OPM 3000 - EXAM 1 QUESTIONS WITH
COMPLETE SOLUTIONS
Consumption utility measures how much you like a product or service, ignoring the
effects of price and the inconvenience of obtaining the product or service. What are the
two subcomponents of "consumption utility"? - ANSWER Performance and Fit
What are the two subcomponents of inconvenience? - ANSWER Location and Timing
: A fast-food restaurant promising a meal in two minutes or less attempts to cater to
which dimension of the customer utility function? - ANSWER Timing
Which of the following indicates that a car manufacturing company is prioritizing "fit"
dimension of customer utility? - ANSWER It sells cars in several different colors -- from
very popular to very obscure
: Panos' Pizza shop prepares standard pizzas for its customers even before customers
place order, whereas at Julie's Pizza shop customers order pizzas by specifying all the
toppings they want in the pizza. At Julies's Pizza shop there is usually a line of
customers waiting for their orders, whereas as Panos' Pizza shop customers do not
have to wait much. This example illustrates the following strategic trade-off: - ANSWER
Fit vs Timin
A mattress manufacturing company sells its mattresses only online through a website at
"shockingly low" prices as compared to mattress retail stores. It is able to achieve such
low prices by selling directly to customers rather than through a retailer. The company
is sacrificing __________ dimension of the utility to better serve ___________ dimension -
ANSWER Time, Price
Subway promises its customers highly customized and freshly prepared sandwiches.
Which of the following changes align with Subway's strategy? - ANSWER Offering to
toast vegetables along with toasting bread and cheese
McDonalds promises to offer its customers fast delivery of inexpensive food items (such
as burgers). The change of offering custom made burgers is not aligned with this
strategy because of which of the following reasons? - ANSWER Custom made burgers
will increase time and cost
Efficient frontier is characterized by: - ANSWER All the companies that are more
profitable than other companies
Hotel Price Reviews (1 = worst . . . 5 = best)
H1 $100 2
, H2 $250 5
H3 $200 4
H4 $150 2 - ANSWER H4 is Pareto dominated by H1
Which of the following is a resource in pizza making process at a Pizza restaurant?
A. Pizza boxes B. Oven C. Pizza D. Customer orders - ANSWER Oven
An example of a flow unit at a fast-food restaurant is: - ANSWER the customers
Arrivals and departures to an UrgentCare clinic are collected and reported below:
Patient Arrival Time Departure Time
1 8:05am 8:45am
2 8:30am 9:15am
3 9:23am 10:26am
4 10:00am 10:53am
5 10:15am 11:45am
6 10:40am 11:55am
If the clinic is open from 8:00am to noon, what is the flow rate of patients in
patients/hour? - ANSWER 1.5 patients/hr
Five customers visit a bakery from 8 a.m. to 10 a.m. The customers spend 6, 13, 4, 10
and 21 minutes in the bakery. What is the average flow time (in minutes) of a customer at
this bakery? (Specify your answer in at least one decimal points) - ANSWER
(6+13+4+10+21)/6 = 9 minutes
A management class starts at 5:30pm and ends at 7:00pm. 100 students join at the class
at the beginning. Of these 100 students, 50 students leave at 6:30pm and the remaining
stay until the end (i.e., until 7:00pm). What is the average inventory of students in the
class during these 1.5 hours? - ANSWER For first 60 minutes, the inventory of students
is 100 and for last 30 minutes it is 50. So average inventory is = (60*100+30*50)/90 =
83.33 students
A Museum has three million visitors per year. Each visitor spends an average of 1 hour
in the museum. What is the average number of visitors in the museum on a given day if
the museum is open 300 days a year from 9 a.m. to 5 p.m.? - ANSWER In this case, the
flow rate is = 3,000,000 per year = 3000000/300/8 per hour R = 1250 per hour Flow time T
= 1 hour Inventory (avg number of visitors) = R x T = 1250 x 1 = 1250
Twenty new members are elected to an agency every two years. The agency has 100
members on average overall. How long does a member hold his/her position at the
