WGU C720 Operations and Supply Chain
Management Exam Guide (2026 Edition) A+
Graded
1. Economic Production Quantity (EPQ) - ANSWER A model that helps
companies control the cost of ordering, receiving, and holding inventory;
this model allows for incomplete inventory to arrive, thus proving useful for
businesses that produce their own parts; also known as Production Order
Quantity.
2. Review Interval (Formula) - ANSWER Economic Order Quantity (EOQ) /
D
3. Order-Up-To Level (Formula and definition) - ANSWER M = D(R + L); A
formula used to calculate how much to increase inventory to a level
sufficient to cover anticipated demand before the next order is received.
4. Just-in-Time (JIT) - ANSWER Characterized by maximizing efficiency and
eliminating waste; encompasses standardized processes with single-piece
flow, allowing variety; focus on a smooth, even flow of high-volume
production; often used synonymously with "lean systems"; minimizes work-
in-process (WIP) inventory; transition to general-use machines; move
workers closer together so they can hand-off material throughout the
process; make blanket purchases; uses a pull system; often has shorter
planning horizons with small batch sizes and less scheduling; low
inventories help spot inefficiencies.
5. Toyota Production System (TPS) - ANSWER Toyota's version of Just-in-
Time (JIT) and lean systems.
6. Push System - ANSWER Moves materials through the process based upon a
schedule.
7. Pull System - ANSWER Moves materials through the process as needed.
1
,8. Kanban - ANSWER The Japanese word for "card" that is used to signal the
need for more materials or parts at downstream operations; developed by
Toyota; used in pull systems.
9. Conveyance Kanban (C-Kanban) - ANSWER An authorization to move a
container of parts or materials; nothing can move without it.
10.Single-Card Kanban System - ANSWER Inventory at a work center can
only be replenished when a container is emptied, whereby preventing the
hoarding of extra parts.
11.Production Kanban (P-Kanban) - ANSWER Used to authorize the
production of parts.
12.Dual-Card Kanban System - ANSWER Combines Conveyance Kanban (C-
Kanban) and Production Kanban (P-Kanban); allows greater control over
production and inventory.
13.Total Preventive Maintenance (TPM) - ANSWER Preventing defecting
parks or equipment failure in the process; also known as total productive
maintenance; relies on preventive maintenance, the allocation of time for
maintenance, and operator responsibility for maintenance (as opposed to
departmental responsibility).
14.Level Assembly Schedule - ANSWER The number of units of each end
product produced at a time is as small as possible, and the total production
of each matches average demand during the scheduling horizon. For
example, if the scheduling horizon is 20 days, and the demand during that
period is expected to be 300 units, a level schedule work require 15 units
(300/20) be produced per day. Makes demand for each part fairly uniform
throughout the day.
15.Operations - ANSWER The process used to acquire inputs, such as people,
capital, and material, and transform them into outputs, such as products and
services.
16.Operations Manager - ANSWER They allocate resources.
17.Capital - ANSWER Facilities and equipment
2
,18.Competitive Advantage - ANSWER Developing capabilities that customers
value, can be sustained over the long-term, and competitors find difficult to
replicate.
19.Inseparability - ANSWER The process of separating production from
consumption; cannot be done for services because they are produced and
consumed simultaneously.
20.Technology - ANSWER The application of knowledge, tools, processes, and
procedures to solve problems.
21.Product Design - ANSWER The characteristics, features, and performance
of the product; how the product functions; does not fundamentally change
the product. Example: changing Coca-Cola's beverage containers from glass
to aluminum.
22.Product Technology - ANSWER The application of knowledge to improve
the product.
23.Process - ANSWER How to accomplish a task.
24.Process Design - ANSWER How a product is made; can fundamentally alter
the nature of the product. Example: changing the taste of Coca-Cola.
25.Process Technology - ANSWER The application of knowledge to improve a
process.
26.Cross-Functionality - ANSWER When individuals with different expertise
work towards a common goal; this is an essential business process.
27.Concurrent Engineering - ANSWER Completing product design and process
design simultaneously.
28.Functional Areas - ANSWER Subsystems within an organization, such as
marketing, finance, and accounting, that are linked together by a common
organizational goal.
29.Strategy - ANSWER Consists of the organizational goals and the methods of
implementing the goals; every element of the SWOT analysis should be
considered when developing strategies.
3
, 30.Key Policies - ANSWER Main goals of an organization.
31.Organizational Structure - ANSWER The formal relationships among
different functional areas that aids in communication.
32.Relative Advantage - ANSWER Where one entity has an advantage over
another; will often trade their specialized products for those that they do not
produce; companies with a relative advantage are able to produce products at
a lower cost than their competitors.
33.North American Free Trade Agreement (NAFTA) - ANSWER A free trade
agreement between the United State, Mexico, and Canada to reduce tariffs
and other trade restrictions.
34.General Agreement on Tariffs and Trade (GATT) - ANSWER A trade
agreement designed to reduce tariffs and other trade restrictions.
35.Sustainability - ANSWER Balancing the interconnected obligations to
economic viability, society, and the environment (the triple bottom line).
36.What is the percentage of businesses that operate within the service sector? -
ANSWER 88 percent
37.Supporting Goods - ANSWER Supplies and equipment that aid in the
development of products and services.
38.Market Share - ANSWER The percentage of sales in a particular market.
39.VIRAL - ANSWER Value, Inimitable, rare, aptitude, and lifespan.
40.SWOT Analysis - ANSWER Analyzing the internal (strengths and
weaknesses) and external (opportunities and threats) environments.
41.Requirements for developing competitive advantage - ANSWER SWOT,
business process, competitive capabilities, and customer requirements.
42.Learning Curve - ANSWER Continuously improving a product to make it
better and cheaper.
