Exam
Name___________________________________
 
TRUE/FALSE.  Write 'T' if the statement is true and 'F' if the statement is false. 
1) 

A process involves transforming inputs into outputs. 

1) 

_______ 

 
2) 

Inputs to a process can include human resources. 

2) 

_______ 

 
3) 

Every process has a customer. 

3) 

_______ 

 
4) 

A nested process refers to a process within a process. 

4) 

_______ 

 
5) 

Operations management refers to the direction and control of inputs that transform processes into products and services. 

5) 

_______ 

 
6) 

Relative to strategic decisions, tactical decisions are less structured and have longer-term consequences.  

6) 

_______ 

 
7) 

Many service operations have little outside customer contact. 

7) 

_______ 

 
8) 

As a percentage of total employment within the Canadian economy, jobs in the service sector have declined over the past 40 years. 

8) 

_______ 

 
9) 

Productivity is measured as input over output. 

9) 

_______ 

 
10) 

Labour productivity is an index of the output per person or hours worked. 

10) 

______ 

 
11) 

As the value of output per work hour goes up, the nations standard of living is lowered. 

11) 

______ 

 
12) 

Over the last decade the gains in labour productivity in Canada have been greater in the manufacturing sector than in the service sector.  

12) 

______ 

 
13) 

Today, most products are made of material and services from around the world. 

13) 

______ 

 
14) 

Many companies today compete on the basis of time. 

14) 

______ 

 
15) 

Today, many environmental issues are receiving more emphasis. 

15) 

______ 

 
16) 

Competitive priorities are the means by which operations implements the firm's corporate strategies. 

16) 

______ 

 
17) 

Entering into regional trade blocks such as the North American Free Trade Agreement (NAFTA) tends to lessen the competitive pressures on manufacturers located within member countries such as Canada.  

17) 

______ 

 
18) 

On a per capita basis, as a nation Canada is one of lowest emitters of green house gases in the world. 

18) 

______ 

 
19) 

Environmental scanning refers to the unique resources and strengths that an organization's management considers when formulating strategy. 

19) 

______ 

 
20) 

One effective global strategy is strategic alliances. 

20) 

______ 

 
21) 

One factor used to determine market segments is psychological factors. 

21) 

______ 

 
22) 

The first step of needs assessment is market analysis. 

22) 

______ 

 
23) 

Flexibility is a possible competitive priority. 

23) 

______ 

 
24) 

Consistent quality is unimportant to today's consumers. 

24) 

______ 

 
25) 

Delivery time should always be less than two days. 

25) 

______ 

 
26) 

Processes that provide services with little variety in high volume tend to use the assemble-to-order strategy. 

26) 

______ 

 
27) 

Processes designed to provide individualized services tend to use standardized-service strategies. 

27) 

______ 

 
28) 

Firm's utilizing a make-to-stock manufacturing strategy often use mass production. 

28) 

______ 

 
29) 

The make-to-order manufacturing strategy provides a high level of customization. 

29) 

______ 

 
30) 

Successful mass customizers tend to postpone the task of differentiating a product or service for a specific customer until the last possible moment. 

30) 

______ 

 
31) 

One tactic of mass customization is to design the product or service so that it consists of independent modules that can be easily assembled into different forms. 

31) 

______ 

 
32) 

An operations management department typically performs one process. 

32) 

______ 

 
33) 

Functions within an organization are characterized by having their own knowledge and skill areas, primary responsibilities, processes, and decision domains.  

33) 

______ 

 
34) 

Multifactor productivity measures are determined by measuring more than one of the input resources used to produce outputs.  

34) 

______ 

 
35) 

In computing a multifactor measure of productivity, the inputs can be measured in different units such as dollars, labour hours, volume of materials used, etc. 

35) 

______ 

 
36) 

An increase in the value of the Canadian dollar relative to other currencies lessens the pressure on manufacturing companies based in Canada to consider locating facilities in low-cost labour countries such as China and India.  

36) 

______ 

 
37) 

An assemble-to-order service strategy provides low-variety, homogenous services at high volumes. 

37) 

______ 

 
38) 

A customized-services strategy provides individualized services. 

38) 

______ 

 
39) 

A make-to-stock manufacturing strategy is feasible for relatively standardized products with high volumes and reasonably accurate forecasts. 

39) 

______ 

 
40) 

An assemble-to-order manufacturing strategy involves holding finished products in stock for immediate delivery.   

40) 

______ 

 
41) 

Measuring the number of square metres of carpet installed per day by an installer working for a flooring company is example of a multifactor measure of productivity.  

