Principles of Operations Management 9th By Heizer – Test Bank

Complete Test Bank With Answers

 

 

Sample Questions Posted Below

 

CHAPTER 2: OPERATIONS STRATEGY IN A GLOBAL ENVIRONMENT

TRUE/FALSE

NAFTA seeks to phase out all trade and tariff barriers among Canada, Mexico, and the United States.

True (A global view of operations, moderate) {AACSB: Multiculture and Diversity}

The World Trade Organization has helped to significantly reduce tariffs around the world.

True (Global company profile, moderate) {AACSB: Multiculture and Diversity}

Production processes are being dispersed to take advantage of national differences in labor costs.

True (A global view of operations, moderate) {AACSB: Multiculture and Diversity}

NAFTA seeks to phase out all trade and tariff barriers between the United States and Asia.

False (A global view of operations, moderate) {AACSB: Multiculture and Diversity}

One reason for global operations is to gain improvements in the supply chain.

True (A global view of operations, moderate) {AACSB: Multiculture and Diversity}

One reason to globalize is to learn to improve operations.

True (A global view of operations, easy) {AACSB: Multiculture and Diversity}

To attract and retain global talent, and to expand a product’s life cycle, are both reasons to globalize.

True (A global view of operations, moderate) {AACSB: Multiculture and Diversity}

A product will always be in the same stage of its product life cycle regardless of the country.

False (A global view of operations, moderate) {AACSB: Multiculture and Diversity}

The World Trade Organization helps provide governments and industries around the world with protection from firms that engage in unethical conduct.
True (A global view of operations, moderate) {AACSB: Ethical Reasoning}

Boeing’s development of the 787 Dreamliner is an example of a company obtaining a competitive advantage via product differentiation/innovation.

True (Global company profile, easy)

An organization’s strategy is its purpose or rationale for an organization’s existence.

False (Developing missions and strategies, easy)

Operations strategies are implemented in the same way in all types of organizations.

False (Developing missions and strategies, moderate)

 

 

19

Between 1980 and 2005, the amount of money (bank deposits, government and corporate debt securities, and equity securities) invested in global capital markets more than tripled.

True (Introduction, difficult) {AACSB: Multiculture and Diversity}

Experience differentiation is an extension of product differentiation, accomplished by using people’s five senses to create an experience rather than simply providing a service.

True (Achieving competitive advantage through operations, moderate)

An organization’s ability to generate unique advantages over competitors is central to a successful strategy implementation.
True (Achieving competitive advantage through operations, moderate)

Low-cost leadership is the ability to distinguish the offerings of the organization in any way that the customer perceives as adding value.

False (Ten strategic decision of OM, moderate)

Most services are tangible; this factor determines how the ten decisions of operations management are handled differently for goods than for services.

False (Ten strategic decisions of OM, moderate)

The relative importance of each of the ten operations decisions depends on the ratio of goods and services in an organization.
True (Ten strategic decisions of OM, moderate)

Decisions that involve what is to be made and what is to be purchased fall under the heading of supply chain management.

True (Ten strategic decision of OM, moderate)

Manufacturing organizations have ten strategic OM decisions, while service organizations have only eight.

False (Ten strategic decisions of OM, easy)

Errors made within the location decision area may overwhelm efficiencies in other areas.

True (Ten strategic decisions of OM, moderate)

The PIMS study indicated that high ROI firms tend to have high product quality.

True (Issues in operations strategy, easy)

Southwest Airlines’ core competence is operations.

True (Strategy development and implementation, moderate)

Critical success factors and core competencies are synonyms.

False (Strategy development and implementation, moderate)

SWOT analysis identifies those activities that make a difference between having and not having a competitive advantage.
False (Strategy development and implementation, moderate)

 

 

20

For the greatest chance of success, an organization’s operations management strategy must support the company’s strategy.

True (Strategy development and implementation, moderate)

Critical Success Factors are those activities that are key to achieving competitive advantage.

True (Strategy development and implementation, moderate)

A multinational corporation has extensive international business involvements.

True (Global operations strategy options, easy) {AACSB: Multiculture and Diversity}

The multidomestic OM strategy maximizes local responsiveness while achieving a significant cost advantage.

