Chapter 9 2

Chapter 9
Student: ___________________________________________________________________________
1. _______ goes beyond the ability to control or improve, and fundamentally focuses on the design and
development of such processes as well.
A. Total production system
B. Production
C. Operational efficiency
D. Operations management
E. Tactical
2. Successful organizations understand the interconnectivity of ___________, and seek to ensure that all
three are integrated into the decision-making process.
A. strategy, business systems, and operations
B. strategy, business structure, and organization
C. systems, business structure, and operations
D. systems, business structure, and organization
E. strategy, business structure, and operations
3. Which of the following is NOT one of the results of the business system and the corresponding actions
which take place within the operations area
A. the right product or service
B. the right customer
C. the right place
D. the right colour
E. the right time
4. ___________ are understood to be the actual processes employed, which, when combined with the
utilization of the organization's capital assets, enable strategic outcomes to be actualized.
A. Systems
B. Tactics
C. Processes
D. Operations
E. Controls
5. The organization must develop and maintain efficient and effective ________ processes, which deliver to
the marketplace the products and/or services which the organization offers.
A. tactical
B. functional
C. operational
D. structural
E. logistical
6. Companies like Dell and General Electric have prospered and grown by:
A. focusing on manufacturing of goods rather than the provision of services.
B. achieving natural monopolies in their markets.
C. using franchise arrangements to sell their products in a wider range of markets.
D. getting closer to their customers by offering a variety of services.
7. Aaron Nance is a freshman in college who has not yet decided on his major. He is thinking about
majoring in operations management and is concerned about job opportunities in this field. Which of the
following statements about jobs for operations management majors is most accurate? If he majors in
operations management, Aaron will
A have limited job opportunities because operations management positions are only available in the
. slowly growing manufacturing sector.
B. acquire skills and knowledge that are valuable to firms in both the manufacturing and service sectors.
C. have plenty of job offers, but they will mainly be in low wage positions in the service sector.
D. find plenty of employment opportunities in the government and education, but not very many in the
private sector.
8. Operations management refers to activities managers perform to help their firms produce:
A. services, rather than goods.
B. goods, rather than services.
C. both goods and services.
D. financial data.
9. ________________ is the specialized area of management that converts or transforms resources into
goods and services.
A. Logistics management
B. Resource engineering
C. Intrapreneuring
10. ____________ is the design and development of the work flow and connectivity of the operational
requirements (processes) needed to ensure that an organization's products and services are efficiently
produced and effectively delivered to the marketplace.
A. Process management
B. Supply Chain management
C. Product/Service management
D. Efficient work flow
E. Process development
11. __________ refers to the management of the flow of materials and/or products, information, and costs
through the front-end of an organization's Value Chain.
E. Distribution logistics
12. _____ is the management of the inter-dependencies which suppliers, manufacturers, and distributors all
have with each other.
13. Product/service management includes all of the following EXCEPT:
A. supporting product modifications
B. supporting product enhancements
C. process management overview
D. supporting other product changes made throughout its lifecycle
E. the decision trade-offs associated with quality and cost.
14. ________ refers to the variety of activities which commence with the design and development of
potential new products in R&D, and extend to the post-purchase support of products and services now in
the hands of customers.
15. Which of the following activities are included in supply chain management?
A. Getting products to customers
B. Obtaining and managing raw materials
C. Managing finished products
D. Packaging finished products
E. All of the answers are correct
16. All activities involved in obtaining and managing raw materials and component parts, managing finished
products, packaging them, and getting them to customers are part of
A. resource management.
B. supply chain management.
C. engineering.
D. finance.
E. strategic planning.
17. What is the root concept of "value chain analysis"?
A. product uniqueness
B. value maximization
C. high quality standards
D. cost reduction
E. high performance standards
18. Which of the following is NOT one of the primary activities in the value chain?
A. Inbound Logistics
B. Operations
C. Outbound Logistics
D. Marketing and Sales
E. Repair Service
19. ________ refers to the management of supplier relationships relating to those parts and/or components, or
finished products, which are brought into the organization in order to manufacture finished products for
delivery to the marketplace.
B. Operations
E. Customer Service
20. Which of the following is NOT an operations decision?
A. process application
B. labour
C. production management activities
D. temporary storage
E. None of the above
21. _______ are those areas within the organization which are not directly associated with the actual
processes which the organization uses to produce products and/or deliver services.
A. Support structure
B. Customer services
C. Primary activities
D. Support activities
E. Marketing activities
22. For most service businesses the quality standard has become:
A. providing prompt and predictable service.
B. providing a competitive level of service at the lowest cost.
C. delighting customers by anticipating their needs.
D. less important than it is for manufacturing businesses.
23. Which of the following statements about operations management in the service sector is most accurate?
Operations management in the service sector:
A. is all about providing the service at the lowest cost.
B. should focus on providing customers with a good experience.
C has less flexibility than operations management in the manufacturing sector, because services are less
. able to make use of computers.
D. has done a good job of increasing output, but a poor job of improving quality.
24. Recent trends in the service sector suggest that:
A. the Internet is unlikely to become a major force in retailing because most customers are unwilling to
buy services online.
B. services can only improve productivity by reducing the quality of the service they provide.
C. technological change is less likely to boost productivity in services than in manufacturing.
D. services have increased consumer satisfaction by becoming increasingly interactive.
25. _________ is the alignment of the operational tasks within an organization, by its management team, in
order to meet the strategic outcomes defined in the organization's business strategy.
A. Strategy implementation
B. The operations cycle
C. Strategy execution
D. Operational management
E. Tactical implementation
26. Which of the following is NOT one of the core decision areas that operations managers need to examine?
A. Process design, layout, and execution

B. Materials resource planning
C. Materials management
D. Facility design and layout
E. Capital asset evaluation and acquisition
27. _________ refers to the assessment and implementation of the tasks necessary to get the required work
accomplished, and how such tasks will be grouped and sequenced to ensure that the most efficient and
effective processes are utilized in the production of products and/or services.
28. ________ refers to the development of the supply chain structure and the accumulation of the necessary
information needed to make effective supply chain decisions.
A. Supply chain management
B. Supply chain planning
C. Supply chain operating execution
D. Supply chain operations planning
E. Supply chain performance evaluation
29. The ISO's focus is to strive to make the manufacturing of products and services ________.
A. safer
B. more efficient
C. more socially responsible
D. more consistent
E. a), b) and c)
30. Which of the following is NOT part of the Six Sigma methodology?
A. philosophy of total improvement
B. organized approach for the analysis of processes
C. intent of minimizing (and eliminating) the occurrence of defects
D. impact the quality of the products and service
E. upgrade their quality performance results
31. _______ can be thought of as a management system which seeks to assimilate the concept of quality
improvement across the entire organization.
A. ISO 14000
B. TQM
C. Six Sigma
D. DMAIC
E. ISO 9000
32. ________ challenges the organization to be customer focused and to strive for total employee
involvement to ensure that quality (in the delivery of products or services) is fully integrated as a core
component into the strategy, processes, and communication messages of the organization.
A. ISO 14000
B. TQM
C. Six Sigma
D. DMAIC
E. ISO 9000
33. ________ focuses on how organizations transform production and manufacturing processes to improve
the way that people work.
A. ISO 14000
B. TQM
C. Six Sigma
D. BPR
E. DMAIC
34. ___________ is one of the predominant challenges facing the small business owner.
A. Operational efficiency and effectiveness
B. Strategy implementation
C. Process design, layout, and execution
D. Materials resource planning
E. Materials management
35. How does a small business owner seek to tackle the need to create as efficient an operation as is possible?
A. understand customer expectations and translate this into processes

