WorksheetsFinal review Ch 5
Total questions: 79
Worksheet time: 40mins
Which of the following statements is incorrect?
Production decisions impact all other divisions within the firm
Mass production and capital intensity output require a large amount of investment
Making customized products enables the marketing team to sell these at a higher price
Quaternary sector firms are not involved in the production process
When a firm relies on workers to produce its output, rather than machinery, it can be described as a ______________ firm.
Labour-intensive
Capital-intensive
Technology-driven
Automated
A firm which has an entirely automated production system manufacturing pens is likely to be a _____________ firm.
Capital-intensive
Labor-intensive
Resource-intensive
Energy-intensive
Which of the following is not a measure included in the “triple bottom line” measure of sustainability?
Social sustainability
Legal sustainability
Environmental sustainability
Economic sustainability
Removing gender inequalities in recruitment (hiring) practices is an example of which of the following?
Legal sustainability
Social sustainability
Ecological sustainability
Economic sustainability
What is over-production a threat to?
The value added process
Social sustainability
Economic sustainability
Secondary sector output
What is the operations management division of an organization in charge of?
Handling staffing matters such as recruitment, training, performance appraisals and dismissals
Identifying customer requirements and promoting a firm’s goods and/or services
Managing financial resources and budgeting
Overseeing legal compliance and regulatory issues
Which of the following is not an example of a method to achieve ecological sustainability?
Preservation
Recycling
Adopting green technologies
Eradicating discrimination
For a business to earn a profit on its sales, its production process must ___________.
Add value
Be capital-intensive
Be labour-intensive
Adopt lean production
Which method of production is most suitable to producing movies (films)?
Mass production
Batch production
Job production
Cellular production
Which of the following is not an advantage of job production?
High quality output is produced
Production flexibility is maximised
Workers are likely to be more motivated
Standardised output is produced
Which of the following is not applicable to job production?
A long working capital cycle may be faced
It is very capital intensive
It is difficult to enjoy economies of scale
Production is time consuming
Which form of production is most likely to be used to produce bread in a bakery?
Job production
Batch production
Flow production
Mass production
Which of the following is not an advantage of batch production?
Lower average unit costs of production compared to job production
Customers receive greater choice than with job production
A high price can be charged due to the product’s uniqueness
Risks are spread due to the ability to produce a variety of products
Which of the following statements is not true regarding batch production?
There is no flexibility
Downtime occurs between batches
Inventory storage costs rise
Workers may feel demotivated due to the monotony of work
The main difference between mass and flow production is that the latter
Involves a larger scale of production
Involves a smaller scale of production
Produces standardised goods
Relies on using more workers
Which of the following firms is most likely to use flow production?
A local bakery
A local school
A furniture manufacturer
A national newspaper printing press
Which of the following is most likely to use mass production?
Bottled water producers
Fashion (clothing) retailers
Holiday agents
Bespoke tailors
Which of the following is not an advantage of mass and flow production?
Technical economies of scale are achieved
Labour costs are lowered
Output is highly standardised
Workers are likely to be more motivated due to specialization
Which of the following is not a valid criticism of mass and flow production?
Production is inflexible
Set-up and operational costs are relatively high
The firm is likely to experience limited economies of scale
Relatively low profit margins can be received
When independent teams have the responsibility of effectively carrying out a particular part of the production process, what is this called?
Mass production
Cellular manufacturing
Job production
Which of the following is not an advantage of cellular manufacturing?
Workers have greater autonomy
Workers are held accountable and responsible for quality assurance
Training costs are minimized
Productivity rises due to specialization
Which of the following is not a disadvantage of cellular production?
Economies of scale are not achieved
Output is lower than in traditional flow or mass production
Internal conflict within teams may occur
Set-up, training and operational costs are relatively high
A cookie shop is likely to use _______ production, whereas an oil refinery is likely to use _______.
Batch, flow
Flow, batch
Flow, job
Batch, job
Job, flow
Which of the following statements refers to lean production?
Streamlining processes to reduce waste and increase efficiency
Continuously finding ways to improve the production process
Using a just-in-time inventory management system to minimize buffer stock requirements
A highly automated production system producing a very large scale of output
Which of the following is not a source of waste (“muda”)?
Chemical waste
Overproduction
Excess worker movement
Waiting time
What is the term used to describe the concept of achieving small yet continuous improvements to increase productivity and efficiency?
Empowerment
Kaizen
Kanban
Andon
What is the name of the stock control system which aims to minimise buffer stock requirements by ensuring raw materials are received just before they are used in production?
