OPERATIONS MANAGEMENT MIDTERM
EXAM PREP | NOTES, REVIEW & PRACTICE
QUESTIONS | 2026/2027
True or False? All organizations, including service firms such as banks and
hospitals, have a production function. - correct answer-true
True or False? An example of a "hidden" production function is the transfer of
funds between accounts at a bank. - correct answer-true
Operations management is applicable:
A) mostly to the service sector.
B) mostly to the manufacturing sector.
C) to all firms, whether manufacturing or service.
D) to the manufacturing sector exclusively. - correct answer-c
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 - correct answer-d
,True or False? An accounting firm that provides tax services for a company would
be considered to be part of that company's supply chain. - correct answer-true
True or False? Competition in the 21st century is no longer between companies; it
is between supply chains - correct answer-true
. True or False? Manufacturing now constitutes the largest economic sector in
postindustrial societies. - correct answer-false
The service sector makes up approximately what percentage of all jobs in the
United States?
A) 12%
B) 40%
C) 66%
D) 85% - correct answer-d
Which is NOT true regarding differences between goods and services?
A) Tangible goods are generally produced and consumed simultaneously; services
are not.
B) Most goods are common to many customers; services are often unique to the
final customer.
C) Services tend to have a more inconsistent product definition than goods.
D) Services tend to have higher customer interaction than goods.
E) None, i.e., all of the above are true. - correct answer-a
,True or False? Production is a measure of output only and not a measure of
efficiency. - correct answer-true
True or False? Productivity is generally more difficult to improve in the service
sector than in the manufacturing sector. - correct answer-true
True or False? Productivity is the total value of all inputs to the transformation
process divided by the total value of the outputs produced. - correct answer-false
A foundry produces circular utility access hatches (manhole covers). If 120 covers
are produced in a 10-hour shift, the productivity of the line is_________covers/hr.
- correct answer-12 covers per hour
Collins Title Insurance Ltd. wants to evaluate its labor and multifactor productivity
with a new computerized title-search system. The company has a staff of four,
each working 8 hours per day (for a payroll cost of $640/day) and overhead
expenses of $400 per day. Collins processes and closes on 8 titles each day. The
new computerized title-search system will allow the processing of 14 titles per
day. Although the staff, their work hours, and pay are the same, the overhead
expenses are now $800 per day.
Calculate:
1. Labor productivity with the old system (in titles per labor-hour)
2. Labor productivity with the new system
3. Multifactor productivity with the old system (in titles per dollar)
4. Multifactor productivity with the new system - correct answer-1. .25
2. .4375
3..0077
4. .0091
, Which of the following statements about challenges in operations management is
FALSE?
A) Job specialization is giving way to empowered employees.
B) Local or national focus is giving way to global focus.
C) Sustainable production is giving way to a low-cost focus.
D) Rapid product development is partly the result of shorter product cycles.
E) The goal of mass customization is to produce customized products, whenever
and wherever needed. - correct answer-c
Which of the following is NOT among the ethical and social challenges facing
operations managers?
A) honoring stakeholder commitments
B) training, retaining, and motivating employees
C) efficiently developing and producing safe high-quality green products
D) increasing executive pay
E) providing a safe workplace - correct answer-d
True or False? The World Trade Organization has helped to significantly reduce
tariffs around the world. - correct answer-true
True or False? Production processes are being dispersed to take advantage of
national differences in labor costs. - correct answer-true
True or False? NAFTA seeks to phase out all trade and tariff barriers between the
United States and Asia. - correct answer-false
EXAM PREP | NOTES, REVIEW & PRACTICE
QUESTIONS | 2026/2027
True or False? All organizations, including service firms such as banks and
hospitals, have a production function. - correct answer-true
True or False? An example of a "hidden" production function is the transfer of
funds between accounts at a bank. - correct answer-true
Operations management is applicable:
A) mostly to the service sector.
B) mostly to the manufacturing sector.
C) to all firms, whether manufacturing or service.
D) to the manufacturing sector exclusively. - correct answer-c
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 - correct answer-d
,True or False? An accounting firm that provides tax services for a company would
be considered to be part of that company's supply chain. - correct answer-true
True or False? Competition in the 21st century is no longer between companies; it
is between supply chains - correct answer-true
. True or False? Manufacturing now constitutes the largest economic sector in
postindustrial societies. - correct answer-false
The service sector makes up approximately what percentage of all jobs in the
United States?
A) 12%
B) 40%
C) 66%
D) 85% - correct answer-d
Which is NOT true regarding differences between goods and services?
A) Tangible goods are generally produced and consumed simultaneously; services
are not.
B) Most goods are common to many customers; services are often unique to the
final customer.
C) Services tend to have a more inconsistent product definition than goods.
D) Services tend to have higher customer interaction than goods.
E) None, i.e., all of the above are true. - correct answer-a
,True or False? Production is a measure of output only and not a measure of
efficiency. - correct answer-true
True or False? Productivity is generally more difficult to improve in the service
sector than in the manufacturing sector. - correct answer-true
True or False? Productivity is the total value of all inputs to the transformation
process divided by the total value of the outputs produced. - correct answer-false
A foundry produces circular utility access hatches (manhole covers). If 120 covers
are produced in a 10-hour shift, the productivity of the line is_________covers/hr.
- correct answer-12 covers per hour
Collins Title Insurance Ltd. wants to evaluate its labor and multifactor productivity
with a new computerized title-search system. The company has a staff of four,
each working 8 hours per day (for a payroll cost of $640/day) and overhead
expenses of $400 per day. Collins processes and closes on 8 titles each day. The
new computerized title-search system will allow the processing of 14 titles per
day. Although the staff, their work hours, and pay are the same, the overhead
expenses are now $800 per day.
Calculate:
1. Labor productivity with the old system (in titles per labor-hour)
2. Labor productivity with the new system
3. Multifactor productivity with the old system (in titles per dollar)
4. Multifactor productivity with the new system - correct answer-1. .25
2. .4375
3..0077
4. .0091
, Which of the following statements about challenges in operations management is
FALSE?
A) Job specialization is giving way to empowered employees.
B) Local or national focus is giving way to global focus.
C) Sustainable production is giving way to a low-cost focus.
D) Rapid product development is partly the result of shorter product cycles.
E) The goal of mass customization is to produce customized products, whenever
and wherever needed. - correct answer-c
Which of the following is NOT among the ethical and social challenges facing
operations managers?
A) honoring stakeholder commitments
B) training, retaining, and motivating employees
C) efficiently developing and producing safe high-quality green products
D) increasing executive pay
E) providing a safe workplace - correct answer-d
True or False? The World Trade Organization has helped to significantly reduce
tariffs around the world. - correct answer-true
True or False? Production processes are being dispersed to take advantage of
national differences in labor costs. - correct answer-true
True or False? NAFTA seeks to phase out all trade and tariff barriers between the
United States and Asia. - correct answer-false