B. think in terms of product consistency
C. recruit, trained and educated employees with customer contact skills
D. plan their business layout
E. all of the above
36. Small business owners should seek to involve their employee team in discussions relating _______.
A. facility layout
B. process planning
C. service delivery changes
D. distribution process
E. a), b), and c)
37. Small business owners should think in terms of _________, striving to deliver consistent experience with
each customer interaction.
A. layout design
B. process design
C. product consistency
D. product reliability
E. product dependability
38. Organizations must tailor their ______ to the needs of their customers, ensuring that the expectations of
these customers are met, and that the right product is delivered to the right place at the right time for the
right price.
B. Operations
E. Customer Service
39. Operations management goes beyond the ability to control or improve, and fundamentally focuses on the
design and development of such processes as well.
True False
40. Total production system goes beyond the ability to control or improve, and fundamentally focuses on the
True False
41. Production goes beyond the ability to control or improve, and fundamentally focuses on the design and
development of such processes as well.
True False
42. Operational efficiency goes beyond the ability to control or improve, and fundamentally focuses on the
True False
43. Successful organizations understand the interconnectivity of strategy, business structure, and operations
and seek to ensure that all three are integrated into the decision-making process.
True False
44. Successful organizations understand the interconnectivity of strategy, business systems, and operations
True False
45. Successful organizations understand the interconnectivity of strategy, business structure, and organization
True False
46. Successful organizations understand the interconnectivity of systems, business structure, and operations
True False
47. The right colour is one of the results of the business system and the corresponding actions which take
place within the operations area
True False
48. The right product or service is one of the results of the business system and the corresponding actions
which take place within the operations area
True False
49. The right customer is one of the results of the business system and the corresponding actions which take
True False
50. The right place is one of the results of the business system and the corresponding actions which take
True False
51. Operations are understood to be the actual processes employed, which, when combined with the
True False
52. Systems are understood to be the actual processes employed, which, when combined with the utilization
of the organization's capital assets, enable strategic outcomes to be actualized.
True False
53. Tactics are understood to be the actual processes employed, which, when combined with the utilization of
the organization's capital assets, enable strategic outcomes to be actualized.
True False
54. Processes are understood to be the actual processes employed, which, when combined with the utilization
of the organization's capital assets, enable strategic outcomes to be actualized.
True False
55. The organization must develop and maintain efficient and effective operational processes, which deliver
to the marketplace the products and/or services which the organization offers.
True False
56. The organization must develop and maintain efficient and effective tactical processes, which deliver to
True False
57. The organization must develop and maintain efficient and effective functional processes, which deliver to
True False
58. The organization must develop and maintain efficient and effective structural processes, which deliver to
True False
59. Operations management is the implementation phase of management.
True False
60. Operations management is a specialized area in management that is concerned with the production of
both goods and services.
True False
61. Operations management involves inventory management, quality control, and production scheduling.
True False
62. In recent years, operations management has become more focused on providing services, because that is
where the growth and profit potential is greatest.
True False
63. Billie just graduated with high honours with a degree in operations management from a respected
university. The knowledge she gained and skills she developed while obtaining this degree could make
her an attractive employee for either a manufacturing firm or a service firm.
True False
64. Process management is the design and development of the work flow and connectivity of the operational
True False
65. Supply Chain management is the design and development of the work flow and connectivity of the
operational requirements (processes) needed to ensure that an organization's products and services are
efficiently produced and effectively delivered to the marketplace.
True False
66. Product/Service management is the design and development of the work flow and connectivity of the
operational requirements (processes) needed to ensure that an organization's products and services are
True False
67. Process development is the design and development of the work flow and connectivity of the operational
True False
68. Supply Chain management refers to the management of the flow of materials and/or products,
information, and costs through the front-end of an organization's Value Chain.
True False
69. Process management refers to the management of the flow of materials and/or products, information, and
costs through the front-end of an organization's Value Chain.
True False
70. Product/Service management refers to the management of the flow of materials and/or products,
information, and costs through the front-end of an organization's Value Chain.
True False
71. Distribution logistics refers to the management of the flow of materials and/or products, information, and
costs through the front-end of an organization's Value Chain.
True False
72. Supply Chain management is the management of the inter-dependencies which suppliers, manufacturers,
and distributors all have with each other.
True False
73. Process management is the management of the inter-dependencies which suppliers, manufacturers, and
distributors all have with each other.
True False
74. Product/Service management is the management of the inter-dependencies which suppliers,
manufacturers, and distributors all have with each other.
True False
75. Distribution logistics is the management of the inter-dependencies which suppliers, manufacturers, and
distributors all have with each other.
True False
76. Product/service management includes process management overview.
True False
77. Product/service management includes supporting product modifications.
True False
78. Product/service management includes supporting product enhancements.
True False
79. Product/service management includes the decision trade-offs associated with quality and cost.
True False
80. Product/Service management refers to the variety of activities which commence with the design and
development of potential new products in R&D, and extend to the post-purchase support of products and
services now in the hands of customers.
True False
81. Process management refers to the variety of activities which commence with the design and development
of potential new products in R&D, and extend to the post-purchase support of products and services now
in the hands of customers.
True False
82. Supply Chain management refers to the variety of activities which commence with the design and
development of potential new products in R&D, and extend to the post-purchase support of products and
services now in the hands of customers.
True False
83. Efficient work flow refers to the variety of activities which commence with the design and development
of potential new products in R&D, and extend to the post-purchase support of products and services now
True False
84. Value maximization is the root concept of "value chain analysis".
True False
85. Product uniqueness is the root concept of "value chain analysis".
True False
86. Cost reduction is the root concept of "value chain analysis".
True False
87. High quality standards is the root concept of "value chain analysis".
True False
88. Repair Service is one of the primary activities in the value chain?
True False
89. Inbound Logistics is one of the primary activities in the value chain?
True False
90. Outbound Logistics is one of the primary activities in the value chain?
True False
91. Marketing and Sales is one of the primary activities in the value chain?
True False
92. Customer Service refers to the management of supplier relationships relating to those parts and/or
components, or finished products, which are brought into the organization in order to manufacture
finished products for delivery to the marketplace.
True False
93. Inbound Logistics refers to the management of supplier relationships relating to those parts and/or
components, or finished products, which are brought into the organization in order to manufacture
True False
94. Outbound Logistics refers to the management of supplier relationships relating to those parts and/
or components, or finished products, which are brought into the organization in order to manufacture
True False
95. Operations refers to the management of supplier relationships relating to those parts and/or components,
or finished products, which are brought into the organization in order to manufacture finished products
for delivery to the marketplace.
True False
96. Temporary storage is an operations decision.
True False
97. Process application is an operations decision.
True False
98. Production management activities is an operations decision.
True False
99. Labour is an operations decision.
True False
100.Support activities are those areas within the organization which are not directly associated with the actual
True False
101.Support structure are those areas within the organization which are not directly associated with the actual
True False
102.Customer services are those areas within the organization which are not directly associated with the
actual processes which the organization uses to produce products and/or deliver services.