False (Global operations strategy options, moderate) {AACSB: Multiculture and Diversity}

Firms using the global strategy can be thought of as “world companies.”

False (Global operations strategy options, moderate) {AACSB: Multiculture and Diversity}

MULTIPLE CHOICE

Which of the following statements regarding the Dreamliner 787 is true?

Boeing has found partners in over a dozen countries.

The new aircraft incorporates a wide range of aerospace technologies.

The new aircraft uses engines from not one, but two manufacturers.

Boeing will add only 20 to 30 percent of the aircraft’s value.

All of the above are true.

e (Global company profile, moderate)

Boeing’s new 787 Dreamliner

is assembled in Washington, D.C.

uses engines from Japan

has its fuselage sections built in Australia

has increased efficiency from new engine technology

results from a partnership of about a dozen companies

(Global company profile, moderate)

Examples of response to the global environment include

Boeing’s worldwide sales and production

Benneton’s flexibility in design, production, and distribution

A Chinese manufacturer, Haier, opening plants in the United States

Ford’s partnerships with Volvo and Mazda

All of the above are examples.

e (Introduction, easy) {AACSB: Multiculture and Diversity}

 

 

 

 

 

21

Which of the following is an example of globalization of operations strategy?

Boeing’s Dreamliner has engines with higher fuel/payload efficiency.

Ford’s new auto models have dent-resistant panels.

A Chinese manufacturer, Haier, now operates plants in the United States.

Hard Rock Café provides an “experience differentiation” at its restaurants.

All of the above are examples.

c (Introduction, moderate) {AACSB: Multiculture and Diversity}

Cost cutting in international operations can take place because of

lower taxes and tariffs

lower wage scales

lower indirect labor costs

less stringent regulations

all of the above

e (A global view of operations, moderate) {AACSB: Multiculture and Diversity}

Which of the following did the authors not suggest as a reason for globalizing operations?

reduce costs

improve the supply chain

stockholder approval ratings

attract new markets

All of the above were suggested.

c (A global view of operations, moderate) {AACSB: Multiculture and Diversity}

Multinational organizations can shop from country to country and cut costs through

lower wage scales

lower indirect labor costs

less stringent regulations

lower taxes and tariffs

all of the above

e (A global view of operations, moderate) {AACSB: Multiculture and Diversity}

The term maquiladora is most synonymous with

free trade zones

Chinese forced labor camps

home-based or cottage industry

areas that do not meet U.S. standards for workplace safety and pollution

none of the above

a (A global view of operations, moderate) {AACSB: Multiculture and Diversity}

Which of the following represent reasons for globalizing operations?

to gain improvements in the supply chain

to improve operations

to expand a product’s life cycle

to attract and retain global talent

All of the above are valid.

e (A global view of operations, moderate) {AACSB: Multiculture and Diversity}

 

 

22

Which of the following does not represent reasons for globalizing operations?

reduce costs

improve supply chain

reduce responsiveness

attract and retain global talent

All of the above are valid reasons for globalizing operations.

c (A global view of operations, moderate) {AACSB: Multiculture and Diversity}

NAFTA seeks to

substitute cheap labor in Mexico for expensive labor in the United States

curb illegal immigration from Mexico to the United States

phase out all trade and tariff barriers between the United States and Mexico

phase out all trade and tariff barriers between the United States, Canada, and Mexico

All of the above are NAFTA goals.

d (A global view of operations, moderate) {AACSB: Multiculture and Diversity}

With reference to cultural and ethical issues, the World Trade Organization has

succeeded in providing equal protection of intellectual property among nations

made progress in providing equal protection of intellectual property among nations

phased out all trade and tariff barriers between the United States and Mexico

eliminated slave labor and child labor

played little role in addressing cultural and ethical issues among nations

b (A global view of operations, difficult) {AACSB: Ethical Reasoning}

Which of the following is true about business strategies?

An organization should stick with its strategy for the life of the business.

All firms within an industry will adopt the same strategy.

Well defined missions make strategy development much easier.

Strategies are formulated independently of SWOT analysis.