4
Management Exam Guide (2026 Edition) A+
Graded
1. Economic Production Quantity (EPQ) - ANSWER A model that helps
companies control the cost of ordering, receiving, and holding inventory;
this model allows for incomplete inventory to arrive, thus proving useful for
businesses that produce their own parts; also known as Production Order
Quantity.
2. Review Interval (Formula) - ANSWER Economic Order Quantity (EOQ) /
D
3. Order-Up-To Level (Formula and definition) - ANSWER M = D(R + L); A
formula used to calculate how much to increase inventory to a level
sufficient to cover anticipated demand before the next order is received.
4. Just-in-Time (JIT) - ANSWER Characterized by maximizing efficiency and
eliminating waste; encompasses standardized processes with single-piece
flow, allowing variety; focus on a smooth, even flow of high-volume
production; often used synonymously with "lean systems"; minimizes work-
in-process (WIP) inventory; transition to general-use machines; move
workers closer together so they can hand-off material throughout the
process; make blanket purchases; uses a pull system; often has shorter
planning horizons with small batch sizes and less scheduling; low
inventories help spot inefficiencies.
5. Toyota Production System (TPS) - ANSWER Toyota's version of Just-in-
Time (JIT) and lean systems.
6. Push System - ANSWER Moves materials through the process based upon a
schedule.
7. Pull System - ANSWER Moves materials through the process as needed.
1
,8. Kanban - ANSWER The Japanese word for "card" that is used to signal the
need for more materials or parts at downstream operations; developed by
Toyota; used in pull systems.
9. Conveyance Kanban (C-Kanban) - ANSWER An authorization to move a
container of parts or materials; nothing can move without it.
10.Single-Card Kanban System - ANSWER Inventory at a work center can
only be replenished when a container is emptied, whereby preventing the
hoarding of extra parts.
11.Production Kanban (P-Kanban) - ANSWER Used to authorize the
production of parts.
12.Dual-Card Kanban System - ANSWER Combines Conveyance Kanban (C-
Kanban) and Production Kanban (P-Kanban); allows greater control over
production and inventory.
13.Total Preventive Maintenance (TPM) - ANSWER Preventing defecting
parks or equipment failure in the process; also known as total productive
maintenance; relies on preventive maintenance, the allocation of time for
maintenance, and operator responsibility for maintenance (as opposed to
departmental responsibility).
14.Level Assembly Schedule - ANSWER The number of units of each end
product produced at a time is as small as possible, and the total production
of each matches average demand during the scheduling horizon. For
example, if the scheduling horizon is 20 days, and the demand during that
period is expected to be 300 units, a level schedule work require 15 units
(300/20) be produced per day. Makes demand for each part fairly uniform
throughout the day.
15.Operations - ANSWER The process used to acquire inputs, such as people,
capital, and material, and transform them into outputs, such as products and
services.
16.Operations Manager - ANSWER They allocate resources.
17.Capital - ANSWER Facilities and equipment
2
,18.Competitive Advantage - ANSWER Developing capabilities that customers
value, can be sustained over the long-term, and competitors find difficult to
replicate.
19.Inseparability - ANSWER The process of separating production from
consumption; cannot be done for services because they are produced and
consumed simultaneously.
20.Technology - ANSWER The application of knowledge, tools, processes, and
procedures to solve problems.
21.Product Design - ANSWER The characteristics, features, and performance
of the product; how the product functions; does not fundamentally change
the product. Example: changing Coca-Cola's beverage containers from glass
to aluminum.
22.Product Technology - ANSWER The application of knowledge to improve
the product.
23.Process - ANSWER How to accomplish a task.
24.Process Design - ANSWER How a product is made; can fundamentally alter
the nature of the product. Example: changing the taste of Coca-Cola.
25.Process Technology - ANSWER The application of knowledge to improve a
process.
26.Cross-Functionality - ANSWER When individuals with different expertise
work towards a common goal; this is an essential business process.
27.Concurrent Engineering - ANSWER Completing product design and process
design simultaneously.
28.Functional Areas - ANSWER Subsystems within an organization, such as
marketing, finance, and accounting, that are linked together by a common
organizational goal.
29.Strategy - ANSWER Consists of the organizational goals and the methods of
implementing the goals; every element of the SWOT analysis should be
considered when developing strategies.
3
, 30.Key Policies - ANSWER Main goals of an organization.
31.Organizational Structure - ANSWER The formal relationships among
different functional areas that aids in communication.
32.Relative Advantage - ANSWER Where one entity has an advantage over
another; will often trade their specialized products for those that they do not
produce; companies with a relative advantage are able to produce products at
a lower cost than their competitors.
33.North American Free Trade Agreement (NAFTA) - ANSWER A free trade
agreement between the United State, Mexico, and Canada to reduce tariffs
and other trade restrictions.
34.General Agreement on Tariffs and Trade (GATT) - ANSWER A trade
agreement designed to reduce tariffs and other trade restrictions.
35.Sustainability - ANSWER Balancing the interconnected obligations to
economic viability, society, and the environment (the triple bottom line).
36.What is the percentage of businesses that operate within the service sector? -
ANSWER 88 percent
37.Supporting Goods - ANSWER Supplies and equipment that aid in the
development of products and services.
38.Market Share - ANSWER The percentage of sales in a particular market.
39.VIRAL - ANSWER Value, Inimitable, rare, aptitude, and lifespan.
40.SWOT Analysis - ANSWER Analyzing the internal (strengths and
weaknesses) and external (opportunities and threats) environments.
41.Requirements for developing competitive advantage - ANSWER SWOT,
business process, competitive capabilities, and customer requirements.
42.Learning Curve - ANSWER Continuously improving a product to make it
better and cheaper.
4
