations management

22) Operations management is applicable

A) mostly to the service sector.
B) to services exclusively.
C) mostly to the manufacturing sector.
D) to all firms, whether manufacturing or service.
E) to the manufacturing sector exclusively.
Answer: D
Diff: 2
Skill: comprehension
Objective: LO1 Define operations management

23) Which of the following are the primary functions of all organizations?
A) production/operations, marketing, and human resources
B) marketing, human resources, and finance/accounting
C) sales, quality control, and production/operations,
D) marketing, production/operations, and finance/accounting
E) research and development, finance/accounting, and purchasing
Answer: D
Diff: 2
Skill: knowledge
Objective: LO1 Define operations management

26) The marketing function's main concern is with

A) producing goods or providing services.
B) procuring materials, supplies, and equipment.
C) building and maintaining a positive image.
D) generating the demand for the organization's products or services.
E) securing monetary resources.
Answer: D
Diff: 2
Skill: knowledge
Objective: LO1 Define operations management
29) Reasons to study Operations Management include learning about all of the following except
A) how people organize themselves for productive enterprise.
B) how goods and services are produced.
C) what operations managers do.
D) a costly part of the enterprise.
E) how to market a product.
Answer: E

35) The Ten Critical Decisions of Operations Management include except

A) layout strategy.
B) maintenance.
C) process and capacity design.
D) managing quality.
E) fiscal year-end.
Answer: E
Diff: 1
Skill: knowledge
Objective: LO1 Define operations management

36) Which of the following is not one of The Ten Critical Decisions of Operations Management?
A) layout strategy
B) maintenance
C) process and capacity design
D) mass customization
E) supply-chain management
Answer: D
Diff: 2
Skill: knowledge
Objective: LO1 Define operations management

72) Which productivity variable has the greatest potential to increase productivity?
A) labour
B) globalization
C) management
D) capital
E) industrialization
Answer: C
Diff: 2
Skill: knowledge
Objective: LO6 Identify the critical variables in enhancing productivity

78) Three commonly used productivity variables are

A) quality, external elements, and precise units of measure.
B) labour, capital, and management.
C) technology, raw materials, and labour.
D) education, diet, and social overhead.
E) quality, efficiency, and low cost.
Answer: B
Diff: 2
Skill: knowledge
Objective: LO3 Explain the difference between production and productivity

29) Which of the following is an example of a response to the global environment?

A) Boeing's local sales and production
B) Benneton's strict limits on design, production, and distribution
C) a Chinese manufacturer, Haier, producing in China
D) Ford's partnerships with GM
E) Ford's partnerships with Volvo and Mazda
Answer: E
Diff: 2
Skill: application
Objective: LO5 Identify and explain four global operations strategy options

30) Which of the following is an example of globalization of operations strategy?

A) Boeing's Dreamliner has engines with higher fuel/payload efficiency.
B) Ford's new auto models have dent-resistant panels.
C) A Chinese manufacturer, Haier, now operates plants in the United States.
D) Hard Rock Café provides an "experience differentiation" at its restaurants.
E) Porter Airlines focuses on short-haul flights.
Answer: C
Diff: 2
Skill: application
Objective: LO5 Identify and explain four global operations strategy options

34) The term maquiladora is synonymous with

A) free trade zones in Mexico.
B) Chinese forced labour camps.
C) home-based or cottage industry.
D) areas that do not meet U.S. standards for workplace safety and pollution.
E) taxes charged by the Mexican government.
Answer: A
Diff: 2
Skill: knowledge
Objective: A Global View of Operations

36) Which of the following is not a reason for globalizing operations?

