CHAPTER 1

1 CORRECT
The process that is not a part of the supply chain process is:

A) Planning

B) Making

C) Sourcing

D) Servicing

E) Delivering

Feedback: A-C and E are 4 of the 5 supply chain processes.

2 CORRECT
Differences between products and services are:
1. Product innovations can be patented but service
innovations cannot be patented.
2. Service may be inventoried while product cannot be.
3. All products are useful, while all services are not useful.

A) I only

B) I and III only

C) II and III only

D) I, II and III

E) I and II only

Feedback:
I is true and II & III is not true. Hence, B through E are incorrect and A is the
only correct option.
3 CORRECT
Operations and SC processes generally involve:
1. Planning and sourcing
2. Championing by top management
3. Making, delivering and returning
4. Operational planning and control

A) II only

B) I and III only

C) I, II, and III

D) I, II, and IV

E) II and IV only

Feedback: B is the correct answer. II and IV are general things not part of the
five characteristics of processes.

4 INCORRECT
The radical change paradigm, introduced by Michael Hammer and
major consulting firms, is referred to as:

A) Total quality management

B) Synchronous manufacturing

C) Electronic enterprise

D) Manufacturing strategy paradigm

E) Business process reengineering

Feedback: Michael Hammer wrote a book titled "Reengineering the

Corporation"

5 CORRECT
The most appropriate definition for Product-Service bundling is
 A) Have to buy the product to get the service

B) Have to buy the service to get the product

C) A and B

D) Building service activities into product offerings to create

additional value

E) Building product and services together to increase price

Feedback: D is the specific definition. Add-on services such as extended

warranty may be offered but need not be purchased. The purpose is to
increase value and not increase price.

6 INCORRECT
Current issues in operations management include:

A) coordinating mutually supportive but separate

organizations

B) management of global supplier, production and distribution

networks

C) managing customer touch points

D) only A and B

E) only B and C

F) A, B, and C

Feedback: A, B, and C are current issues in OM.

7 INCORRECT
Goods-Service continuum is best described as follows:

A) pure goods – pure service - core goods - core service

B) goods – goods service bundle - service

 C) core goods - pure goods - pure service – core service

D) pure goods - core goods - core service – pure service

E) service – service and product bundle - goods

Feedback: Only D is in the correct order and has all the elements.

8 INCORRECT
___________ means doing the right things to create the most
benefit for the company.

A) Efficiency

B) Effectiveness

C) Value

D) Productivity

E) None of the above

Feedback: Effectiveness means doing the right thing.

9 INCORRECT
Efficiently scheduling material and labor is an example of ______
decisions.

A) strategic

B) tactical

C) operational

D) short-term

E) None of the above.

 Feedback: Strategic decisions impact the company's long-term effectiveness
in terms of how it can address its customers' needs

10 CORRECT
Careers in operations and supply chain management include all of
the following except:

A) Call center manager

B) Quality control manager

C) Plant manager

D) Business analyst

E) Production control analyst

Feedback: Business analyst is not a OM/SCM career.

CHAPTER 2
1 INCORRECT
Which of the following statements is not true about operations
strategy?

A) Operations strategy is concerned with setting broad

policies and plans for using the resources of the firm to
best support the firm's long-term competitive strategy.

B) An operations strategy involves decisions that relate to the

design of a product and the infrastructure needed to
support the product.

C) Operations strategy can be viewed as part of the planning

process that coordinates operational goals with those of
the larger organization.

D) Operations strategy involves a long-term process that

must foster inevitable change.
 Feedback:
A & C-D are true statements. B is the correct answer. An operations strategy
involves decisions that relate to the design of a process (and not product) and
the infrastructure needed to support the process (and not product).

2 INCORRECT
The item in the list below that is not a major competitive dimension
that forms the competitive position of a company is:

A) cost

B) product quality and reliability

C) delivery speed

D) coping with changes in supply

E) flexibility and new product introduction speed

Feedback:
A-C & E are major competitive dimensions. D is the correct answer. Reliability
and coping with changes in demand (and not supply) are also dimensions.

