Chapter 8

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
answers the question.
1) If an employee’s primary function in an organization is transforming resources into goods
and services, then they are involved in
A) staffing.
B) financing.
C) customer relationship management.
D) operations management.
E) marketing.

2) Lena is a manager at a car dealership’s service department. She manages the logistics,
quality, and productivity of the service department. Lena is a(n) ________ manager.
A) finance
B) sales
C) marketing
D) human resource
E) operations

3) Operations management has the primary responsibility of

A) securing funds for the activities of an organization.
B) conducting research on consumer behavior.
C) creating goods and services that satisfy customers.
D) developing only intangible products.
E) replacing quality with productivity in the manufacturing of goods.

4) Which statement accurately describes the difference between the terms "operations" and
"production"?
A) Operations is the first step in manufacturing, whereas production is the last step.
B) Operations is simply an analysis of inputs and outputs, whereas production includes
a wide range of organizational activities and situations.
C) Operations includes processes used in the making of both tangible and intangible
products, whereas production is related only to tangible products.
D) Operations focuses solely on quality, whereas the primary focus of production is
productivity.
E) Operations is restricted to small businesses, whereas production occurs in both small
and large businesses.

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5) Corrine is the operations manager of a new day spa in an upscale urban neighborhood.
Customers in this neighborhood expect high quality services and products, and Corrine is
struggling to use the spa’s resources efficiently and effectively to provide the level of quality
the customers demand. If Corrine can’t find a way to meet customers’ demands for quality,
most likely the spa will
A) be forced to move to a less demanding neighborhood.
B) be taken over by competitors in the area.
C) stay in business, and customers will adapt to its services and products.
D) be converted into a different type of business that can succeed in this area.
E) go out of business.

6) Which activity can be described as production?

A) the services provided by a financial advisor
B) the manufacturing of cars in an automobile company
C) the surgeries conducted by a doctor
D) the legal advice provided by a lawyer for a fee
E) services provided at a hair salon

7) The transformation process in operations management

A) is a process of replacing quality with productivity when manufacturing products.
B) is the conversion of resources such as labor, money, materials, and energy into
goods, services, and ideas.
C) is efficient only when inputs are used in large quantities to produce small quantities
of output.
D) is associated with the marketing and selling of both inputs and outputs to customers.
E) is a process of initiating corrective action when the actual output is more than the
desired output.

8) A team of carpenters perform home repairs and improvements for their customers. From the
perspective of operations, the money they use to purchase their tools and the electricity they
use to run their power saws are
A) processes.
B) outputs.
C) stocks.
D) inputs.
E) inventories.

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9) Ossie and her father have been building rustic furniture for family and friends since she was
little. As an adult, Ossie decided to start her own furniture company. From the perspective of
operations, the beds, tables, chairs, and dressers she builds are
A) capital.
B) inputs.
C) equipment.
D) outputs.
E) processes.

10) The head chef at an Italian restaurant imports many of his ingredients from Italy and prepares
them using family recipes that have been passed down for generations. From the perspective
of operations, the food he sells to customers and the authentic Italian atmosphere he provides
are
A) components.
B) inputs.
C) outputs.
D) stocks.
E) inventories.

11) A makeup artist works in a salon and travels to provide her services to clients at weddings
and other events. As part of her services, she gives her clients lipstick, blotting sheets, and
face powder, so they can touch up their makeup throughout the event. Her biggest expenses
are the cost of the items she gives to clients, the cost of keeping her makeup kit stocked with
a variety of colors, travel expenses to get to the events, and her time. Which of these is
considered an input?
A) the lipstick, blotting sheets, and face powder she gives to clients
B) the makeup services she provides in the salon
C) the makeup services she provides at events
D) her time and money
E) her creative application of makeup to make her clients look perfect for any event

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12) Kesha is an operations manager at a hotel. Her hotel has a standard of 80 percent of rooms
being ready when guests arrive to check-in. However, she recently collected feedback to
check on the hotel’s efficiency and found that only 60 percent were ready on time. What
should Kesha do to resolve this 20 percent negative deviation without affecting her
customers?
A) Make adjustments to the cleaning schedule to ensure that rooms will be available by
check-in time.
B) Make the check-in time later to match when rooms are ready.
C) Adda disclaimer that all check-in times are approximate and subject to change.
D) Change the standard for room availability.
E) Offer a complimentary meal to guests who can’t get into their rooms when expected.