A) to gain improvements in the supply chain
B) to improve operations
C) to expand a product's life cycle
D) to attract and retain global talent
E) to increase profits at the expense of quality
Answer: E
Diff: 2
Skill: comprehension
Objective: LO5 Identify and explain four global operations strategy options

37) Which of the following does not represent a reason for globalizing operations?
A) to reduce costs
B) to improve the supply chain
C) to reduce responsiveness
D) to attract and retain global talent
E) All of the above are valid reasons for globalizing operations.
Answer: C
Diff: 2
Skill: comprehension
Objective: LO5 Identify and explain four global operations strategy options

38) NAFTA seeks to

A) substitute cheap labour in Mexico for expensive labour in the United States.
B) curb illegal immigration from Mexico to the United States.
C) phase out all trade and tariff barriers between North America and South America.
D) phase out all trade and tariff barriers between the United States, Canada, and Mexico.
E) phase out trade between the United States, Canada, and Mexico.
Answer: D
Diff: 2
Skill: comprehension
Objective: A Global View of Operations

39) With reference to cultural and ethical issues, the World Trade Organization has
A) succeeded in providing equal protection of intellectual property among nations.
B) made progress in providing equal protection of intellectual property among nations.
C) phased out all trade and tariff barriers between the United States and Mexico.
D) eliminated slave labour and child labour.
E) played little role in addressing cultural and ethical issues among nations.
Answer: B
Diff: 3
Skill: comprehension
Objective: A Global View of Operations

41) Which of the following activities takes place most immediately once the mission has been
developed?
A) The firm develops alternative or back-up missions in case the original mission fails.
B) The functional areas develop their functional area strategies.
C) The functional areas develop their supporting missions.
D) The ten OM decision areas are prioritized.
E) Operational tactics are developed.
Answer: C
Diff: 3
Skill: comprehension
Objective: LO1 Define mission and strategy

45) Which of the following is true?

A) Corporate mission is shaped by functional strategies.
B) Corporate strategy is shaped by functional strategies.
C) Functional strategies are shaped by corporate strategy.
D) External conditions are shaped by corporate mission.
E) Functional area missions are merged to become the organizational mission.
Answer: C
Diff: 3
Skill: comprehension
Objective: LO1 Define mission and strategy

92) The acronym MNC stands for

A) Mexican National Committee (for international trade).
B) Maquiladora Negates Competition.
C) Maytag-Nestlé Corporation.
D) Multinational Corporation.
E) Mostly-national Corporation.
Answer: D
Diff: 1
Skill: knowledge
Objective: LO5 Identify and explain four global operations strategy options

28) A job shop is an example of a(n)

A) repetitive process.
B) continuous process.
C) line process.
D) intermittent process.
E) specialized process.
Answer: D
Diff: 1
Skill: knowledge
Objective: LO1 Describe four production processes

32) Which one of the following products is most likely made in a job shop environment?
A) rolls of newsprint
B) paper forms
C) television sets
D) cigarettes
E) canned vegetables
Answer: B
Diff: 1
Skill: comprehension
Objective: LO1 Describe four production processes

38) One of the similarities between repetitive focus and mass customization is
A) the wide variety of outputs.
B) module inputs.
C) the process layout.
D) the standard cost.
E) the high volume of outputs.
Answer: B
Diff: 2
Skill: comprehension
Objective: LO1 Describe four production processes

41) High fixed costs and low variable costs are typical of which approach(es)?
A) product and process
B) process
C) mass customization
D) repetitive
E) product and mass customization
Answer: E
Diff: 2
Skill: comprehension
Objective: LO1 Describe four production processes

43) iTunes uses a ________ approach when it allows customers to select a dozen songs of their
choosing and have them made into a CD.
A) mass customization
B) product focus
C) process focus
D) repetitive focus
E) continuous
Answer: A
Diff: 2
Skill: comprehension
Objective: LO1 Describe four production processes

50) Which of the following phrases best describes process focus?

