Operations Management Chapter 1 EXAM QUESTIONS AND CORRECT DETAILED ANSWERS|AGRADE

Operations Management Chapter 1 EXAM QUESTIONS AND CORRECT DETAILED ANSWERS|AGRADE 1. Operations managers are responsible for assessing consumer wants and needs and selling and promoting the organization's goods or services. - ANSWER- FALSE Operation managers are not responsible for promoting goods/services. 2. Often, the collective success or failure of companies' operations functions will impact the ability of a nation to compete with other nations. - ANSWER- TRUE A nation is often only as competitive as its companies. 3. Companies are either producing goods or delivering services. This means that only one of the two types of operations management strategies are used. - ANSWERFALSE Most systems involve a blend of goods and services. 4. Operations, marketing, and finance function independently of each other in most organizations. - ANSWER- FALSE Operations, marketing and finance are naturally dependent upon one another 5. The greater the degree of customer involvement, the more challenging the design and management of operations. - ANSWER- TRUE Greater customer involvement leads to more complexity in the design and management of operations. 6. Goods producing organizations are not involved in service activities. - ANSWERFALSE Most systems involve a blend of goods and services. 7. Service operations require additional inventory because of the unpredictability of consumer demand. - ANSWER- FALSE Service operations cannot use inventory as a hedge against unpredictable demand. 8. The value of outputs is measured by the prices customers are willing to pay for goods or services. - ANSWER- TRUE Customers' willingness to pay for goods or services sets the value of these outputs. 9. The use of models will guarantee the best possible decisions. - ANSWER- FALSE Models are useful, but their use does not guarantee the best decisions. 10. People who work in the field of operations should have skills that include both knowledge and people skills. - ANSWER- TRUE Operations management requires a blend of knowledge and people skills. 11. Assembly lines achieved productivity but at the expense of standard of living. - ANSWER- FALSE Productivity and standard of living go hand in hand. 12. The operations manager has primary responsibility for making operations system design decisions, such as system capacity and location of facilities. - ANSWER- FALSE The operations manager plays a role in these decisions but is not primarily responsible for them. 13. The word "technology" is used only to refer to "information technology". - ANSWERFALSE Technology also refers to the technology involved in resource transformations. 14. 'Value added' by definition is always a positive number since 'added' implies increases. - ANSWER- FALSE Some transformations result in the output being worth less than the inputs. 15. Service often requires greater labor content, whereas manufacturing is more capital intensive. - ANSWER- TRUE Service operations tend to be more labor-intensive than manufacturing. 16. Measurement of productivity in service is more straightforward than in manufacturing since it is not necessary to take into account the cost of materials. - ANSWER- FALSE Materials cost must be considered in services as well. 17. Special-purpose technology is a common way of offering increased customization in manufacturing or services without taking on additional labor costs. - ANSWER- FALSE Special-purpose technology typically reduces costs through standardization. 18. One concern in the design of production systems is the degree of standardization. - ANSWER- TRUE How standardized outputs will be is a critical consideration in the system design question. 19. Most people encounter operations only in profit-making organizations. - ANSWERFALSE Operations are also relevant to not-for-profit organizations such as the Red Cross. 0. Service involves a much higher degree of customer contact than manufacturing. - ANSWER- TRUE Customer contact tends to be much higher in services. 21. A systems approach emphasizes interrelationships among subsystems, but its main theme is that the whole is greater than the sum of its individual parts. - ANSWERTRUE Optimizing the performance of individual subsystems does not guarantee optimal performance from the overall system. 22. The Pareto phenomenon is one of the most important and pervasive concepts that can be applied at all levels of management. - ANSWER- TRUE Pareto phenomena can be observed in a wide variety of organization situations. 23. Operations managers, who usually use quantitative approaches, are not really concerned with ethical decision-making. - ANSWER- FALSE Ethics issues are touching on all areas of management, including operations. 24. The optimal solutions produced by quantitative techniques should always be evaluated in terms of the larger framework. - ANSWER- TRUE Quantitative techniques have limitations that must be considered. 25. Managers should most often rely on quantitative techniques for important decisions since quantitative approaches result in more accurate decisions. - ANSWER- FALSE Just as other techniques do, quantitative techniques have limitations. 26. Many operations management decisions can be described as tradeoffs. - ANSWERTRUE Managing tradeoffs is the essence of operations management. 27. A systems approach means that we concentrate on efficiency within a subsystem and thereby assure overall efficiency. - ANSWER- FALSE Subsystem efficiency doesn't necessarily translate into overall efficiency. 28. Prior to the Industrial Revolution, goods were produced primarily by craftsmen or their apprentices using custom made parts. - ANSWER- TRUE After the Industrial Revolution, more standardized approaches became common. 29. Elton Mayo's "Hawthorne Experiment" was the focal point of the Human Relations Movement, which emphasized the importance of the human element in job design. - ANSWER- TRUE The Hawthorne Expe