3 INCORRECT
A company that can offer on-site repair in only 1 or 2 hours is an
example of a company that is competing on _______ competitive
dimension.

A) flexibility

B) process quality

C) coping with changes in demand

D) delivery reliability

E) delivery speed
 Feedback: This is an example of a company that is competing on the delivery
speed dimension.

4 INCORRECT
When a company seeks to match the benefits of a successful
competitor’s position while maintaining its existing competitive
position this is called:

A) fair competitive response

B) straddling

C) strategic fitting

D) activity-system mapping

E) order winning

Feedback: Straddling means trying to compete on multiple dimensions.

5 INCORRECT
A criterion that differentiates the products or services of one firm
from another is called:

A) an order qualifier

B) a sure winner

C) core competence

D) a comparator

E) an order winner

Feedback: Qualifiers allow the firm to be considered; the order winner

differentiates the firm.

6 INCORRECT
 Which of the following is not the best example of an order qualifier
in a car purchase?

A) Low time and distance to break to a halt from 30 mph.

B) A car manufacturer with the most flexible production line

C) A driver side airbag system

D) A passenger side airbag system

E) Having a service facility at the dealership

Feedback: A and C-E are order qualifiers. B is not an order qualifier.

7 CORRECT
Which of the following is not a direct measure of productivity?

A) Input

B) Output/Labor

C) Output/Capital

D) Output/Materials

E) Output/Energy

Feedback: Input does not measure productivity, just how much is bought.

8 INCORRECT
Which of the following is not a specific supply chain risk mitigation
strategy?

A) Pooling inventory

B) Insurance

C) Having money in the bank

 D) Multi-sourcing

E) Detailed tracking

Feedback: Having money in the bank may be useful but it is not a specific
strategy for risk mitigation.

9 CORRECT
Which of the following statements about Activity System Maps is
correct?

A) Illustrate how a company's strategic position is contained

in a set of tailored activities

B) Show peaks and valleys in a supply chain

C) Are limited to service company's such as IKEA

D) Link activities to performance time

E) All of the above

Feedback: The activity system maps in this chapter do not show peaks and
valleys or performance time, they just illustrate the company's strategic
position in a set of tailored activities. They can be used for any type of
company, not just services.

10
INCORRECT IKEA's operations strategy emphasizes all but:

A) Self-service

B) Furniture provided by third party manufacturers

C) Cost over customization

D) Service needs of younger customers

E) Modular furniture design

 Feedback: IKEA designs its own furniture.

CHAPTER 4
1 INCORRECT
Which of the following is a project category discussed in the text?

A) Product change and process change

B) Product change and personnel change

C) Research and development

D) Alliances and partnership

E) A, C and D

2 INCORRECT
Project teams may be organized as:

A) Pure project

B) Functional project

C) Matrix project

D) A and C only

E) A, B and C

3 INCORRECT
Advantage/s of a pure project structure is/are:

A) Duplication of resources providing redundancy that can

reduce project time
 B) Team members report only to one boss, the project
manager

C) Lines of communication are shortened

D) A, B and C

E) B and C

4 INCORRECT
Disadvantage/s of Matrix project structure is/are:

A) Duplication of resources is maximized

B) There are two bosses

C) It is doomed to failure, unless the project manager has

strong negotiating skills

D) B and C

E) A, B and C

5 INCORRECT
Critical path in a project:

A) Is the longest path

B) Activities in a critical path will have 0 slack

C) The length of the critical path will be greater than the sum
of all activity times in the project

D) Both A and B

E) A, B and C
6 CORRECT
The length of the critical path will always be less than or equal to
the sum of all activity times of a project.

A) True

B) False

Feedback: Critical path is the longest path, but its total time will be less than
or equal to the sum of all activates. If there is only one sequence of activities
in a project, the two numbers will be equal. Hence, less than or equal was
used.

