Chapter 1: Introduction to Managing Global Operations and Supply Chains
Test Bank
Multiple Choice
1. The proportion of businesses that operate in global markets is ______.
A. not known
B. about 50%
C. less than 58%
D. more than 65%
Ans: D
KEY: Learning Objective: 1.1: Explain how globalization has influenced the management of supply chains and their operations.
REF: Cognitive Domain: Knowledge
Answer Location: Supply chains and operations management in the global economy
Difficulty Level: Easy
TOP: AACSB: Systems and processes in organizations
2. The benefits of offshoring include ______.
A. availability of skilled human resources
B. increased labor costs
C. high processing costs
D. availability of child labor
Ans: A
KEY: Learning Objective: 1.1: Explain how globalization has influenced the management of supply chains and their operations.
REF: Cognitive Domain: Knowledge
Answer Location: Offshoring and Outsourcing
Difficulty Level: Easy
TOP: AACSB: Systems and processes in organizations
3. Which of the following is a risk that a company faces when it outsources its operations?
A. The third-party provider may not have the degree of expertise in in-house operations that the outsourcing company has.
B. The cost of labor for the outsourcing company may decline.
C. If the outsourcing operation is too profitable, the outsourcing company may want to acquire the third-party provider.
D. If the outsourcing operation is too successful, the third-party provider may want to acquire the outsourcing company.
Ans: A
KEY: Learning Objective: 1.1: Explain how globalization has influenced the management of supply chains and their operations.
REF: Cognitive Domain: Analysis
Answer Location: Offshoring and Outsourcing
Difficulty Level: Hard
TOP: AACSB: Analytical thinking
4. Thanks to the benefits of outsourcing and offshoring, manufacturing in the United States, as a percentage of GDP, has ______.
A. declined from about 30% after World War II to 12% by 2017
B. increased from about 12% after World War II to 30% by 2017
C. declined from about 65% after World War II to 30% by 2017
D. increased from about 30% after World War II to 65% by 2017
Ans: A
KEY: Learning Objective: 1.1: Explain how globalization has influenced the management of supply chains and their operations.
REF: Cognitive Domain: Analysis
Answer Location: Offshoring and Outsourcing
Difficulty Level: Hard
TOP: AACSB: Analytical thinking
5. Which of the following strategies can American manufacturers follow to survive the drain of manufacturing operations to other countries?
A. develop cutting-edge technologies that are difficult to replicate
B. reduce prices
C. switch to new products that are not manufactured elsewhere
D. reduce quality with a view to reduce costs
Ans: A
KEY: Learning Objective: 1.1: Explain how globalization has influenced the management of supply chains and their operations.
REF: Cognitive Domain: Analysis
Answer Location: Consider This 1.1: Is American Manufacturing Dead?
Difficulty Level: Hard
TOP: AACSB: Analytical thinking
6. Which of the following are reasons a company may outsource its operations?
A. to access specialized skills
B. to have greater control over its operations
C. to comply with foreign government regulations
D. to avoid trade barriers
Ans: A
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Comprehension
Answer Location: Offshoring and Outsourcing
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
7. The growth of the service sector in the United States has ______.
A. limited the number of career possibilities for professionals in supply chain management
B. been about the same as the growth in manufacturing sector
C. led to the decline in importance for supply chain management as this is relevant only to physical goods and services
D. increased career opportunities for professionals in supply chain management
Ans: D
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Application
Answer Location: Globalization, Supply Chains, and Operations Management
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
8. Contracting with a third party or an external company to manufacture a good or deliver a service is known as ______.
A. offshoring
B. outsourcing
C. domestic production
D. internalization
Ans: B
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Comprehension
Answer Location: Offshoring and Outsourcing
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
9. By effective operations management, we can ______.
A. increase costs to the consumer
B. improve quality of goods and service
C. reduce the aesthetic appearance of goods
D. deliver products to customer more slowly
Ans: B
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Knowledge
Answer Location: What Does Operations Management Entail?
