Deck 21: Managing Small Business Operations

Question 1

For service firms, the customer has to arrive before production begins resulting in employee scheduling issues.

Answer 1

True

Question 2

Flexible management systems uses machine automation to cut manufacturing costs while satisfying customer needs.

Answer 2

True

Question 3

Because close interactions with customers allow employees to better understand them, management should be sent in the field periodically.

Answer 3

True

Question 4

In order to achieve market success, a firm merely needs to concentrate on either providing an excellent product or service, or devising an insightful marketing strategy.

Question 5

A demand management strategy is the use of pagers by restaurants to notify persons on the waiting list that a table is ready.

Question 6

Most companies run out of stock from incorrect ordering.

Question 7

Powerful c ompanies, whether they are large or small, gain power when satisfying customer needs and wants better than their competitors.

Question 8

The ideal quantity of an item to purchase is referred to as the economic order quantity (EOQ).

Question 9

Event management companies use project manufacturing .

Question 10

Operations refers to the processes used to create and deliver a good or service.

Question 11

The terms repetitive manufacturing and mass production are synonymous.

Question 12

Job shops in manufacturing use specialized equipment.

Question 13

Continuous manufacturing refers to assembly lines that run 24 hours a day, seven days a week.

Question 14

The just-in-time inventory system classifies inventory into three categories based on value.

Question 15

Technology can adequately replace the human touch when the needs of the customer involve large amounts of data.

Question 16

Obsolescence is a cost of inventory.

Question 17

Manufacturers with seasonal demand schedules often hire temps during peak production and keep only skeleton crews the rest of the year.

Question 18

Only product firms have an operations process.

Question 19

Work groups tend to be better at coordination than specialization.

Question 20

When Kentucky Chocolates mixes ingredients for their candies, this act is part of operations.

Question 21

An example of associative forecasting is when a concert promoter predicts attendance based on the trend of attendance of the same event in the same location in previous years.

Question 22

The cost of getting quality right may be more than a small business can bear.

Question 23

Poka-yoke is a proactive approach that seeks to mistake-proof a firm's operations.

Question 24

Cooperative purchasing organizations are firms that specialize in the purchasing function and provide this service to small businesses.

Question 25

Because the small business owner must perform many functions that consume many hours each day, it is acceptable practice to decline a salesperson's request for an appointment.

Question 26

Weighing bags of mulch during a production process is an example of an variable inspection.

Question 27

Quality is best defined as the totality of features and characteristics of a product or service that impacts the firm's ability to satisfy stated or implied needs.

Question 28

Acceptance sampling makes it possible to determine tolerance limits that allow for inherent variation due to chance.

Question 29

Unless a firm is planning to market products in Europe or supply components to U.S. automakers, getting ISO 9000 certification is a waste of time and money.

Question 30

Buying components is preferable to making them when it is necessary to protect a secret design for a seasonal item.

Question 31

Firms who pay attention to operating details are stronger than those who empower their customers for quality improvement.

Question 32

A genuine concern for customer needs and customer satisfaction can assist the TQM efforts of a small business.

Question 33

Measuring quality in a service business is easier than measuring quality in a production business.  All you have to do is ask the customer.

Question 34

Kaoru Ishikawa contends that 95 percent of the typical company's quality problems can be solved by using "The Basic Six" quality tools.

Question 35

While large corporations have access to data mining techniques for insights into customer buying patterns, small companies typically cannot afford the software.

Question 36

The quality of a finished product depends on the quality of the raw materials used to make it.

Question 37

The importance of purchasing rests on three areas:  quality, service, and cost.

Question 38

Outsourcing non-competitive functions can free the entrepreneur to focus on his/her greatest strengths.

Question 39

The simplest method of inventory record-keeping is called cycle counting.

Question 40

The Supply Chain Operations Reference model is a list of five critical factors when assessing a strategic alliance.

