MGSC 395 EXAM 1 QUESTIONS WITH VERIFIED SOLUTIONS LATEST UPDATE 2026
Operations management - Answers The systematic design, direction, and control of processes that
transforms inputs into serves and products for internal, as well as external, customers
Process - Answers any activity or group of activities that takes one or more inputs, transforms them,
and provides one or more outputs for its customers
Operation - Answers a group of resources performing all or part of one or more processes
Supply Chain - Answers An interrelated series of processes within and across firms that produces a
service or product to the satisfaction of customers
Supply Chain Management - Answers the synchronization of a firm's processes with those of its
suppliers and customers to match the flow of materials, services, and information with customer
demand
External Customers - Answers a customer who is either an end user or an intermediary (ex.
Manufacturers, financial institutions, or retailers) buying the firm's finished services or products
Internal Customers - Answers one or more employees or processes that rely on inputs from other
employees or processes in order to perform their work
External Suppliers - Answers the businesses or individuals who provide the resources, services,
products, and materials for the firm's short-term and long-term needs
Internal Suppliers - Answers the employees or processes that supply important information or
materials to a firm's processes
Nested process - Answers the concept of a process within a process
Core process - Answers a set of activities that delivers value to external customers
Supplier relationship process - Answers a process that selects the suppliers of services, materials, and
information and facilitates the timely and efficient flow of these items into the firm
New service/product development process - Answers a process that designs and develops new
services or products from inputs received from external customer specifications or from the market in
general through the customer relationship process
Order fulfillment process - Answers a process that includes the activities required to produce and
deliver the service or product to the external customer
Customer relationship process - Answers a process that identifies, attracts, and builds relationships
with external customers, and facilitates the placement of orders by customers, sometimes referred to
as customer relationship management
Support process - Answers a process that provides vital resources and inputs to the core processes
and therefore is essential to the management of the business
Operations strategy - Answers the means by which operations implements the firm's corporate
strategy and helps to build a customer driven firm
Environmental scanning - Answers the process by which managers monitor trends in the
environment for potential opportunities or threats. A crucial reason for environmental scanning is to
stay ahead of the competition
Developing a corporate strategy - Answers the four considerations are- (1) Monitoring and adjusting
to changes in the business environment, (2) Identifying and developing the firm's core competencies,
(3) developing the firm's core processes, and (4) developing the firm's global strategies
Productivity = - Answers output/input
Labor productivity = - Answers output/input = policies processed/employee hours (employees x
hours)
Multifactor productivity = - Answers value of output/total cost
Core competencies - Answers the unique resources and strengths that an organization's management
considers when formulating strategy
Developing core competencies include the following - Answers (1) workforce, (2) facilities, (3) market
and financial know-how, (4) systems and technology
Lead time - Answers the elapsed time between the receipt of a customer order and filling it
Two effective global strategies - Answers (1) strategic alliances, (2) locating abroad
Competitive priorities - Answers the critical dimensions that a process or supply chain must process
to satisfy its internal or external customers, both now and in the future
Competitive capabilities - Answers the cost, quality, time, and flexibility dimensions that a process or
supply chain actually processes and is able to deliver
, Time-based competition - Answers a strategy that focuses on the competitive priorities of delivery
speed and development speed
Order winner - Answers a criterion customers use to differentiate the services or products of one firm
from those of another
Measure for low-cost operations - Answers cost per billing statement and weekly postage
Measure for consistent quality - Answers percent errors in bill information and percent errors in
posting payments
Measure for delivery speed - Answers lead time to process merchant payments
Measure for volume flexibility - Answers utilization
Productivity - Answers the value of outputs (services and products) produced divided by the values of
input resources (wages, costs of equipment, and so on)
Two principles to keep in mind - Answers (1) each part of an organization, not just the operations
function, must design and operate processes that are part of a supply chain and deal with quality,
technology, and staffing issues. (2) each function of an organization has its own identity and yet is
connected with operations through shared processes
Break even analysis - Answers helps the manager identify how much change in volume or demand is
necessary before a second alternative becomes better than the first alternative