Difficulty Level: Easy
TOP: AACSB: Systems and processes in organizations
10. Which of the following is a characteristic of a product or good (i.e., not a service)?
A. helps to transform the customer physically or psychologically
B. is intangible
C. can be inventoried
D. always requires a high degree of customer contact
Ans: C
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Comprehension (Understand)
Answer Location: What Does Operations Management Entail?
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
11. Which of the following is a characteristic of a service (i.e., not a product or good)?
A. usually labor intensive
B. involves the transformation of raw materials
C. easy to track and monitor quality
D. can be easily stored for future use
Ans: A
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Comprehension
Answer Location: What Does Operations Management Entail?
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
12. The fact that services cannot be stored for future use leads to services being described as ______.
A. time perishable
B. readily depreciated
C. consumable
D. temporary
Ans: A
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Comprehension
Answer Location: What Does Operations Management Entail?
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
13. The nature of services is such that ______.
A. customers need not be involved in the delivery of the service
B. a service to one customer can be transferred to another customer
C. it is primarily capital (and not labor) intensive
D. a service needs to be consumed as it is produced
Ans: D
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Application
Answer Location: What Does Operations Management Entail?
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
14. The following are pairs of transformation types with examples of the transformation. Which of these is correctly paired?
A. Physical transformation, as in teaching and communication
B. Locational transformation, as in banking and retail operations
C. Psychological transformation, as in entertainment
D. Informational transformation, as in transportation and warehouse operations
Ans: C
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Application
Answer Location: What Does Operations Management Entail?
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
15. The operations management function ______.
A. transforms outputs such as materials and energy and labor into useful products and services
B. is responsible for designing, operating, and improving the processes used to produce goods and services that the final consumer values
C. refers to the efficient and effective management of capital
D. helps the company to identify new markets and what customers in these markets want
Ans: B
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Application
Answer Location: What Does Operations Management Entail?
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
16. In the context of a global supply chain, which of the following players does the operations management function bring together?
A. the individual firm and its global suppliers
B. potential consumers of the firm’s products and local retailers
C. sources of finance (e.g., banks) and consumers of capital
D. equipment manufacturers and suppliers of equipment parts
Ans: A
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Application
Answer Location: What Does Operations Management Entail?
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
17. To be responsive to changes in customer demands, technology, competition, and resources, ______.
A. the operations management function must be careful about choosing the right area in which to function
B. the operations management function must be dynamic
C. the operations management function must be cost conscious to ensure that change is not too expensive
D. the operations management function must seek to outsource more of its operations
Ans: B
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Analysis
Answer Location: What Does Operations Management Entail?
Difficulty Level: Hard
TOP: AACSB: Analytical thinking
18. The following are different organizational functions paired with a description of the function. Which of these is correctly paired?
A. Finance function: gathers market intelligence and can provide the operations group with meaningful ideas for product-improvement programs.
B. Marketing function: provides the operations group with technical information support.
C. Information technology function: provides funding that allows a firm’s operations group to produce products and invest in new production equipment.
D. Human resources function: provides the recruitment, hiring, and training of operations personnel as well as health-and-safety compliance training and advice related to current environmental and regulatory issues.
Ans: D
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Comprehension
Answer Location: What Does Operations Management Entail?
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
19. The scope of the operations function ______.
A. is restricted to areas within the firm
B. is applicable only to manufacturing
C. is applicable only to services
D. applies both within and outside the firm
Ans: D
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Comprehension
Answer Location: What Does Operations Management Entail?
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
20. The operations function needs to interface with which organizations?
A. government agencies or regulatory organizations to comply with given rules and regulations
B. competitors so as to be able to fix prices to ensure good margins on products and services
C. the agencies of the United Nations to ensure compliance with global regulations
D. agencies representing consumers to ensure that consumer wants are satisfied
Ans: A
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Comprehension
Answer Location: What Does Operations Management Entail?
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
21. Which of the following is a challenge that an organization will face in managing global supply chains?
A. deciding which functions should be outsourced and which functions should be performed in-house
B. deciding the sources and uses of capital
C. identifying new markets for its products
D. recruiting employees for global operations
Ans: A
KEY: Learning Objective: 1.1: Explain how globalization has influenced the management of supply chains and their operations.