Lean production
Kaizen
Just-in-time
Just-in-case
Which of the following is incorrect about a JIT inventory management system?
Raw materials are delivered just before they are required for production
Finished goods are immediately dispatched to customers
It reduces inventory holding costs
It requires a reliable supply chain
With respect to Kanban, which of the following is not true?
It is a method of lean production
It involves audio-visual control systems
It uses a card-based system to ensure efficient stock management
It manages workflow processes
What is the name of the method of lean production that utilises audio-visual control systems to indicate the status of particular aspects of the production process?
Andon
Kanban
Kaizen
Benchmarking
__________ refers to a sustainable, waste-free production model in which all material inputs can be recycled or reused, or are consumable or compostable.
Cradle-to-cradle manufacturing
Linear economy
Traditional manufacturing
Disposable production
What is the traditional approach to quality management called, in which supervisors inspect a sample of the output?
Quality assurance
Quality control
Quality standards
Total quality management
Which of the following features does not determine a product’s quality?
After-sales services
Reliability
Durability
Price
Quality control is __________ whereas quality assurance is __________.
Quality standard-oriented, efficiency-oriented
Process-oriented, product-oriented
Product-oriented, process-oriented
Efficiency-oriented, customer satisfaction-oriented
QC is __________ whereas QA is __________.
Reactive, proactive
Proactive, reactive
Preventative, corrective
Reactive, reactive
Expensive, Cheap
Which of the following is untrue regarding quality assurance?
It is process-oriented
It focuses on preventing defects
It is reactive
It aims for continuous improvement
What is the term for small groups comprised of employees who come together to assess quality and make recommendations to improve the quality of output?
Kaizen groups
Focus groups
Quality control
Quality circles
Which of the following is not an advantage of quality circles?
They promote team working and team cohesiveness
They are cost-effective
They lead to quality improvements
They boost employee morale
When a firm compares its products, processes, and performance to that of its competitors or its own historical performance, what is this called?
Benchmarking
Quality assurance
Lean production
Quality management
Which of the following is not a benefit of total quality management (TQM)?
Production costs are reduced
Corporate image is improved
Employee morale is improved
It is reactive rather than proactive
Which of the following is not a valid criticism of implementing total quality management (TQM)?
It is expensive to set up and maintain
There is a time lag before the benefits of TQM are experienced
Reworking costs rise
It requires total commitment from every employee
What is a region with high unemployment being provided financial assistance by the government called?
Developing area
Enterprise zone
Less developed region
Structurally-deficit zone
What is a firm that is indifferent to location, i.e. it receives no cost advantages by locating in a particular zone, called?
Brick and mortar enterprise
Flexible organization
Footloose organization
Location-independent firm
What is the reluctance to relocate referred to as?
Clustering
Geographical immobility
Industrial inertia
Relocation inconvenience
Bottled water is an example of a _____________ product.
Luxury
Convenience
Specialty
Unsought
It makes sense for __________ industries to locate close to their customers, and for __________ industries to locate close to their raw material sources.
Bulk-increasing, bulk-reducing
Bulk-reducing, bulk-increasing
Bulk-reducing, weight-losing
Weight-gaining, bulk-increasing
What is the act of transferring internal business activities to external subcontractors to reduce costs referred to as?
Insourcing
Offshoring
Outsourcing
Relocating
Which of the following is not an advantage of subcontracting?
It allows the firm to focus on its core activities
It cuts costs and improves profitability
Staff morale increases
The subcontractor provides specialised services
Which of the following is not a valid criticism of subcontracting?
Cultural issues and barriers may be faced
High costs of monitoring subcontractor’s performance may be incurred
Potential conflict may arise with the subcontractor
When a firm uses external subcontractors in a foreign nation to produce its products, what is this called?
Offshore outsourcing
Offshoring
Outsourced offshoring
Outsourcing
What is it called when a firm uses its own staff and resources to conduct activities that would have otherwise been outsourced?
Empowerment
Insourcing
Offshoring
Reshoring
Which of the following is not an advantage of offshoring?
It limits the extent of cultural issues
Labour laws may be less stringent overseas
Lower operational costs may be achieved
The firm can concentrate on its core activities
Which of the following is not an advantage of insourcing?
It allows the firm to concentrate on its core activities
It creates jobs domestically
It develops employees’ skills
Using internal resources might be cheaper than using external subcontractors
Which of the following is not a disadvantage of insourcing?
It may lead to higher costs
It requires more management oversight
It can limit access to external expertise
It develops employees’ skills
Assume you buy a new computer from Apple, and receive complementary technical support over the phone for a one-year period from a third-party, specialist IT-support organization situated in India. What is this an example of?