True False
103.Primary activities are those areas within the organization which are not directly associated with the actual
True False
104.Operations managers have little concern for supply-chain management activities.
True False
105.The operations cycle is the alignment of the operational tasks within an organization, by its management
team, in order to meet the strategic outcomes defined in the organization's business strategy.
True False
106.Strategy implementation is the alignment of the operational tasks within an organization, by its
management team, in order to meet the strategic outcomes defined in the organization's business
strategy.
True False
107.Strategy execution is the alignment of the operational tasks within an organization, by its management
team, in order to meet the strategic outcomes defined in the organization's business strategy.
True False
108.Operational management is the alignment of the operational tasks within an organization, by its
strategy.
True False
109.Materials management is one of the core decision areas that operations managers need to examine?
True False
110.Process design, layout, and execution is one of the core decision areas that operations managers need to
examine?
True False
111.Materials resource planning is one of the core decision areas that operations managers need to examine?
True False
112.Facility design and layout is one of the core decision areas that operations managers need to examine?
True False
113.Process design, layout, and execution refers to the assessment and implementation of the tasks necessary
to get the required work accomplished, and how such tasks will be grouped and sequenced to ensure that
the most efficient and effective processes are utilized in the production of products and/or services.
True False
114.Materials resource planning refers to the assessment and implementation of the tasks necessary to get the
required work accomplished, and how such tasks will be grouped and sequenced to ensure that the most
efficient and effective processes are utilized in the production of products and/or services.
True False
115.Materials management refers to the assessment and implementation of the tasks necessary to get the
required work accomplished, and how such tasks will be grouped and sequenced to ensure that the most
True False
116.Capital asset evaluation and acquisition refers to the assessment and implementation of the tasks
necessary to get the required work accomplished, and how such tasks will be grouped and sequenced to
ensure that the most efficient and effective processes are utilized in the production of products and/or
services.
True False
117.Supply chain planning refers to the development of the supply chain structure and the accumulation of the
necessary information needed to make effective supply chain decisions.
True False
118.Supply chain management refers to the development of the supply chain structure and the accumulation
of the necessary information needed to make effective supply chain decisions.
True False
119.Supply chain operating execution refers to the development of the supply chain structure and the
accumulation of the necessary information needed to make effective supply chain decisions.
True False
120.Supply chain performance evaluation refers to the development of the supply chain structure and the
accumulation of the necessary information needed to make effective supply chain decisions.
True False
121.Quality is a critical element of operations management.
True False
122.Determining quality can be difficult.
True False
123.Service businesses cannot incorporate quality standards.
True False
124.Inspection reveals whether a product meets quality standards.
True False
125.The ISO's focus is to strive to make the manufacturing of products and services more consistent.
True False
126.The ISO's focus is to strive to make the manufacturing of products and services more safe.
True False
127.The ISO's focus is to strive to make the manufacturing of products and services more efficient.
True False
128.The ISO's focus is to strive to make the manufacturing of products and services more socially
responsible.
True False
129.Upgrading the quality performance results is part of the Six Sigma methodology?
True False
130.Philosophy of total improvement is part of the Six Sigma methodology?
True False
131.Organized approach for the analysis of processes is part of the Six Sigma methodology?
True False
132.Intent of minimizing (and eliminating) the occurrence of defects is part of the Six Sigma methodology?
True False
133.TQM can be thought of as a management system which seeks to assimilate the concept of quality
True False
134.ISO 14000 can be thought of as a management system which seeks to assimilate the concept of quality
True False
135.Six Sigma can be thought of as a management system which seeks to assimilate the concept of quality
True False
136.ISO 9000 can be thought of as a management system which seeks to assimilate the concept of quality
True False
137.TQM challenges the organization to be customer focused and to strive for total employee involvement to
ensure that quality (in the delivery of products or services) is fully integrated as a core component into the
strategy, processes, and communication messages of the organization.
True False
138.ISO 14000 challenges the organization to be customer focused and to strive for total employee
True False
139.ISO 9000 challenges the organization to be customer focused and to strive for total employee
True False
140.Six Sigma challenges the organization to be customer focused and to strive for total employee
True False
141.BPR focuses on how organizations transform production and manufacturing processes to improve the
way that people work.
True False
142.ISO 14000 focuses on how organizations transform production and manufacturing processes to improve
True False
143.TQM focuses on how organizations transform production and manufacturing processes to improve the
way that people work.
True False
144.Six Sigma focuses on how organizations transform production and manufacturing processes to improve
True False
145.Operational efficiency and effectiveness is one of the predominant challenges facing the small business
owner.
True False
146.Strategy implementation is one of the predominant challenges facing the small business owner.
True False
147.Process design, layout, and execution is one of the predominant challenges facing the small business
owner.
True False
148.Materials resource planning is one of the predominant challenges facing the small business owner.
True False
149.A small business owner seeks to understand customer expectations and translate this into processes in
order to tackle the need to create as efficient an operation as is possible?
True False
150.A small business owner seeks to u think in terms of product consistency in order to tackle the need to
create as efficient an operation as is possible?
True False
151.A small business owner seeks to recruit, train and educated employees with customer contact skills in
order to tackle the need to create as efficient an operation as is possible?
True False
152.A small business owner seeks to plan their business layout in order to tackle the need to create as efficient
an operation as is possible?
True False
153.Small business owners should seek to involve their employee team in discussions relating distribution
process.
True False
154.Small business owners should seek to involve their employee team in discussions relating facility
layout.
True False
155.Small business owners should seek to involve their employee team in discussions relating process
planning.
True False
156.Small business owners should seek to involve their employee team in discussions relating service
delivery changes.
True False
157.Small business owners should think in terms of product consistency, striving to deliver consistent
experience with each customer interaction.
True False
158.Small business owners should think in terms of layout design, striving to deliver consistent experience
with each customer interaction.
True False
159.Small business owners should think in terms of process design, striving to deliver consistent experience
with each customer interaction.
True False
160.Small business owners should think in terms of product dependability, striving to deliver consistent
True False
161.Organizations must tailor their operations to the needs of their customers, ensuring that the expectations
of these customers are met, and that the right product is delivered to the right place at the right time for
the right price.
True False
162.Organizations must tailor their inbound logistics to the needs of their customers, ensuring that the
expectations of these customers are met, and that the right product is delivered to the right place at the
right time for the right price.
True False
163.Organizations must tailor their customer service to the needs of their customers, ensuring that the
True False
164.Organizations must tailor their outbound logistics to the needs of their customers, ensuring that the
True False
165.Explain why operations management goes beyond the ability of a company to control and improve its
business processes?
166.Explain he interconnectivity of these three business system components.
167.Explain Product/Service Management.
168.Explain operations management including the three categories of responsibility.
169.What is the root concept of value chain analysis.
170.What is the "Value Chain" concept and who first proposed it?
171.Compare the two different operations cycles if an organization wants to focus on differentiated markets or
on low price.
172.Explain the operations cycle and provide an example of its use for a strategic intent like differentiated
products.
173.What is a key weapon for operations managers in their quest to continually improve the efficiency and
effectiveness of the organization's operations cycle, while, at the same time, striving to reduce the costs
incurred?
174.How is the Six Sigma approach different from TQM?
175.How does a small business owner seek to tackle the need to create as efficient an operation as is possible?
176.How should small organizations develop sustainable competitive advantages

