, CHAPTER 1: OPERATIONS AND PRODUCTIVITY
Q1.
Which of the following most accurately defines Operations Management (OM)?
A) Managing people, equipment, and technology to reduce costs
B) Coordinating only the manufacturing function of a firm
C) The set of activities that creates value by transforming inputs into outputs
D) Supervising production workers in the plant
Answer: C
Rationale: OM is broader than just supervision or manufacturing — it involves designing
and managing processes that transform inputs into goods and services, creating value for
customers.
Q2.
Which of the following is not considered a primary function of all organizations?
A) Operations
B) Marketing
C) Finance/Accounting
D) Research and Development
Answer: D
Rationale: The three core functions are operations, marketing, and finance/accounting.
R&D supports innovation but is not fundamental to every organization.
Q3.
The productivity of a process that produces 1,200 units with 300 labor hours is:
A) 2 units/hour
B) 4 units/hour
C) 6 units/hour
D) 8 units/hour
Answer: B
Rationale: Productivity = Output ÷ Input = 1200 ÷ 300 = 4 units/hour. Students often
confuse total units with rate, so this tests careful calculation.
Q4.
Why is productivity harder to improve in the service sector than in manufacturing?
A) Services rely more on advanced machinery
B) Services are generally easier to standardize
C) Services often involve customer interaction and customization
D) Service processes rely less on labor
,Answer: C
Rationale: Services are typically labor-intensive, customized, and involve high customer
interaction, making them harder to automate or standardize compared to manufacturing.
Q5.
Which of the following is a multifactor productivity (MFP) measure?
A) Output ÷ Labor hours
B) Output ÷ Raw materials
C) Output ÷ (Labor + Capital + Energy)
D) Output ÷ Time
Answer: C
Rationale: MFP uses multiple inputs such as labor, capital, and energy. Single-factor
productivity uses just one input (e.g., labor productivity).
Q6.
Which input is estimated to contribute over one-half of annual productivity growth?
A) Labor
B) Capital
C) Management
D) Technology
Answer: C
Rationale: Research shows that management (better methods, coordination, innovation)
accounts for the largest share of productivity gains — more than technology or labor.
Q7.
Illiteracy and poor nutrition have been found to reduce productivity by up to:
A) 5%
B) 10%
C) 20%
D) 50%
Answer: C
Rationale: Human resources (skills, education, health) are critical. Countries with widespread
poor diets and illiteracy can lose up to 20% of productivity.
Q8.
Which of the following is not one of the Ten Critical Decisions of Operations Management?
A) Layout strategy
B) Process and capacity design
C) Managing quality
D) Tax planning
, Answer: D
Rationale: Tax planning falls under finance, not OM. The Ten OM decisions include quality,
process design, layout, supply chain, inventory, HR/job design, scheduling, maintenance,
etc.
Q9.
The Father of Scientific Management is:
A) Henry Ford
B) Frederick W. Taylor
C) Walter Shewhart
D) Eli Whitney
Answer: B
Rationale: Taylor introduced time studies, work standardization, and efficiency
principles, earning him this title. Ford pioneered mass assembly, and Shewhart contributed
statistical control.
Q10.
Which statement best explains why productivity measurement is challenging?
A) Inputs are always easy to define
B) Outputs may be intangible or hard to quantify
C) Productivity is constant across industries
D) Productivity only matters in manufacturing
Answer: B
Rationale: Service outputs (e.g., legal advice, teaching quality) are difficult to measure,
complicating productivity analysis compared to tangible goods.
Q11.
Hard Rock Café’s operations include all of the following except:
A) Designing meals
B) Analyzing ingredient costs
C) Borrowing funds for expansion
D) Scheduling employees
Answer: C
Rationale: Borrowing funds is a finance function, not operations. Operations tasks include
designing, costing, scheduling, and process management.
Q12.
Which of the following would be considered a hidden production function?