13) What is a similarity between goods and services?

A) Both are equally labor-intensive.
B) Both produce uniform outputs.
C) Both undergo a transformation process.
D) Both are equally tangible.
E) Both have equal control over the variability of their inputs.

14) For most organizations, the ultimate objective of the transformation process is
A) to replace quality with productivity in the transformation process.
B) to create intangible outputs using tangible inputs.
C) for operations to be replaced by production and manufacturing.
D) for the produced outputs to be worth more than the cost of inputs.
E) to be able to apply the transformation process to services delivered and not just to
goods produced.

15) A nonprofit organization uses money, groceries, and volunteer time and labor to transform
food into hot prepared meals for needy families. In this setting, which is a transformation
process?
A) paying rent for a cooking facility
B) traveling abroad to find less expensive ingredients
C) tasting the meals to make sure they are satisfactory
D) giving families raw ingredients so they can prepare meals themselves
E) fundraising and promoting the cause to gain new volunteers and food donations

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16) Health care, real estate, and tax preparation are all examples of ________ services.
A) low-contact
B) impersonal
C) low-level
D) high-contact
E) tangible

17) At the Medieval Manor Restaurant, diners expect an authentic medieval dining experience.
The waitstaff are in character and dress in authentic medieval clothing, the walls of the
restaurant are covered with art from the Middle Ages, and as diners eat medieval-era foods,
they are entertained by troubadours and performers. What type of service does this restaurant
provide?
A) low-contact
B) high-contact
C) high-tech
D) low-level
E) tangible

18) Fritz runs an arena that hosts sporting and music events. When booking these events, he must
consider how many people would be interested in buying tickets. Based on the demand, he
must set his ticket prices at the appropriate level. Which challenge is associated with
providing this type of service?
A) It is difficult to determine the appropriate level of customer contact required when
providing such a service.
B) With services like this, it is difficult to ensure that the produced outputs will be
worth more than the combined costs of the inputs.
C) It is difficult to accurately estimate the demand to match the right supply of a
service.
D) When providing this type of service, it is difficult to balance in-person and online
ticket sales.
E) It is difficult to convince customers to spend money on tangible services like this.

19) What is a defining characteristic of a service?

A) The outcome of a service is tangible.
B) The delivery of a service requires little customer contact.
C) The performance of a service typically occurs at the point of consumption.
D) Demand for a service is easy to calculate.
E) Services do not undergo a transformation process.

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20) Service experience tends to vary each time because
A) services are not labor-intensive.
B) of the tangible element inherent in delivering services.
C) services can be easily separated from the point of consumption.
D) services are less customized than tangible products.
E) of the human element inherent in providing services.

21) The products of service providers tend to be more customized than those of manufacturers
because
A) different customers have different needs.
B) the requirements of all customers are more or less the same.
C) technological innovations have reduced variability.
D) there is more capital required in service provision.
E) service providers have limited contact with customers.

22) Fernando is a hairdresser who gives haircuts to two customers in the same day. The haircut
he gives to the first customer is not exactly the same as the haircut he gives to the second
customer. This relates to the difference between service providers and manufacturers in terms
of
A) consumption of output.
B) tangibility of inputs.
C) labor required.
D) measurement of productivity.
E) uniformity of output.

23) When compared to service providers, the products of manufacturers are typically
A) more labor-intensive.
B) less standardized.
C) more customized.
D) more uniform.
E) less tangible.