41) 

______ 

 
42) 

Web pages can be designed to allow customers to configure their own products. 

42) 

______ 

 
MULTIPLE CHOICE.  Choose the one alternative that best completes the statement or answers the question. 
43) 

Which one of the following statements regarding operations management is TRUE? 

43) 

______ 
A) 

Operations management deals only with manufacturing organizations because service organizations do not have tangible outputs. 
B) 

Customer participation and information on performance are two special types of inputs to a production system. 
C) 

Typical inputs to a production system are processes and consumer goods. 
D) 

Inputs to a production system include capital and materials, but not human resources. 

 
44) 

Operations management is part of a production system that can be described in the following manner Organization inputs-processes-outputs. Which one of the following correctly describes a production system? 

44) 

______ 
A) 

Bank tellers-computer equipment-deposits 
B) 

Furniture manufacturer wood-sanding-chair 
C) 

Airline pilots-planes-transportation 
D) 

Telephone company satellites-cables-communication 

 
45) 

Which one of the following statements is TRUE? 

45) 

______ 
A) 

Because outputs from service organizations typically cannot be inventoried, inventories are of little importance to service systems. 
B) 

The share of the workforce in service jobs in countries such as Canada, France, Britain, Japan, and the United States is well above 60 percent. 
C) 

Service-sector organizations generally cannot utilize operations management techniques. 
D) 

The absolute number of Canadian manufacturing jobs has decreased since the late 1950s because the percentage of service jobs in the economy increased. 

 
46) 

Which one of the following statements concerning productivity is true? 

46) 

______ 
A) 

Multifactor productivity is an index of the output provided by more than one of the resources used in production.  
B) 

Productivity improvement is achieved by increasing the inputs used to produce a given level of output.  
C) 

The low growth in service productivity has had little effect on overall productivity in countries such as Canada and the U.S.. 
D) 

Accounting for several inputs simultaneously is not possible.  

 
47) 

Which one of the following statements concerning measures of productivity is false? 

47) 

______ 
A) 

Measures of labour productivity are generally more informative than multifactor measures of productivity. 
B) 

Productivity is measured as the ratio of outputs divided by inputs.  
C) 

Multifactor measures of productivity must convert the quantities being measured to a common unit of measure such as dollars. 
D) 

The number of insurance claims processed per week by employees in an insurance company is a valid measure of productivity.  

 
48) 

The percentage of the workforce in service jobs in some industrialized countries such as Canada, France, Japan, and Britain is 

48) 

______ 
A) 

much lower than that of the manufacturing sector in these countries. 
B) 

more than 60 percent of the total workforce in these countries. 
C) 

lower than that in the manufacturing sector now, but shows a rising trend. 
D) 

higher than that in the manufacturing sector now, but shows a declining trend. 

 
49) 

In countries such as Canada, the United States, Japan and Germany, productivity gains in the service sector  

49) 

______ 
A) 

have improved recently with widespread adoption of the Internet as a means to service customers more directly.  
B) 

have tended to lag gains in labour productivity in manufacturing.  
C) 

have accelerated with greater international competition in areas such as financial services.  
D) 

all the above 

 
50) 

Which of the following technologies is least likely to help companies to improve their competitiveness? 

50) 

______ 
A) 

keypunch cards 

B) 

electronic mail 
C) 

automated robots 

D) 

the Internet 

 
51) 

Which of the following is the responsibility of operations? 

51) 

______ 
A) 

transform inputs into new products and services 
B) 

develop new products and services 
C) 

transport inputs and outputs 
D) 

interpret financial information 

 
52) 

Which of the following skill areas is NOT fundamental to operations managers? 

52) 

______ 
A) 

quantitative analysis 

B) 

understanding of international business 
C) 

advertising tactics 

D) 

knowledge of information systems 

 
53) 

The text views operations management in several different ways. One acceptable view of operations management is as a  

53) 

______ 
A) 

system wherein inputs pass through one or more operations and are transformed into outputs (goods or services). 
B) 

set of decisions related to budgeting the annual resources between different functional areas. 
C) 

set of decisions related to product pricing and marketing. 
D) 

corporate function in which the best way to finance corporate assets is determined. 

 
54) 

Which of the following statements is best? Operations management can be made more effective by 

54) 

______ 
A) 

making products early enough so that stock outs do not occur. 
B) 

coordinating all activities related to operations, directly or indirectly, both within and outside the organization. 
C) 

coordinating operations with other functional areas that impact operations. 
D) 

focusing on aspects of operations that are directly related to production. 

 
55) 

Which of the following statements is best? 