The preference matrix - Answers helps a manager deal with multiple criteria that cannot be evaluated
with a single measure of merit such as total profit or cost
Decision theory - Answers helps the manager choose the best alternative when outcomes are
uncertain
Break even quantity - Answers the volume at which total revenues equal total costs
Break even analysis - Answers the use of break even quantity; it can be used to compare processes by
finding the volume at which two different processes have equal total costs
Variable costs (cQ) - Answers the portion of the total cost that varies directly with volume of output
Fixed cost (F) - Answers the portion of the total cost that remains constant regardless of changes in
levels of output
Total cost = - Answers F + cQ
Total revenue = - Answers pQ
Breakeven quantity - Answers Q = F / p - c
Sensitivity analysis - Answers a technique for systematically changing parameters in a model to
determine the effects of such changes
Project management - Answers a systemize, phased approach to defining, organizing, planning,
monitoring, and controlling projects
Program - Answers an independent set of projects that have a common strategic purpose
The roles that the project manager must play - Answers facilitator, communicator, and decision
maker
Characteristics that should be considered when selecting the project team - Answers technical
competence, sensitivity, and dedication
Planning projects involves five steps - Answers (1) defining the work breakdown structure, (2)
diagramming the network, (3) developing the schedule, (4) analyzing cost-time trade-offs, and (5)
assessing risks
Work breakdown structure (WBS) - Answers a statement of all work that has to be completed
Activity - Answers the smallest unit of work effort consuming both time and resources that the
project manager can schedule and control
Activity ownership - Answers avoids confusion in the execution of activities and assigns responsibility
for timely completion
Network diagram - Answers a network planning method, designed to depict the relationships
between activities that consists of nodes (circles), and arcs (arrows)
Critical path method (CPM) - Answers a network planning method developed in the 1950s as a means
of scheduling maintenance shutdowns at chemical-processing plants
Precedence relationship - Answers a relationship that determines a sequence for undertaking
activities; it specifies that one activity cannot start until a preceding activity has been completed
Activity-on-node network - Answers an approach used to create a network diagram, in which nodes
represent activities and arcs represent the precedence relationships between them
Path - Answers the sequence of activities between a projects start and finish
Operations management - Answers The systematic design, direction, and control of processes that
transforms inputs into serves and products for internal, as well as external, customers
Process - Answers any activity or group of activities that takes one or more inputs, transforms them,
and provides one or more outputs for its customers
Operation - Answers a group of resources performing all or part of one or more processes
Supply Chain - Answers An interrelated series of processes within and across firms that produces a
service or product to the satisfaction of customers
Supply Chain Management - Answers the synchronization of a firm's processes with those of its
suppliers and customers to match the flow of materials, services, and information with customer
demand
External Customers - Answers a customer who is either an end user or an intermediary (ex.
Manufacturers, financial institutions, or retailers) buying the firm's finished services or products
Internal Customers - Answers one or more employees or processes that rely on inputs from other
employees or processes in order to perform their work
External Suppliers - Answers the businesses or individuals who provide the resources, services,
products, and materials for the firm's short-term and long-term needs
Internal Suppliers - Answers the employees or processes that supply important information or
materials to a firm's processes
Nested process - Answers the concept of a process within a process
Core process - Answers a set of activities that delivers value to external customers
Supplier relationship process - Answers a process that selects the suppliers of services, materials, and
information and facilitates the timely and efficient flow of these items into the firm
New service/product development process - Answers a process that designs and develops new
services or products from inputs received from external customer specifications or from the market in
general through the customer relationship process
Order fulfillment process - Answers a process that includes the activities required to produce and
deliver the service or product to the external customer
Customer relationship process - Answers a process that identifies, attracts, and builds relationships
with external customers, and facilitates the placement of orders by customers, sometimes referred to
as customer relationship management
Support process - Answers a process that provides vital resources and inputs to the core processes
and therefore is essential to the management of the business
Operations strategy - Answers the means by which operations implements the firm's corporate
strategy and helps to build a customer driven firm