7 INCORRECT
Slack time of an activity:

A) Is the time an activity may be delayed without delaying the

project

B) Is equal to latest start time – earliest start time

C) Is equal to latest finish time – earliest start time

D) A and B

E) A, B and C

8 INCORRECT
If the optimistic, most likely, and pessimistic times for an activity in
a project are 4, 7, and 16, then the expected time for that activity
is:

A) 7
 B) 9

C) 8

D) 2

E) None of the above

Feedback: (4+4*7+16)/3 = 8

9 INCORRECT
If the optimistic, most likely, and pessimistic times for an activity in
a project are 4, 7, and 16, then the standard deviation of the
activity is:

A) 7

B) 8

C) 2

D) 6

E) 3.5

Feedback: (16-4)/6 = 2

10
INCORRECT EVM in the context of project management refers to:

A) Earned value management

B) Expected value management

C) A technique that combines measures of scope, schedule

and cost for evaluating project progress

D) A and C

E) B and C
 CHAPTER 7
1 INCORRECT
Which of the following is not a basic process flow structure?

A) Work Center

B) Mass Attack

C) Assembly Line

D) Project Layout

E) Continuous Process

2 INCORRECT
The type of processing structure that is used to produce gasoline,
chemicals, and drugs is:

A) Work Center

B) Batch

C) Assembly Line

D) Project Layout

E) Continuous Process

Feedback: Job shop produces low standardized products, batch produces

multiple products and assembly line produces fewer major products. Project,
on the other hand, is not a processing structure.

3 INCORRECT
The type of processing structure that is used for producing discrete
products at higher volume is:

A) Work Center
 B) Batch

C) Assembly Line

D) Project Layout

E) Continuous Process

Feedback: C is the correct answer. The other options either produce small
volume or cannot produce discrete products.

4 INCORRECT
The best description of the process structure used for assembling
the Space Shuttle is:

A) Work Center

B) Manufacturing Cell

C) Assembly Line

D) Project Layout

E) Continuous Process

Feedback: Due to the size of the Space Shuttle it is assembled at a central

location.

5 INCORRECT
The major decision variables in equipment selection are:

A) Flexibility

B) Labor requirements

C) Manufacturer

D) Both A and B

E) Both B and C
 Feedback: D is the correct answer. Manufacturer (Choice C) is a factor to
consider under decision variable initial investment.

6 CORRECT
When comparing multiple processes to manufacture a product, the
path of lowest total cost is always a straight line:

A) True

B) False

Feedback: Depending on the amount produced, the process that gives the
lowest total cost will change so the path of lowest total cost combines the
production cost line of multiple processes usually making it look more like a
curve.

7 INCORRECT
The product-process matrix:

A) shows as volume decreases an assembly line is the

solution

B) shows as volume increases specialized equipment

becomes cost effective

C) shows all process structures except work centers are

inefficient

D) guides companies on what products to produce

E) allows a manager to justify buying new equipment

Feedback: The point of the matrix is to show that as volume increases and
the product line narrows, specialized equipment and standardized material
flow becomes feasible.

8 INCORRECT
A process flow diagram shows how parts are put together to make
a product.
 A) True

B) False

Feedback: A process flow diagram shows the steps required to make a

product. An assembly diagram shows how the parts go together.

9 INCORRECT
Assume a fixed cost for a process of $100,000. The variable cost
to produce each unit of product is $10, and the selling price for the
finished product is $50. Ignoring inventory, how many units must
the firm sell to break-even?

A) 1,000 units

B) 2,000 units

C) 2,500 units

D) 5,000 units

E) 7,500 units

Feedback: Breakeven Volume = Fixed cost /(Selling price – Variable cost) =

100000/(50-10) = 2500.

10
INCORRECT A breakeven point indicates which of the following:

A) The point where profit is maximized

B) The point where cost is minimized

C) The point where we are indifferent between two options

D) The point where we are most efficient

E) All of the above

CHAPTER 9
1 INCORRECT
The service triangle includes:

A) The service strategy

B) Employees

C) Management

D) Support systems

E) A, B, and D

Feedback: Management is important, however, it is not one of the service

triangle elements.

2 INCORRECT
The ______ percentage of contact time between the service
system and the customer, the ________ the degree of interaction
between the two during the production process.

A) Greater, lesser

B) Lesser, greater

C) Greater, greater

D) None of the above

Feedback: C is the correct answer because the extent of contact is roughly

defined as the percentage of time the customer must be in the system relative
to the total time it takes to perform the customer service.

