Bam 421 operations management unit exam 2


BAM 421 Operations Management Unit Exam 2




1. The analysis tool that helps determine what products to develop, and by what strategy, by listing products in descending order of their individual dollar contribution to the firm is


_______________ analysis.


a. decision tree


b. Pareto


c. breakeven


d. product-by-value


e. product life cycle




2. In which stage of the product life cycle should product strategy focus on improved cost control?


a. introduction


b. growth


c. maturity


d. saturation


e. inflation




3. _______________ is used to rank a company’s products to determine which products represent the best use of the firm’s resources, or, perhaps, to determine which products are to be eliminated.


a. Value analysis


b. Value engineering


c. Financial analysis


d. Product-by-value analysis


e. Product cost justification




4. Which of the following represents an opportunity for generating a new product?


a. understanding the customer


b. demographic change, such as decreasing family size


c. changes in professional standards


d. economic change, such as rising household incomes


e. All of the above are such opportunities.




5. What percentage of sales from new products is indicative of industry leaders?


a. below 25%


b. 25 to 35%


c. 35 to 45%


d. 50%


e. above 60%














6. Which of the following is not one of the major categories of costs associated with quality?


a. prevention costs


b. appraisal costs


c. internal failures


d. external failures


e. None of the above; they are all major categories of costs associated with quality.




7. All of the following costs are likely to decrease as a result of better quality EXCEPT _______________ costs.


a. customer dissatisfaction


b. inspection


c. scrap


d. warranty and service


e. maintenance




8. Quality can improve profitability by reducing costs. Which of the following is not an aspect of reduced costs by quality improvements?


a. flexible pricing


b. increased productivity


c. lower rework and scrap costs


d. lower warranty costs


e. All of the above are aspects of reduced costs by quality improvements.




9. Which of the four major categories of quality costs is particularly hard to quantify?


a. prevention costs


b. appraisal costs


c. internal failure costs


d. external failure costs


e. None of the above are hard to quantify.




10. Which of the following statements is NOT true?


a. Self-promotion is not a substitute for quality products.


b. Inferior products harm a firm’s profitability and a nation’s balance of payments.


c. Product liability transfers from the manufacturer to the retailer once the retailer accepts delivery of the product.


d. Quality—be it good or bad—will show up in perceptions about a firm’s new products, employment practices and supplier relations.


e. Legislation, such as the Consumer Product Safety Act, sets and enforces product standards by banning products that do not reach those standards.














11. Frito-Lay is to _____________ focus as Harley Davidson is to _____________ focus.


a. pocess; repetitive


b. product; repetitive


c. repetitive; product


d. process; product


e. product; mass customization




12. One of the similarities between repetitive focus and mass customization is _____________.


a. the wide variety of outputs


b. module inputs


c. the process layout


d. the standard cost


e. the high volume of outputs




13. Flexible equipment with rapid changeovers is most closely associated with which approach?


a. product


b. process


c. mass customization


d. repetitive


e. a and c




14. Swift movement through the facility is typical of goods in which approach?


a. product


b. process


c. mass customization


d. repetitive


e. a and c




15. High fixed costs and low variable costs are typical of which approach?


a. product


b. process


c. mass customization


d. repetitive


e. a and c




16. Instead of comparing the salaries of Detroit autoworkers to foreign autoworkers to determine if Union labor prices are the cause of Detroit’s financial woes, which of the following should be used?


a. labor content per vehicle


b. labor productivity


c. total production


d. a or b


e. None of the above; salary is the best comparison.








17. The reason fast food restaurants often are found in close proximity to each other is ______________.


a. they enjoy competition


b. location clustering near high traffic flows


c. low cost


d. availability of skilled labor


e. All of the above.




18. Currency risk is based on what assumption?


a. Firms that do not continuously innovate will lose market share.


b. Values of foreign currencies continually rise and fall in most countries.


c. Changing product lines by reacting to every current trend may alienate the customer base.


d. The value of one dollar today is greater than the value of one dollar to be received one year from now.


e. The U.S. stock market fluctuates daily.




19. Governmental attitudes toward issues such as private property, intellectual property, zoning, pollution and employment stability may change over time. The term associated with this phenomenon is _____________ risk.


a. bureaucratic


b. political


c. legislative


d. judicial


e. democratic




20. A location decision for an appliance manufacturer would tend to have a(n) _____________.


a. cost focus


b. focus on finding very highly skilled technicians


c. revenue focus


d. environmental focus


e. education focus




21. Slotting fees _____________.


a. are charged by retailers to stock a product


b. can amount to as much as $25,000


c. are not a part of Wal-Mart’s business practices


d. can reduce the ability of small businesses to introduce new products


e. All of the above.




22. Which of the following is not a retail layout practice?


a. high-draw items along periphery


b. distribute power items throughout store


c. end-aisle locations are used to maximize product exposure


d. high-margin and impulse items in prominent locations


e. All of the above are retail layout practices.








23. What is the primary reason why retailers tend to locate high-draw items around the periphery of the store?


a. More shelf space for those popular items is available around the periphery.


b. There will be less congestion of customers than there would be in the middle.


c. This arrangement will help to maximize customer exposure to other items in the store.


d. It is easier to put large advertisement signs on the outside walls right next to the items.


e. This arrangement allows customers to travel through the store as quickly as possible.




24. The fixed-position layout would be most appropriate in which of the following settings?


a. a fast-food restaurant


b. a doctor’s office


c. a casual dining restaurant


d. a cruise ship assembly facility


e. None of the above.




25. For which of the following operations would a fixed-position layout be most appropriate?


a. assembling automobiles


b. producing TV sets


c. constructing a highway tunnel or bridge


d. refining of crude oil


e. running an insurance agency




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