Production and operation management

Section 1

Multiple-Choice Questions:

1. What is operations management?

a) The management of financial services

b) The management of marketing processes

c) The management of systems or processes that create goods

and/or provide services

d) The management of human resources

2. Which of the following is NOT an input in the transformation process?

a) Land

b) Labor

c) Information

d) Finished Goods

3. Which type of variation is generally predictable and important for

capacity planning?

a) Random variation

b) Structural variation in demand

c) Assignable variation

d) None of the above

4. Which of the following is an example of a service?

a) Computer
 b) Oven

c) Air travel

d) Automobile

5. Which is NOT one of the three major functional areas of an

organization?

a) Operations

b) Finance

c) Marketing

d) Supply chain management

6. Which of the following activities is NOT typically considered part of

operations management?

a) Scheduling

b) Inventory management

c) Managing employee benefits

d) Quality assurance

7. Which of the following is considered a ‘good’?

a) Education

b) Legal counsel

c) Shampoo

d) Haircut

8. What does the ‘value-added’ refer to in the context of the

transformation process?

a) The feedback provided by customers

 b) The increase in value created by the transformation of inputs into
outputs

c) The amount of profit generated by an organization

d) The total cost of raw materials

9. Which type of variation can be influenced by managerial decisions?

a) Structural variation in demand

b) Random variation

c) Assignable variation

d) None of the above

10.Which of the following best describes a supply chain?

a) A network of facilities used for the production of goods

b) A sequence of activities and organizations involved in producing and

delivering a product

c) A process that transforms inputs into outputs

d) A system used to manage the quality of goods produced

11.Which aspect of operations management deals with decisions about

capacity and facility layout?

a) System operation decisions

b) Inventory management

c) System design decisions

d) Process control
12.What does a Pareto phenomenon refer to in operations management?

a) The principle that a few factors account for a large percentage of a

problem’s occurrence

b) A method of inventory management

c) A technique used to measure productivity

d) A statistical model used for decision-making

13.Which of the following best describes a “model” in operations

management?

a) A real-life experiment to test a business hypothesis

b) An abstraction or simplification of reality to analyze specific aspects

of a system

c) A detailed blueprint for constructing a product

d) A complete and accurate representation of an organization’s processes

14.Which of the following functional areas is responsible for the provision

of funds in an organization?

a) Marketing

b) Operations

c) Finance

d) Human Resources

15. What is the main focus of the scientific management movement in the
history of operations management?

a) Maximizing efficiency through worker motivation

b) Improving management’s understanding of worker psychology

 c) Increasing output through observation, measurement, and work
analysis

d) Reducing environmental impacts of production

True/False Questions:
1. Operations management only applies to the production of physical
goods.
Answer: False
2. Supply chain refers to the sequence of activities and organizations
involved in producing and delivering a good or service.
Answer: True
3. The operations manager’s job primarily focuses on the strategic design
of the system.
Answer: False
4. Sustainability in operations management includes social criteria in
decision-making.
Answer: True
5. Random variation in a system can be controlled by managers.
Answer: False
6. The operations manager’s job involves only strategic decisions and
excludes tactical or operational decisions.
Answer: False
7. The inputs of a production system include land, labor, capital, and
information.
Answer: True
8. A supply chain includes both the internal operations of a company and
its suppliers’ suppliers.
Answer: True
9. Operations management is less important in service industries
compared to manufacturing industries.
Answer: False
10.The goal of quality assurance in operations management is to ensure
products meet customer specifications and standards.
Answer: True
 11.Historical developments like the Industrial Revolution and scientific
management had a major impact on the evolution of operations
management.
Answer: True
12.Random variations in processes can be reduced or eliminated by
management decisions.
Answer: False
13.Assigning higher priority to critical tasks that have the greatest impact
on operations is a key concept of the Pareto phenomenon.
Answer: True
14.Operations management has no significant role in marketing-related
activities within a business.
Answer: False
15.Using computerized models guarantees better decision-making in
operations management.
Answer: False

ESSAY QUESTIONS:

1. Explain the differences between production and service operations. Provide

examples for each.

Production operations typically focus on the manufacturing of physical goods.

These goods are tangible, meaning they can be touched, stored, and inventoried.
The process is often standardized, allowing for uniform outputs, and customer
contact is usually minimal. Examples of production operations include the
manufacturing of cars, computers, or clothing.

Service operations, on the other hand, revolve around providing intangible

products like services, which cannot be stored or inventoried. Service operations
often require a higher level of customer interaction and customization. The output
in services varies based on customer needs, and there is a strong focus on time and
location. Examples include healthcare, education, or legal services.
Key differences:

 Tangibility: Goods are tangible, whereas services are intangible.

 Uniformity of Output: Production tends to be more standardized, while
service operations often deal with variable outputs due to customer
interaction.
 Customer Contact: Services generally require more direct customer
interaction than production operations.
 Measurement of Productivity: Productivity in manufacturing is easier to
measure than in services due to the physical nature of goods.

2. Discuss the importance of operations management in a business

organization. How does it relate to other functional areas such as finance and
marketing?

Operations management is critical to ensuring that a company efficiently creates

goods or provides services that meet customer needs. It focuses on optimizing
processes, controlling costs, and maintaining quality, all of which are key to a
company’s success. Operations management helps ensure that resources are used
effectively and that production or service delivery is done on time, minimizing
waste and maximizing output.

 Relationship with Finance: Operations management works closely with

finance to manage budgets, control costs, and ensure that financial resources
are appropriately allocated for production or service provision. Operations
decisions can have significant financial impacts, such as investment in new
equipment, cost management of materials, and labor costs.
 Relationship with Marketing: Operations and marketing must align to
ensure that customer demands are met. Marketing generates demand through
promotional efforts and sales forecasting, while operations ensures that
products or services are available to meet this demand in a timely and cost-
effective manner.

Without effective operations management, an organization risks inefficiencies,

higher costs, and failure to meet customer expectations, which directly impacts
profitability and market competitiveness.
3. Describe the transformation process model. How do inputs, outputs, and
feedback control contribute to effective operations management?

The transformation process model refers to the systematic process through which
inputs are transformed into outputs. It is at the heart of operations management and
applies to both production and service industries.

 Inputs: These are the resources that are transformed during the production
process. Inputs include physical resources like raw materials (e.g., steel for
manufacturing cars), labor (employees working on the production line),
capital (machinery and facilities), and information (data used to guide
production processes).
 Transformation Process: This is the core of operations management, where
inputs are converted into outputs. In manufacturing, this could involve
assembling raw materials into a finished product. In service operations, this
could involve the application of skills to solve a client’s problem (e.g.,
providing legal counsel or a haircut).
 Outputs: The outputs are the final goods or services that are produced. In
manufacturing, this could be a car, while in service, it could be the delivery
of a service such as consulting or transportation.
 Feedback and Control: Feedback is critical for ensuring that operations
meet quality standards and efficiency goals. Measurements are taken at
various points in the transformation process (e.g., quality checks, customer
satisfaction surveys), and the results are compared to established standards.
If deviations are found, corrective actions are taken to bring the process back
into alignment with goals. This ensures continuous improvement in both
production and service processes.