REF: Cognitive Domain: Comprehension
Answer Location: What Does Operations Management Entail?
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
22. Which of the following is part of the outbound portion of a company’s supply chain?
A. local or foreign suppliers of product ideas and designs
B. suppliers of raw materials
C. distribution centers
D. suppliers of partly assembled products and other inputs
Ans: C
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Application
Answer Location: Supply Chain Structures and Partners
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
23. Which of the following is part of the inbound portion of a company’s supply chain?
A. retailers
B. basic raw materials and components, transportation links, and warehouses
C. wholesalers
D. regulatory organizations and government agencies
Ans: B
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Application
Answer Location: Supply Chain Structures and Partners
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
24. First-tier suppliers refers to ______.
A. suppliers who provide components, systems, or finished goods and services to the primary firm
B. suppliers who provide components, systems, or finished goods and services that are of high quality
C. suppliers who provide components, systems, or finished goods and services at the lowest cost
D. suppliers who provide components, systems, or finished goods and services at the highest cost
Ans: A
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Comprehension
Answer Location: First-Tier Suppliers
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
25. First-tier suppliers are those who ______.
A. depend on the primary firm for certain supplies or raw materials
B. depend on other suppliers for certain supplies or raw materials
C. charge the highest prices
D. charge the lowest prices
Ans: B
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Application
Answer Location: First-Tier Suppliers
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
26. Final consumers are ______.
A. those people and firms who actually consume the goods produced by the primary firm
B. also known as intermediate users
C. those people and firms who make the decision to purchase the product
D. those people and firms involved in financing the purchase of the product
Ans: A
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Application
Answer Location: Final Consumers
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
27. The three general types of decisions with regard to the operations and supply chain function include ______.
A. decisions related to the primary firm, first-tier suppliers, and second-tier suppliers
B. corporate, business, and functional decisions
C. strategic, tactical, and operational decisions
D. logistics, transportation, and warehousing decisions
Ans: C
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Application
Answer Location: Decisions in Operations and Supply Chain Management
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
28. Which of the following represents the correct pairing of one of the three general types of decisions with regard to the operations and supply chain function with its description?
A. strategic: medium-term decisions
B. tactical: long-term decisions
C. operational: decisions with respect to day-to-day operations
D. functional: decisions with regard to diversification of the firm
Ans: C
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Application
Answer Location: Decisions in Operations and Supply Chain Management
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
29. A service supply chain ______.
A. is a stand-alone organization (i.e., not connected to other organizations)
B. uses resources and transforms inputs (skills and knowledge) into services
C. is involved in processing the financing and other services associated with a supply chain for products
D. is less demanding of operations management than a supply chain for products
Ans: B
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Application
Answer Location: Operations Interfaces in a Service Supply Chain
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
30. In a service supply chain, ______.
A. activities such as supplier relationship management, demand management, and customer relationship management are very different from those that exist in a product supply chain
B. the main similarity with the product supply chain is the degree of interaction between the value provider and the customer
C. there is a greater distance between the supplier and consumer of the service in comparison to a product supply chain
D. the interfaces and activities such as supplier relationship management, demand management, and customer relationship management are identical to those that exist in a product supply chain
Ans: D
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Application
Answer Location: Operations Interfaces in a Service Supply Chain
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
31. If we look back in history and reflect on the great civilizations, we can find early examples of production accomplishments in ______.
A. China
B. the United States
C. Austria
D. Bangladesh
Ans: A
KEY: Learning Objective: 1.5: Describe the evolution of operations and supply chain management from the Industrial Revolution to the present.
REF: Cognitive Domain: Knowledge
Answer Location: The Evolution of Operations and Supply Chain Management
Difficulty Level: Easy
TOP: AACSB: Systems and processes in organizations
32. Organized and large-scale production of consumer goods began ______.
A. during the Industrial Revolution
B. around 300 B.C.E
C. only in the early 20th century
D. after World War II
Ans: A
KEY: Learning Objective: 1.5: Describe the evolution of operations and supply chain management from the Industrial Revolution to the present.