Question 41

Ralph operates a computer-controlled machine.  His jobs can be either large or small.  To change the set up from one product to another usually requires only a change in programming.  This type of manufacturing is known as:

A) continuous manufacturing.
B) flexible manufacturing.
C) project manufacturing.
D) repetitive manufacturing.

Question 42

The goal of lean production is to use the minimum amount of resources necessary to achieve a total bundle of satisfaction for the customer.

Question 43

When a company expands resources in response to a constraint, they are using the option of increasing efficiency.

Question 44

Job shops are best suited for

A) short production runs.
B) long production runs.
C) special-purpose equipment.
D) standardized products.

Question 45

Martha knows that to be successful, everything her company does must create customer

A) premiums.
B) products.
C) services
D) value.

Question 46

Linda creates websites for her customers.  Each one is designed to meet the specific needs of the customer.  This type of manufacturing is called:

A) continuous manufacturing.
B) flexible manufacturing.
C) project manufacturing.
D) repetitive manufacturing.

Question 47

Bottlenecks in a process are responsible for slower throughput times for the entire process.

Question 48

Purchasing and inventory management share the same objective by contributing to profitable operations.

Question 49

One factor that differentiates the operations of a service firm from manufacturing is its

A) operating space.
B) ability to maintain high quality standards.
C) inability to produce services and hold them in inventory.
D) working hours.

Question 50

Forrester Research has shown that using computerized information systems can cut accounts payable costs by 95%.

Question 51

Jasper operates a machine shop.  Orders from his his customers are small, but his machines can easily be set up to make other items for different customers.  This type of manufacturing  is known as

A) flexible manufacturing.
B) a job shop.
C) project manufacturing.
D) repetitive manufacturing.

Question 52

Which aspect is the most descriptive of a product operations as opposed to a service operations?

A) Customer interaction
B) Created and delivered on demand
C) Intangible aspects
D) Repetitive operations

Question 53

At CPL Manufacturing, the one-millionth product must be identical to the first.  The work is automated and accomplished by machines designed expressly to make these products.  This type of manufacturing is known as:

A) continuous manufacturing.
B) flexible manufacturing.
C) project manufacturing.
D) repetitive manufacturing.

Question 54

The inventory control method that uses a targeted service level allowing for the variability of supply and demand is

A) ABC method.
B) economic order quantity.
C) just-in-time inventory system.
D) statistical inventory control.

Question 55

Which operations factor is centered around satisfying customers over time?

A) Flexibility
B) Facilities and  equipment
C) Choice of a joint venture
D) Customer demand

Question 56

Duff's Buffet offers a discount for lunches on Tuesdays. Duff's is using

A) capacity planning.
B) a demand management strategy.
C) project marketing.
D) service inputs.

Question 57

Which item is a tangible output for a bed and breakfast inn guest?

A) Questions answered about local attractions
B) Full breakfast in the morning
C) Use of a Room
D) Two of the above tangible outputs.

Question 58

At the weekly managers' meeting, Marcel is discussing how the company's product is made and delivered to its customers.  Marcel is talking about:

A) distribution.
B) human resources.
C) operations.
D) planning.

Question 59

Repetitive operations in manufacturing use

A) general-purpose machines.
B) job-order schedules.
C) highly specialized equipment.
D) short production runs.

Question 60

The topic of discussion during the monthly senior managers' meeting is how best to manufacture the company's product with existing materials, manpower, and machinery.  This discussion is about:

A) inventory management.
B) inventory overhead.
C) operations management.
D) production management.

Question 61

A category "C" item in the ABC method of inventory management for a college bookstore would be

A) pens.
B) magazines.
C) shirts.
D) textbooks.

Question 62

The basic quality tool that Kaoru Ishikawa recognized that identifies potential causes of a problem while sorting them into categories is the

A) check sheet.
B) cause-and effect diagram.
C) control chart.
D) parento chart.

