File: ch01, Chapter 1: Operations Strategy and Global Competitiveness

Multiple Choice

1. A purposeful collection of people, objects, and procedures for operating within an environment is known as a(n):
a) Operation
b) Sub -system
c) System 
d) Sub-operation

Ans: c
Difficulty: Easy 
Response: See page 7
Ref: Operations 

2. Which of the following is among the six major elements of a production system?
a) Inputs
b) Output
c) Monitoring and legislative compliance
d) Only A and B

Ans: d
Difficulty: Easy 
Response: See Figure 1.1 on page 8
Ref: Operations 

3. Value can be added to an entity in all the following ways, EXCEPT:
a) Altering
b) Facilitating
c) Storing 
d) Transporting

Ans: b
Difficulty: Easy 
Response: Value can be added by altering, transporting, storing, and inspecting. See p. 10.
Ref: Operations 

4. A type of output that commonly results from a production system is:
a) A product
b) A service
c) Neither A nor B 
d) Both A and B

Ans: d
Difficulty: Easy 
Response: See page 10
Ref: Operations 

5. Which of the following is NOT considered a characteristic of a service?
a) Intangible
b) Labor-intense production
c) Quality difficult to measure
d) Delayed consumption 

Ans: d
Difficulty: Easy 
Response: Services are consumed immediately. See page 11
Ref: Operations 

6. A distinction between normal goods and information/knowledge is that
a) Normal goods wear out, but information/knowledge does not
b) Information/knowledge can be given or sold to many others
c) Information/knowledge is subject to diminishing returns, but physical outputs are subject to increasing returns
d) Both A and B

Ans: d
Difficulty: Medium
Response: Page 13
Ref: Operations 

7. Inputs in a bank’s production system may include:
a) Loan default rates and the environment 
b) Interest rates and wage rates
c) Checks and deposits 
d) Federal Reserve decisions and the economy

Ans: c
Difficulty: Easy 
Response: See page 14
Ref: Operations 

8. Which of the following uses techniques from Toyota Production System and JIT to eliminate waste and nonvalue-added activities?
a) Enterprise and material requirements planning
b) Lean Management 
c) Quality Control 
d) Capacity Management

Ans: b
Difficulty: Hard 
Response: See page 15
Ref: Customer Value

9. Learning how to plan and control project activities to meet specifications for performance, schedule, and cost are among the subjects of:
a) Project management
b) Lean management
c) Supply chain management
d) Inventory management

Ans: a
Difficulty: Hard
Response: See page 15
Ref: Customer Value

10. Customization occurs when 
a) Products or services are world-class, suitable for most markets
b) Products or services are offered on a made-to-order basis
c) Products or services are developed with several options
d) Both A and C

Ans: b
Difficulty: Medium
Response: See page 21
Ref: Customer Value

11. What are the two trends in the range of accommodation to customers’ needs?
a) Extraction and delivery
b) Standardization and flexibility 
c) Customization and standardization 
d) Experience and flexibility

Ans: c
Difficulty: Easy
Response: See page 21
Ref: Customer Value

12. Which of the following is NOT a mass customization strategy? 
a) Adaptive customizers
b) Transparent customizers
c) Cosmetic customizers
d) Flexible customizers

Ans: d
Difficulty: Hard
Response: See pages 22-23
Ref: Customer Value

13. Which of the following is NOT an advantage of rapid response?
a) First-mover advantage
b) Elimination of overhead
c) Improved morale and communication
d) Sharper focus on the customer

Ans: a
Difficulty: Medium
Response: Page 24
Ref: Customer Value

14. Which business strategy waits for the product to become fairly standardized and is demanded in large volumes?
a) First-to-market
b) Cost minimization or late-to-market
c) Second-to-market
d) Market Segmentation 

Ans: b
Difficulty: Medium
Response: Pages 31-32
Ref: Strategy and Competitiveness

15. Bartmess and Cerny (1996) identify three elements of a core capability that hinders imitation; which of the following is NOT one of these elements?
a) It is complex and requires organizational learning over a period of time
b) It is based on multiple functional areas, both internal and external to the organization
c) It is a result of how the functions interact 
d) It is based on the skills/knowledge within the functions themselves

Ans: d
Difficulty: Hard
Response: It is a result of how the functions interact rather than the skills/knowledge within the functions themselves. A and B are also elements. See page 38
Ref: Strategy and Competitiveness

True/False

1. A system is defined as a purposeful collection of people, objects, and procedures for operating within an environment. 

Ans: True
Difficulty: Easy 
Response: See page 7
Ref: Operations 

2. Sub-optimization occurs when one part of the system is improved to the detriment of other parts of the system. 

Ans: True
Difficulty: Easy
Response: See page 9
Ref: Operations

3. Generally speaking, products are characterized by immediate consumption. 

Ans: False; their consumption tends to be delayed
Difficulty: Easy
Response: See page 11
Ref: Operations

4. A renovation activity is any physical entity accompanying a transformation that adds value.

Ans: False
Difficulty: Hard
Response: A facilitating good is any physical entity accompanying a transformation that adds value. See page 11.
Ref: Operations

5. Operations only include those activities associated specifically with the production system.

Ans: False
Difficulty: Medium
Response: Operations include a variety of other activities (for example, purchasing or procurement activities are concerned with obtaining many of the inputs needed in the production system).  See page 13.
Ref: Operations

6. The mortality curve is also referred to as the fallout rate. 

Ans: True
Difficulty: Easy 
Response: See page 16
Ref: Global Competition

7. As an alternative to research, industries where bringing a product to market is extremely expensive (for example, high technology or pharmaceuticals) tend to adapt the imitation strategy.

Ans: False
Difficulty: Medium
Response: They tend to adapt the outright purchase strategy. See page 17
Ref: Global Competition

8. Quality typically implies reliability.

Ans: True
Difficulty: Medium
Response: See page 18
Ref: Customer Value 

9. The resource-based view considers the set of resources available to the organization as a secondary driver of the business strategy.  

Ans: False
Difficulty: Easy 
Response: See page 27-28
Ref: Strategy and Competitiveness

10. Vision statements express the organization’s purpose or reason for existence. 

Ans: False
Difficulty: Medium
Response: Those would be the “Mission” statements.  See page 28
Ref: Strategy and Competitiveness

Short Answer

1. A type of output that is substantially different from products and other types of services is that of knowledge or _______; the more they are used, the more valuable they become.

Ans: information
Difficulty: Medium
Response: See page 13
Ref: Operations

2. ________ for a nation is the degree to which it can, under free and fair market conditions, produce goods and services that meet the test of international markets while simultaneously maintaining and expanding the real incomes of its citizens (US President’s Council on Industrial _________, 1985):

Ans: Competitiveness
Difficulty: Easy
Response: See page 25
Ref: Strategy and Competitiveness