REF: Cognitive Domain: Knowledge
Answer Location: The Evolution of Operations and Supply Chain Management
Difficulty Level: Easy
TOP: AACSB: Systems and processes in organizations
33. Most of the innovations in operations management occurred during the ______ century.
A. 18th
B. early 19th
C. late 19th
D. 20th
Ans: D
KEY: Learning Objective: 1.5: Describe the evolution of operations and supply chain management from the Industrial Revolution to the present.
REF: Cognitive Domain: Knowledge
Answer Location: The Evolution of Operations and Supply Chain Management
Difficulty Level: Easy
TOP: AACSB: Systems and processes in organizations
34. The importance of operations strategies was stimulated by ______.
A. loss of market share due to global competition
B. operations personnel making significant contributions to corporate strategy
C. the adoption of operations strategies worldwide
D. less emphasis being placed on marketing and finance functions
Ans: A
KEY: Learning Objective: 1.5: Describe the evolution of operations and supply chain management from the Industrial Revolution to the present.
REF: Cognitive Domain: Knowledge
Answer Location: The Evolution of Operations and Supply Chain Management
Difficulty Level: Easy
TOP: AACSB: Systems and processes in organizations
35. Achieving total quality requires ______.
A. the commitment of the organization’s management and employees
B. the involvement of the United Nations
C. the involvement of the ISO
D. the involvement of the U.S. Senate
Ans: A
KEY: Learning Objective: 1.5: Describe the evolution of operations and supply chain management from the Industrial Revolution to the present.
REF: Cognitive Domain: Comprehension
Answer Location: The Evolution of Operations and Supply Chain Management
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
36. The Six Sigma approach to quality ______.
A. was initiated by Motorola
B. was started in 1962
C. was welcomed by all companies
D. applies only to manufacturing
Ans: A
KEY: Learning Objective: 1.5: Describe the evolution of operations and supply chain management from the Industrial Revolution to the present.
REF: Cognitive Domain: Comprehension
Answer Location: The Evolution of Operations and Supply Chain Management
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
37. The application of Six Sigma is least likely to be appropriate for ______.
A. manufacturing
B. services
C. supply chain
D. creative works like painting
Ans: D
KEY: Learning Objective: 1.5: Describe the evolution of operations and supply chain management from the Industrial Revolution to the present.
REF: Cognitive Domain: Comprehension
Answer Location: The Evolution of Operations and Supply Chain Management
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
38. Which of the following quality philosophies is correctly paired with its strategy?
A. lean: improving quality by reducing the number of defects
B. Six Sigma: eliminating waste
C. agile manufacturing: using technology to integrate different operations
D. TQM: expediting rework
Ans: C
KEY: Learning Objective: 1.5: Describe the evolution of operations and supply chain management from the Industrial Revolution to the present.
REF: Cognitive Domain: Application
Answer Location: The Evolution of Operations and Supply Chain Management
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
39. The General Agreement on Tariffs and Trade (GATT) ______.
A. is a treaty governing interstate commerce within different countries
B. is designed to promote trade between different states within a country
C. levies a flat rate or tariff on trade between member countries
D. was established in 1947
Ans: D
KEY: Learning Objective: 1.5: Describe the evolution of operations and supply chain management from the Industrial Revolution to the present.
REF: Cognitive Domain: Comprehension
Answer Location: The Evolution of Operations and Supply Chain Management
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
40. The WTO (World Trade Organization) ______.
A. replaced the GATT in 1945
B. governs trade in goods but not services
C. has opened up markets for regulated industries (e.g., agriculture and textiles)
D. is governed by NAFTA
Ans: C
KEY: Learning Objective: 1.5: Describe the evolution of operations and supply chain management from the Industrial Revolution to the present.
REF: Cognitive Domain: Comprehension
Answer Location: The Evolution of Operations and Supply Chain Management
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
41. The formation of the European Union ______.
A. encouraged trade barriers among European countries
B. led to strict quality and environmental standards that companies have to meet in order to do business with member countries.
C. was initiated by World War I
D. was initiated by World War II
Ans: B
KEY: Learning Objective: 1.5: Describe the evolution of operations and supply chain management from the Industrial Revolution to the present.
