GMS 401 PRACTICE EXAMS 2025/2026 QUESTIONS WITH
ANSWERS RATED A+
✔✔Productivity Equation - ✔✔Productivity = Outputs/Inputs
✔✔Why Productivity Matters - ✔✔- High productivity is linked to higher standards of
living
- As an economy replaces manufacturing jobs with lower productivity service jobs, it is
more difficult to maintain high standards of living
- Higher productivity relative to the competition leads to competitive advantage in the
marketplace
- Pricing and profit effects
- For an industry, high relative productivity makes it less likely to be replaced by foreign
industry
✔✔Value Added - ✔✔Value Added = (Total Outputs - Total Inputs)
✔✔Productivity Growth - ✔✔Productivity Growth = (Current period productivity -
previous period productivity)/Previous Period Productivity
✔✔Partial Measures - ✔✔Partial Measures = output/labour, output/machine,
output/capital, output/energy
✔✔Multifactor Measures - ✔✔Multifactor Measures = output/labor+machine,
output/labor+capital+energy
✔✔Total Measure - ✔✔Total Measure = goods or services produced/all inputs used to
produce them
✔✔Outputs - ✔✔Outputs = goods and/or services produced by the operations system
(measured in units or $)
✔✔Inputs - ✔✔Inputs = Single input/single factor (labor, materials, capital, time)
✔✔Improving Productivity - ✔✔- Develop productivity measures and use them
- Focus on critical operations (bottleneck operations)
- Develop methods for productivity improvements
- Establish reasonable goals for improvement
- Make it clear that management supports productivity improvement
- Measure and publicize improvements
✔✔Factors Affecting Productivity - ✔✔- Quality, capital, technology, management
- Standardization, quality, use of internet, computer viruses, searching for lost or
misplaced items
,- Scrap rates, new workers, safety, shortage of IT workers, layoffs, labour turnover,
design of the workplace, incentive plans that reward productivity
✔✔Competitiveness - ✔✔- Refers to how effective an organization is in the competition
for customers' purchases
- Primarily a function of how well the organization (through its operations) meets the
needs of customers
- Competitiveness is relative to others that offer similar goods or services
- What is competitive today may not be competitive tomorrow
✔✔Strategies for Competitive Advantage - ✔✔- Differentiation - better or at least
different
- Uniqueness can go beyond both the physical characteristics and service attributes to
include everything that impacts customers' perception of value
- Cost leadership - cheaper
- Provide the maximum value as perceived by customer; does not imply low quality
- Response - rapid response
- Flexibility is matching market changes in design innovation and volumes
- Reliability is meeting schedules
- Timeliness is quickness in design, production, and delivery
✔✔Operations Strategy in a Global Environment - ✔✔- Competitive advantage implies
the creation of a system that has a unique advantage over competitors
- The idea is to create customer value in an efficient and sustainable way
- Pure forms of these strategies may exist, but operations managers will more likely be
called on to implement some combination of them
✔✔Mission - ✔✔- Economic success, indeed survival, is the result of identifying
missions to satisfy a customer's needs and wants
- We define the organization's mission as its purpose - what it will contribute to society
- Mission statements provide boundaries and focus for organizations and the concept
around which the firm can rally
- The mission states the rationale for the organization's existence
✔✔Strategy - ✔✔- With the mission established, strategy and its implementation can
begin
- An organization's action plan to achieve the mission; each functional area has a
strategy for achieving its mission and for helping the organization reach the overall
mission
- These strategies exploit opportunities and strengths, neutralize threats, and avoid
weaknesses
✔✔Differentiation - ✔✔- Firms achieve missions in three conceptual ways:
1. Differentiation
2. Cost leadership
3. Response
, - Operation managers are called on to deliver goods and services that are
1) better or different
2) cheaper
3) responsive
✔✔Competition - ✔✔- Competing on Cost
- Low/cost leadership entails achieving maximum value, as defined by your customer
- A low-cost strategy does not imply low value or low quality
- Response: a set of values related to rapid, flexible, and reliable performance
✔✔Causes of Poor Competitiveness - ✔✔- Excess emphasis on short-term financial
performance
- Failing to take advantage of strengths or opportunities, failing to recognize and counter
weaknesses and threats
- Failing to view operations from a strategic perspective
- Placing too much emphasis on product/service design and not enough on process
design
- Neglecting investments in capital and HR
- Failing to establish good internal communication and cooperation
- Failing to consider customer wants and needs
✔✔Key Strategies for Operations - ✔✔Quality-Based Strategies:
- Focus on satisfying the customer by integrating quality into all phases of the
organization
- Quality includes both products and processes such as design, production, and service
after the sale
Time-Based Strategies:
- Gain competitive advantage by performing certain activities more quickly than
competitors
- Planning, design, processing, changeover, delivery, response time for complaints, etc.