Question 63

A small business owner decides that her firm has a good customer focus and adequate tools and techniques needed for a TQM program. To be assured of a strong quality program, she must also have the proper

A) benchmarking.
B) marketing research.
C) organizational culture.
D) statistical quality control.

Question 64

In March, chassis prep counts its inventory.  In June, the cabinet shop does the same thing.  In September, appliances counts its inventory.  This inventory system is known as:

A) cycle counting.
B) perpetual.
C) physical.
D) two-bin.

Question 65

Rather than rely on the bartender to use the correct proportions of ingredients in mixed drinks, the owner installed a drink-mixing machine that automatically selects and measures the ingredients into the glass.  This method is a type of:

A) idiot-proofing.
B) poka-yoke.
C) kan-ban
D) robotics.

Question 66

Twice a year the entire production line shuts down and a complete count is taken of every inventory item.  This inventory system is called:

A) cycle counting.
B) perpetual inventory.
C) physical inventory.
D) two-bin inventory.

Question 67

The ABC method of inventory management is founded on the notion that

A) some inputs are more valuable or more critical to the firm's operations than others.
B) inventory costs should be cut to an absolute minimum by reducing inventory on hand.
C) a firm should know its economic order quantity at all times.
D) the cost of placing an order is a fixed cost.

Question 68

A reason to buy component parts is

A) closer coordination between scheduling and production.
B) equipment obsolescence.
C) improved plant utilization.
D) the parts are a specialty of the supplier.

Question 69

The traditional method of maintaining product quality has been the

A) check sheet.
B) control chart.
C) inspection.
D) histogram.

Question 70

In his retail store, Jose's point-of-sale software relieves inventory for each item purchased.  At any time, Jose can look at the inventory records on his computer and know exactly how many of each item are in stock.  This type of inventory system is called:

A) cycle counting.
B) perpetual.
C) physical.
D) two-bin.

Question 71

Which of the following is an example of "quality"?

A) The taste of a restaurant's food
B) Turn time at an auto repair shop
C) Product fail rate for a manufacturer
D) All of the above

Question 72

If a small plumbing company is installing a TQM program, management should be aware that

A) quality must become a very important goal of the entire business.
B) ISO 9000 will be the controlling criterion.
C) costs cannot be allowed to limit quality goals.
D) acceptance sampling may be necessary.

Question 73

Bobbi Jo pulls one part from the production line every 15 minutes and measures its dimensions against the specifications.  Bobbi Jo is using:

A) acceptance sampling.
B) a control chart.
C) statistical process control.
D) TQM.

Question 74

Bettina would like to improve the quality of the dining experience in her cafe.  To achieve this, Bettina's efforts should begin with a focus on

A) customers.
B) employees.
C) management.
D) operations.

Question 75

Adoption of the just-in-time inventory system requires

A) the elimination of raw materials wherever possible.
B) an emphasis on work in progress.
C) a reduction in the firm's finished goods.
D) close cooperation with suppliers.

Question 76

Service businesses are typically more concerned with _____ costs than with the cost of materials for operations.

A) equipment
B) fixed asset
C) labor
D) leasing

Question 77

A method that judges products as acceptable or unacceptable is known as

A) poka-yoke.
B) attribute inspection.
C) acceptance sampling.
D) variable inspection.

Question 78

By conforming to ISO 9000, a small manufacturing firm could achieve improvements in

A) sales to Walmart.
B) export sales.
C) product design.
D) quality of incoming raw materials.

Question 79

If a small fencing company wants to check the length of fence posts to determine if they are acceptable, a(n) ______ should be used.

A) poka-yoke.
B) an attribute inspection.
C) acceptance sampling.
D) a variable inspection.

Question 80

ISO 9000

A) is more important for large global firms than small firms with domestic markets.
B) measures how companies have improved their environmental footprint.
C) is challenging to earn but is rewarding from a marketing viewpoint.
D) reflects international excellence in quality management standards.