OM 3080 Test 1
MATT BURTON
SECTION 004

1. | Efficiency means doing the right things to create the most value for the company. True False | 2. | Effectiveness means doing the right things to create the most value for the company. True False |

3. | A doctor completes a surgical procedure on a patient without error. The patient dies anyway. In operations management terms, we could refer to this doctor as being efficient but not effective. True False | 4. | An operations and supply chain strategy must be integrated with the organization's corporate strategy. True False | 5. | One of the competitive dimensions that form the competitive position of a company when planning its strategies is cost. True False | 6. | One of the competitive dimensions that form the competitive position of a company when planning its strategies is delivery speed. True False |

| Various financial data for SunPath Manufacturing for 2012 and 2013 follow. What is the percentage change in the energy partial productivity measure between 2012 and 2013? A. | -9.22% | B. | 2.33% | C. | -0.53% | D. | 2.88% | E. | 22.2% | | . | i | What is the percentage change in the labor partial productivity measure between 2012 and 2013? A. | -9.22 |

B. | | 2.33 |

C. | -0.53 |

D. | 2.88 |

| | | |
What is the percentage change in the multifactor labor and raw materials productivity measure between 2012 and 2013?

A. | -9.22 |

B. | 2.33 |

C. | -0.53 |

D. | -2.88 |

E. | 10.39 |

| Similarity of projects allows for a streamlined and highly structured development process in which variant of the generic product development process? A. | Technology-push products | B. | Customized products | C. | Complex systems | D. | Quick-build products | E. | Process-intensive products | | | Sensitivity analysis of the base-case financial model is a useful tool for which of the following reasons? A. | To determine how long the development process can profitably last | B. | To understand how many technical people are needed to make the project a success | C. | To help understand the basic trade-offs of resources committed and cash received | D. | To identify the necessary product launch date | E. | To set marketing and sales budgets | | | Advocates of financial modeling of product design projects argue that: A. | Financial analysis focuses on measurable quantities only. | B. | Financial analysis brings discipline and control to the product development process. | C. | Sufficiently rigorous financial analysis can accurately forecast the product's profit potential. | D. | Financial analysis is as solid as the assumptions that go into the model. | E. | Financial analysis nurtures innovation and creativity. | |

. | Assume a fixed cost for a process of $15,000. The variable cost to produce each unit of product is $10, and the selling price for the finished product is $25. What is the number of units that has to be produced and sold to break even? [ 15000 (25 – 10) ] = 1000 | . | Assume a fixed cost for a process of $120,000. The variable cost to produce each unit of product is $35, and the selling price for the finished product is $50. What is the number of units that has to be produced and sold to break even? [ 120000 / (50 – 35) ] = 8000 | . | You are hired as a consultant to decide if your client should purchase a new, highly specialized piece of equipment. The product to be produced by this equipment is forecast to have a total worldwide demand of 15,000 units over the entire product life. The initial investment to acquire and install the equipment is $256,000. The variable cost to produce each unit will be $15, and the selling price for the finished product will be $30. Should the company buy the new equipment? Why? No, the cost of the equipment is 256,000 but the profit from forecasted sales is only 225,000 a loss of 31,000 [ (30-15) * 15000 ] = 225000 |

| Using the assembly-line balancing procedure, which of the following is the theoretical minimum number of workstations if the task times for the six tasks that make up the job are 4, 6, 7, 2, 6, and 5 minutes, and the cycle time is 10 minutes? (4+6+7+2+6+5) / 10 = 3 | | Using the assembly-line balancing procedure, which of the following is the theoretical minimum number of workstations if the task times for the eight tasks that make up the job are 7, 4, 7, 8, 9, 4, 3, and 6 minutes, and the cycle time is 8 minutes? (7+4+7+8+9+4+3+6) / 8 = 6 | | You have just determined the actual number of workstations that will be used on an assembly line to be 6 using the assembly-line balancing procedure. The cycle time of the line is 5 minutes, and the sum of all that tasks required on the line is 25 minutes. What is the resulting line's efficiency? [ 25 / (6*5) ] = .833 | . | You have just determined the actual number of workstations that will be used on an assembly line to be 8 using the assembly-line balancing procedure. The cycle time of the line is 10 minutes, and the sum of all that tasks required on the line is 60 minutes. What is the resulting line's efficiency? [60/ (8*10)] = .75 |

| Which company is mentioned in the text as a pioneering of the production line approach to delivering on-site service? A. | Ritz-Carlton Hotel Company | B. | McDonald's Corporation | C. | Prudential Insurance Company | D. | Southwest Airlines | E. | Citibank | | | Which of the following approaches to service design is characterized by having the customer take a greater role in the production of the service? A. | Production-line approach | B. | Personal-attention approach | C. | Quality approach | D. | Do-it-yourself approach | E. | Self-service approach | | | Which of the following is not an element of a good service guarantee? A. | Unconditional (no small print) | B. | The customer controls the process | C. | Easy to understand | D. | Easy to communicate | E. | Meaningful to the customer | |