REF: Cognitive Domain: Comprehension
Answer Location: The Evolution of Operations and Supply Chain Management
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
42. Which of the following is a management challenge faced in recent years by supply chain managers?
A. The growth in prosperity of developing countries has increased the demand for goods and services from developed nations, causing a strain on managing the distribution to developing countries.
B. Managers are now expected to handle a shift from low- to high-volume production.
C. Most of the problems faced by supply chain managers are internal to their company’s operations.
D. Managers must deal with an increase in trade turbulence.
Ans: D
KEY: Learning Objective: 1.6: Identify some of the emerging trends in operations and supply chain management.
REF: Cognitive Domain: Application
Answer Location: Current and Emerging Issues in Operations and Supply Chain Management
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
43. Risks in global supply chain management are increasing due to ______.
A. greater levels of outsourcing and offshoring
B. reduction in complexity of products and services
C. an increase in domestic resourcing and manufacturing
D. emphasis on supporting local manufacturers
Ans: A
KEY: Learning Objective: 1.6: Identify some of the emerging trends in operations and supply chain management.
REF: Cognitive Domain: Application
Answer Location: Current and Emerging Issues in Operations and Supply Chain Management
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
44. Factors that have increased the risk of global supply chain management include the ______.
A. reduced financial volatility
B. stability of energy prices
C. increases in complexity of goods and services produced
D. emergence of the European Union as a major economic power
Ans: C
KEY: Learning Objective: 1.6: Identify some of the emerging trends in operations and supply chain management.
REF: Cognitive Domain: Application
Answer Location: Greater Supply Chain Risks and Supply Chain Restructuring
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
45. The growing demand for businesses to operate in a socially responsible manner means that ______.
A. focusing solely on costs and time efficiency is sufficient to meet sustainability goals
B. business strategies should also incorporate responsible labor practices
C. operations should maximize the use of the world’s resources before they are used up by others
D. governments should reduce emphasis on free trade
Ans: B
KEY: Learning Objective: 1.6: Identify some of the emerging trends in operations and supply chain management.
REF: Cognitive Domain: Application
Answer Location: Sustainability
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
46. The operations function of most businesses focuses ______.
A. only on services
B. only on goods
C. on a mix of goods and services
D. on a mix of goods and financing
Ans: C
KEY: Learning Objective: 1.6: Identify some of the emerging trends in operations and supply chain management.
REF: Cognitive Domain: Application
Answer Location: What Does Operations Management Entail?
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
47. Sustainability refers to ______.
A. the use of methods, systems, and materials that will not deplete resources or harm natural cycles
B. a company’s ability to ensure that suppliers deliver raw materials and other inputs on a timely basis over an extended period
C. the financial capability of a firm to maintain its operations without resorting to external funding
D. the use of proper methods for maintaining the longevity of machines and other equipment
Ans: A
KEY: Learning Objective: 1.6: Identify some of the emerging trends in operations and supply chain management.
REF: Cognitive Domain: Application
Answer Location: Sustainability
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
48. Outsourcing refers to contracting a portion of operations to a third party. Such outsourcing ______.
A. refers to third-party contracting for manufacturing only
B. refers to third-party contracting when the third party is located in a different country
C. is applicable only for services
D. can improve operational flexibility
Ans: D
KEY: Learning Objective: 1.6: Identify some of the emerging trends in operations and supply chain management.
REF: Cognitive Domain: Application
Answer Location: Offshoring and Outsourcing
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
49. Companies that take a creative and proactive approach to incorporating sustainability into their operations and supply chains ______.
A. can reduce reliance on external resources
B. craft legal contracts that will penalize suppliers in case of failure to meet the company’s supply requirements
C. can reduce costs and mitigate risks
D. can charge high prices for products of poor quality
Ans: C
KEY: Learning Objective: 1.6: Identify some of the emerging trends in operations and supply chain management.
REF: Cognitive Domain: Application
Answer Location: Sustainability
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
50. The fact that people around the world can watch MTV, wear Levi’s, or eat at Pizza Hut points primarily to ______.
A. the ability of consumers to buy products or services from firms, regardless of where the firms or the customers are located
B. economies of scale in production
C. the increase in global offshoring
D. the increase in global outsourcing
Ans: A
KEY: Learning Objective: 1.1: Explain how globalization has influenced the management of supply chains and their operations.
