Process and Operations Management
Multiple choice questions: Please select the best answer for each question below, and enter the selected answer in the Answer Sheet given on page 8.
1. A cause-effect chart:
A. Identifies potential causes for specific problems
B. Shows the prevalence of the various types of defects that have been found
C. Is not useful when first studying a quality problem
D. Has both upper and lower specification limits
2. The planning, design and control of the sequence of business processes, information and materials from suppliers through manufacturing and distribution to the customer is called_______.
A. Demand management
B. Distribution channel management
C. Supply chain management
D. Logistics management
3. Which of the following is not used to measure supply chain performance?
A. Quality including customer satisfaction.
B. Throughput time
C. Innovation
D. On time delivery
E. Flexibility to accommodate customer needs
4. Quality improvement increases profitability by:
A. increasing market share
B. enabling the company to charge higher prices for its products/services
C. enhancing productivity
D. all of the above.
5. What are the two fundamental processes in all supply chains that are being affected by the Internet?
A. Electronic interchange and order placement
B. Order fulfillment and order placement
C. B2B and order fulfillment
D. None of the above
6. Suppose your title in your company is Logistics Manager. Key decisions that fall under your purview will likely include:
A. warehousing and materials handling.
B. materials sourcing.
C. packaging and shipping.
D. supplier selection
E. A and C above.
7. In supply chains, demand changes by the end user tend to magnify the size of demand changes on the upstream supply chain elements. This:
A. is known as the accelerator effect
B. is known as the bullwhip effect
C. is not a problem to be concerned about in managing supply chains.
D. is not related to changes in quantities in the supply chain.
E. Both A and B above
8. A company used to purchase a particular component that it needs for the final assembly of its product from a supplier. It has now started producing the component in its own facilities. This is an example of:
A. Forward vertical integration.
B. Outsourcing
C. Backward vertical integration
D. Increasing organizational flexibility.
E. None of the above
9. Dimensions of service quality include:
A. Reliability, Tangibles, Assurance, Empathy, Conformance quality.
B. Performance Quality, Tangibles, Responsiveness, Reliability, Assurance.
C. Responsiveness, Tangibles, Empathy, Assurance, Reliability.
D. Reliability, Tangibles, Responsiveness, Empathy, Conformance quality.
10. Quality of conformance:
A. Is one of the four decision areas of operations management.
B. Is determined based on market research and expected demand level.
C. Refers to producing the product according to design specifications.
D. Refers to a company's ability to conform to its strategic plans and policies.
11. The quality cycle:
A. Begins and ends with the customer.
B. Is stated as tolerances or minimum and maximum acceptable limits
C. Applies primarily to manufacturing organizations
D. Produces control points and inspection techniques
12. Which of the following statements is correct about the cost of quality?
I. Higher investments in appraisal and prevention results in lower cost of quality.
II. Increasing inspection to identify internal failure costs before shipping out the
product is the best approach to lower cost of quality overall.
A. Only statement I is correct.
B. Only statement II is correct.
C. Both statements are correct.
D. Both statements are incorrect.
13. Which of the following is a primary dimension of quality for goods?
A. Quality of design
B. Quality of conformance
C. Availability
D. All the above are primary dimensions of quality.
14 Which of the following techniques is not commonly used for continuous improvement?
A. Cause-and-effect diagrams
B. Process control charts
C. Pareto charts
D. Decision tree analysis
E. All of the above
15. Which of the following statements is not true about ISO 9000?
A. ISO has had a major impact on worldwide quality practice
B. ISO is an international body consisting of members from over 100 countries around the world.
C. ISO involves an international quality award program given to outstanding companies in selected industries.
D. To be ISO certified, a company must have a quality assurance system in place.
16. Costs of inspectors, testing, testing equipment, and quality labs are examples of:
A. Prevention costs
B. Appraisal costs
C. Internal failure costs
D. External failure costs
E. Improvement costs
17. Which of the following are reasons for the failure of quality improvement efforts in
organizations?
A. Managers continue to focus on short-term financial results
B. Managers instinctively blame employees when there is a quality failure
C. Managers interfere with true teamwork
D. All of the above
E. Only A and B
18. The purpose of the Malcolm Baldrige National Quality Award is:
A. To promote better quality management practices in the US
B. To recognize quality achievements of U.S. companies
C. To publicize successful quality programs so other US companies can learn from them
D. Only A and B
E. A, B & C
19. A Pareto Chart
A. Shows causes and effects of quality problems
B. Shows the few but important problems that impact quality.
C. Is NOT useful when first studying a quality problem
D. Has both upper and lower specification limits.
20. The Plan-Do-Check-Act (PDCA) cycle refers to a process used for:
A. ISO certification
B. Continuous improvement
C. New product design
D. Business process reengineering
E. None of the above.
21. Which of the following statement(s) correctly describes aggregate planning?
A. Aggregate planning seeks to meet short-term customer demand by hiring and
firing workers as needed.