55) 

______ 
A) 

Operations management refers primarily to manufacturing. 
B) 

Global competition is putting additional pressures on operations managers. 
C) 

Productivity in the service sector has kept pace with the manufacturing sector. 
D) 

Operations managers have little interaction with other functional areas. 

 
56) 

In response to social and political moves to discourage cigarette smoking, major cigarette manufacturers have had to diversify into other products. Identifying the pressures against smoking is an example of 

56) 

______ 
A) 

market segmentation. 

B) 

environmental scanning. 
C) 

mission statement development. 

D) 

flow strategy. 

 
57) 

Monitoring trends in the industry, the marketplace, and society for potential opportunities or threats is known as 

57) 

______ 
A) 

mission statement development. 

B) 

market segmentation. 
C) 

environmental scanning. 

D) 

flow strategy. 

 
58) 

A company realizes that layoffs at its primary customers reflects falling demands for its customers' products, and hence for its own products. The company has engaged in 

58) 

______ 
A) 

mission statement redefinition. 

B) 

market segmentation. 
C) 

flow strategy. 

D) 

environmental scanning. 

 
59) 

Core competencies are 

59) 

______ 
A) 

another name for competitive priorities. 
B) 

the unique resources and strengths that management considers when formulating strategy. 
C) 

various flow strategies. 
D) 

product or service attributes that represent the needs of a particular market segment. 

 
60) 

Which of the following is NOT something that could potentially serve as the basis of a company's a core competency? 

60) 

______ 
A) 

workforce 

B) 

competitive priorities 
C) 

market and financial know-how 

D) 

facilities 

 
61) 

Which of the following is NOT something that could potentially serve as the basis of a company's a core competency? 

61) 

______ 
A) 

facilities 

B) 

competitive priorities 
C) 

market and financial know-how 

D) 

systems and technology 

 
62) 

Which of the following is an example of a core competency? 

62) 

______ 
A) 

facilities 
B) 

competitive priorities 
C) 

flow strategies 
D) 

product or service attributes that represent the needs of a particular market segment 

 
63) 

The Gap, INC. has targeted teenagers and young adults needing casual clothes and, for its GapKids stores, the parents or guardians of infants through 12-year-olds. This is an example of 

63) 

______ 
A) 

market segmentation. 
B) 

a mission statement. 
C) 

a needs assessment. 
D) 

a collaborative effort between the company and its customers. 

 
64) 

A steel company has categorized its customers as standard steel customers, special bar quality steel customers, and mixed-steel customers. This is an example of  

64) 

______ 
A) 

market segmentation. 

B) 

a needs assessment. 
C) 

a mission statement. 

D) 

a joint venture with its customers. 

 
65) 

Customers interested in the low price of computer chips is an example of needs assessment on the basis of 

65) 

______ 
A) 

volume needs. 

B) 

industry factors. 
C) 

product/service needs. 

D) 

delivery system needs. 

 
66) 

Customers desiring conveniently located food stores is an example of needs assessment on the basis of 

66) 

______ 
A) 

delivery system needs. 

B) 

volume needs. 
C) 

product/service needs. 

D) 

psychological factors. 

 
67) 

A lawn fertilizer company has identified a group of customers, such as Canadian Tire and Wal-Mart, that have a high degree of variability in their demands for fertilizer. This is an example of needs assessment on the basis of 

67) 

______ 
A) 

industry factors. 

B) 

volume needs. 
C) 

product/service needs. 

D) 

delivery system needs. 

 
68) 

Competitive priorities define the dimensions on which the firm should excel with its products or services. Which one of the following statements regarding this concept is TRUE? 

68) 

______ 
A) 

Often there are trade-offs among competitive priorities; thus, the best emphasis is situational. 
B) 

All eight dimensions of competitive priorities should be equally emphasized in order to service the increasingly competitive market of the 1990s. 
C) 

The strategy of emphasizing lower price is most appropriate when the product is highly differentiated. 
D) 

McDonald's restaurants emphasize high-performance design quality rather than consistent quality. 

 
69) 

Competitive priorities state the dimensions on which a firm can excel. Which one of the following statements about each dimension is TRUE? 

69) 

______ 
A) 

A firm that intends to excel at high-performance design quality can succeed only when its production volume is very high. 
B) 

McDonald's is a typical example of an organization that excels at volume flexibility rather than quality consistency. 
C) 

Emphasizing low price is most appropriate for differentiated products in the growth stage of demand. 
D) 

For a firm that gives top priority to customization, volumes for any individual product tend to be low. 

 
70) 

An ethnic restaurant, in serving a lovely, four-hour, seven-course dinner for two for $150, is giving particular emphasis to which dimension of competitive priorities? 