REF: Cognitive Domain: Application
Answer Location: Globalization, Supply Chains, and Operations Management
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
51. A career in operations management is facilitated by ______.
A. membership in the WTO
B. an undergraduate or graduate degree in operations management
C. membership in the GATT
D. an interest in manufacturing rather than services
Ans: B
KEY: Learning Objective: 1.1: Explain how globalization has influenced the management of supply chains and their operations.
REF: Cognitive Domain: Application
Answer Location: Consider This 1.2: Why You Should Consider a Career in Operations and Supply Chain Management
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
52. Who among the following is responsible for the physical environment (e.g., a company’s buildings, furniture, and equipment)?
A. quality assurance manager
B. facilities coordinator
C. logistics manager
D. warehouse operations manager
Ans: B
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Comprehension
Answer Location: Table 1.1: Careers in Operations and Supply Chain Management
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
53. Operations management in an organization ______.
A. is concerned only with short-term strategies as the environment is rapidly changing
B. guides corporate strategy
C. is a part of functional strategy
D. has declined in importance in recent years
Ans: C
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Comprehension
Answer Location: What Does Operations Management Entail?
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
54. Operations management can add economic value by ______.
A. increasing costs to customers
B. enhancing the value of products and services
C. identifying markets for new products
D. identifying new markets for existing products
Ans: C
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Application
Answer Location: What Does Operations Management Entail?
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
55. The textbook discusses Frito-Lay’s preestablished standards to measure crunchiness and salt content of its chips as an example of ______.
A. the quality of the products Frito-Lay produces
B. the ease of measuring quality in products as contrasted to services
C. the type of benchmarks and standards companies may have for their products and services
D. the superiority of Frito-Lay’s chips to McDonnell’s French fries
Ans: B
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Application
Answer Location: Table 1.2: Differences Between Goods and Services
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
56. The subjective nature of service quality means that ______.
A. the same service may be viewed differently by different customers
B. different services are viewed in an identical fashion by different customers
C. it is easier to assess service quality than product quality
D. it is easier to satisfy service customers than product customers
Ans: A
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Application
Answer Location: Table 1.2: Differences Between Goods and Services
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
57. Which of the following countries is the world’s leading provider of services?
A. Brazil
B. Russia
C. India
D. China
Ans: C
KEY: Learning Objective: 1.1: Explain how globalization has influenced the management of supply chains and their operations.
REF: Cognitive Domain: Knowledge
Answer Location: Consider This 1.3: Service Operations in India
Difficulty Level: Easy
TOP: AACSB: Systems and processes in organizations
58. The provision of services can include services such as ______.
A. manufacture of parts
B. development of raw materials in house
C. provision of finance
D. research and development
Ans: D
KEY: Learning Objective: 1.1: Explain how globalization has influenced the management of supply chains and their operations.
REF: Cognitive Domain: Knowledge
Answer Location: Consider This 1.3: Service Operations in India
Difficulty Level: Easy
TOP: AACSB: Systems and processes in organizations
59. In the process of transforming inputs into value added goods and services, it is useful to have a feedback loop. Which of the following is less likely to be considered part of the operations feedback loop?
A. communications from customers to the company
B. feedback from the manufacturer to its suppliers
C. communications from the manufacturing manager to the company’s management
D. communications from customers to the company’s suppliers
Ans: D
KEY: Learning Objective: 1.1: Explain how globalization has influenced the management of supply chains and their operations.
REF: Cognitive Domain: Knowledge
Answer Location: What Does Operations Management Entail?
Difficulty Level: Easy
TOP: AACSB: Systems and processes in organizations
60. In viewing the educational system as a process of transforming inputs into outputs, which of the following pairs is correct?
A. inputs: students graduating with good grades
B. outputs: students and faculty
C. transformation process: teaching
D. feedback loop: research publications by faculty
Ans: C
KEY: Learning Objective: 1.3: Trace the path of a raw material from the start of the supply chain to the final consumer.
