EXAM 2026 – 350 PRACTICE QUESTIONS AND
CORRECT ANSWERS WITH DETAILED
RATIONALES
SECTION 1: INTRODUCTION TO OPERATIONS MANAGEMENT (Questions 1–
35)
1. Which of the following best defines operations management?
A. The management of financial resources to maximize shareholder value
B. The design, operation, and improvement of the systems that create and
deliver the firm's primary products and services
C. The process of marketing and selling products to customers
D. The management of human resources to improve employee satisfaction
Correct Answer: B
Rationale: Operations management focuses on transforming inputs into
outputs (goods and services) efficiently and effectively. It encompasses
design, planning, control, and improvement of production systems.
2. Operations management is one of the three major functions of any
organization. Which of the following is NOT one of the three?
A. Operations
B. Marketing
,C. Finance/Accounting
D. Human Resources
Correct Answer: D
Rationale: The three major functions of any organization are operations,
marketing, and finance/accounting. Human Resources is a support function,
not a primary organizational function.
3. Which of the following is a primary function of operations management?
A. Financial auditing
B. Supply chain management
C. Employee recruitment
D. Advertising campaigns
Correct Answer: B
Rationale: Supply chain management is a core component of operations
management, involving the coordination of materials, information, and
finances from suppliers to customers. Recruitment is HR, advertising is
marketing, auditing is accounting.
4. Operations management is primarily concerned with which of the
following?
A. Marketing strategies
B. Financial auditing
C. Production of goods and services
D. Human resource recruitment
,Correct Answer: C
Rationale: Operations management focuses on the design, operation, and
improvement of the systems that create and deliver the firm's primary
products and services.
5. Which of the following is a strategic decision in operations management?
A. Scheduling weekly shifts
B. Ordering office supplies
C. Selecting a facility location
D. Inspecting a finished product
Correct Answer: C
Rationale: Strategic decisions are longterm and have broad organizational
impact. Facility location commits significant resources for years and affects
cost structure and customer access.
6. A company that uses minimal inventory and produces only what is needed
when it is needed is practicing which philosophy?
A. Justin Time (JIT)
B. Mass production
C. Batch processing
D. Six Sigma
Correct Answer: A
Rationale: JIT is a lean production philosophy that aims to reduce inventory
and eliminate waste by producing only what is required, when it is required,
in the exact quantity needed.
, 7. Which of the following is an example of a service operation?
A. Automobile assembly line
B. Oil refinery
C. Hospital emergency room
D. Steel mill
Correct Answer: C
Rationale: A hospital emergency room provides a service (healthcare) rather
than manufacturing a tangible product. The other options are manufacturing
operations.
8. Which of the following is a key performance indicator (KPI) in operations?
A. Return on investment (ROI)
B. Ontime delivery
C. Earnings per share
D. Customer satisfaction score
Correct Answer: B
Rationale: Ontime delivery is an operational KPI that measures supply chain
and production performance. ROI and EPS are financial metrics. Customer
satisfaction is broader but often tied to operations.
9. What is the main objective of operations management?
A. To maximize profits
B. To efficiently produce goods and services