70) 

______ 
A) 

fast delivery time 

B) 

price 
C) 

high-performance quality 

D) 

consistent quality 

 
71) 

Which of the following statements about competitive priorities is TRUE? 

71) 

______ 
A) 

To survive, all firms in an industry must compete on the same dimensions of competitive priority. 
B) 

Club Med competes on the dimension of high-performance design in part by offering excellent entertaining, dining, and recreational facilities. 
C) 

Firms emphasizing low price have slack capacity and hold large inventories in order to be efficient. 
D) 

A good delivery time is less than a few weeks, irrespective of the industry under consideration. 

 
72) 

Competitive priorities define the dimensions on which companies should excel in producing their products or services. Which one of the following statements is TRUE? 

72) 

______ 
A) 

A firm offering little customization cannot compete simultaneously on the dimension of consistent quality. 
B) 

A firm that competes on the dimension of customization tends have operating systems that are inflexible.
 
C) 

It is impossible for a firm to improve cost and quality simultaneously. 
D) 

A firm that competes on the dimension of volume flexibility is more likely to manufacture products that experience a seasonal demand variation. 

 
73) 

Which one of the following statements is TRUE? 

73) 

______ 
A) 

The process of concurrent engineering requires design engineers, manufacturing specialists, and marketers to work jointly in designing a product and selecting a production process. 
B) 

Firms like Ford and Honda found that the concept of concurrent engineering is not cost effective. 
C) 

Increased market segmentation and technological advances mandate long development cycles. 
D) 

Recent trends are for manufacturing firms not to involve operations until the final design stage has been reached. 

 
74) 

Which of the service strategies is used to provide services with little variety and high volume? 

74) 

______ 
A) 

standardized-services strategy 

B) 

assemble-to-order service strategy 
C) 

customized-services strategy 

D) 

make-to-stock services strategy 

 
75) 

Which of the service strategies amounts to designing operations to include processes devoted to producing standardized services and processes devoted to assembling standardized offerings for a specific customer's needs? 

75) 

______ 
A) 

standardized-services strategy 

B) 

assemble-to-order service strategy 
C) 

customized-services strategy 

D) 

make-to-stock services strategy 

 
76) 

Which of the service strategies uses processes designed to provide individualized services? 

76) 

______ 
A) 

standardized-services strategy 

B) 

assemble-to-order service strategy 
C) 

customized-services strategy 

D) 

make-to-stock services strategy 

 
77) 

Firms that produce high volumes of relatively few standardized products, for which reasonably accurate forecasts are available, are most likely to use a 

77) 

______ 
A) 

make-to-stock strategy. 

B) 

assemble-to-order service strategy. 
C) 

make-to-order strategy. 

D) 

flexible-flow strategy. 

 
78) 

Mass production is a term most often used to describe firms using a 

78) 

______ 
A) 

make-to-stock strategy. 

B) 

assemble-to-order strategy. 
C) 

make-to-order strategy. 

D) 

flexible flow strategy. 

 
79) 

A manufacturer of upscale upholstered furniture can produce hundreds of a particular style of sofa, no two alike, to meet customers' selection of fabric and wood. The manufacturer is most likely using a 

79) 

______ 
A) 

make-to-stock strategy. 

B) 

assemble-to-order strategy. 
C) 

make-to-order strategy. 

D) 

mass production strategy. 

 
80) 

A firm producing medical equipment to customer specifications is most likely using a 

80) 

______ 
A) 

make-to-stock strategy. 

B) 

assemble-to-order strategy. 
C) 

make-to-order strategy. 

D) 

mass production strategy. 

 
81) 

Mass customization is a new concept that is the ultimate use of a 

81) 

______ 
A) 

make-to-stock strategy. 

B) 

assemble-to-order strategy. 
C) 

make-to-order strategy. 

D) 

mass production strategy. 

 
SHORT ANSWER.  Write the word or phrase that best completes each statement or answers the question. 
82) 

A(n) __________ is any activity or group of activities that takes one or more input, transforms and adds value to them, and provides one or more outputs for its customers. 

82)  

_____________ 

 
83) 

Operations management refers to the direction and control of __________ that transform __________ into products and services. 

83)  

_____________ 

 
84) 

The concept of a process within a process is referred to as a(n) __________. 

84)  

_____________ 

 
85) 

Productivity is defined as __________ over __________. 

85)  

_____________ 

 
86) 

A firm gains competitive advantage by outperforming competitors in terms of competitive priorities, which fall into four major groups __________, __________, __________, and __________. 