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24) When customers go to Innovations Salon, they must rely on the different talents of the
stylists to achieve the cut they desire. In comparison, the manufacturer that produces
Vibrancy Shampoo has more control over the amount of variability of the resources it uses to
create its shampoos. Which difference between manufacturers and service providers does this
scenario relate to?
A) consumption of output
B) labor required
C) measurement of productivity
D) uniformity of output
E) uniformity of inputs

25) Compared to service providers, manufacturers are generally more

A) labor-intensive.
B) capital-intensive.
C) capable of customizing their products.
D) variable in their inputs and outputs.
E) vulnerable to the perishability of their output.

26) City Hotels has a chain of luxury hotels and resorts across the globe. Life Vision is a
pharmaceutical company known for its breakthrough lifesaving drugs. How do the two
businesses differ from each other?
A) City Hotels is more capable of customizing its products when compared to Life
Vision.
B) City Hotels is able to keep its output standardized, whereas Life Vision cannot.
C) City Hotels has less contact with its customers when compared to Life Vision.
D) City Hotels is able to incorporate quality standards, whereas Life Vision cannot.
E) City Hotels, unlike Life Vision, does not produce its output at the point of
consumption.

27) An appliance repair technician usually fixes between 5 and 10 appliances per day, so the tech
interacts with a lot of customers with a variety of appliance issues. This job is
A) capital-intensive.
B) standardized.
C) labor-intensive.
D) uniform in terms of inputs.
E) uniform in terms of output.

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28) Service providers are often more limited than manufacturers in selecting work methods,
assigning jobs, scheduling work, and exercising control over operations because
A) services are not labor-intensive.
B) services are highly standardized.
C) services cannot be customized.
D) of their tangibility.
E) of their need for customer contact.

29) Which description is most accurate regarding the differences between manufacturers and
service providers?
A) Service providers have more control over the amount of variability of the resources
they use than manufacturers do.
B) For service providers, measuring productivity is fairly straightforward, whereas for
manufacturers measuring productivity is more complicated.
C) Manufacturers can separate the production of a product from its actual use, whereas
the service dimension requires closer contact with the consumer.
D) The products of manufacturers tend to be more customized than those of service
providers.
E) Manufacturers make more contact with their customers when compared to service
providers.

30) Which statement depicts the relationship between services and their providers?
A) Service providers are more capital-intensive than they are labor-intensive.
B) The quality of the service experience is controlled by a service contact employee.
C) Service experience is usually constant irrespective of the person delivering or
receiving it.
D) Services can be provided in an isolated environment, away from customers.
E) Regardless of how it is delivered, the degree of variation of inputs and outputs is
negligible for services.

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31) Which scenario reflects the capital-intensive nature of a manufacturer?
A) A lawyer provides varying services that include consulting clients on legal
documents, preparing legal documents for clients, and representing clients in court.
B) An electrician goes into customers' homes and fixes a variety of expensive electrical
issues.
C) A computer store provides temporary support personnel to help new customers use
its products.
D) A flooring company offers customers many flooring options, and their prices
include installation.
E) An appliance manufacturer mass produces coffee makers with multiple settings, so
customers can choose whether they want to brew a cup, two cups, or an entire pot
using the same machine.

32) The output of service providers typically must be consumed immediately, and only a few
services can be saved, stored, resold, or returned. Which characteristic feature of services
does this best illustrate?
A) low degree of customer contact
B) high degree of standardization of outputs
C) tangibility of outputs
D) perishability of outputs
E) uniformity of inputs

33) Autoworks is a reputable automobile manufacturing company, and The Travel Center is an
established chain of travel agencies. How do the two businesses differ from each other?
A) While The Travel Center is able to incorporate quality standards in its business,
Autoworks cannot.
B) Measuring productivity is fairly straightforward for Autoworks when compared to
The Travel Center.
C) Standardizing output is easier for The Travel Center when compared to Autoworks.
D) Autoworks faces a higher degree of variation of inputs and outputs when compared
The Travel Center.
E) Autoworks has more customer contacts than The Travel Center.