3 INCORRECT
Which of the following is not an alternative identified in the
service-system design matrix?

A) Mail contact

B) Face-to-face loose specs

 C) Face-to-face tight specs

D) Phone contact

E) All of the above are identified

4 INCORRECT
____________ refers to service encounters whose specifications
must be developed through some interaction between the
customer and the server.

A) Mail contact

B) Face-to-face loose specs

C) Face-to-face tight specs

D) Phone contact

E) Face-to-Face total customization

Feedback: Under mail contact and phone contact customers have little
interaction with the system. Face-to-face loose specs refer to situations where
the service process is generally understood but there are options in how it will
be performed. Face-to-face tight specs refer to those situations where there is
little variation in the service process; neither customer nor server has much
discretion in creating the service.

5 INCORRECT
Which of the following statements is not true about the strategic
uses of the service-system design matrix?

A) Enables systematic integration of operations and

marketing strategy

B) Permits comparison with how other firms deliver specific

services

C) Indicates life cycle changes that might be in order as the

firm grows
 D) Both A and B

E) A, B, and C

6 INCORRECT
What are poka-yokes?

A) Service quality that fluctuates like a yo-yo

B) Procedures that prevent defects from happening

C) Drawings of a customer point of view of a service

D) Low contact customer service jobs that can be automated

E) Service strategy improvement techniques

Feedback: A poka-yoke is a procedure to prevent mistakes from happening.

7 INCORRECT
Which is not a characteristic of a well-designed service system?

A) User-friendly

B) Links the back and front office

C) Gives the same service to all customers regardless of

their needs

D) Robust so it can cope with variations

E) Gives evidence of the quality of service

Feedback: A well-designed service system should provide service that

matches the needs of the customers, not a one size fits all approach.
8 INCORRECT
The approach to delivering on-site service made famous by
Nordstrom department stores is:

A) Production line approach

B) Self-service approach

C) Personal attention approach

D) None of the above

Feedback: McDonald's popularized the production line approach, while ATMs

and gas stations made the self-service approach famous.

9 CORRECT
Which of the following is not an application of behavioral concepts
to enhance service encounters?

A) Segment the pain, combine the pleasure

B) The front-end and back-end of a service are not equal

C) Give the customer control

D) Pay attention to norms

E) None of the above

Feedback: The correct form is segment the pleasure, combine the pain.

10
INCORRECT Which of the following is not an element of a good service
guarantee?

A) Unconditional

B) Easy to understand and communicate

 C) Painless to invoke

D) Ensures the firm makes a profit

E) Meaningful to the customer

11
INCORRECT Netflix is an example of which of the following approaches to
managing customer induced variation?

A) Cost penalties

B) Uncompromised reduction

C) Classic reduction

D) Classic accommodation

E) None of the above

Feedback: The Netflix model uses knowledge of the customer to enable good
service without adding staff or imposing explicit penalties for failure to return
movies.

CHAPTER 14
1 INCORRECT
The benefit of group technology includes:

A) Elimination of movement and waiting time between

operations

B) Reduction of inventory

C) Reduction of number of employees required

D) A and B

E) A, B, and C
 Feedback: All of the above are benefits of group technology.

2 INCORRECT
Which of the following is not true about JIT systems?

A) The JIT system is based on the philosophy of eliminating

waste and utilizing the full capability of the worker

B) Under JIT, the ideal lot size is one

C) JIT is typically applied to repetitive manufacturing

D) The goal of JIT is to drive all inventory queues to zero

level, thus minimizing inventory investment and shortening
lead times

E) JIT will be most useful in continuous production operations

such as gasoline production

Feedback: JIT is not "most useful" for continuous production.

3 INCORRECT
Lean production integrated activities designed to achieve:

A) High volume

B) High quality production

C) Minimization of inventories of raw materials,

work-in-process and finished goods

D) A and B

E) A, B and C

4 INCORRECT
Which of the following is not an element of JIT?
 A) Small-lot production

B) Quickly changing schedule

C) Multifunction worker

D) Kanban pull system

E) Perfect or nearly perfect quality

Feedback: An important element of JIT is to have level/fixed schedules. All

other elements are correct.