Organizational strategies depend on operations strategies.

c (Developing missions and strategies, moderate)

Which of the following activities takes place once the mission has been developed?

The firm develops alternative or back-up missions in case the original mission fails.

The functional areas develop their functional area strategies.

The functional areas develop their supporting missions.

The ten OM decision areas are prioritized.

Operational tactics are developed.

c (Developing missions and strategies, moderate)

Which of the following statements about organizational missions is false?

They reflect a company’s purpose.

They indicate what a company intends to contribute to society.

They are formulated after strategies are known.

They define a company’s reason for existence.

They provide guidance for functional area missions.

c (Developing missions and strategies, moderate)

 

 

23

The impact of strategies on the general direction and basic character of a company is

short range

medium range

long range

temporal

minimal

c (Developing missions and strategies, moderate)

The fundamental purpose of an organization’s mission statement is to

create a good human relations climate in the organization

define the organization’s purpose in society

define the operational structure of the organization

generate good public relations for the organization

define the functional areas required by the organization

b (Developing missions and strategies, moderate)

Which of the following is true?

Corporate mission is shaped by functional strategies.

Corporate strategy is shaped by functional strategies.

Functional strategies are shaped by corporate strategy.

External conditions are shaped by corporate mission.

Functional area missions are merged to become the organizational mission.

(Developing missions and strategies, difficult)

According to the authors, which of the following strategic concepts allow firms to achieve their missions?

productivity, efficiency, and quality leadership

differentiation, cost leadership, and quick response

differentiation, quality leadership, and quick response

distinctive competency, cost leadership, and experience

differentiation, distinctive competency, quality leadership, and capacity

b (Achieving competitive advantage through operations, moderate)

A firm can effectively use its operations function to yield competitive advantage via all of the following except

customization of the product

setting equipment utilization goals below the industry average

speed of delivery

constant innovation of new products

maintain a variety of product options

b (Achieving competitive advantage through operations, moderate)

Which of the following has progressed the furthest along its product life cycle?

drive-thru restaurants

Internet search engines

iPods

LCD & plasma TVs

Xbox 360

a (Issues in operations strategy, moderate)

 

24

The ability of an organization to produce goods or services that have some uniqueness in their characteristics is

mass production

time-based competition

competing on productivity

competing on flexibility

competing on differentiation

e (Achieving competitive advantage through operations, moderate)

Which of the following has made the least progress along its product life cycle?

drive-thru restaurants

Internet search engines

iPods

LCD & plasma TVs

Xbox 360

e (Issues in operations strategy, moderate)

A strategy is a(n)

set of opportunities in the marketplace

broad statement of purpose

simulation used to test various product line options

plan for cost reduction

action plan to achieve the mission

e (Achieving competitive advantage through operations, moderate)

Which of the following statements best characterizes delivery reliability?

a company that always delivers on the same day of the week

a company that always delivers at the promised time

a company that delivers more frequently than its competitors

a company that delivers faster than its competitors

a company that has a computerized delivery scheduling system

b (Achieving competitive advantage through operations, difficult)

Which of the following is an example of competing on the basis of differentiation?

A firm manufactures its product with less raw material waste than its competitors do.

A firm’s products are introduced into the market faster than its competitors’ products are.

A firm’s distribution network routinely delivers its product on time.

A firm offers more reliable products than its competitors do.

A firm advertises more than its competitors do.

d (Achieving competitive advantage through operations, moderate)

 

 

 

 

 

 

25

The ability of an organization to produce services that, by utilizing the consumer’s five senses, have some uniqueness in their characteristics is

mass production

time-based competition

differentiation

flexible response

experience differentiation

e (Achieving competitive advantage through operations, moderate)

Which of the following best describes “experience differentiation”?

immerses consumers in the delivery of a service

uses people’s five senses to enhance the service

complements physical elements with visual and sound elements

consumers may become active participants in the product or service

All are elements of experience differentiation.

e (Achieving competitive advantage through operations, easy)

Experience Differentiation

isolates the consumer from the delivery of a service

is an extension of product differentiation in the service sector

uses only the consumer’s senses of vision and sound

keeps consumers from becoming active participants in the service

is the same as product differentiation, but applied in the service sector

(Achieving competitive advantage through operations, easy)

Which of the following is the best example of competing on low-cost leadership?