34) For manufacturers, measuring productivity is fairly straightforward because

A) of the tangibility of their output.
B) they are labor-intensive.
C) their output lacks uniformity.
D) of the variability of their inputs.
E) of their high-contact with customers.

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35) A chain of private chiropractic offices finds it difficult to measure the productivity of its
staff. Which reason can be attributed to this problem of service providers?
A) Services cannot be delivered at the point of consumption.
B) Services have a high degree of uniformity.
C) Service requirements vary from job to job.
D) Service experience remains constant each time.
E) Services require minimal customer contact.

36) A consumer electronics company is deciding what new products to manufacture and for what
group of customers. Once that information has been decided, it will have to determine what
processes it needs to make these products, as well as the facilities it needs to produce them.
These decisions comprise ________ planning.
A) enterprise resource
B) human resource
C) succession
D) material-requirements
E) operations

37) A company is determining the demand for a new product and how much consumers are
willing to pay for it. In order to do this, the company should use
A) case studies.
B) marketing research.
C) trial and error.
D) successful past experiences.
E) intuition.

38) From the perspective of manufacturers, standardization means

A) ensuring that each product is sold at the same price.
B) ensuring that one's product has the exact same features as that of a competitor.
C) making identical, interchangeable components or complete products.
D) making the exact product a particular customer needs or wants.
E) meeting the benchmark set by a market leader.

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39) A manufacturer of external hard drives sells them under the brand name Armor. They are
identical to each other and are of the same quality. This is an example of
A) flexible manufacturing.
B) customization.
C) standardization.
D) benchmarking.
E) lean manufacturing.

40) A primary reason for using standardization is to

A) reduce production costs.
B) increase the choices available for customers.
C) reduce product quality.
D) support variability of the resources used.
E) foster creativity.

41) A mechanic who fixes Toyota cars orders parts directly from Toyota because they are created
specifically to fit and function properly in its vehicles. Which advantage of standardization
does this scenario illustrate?
A) The customer gets exactly what he or she wants.
B) The mechaniccan charge more for a standardized product than a custom-designed
product.
C) Standardized products function uniformly all the time, so customers get a product
that meets their expectations.
D) Customers have more choices available to them.
E) Customers can mix and match components for a customized design.

42) Standardization becomes complex on a global scale because

A) different countries have different standards for quality.
B) customer needs are same across the globe.
C) standardization slows down production.
D) standardization does not support mass manufacturing.
E) standardization increases production costs.

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43) A computer manufacturer builds its computers so that the components can be installed in
different configurations to meet certain needs of a customer. This is an example of
A) flexible manufacturing.
B) modular design.
C) lean manufacturing.
D) standardization.
E) reverse engineering.

44) ________ is making products to meet a particular customer's needs or wants.

A) Customization
B) Standardization
C) Mass production
D) Modular design
E) Benchmarking

45) A premium jeweler has a team of jewelry experts who design jewelry for each client from
scratch. Everything is made to meet the specific requirements of the clients, and no two
jewelry pieces produced by this company are ever identical. This is an example of
A) customization.
B) standardization.
C) mass production.
D) crowdsourcing.
E) benchmarking.

46) An auto manufacturer allows its customers to select the color, interiors, and features of their
cars based on their individual preferences. Though most parts of the cars can be altered to
meet customer specifications, the chassis remains the same. This is an example of
A) lean manufacturing.
B) standardization.
C) mass customization.
D) crowdsourcing.
E) benchmarking.

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47) Mary has just joined a gym. As part of her membership, she gets a free personal training
session to determine her current fitness level, and the results are used to develop a fitness
plan that will help her meet her goals. Mary can choose between several personal training
programs, small group programs, and fitness classes. This is an example of
A) standardization.
B) modular design.
C) component planning.
D) consistent service.
E) mass customization.

48) A secure, public ledger that records all transactions and is spread across multiple computers
is referred to as
A) the blockchain.
B) total quality management.
C) a router.
D) a JIT system.
E) a material-requirements plan.