Environmental scanning - Answers the process by which managers monitor trends in the
environment for potential opportunities or threats. A crucial reason for environmental scanning is to
stay ahead of the competition
Developing a corporate strategy - Answers the four considerations are- (1) Monitoring and adjusting
to changes in the business environment, (2) Identifying and developing the firm's core competencies,
(3) developing the firm's core processes, and (4) developing the firm's global strategies
Productivity = - Answers output/input
Labor productivity = - Answers output/input = policies processed/employee hours (employees x
hours)
Multifactor productivity = - Answers value of output/total cost
Core competencies - Answers the unique resources and strengths that an organization's management
considers when formulating strategy
Developing core competencies include the following - Answers (1) workforce, (2) facilities, (3) market
and financial know-how, (4) systems and technology
Lead time - Answers the elapsed time between the receipt of a customer order and filling it
Two effective global strategies - Answers (1) strategic alliances, (2) locating abroad
Competitive priorities - Answers the critical dimensions that a process or supply chain must process
to satisfy its internal or external customers, both now and in the future
Competitive capabilities - Answers the cost, quality, time, and flexibility dimensions that a process or
supply chain actually processes and is able to deliver
, Time-based competition - Answers a strategy that focuses on the competitive priorities of delivery
speed and development speed
Order winner - Answers a criterion customers use to differentiate the services or products of one firm
from those of another
Measure for low-cost operations - Answers cost per billing statement and weekly postage
Measure for consistent quality - Answers percent errors in bill information and percent errors in
posting payments
Measure for delivery speed - Answers lead time to process merchant payments
Measure for volume flexibility - Answers utilization
Productivity - Answers the value of outputs (services and products) produced divided by the values of
input resources (wages, costs of equipment, and so on)
Two principles to keep in mind - Answers (1) each part of an organization, not just the operations
function, must design and operate processes that are part of a supply chain and deal with quality,
technology, and staffing issues. (2) each function of an organization has its own identity and yet is
connected with operations through shared processes
Break even analysis - Answers helps the manager identify how much change in volume or demand is
necessary before a second alternative becomes better than the first alternative
The preference matrix - Answers helps a manager deal with multiple criteria that cannot be evaluated
with a single measure of merit such as total profit or cost
Decision theory - Answers helps the manager choose the best alternative when outcomes are
uncertain
Break even quantity - Answers the volume at which total revenues equal total costs
Break even analysis - Answers the use of break even quantity; it can be used to compare processes by
finding the volume at which two different processes have equal total costs
Variable costs (cQ) - Answers the portion of the total cost that varies directly with volume of output
Fixed cost (F) - Answers the portion of the total cost that remains constant regardless of changes in
levels of output
Total cost = - Answers F + cQ
Total revenue = - Answers pQ
Breakeven quantity - Answers Q = F / p - c
Sensitivity analysis - Answers a technique for systematically changing parameters in a model to
determine the effects of such changes
Project management - Answers a systemize, phased approach to defining, organizing, planning,
monitoring, and controlling projects
Program - Answers an independent set of projects that have a common strategic purpose
The roles that the project manager must play - Answers facilitator, communicator, and decision
maker
Characteristics that should be considered when selecting the project team - Answers technical
competence, sensitivity, and dedication
Planning projects involves five steps - Answers (1) defining the work breakdown structure, (2)
diagramming the network, (3) developing the schedule, (4) analyzing cost-time trade-offs, and (5)
assessing risks
Work breakdown structure (WBS) - Answers a statement of all work that has to be completed
Activity - Answers the smallest unit of work effort consuming both time and resources that the
project manager can schedule and control
Activity ownership - Answers avoids confusion in the execution of activities and assigns responsibility
for timely completion
Network diagram - Answers a network planning method, designed to depict the relationships
between activities that consists of nodes (circles), and arcs (arrows)
Critical path method (CPM) - Answers a network planning method developed in the 1950s as a means
of scheduling maintenance shutdowns at chemical-processing plants
Precedence relationship - Answers a relationship that determines a sequence for undertaking
activities; it specifies that one activity cannot start until a preceding activity has been completed
Activity-on-node network - Answers an approach used to create a network diagram, in which nodes
represent activities and arcs represent the precedence relationships between them
Path - Answers the sequence of activities between a projects start and finish