86)  

_____________ 

 
87) 

In a process called __________, design engineers, manufacturing specialists, marketers, buyers, and quality specialists work jointly to design a product or service and select the production process. 

87)  

_____________ 

 
88) 

__________ measures how quickly a new product or service is introduced, covering the elapsed time from idea generation through final design and production. 

88)  

_____________ 

 
89) 

__________ is the elapsed time between receiving a customer's ordering and filling it. 

89)  

_____________ 

 
90) 

__________ is how industrial buyers often refer to fast delivery time. 

90)  

_____________ 

 
91) 

__________ measures the frequency with which delivery-time promises are met. 

91)  

_____________ 

 
92) 

__________ is the ability to accelerate or decelerate the rate of production quickly to handle large fluctuations in demand. 

92)  

_____________ 

 
93) 

A key element of mass customization is __________ the task of differentiating a product or service until __________ moment. 

93)  

_____________ 

 
94) 

Mass customization is a form of a(n) __________ operations strategy. 

94)  

_____________ 

 
95) 

Two goals of mass customization are __________ and __________. 

95)  

_____________ 

 
96) 

Firms that use a make-to-stock strategy typically have competitive priorities of __________ and __________. 

96)  

_____________ 

 
97) 

The assemble-to-order strategy addresses competitive priorities of __________ and __________. 

97)  

_____________ 

 
98) 

What skill areas contribute to the success of an operations manager? 

98)  

_____________ 

 
99) 

Identify a large employer in your hometown. Describe this organization's inputs, processes, and outputs. 

99)  

_____________ 

 
100) 

Identify and describe three different trends in operations management. 

100)  

____________ 

 
101) 

Explain what an operations strategy is and the importance of competitive priorities. Give an example from an organization (public or private, manufacturing or service). 

101)  

____________ 

 
102) 

Name the two competitive priorities for quality, and give an example of each. 

102)  

____________ 

 
103) 

Name the three competitive priorities for time, and give an example of each. 

103)  

____________ 

 
104) 

List and explain the three service strategies. 

104)  

____________ 

 
105) 

List and explain the three manufacturing strategies. 

105)  

____________ 

 
ESSAY.  Write your answer in the space provided or on a separate sheet of paper. 
106) 

Explain what is meant by a "process view" of organizations. Use examples to support your explanation. 

 
107) 

Explain what is meant by an organization's internal customer, and its external customers. Use examples to support your explanation of the difference between these two types of customers.  

 
108) 

Explain how productivity is measured. 

 
109) 

Describe what is meant by the "core competencies" of an organization, the strategic importance of core competencies, and give an example of a core competency for a business organization.  

 
110) 

Briefly describe the four broad dimensions of customer value, and identify the competitive priorities for operational processes associated with each of these dimensions.  

 
111) 

Explain the distinction between "order winner" and "order qualifier" competitive priorities, and provide an example of each. 

 
112) 

Describe what is meant by a mass customization operations strategy, and explain the product or service, and process implications of this type of strategy. Use examples to support your explanation.  

 
113) 

Explain at least four approaches organizations use to achieve cross-functional coordination. 

 
114) 

Explain the distinction between the three competitive priorities that deal with time, and provide examples of each fast delivery time, on-time delivery, and development speed. 

 
115) 

Beyond setting goals or objectives, identify and briefly describe the three major aspects of corporate strategy that are critical to the operations of a company.  

 
1) 

TRUE 

2) 

TRUE 

3) 

TRUE 

4) 

TRUE 

5) 

TRUE 

6) 

FALSE 

7) 

TRUE 

8) 

FALSE 

9) 

FALSE 

10) 

TRUE 

11) 

FALSE 

12) 

TRUE 

13) 

TRUE 

14) 

TRUE 

15) 

TRUE 

16) 

FALSE 

17) 

FALSE 

18) 

FALSE 

19) 

FALSE 

20) 

TRUE 

21) 

TRUE 

22) 

FALSE 

23) 

TRUE 

24) 

FALSE 

25) 

FALSE 

26) 

FALSE 

27) 

FALSE 

28) 

TRUE 

29) 

TRUE 

30) 

TRUE 

31) 

TRUE 

32) 

FALSE 

33) 

TRUE 

34) 

TRUE 

35) 

FALSE 

36) 

FALSE 

37) 

FALSE 

38) 

TRUE 

39) 

TRUE 

40) 

FALSE 

41) 

FALSE 

42) 

TRUE 

43) 

B 

44) 

B 

45) 

B 

46) 

A 

47) 

A 

48) 

B 

49) 

D 

50) 