49) A commercial brewery can produce a maximum of 20,000 cans of beer per day. This refers
to the ________ of the brewery.
A) design
B) variability
C) utility
D) perishability
E) capacity

50) The emergency department at Seaside hospital can effectively handle a maximum number of
20 patients at any one particular time. This is referred to as its
A) design.
B) variability.
C) capacity.
D) perishability.
E) utility.

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51) The capacity of a restaurant would be the
A) average number of customers that visit the restaurant on weekends.
B) total number of customers who have visited the restaurant since its establishment.
C) average number of employees who work in the restaurant on a normal day.
D) maximum number of customers who can be effectively served at any one particular
time.
E) minimum operating cost of the restaurant during a workweek.

52) Frances is an operations manager for a chain of amusement parks. Before she determines a
new location for a park, she must forecast what the customer demand will be so she can
determine the appropriate capacity. Why is it important for Frances to efficiently plan the
park’s capacity needs?
A) Capacity levels that fall short can drive operation costs up due to unused and
expensive resources.
B) Once a capacity decision has been implemented, changing the decision can incur
substantial costs.
C) When there is more capacity available than needed, the organization may lose
customers.
D) Too much capacity can result in unmet demand.
E) Capacity should reflect future demand and stakeholder desires from the beginning
because adjusting for these things later is impossible.

53) What factor should an organization take into consideration when planning the location of its
manufacturing facility?
A) Customers prefer to have production facilities located nearby.
B) Most customer contacts occur in manufacturing facilities.
C) Manufacturing plants located in urban areas will increase a firm's reputation.
D) Facility decisions are fairly straightforward and involve few outside variables.
E) Facility decisions are complex and costly for an organization.

54) A manufacturer that builds large apartment complexes brings all the construction resources to
a central location during production. This type of a facility layout is called a(n) ________
layout.
A) fixed-position
B) product
C) line
D) continuous
E) intermittent

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55) An oil drilling plant uses a fixed-position layout because it is involved in large, complex
projects, exploring the ground for oil deposits. As a result, this company may be called a(n)
________ organization.
A) continuous manufacturing
B) intermittent
C) project
D) contract manufacturing
E) lean manufacturing

56) A characteristic of project organizations is that they

A) produce a standardized product.
B) produce a large number of units.
C) have low production costs per unit.
D) rely on highly skilled labor.
E) generally use product layouts.

57) A furniture manufacturer makes dining tables and chairs. The plant has a wood cutting
department, an assembly department, and a staining department. This plant is using a
________ layout to organize its facility.
A) fixed-position
B) project
C) process
D) geographical
E) skill-level

58) A hospital that has a laboratory, an emergency department, an intensive care unit, and other
departments would best be classified as a(n) ________ organization.
A) intermittent
B) project
C) continuous manufacturing
D) standardized
E) assembly line

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59) How are project organizations different from intermittent organizations?
A) Project organizations deal with products of a lesser magnitude than do intermittent
organizations.
B) Project organizations use product layouts, whereas intermittent organizations use
fixed-position layouts.
C) Project organizations are mainly found in service industries, whereas intermittent
organizations focus on manufacturing.
D) Project organizations are effective for mass production, whereas intermittent
organizations produce very few units of a product.
E) Project organizations generally make a unique product, but the products of
intermittent organizations are not necessarily unique.

60) A company creates promotional products for small companies. It takes a customer’s logo and
places it on products such as drawstring bags, coffee mugs, and pens. It produces relatively
few units of each product. Because of the low level of output it produces, this company
charges a higher price per unit of the product. What type of organization is this company?
A) a fixed organization
B) a project organization
C) an intermittent organization
D) a process organization
E) a service organization

61) An organization that creates many products with similar characteristics and using assembly
lines would most likely be categorized as a(n) ________ organization.
A) continuous manufacturing
B) intermittent
C) project
D) contract manufacturing
E) fixed-position

62) A manufacturer of computer monitors uses a facility layout in which the workers remain in
one location, and the monitors move from one worker to another. Each person in turn
performs required tasks. This company is using a ________ layout.
A) product
B) process
C) project
D) web
E) fixed-position

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63) What is a defining characteristic of continuous manufacturing organizations using a product
layout?
A) They make a unique product.
B) They have an extremely high unit cost of production.
C) They deploy all resources in a central location.
D) They produce a large number of units.
E) They do not use assembly lines.