A firm produces its product with less raw material waste than its competitors.

A firm offers more reliable products than its competitors.

A firm’s products are introduced into the market faster than its competitors’ products.

A firm’s research and development department generates many ideas for new products.

A firm advertises more than its competitors.

a (Achieving competitive advantage through operations, difficult)

Franz Colruyt has achieved low-cost leadership through

Spartan headquarters

absence of voice mail

low-cost facilities

no background music

all of the above

e (Achieving competitive advantage through operations, easy)

Franz Colruyt has achieved low-cost leadership through

effective use of voice mail

plastic, not paper, shopping bags

background music that subtly encourages shoppers to buy more

converting factories, garages, and theaters into retail outlets

use of the Euro, not the currency of each European country

d (Achieving competitive advantage through operations, easy)

 

26

Which of the following is an example of competing on quick response?

A firm produces its product with less raw material waste than its competitors.

A firm offers more reliable products than its competitors.

A firm’s products are introduced into the market faster than its competitors’ products.

A firm’s research and development department generates many ideas for new products.

A firm advertises more than its competitors.

c (Achieving competitive advantage through operations, difficult)

Costs, quality, and human resource decisions interact strongly with the _______ decision.

layout design

process and capacity design

supply chain management

goods and service design

All of the above are correct.

d (Ten strategic decisions of OM, moderate)

Which of the following influences layout design?

inventory requirements

capacity needs

personnel levels

technology decisions

All of the above influence layout decisions.

(Ten strategic decisions of OM, moderate)

Response-based competitive advantage can be

flexible response

reliable response

quick response

all of the above

none of the above

d (Ten strategic decisions of OM, moderate)

Which of the following is not an operations strategic decision?

maintenance

price

layout design

quality

inventory

b (Ten strategic decisions of OM, moderate)

Which of the following OM strategic decisions pertains to sensible location of processes and materials in relation to each other?

layout design

goods and service design

supply chain management

inventory

scheduling

a (Ten strategic decisions of OM, moderate)

 

27

Which of these companies is most apt to have quality standards that are relatively subjective?

Chrysler

Dell Computer

Sanyo Electronics

Harvard University

Whirlpool

d (Ten strategic decision of OM, moderate)

Which of the following will more likely locate near their customers?

an automobile manufacturer

an aluminum manufacturer

an insurance company headquarters

a medical clinic

All of the above will tend to locate near their customers.

d (Ten strategic decisions of OM, moderate)

Which of the following statements concerning the operations management decision is relevant to services?

There are many objective quality standards.

The customer is not involved in most of the process.

The work force’s technical skills are very important.

Labor standards vary depending on customer requirements.

Ability to inventory may allow the leveling of the output rates.

d (Ten strategic decisions of OM, moderate)

Which of these organizations is likely to have the most important inventory decisions?

a marketing research firm

a lobbying agency

a management consulting firm

an aluminum manufacturer

a law firm

d (Ten strategic decisions of OM, moderate)

The PIMS program has identified the

operations decisions all organizations must make

distinctive competencies any company needs

characteristics of firms with high “ROI”

corporate decisions any company needs to make

all of the above

c (Issues in operations strategy, moderate)

Which of these is not one of the PIMS characteristics of high return on investment organizations?

high product quality

high capacity utilization

low investment intensity

low direct cost per unit

All of the above are PIMS characteristics.

e (Issues in operations strategy, moderate)

 

28

Standardization is an appropriate strategy in which stage of the product life cycle?

introduction

growth

maturity

decline

retirement

c (Issues in operations strategy, moderate)

Cost minimization is an appropriate strategy in which stage of the product life cycle?

introduction

growth

maturity

decline

retirement

d (Issues in operations strategy, moderate)

Which of the following preconditions does not affect the formulation of an OM strategy?

knowledge of each product’s life cycle

external economic and technological conditions

the company’s employment benefits

competitors’ strengths and weaknesses

knowledge of the company’s strategy

c (Issues in operations strategy, moderate)