Chapter 9 Key
1. _______ goes beyond the ability to control or improve, and fundamentally focuses on the design and
(p. 221) development of such processes as well.
A. Total production system
B. Production
C. Operational efficiency
E. Tactical
Bissonette - Chapter 09 #1
Difficulty: Easy
Learning Objective: 1
2. Successful organizations understand the interconnectivity of ___________, and seek to ensure that all
(p. 221) three are integrated into the decision-making process.
A. strategy, business systems, and operations
B. strategy, business structure, and organization
C. systems, business structure, and operations
D. systems, business structure, and organization
E. strategy, business structure, and operations
Difficulty: Easy
3. Which of the following is NOT one of the results of the business system and the corresponding actions
(p. 222) which take place within the operations area
A. the right product or service
B. the right customer
C. the right place
D. the right colour
E. the right time
Difficulty: Easy
4. ___________ are understood to be the actual processes employed, which, when combined with the
(p. 222) utilization of the organization's capital assets, enable strategic outcomes to be actualized.
A. Systems
B. Tactics
C. Processes
D. Operations
E. Controls
Difficulty: Easy
5. The organization must develop and maintain efficient and effective ________ processes, which
(p. 221) deliver to the marketplace the products and/or services which the organization offers.
A. tactical
B. functional
C. operational
D. structural
E. logistical
Difficulty: Easy
6. Companies like Dell and General Electric have prospered and grown by:
(p. 222) A. focusing on manufacturing of goods rather than the provision of services.
B. achieving natural monopolies in their markets.
C. using franchise arrangements to sell their products in a wider range of markets.
D. getting closer to their customers by offering a variety of services.
Difficulty: Easy
7. Aaron Nance is a freshman in college who has not yet decided on his major. He is thinking about
(p. 223) majoring in operations management and is concerned about job opportunities in this field. Which of
the following statements about jobs for operations management majors is most accurate? If he majors
in operations management, Aaron will
A have limited job opportunities because operations management positions are only available in the
. slowly growing manufacturing sector.
B. acquire skills and knowledge that are valuable to firms in both the manufacturing and service
sectors.
C. have plenty of job offers, but they will mainly be in low wage positions in the service sector.
D. find plenty of employment opportunities in the government and education, but not very many in the
private sector.
Difficulty: Easy
8. Operations management refers to activities managers perform to help their firms produce:
(p. 223) A. services, rather than goods.
B. goods, rather than services.
C. both goods and services.
D. financial data.
Difficulty: Easy
9. ________________ is the specialized area of management that converts or transforms resources into
(p. 223) goods and services.
A. Logistics management
B. Resource engineering
C. Intrapreneuring
Difficulty: Easy
10. ____________ is the design and development of the work flow and connectivity of the operational
(p. 223) requirements (processes) needed to ensure that an organization's products and services are efficiently
E. Process development
Difficulty: Easy
11. __________ refers to the management of the flow of materials and/or products, information, and costs
(p. 224) through the front-end of an organization's Value Chain.
Difficulty: Easy
12. _____ is the management of the inter-dependencies which suppliers, manufacturers, and distributors
(p. 224) all have with each other.
Difficulty: Easy
13. Product/service management includes all of the following EXCEPT:
(p. 224) A. supporting product modifications
B. supporting product enhancements
C. process management overview
D. supporting other product changes made throughout its lifecycle
E. the decision trade-offs associated with quality and cost.
Difficulty: Easy
14. ________ refers to the variety of activities which commence with the design and development of
(p. 224) potential new products in R&D, and extend to the post-purchase support of products and services now
Difficulty: Easy
15. Which of the following activities are included in supply chain management?
(p. 228) A. Getting products to customers
B. Obtaining and managing raw materials
C. Managing finished products
D. Packaging finished products
E. All of the answers are correct
Difficulty: Easy
16. All activities involved in obtaining and managing raw materials and component parts, managing
(p. 228) finished products, packaging them, and getting them to customers are part of
A. resource management.
B. supply chain management.
C. engineering.
D. finance.
E. strategic planning.
Difficulty: Easy
17. What is the root concept of "value chain analysis"?
(p. 224) A. product uniqueness
B. value maximization
C. high quality standards
D. cost reduction
E. high performance standards
Difficulty: Easy
18. Which of the following is NOT one of the primary activities in the value chain?
(p. 224) A. Inbound Logistics
B. Operations
E. Repair Service
Difficulty: Easy
19. ________ refers to the management of supplier relationships relating to those parts and/or
(p. 224) components, or finished products, which are brought into the organization in order to manufacture
B. Operations
E. Customer Service
Difficulty: Easy
20. Which of the following is NOT an operations decision?
(p. 224) A. process application
B. labour
C. production management activities
D. temporary storage
E. None of the above
Difficulty: Easy
21. _______ are those areas within the organization which are not directly associated with the actual
(p. 227) processes which the organization uses to produce products and/or deliver services.
A. Support structure
B. Customer services
C. Primary activities
D. Support activities
E. Marketing activities
Difficulty: Easy
22. For most service businesses the quality standard has become:
(p. 224) A. providing prompt and predictable service.
B. providing a competitive level of service at the lowest cost.
C. delighting customers by anticipating their needs.
D. less important than it is for manufacturing businesses.
Difficulty: Easy
23. Which of the following statements about operations management in the service sector is most
(p. 224) accurate? Operations management in the service sector:
A. is all about providing the service at the lowest cost.
B. should focus on providing customers with a good experience.
C. has less flexibility than operations management in the manufacturing sector, because services are
less able to make use of computers.
D. has done a good job of increasing output, but a poor job of improving quality.
Difficulty: Easy
24. Recent trends in the service sector suggest that:
(p. 224) A. the Internet is unlikely to become a major force in retailing because most customers are unwilling
to buy services online.
B. services can only improve productivity by reducing the quality of the service they provide.
C. technological change is less likely to boost productivity in services than in manufacturing.
D. services have increased consumer satisfaction by becoming increasingly interactive.
Difficulty: Easy
25. _________ is the alignment of the operational tasks within an organization, by its management team,
(p. 230) in order to meet the strategic outcomes defined in the organization's business strategy.
A. Strategy implementation
B. The operations cycle
C. Strategy execution
D. Operational management
E. Tactical implementation
Difficulty: Easy
26. Which of the following is NOT one of the core decision areas that operations managers need to
(p. 231) examine?
Difficulty: Easy
27. _________ refers to the assessment and implementation of the tasks necessary to get the required
(p. 230) work accomplished, and how such tasks will be grouped and sequenced to ensure that the most
Difficulty: Easy
28. ________ refers to the development of the supply chain structure and the accumulation of the
(p. 237) necessary information needed to make effective supply chain decisions.
A. Supply chain management
B. Supply chain planning
C. Supply chain operating execution
D. Supply chain operations planning
E. Supply chain performance evaluation
Difficulty: Easy
29. The ISO's focus is to strive to make the manufacturing of products and services ________.
(p. 243) A. safer
B. more efficient
C. more socially responsible
D. more consistent
E. a), b) and c)
Difficulty: Easy
30. Which of the following is NOT part of the Six Sigma methodology?
(p. 243) A. philosophy of total improvement
B. organized approach for the analysis of processes
C. intent of minimizing (and eliminating) the occurrence of defects
D. impact the quality of the products and service
E. upgrade their quality performance results
Difficulty: Easy
31. _______ can be thought of as a management system which seeks to assimilate the concept of quality
(p. 243) improvement across the entire organization.
A. ISO 14000
B. TQM
C. Six Sigma
D. DMAIC
E. ISO 9000
Difficulty: Easy
32. ________ challenges the organization to be customer focused and to strive for total employee
(p. 243) involvement to ensure that quality (in the delivery of products or services) is fully integrated as a core
A. ISO 14000
B. TQM
C. Six Sigma
D. DMAIC
E. ISO 9000
Difficulty: Easy
33. ________ focuses on how organizations transform production and manufacturing processes to
(p. 243) improve the way that people work.
A. ISO 14000
B. TQM
C. Six Sigma
D. BPR
E. DMAIC
Difficulty: Easy
34. ___________ is one of the predominant challenges facing the small business owner.
(p. 245) A. Operational efficiency and effectiveness
B. Strategy implementation
C. Process design, layout, and execution
D. Materials resource planning
E. Materials management
Difficulty: Easy
35. How does a small business owner seek to tackle the need to create as efficient an operation as is
(p. 245) possible?
A. understand customer expectations and translate this into processes
B. think in terms of product consistency
C. recruit, trained and educated employees with customer contact skills
D. plan their business layout
E. all of the above
Difficulty: Easy
