MGT 702 Exam Question With
Verified Answers
1. In your internship at Sutter Health, the VP for environment asks you how
you would evaluate their materials management. You reply: - ANSWER
"Materials management should have its own unit scorecard. I'd look for
benchmarks and OFIs."
2. One of your responsibilities is linen service. It is supplied by an outside
contractor on a three-year contract with 14 months to go. You receive a
solicitation from a competing supplier, which claims it can cut laundry costs
by 20 percent. "Thank you," you reply. "Our current supplier has a contract
through more than a year from now." You continue: - ANSWER "I'll see
that your company is notified when we solicit bids for the next contract. You
should understand that we will rate service as the prime objective—no
shortages, no late deliveries, no wrong items. We will only consider bidders
with a substantial record of excellent service."
3. People's reaction to disaster planning is usually a form of denial: "It can't
happen here, so why should I take the disaster procedures seriously?" As a
representative of management, you need several good answers on the tip of
your tongue. They include: - ANSWER All of the above
4. PT has come in with a solid forecast of increased demand. Moving Social
Service and expanding PT will meet their needs. If they get the new space,
they are committed to making substantial gains in patient satisfaction and
improvements in some patient outcomes. The orthopedics surgery service
passed a resolution that expansion is a must. Social Service must move to a
location on the second floor, and farther from the main entrance. Social
, Service is very upset. "Our patients need easy access, too," the chief says.
"You're just giving it to PT because they make money and we don't. Our
HCO's value of compassion is being ignored!" You reply: - ANSWER "I
understand. Let's ask the senior management team to review the decision.
Kate Strate, in internal consulting, works on space planning. She can help
you prepare your case."
5. You meet weekly with the COO, who seems to be preparing you for
promotion. One day she says, "We buy most environment of care services
from outside vendors, but we have a few services that we make. Why should
we make those? What are the criteria that determine whether we make or
buy a specific service?" You reply, "Well, of course we want low cost, but
just low cost could get us into trouble. Let me think about it till next week."
Which approach should you use at your next meeting? - ANSWER
"Supplier change (either way) is an OFI if there's a substantial price
advantage or a reliability advantage, or if we are far from benchmark costs."
6. You're staffing a PIT that is evaluating improvements to a work process. An
outside vendor proposes to provide the process, meeting your quality and
service specifications for a unit cost that is lower than the activity-based
costing (ABC) unit cost of doing it in house. The vendor is fully qualified;
there's no reason to think it would not produce effectively on a contract at
that price. A member of the PIT says, "I guess that settles it. We should
accept the vendor's proposal." You say:
1)
"Sure. We'll be ahead of the game."
2)
"I think we should compare it carefully to the ABC. Some elements of the ABC
might continue if we accept the offer. There might be ways to cut our costs."
3)
"We need to make clear that the vendor's employees must follow our values.
We should also consider the impact on our work force."
Verified Answers
1. In your internship at Sutter Health, the VP for environment asks you how
you would evaluate their materials management. You reply: - ANSWER
"Materials management should have its own unit scorecard. I'd look for
benchmarks and OFIs."
2. One of your responsibilities is linen service. It is supplied by an outside
contractor on a three-year contract with 14 months to go. You receive a
solicitation from a competing supplier, which claims it can cut laundry costs
by 20 percent. "Thank you," you reply. "Our current supplier has a contract
through more than a year from now." You continue: - ANSWER "I'll see
that your company is notified when we solicit bids for the next contract. You
should understand that we will rate service as the prime objective—no
shortages, no late deliveries, no wrong items. We will only consider bidders
with a substantial record of excellent service."
3. People's reaction to disaster planning is usually a form of denial: "It can't
happen here, so why should I take the disaster procedures seriously?" As a
representative of management, you need several good answers on the tip of
your tongue. They include: - ANSWER All of the above
4. PT has come in with a solid forecast of increased demand. Moving Social
Service and expanding PT will meet their needs. If they get the new space,
they are committed to making substantial gains in patient satisfaction and
improvements in some patient outcomes. The orthopedics surgery service
passed a resolution that expansion is a must. Social Service must move to a
location on the second floor, and farther from the main entrance. Social
, Service is very upset. "Our patients need easy access, too," the chief says.
"You're just giving it to PT because they make money and we don't. Our
HCO's value of compassion is being ignored!" You reply: - ANSWER "I
understand. Let's ask the senior management team to review the decision.
Kate Strate, in internal consulting, works on space planning. She can help
you prepare your case."
5. You meet weekly with the COO, who seems to be preparing you for
promotion. One day she says, "We buy most environment of care services
from outside vendors, but we have a few services that we make. Why should
we make those? What are the criteria that determine whether we make or
buy a specific service?" You reply, "Well, of course we want low cost, but
just low cost could get us into trouble. Let me think about it till next week."
Which approach should you use at your next meeting? - ANSWER
"Supplier change (either way) is an OFI if there's a substantial price
advantage or a reliability advantage, or if we are far from benchmark costs."
6. You're staffing a PIT that is evaluating improvements to a work process. An
outside vendor proposes to provide the process, meeting your quality and
service specifications for a unit cost that is lower than the activity-based
costing (ABC) unit cost of doing it in house. The vendor is fully qualified;
there's no reason to think it would not produce effectively on a contract at
that price. A member of the PIT says, "I guess that settles it. We should
accept the vendor's proposal." You say:
1)
"Sure. We'll be ahead of the game."
2)
"I think we should compare it carefully to the ABC. Some elements of the ABC
might continue if we accept the offer. There might be ways to cut our costs."
3)
"We need to make clear that the vendor's employees must follow our values.
We should also consider the impact on our work force."