The stage in the product life cycle at which it is a poor time to change quality is

introduction

growth

maturity

decline

incubation

c (Issues in operations strategy, moderate)

Which of the following changes does not result in strategy changes?

change in the company’s financial situation

a company’s adoption of new technology

change in the product life cycle

change in the competitive environment

change in job scheduling techniques

(Issues in operations strategy, moderate)

All of these preconditions affect an operations management strategy except

external economic and technological conditions

competitors’ strengths and weaknesses

maintenance policies

knowledge of the company’s strategy

knowledge of each product’s life cycle

c (Issues in operations strategy, moderate)

 

 

29

Understanding competitors’ strengths and weaknesses, understanding current and prospective technological issues, and understanding product life cycle are examples of

what is important to the transnational strategy but not the multidomestic strategy

SWOT analysis

elements in the formulation of an organization’s mission

preconditions to establishing and implementing a strategy

the critical decision area of supply chain analysis

d (Issues in operations strategy, moderate)

Which of the following statements is most correct?

CSFs are often necessary, but not sufficient for competitive advantage.

CSFs are often sufficient, but not necessary for competitive advantage.

CSFs are neither necessary nor sufficient for competitive advantage.

CSFs are both necessary and sufficient for competitive advantage.

None of the above statements is correct.

a (Strategy development and implementation, difficult)

Given the position of the iPod in the growth stage of its life cycle, which of the following OM Strategy/Issues should the makers of iPods be least concerned with at the current time?
forecasting

cost cutting

increasing capacity

product and process reliability

enhancing distribution

b (Issues in operations strategy, moderate)

Which of these organizations is likely to have the most complex inventory decisions?

a marketing research firm

a stock brokerage firm

a management consulting firm

a computer manufacturing company

a high school

d (Strategy development and implementation, moderate)

The three steps of the operations manager’s job, in order, are

develop the strategy, establish the organizational structure, find the right staff

develop the strategy, find the right staff, establish the organizational structure

find the right staff, establish the organizational structure, develop the strategy

find the right staff, develop the strategy, establish the organizational structure

establish the organizational structure, find the right staff, develop the strategy

(Strategy development and implementation, moderate)

When developing the operations strategy for a new manufacturing organization, one of the most important considerations is that it

requires minimal capital investment

utilizes as much automation as possible

utilizes an equal balance of labor and automation

supports the overall competitive strategy of the company

none of the above

d (Strategy development and implementation, moderate)

30

Which of the international operations strategies involves high cost reductions and high local responsiveness?

international strategy

global strategy

transnational strategy

multidomestic strategy

none of the above

c (Global operations strategy options, moderate) {AACSB: Multiculture and Diversity}

Which of the international operations strategies involves low cost reductions and low local responsiveness?

international strategy

global strategy

transnational strategy

multidomestic strategy

none of the above

a (Global operations strategy options, moderate) {AACSB: Multiculture and Diversity}

Which of the international operations strategies uses import/export or licensing of existing products?

international strategy

global strategy

transnational strategy

multidomestic strategy

none of the above

a (Global operations strategy options, moderate) {AACSB: Multiculture and Diversity}

Which of the international operations strategies uses the existing domestic model globally?

international strategy

global strategy

transnational strategy

multidomestic strategy

none of the above

d (Global operations strategy options, moderate) {AACSB: Multiculture and Diversity}

The acronym MNC stands for

Mexican National Committee (for international trade)

Maquiladora Negates Competition

Maytag- Nestlé Corporation

Multinational Corporation

none of the above

d (Global operations strategy options, easy) {AACSB: Multiculture and Diversity}

 

 

 

 

 

31

Caterpillar and Texas Instruments are two firms that have benefited from the use of

the multidomestic strategy option.

the multinational corporation strategy.

the transnational strategy option.

the maquiladora system in Europe.

the global strategy option.

e (Global operations strategy options, moderate) {AACSB: Multiculture and Diversity}

Which of the following are examples of transnational firms?