A 

51) 

A 

52) 

C 

53) 

A 

54) 

B 

55) 

B 

56) 

B 

57) 

C 

58) 

D 

59) 

B 

60) 

B 

61) 

B 

62) 

A 

63) 

A 

64) 

A 

65) 

C 

66) 

A 

67) 

B 

68) 

A 

69) 

D 

70) 

C 

71) 

B 

72) 

D 

73) 

A 

74) 

A 

75) 

B 

76) 

C 

77) 

A 

78) 

A 

79) 

B 

80) 

C 

81) 

C 

82) 

process 

83) 

processes, inputs 

84) 

nested process 

85) 

output, input 

86) 

cost, quality, time, flexibility 

87) 

concurrent engineering 

88) 

Development speed 

89) 

Fast delivery time 

90) 

Lead time 

91) 

On-time delivery 

92) 

Volume flexibility 

93) 

postponing, the last possible 

94) 

assemble-to-order 

95) 

variety, relatively high volume 

96) 

low cost, consistent quality 

97) 

customization, fast delivery times 

98) 

Skills include quantitative analysis to solve problems, knowledge of information systems to manage vast quantities of data, concepts of organizational behavior to aid in designing jobs and managing the workforce, and an understanding of international business, methods to gain useful ideas about facility location, technology, and inventory management. 

99) 

Answers will vary based on the employer selected. 

100) 

The textbook lists four trendsgrowth of service sector; productivity changes; and technological change; and environmental, ethical, and diversity issues. 

101) 

An operations strategy is the means by which operations implements the firm's corporate strategy. Competitive priorities are the key capabilities that operations must develop to compete successfully in a market segment. Possible competitive priorities include low-cost operation, high-performance design, consistent quality, fast delivery time, on-time delivery, development speed, customization, and volume flexibility. Examples will vary. 

102) 

The two competitive priorities are high-performance design, which is the determination of the level of operations performance required in making a product or performing a service, and consistent quality, which measures the frequency with which the product or service meets design specifications. Examples will vary. 

103) 

The three competitive priorities for time are fast delivery time, on-time delivery, and development speed. Fast delivery speed refers to the elapsed time between receiving a customer's order and filling it. On-time delivery measures the frequency with which delivery time promises are met. Development speed measures how quickly a new product or service is introduced. Examples will vary. 

104) 

The three service strategies are standardized-services strategy, assemble-to-order strategy, and customized-services strategy. The standardized-services strategy provides services with little variety in high volume. The assemble-to-order service strategy designs operations to include processes that produce a set of standardized services that are assembled for specific customers. Customized-services strategy uses processes designed to provide individualized services for each customer. 

105) 

The three manufacturing strategies are make-to-stock, assemble-to-order, and make-to-order. Make-to-stock involves holding inventories in stock for immediate delivery, minimizing customer delivery time. Typically done for standardized products, with high volume and reasonably accurate forecasts. The assemble-to-order strategy is used to produce customized products from relatively few assemblies and components. Typical competitive priorities are customization and fast delivery. The make-to-order strategy makes products to customer specification in low volume. High degree of customization is the major competitive priority for this strategy. 

106) 

A process is an activity or group of activities that takes one of more inputs, transforms and adds value, and generates one or more outputs for its customers.  The types of processes that exist within organizations can vary significantly.  For example, the primary process for an airline is the movement of passengers and their luggage from one location to another.  In addition, an airline requires processes for making reservations, checking in passengers, serving meals, and scheduling crews.  Processes involve various inputs and outputs in the form of goods and services for its customers.  Inputs include human resources (workers and managers), capital (equipment and facilities), energy, and purchased materials and services including information.  The operational processes of an organization transform these inputs by adding value through the various activities it performs to produce the outputs for its customers in the form of goods and services.  Customers can include external customers, who may be either end users or intermediaries (such as manufacturers, wholesalers, or retailers), buying the firm's finished products or services.  Others are internal customers who may be one or more other employees who rely on inputs from other (earlier) processes within the organization in order to perform related (later) processes. Processes can involve a whole firm, a department or small group, or even a single individual.  Each one has inputs and uses processes at various operations to produce outputs.  Some processes are said to be nested in the sense that they can be broken down into sub processes, which in turn can be broken down into still narrower sub processes.  Examples used to support the explanation will vary.   

107) 

Internal customers are one or more employees who use outputs from earlier, upstream processes in the organization to perform related, downstream processes in the next office, work station, shop, or department.  External customers are end users or intermediaries, such as manufacturers, wholesalers, or retailers, who buy a firm's products and services.  Examples used to support the explanation will vary.   