A) low volume, high variety
B) finished goods are usually made to a forecast and stored
C) operators are modestly skilled
D) high fixed costs, low variable costs
E) raw material inventories are low relative to the value of the product
Answer: A
Diff: 3
Skill: comprehension
Objective: LO1 Describe four production processes

53) All of the following are true about a quasi-custom product except
A) gets its apparent customization from the combinations available from a small number of
modules.
B) is often the output of repetitive focus facilities.
C) is a valid description of a fast food sandwich.
D) is only possible when the focus strategy of service productivity improvement is in use.
E) it obtains both the economic advantage of the continuous and the custom advantage of the
low-volume, high-variety model.
Answer: D
Diff: 3
Skill: comprehension
Objective: LO1 Describe four production processes

61) A drawing of the movement of material, product, or people is a

A) flowchart.
B) process chart.
C) service blueprint.
D) process map.
E) network diagram.
Answer: A
Diff: 1
Skill: comprehension
Objective: LO3 Use the tools of process analysis

83) The four R's of sustainability do not include

A) recycling.
B) resources.
C) regulations.
D) reputation.
E) responsibility.
Answer: E
Diff: 2
Skill: knowledge
Objective: LO5 Identify recent advances in production technology

27) Why is Northern Mexico used as a cluster for electronics firms?

A) high traffic flows
B) venture capitalists located nearby
C) natural resources of land and climate
D) NAFTA
E) high per capita GDP
Answer: D
Diff: 2
Skill: comprehension
Objective: LO1 Identify and explain seven major factors that affect location decisions

30) ________ and ________ are to key country success factors as ________ and ________ are
to key region success factors.
A) Cultural issues; location of markets; site size and cost; zoning restrictions
B) Exchange rates; labour availability; site size and cost; environmental impact
C) Labour cost; currency risk; land costs; proximity to customers
D) Land costs; proximity to customers; labour cost; air and rail systems
E) Cultural issues; proximity to customers; environmental impact; zoning restrictions.
Answer: C
Diff: 3
Skill: knowledge
Objective: LO1 Identify and explain seven major factors that affect location decisions

31) Which of the following workers is the most productive?

A) $50 wages, 10 parts produced
B) $10 wages, 1 part produced
C) $30 wages, 5 parts produced
D) $100 wages, 21 parts produced
E) $500 wages, 100 parts produced
Answer: D
Diff: 2
Skill: application
Objective: LO2 Compute labour productivity

32) An employee produces 15 parts during a shift in which he made $90. The labour content of
the product is
A) $90.
B) $5.
C) $6.
D) $.167.
E) $60.
Answer: C
Diff: 2
Skill: application
Objective: LO2 Compute labour productivity
34) The reason fast food restaurants often are found in close proximity to each other is
A) they enjoy competition.
B) location clustering near high traffic flows.
C) low cost.
D) availability of skilled labour.
E) by-law requirements.
Answer: B
Diff: 2
Skill: comprehension
Objective: LO1 Identify and explain seven major factors that affect location decisions

39) Globalization of the location decision is the result of all of the following except
A) market economics.
B) higher quality of labour overseas.
C) ease of capital flow between countries.
D) high differences in labour costs.
E) more rapid, reliable travel and shipping.
Answer: B
Diff: 2
Skill: comprehension
Objective: LO1 Identify and explain seven major factors that affect location decisions

41) A manufacturing firm finds a location that has a significant cost advantage over alternatives,
but rejects that location because the educational infrastructure was insufficient to train the firm's
workers in its special production technologies. The firm's action illustrates the link between
________ and location.
A) innovation
B) clustering
C) tax incentives
D) globalization
E) proximity
Answer: A
Diff: 1
Skill: comprehension
Objective: LO1 Identify and explain seven major factors that affect location decisions

49) Operations managers will need to consider ethical and social responsibility issues when
location decisions involve
A) child labour issues.
B) sweatshop conditions.
C) allegiance to the firm's current location.
D) corruption.
E) all of the above.
Answer: E
Diff: 3
Skill: knowledge
Objective: LO1 Identify and explain seven major factors that affect location decisions

55) Which of the following methods best considers intangible costs related to a location
decision?
A) crossover methods
B) locational break-even analysis
C) factor-rating analysis
D) the transportation method
E) the assignment method
Answer: C
Diff: 3
Skill: knowledge
Objective: LO3 Apply the factor-rating method