REF: Cognitive Domain: Application
Answer Location: What Does Operations Management Entail?
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
61. Trends that are expected to continue with regard to resource usage include ______.
A. elimination of waste
B. decline in productivity
C. increase in resource price
D. decline in sustainability
Ans: A
KEY: Learning Objective: 1.6: Identify some of the emerging trends in operations and supply chain management.
REF: Cognitive Domain: Comprehension
Answer Location: Greater Supply Chain Risks and Supply Chain Restructuring
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
62. Challenges that a company can face with regard to global supply chains include ______.
A. political upheavals
B. decline in the importance of offshoring
C. decline in the importance of outsourcing
D. impact of organizations such as the European Union
Ans: C
KEY: Learning Objective: 1.6: Identify some of the emerging trends in operations and supply chain management.
REF: Cognitive Domain: Application
Answer Location: Current and Emerging Issues in Operations and Supply Chain Management
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
63. Some of the risks presented by offshoring jobs include ______.
A. geopolitical risks
B. increasing use of English as a common language
C. reduction in trade barriers
D. growth in political stability in developing economies
Ans: A
KEY: Learning Objective: 1.3: Trace the path of a raw material from the start of the supply chain to the final consumer.
REF: Cognitive Domain: Comprehension
Answer Location: Offshoring and Outsourcing
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
64. One reason why many of the manufacturing jobs are outsourced is ______.
A. lower labor cost in these countries
B. increased political risk
C. trade barriers
D. greater potential for products of poor quality
Ans: A
KEY: Learning Objective: 1.1: Explain how globalization has influenced the management of supply chains and their operations.
REF: Cognitive Domain: Comprehension
Answer Location: Offshoring and Outsourcing
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
65. A U.S. manufacturing worker’s average hourly compensation is approximately equal to ______.
A. the weekly average compensation for a manufacturing worker in Sri Lanka
B. the weekly average compensation for a German manufacturing worker
C. the monthly average compensation for a manufacturing worker in Sri Lanka
D. the monthly average compensation for a German manufacturing worker
Ans: A
KEY: Learning Objective: 1.1: Explain how globalization has influenced the management of supply chains and their operations.
REF: Cognitive Domain: Comprehension
Answer Location: Offshoring and Outsourcing
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
True/False
1. A supply chain includes all organizations that contribute to the development, manufacture, and shipping of products to a consumer.
Ans: T
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Analysis
Answer Location: Globalization, Supply Chains, and Operations Management
Difficulty Level: Hard
TOP: AACSB: Analytical thinking
2. Managing supply chains has become easier, as a large number of operations are outsourced to other companies.
Ans: F
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Analysis
Answer Location: Globalization, Supply Chains, and Operations Management
Difficulty Level: Hard
TOP: AACSB: Analytical thinking
3. Logistics refers to the transportation and storage of goods and materials both for the outbound and inbound areas of the supply chain.
Ans: T
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Comprehension
Answer Location: Consider This 1.2: Why You Should Consider a Career in Operations and Supply Chain Management
Difficulty Level: Easy
TOP: AACSB:Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
4. Different customers may view the same service as having varying degrees of quality.
Ans: T
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Application
Answer Location: What Does Operations Management Entail?
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
5. When we consider operations as a transformation system, labor, capital, and energy are considered as inputs into the system.
Ans: T
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Application
Answer Location: What Does Operations Management Entail?
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
6. To a primary firm, a first-tier supplier supplies finished goods and a second-tier supplier supplies raw materials.
Ans: T
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Application
Answer Location: First-Tier Suppliers | Second-Tier Suppliers
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
7. Outbound warehousing refers to storing finished goods prior to their shipment to a wholesale or retail destination.
Ans: T
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Application
Answer Location: Inbound and Outbound Storage
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
8. Only the primary firms (not first- or second-tier suppliers) have storage facilities.
Ans: F
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Application
Answer Location: Inbound and Outbound Storage
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
9. A primary firm may have many wholesalers and retailers.
Ans: T
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Application
Answer Location: Wholesalers and Retailers
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
10. In the hierarchy of decisions, strategic decisions follow operational decisions.
Ans: F
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Application
Answer Location: Decisions in Operations and Supply Chain Management
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
11. Tactical and operational decisions have to conform to their higher-order, strategic choices.
Ans: T
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Application
Answer Location: Decisions in Operations and Supply Chain Management
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
12. Operations interfaces in a product supply chain include upstream, downstream, and vertical interfaces.
Ans: T
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Application
Answer Location: Operations Interfaces in a Product Supply Chain
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
13. With regard to operations interfaces in a product supply chain, vertical interfaces include technology management and service support.