5 INCORRECT
A kanban card is used to signal that:

A) work should not be moved to the next station

B) a worker has run out of parts

C) a machine has broken down

D) work is authorized to replenish a downstream station

E) a machine is ready for preventive maintenance

Feedback: Kanban cards are used to signal that material is needed. This
helps in regulating the JIT flow.

6 INCORRECT
With regards to working with suppliers, lean systems typically
require:

A) delivery of large lots at frequent intervals

B) buyer inspection of goods and materials

C) multiple sources from which to purchase

D) long-term relationships and commitments

 E) the lowest price possible

Feedback: A, B, C and E contradict the lean philosophy, i.e., lean preaches

smaller lot sizes, supplier inspection of goods and materials, single sourcing,
and that quality, not price, should be the main criteria when selecting supplies.

7 INCORRECT
Which of the following is NOT one of the more successful
applications of lean concepts in services?

A) Organize problem-solving groups

B) Upgrade housekeeping

C) Upgrade quality

D) Clarification of process flows

E) Introduction of demand-push scheduling

Feedback: Introduction of demand-pull/customer-driven scheduling (and not

demand-push scheduling) is necessary for operating a service business.

8 INCORRECT
Which of the following are lean implementation requirements?

A) Preventive maintenance

B) Excellent quality

C) Vertically integrated facilities

D) A and B

E) A, B, and C
 Feedback: Vertically integrated facilities are not a lean implementation
requirement. Lean philosophy prefers small specialized plants or focused
factories.

9 CORRECT
Which is not an example of production leveling?

A) Hiring temporary tax preparers in March and April

B) McDonald's offering a limited breakfast menu

C) A take-a-number system to wait in line

D) The post office charging more for expedited service

E) Building inventory for the holiday season throughout the

year

Feedback: The government would level production of tax professionals if they

gave individuals staggered dates to submit their taxes instead of one date for
everyone.

10
INCORRECT i2 Technologies rate-based planning is based upon the following
planning and execution approaches:

A) Using inventory to accommodate demand variation

B) No rates are established for end items or parts

C) Discrete orders are used to communicate requirements

throughout the supply chain

D) All of the above

E) None of the above

Feedback: A-C are conventional planning and execution approaches, not

rate-based planning and execution.

CHAPTER 15
1 INCORRECT
Which most closely matches the Association for Operations
Management definition of logistics?

A) The ability to move items from one location to the next

B) The art and science of obtaining, producing and

distributing material and products in the proper place in
the proper quantity

C) The art and science of coordinating shipping items

between two vendors

D) Ensuring that items are delivered on time to customers

domestically and globally

E) The art of determining when an item has to get from one

location to the next

2 INCORRECT
Third-party logistics providers include all of the following except:

A) United Parcel Service (UPS)

B) FedEx

C) DHL

D) Ceva Logistics

E) Office Max

3 INCORRECT
The fundamental decision in logistics is:

A) What to send

B) How often to send something

 C) How many items to send

D) What form of transportation to use

E) What color to paint your delivery trucks

Feedback: Deciding the form of transportation is fundamental and many forms

are competitive.

4 CORRECT
According to the Logistics-System Design Matrix, when shipping
high volumes of materials, all of the following are logical except:

A) Air

B) Pipeline

C) Highway

D) Rail

E) Water

Feedback: Due to the cost, it is too expensive to send large volumes by air.

5 INCORRECT
Cross-docking refers to:

A) The practice of having ships dock in the form of a cross

B) Using a consolidation warehouse to break down larger

shipments for the local area

C) Finding the optimal parking location at a loading dock

D) Optimizing dock size in a port

E) Mobile platforms to dock at for ships

 Feedback: It is called cross-docking because inbound trucks unload on one
ship and outbound load on the other side of the warehouse.

6 INCORRECT
Typical issues to consider in facility location include all of the
following except:

A) Proximity to customers

B) Business climate

C) Total cost

D) Quality of labor

E) None of the above

Feedback: All of the answers are issues to consider.

