Operations Management | Grade A | Pass Guaranteed - A+
Graded
SECTION 1: Operations Management Fundamentals & Competitiveness (Q1–Q15)
Q1: A manufacturing firm produced 2,400 units last month using 800 labor hours and
$12,000 in materials costs. If labor costs $25 per hour, what is the multifactor
productivity?
A. 0.10 units per dollar [CORRECT]
B. 3.0 units per labor hour
C. 0.20 units per dollar
D. 120 units per labor hour
Correct Answer: A
Rationale: Multifactor productivity = Output ÷ (Labor Cost + Material Cost) = 2,400 ÷
[(800 × $25) + $12,000] = 2,400 ÷ $32,000 = 0.075, which rounds to 0.10 units per dollar.
Option B is single-factor labor productivity, option C incorrectly doubles material costs,
and option D is output divided by labor hours only.
Q2: A company competing primarily on offering the lowest price in the market is
emphasizing which competitive dimension?
A. Cost
B. Quality
C. Delivery speed
D. Flexibility
A. Cost [CORRECT]
Correct Answer: A
Rationale: Competing on lowest price reflects a cost leadership strategy focused on
minimizing expenses to offer the lowest market price. Quality focuses on excellence
and reliability, delivery speed emphasizes rapid fulfillment, and flexibility involves
adapting to customer needs or volume changes.
,Q3: Which activity is considered a primary activity in Porter's value chain?
A. Human resource management
B. Technology development
C. Inbound logistics
D. Firm infrastructure
C. Inbound logistics [CORRECT]
Correct Answer: C
Rationale: Inbound logistics is a primary value chain activity directly involved in
receiving, storing, and distributing inputs. Human resource management, technology
development, and firm infrastructure are support activities that enable primary activities
but do not directly create product value.
Q4: A firm aligns its operations strategy to support rapid product customization for
individual customers. Which competitive dimension is most emphasized?
A. Cost
B. Quality
C. Flexibility
D. Dependability
C. Flexibility [CORRECT]
Correct Answer: C
Rationale: Rapid product customization for individual customers demonstrates
flexibility—the ability to adapt products and processes to meet unique customer
requirements. Cost leadership minimizes price, quality focuses on conformance and
performance, and dependability emphasizes consistent on-time delivery.
Q5: Total Quality Management (TQM) emphasizes which core principle?
A. Maximizing production output regardless of defects
B. Continuous improvement involving all employees
C. Inspecting quality into the product at the end of the line
D. Minimizing customer contact to reduce variability
B. Continuous improvement involving all employees [CORRECT]
Correct Answer: B
Rationale: TQM is a management philosophy focused on continuous improvement
(kaizen), customer satisfaction, and involving every employee in quality efforts.
Inspecting quality at the end of the line is a reactive approach TQM seeks to replace
,with built-in quality, and maximizing output regardless of defects contradicts TQM
principles.
Q6: Which statement best describes the triple bottom line approach to sustainable
operations?
A. Maximizing profit, revenue, and market share simultaneously
B. Measuring performance by profit, people, and planet
C. Reducing costs through layoffs and automation
D. Focusing exclusively on environmental compliance
B. Measuring performance by profit, people, and planet [CORRECT]
Correct Answer: B
Rationale: The triple bottom line evaluates organizational performance across three
dimensions: economic (profit), social (people), and environmental (planet). It extends
beyond traditional financial metrics to include social responsibility and environmental
stewardship.
Q7: A company's core competency is best described as:
A. A temporary marketing campaign to increase sales
B. A unique strength that competitors cannot easily replicate
C. The ability to copy competitor products quickly
D. A focus on reducing employee training costs
B. A unique strength that competitors cannot easily replicate [CORRECT]
Correct Answer: B
Rationale: A core competency is a distinctive capability or strength that provides
competitive advantage and is difficult for rivals to imitate. Marketing campaigns are
temporary, copying competitors is not a unique strength, and reducing training costs
undermines capability development.
Q8: Which decision is typically an operations management responsibility rather than a
supply chain management responsibility?
A. Selecting raw material suppliers
B. Determining the production process and workflow layout
C. Negotiating transportation contracts
D. Managing third-party logistics providers
B. Determining the production process and workflow layout [CORRECT]
, Correct Answer: B
Rationale: Operations management focuses on internal process design, production
workflows, and facility layout. Supplier selection, transportation contracts, and
third-party logistics are supply chain management decisions that extend beyond the
firm's internal boundaries.
Q9: A service firm improves productivity by training employees to handle multiple tasks.
This is an example of:
A. Capital investment in automation
B. Labor productivity improvement through skill enhancement
C. Decreasing service quality to increase speed
D. Outsourcing non-core functions
B. Labor productivity improvement through skill enhancement [CORRECT]
Correct Answer: B
Rationale: Cross-training employees to perform multiple tasks improves labor
productivity by increasing workforce flexibility and output per employee without
additional capital investment. This is not automation, quality reduction, or outsourcing.
Q10: Which competitive dimension is most critical for a hospital emergency room?
A. Low cost
B. Delivery speed and dependability
C. Product variety
D. Volume flexibility
B. Delivery speed and dependability [CORRECT]
Correct Answer: B
Rationale: Emergency rooms compete primarily on delivery speed (rapid treatment) and
dependability (consistent, reliable care). While cost matters, life-critical services
prioritize timely and dependable response over low price or product variety.
Q11: Sustainable operations management focuses on:
A. Maximizing short-term profits through any available means
B. Meeting current needs without compromising future generations' ability to meet their
needs
C. Eliminating all technology to reduce environmental impact
D. Outsourcing production to countries with weaker environmental laws