A) Teaching in a classroom
B) Assembling cars in a plant
Q1.
Which of the following most accurately defines Operations Management (OM)?
A) Managing people, equipment, and technology to reduce costs
B) Coordinating only the manufacturing function of a firm
C) The set of activities that creates value by transforming inputs into outputs
D) Supervising production workers in the plant
Answer: C
Rationale: OM is broader than just supervision or manufacturing — it involves designing
and managing processes that transform inputs into goods and services, creating value for
customers.
Q2.
Which of the following is not considered a primary function of all organizations?
A) Operations
B) Marketing
C) Finance/Accounting
D) Research and Development
Answer: D
Rationale: The three core functions are operations, marketing, and finance/accounting.
R&D supports innovation but is not fundamental to every organization.
Q3.
The productivity of a process that produces 1,200 units with 300 labor hours is:
A) 2 units/hour
B) 4 units/hour
C) 6 units/hour
D) 8 units/hour
Answer: B
Rationale: Productivity = Output ÷ Input = 1200 ÷ 300 = 4 units/hour. Students often
confuse total units with rate, so this tests careful calculation.
Q4.
Why is productivity harder to improve in the service sector than in manufacturing?
A) Services rely more on advanced machinery
B) Services are generally easier to standardize
C) Services often involve customer interaction and customization
D) Service processes rely less on labor
,Answer: C
Rationale: Services are typically labor-intensive, customized, and involve high customer
interaction, making them harder to automate or standardize compared to manufacturing.
Q5.
Which of the following is a multifactor productivity (MFP) measure?
A) Output ÷ Labor hours
B) Output ÷ Raw materials
C) Output ÷ (Labor + Capital + Energy)
D) Output ÷ Time
Answer: C
Rationale: MFP uses multiple inputs such as labor, capital, and energy. Single-factor
productivity uses just one input (e.g., labor productivity).
Q6.
Which input is estimated to contribute over one-half of annual productivity growth?
A) Labor
B) Capital
C) Management
D) Technology
Answer: C
Rationale: Research shows that management (better methods, coordination, innovation)
accounts for the largest share of productivity gains — more than technology or labor.
Q7.
Illiteracy and poor nutrition have been found to reduce productivity by up to:
A) 5%
B) 10%
C) 20%
D) 50%
Answer: C
Rationale: Human resources (skills, education, health) are critical. Countries with widespread
poor diets and illiteracy can lose up to 20% of productivity.
Q8.
Which of the following is not one of the Ten Critical Decisions of Operations Management?
A) Layout strategy
B) Process and capacity design
C) Managing quality
D) Tax planning
, Answer: D
Rationale: Tax planning falls under finance, not OM. The Ten OM decisions include quality,
process design, layout, supply chain, inventory, HR/job design, scheduling, maintenance,
etc.
Q9.
The Father of Scientific Management is:
A) Henry Ford
B) Frederick W. Taylor
C) Walter Shewhart
D) Eli Whitney
Answer: B
Rationale: Taylor introduced time studies, work standardization, and efficiency
principles, earning him this title. Ford pioneered mass assembly, and Shewhart contributed
statistical control.
Q10.
Which statement best explains why productivity measurement is challenging?
A) Inputs are always easy to define
B) Outputs may be intangible or hard to quantify
C) Productivity is constant across industries
D) Productivity only matters in manufacturing
Answer: B
Rationale: Service outputs (e.g., legal advice, teaching quality) are difficult to measure,
complicating productivity analysis compared to tangible goods.
Q11.
Hard Rock Café’s operations include all of the following except:
A) Designing meals
B) Analyzing ingredient costs
C) Borrowing funds for expansion
D) Scheduling employees
Answer: C
Rationale: Borrowing funds is a finance function, not operations. Operations tasks include
designing, costing, scheduling, and process management.
Q12.
Which of the following would be considered a hidden production function?
A) Teaching in a classroom
B) Assembling cars in a plant