Ans: T
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Application
Answer Location: Operations Interfaces in a Product Supply Chain
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
14. With technology management, we are continuously looking for ways to improve the design of facilities and engineer our processes to make our production more efficient.
Ans: T
KEY: Learning Objective: 1.4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
REF: Cognitive Domain: Application
Answer Location: Operations Interfaces in a Product Supply Chain
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
15. The function of operations strategy is to facilitate in identifying whether sales can be improved through rebates or advertising.
Ans: F
KEY: Learning Objective: 1.5: Describe the evolution of operations and supply chain management from the Industrial Revolution to the present.
REF: Cognitive Domain: Application
Answer Location: The Evolution of Operations and Supply Chain Management
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
16. BPR is the radical redesign of a firm’s existing workflows and resources to reduce operational costs.
Ans: T
KEY: Learning Objective: 1.5: Describe the evolution of operations and supply chain management from the Industrial Revolution to the present.
REF: Cognitive Domain: Application
Answer Location: The Evolution of Operations and Supply Chain Management
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
17. ERP systems were developed in the early 1960s.
Ans: F
KEY: Learning Objective: 1.5: Describe the evolution of operations and supply chain management from the Industrial Revolution to the present.
REF: Cognitive Domain: Knowledge
Answer Location: The Evolution of Operations and Supply Chain Management
Difficulty Level: Easy
TOP: AACSB: Systems and processes in organizations
18. One of the consequences of globalization is an increase in consolidation of businesses.
Ans: F
KEY: Learning Objective: 1.5: Describe the evolution of operations and supply chain management from the Industrial Revolution to the present.
REF: Cognitive Domain: Comprehension
Answer Location: The Evolution of Operations and Supply Chain Management
Difficulty Level: Easy
TOP: AACSB: Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society
19. As a response to managing challenges in the supply chain, supply chains are being broken up into smaller fragments to make them more flexible.
Ans: F
KEY: Learning Objective: 1.6: Identify some of the emerging trends in operations and supply chain management.
REF: Cognitive Domain: Application
Answer Location: Greater Supply Chain Risks and Supply Chain Restructuring
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
20. Globalization means a business can avoid payment of tariffs on goods and services.
Ans: F
KEY: Learning Objective: 1.1: Explain how globalization has influenced the management of supply chains and their operations.
REF: Cognitive Domain: Application
Answer Location: Globalization, Supply Chains, and Operations Management
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
21. Companies typically engage in either outsourcing or offshoring but not both.
Ans: F
KEY: Learning Objective: 1.1: Explain how globalization has influenced the management of supply chains and their operations.
REF: Cognitive Domain: Application
Answer Location: Offshoring and Outsourcing
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
22. Responsibility of the purchasing manager includes scheduling production and managing inventory of raw materials, work-in-progress, and finished products.
Ans: F
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Application
Answer Location: Table 1.1: Careers in Operations and Supply Chain Management
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
23. The Quality assurance manager always reports directly to the CEO of the company.
Ans: F
KEY: Learning Objective: 1.2: Describe the role of operations management within a company and in society.
REF: Cognitive Domain: Application
Answer Location: Table 1.1: Careers in Operations and Supply Chain Management
Difficulty Level: Medium
TOP: AACSB: Application of knowledge
24. With regard to the current global business environment, companies are competing in a very complex environment.
Ans: T
KEY: Learning Objective: 1.3: Trace the path of a raw material from the start of the supply chain to the final consumer.
REF: Cognitive Domain: Analysis
Answer Location: Current and Emerging Issues in Operations and Supply Chain Management
Difficulty Level: Hard
TOP: AACSB: Analytical thinking