64) ________ employs specialized computer systems to actually guide and control the
transformation process of inputs into outputs.
A) Computer-assisted design (CAD)
B) A transaction processing system
C) Computer-assisted manufacturing (CAM)
D) A just-in-time (JIT) process
E) An economic order quantity (EOQ) system

65) ________ is a complete system that designs products, manages machines and materials, and
controls the operations function in the transformation process.
A) Computer-assisted design (CAD)
B) Computer-integrated manufacturing (CIM)
C) Computer-assisted manufacturing (CAM)
D) Flexible manufacturing (FM)
E) Economic order quantity (EOQ)

66) Darius owns a construction company that builds homes. To help his customers visualize the
types of homes he can build for them, he designs three different models on the computer,
using 3D printing to develop 3D paper models. What type of technology is Darius using to
develop these 3D models?
A) computer-assisted manufacturing
B) flexible manufacturing
C) computer-integrated manufacturing
D) computer-assisted design
E) drones

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67) A large nuclear power plant uses "steel-collar" workers in the transformation process because
having humans perform these tasks would put them at risk. What are these "steel-collar"
workers called?
A) computers
B) machines
C) 3D models
D) drones
E) robots

68) A fixtures company is dedicated to green technology and sustainability. As a result, it

produces toilets and showers that are designed to conserve water. Doing so protects the
environment, but it may
A) decrease customer loyalty.
B) damage the firm's reputation.
C) cause stakeholders to protest.
D) lead to improved profits.
E) decrease the company's profits.

69) Much of the movement to green manufacturing and operations is the belief that global
warming and climate change must decline. In the United States, roughly 40 percent of carbon
dioxide emissions are accounted for by________, which Leadership in Energy and
Environmental Design is trying to lower.
A) cows.
B) gasoline power cars.
C) forest fires.
D) buildings.
E) coal burning.

70) The Brookings Institute reported what technology could disrupt 25 percent of U.S. jobs, even
though many feel it will actually add jobs?
A) computer-integrated manufacturing
B) flexiblemanufacturing
C) artificial intelligence
D) supply chain automation
E) robots

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71) Which statement about blockchain is accurate?
A) It requires the control of intermediaries or third parties.
B) Information can be added but not deleted.
C) It increases information asymmetry.
D) It takes power away from buyers.
E) It will make supply chain management obsolete.

72) When a furniture manufacturer buys the lumber and other raw materials, machines and
equipment, manufacturing supplies, and office supplies needed to build its furniture pieces,
this is called
A) consumption.
B) logistics.
C) capacity management.
D) procurement.
E) operations.

73) Fumiyo’s job is to buy all the materials needed by the organization in the right quantities at
the lowest price. This describes
A) purchasing.
B) acquisitions.
C) supply management.
D) materials handling.
E) leveraging.

74) The term ________ refers to all raw materials, components, completed or partially completed
products, and pieces of equipment a firm uses.
A) inventory
B) capital reserve
C) input
D) logistics
E) capital

75) Materials that have been purchased to be used as inputs in making other products are
included in ________ inventory.
A) finished products
B) partial
C) raw materials
D) supplier
E) work-in-process

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76) A company purchases cement, steel rods, and wooden panels to use in the construction of
buildings, houses, and bridges. These inputs are considered ________ inventory for a
construction business.
A) finished
B) partial
C) work-in-process
D) supplier
E) raw materials

77) What is an example of finished-goods inventory for an apparel company?