36. Small business owners should seek to involve their employee team in discussions relating
(p. 245) _______.
A. facility layout
B. process planning
C. service delivery changes
D. distribution process
E. a), b), and c)
Difficulty: Easy
37. Small business owners should think in terms of _________, striving to deliver consistent experience
(p. 245) with each customer interaction.
A. layout design
B. process design
C. product consistency
D. product reliability
E. product dependability
Difficulty: Easy
38. Organizations must tailor their ______ to the needs of their customers, ensuring that the expectations
(p. 245) of these customers are met, and that the right product is delivered to the right place at the right time
for the right price.
B. Operations
E. Customer Service
Difficulty: Easy
39. Operations management goes beyond the ability to control or improve, and fundamentally focuses on
(p. 221) the design and development of such processes as well.
TRUE
Difficulty: Easy
40. Total production system goes beyond the ability to control or improve, and fundamentally focuses on
FALSE
Difficulty: Easy
41. Production goes beyond the ability to control or improve, and fundamentally focuses on the design
(p. 221) and development of such processes as well.
FALSE
Difficulty: Easy
42. Operational efficiency goes beyond the ability to control or improve, and fundamentally focuses on
FALSE
Difficulty: Easy
43. Successful organizations understand the interconnectivity of strategy, business structure, and
(p. 221) operations and seek to ensure that all three are integrated into the decision-making process.
TRUE
Difficulty: Easy
44. Successful organizations understand the interconnectivity of strategy, business systems, and
FALSE
Difficulty: Easy
45. Successful organizations understand the interconnectivity of strategy, business structure, and
(p. 221) organization and seek to ensure that all three are integrated into the decision-making process.
FALSE
Difficulty: Easy
46. Successful organizations understand the interconnectivity of systems, business structure, and
FALSE
Difficulty: Easy
47. The right colour is one of the results of the business system and the corresponding actions which take
(p. 222) place within the operations area
FALSE
Difficulty: Easy
48. The right product or service is one of the results of the business system and the corresponding actions
(p. 222) which take place within the operations area
TRUE
Difficulty: Easy
49. The right customer is one of the results of the business system and the corresponding actions which
(p. 222) take place within the operations area
TRUE
Difficulty: Easy
50. The right place is one of the results of the business system and the corresponding actions which take
(p. 222) place within the operations area
TRUE
Difficulty: Easy
51. Operations are understood to be the actual processes employed, which, when combined with the
TRUE
Difficulty: Easy
52. Systems are understood to be the actual processes employed, which, when combined with the
FALSE
Difficulty: Easy
53. Tactics are understood to be the actual processes employed, which, when combined with the
FALSE
Difficulty: Easy
54. Processes are understood to be the actual processes employed, which, when combined with the
FALSE
Difficulty: Easy
55. The organization must develop and maintain efficient and effective operational processes, which
TRUE
Difficulty: Easy
56. The organization must develop and maintain efficient and effective tactical processes, which deliver to
(p. 221) the marketplace the products and/or services which the organization offers.
FALSE
Difficulty: Easy
57. The organization must develop and maintain efficient and effective functional processes, which
FALSE
Difficulty: Easy
58. The organization must develop and maintain efficient and effective structural processes, which deliver
(p. 221) to the marketplace the products and/or services which the organization offers.
FALSE
Difficulty: Easy
59. Operations management is the implementation phase of management.
(p. 223) TRUE
Difficulty: Easy
60. Operations management is a specialized area in management that is concerned with the production of
(p. 223) both goods and services.
TRUE
Difficulty: Easy
61. Operations management involves inventory management, quality control, and production
(p. 223) scheduling.
TRUE
Difficulty: Easy
62. In recent years, operations management has become more focused on providing services, because that
(p. 223) is where the growth and profit potential is greatest.
TRUE
Difficulty: Easy
63. Billie just graduated with high honours with a degree in operations management from a respected
(p. 223) university. The knowledge she gained and skills she developed while obtaining this degree could
make her an attractive employee for either a manufacturing firm or a service firm.
TRUE
Difficulty: Easy
64. Process management is the design and development of the work flow and connectivity of the
(p. 223) operational requirements (processes) needed to ensure that an organization's products and services are
TRUE
Difficulty: Easy
65. Supply Chain management is the design and development of the work flow and connectivity of the
FALSE
Difficulty: Easy
66. Product/Service management is the design and development of the work flow and connectivity of the
FALSE
Difficulty: Easy
67. Process development is the design and development of the work flow and connectivity of the
FALSE
Difficulty: Easy
68. Supply Chain management refers to the management of the flow of materials and/or products,
(p. 224) information, and costs through the front-end of an organization's Value Chain.
TRUE
Difficulty: Easy
69. Process management refers to the management of the flow of materials and/or products, information,
(p. 224) and costs through the front-end of an organization's Value Chain.
FALSE
Difficulty: Easy
70. Product/Service management refers to the management of the flow of materials and/or products,
(p. 224) information, and costs through the front-end of an organization's Value Chain.
FALSE
Difficulty: Easy
71. Distribution logistics refers to the management of the flow of materials and/or products, information,
(p. 224) and costs through the front-end of an organization's Value Chain.
FALSE
Difficulty: Easy
72. Supply Chain management is the management of the inter-dependencies which suppliers,
(p. 224) manufacturers, and distributors all have with each other.
TRUE
Difficulty: Easy
73. Process management is the management of the inter-dependencies which suppliers, manufacturers,
(p. 224) and distributors all have with each other.
TRUE
Difficulty: Easy
74. Product/Service management is the management of the inter-dependencies which suppliers,
(p. 224) manufacturers, and distributors all have with each other.
TRUE
Difficulty: Easy
75. Distribution logistics is the management of the inter-dependencies which suppliers, manufacturers,
(p. 224) and distributors all have with each other.
TRUE
Difficulty: Easy
76. Product/service management includes process management overview.
(p. 224) FALSE
Difficulty: Easy
77. Product/service management includes supporting product modifications.
(p. 224) TRUE
Difficulty: Easy
78. Product/service management includes supporting product enhancements.
(p. 224) TRUE
Difficulty: Easy
79. Product/service management includes the decision trade-offs associated with quality and cost.
(p. 224) TRUE
Difficulty: Easy
80. Product/Service management refers to the variety of activities which commence with the design and
(p. 224) development of potential new products in R&D, and extend to the post-purchase support of products
and services now in the hands of customers.
TRUE
Difficulty: Easy
81. Process management refers to the variety of activities which commence with the design and
FALSE
Difficulty: Easy
82. Supply Chain management refers to the variety of activities which commence with the design and
FALSE
Difficulty: Easy
83. Efficient work flow refers to the variety of activities which commence with the design and
FALSE
Difficulty: Easy
84. Value maximization is the root concept of "value chain analysis".
(p. 224) TRUE
Difficulty: Easy
85. Product uniqueness is the root concept of "value chain analysis".
(p. 224) FALSE
Difficulty: Easy
86. Cost reduction is the root concept of "value chain analysis".
(p. 224) FALSE
Difficulty: Easy
87. High quality standards is the root concept of "value chain analysis".
(p. 224) FALSE
Difficulty: Easy
88. Repair Service is one of the primary activities in the value chain?
(p. 224) FALSE
Difficulty: Easy
89. Inbound Logistics is one of the primary activities in the value chain?
(p. 224) TRUE
Difficulty: Easy
90. Outbound Logistics is one of the primary activities in the value chain?
(p. 224) TRUE
Difficulty: Easy
91. Marketing and Sales is one of the primary activities in the value chain?
(p. 224) TRUE
Difficulty: Easy
92. Customer Service refers to the management of supplier relationships relating to those parts and/or
TRUE
Difficulty: Easy
93. Inbound Logistics refers to the management of supplier relationships relating to those parts and/or
FALSE
Difficulty: Easy
94. Outbound Logistics refers to the management of supplier relationships relating to those parts and/or
FALSE
Difficulty: Easy
95. Operations refers to the management of supplier relationships relating to those parts and/or
FALSE
Difficulty: Easy
96. Temporary storage is an operations decision.
(p. 224) FALSE
Difficulty: Easy
97. Process application is an operations decision.
(p. 224) TRUE
Difficulty: Easy
98. Production management activities is an operations decision.
(p. 224) TRUE
Difficulty: Easy
99. Labour is an operations decision.
(p. 224) TRUE
Difficulty: Easy
100. Support activities are those areas within the organization which are not directly associated with the
(p. 228) actual processes which the organization uses to produce products and/or deliver services.
TRUE
Difficulty: Easy
101. Support structure are those areas within the organization which are not directly associated with the
FALSE
Difficulty: Easy
102. Customer services are those areas within the organization which are not directly associated with the
FALSE
Difficulty: Easy
103. Primary activities are those areas within the organization which are not directly associated with the
FALSE
Difficulty: Easy
104. Operations managers have little concern for supply-chain management activities.