B. Aggregate planning seeks to meet required demand for the intermediate period at minimum possible cost.
C. The aim of aggregate planning is to set overall output levels in the long-term future in the face of fluctuating or uncertain demand.
D. (A), (B) and (C) above
22. Under a level strategy of aggregate planning, variations in demand are met by:
A. Varying the rate of regular-time output
B. Using overtime
C. Varying inventories
D. a, b and c
E. b and c
23. Based on the data below, determine whether Product X or Product Y is of better quality in terms of availability.
MTBF MTTR
Product X 30,000 hrs. 300 hrs.
Product Y 65,000 hrs. 1,000 hrs.
A. Product X
B. Product Y
C. They have the same availability.
D. Cannot be determined.
24. Based on the data below, determine whether Company D or Company F is performing better using cash-to-cash cycle measure of supply chain performance.
Company D Company F
Days in inventory 20 days 15 days
Days in Accounts Receivable 10 days 15 days
Days in Accounts Payable 21 days 20 days
A. Company D's performance is better
B. Company F's performance is better
C. The two companies have the same level of performance
D. Cannot be determined based on the information given.
25. Which phrase most closely describes the Delphi forecasting technique? Delphi uses:
A. one-time customer survey
B. focus groups in a face-to-face discussion to gather important data
C. Several rounds of anonymous data collection process
D. Historic data
26. Under exponential smoothing, if we want the forecast for the next period to be closer to current period actual demand, the value of alpha ( ) should be:
A. Large
B. Small
C. Moderate
D. Zero
E. The value of alpha does not matter.
27. Facilities decisions:
A. Are medium-range capacity decisions
B. Have no impact on other capacity decisions
C. Are long-term in nature.
D. Require planning for one year or less
28. Which of the following departments is NOT affected directly by the facilities decision?
A. Operations
B. Marketing
C. Finance
D. All of the above are affected.
29. Which of the following statements regarding capacity is NOT correct?
A. Capacity can be measured in several units such as hours of output, number of units produced, number of customers served, etc.
B. Effective capacity (i.e., actual capacity) is generally less than the maximum capacity.
C. Capacity is the maximum output that could be produced over a given period of time.
D. All of the above are correct.
30. Aggregate planning:
A. is concerned with planning for the intermediate period
B. Always uses minimum capacity
C. is also called production planning.
D. Does not consider overtime, hiring, firing, subcontracting, and inventory levels
E. Only A and C above.
31. Which of the following is/are used to influence demand in aggregate production planning? (Select the best answer.)
A. Pricing, inventory, and advertising
B. Reservations, pricing, and advertising
C. Subcontracting, advertising, and pricing
D. Inventory, reservations, and pricing
32. Subcontracting and hiring are approaches used to influence _____ in developing aggregate production plans.
A. demand
B. supply
C. supply chain
D. None of the above.
33. A major difference between facilities planning and scheduling is that:
A. The former refers to the long-range capacity and the latter refers to the short-range
capacity.
B. The former is concerned with allocating available resources and the latter with the
acquisition of resources.
C. The former refers to the long-range and the latter refers to the medium-range.
D. None of the above.
34. Suppose the cost of not having adequate capacity to absorb demand is very high. What type of capacity cushion strategy is a company likely to use in this situation?
A. Small cushion
B. Large cushion
C. Moderate cushion
D. None of the above
35. Given the demand data below, what is the forecast for Quarter 4 of Year 2 if Naïve II method is used?
Year 1 Year 2
Quarter 1 5400 6500
Quarter 2 6900 7500
Quarter 3 9000 8500
Quarter 4 9800 ?
A. 7500
B. 9800
C. 8500
D. None of the above
36. Which of the following statements is true?
I. Emphasizing appraisal and prevention methods is ill-advised since this often results in higher total quality management costs.
II. When a company invests in quality improvement the likely outcome is increased profitability and competitiveness.
A. Only statement I is correct.
B. Only statement II is correct.
C. Both statements are correct.
D. Both statements are incorrect
37. Which of the following statements is true?
I. When measurement for quality control is discrete such as Accept/Reject, or Yes/NO, the appropriate statistical control chart to use is the p-chart.
II. The statistical quality control chart is based on 3-standard deviations which gives 99.7% confidence that the process is in control.
A. Only statement I is correct.
B. Only statement II is correct.
C. Both statements are correct.
D. Both statements are incorrect.