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Northwest Christian University (NCU)
MGMT 410 ADP – Operations Management
Instructor: Aaron Blossom
Quiz #1 – Take Home: Chapters 1, 2, 4 Student Name KALLIE GARDIEPY

INSTRUCTIONS: This quiz is composed of True/False and Multiple Choice questions as well as Problem Sets. This is an open book, open note quiz. This is to be done by you alone, without help from anyone. Attach your answers to the upload area associated with this quiz. Be sure to show your work. This quiz is worth 30 points.

TRUE/FALSE QUESTIONS: Circle the appropriate letter, either T=True or F=False. Worth 2 points each. 1. Operations and supply management is defined as the design, operation, and improvement of the systems that create and deliver the firm’s primary products and services. T F 2. One of the competitive dimensions that form the competitive position of a company when planning strategies is making the best trade off. T F 3. Capacity planning is generally viewed in three time dimensions: long range (greater than one year), intermediate range (6 to 18 months), and short range (less than one month). T F

MULTIPLE CHOICE QUESTIONS: Circle the letter which gives the bestanswer. Worth 3 points each. 4. A production system involves which of the following: a. inputs, conversion, outputs, control b. primary resources, conversion, services, feedback c. utilities, storage, taxes, control d. market considerations, transportation, wages, monitoring 1. personnel, conversion, products, control

5. The triple bottom line consists of which of the following: a. making money, building stakeholder value, social responsibility b. economic prosperity, social responsibility, environmental stewardship c. building net worth, taking care of employees, helping the community d. economic prosperity, stewardship, ethical behavior 1. social responsibility, environmental stewardship, valuing employees 6. Which of the following best describes the concept of best operating level: a. as volume gets larger, the average per unit cost decreases
b. the rapid low-cost shifting from one product to another
c. rapidly increasing or decreasing production levels
d. the volume of output at which the average per unit cost is minimized
e. the best overall level of capital intensive resources 7. What is an important difference between capacity planning in services as contrasted to capacity planning in manufacturing operations: 1. time 2. location 3. demand volatility
d. utilization impacts service e. all of the above

PROBLEM SETS: These problems involve calculations. Show your work and indicate your answer. Partial credit will be given. Worth 6 points each. Questions 8 and 9 refer to the following: A regional fastfood restaurant is considering an expansion program. The major factor influencing the success of such a program is the future level of interest rates. It is estimated that there is a 20 percent chance that interest rates will increase by 2 percentage points, a 50 percent chance that they will remain the same, and a 30 percent chance that they will decrease by 2 percentage points. The alternatives they are considering and possible payoffs are shown in the following table: Rates up Rates Rates down 2 percent unchanged 2 percent
Build 50 new places $200,000 $50,000 $150,000
Build 25 new places $115,000 $26,000 $80,000
Do nothing $70,000 $0 $5,000 8. Develop a decision tree for the restaurant and indicate the probabilities and outcomes.

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