(p. 228) FALSE
Difficulty: Easy
105. The operations cycle is the alignment of the operational tasks within an organization, by its
(p. 230) management team, in order to meet the strategic outcomes defined in the organization's business
strategy.
TRUE
Difficulty: Easy
106. Strategy implementation is the alignment of the operational tasks within an organization, by its
strategy.
FALSE
Difficulty: Easy
107. Strategy execution is the alignment of the operational tasks within an organization, by its management
(p. 230) team, in order to meet the strategic outcomes defined in the organization's business strategy.
FALSE
Difficulty: Easy
108. Operational management is the alignment of the operational tasks within an organization, by its
strategy.
FALSE
Difficulty: Easy
109. Materials management is one of the core decision areas that operations managers need to examine?
(p. 231)
FALSE
Difficulty: Easy
110. Process design, layout, and execution is one of the core decision areas that operations managers need
(p. 231) to examine?
TRUE
Difficulty: Easy
111. Materials resource planning is one of the core decision areas that operations managers need to
(p. 231) examine?
TRUE
Difficulty: Easy
112. Facility design and layout is one of the core decision areas that operations managers need to examine?
(p. 231)
TRUE
Difficulty: Easy
113. Process design, layout, and execution refers to the assessment and implementation of the tasks
(p. 230) necessary to get the required work accomplished, and how such tasks will be grouped and sequenced
to ensure that the most efficient and effective processes are utilized in the production of products and/
or services.
TRUE
Difficulty: Easy
114. Materials resource planning refers to the assessment and implementation of the tasks necessary to get
(p. 230) the required work accomplished, and how such tasks will be grouped and sequenced to ensure that the
most efficient and effective processes are utilized in the production of products and/or services.
FALSE
Difficulty: Easy
115. Materials management refers to the assessment and implementation of the tasks necessary to get the
(p. 230) required work accomplished, and how such tasks will be grouped and sequenced to ensure that the
most efficient and effective processes are utilized in the production of products and/or services.
FALSE
Difficulty: Easy
116. Capital asset evaluation and acquisition refers to the assessment and implementation of the tasks
(p. 230) necessary to get the required work accomplished, and how such tasks will be grouped and sequenced
to ensure that the most efficient and effective processes are utilized in the production of products and/
or services.
FALSE
Difficulty: Easy
117. Supply chain planning refers to the development of the supply chain structure and the accumulation of
(p. 237) the necessary information needed to make effective supply chain decisions.
TRUE
Difficulty: Easy
118. Supply chain management refers to the development of the supply chain structure and the
(p. 237) accumulation of the necessary information needed to make effective supply chain decisions.
FALSE
Difficulty: Easy
119. Supply chain operating execution refers to the development of the supply chain structure and the
FALSE
Difficulty: Easy
120. Supply chain performance evaluation refers to the development of the supply chain structure and the
FALSE
Difficulty: Easy
121. Quality is a critical element of operations management.
(p. 224) TRUE
Difficulty: Easy
122. Determining quality can be difficult.
(p. 224) TRUE
Difficulty: Easy
123. Service businesses cannot incorporate quality standards.
(p. 224) FALSE
Difficulty: Easy
124. Inspection reveals whether a product meets quality standards.
(p. 224) FALSE
Difficulty: Easy
125. The ISO's focus is to strive to make the manufacturing of products and services more consistent.
(p. 243) FALSE
Difficulty: Easy
126. The ISO's focus is to strive to make the manufacturing of products and services more safe.
(p. 243) TRUE
Difficulty: Easy
127. The ISO's focus is to strive to make the manufacturing of products and services more efficient.
(p. 243) TRUE
Difficulty: Easy
128. The ISO's focus is to strive to make the manufacturing of products and services more socially
(p. 243) responsible.
TRUE
Difficulty: Easy
129. Upgrading the quality performance results is part of the Six Sigma methodology?
(p. 243) FALSE
Difficulty: Easy
130. Philosophy of total improvement is part of the Six Sigma methodology?
(p. 243) TRUE
Difficulty: Easy
131. Organized approach for the analysis of processes is part of the Six Sigma methodology?
(p. 243) TRUE
Difficulty: Easy
132. Intent of minimizing (and eliminating) the occurrence of defects is part of the Six Sigma
(p. 243) methodology?
TRUE
Difficulty: Easy
133. TQM can be thought of as a management system which seeks to assimilate the concept of quality
TRUE
Difficulty: Easy
134. ISO 14000 can be thought of as a management system which seeks to assimilate the concept of quality
FALSE
Difficulty: Easy
135. Six Sigma can be thought of as a management system which seeks to assimilate the concept of quality
FALSE
Difficulty: Easy
136. ISO 9000 can be thought of as a management system which seeks to assimilate the concept of quality
FALSE
Difficulty: Easy
137. TQM challenges the organization to be customer focused and to strive for total employee involvement
(p. 243) to ensure that quality (in the delivery of products or services) is fully integrated as a core component
into the strategy, processes, and communication messages of the organization.
TRUE
Difficulty: Easy
138. ISO 14000 challenges the organization to be customer focused and to strive for total employee
FALSE
Difficulty: Easy
139. ISO 9000 challenges the organization to be customer focused and to strive for total employee
FALSE
Difficulty: Easy
140. Six Sigma challenges the organization to be customer focused and to strive for total employee
FALSE
Difficulty: Easy
141. BPR focuses on how organizations transform production and manufacturing processes to improve the
(p. 243) way that people work.
TRUE
Difficulty: Easy
142. ISO 14000 focuses on how organizations transform production and manufacturing processes to
FALSE
Difficulty: Easy
143. TQM focuses on how organizations transform production and manufacturing processes to improve the
(p. 243) way that people work.
FALSE
Difficulty: Easy
144. Six Sigma focuses on how organizations transform production and manufacturing processes to
FALSE
Difficulty: Easy
145. Operational efficiency and effectiveness is one of the predominant challenges facing the small
(p. 245) business owner.
TRUE
Difficulty: Easy
146. Strategy implementation is one of the predominant challenges facing the small business owner.
(p. 245) FALSE
Difficulty: Easy
147. Process design, layout, and execution is one of the predominant challenges facing the small business
(p. 245) owner.
FALSE
Difficulty: Easy
148. Materials resource planning is one of the predominant challenges facing the small business owner.
(p. 245) FALSE
Difficulty: Easy
149. A small business owner seeks to understand customer expectations and translate this into processes in
(p. 245) order to tackle the need to create as efficient an operation as is possible?
TRUE
Difficulty: Easy
150. A small business owner seeks to u think in terms of product consistency in order to tackle the need to
(p. 245) create as efficient an operation as is possible?
TRUE
Difficulty: Easy
151. A small business owner seeks to recruit, train and educated employees with customer contact skills in
(p. 245) order to tackle the need to create as efficient an operation as is possible?
TRUE
Difficulty: Easy
152. A small business owner seeks to plan their business layout in order to tackle the need to create as
(p. 245) efficient an operation as is possible?
TRUE
Difficulty: Easy
153. Small business owners should seek to involve their employee team in discussions relating distribution
(p. 245) process.
FALSE
Difficulty: Easy
154. Small business owners should seek to involve their employee team in discussions relating facility
(p. 245) layout.
TRUE
Difficulty: Easy
155. Small business owners should seek to involve their employee team in discussions relating process
(p. 245) planning.
TRUE
Difficulty: Easy
156. Small business owners should seek to involve their employee team in discussions relating service
(p. 245) delivery changes.
TRUE
Difficulty: Easy
157. Small business owners should think in terms of product consistency, striving to deliver consistent
(p. 245) experience with each customer interaction.
TRUE
Difficulty: Easy
158. Small business owners should think in terms of layout design, striving to deliver consistent experience
(p. 245) with each customer interaction.
FALSE
Difficulty: Easy
159. Small business owners should think in terms of process design, striving to deliver consistent
FALSE
Difficulty: Easy
160. Small business owners should think in terms of product dependability, striving to deliver consistent
FALSE
Difficulty: Easy
161. Organizations must tailor their operations to the needs of their customers, ensuring that the
(p. 245) expectations of these customers are met, and that the right product is delivered to the right place at the
TRUE
Difficulty: Easy
162. Organizations must tailor their inbound logistics to the needs of their customers, ensuring that the
FALSE
Difficulty: Easy
163. Organizations must tailor their customer service to the needs of their customers, ensuring that the
FALSE
Difficulty: Easy
164. Organizations must tailor their outbound logistics to the needs of their customers, ensuring that the
FALSE
Difficulty: Easy
165. Explain why operations management goes beyond the ability of a company to control and improve its
(p. 221) business processes?
operations management is all about the ability of a company to control and/or improve its business
processes. In fact, operations management goes beyond the ability to control or improve, and
fundamentally focuses on the design and development of such processes as well. Based on your
readings of prior chapters, you should be getting a sense as to the importance of developing a business
system within the organization and ensuring that this system is aligned properly to the business'
strategy, its vision, and mission.