A) the clothes for sale in the company's retail store
B) the buttons to be used on pants
C) a batch of pants that are in the stitching process
D) a bottle of fabric dye in the company's factory
E) the thread used for stitching

78) What is an example of work-in-process inventory for an automobile company?

A) cars for sale in one of the company's outlets
B) cars that are in the initial stages of the assembly line
C) tires in the company's warehouse
D) nuts and bolts used in the cars
E) windshields used in the cars

79) The process of determining how many supplies and goods are needed and keeping track of
quantities on hand, each item's location, and who is responsible for it within an organization
is called
A) facility planning.
B) benchmarking.
C) succession planning.
D) inventory control.
E) capacity management.

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80) A clothing company tracks its clothing through the supply chain so it knows the location and
usage rate of the products. It does this by using ________, a wireless system that uses radio
waves to communicate information.

A) PERT
B) computer-assisted tracking
C) MRP
D) CIM
E) RFID tags

81) A model of inventory management that identifies the optimum number of items to order to
minimize the costs of managing them is called the ________ model.
A) just-in-time marketing
B) flexible scheduling
C) cost-plus
D) economic order quantity
E) value chain

82) Minimizing inventory by providing an almost continuous flow of items from suppliers to the
production facility is referred to as
A) just-in-time inventory management.
B) flexible scheduling.
C) a continuous manufacturing system.
D) contract manufacturing.
E) outsourcing.

83) A consumer electronics company does not store any of its materials in the warehouse.
Instead, the company's procurement department orders small quantities of materials as and
when they are required. The vendors supply the ordered material directly to the company's
manufacturing unit a day or two before the production starts. This arrangement helps the
company reduce costs and boost efficiency. This scenario best illustrates
A) continuous manufacturing systems.
B) contract manufacturing.
C) just-in-time inventory management.
D) outsourcing.
E) mass customization.

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84) An inventory planning system that schedules the precise quantity of materials needed to
make a product is called
A) succession planning.
B) material-requirements planning.
C) benchmarking.
D) flexible scheduling.
E) capacity-requirements planning.

85) At Better Boats, the inventory-control manager uses material-requirements planning and
schedules the precise quantity of materials needed to make all the boats the company plans to
build each month. What basic component does the inventory-control manager need to create
as part of material-requirements planning?
A) an executive summary
B) a master production schedule
C) a promissory bill
D) a balance sheet
E) a balanced scorecard

86) In order for a company to complete material-requirements planning, it needs to create a

master production schedule, a bill of materials, and
A) a summary of outsourced tasks.
B) an economic order quantity.
C) a raw materials inventory.
D) an inventory status file.
E) a blockchain arrangement.

87) A brand of women’s apparel and accessories uses contract manufacturers in different
countries. The company benefits because of the lower cost of labor and minimal government
regulations in other countries compared to its home country. This is an example of
A) off shoring.
B) in sourcing.
C) outsourcing.
D) reverse engineering.
E) franchising.

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88) Nike sends almost all of its production to Asian countries, and Accenture uses workers in
India to conduct certain business services. This is called
A) offshoring.
B) insourcing.
C) outsourcing.
D) reverse engineering.
E) franchising.

89) What is a popular method of scheduling materials that identifies all the major activities or
events required to complete a project, arranges them in a sequence or path, determines the
critical path, and estimates the time required for each event?
A) the just-in-time method
B) the Program Evaluation and Review Technique (PERT)
C) the Continuous Manufacturing System (CMS)
D) the economic order quantity (EOQ) model
E) the outsourcing technique

90) Which statement is true about quality?

A) It is extremely easy to measure quality characteristics when the product is a service.
B) It is a concern only for service providers.
C) It primarily indicates the price charged for a product.
D) It depends on customers' perceptions.
E) Its definition should vary from employee to employee when a firm adopts total
quality management.