✔✔Key Strategies for Operations (2) - ✔✔Vertical integration and outsourcing:
- Make vs. buy, strategic alliances
Supply chain management - synchronization of the supply chain to achieve high
performance
- Suppliers, manufacturers, distribution channels, retailers and customers - all viewed as
an integrated system
- Cooperation between links, sharing of information
- Focus on trade-off between cost and level of service
✔✔Reliable - ✔✔- Trusty, authentic, consistent, fallible
✔✔Strategic Importance of Reliability - ✔✔Failure has far reaching effects on a firm's:
- Operation
- Reputation
- Profitability
ANSWERS RATED A+
✔✔Productivity Equation - ✔✔Productivity = Outputs/Inputs
✔✔Why Productivity Matters - ✔✔- High productivity is linked to higher standards of
living
- As an economy replaces manufacturing jobs with lower productivity service jobs, it is
more difficult to maintain high standards of living
- Higher productivity relative to the competition leads to competitive advantage in the
marketplace
- Pricing and profit effects
- For an industry, high relative productivity makes it less likely to be replaced by foreign
industry
✔✔Value Added - ✔✔Value Added = (Total Outputs - Total Inputs)
✔✔Productivity Growth - ✔✔Productivity Growth = (Current period productivity -
previous period productivity)/Previous Period Productivity
✔✔Partial Measures - ✔✔Partial Measures = output/labour, output/machine,
output/capital, output/energy
✔✔Multifactor Measures - ✔✔Multifactor Measures = output/labor+machine,
output/labor+capital+energy
✔✔Total Measure - ✔✔Total Measure = goods or services produced/all inputs used to
produce them
✔✔Outputs - ✔✔Outputs = goods and/or services produced by the operations system
(measured in units or $)
✔✔Inputs - ✔✔Inputs = Single input/single factor (labor, materials, capital, time)
✔✔Improving Productivity - ✔✔- Develop productivity measures and use them
- Focus on critical operations (bottleneck operations)
- Develop methods for productivity improvements
- Establish reasonable goals for improvement
- Make it clear that management supports productivity improvement
- Measure and publicize improvements
✔✔Factors Affecting Productivity - ✔✔- Quality, capital, technology, management
- Standardization, quality, use of internet, computer viruses, searching for lost or
misplaced items
,- Scrap rates, new workers, safety, shortage of IT workers, layoffs, labour turnover,
design of the workplace, incentive plans that reward productivity
✔✔Competitiveness - ✔✔- Refers to how effective an organization is in the competition
for customers' purchases
- Primarily a function of how well the organization (through its operations) meets the
needs of customers
- Competitiveness is relative to others that offer similar goods or services
- What is competitive today may not be competitive tomorrow
✔✔Strategies for Competitive Advantage - ✔✔- Differentiation - better or at least
different
- Uniqueness can go beyond both the physical characteristics and service attributes to
include everything that impacts customers' perception of value
- Cost leadership - cheaper
- Provide the maximum value as perceived by customer; does not imply low quality
- Response - rapid response
- Flexibility is matching market changes in design innovation and volumes
- Reliability is meeting schedules
- Timeliness is quickness in design, production, and delivery
✔✔Operations Strategy in a Global Environment - ✔✔- Competitive advantage implies
the creation of a system that has a unique advantage over competitors
- The idea is to create customer value in an efficient and sustainable way
- Pure forms of these strategies may exist, but operations managers will more likely be
called on to implement some combination of them
✔✔Mission - ✔✔- Economic success, indeed survival, is the result of identifying
missions to satisfy a customer's needs and wants
- We define the organization's mission as its purpose - what it will contribute to society
- Mission statements provide boundaries and focus for organizations and the concept
around which the firm can rally
- The mission states the rationale for the organization's existence
✔✔Strategy - ✔✔- With the mission established, strategy and its implementation can
begin
- An organization's action plan to achieve the mission; each functional area has a
strategy for achieving its mission and for helping the organization reach the overall
mission
- These strategies exploit opportunities and strengths, neutralize threats, and avoid
weaknesses
✔✔Differentiation - ✔✔- Firms achieve missions in three conceptual ways:
1. Differentiation
2. Cost leadership
3. Response
, - Operation managers are called on to deliver goods and services that are
1) better or different
2) cheaper
3) responsive
✔✔Competition - ✔✔- Competing on Cost
- Low/cost leadership entails achieving maximum value, as defined by your customer
- A low-cost strategy does not imply low value or low quality
- Response: a set of values related to rapid, flexible, and reliable performance
✔✔Causes of Poor Competitiveness - ✔✔- Excess emphasis on short-term financial
performance
- Failing to take advantage of strengths or opportunities, failing to recognize and counter
weaknesses and threats
- Failing to view operations from a strategic perspective
- Placing too much emphasis on product/service design and not enough on process
design
- Neglecting investments in capital and HR
- Failing to establish good internal communication and cooperation
- Failing to consider customer wants and needs
✔✔Key Strategies for Operations - ✔✔Quality-Based Strategies:
- Focus on satisfying the customer by integrating quality into all phases of the
organization
- Quality includes both products and processes such as design, production, and service
after the sale
Time-Based Strategies:
- Gain competitive advantage by performing certain activities more quickly than
competitors
- Planning, design, processing, changeover, delivery, response time for complaints, etc.
✔✔Key Strategies for Operations (2) - ✔✔Vertical integration and outsourcing:
- Make vs. buy, strategic alliances
Supply chain management - synchronization of the supply chain to achieve high
performance
- Suppliers, manufacturers, distribution channels, retailers and customers - all viewed as
an integrated system
- Cooperation between links, sharing of information
- Focus on trade-off between cost and level of service
✔✔Reliable - ✔✔- Trusty, authentic, consistent, fallible
✔✔Strategic Importance of Reliability - ✔✔Failure has far reaching effects on a firm's:
- Operation
- Reputation
- Profitability