Nestlé

Asea Brown Boveri

Reuters

Citicorp

All of the above are transnationals.

e (Global operations strategy options, moderate) {AACSB: Multiculture and Diversity}

FILL-IN-THE-BLANK

Boeing found its Dreamliner 787 partners in _____________________ countries.

over a dozen (Global company profile, easy) {AACSB: Multiculture and Diversity}

________ are Mexican factories located along the U.S.-Mexico border that receive preferential tariff treatment.

Maquiladoras (A global view of operations, moderate) {AACSB: Multiculture and Diversity}

_______ is a free trade agreement among Canada, Mexico, and the United States.

NAFTA–North American Free Trade Agreement (A global view of operations, moderate) {AACSB: Multiculture and Diversity}

_____________________ and __________________ are two issues where significant cultural differences are large and progress toward global uniformity has been slow.

Bribery, protection of intellectual property (Global company profile, easy) {AACSB: Ethical Reasoning}

An organization that has worked to achieve global uniformity in cultural and ethical issues such as bribery, child labor, and environmental regulations is _________________________.
the World Trade Organization (Global company profile, easy) {AACSB: Ethical Reasoning}

In goods producing organizations, ________,_________, and ________ may be inventoried.

raw materials, work-in-process, and finished goods (Ten strategic decisions of OM, moderate)

Strategy is not static, but dynamic because of changes in the ________________ and

__________________.

organization, environment (Issues in operations strategy, moderate)

__________________ is the stage in product life cycle at which it is a poor time to change quality.

Maturity (Issues in operations strategy, moderate)

The ______ is how an organization expects to achieve its missions and goals. strategy (Developing missions and strategies, moderate)

32

The creation of a unique advantage over competitors is called a ________.

competitive advantage (Achieving competitive advantage through operations, moderate)

Service organizations can immerse the consumer in the service, or have the consumer become a participant in the service, as they practice ________.

experience differentiation (Achieving competitive advantage through operations, moderate)

Competitive advantage in operations can be achieved by ______, ______, and/or ________. differentiation, low cost, response (Achieving competitive advantage through operations, moderate)

A(n) ________ is a firm that has extensive involvement in international business, owning or controlling facilities in more than one country.
MNC–multinational corporation (Global operations strategy options, moderate) {AACSB: Multiculture and Diversity}

The ________ strategy utilizes a standardized product across countries.

global (Global operations strategy options, moderate) {AACSB: Multiculture and Diversity}

The _______ strategy uses exports and licenses to penetrate globally.

international (Global operations strategy options, moderate) {AACSB: Multiculture and Diversity}

The ________ strategy uses subsidiaries, franchises, or joint ventures with substantial independence.
multidomestic (Global operations strategy options, moderate) {AACSB: Multiculture and Diversity}

The ________ strategy describes a condition in which material, people, and ideas cross or transgress national boundaries.

transnational (Global operations strategy options, moderate) {AACSB: Multiculture and Diversity}

SHORT ANSWER

Identify five countries from which Boeing’s 787 Dreamliner will get suppliers.

France, Germany, UK, Italy, Japan, China, South Korea, Sweden, U.S. (Global company profile, easy) {AACSB: Multiculture and Diversity}

Identify five parts which Boeing’s 787 Dreamliner will get from global suppliers; match each part with the country that will supply it.

France—landing gear, Germany—interior lighting, UK—fuel pumps or electronics, Italy— part of fuselage or horizontal stabilizer, Japan—wing box or hydraulic actuators, China— rudder or general parts, South Korea—wingtips, Sweden—cargo and access doors, U.S.—GE engines (Global company profile, moderate) {AACSB: Multiculture and Diversity}

How can global operations improve the supply chain?

The supply chain can often be improved by locating facilities in countries where unique resources exist. (A global view of operations, moderate) {AACSB: Multiculture and Diversity}

33

How do global operations attract new markets?

Since international operations require local interaction with customers, suppliers, and other competitive businesses, international firms inevitably learn about unique opportunities for new products and services. (A global view of operations, moderate) {AACSB: Multiculture and Diversity}

State two examples of cultural and ethical issues that face operations managers in a global environment.