108) 

Productivity is the value of outputs (goods and services) produced divided by the values of input resources (wages, cost of equipment, and the like) used to produce these outputs.  The basic formula for computing productivity is;

Productivity = Output / Input

Many measures of productivity are possible, and may in fact involve rough approximations.  For example, output may be measured in the number of units produced or the dollar value customers pay for outputs.  The value of inputs can be measured based on costs or by the units such as labour hours.  Typically companies will rely on several reasonable measures of productivity, monitoring trends to identify areas needing improvement.  A measure of labour productivity is an index of the output per person or hour worked.  Similarly, machine productivity is an index of the output a machine produces over a period of time (e.g. hour or day).  Productivity measures can also account for several inputs simultaneously.  Multifactor productivity is an index of the output provided by more than one of the resources used in production.  For example, it may account for inputs of labour, materials, and overhead costs in one measure of productivity.  When developing such a measure, quantities must be converted to a common unit of measure, typically dollars.  

109) 

Core competencies are the unique resources and processes that an organization's management can leverage when formulating and implementing strategy.  They reflect the collective learning of an organization, especially in how to coordinate diverse processes, and integrate multiple technologies.  These competencies include such resources as facilities and people, and processes such as product development.  Competencies typically extend beyond a single product or service, applying to various products or services and across multiple markets.  As a result new business opportunities are possible by continuing to extend the reach of a core competency while creating deep expertise that is difficult for competitors to buy or copy.  The development of core competencies is especially important as global competition grows and competitors move quickly to copy basic product and service features.  Examples used will vary. 

110) 

The four broad dimensions of customer value that collectively create the customer benefit bundle are quality, time, flexibility, and price.  Conceptually, customer value is defined as the ratio of 

Customer Value = (Quality, time, flexibility) / Price

Price The competitive priority for operational processes for the price dimension of value is low-cost operations.  Lowering prices can increase demand for products or services, but it also reduces profit margins if the product or service cannot be produced at a lower cost.  Therefore to compete effectively on the basis of price, operations managers must control costs, including the cost of labour, materials, scrap, overhead, and other costs.  Collectively, improvements in the design and management of operations must create a system that lowers cost per unit of the product or service.   

Quality For operations, two competitive priorities deal with quality high-performance design and conformance.  High-performance design focuses on the level of particular attributes such as superior features, close tolerances, and greater durability.  In services, high-performance design includes features such as helpfulness, courteousness, and availability of service employees.  High performance design determines the level of functionality that operations must achieve in producing a product or service.  To do so, customer needs must be accurately assessed and then translated into a product or service design.  Consistent quality (also referred to as conformance) measures the frequency operations is able to produce goods or services that meet design specifications.  

Time Three competitive priorities deal with time; fast delivery time, on-time delivery, and development speed.  Delivery time is the elapsed time between receiving a customer order and filling it, sometimes referred to as lead-time for buyers in industrial markets.  On-time delivery measures the frequency with which delivery-time promises are met.  Development speed measures how quickly a new product or service is introduced, covering the elapsed time from idea generation through final design to market introduction. 

Flexibility refers to the characteristic of a firm's operations that enables it to react to customer needs quickly and efficiently.  Two types of flexibility are customization and volume flexibility.  Customization typically implies that a company's operations must be flexible to receive individualized customer orders, adjust designs accordingly, and create the requested product or service.  To handle wide fluctuations in the level of demand, volume flexibility is the ability to rapidly accelerate or decelerate the rate of production of a product or service.  

111) 

An order winner is the one particular dimension of customer value for a given market segment that transcends others to influence purchase behaviour between competing products and services.  This order winner dimension represents the criterion that customers use to differentiate the services of products of one firm from those of competing firms.  An order qualifier is the minimum level of a particular dimension of customer value that has become a requirement for doing business in a particular market segment.  Fulfilling an order qualifier will not ensure competitive success in a market; it will only position the firm to compete.  Examples will vary. 

112) 

A mass customization strategy combines an assemble-to-order strategy with mass production, whereby a firm's flexible processes generate customized products or services in high volumes at reasonable costs.  This strategy attempts to provide the variety inherent in an assemble-to-order strategy but often focuses on relatively high-volume markets.  A key to successfully implementing a mass customization strategy is to postpone the task of differentiating a product or service for a specific customer until the last possible moment.  Doing so allows the greatest possibility to rely on standard modules within the design of the product or service before specific customization.  The implications for product or service design are that they should consist of independent modules that can be assembled into different forms easily and inexpensively.  Processes should also be designed so that they can be employed to meet a wide variety of needs in terms of the features of the products and services they produce.  One key to support mass customization is to design processes as independent modules that can be arranged to provide customization at the latest possible stage in a production process. Examples used to support the explanation will vary. 