Difficulty: Difficult
166. Explain he interconnectivity of these three business system components.
(p. 222)
When we visualize the interconnectivity of these three business system components, we should
conclude the following:
• Strategy is what we want to accomplish

• The business structure should provide the controls and the formal communication and responsibility
framework which will guide the organization as it seeks to realize its strategy
• Operations are understood to be the actual processes employed, which, when combined with the

167. Explain Product/Service Management.
(p. 224)
Product/Service Management refers to the variety of activities which commence with the design and
development of potential new products in R&D, and extend to the post-purchase support of products
and services now in the hands of customers. Product/service management includes supporting
product modifications, enhancements, and other changes made throughout its lifecycle. It also
involves the decision tradeoffs associated with quality and cost. Decisions relating to functionality,
durability, and performance are just some of the factors which need to be assessed within this area of
responsibility. As can be assumed by its title, product/service management decisions will be made in
close cooperation with the organization's R&D, marketing and engineering departments. Information
relating to consumer wants and preferences will need to be identified, and decisions relating to this
will need to be jointly made, prior to the product/service management team incorporating them into
the design or redesign of a new or current product. Product/service management decisions also take
into consideration competitor product/service adjustments which are known to be "in development"
or have been presented to the marketplace, as well as emerging technologies which, potentially, could
disrupt a marketplace. Product/service management decisions also focus on assessing the cost base of
a product via the analysis of its various components, and determining which features need to remain in
a product, which new features need to be added, and which features or components can be removed or
will require some level of modification.