Student responses will vary, but there are several issues on which there are wide differences from country to country, culture to culture. Among those listed in the text are bribery, child labor, slave labor, and intellectual property rights. Students may bring forward from an earlier chapter issues such as environmental regulation or safe work environment, and may raise issues such as product safety. (A global view of operations, moderate) {AACSB: Ethical Reasoning}

What is the difference between a firm’s mission and its strategy?

A firm’s mission is its purpose or rationale for an organization’s existence, whereas a firm’s strategy is how it expects to achieve its mission and goals. (Developing missions and strategies, moderate)

Since the early 1990s, residents in a number of developing countries have overcome culture, religious, ethnic, and political productivity barriers. These disappearing barriers coupled with simultaneous advances in technology, reliable shipping, and cheap communication have all led to the growth of what three things?

World trade.

Global capital markets.

International movement of people.

(Introduction, moderate) {AACSB: Multiculture and Diversity}

Provide an example of an organization that achieves competitive advantage through experience differentiation. Explain.
Answers will vary, but Disney and Hard Rock Café are illustrated in the text. Competing on experience differentiation implies providing uniqueness to your service offering through immersion of the consumer into the service, with visual or sound elements to turn the service into an experience. (Achieving competitive advantage through operations, moderate)

With regard to the scheduling decision, how are goods-producing organizations different from service companies? Discuss.

Goods-producing companies: the ability to inventory may allow leveling the output rates;

service companies: primarily concerned with meeting the customer’s immediate schedule. (Ten strategic OM decisions, difficult)

How do goods and services differ with regard to handling the quality decision?

There are many objective quality standards for goods, whereas there are many subjective quality standards for services. (Ten strategic OM decisions, moderate)

What is the difference between goods and services in terms of their location selection?

Manufacturers of goods may need to be located close to raw materials, or labor force. Services, on the other hand, typically are located close to the customer. (Ten Strategic OM decisions, moderate)

34

How has Franz Colruyt achieved low-cost leadership? List three specific examples and describe each briefly.

Several methods are listed in the text. Among these are no shopping bags, dim lighting, no voice mail, conversion of older buildings, Spartan offices. (Achieving competitive advantage through operations, moderate)

Define core competencies.

A set of skills, talents, and activities that a firm does particularly well. (Strategy development and implementation, moderate)

For what type of organization might the location decision area be the least important of its ten decision areas? For what type of organization might the location decision be the most important of the ten decision areas? Discuss, augment your response with examples.
The relationship between the organization and its suppliers or its customers is key. If that relationship is very weak (as in no transportation costs, or customers can reach the firm from any location), location diminishes in importance. If that relationship is strong (uniqueness of site, high transportation costs, customers will not travel far) location increases in importance. “Least” examples: Telemarketing firm, tax help-line, Internet sales. “Most” examples: gold mine, oil well, ski resort. (Ten strategic OM decisions, difficult) {AACSB: Reflective Thinking}

What is SWOT analysis? List its four elements and describe its purpose.

The four elements of SWOT are strengths, weaknesses, opportunities, and threats. Its purpose is to maximize opportunities and minimize threats in the environment, while maximizing the advantages of the organization’s strengths and minimizing the weaknesses. (Strategy development and implementation, moderate)

Are strategies static or dynamic? What are the forces that lead to this result?

Strategies should be dynamic because of changes within the organization; and changes in the environment. (Strategy development and implementation, moderate)

Identify and explain the four basic global operations strategies. Give an example of each strategy.

The multidomestic strategy decentralizes operating decisions to each country to enhance local responsiveness. The primary example from the textbook is McDonald’s. The global strategy centralizes operating decisions, with headquarters coordinating the standardization and learning between facilities. The textbook names Texas Instruments and Caterpillar. The international strategy uses exports and licenses to penetrate the global markets. Students may cite Pier One, World Market, or any wine store. The transnational strategy exploits the economies of scale and learning, as well as pressure for responsiveness, by recognizing that core competence does not reside in just the “home” country, but can exist anywhere in the organization. Examples from the textbook include Bertelsmann, Reuters and Nestlé. (Global operations strategy options, difficult) {AACSB: Multiculture and Diversity}