Insourced subcontracting
Offshore outsourcing
Offshoring
Outsourcing
When a school hires a caterer to run its canteen, what is it an example of?
Insourcing
Offshore outsourcing
Offshoring
Outsourcing
Which of the following is not a reason for supply chain management?
To ensure efficient movement and storage of stocks
To achieve lean production
To procure the most cost-efficient methods of product transportation
To boost an organization’s liquidity ratios
What is the minimum level of stock held by a firm called?
Buffer stock
Safety stock
Reserve stock
Base stock
A ______ stock control system does not have any buffer stock.
Just in case
Just in time
Buffer stock
Supply chain
Which of the following is not an advantage of adopting a JIT stock control system?
It reduces wastage
Stock holding costs are eliminated
Cash flow is improved
Greater economies of scale are achieved
Which of the following is not a drawback of adopting a JIT stock control system?
It relies heavily on technology
It eliminates the use of buffer stocks
It is inflexible in catering for sudden increases in demand
It relies heavily on efficient suppliers
Which of the following is not an advantage of using a JIC stock control system?
It is flexible enough to meet a sudden increase in demand
Lower costs of storage compared to a JIT stock control system
It allows production to continue, even if suppliers delay deliveries
Bulk-buying economies of scale can be achieved
Which of the following is not a disadvantage of a JIC stock control system?
There is significant reliance on suppliers
It allows for production flexibility
Higher storage costs
Risk of stock obsolescence
Which of the following is not a consequence of stockpiling?
Certain stock may perish or become obsolete
Higher costs of storage
Lost sales if customer orders cannot be fulfilled
Poor liquidity and cash flow position
Which of the following is not a consequence for a firm experiencing frequent stockouts?
Lost sales
Production coming to a halt
Lower customer loyalty
High storage costs are incurred
What is the name used to describe the time lag that occurs between placing an order of stock and receiving the delivery?
Just-in-time
Lead time
Flexitime
Overtime
What does the economic order quantity refer to?
The quantity of stock that minimizes storage costs
The level of stock required to be held as a buffer
The minimum level of stock required in a JIC stock control system
The ideal level of stock, balancing inventory needs and storage costs
__________ have a quicker usage rate than __________.
Perishable goods; non-perishable goods
Non-perishable goods; perishable goods
Electronics; perishable goods
Furniture; non-perishable goods
The shorter the lead time, the ________ the buffer stock level. The higher the stock holding costs, the ________ the optimal stock level.
Higher, higher
Higher, lower
Lower, lower
Lower, higher
Capacity utilization is a measure of ___________.
Efficiency
Liquidity
Return on capital employed
Productivity
Assume a lightbulb manufacturer can produce 2.5m lightbulbs per month. In January and February, it produced 1.75m and 1.95m lightbulbs respectively. It can be said that the manufacturer’s capacity utilization rose by ____.
7%
8%
11%
78%
Assume a firm has fixed costs of $200,000 per month and a productive capacity of 150,000 units per month. Capacity utilization in February and March was 80% and 70% respectively. Calculate the change in average fixed costs during these two months.
+$0.55
+$0.23
-$0.15
-$0.37
A firm is deciding whether to make or buy 3,000 new office desks. It can make these for a variable cost per unit of $45 per desk, and would allocate $45,000 in fixed costs to this order. Alternatively, the firm can buy the desks from a supplier at a price of $70 per desk, less 10% discount due to the bulk order. The firm’s cost to make is $________ while its cost to buy is $________.
$135,000, $210,000
$180,000, $189,000
$180,000, $210,000
$162,000, $189,000
A firm receives a special order for 25,000 kettles. These kettles can be made inhouse with direct costs of $13 per unit, but machine upgrades of $57,500 would be required. Alternatively, the firm can purchase these kettles for $15 per unit from an external manufacturer. By purchasing the kettles instead of making them, the firm would save $________ in costs.
$12,500
$10,000
$15,000
$20,000
R&D is beneficial in __________ industries, but not likely to be profitable in __________ industries.
Sunrise, sunset
Tech, traditional
Innovative, declining
Emerging, mature
Which of the following is not an advantage of conducting R&D?
The corporate image may improve
The opportunity cost is usually quite low
A first mover advantage might be gained
Higher prices can be charged
Which of the following is not true about conducting R&D?
There may be a high rate of failure
It is time consuming
It shortens a product’s life cycle
It is expensive
__________ innovation refers to altering customer perceptions of a brand or product.
Product
Process
Paradigm
Position