Difficulty: Easy
168. Explain operations management including the three categories of responsibility.
(p. 223)
Operations Management is all about the effective design, development and management of the
processes, procedures, and practices embedded within an organization's business system for the
purpose of achieving its strategic intent. In broad terms, the mandate of the operations management
team can be thought of as encompassing three broad categories of responsibilities (see Figure 9.3).
The intent of the operations management team is to design and develop such processes, procedures,
and practices in a way which takes into consideration time requirements associated with getting
products and services to the market. In addition, decisions need to be made relating to the quality/
cost trade-offs which are designed to support the value proposition being communicated to the target
market by the marketing team, via the organization's marketing mix strategy.

Difficulty: Easy
169. What is the root concept of value chain analysis.
(p. 225)
This is the root concept of "value chain analysis" (value maximization), and one which can often be
best assessed by asking the question…"what is it that we must do to deliver maximum value to our
customers?" In defining the key success metrics associated with this response, we should then tailor
our value chain initiatives to execute the required tactics, processes, and methodologies, essential to
achieving "value maximization" in the eyes of our customers.
In managing our value chain, we, as managers, must look at the connectivity between two key areas
of business system activity. These two areas are called primary and supporting activities. Primary
activities relate to the specific activities through which the development and transformation of a
product or service occurs as it is produced and delivered to the marketplace. These areas (which may
or may not occur in all organizations) are as follows, and are shown in Figure 9.4:

170. What is the "Value Chain" concept and who first proposed it?
(p. 224)
The "Value Chain" is a business concept which Michael Porter, of the Harvard Business School, first
proposed in 1985, in his book titled "Competitive Advantage: Creating and Sustaining Competitive
Performance". At the center of Michael Porter's "Value Chain" model is the underlying principle
that managers should seek to make decisions across the chain's activity areas in a manner which
contributes positively to the overall value of the products or services being produced or offered. By
value, it is inferred that the benefit which a decision would deliver to the product or service would
outweigh the cost associated with it, thereby enhancing the value of it. The idea behind using this
model is to get managers to think about how to plan their work, schedule the required activities,
determine the most efficient allocation of resources, and execute those activities in a way which
maximizes the value of the process. This maximization of value can be in the form of cost efficiencies,
or it can also be in the form of high quality standards, customization or product uniqueness, or
high performance standards (to name a few). Again, the key is to think in terms of adding value,
which cannot be easily duplicated or mimicked by the competition, in order to create a sustainable
competitive advantage inherent within the activities which the organization undertakes.

171. Compare the two different operations cycles if an organization wants to focus on differentiated
(p. 230) markets or on low price.
If the organization's intent is to focus on differentiated markets, via the development of feature-rich
products and services, and communication of uniqueness and value-added benefits to customers, then
the operations cycle within the organization needs to reflect this. This would imply an operations
cycle which possesses flexibility and customization, and high-quality processes and operations.
It also includes an emphasis on product research and development to stimulate innovation and
creativity, and strong relationships with suppliers and distributors to ensure that this market position
can be supported. Conversely, if the organization's desired strategic position is to focus on low price
and acceptable quality, then the operations cycle will more likely place an emphasis on process
standardization and simplification. This requires a focus on process research and innovation versus
product research and innovation, highly-centralized material procurement to maximize economies of
scale, and a focus on capital investment which drives ease of manufacturing design and execution.
Figure 9.8 provides an outline of the alignment between strategy and operational execution.

Difficulty: Easy
172. Explain the operations cycle and provide an example of its use for a strategic intent like differentiated
(p. 230) products.
The operations cycle is the alignment of the operational tasks within an organization, by its
strategy (see Figure 9.7).
As an example, if the organization's intent is to focus on differentiated markets, via the development
of feature-rich products and services, and communication of uniqueness and value-added benefits to
customers, then the operations cycle within the organization needs to reflect this. This would imply
an operations cycle which possesses flexibility and customization, and high-quality processes and
operations. It also includes an emphasis on product research and development to stimulate innovation
and creativity, and strong relationships with suppliers and distributors to ensure that this market
position can be supported.

Difficulty: Easy
173. What is a key weapon for operations managers in their quest to continually improve the efficiency
(p. 242) and effectiveness of the organization's operations cycle, while, at the same time, striving to reduce the
costs incurred?
A key weapon in this ongoing challenge to preserve quality and maintain the product standards
expected by customers, in the face of pressure to reduce costs, lies with the organization's culture and
the development of performance standards. Operations managers know that the ability to establish,
within the organization, a culture focused on preserving quality and maintaining product consistency
is fundamental to maintaining a competitive advantage in the face of intensifying competition.
Managers also recognize that their ability to supply their products to customers in B2B settings is
predicated on their capability to meet consistent and measurable quality standards. With an increasing
focus on specialization and automation, finished goods producers rely on their suppliers to deliver
consistent (quality) parts and components for integration into their production/transformation
processes.

174. How is the Six Sigma approach different from TQM?
(p. 243)
Whereas Six Sigma focuses more on the specific processes within an organization, TQM (Total
Quality Management) can be viewed as more of a broad-based approach to managing quality within
the organization. TQM can be thought of as a management system which seeks to assimilate the
concept of quality improvement across the entire organization. TQM challenges the organization
to be customer focused and to strive for total employee involvement to ensure that quality (in the
delivery of products or services) is fully integrated as a core component into the strategy, processes,
and communication messages of the organization. Similar to Six Sigma, TQM looks for managers
to initiate quality improvement initiatives on the basis of facts and on the utilization of analytical
thinking in determining ways to become more efficient and effective. TQM also directs its emphasis
on the processes used within the organization to interact with customers. The focus of quality
improvement needs to be in those areas of the organization which influence the quality perception at
known critical customer touch points.

Difficulty: Easy
175. How does a small business owner seek to tackle the need to create as efficient an operation as is
(p. 245) possible?
Although limitations do exist, the small business owner can incorporate many of the key
characteristics of successful operations management. Small business owners should look to
understand customer expectations and translate this into processes which are designed to support
customers at the key interaction touch points where the business and customers connect. Small
business owners should also think in terms of product consistency, striving to deliver consistent

Difficulty: Medium
176. How should small organizations develop sustainable competitive advantages
(p. 245)
More and more organizations understand that the battle to develop sustainable competitive advantages
lies at the front end of the value chain. The need for efficient and effective transformation processes
and supply chains can, and will, dramatically influence the ability of an organization to compete in
today's global marketplace. The ability of marketing to build brand differentiation is dependent upon
the consistent and effective delivery of quality products and services at price points which customers
are willing to pay for the value received. To be successful in meeting customer expectations and in
contributing to the organization's overall value proposition, operations managers must develop the
deep functional expertise and the general business skills needed to develop and manage the processes
and methodologies required for competitive purposes. They must also understand and seek to
eliminate those costs within their operations which do not add value to the products or services being
offered.

Difficulty: Medium
Chapter 9 Summary
Category # of Questions
Bissonette - Chapter 09 176
Difficulty: Difficult 5
Difficulty: Easy 169
Difficulty: Medium 2
Learning Objective: 1 28

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Chapter 9

A. Process design, layout, and execution

A. understand customer expectations and translate this into processes

167.Explain Product/Service Management.

168.Explain operations management including the three categories of responsibility.

169.What is the root concept of value chain analysis.

174.How is the Six Sigma approach different from TQM?

176.How should small organizations develop sustainable competitive advantages

Bissonette - Chapter 09 #165

• Strategy is what we want to accomplish

Bissonette - Chapter 09 #166

Bissonette - Chapter 09 #167

Bissonette - Chapter 09 #168

Bissonette - Chapter 09 #169

Bissonette - Chapter 09 #170

Bissonette - Chapter 09 #171

Bissonette - Chapter 09 #172

Bissonette - Chapter 09 #173

Bissonette - Chapter 09 #174

Bissonette - Chapter 09 #175

Bissonette - Chapter 09 #176

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