113) 

Some blend of the following six approaches are used by organizations to achieve cross-functional coordination include

∙	Having management develop a unified strategy as a starting point, providing each department a vision of what it must do to help fulfill the overall organizational strategy.

∙	Designing the organizational structure and management hierarchy to promote cross-functional coordination.  Drawing departmental lines around areas of specialization may work against integration by creating insular views and "turf battles." Another option is to organize around major product lines or processes. 

∙	The goal-setting process and reward systems can encourage cross-functional coordination.  So can bringing people together from different functional areas - through task forces or committees - to make decisions and solve problems.  

∙	Improvements to information systems can also boost coordination.  In part, information must be tailored to the needs of each functional manager.  However, sharing information helps harmonize the efforts of managers from different parts of the organization and enables them to make decisions consistent with organizational goals.

∙	Informal social systems are another device that can be used to encourage better understanding across functional lines.  Joint cafeteria facilities, exercise rooms, and social events can help build a sense of camaraderie, as can corporate training and development programs.

∙	Employee selection and promotion also can help foster more cross-functional coordination by encouraging broad perspectives and common goals.  Of course, employees must first be competent in their own skill areas. 

114) 

Fast delivery time is the elapsed time between receiving a customer order and filling it, sometimes referred to as lead-time for buyers in industrial markets.  Customer's expectations concerning delivery times vary depending on the product or service market.  For instance, it may be several months for complex, customized industrial products.  Manufacturers can shorten delivery times by having inventory on hand.  Service providers and manufacturers can also reduce lead times by having excess capacity, so that long queues are not created in periods of increased demand. 

On-time delivery measures the frequency with which delivery-time promises are met.  Manufacturers measure on-time delivery as the percentage of customer orders shipped on when promised.  Similar measures apply to distributors, in which case management often tracks incidences when an item is not available for immediate purchase.  In high volume service businesses such as retail or food service businesses, on-time delivery might be measured by the average time customers have to wait in a queue for service.

Development speed measures how quickly a new product or service is introduced, covering the elapsed time from idea generation through final design to market introduction.  This competitive priority is particularly important in technology based product markets, entertainment, and fashion industries.  Repeatedly being able to get new products and services to market ahead of the competition provides an advantage that is difficult to overcome.  This capability is supported by innovative management able to recognize evolving market needs or new technology developments, and is often affiliated with market leaders.  

115) 

Corporate strategy must adapt to changes in the business environment a firm competes within.  Adapting to the business environment begins with environmental scanning, the process of monitoring trends in the socioeconomic environment, the marketplace, and society for potential opportunities or threats.  The principal objectives of environmental scanning are to stay ahead of established competitors, and understand potential threats in the form of new entrants or established competitors that offer substitutes for a firm's products or services.  Understanding the external business environment also involves following economic trends, technological developments, political conditions, social changes, the availability of vital resources, and the collective power of customers or suppliers.  

Corporate strategy must also continually look for new opportunities.  Firms succeed by taking advantage of what they do particularly well - that is, the organization's unique strengths.  Core competencies are the unique resources and processes that an organization's management can leverage when formulating and implementing strategy.  These competencies reflect the collective learning of an organization, especially in how to coordinate diverse processes, and integrate multiple technologies.  These competencies include such resources as facilities and people, and processes such as product development.  Competencies typically extend beyond a single product or service, applying to various products or services and across multiple markets.  As a result new business opportunities are possible by continuing to extend the reach of a core competency while creating deep expertise that is difficult for competitors to buy or copy.  The development of core competencies is especially important as global competition grows and competitors move quickly to copy basic product and service features.  

Corporate strategy must also identify the opportunities and threats for its operations from a global perspective.  International expansion of operations may involve sourcing inputs globally, combating threats from global competitors, or planning ways to enter markets beyond the traditional national boundaries of the firm.  Two approaches for international expansion are strategic alliances and locating abroad.  Strategic alliances can take several forms, including collaborative efforts where one firm has core competencies that another firm needs but is unable or unwilling to duplicate.  Another form is a joint venture in which firms agree to produce a product or service jointly.  This leverages the expertise of a partner as a way to minimize the risks of operating in a new, unfamiliar business environment.  Finally, technology licensing is an agreement in which one company licenses its product or process technologies to another.  Locating operations in a foreign country is another way to enter global markets, although managers must recognize that the strategies that work in their home country may not work well elsewhere.