91) ________ reflects the degree to which a good or service meets the demands and requirements
of customers.
A) Value
B) Cost
C) Quality
D) Service
E) Sourcing

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92) A company that does online marketing for small businesses wants to achieve a high level of
quality in the services it provides. As a result, it sets a goal of winning the Malcolm Baldrige
National Quality Award. Which is one of the criteria the company must meet to receive this
award?
A) inseparability of production and consumption
B) product management
C) business results
D) capacity
E) agility

93) Quality control refers to the

A) processes an organization uses to maintain its established quality standards.
B) efforts of an organization to replace productivity with quality.
C) efforts of an organization to reduce the quality standards set by the best-performing
companies.
D) inspections conducted by the government when a product's quality is above the
required standard.
E) techniques an organization uses to minimize the quality of its products and services.

94) A large personal care products company adopts a(n) ________ approach to gain a
competitive edge in light of intense foreign competition and increasingly demanding
customers. The company believes that uniform commitment to quality in all areas of its
organization will promote a culture that meets customers' perceptions of quality.
A) just-in-time inventory
B) service quality
C) economies of scale
D) economic order quantity
E) total quality management

95) Companies employing total quality management (TQM) programs know that
A) quality control should be incorporated only in the final stage of the transformation
process.
B) benchmarking quality standards will reduce their competitive advantage.
C) reworking defective products is the best way to ensure high standards of quality.
D) TQM requires constant improvements in all areas of the company as well as
employee empowerment.
E) quality control should be a function of the operations process and not an element of
the product itself.

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96) What is an advantage of making a product correctly from the outset?
A) It allows employees to make better use of their time and materials.
B) It gives the company more time to rework defective products.
C) It makes the transformation process slower and more deliberate.
D) It allows the company to pinpoint quality problems in the production system.
E) It eliminates the need to make other products.

97) A company measures and evaluates the quality of its cars and services against the market
leaders in the automobile industry. Wherever there is a gap, the company tries to cover that
gap by imitating the best practices of these market leaders. This is known as
A) crowdsourcing.
B) benchmarking.
C) sampling.
D) mastering.
E) licensing.

98) Benchmarking lets an organization

A) replace quality with productivity.
B) know where it stands competitively in its industry.
C) protect its processes and trade secrets from rival firms.
D) eliminate quality control.
E) limit employee participation in total quality management.

99) The first step in quality control for any organization is

A) undertaking quality inspections.
B) establishing quality standards.
C) sampling products.
D) measuring productivity levels.
E) initiating corrections.

100) A cell phone manufacturer is trying to improve the quality of its products. To do so, its
management collects and analyzes information about the production process to pinpoint
quality problems in the production system. What system is management using in this
scenario?
A) total quality management
B) statistical process control
C) the Program Evaluation and Review Technique
D) the routing exercise
E) production metrics

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101) Sampling as a method to determine whether a product meets quality standards is most likely
to be used when
A) inspection tests are destructive.
B) every product must be tested because of human life and safety.
C) each product is highly customized.
D) an elaborate testing technique is required.
E) a firm has allotted a significant amount of time and money for testing.

102) The goal of the ISO 14000 standards is to

A) provide compliance management guidelines.
B) ensure consistent product quality under many conditions.
C) prevent companies from outsourcing to other countries.
D) promote a uniform approach to environmental management among companies.
E) help companies focus on productivity as opposed to quality.

103) A large international travel agency worked with an independent auditor to verify that the
businessmet the quality standards spelled out by the International Organization for
Standardization.This enabled the agency to do business in Europe. This certification for
service providers is the
A) ISO 9000.
B) ISO 14000.
C) ISO 9002.
D) ISO 19600.
E) ISO 9001.

104) What is given to companies that meet rigorous standards of quality in leadership, business
results, strategic planning, and other measures?
A) J.D. Power & Associates Annual Recognition.
B) Malcolm Baldrige National Quality Award.
C) International Organization for Standardization Nomination
D) Total Quality Management Prize
E) National Quality Control Honors

105) The COVID-19 pandemic demonstrated the importance of

A) supply chains and contingency planning.
B) quality control measures.
C) formal product inspections.
D) statistical process control.
E) total quality management and process management.

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