60) A firm is considering two location alternatives. At location A, fixed costs would be
$4,000,000 per year, and variable costs $0.30 per unit. At alternative B, fixed costs would be
$3,600,000 per year, with variable costs of $0.35 per unit. If annual demand is expected to be 10
million units, which plant offers the lowest total cost?
A) Plant A, because it is cheaper than Plant B for all volumes over 8,000,000 units.
B) Plant B, because it is cheaper than Plant A for all volumes over 8,000,000 units.
C) Plant A, because it is cheaper than Plant B for all volumes.
D) Plant B, because it has the lower variable cost per unit.
E) Neither Plant A nor Plant B, because the crossover point is at 10 million units.
Answer: A
Diff: 1
Skill: application
Objective: LO4 Complete a locational break-even analysis graphically and mathematically

61) The centre-of-gravity method does not take into consideration the
A) location of markets.
B) volume of goods shipped to the markets.
C) value of the goods shipped.
D) combination of volume and distance.
E) centre-of-gravity method considers none of the above.
Answer: C
Diff: 3
Skill: knowledge
Objective: LO5 Use the centre-of-gravity method

65) A county wants to build one centrally-located processing facility to serve the county's four
recycling drop-off locations. The four drop-offs have characteristics as given in the table below.
What is the approximate centre of gravity of these four locations?
Location X-coordinate Y-coordinate Tonnage
Drop-off point A 1 8 10
Drop-off point B 6 7 35
Drop-off point C 6 2 25
Drop-off point D 4 7 50
A) 4.75, 6.04
B) 17, 24
C) 33.5, 135.4
D) 6, 4.25
E) 570, 725
Answer: A
Diff: 2
Skill: application
Objective: LO5 Use the centre-of-gravity method

75) Location analysis techniques typically employed by service organizations include all of the
following except
A) factor rating method.
B) centre-of-gravity method.
C) purchasing power analysis of area.
D) traffic counts.
E) product sales analysis.
Answer: E
Diff: 2
Skill: comprehension
Objective: LO1 Identify and explain seven major factors that affect location decisions

31) The main goal of retail layout is

A) minimizing material handling cost.
B) maximizing high-margin sales.
C) minimizing storage costs.
D) minimizing space required.
E) maximizing profitability per square foot of floor space.
Answer: E
Diff: 2
Skill: knowledge
Objective: LO2 Define the objectives of retail layout

34) Deloitte & Touche solved the empty desk problem by

A) assigning permanent desks.
B) implementing a "hoteling" program.
C) creating open offices.
D) no longer allowing employees to work from home.
E) hiring more consultants.
Answer: B
Diff: 2
Skill: knowledge
Objective: LO1 Discuss important issues in office layout

35) The layout strategy that deals with low-volume, high-variety production is
A) fixed-position layout.
B) retail layout.
C) warehouse layout.
D) office layout.
E) process-oriented layout.
Answer: E
Diff: 2
Skill: knowledge
Objective: LO5 Explain how to achieve a good process-oriented facility layout

42) The fixed-position layout would be most appropriate in which of the following settings?
A) a fast-food restaurant
B) a doctor's office
C) a casual dining restaurant
D) a cruise ship assembly facility
E) a department store
Answer: D
Diff: 2
Skill: comprehension
Objective: LO4 Identify when fixed-position layouts are appropriate

50) The major problem addressed by the process-oriented layout strategy is

A) the movement of material to the limited storage areas around the site.
B) requiring frequent contact close to one another.
C) the provision of low-cost storage with low-cost material handling.
D) minimizing difficulties caused by material flow varying with each product.
E) balancing product flow from one work station to the next.
Answer: D
Diff: 2
Skill: comprehension
Objective: LO5 Explain how to achieve a good process-oriented facility layout

62) Ambient conditions, spatial layout and functionality, and signs, symbols, and artifacts are all
A) indicators of imbalance on an assembly line.
B) indicators that cross-docking has been successful.
C) elements of customization in a warehouse layout.
D) elements of servicescapes.
E) elements of successful office layouts.
Answer: D
Diff: 2
Skill: comprehension
Objective: LO2 Define the objectives of retail layout