7 INCORRECT
In location planning, the Factor rating system:

A) Is the most widely-used

B) Uses an easy to understand format

C) Assigns point values to factors

D) Uses total points from all factors to pick a location

E) All of the above

Feedback: Factor rating is simple and very flexible.

8 INCORRECT
In location planning, the Centroid method requires all of the
following information except:

A) Amount to be shipped
 B) Distance between locations

C) Truck availability for shipping

D) X and Y coordinates on a grid

E) All of the above

Feedback: The centroid method does not consider which transportation

method will be used, only distances and volumes.

9 INCORRECT
Transportation method is all of the following except:

A) A special method of linear programming

B) A special method to solve any logistics problem

C) Can be used to minimize cost of shipping from plants

(warehouses) to destinations (retail outlets)

D) Can be used to choose among a set of potential

warehouse locations

E) Can be solved using Excel Solver

10
INCORRECT All the following is true about the Centroid method except:

A) It is a technique for locating single facility

B) It is often used for locating a warehouse

C) It is used to determine the location of a set of warehouses

D) It is used to locate communication towers

E) It provides formulas to determine X and Y coordinates of

the new facility
 CHAPTER 16
1 INCORRECT
Supply-chain strategy concepts are applicable to what types of
companies?

A) Manufacturing

B) Service

C) Restaurants

D) Airlines

E) All of the above

Feedback: Supply chain strategy concepts are applicable to all of the above
types of companies.

2 CORRECT
Consider the following data from a company annual report:

The inventory turnover for this company is:

A) 4.0

B) 8.0

C) 10.67

D) 32

E) 2.0
 Feedback: Inventory turnover is the ratio of cost of goods sold divided by the
sum of raw material, finished goods, and work-in-process inventory.

3 INCORRECT
Consider the following data from a company annual report:

Lower values of inventory turn are considered better for a

company.

A) True

B) False

Feedback: Lower levels of inventory cause the inventory turnover ratio to

increase. Inventory turnover equals cost of goods sold divided by inventory,
therefore higher rates of inventory are better since they imply less inventory
for a given cost of goods sold.

4 INCORRECT
Which of the following product promotional activities would
probably help make the supply chain more efficient?

A) Price promotions that expire on a specific date

B) An "everyday" low price strategy where prices are not

dependent on quantity delivered with a specific order

C) Special packaging for a specific event that occurs one

time each year

D) A 2-for-1 price promotion

E) All of the above

 Feedback: B is the only option that tends to build a continuous supply chain;
A and C lead to intermittent supply flow, resulting in lower efficiency.

5 INCORRECT
The phenomenon of magnification of demand variability, as we
move from the customer to the producer in the supply chain, is
referred to as the:

A) Postponement effect

B) Elasticity of demand

C) Bullwhip effect

D) Price deflator

E) Just-in-time approach

Feedback: This is a term that relates the supply of a product to demand

fluctuations throughout the supply chain.

6 INCORRECT
According to Hau Lee, a supply side of the supply chain expert,
which of the following types of products need to be delivered with
efficient supply chains?

A) Custom products

B) Innovative products

C) Grocery products

D) High technology products

E) Responsive products

Feedback: Lee categorizes supply chains as efficient, responsive;

risk-hedging or agile. Grocery products employ an efficient supply chain.
7 INCORRECT
Supply chain response relates to the following:

A) How quickly a customer order can be filled

B) How quickly a company can react to a new competing

product

C) How inexpensive the product is

D) A and B

E) All of the above

Feedback: Response relates to reaction speed, not cost.

8 INCORRECT
Total cost of ownership consists of:

A) Acquisition costs

B) Ownership costs

C) Post-ownership costs

D) Maintenance costs

E) A, B and C

9 INCORRECT
What factors do companies need to consider when sourcing
product?

A) Material costs

B) Transportation cost

C) Production costs
 D) Outsourcing costs

E) All of the above

Feedback: All of these factors need to be considered when sourcing.

10 CORRECT
An important strategy for localizing a product in the context of
supply chain design is the following:

A) Postponing the task of differentiating a product until the

last point in the supply network

B) Minimizing reengineering cost

C) Very high volume sales

D) Minimizing inventory cost

E) Low direct labor cost