OMGT QUESTIONS & ANSWERS
"Operations" refers to manufacturing and service processes used to transform
resources employed by a firm into products desired by customers - Answer -TRUE
The "triple bottom line" relates to the economic, employee, and environmental impact of
a firm's strategy. - Answer -TRUE
A process can be effective without being efficient. - Answer -TRUE
The central idea of supply chain management is to apply a total system approach to
managing the flow of information, materials, and services from raw material suppliers
through factories and warehouses to the end customer. - Answer -TRUE
The goods-service continuum consists of which set of the following categories: -
Answer -Pure goods, core goods, core services, pure services
Which of the following is not a way that operations and supply processes are
categories? - Answer -Selecting
Which of the following is a measure of operations and supply management efficiency
used by Wall Street? - Answer -Receivable turnover
Inventory turnover is an operations efficiency measure and which of the following is the
most appropriate answer. - Answer -Both A and B:
Measures efficiency in turning inventory into sales
Purpose to measure liquidity
Which of the following is not a characteristic that distinguishes services from goods? -
Answer -Service jobs are unskilled
Doing something at the lowest possible cost is called ___________. - Answer -
Efficiency
Receivable Turnover Ratio Formula - Answer -=Total Credit Sales/Avg Receivables
Inventory Turnover Ratio Formula - Answer -=COGS/Avg Inventory
Asset Turnover Ratio Formula - Answer -=Total Sales(revenue)/Total Assets
The output that a system is capable of achieving over a period of time is _______. -
Answer -Capacity
, _________ is the level of capacity for which the process was designed and thus is the
volume of output at which average unit cost is minimized. - Answer -Best Operating
Level
T/F At some point, the size of a growing plant can become too large and diseconomies
of scale become a capacity planning problem. - Answer -True
T/F The larger the capacity cushion, the better. - Answer -False
T/F The frequency of adding to productive capacity should balance the costs of
upgrading too frequently and the costs of upgrading too infrequently. - Answer -True
Capacity planning involving acquisition or disposal of fixed assets such as buildings,
equipment or facilities is considered as which of the following planning horizons. -
Answer -Long range
If the best operating level of a piece of equipment is at a rate of 400 units per hour and
the actual output during an hour is 300 units, which of the following is the capacity
utilization rate? - Answer -.75 (300/400)
Hoosier Manufacturing operates a production shop that is designed to have the lowest
unit production cost at an output rate of 100 units per hour. In the month of July, the
company operated the production line for a total of 175 hours and produced 16,900
units of output. What was its capacity utilization rate for the month? - Answer -answer:
96.57%
i. Best operating level = 175 hours * 100 units per hour = 17,500
ii. Capacity utilization rate = 16,900/17,500 = 96.57%
When deciding to add capacity to a factory, which of the following need NOT be
considered? - Answer -NOT: Immediate product demand
TRUE responses include: Maintaining system balance, the frequency of capacity
additions, and use of external capacity
Maintaining system balance in important when adding or decreasing capacity. Ways of
dealing with imbalance include: - Answer -Scheduling overtime at bottleneck stages
AND purchasing additional capacity to at bottleneck stages
_______ is a common source of external capacity. - Answer -outsourcing AND sharing
capacity
The way to build in greater flexibility in your workers is to do which of the following? -
Answer -Provide a broader range of training
Compared with a service operation, a manufacturing operation's capacity is which of the
following? - Answer -Demand can be smoothed by inventory policies
"Operations" refers to manufacturing and service processes used to transform
resources employed by a firm into products desired by customers - Answer -TRUE
The "triple bottom line" relates to the economic, employee, and environmental impact of
a firm's strategy. - Answer -TRUE
A process can be effective without being efficient. - Answer -TRUE
The central idea of supply chain management is to apply a total system approach to
managing the flow of information, materials, and services from raw material suppliers
through factories and warehouses to the end customer. - Answer -TRUE
The goods-service continuum consists of which set of the following categories: -
Answer -Pure goods, core goods, core services, pure services
Which of the following is not a way that operations and supply processes are
categories? - Answer -Selecting
Which of the following is a measure of operations and supply management efficiency
used by Wall Street? - Answer -Receivable turnover
Inventory turnover is an operations efficiency measure and which of the following is the
most appropriate answer. - Answer -Both A and B:
Measures efficiency in turning inventory into sales
Purpose to measure liquidity
Which of the following is not a characteristic that distinguishes services from goods? -
Answer -Service jobs are unskilled
Doing something at the lowest possible cost is called ___________. - Answer -
Efficiency
Receivable Turnover Ratio Formula - Answer -=Total Credit Sales/Avg Receivables
Inventory Turnover Ratio Formula - Answer -=COGS/Avg Inventory
Asset Turnover Ratio Formula - Answer -=Total Sales(revenue)/Total Assets
The output that a system is capable of achieving over a period of time is _______. -
Answer -Capacity
, _________ is the level of capacity for which the process was designed and thus is the
volume of output at which average unit cost is minimized. - Answer -Best Operating
Level
T/F At some point, the size of a growing plant can become too large and diseconomies
of scale become a capacity planning problem. - Answer -True
T/F The larger the capacity cushion, the better. - Answer -False
T/F The frequency of adding to productive capacity should balance the costs of
upgrading too frequently and the costs of upgrading too infrequently. - Answer -True
Capacity planning involving acquisition or disposal of fixed assets such as buildings,
equipment or facilities is considered as which of the following planning horizons. -
Answer -Long range
If the best operating level of a piece of equipment is at a rate of 400 units per hour and
the actual output during an hour is 300 units, which of the following is the capacity
utilization rate? - Answer -.75 (300/400)
Hoosier Manufacturing operates a production shop that is designed to have the lowest
unit production cost at an output rate of 100 units per hour. In the month of July, the
company operated the production line for a total of 175 hours and produced 16,900
units of output. What was its capacity utilization rate for the month? - Answer -answer:
96.57%
i. Best operating level = 175 hours * 100 units per hour = 17,500
ii. Capacity utilization rate = 16,900/17,500 = 96.57%
When deciding to add capacity to a factory, which of the following need NOT be
considered? - Answer -NOT: Immediate product demand
TRUE responses include: Maintaining system balance, the frequency of capacity
additions, and use of external capacity
Maintaining system balance in important when adding or decreasing capacity. Ways of
dealing with imbalance include: - Answer -Scheduling overtime at bottleneck stages
AND purchasing additional capacity to at bottleneck stages
_______ is a common source of external capacity. - Answer -outsourcing AND sharing
capacity
The way to build in greater flexibility in your workers is to do which of the following? -
Answer -Provide a broader range of training
Compared with a service operation, a manufacturing operation's capacity is which of the
following? - Answer -Demand can be smoothed by inventory policies