COMPLETE SOLUTIONS
Consumption utility measures how much you like a product or service, ignoring the
effects of price and the inconvenience of obtaining the product or service. What are the
two subcomponents of "consumption utility"? - ANSWER Performance and Fit
What are the two subcomponents of inconvenience? - ANSWER Location and Timing
: A fast-food restaurant promising a meal in two minutes or less attempts to cater to
which dimension of the customer utility function? - ANSWER Timing
Which of the following indicates that a car manufacturing company is prioritizing "fit"
dimension of customer utility? - ANSWER It sells cars in several different colors -- from
very popular to very obscure
: Panos' Pizza shop prepares standard pizzas for its customers even before customers
place order, whereas at Julie's Pizza shop customers order pizzas by specifying all the
toppings they want in the pizza. At Julies's Pizza shop there is usually a line of
customers waiting for their orders, whereas as Panos' Pizza shop customers do not
have to wait much. This example illustrates the following strategic trade-off: - ANSWER
Fit vs Timin
A mattress manufacturing company sells its mattresses only online through a website at
"shockingly low" prices as compared to mattress retail stores. It is able to achieve such
low prices by selling directly to customers rather than through a retailer. The company
is sacrificing __________ dimension of the utility to better serve ___________ dimension -
ANSWER Time, Price
Subway promises its customers highly customized and freshly prepared sandwiches.
Which of the following changes align with Subway's strategy? - ANSWER Offering to
toast vegetables along with toasting bread and cheese
McDonalds promises to offer its customers fast delivery of inexpensive food items (such
as burgers). The change of offering custom made burgers is not aligned with this
strategy because of which of the following reasons? - ANSWER Custom made burgers
will increase time and cost
Efficient frontier is characterized by: - ANSWER All the companies that are more
profitable than other companies
Hotel Price Reviews (1 = worst . . . 5 = best)
H1 $100 2
, H2 $250 5
H3 $200 4
H4 $150 2 - ANSWER H4 is Pareto dominated by H1
Which of the following is a resource in pizza making process at a Pizza restaurant?
A. Pizza boxes B. Oven C. Pizza D. Customer orders - ANSWER Oven
An example of a flow unit at a fast-food restaurant is: - ANSWER the customers
Arrivals and departures to an UrgentCare clinic are collected and reported below:
Patient Arrival Time Departure Time
1 8:05am 8:45am
2 8:30am 9:15am
3 9:23am 10:26am
4 10:00am 10:53am
5 10:15am 11:45am
6 10:40am 11:55am
If the clinic is open from 8:00am to noon, what is the flow rate of patients in
patients/hour? - ANSWER 1.5 patients/hr
Five customers visit a bakery from 8 a.m. to 10 a.m. The customers spend 6, 13, 4, 10
and 21 minutes in the bakery. What is the average flow time (in minutes) of a customer at
this bakery? (Specify your answer in at least one decimal points) - ANSWER
(6+13+4+10+21)/6 = 9 minutes
A management class starts at 5:30pm and ends at 7:00pm. 100 students join at the class
at the beginning. Of these 100 students, 50 students leave at 6:30pm and the remaining
stay until the end (i.e., until 7:00pm). What is the average inventory of students in the
class during these 1.5 hours? - ANSWER For first 60 minutes, the inventory of students
is 100 and for last 30 minutes it is 50. So average inventory is = (60*100+30*50)/90 =
83.33 students
A Museum has three million visitors per year. Each visitor spends an average of 1 hour
in the museum. What is the average number of visitors in the museum on a given day if
the museum is open 300 days a year from 9 a.m. to 5 p.m.? - ANSWER In this case, the
flow rate is = 3,000,000 per year = 3000000/300/8 per hour R = 1250 per hour Flow time T
= 1 hour Inventory (avg number of visitors) = R x T = 1250 x 1 = 1250
Twenty new members are elected to an agency every two years. The agency has 100
members on average overall. How long does a member hold his/her position at the
