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| Section | Objectives |
|---|---|
| Topic 1: Competency 1: Operations Management Fundamentals | - Operations strategy and competitive priorities - Product and service design - History and evolution of operations management |
| Topic 2: Competency 4: Supply Chain Management | - Inventory management - Supply chain design and strategy - Sourcing and procurement - Logistics and distribution |
| Topic 3: Competency 2: Quality Management | - Total Quality Management (TQM) - Quality management philosophies (Deming, Juran, Crosby) - Cost of quality (prevention, appraisal, internal/external failure) - Malcolm Baldrige National Quality Award criteria |
| Topic 4: Competency 7: Forecasting | - Quantitative forecasting methods (moving averages, exponential smoothing) - Forecast accuracy measures - Qualitative forecasting methods |
| Topic 5: Competency 6: Production Planning and Scheduling | - Theory of Constraints (TOC) - Aggregate planning - Just-in-Time (JIT) and Kanban systems - Material Requirements Planning (MRP) - Master Production Schedule (MPS) |
| Topic 6: Competency 3: Process Improvement and Problem Solving | - Lean operations and waste elimination - Statistical Process Control (SPC) - Cause-and-effect diagrams (fishbone diagrams) - Six Sigma methodology - Plan-Do-Study-Act (PDSA) cycle |
| Topic 7: Competency 5: Capacity Planning and Facility Layout | - Capacity planning strategies - Location analysis and decisions - Facility layout types (process, product, cellular, fixed-position) |
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NEW QUESTION # 56
What is a major factor in the decision to locate a business near its primary market territory?
Answer: B
Explanation:
Comprehensive and Detailed Explanation (#250 words):
The dominant factor in locating a business near its primary market territory isproximity to customers.
From an Operations Management perspective, closeness to customers:
* Reduces transportation and delivery time
* Improves service responsiveness
* Enhances customer satisfaction
* Supports demand growth
This is especially critical for service organizations and distribution-intensive businesses, where customer access and speed are competitive advantages.
While proximity to labor is important, it does not define market territory. Community centers and parks are not operational drivers.
Locating near customers aligns capacity with demand, minimizes logistics complexity, and strengthens market presence.
NEW QUESTION # 57
Why might a company avoid using demand-based options such as inventory and backorders over a long period of time?
Answer: C
Explanation:
Comprehensive and Detailed Explanation (#250 words):
Demand-based options such asinventory accumulation and backordersare avoided long term becausethey are more risky.
Maintaining high inventory levels increases:
* Holding costs
* Obsolescence risk
* Damage and theft
* Cash flow constraints
Backorders, while avoiding inventory buildup, risk:
* Customer dissatisfaction
* Lost sales
* Damage to brand reputation
Operations Management categorizes these options asshort-term demand smoothing tools, not sustainable strategies. Over time, uncertainty in demand magnifies the risks associated with inventory imbalances or unmet demand.
The other options are incorrect:
* These methods are not inherently time consuming
* They do not directly affect subcontracting or labor policies
Thus, firms avoid long-term reliance on demand-based options to maintain stability and customer trust.
NEW QUESTION # 58
A construction company produces furnished pre-fabricated manufactured homes. The production manager has discovered the following challenges within one of the facilities:
* Production quantities are low and only a small number of homes are built efficiently.
* The facility space allows for low handling of materials.
* There is limited space available for employees to operate.
Which hybrid layout should be used to address the company's needs?
Answer: D
Explanation:
The appropriate hybrid layout isgroup technology.
Group technology combines the efficiency of product layouts with the flexibility of process layouts by grouping similar products into familiesand arranging workstations intocells. Each cell is designed to handle a specific family of products from start to finish.
In the case of prefabricated homes:
* Production volumes are low
* Product designs share similarities
* Space is constrained
* Material handling must be minimized
Group technology reduces:
* Movement of materials
* Setup times
* Work-in-process inventory
* Congestion in limited spaces
The other options are not layouts:
* Process performance metrics are measurement tools
* Manufacturing technology refers broadly to automation
* Statistical reduction control is not a recognized layout concept
Operations Management promotes group technology as an effective solution forlow-volume, moderate- variety environments, especially where space efficiency and flow improvement are critical.
NEW QUESTION # 59
Which formula would indicate that a fast-food restaurant was performing at, above, or below its benchmark?
Answer: C
Explanation:
Comprehensive and Detailed Explanation (#250 words):
The formulaActual output / standard outputindicates whether a fast-food restaurant is performingat, above, or below its benchmark.
This ratio compares real performance against a predefined standard. A value:
* Equal to 1 means performance meets the benchmark
* Greater than 1 means performance exceeds expectations
* Less than 1 indicates underperformance
Benchmarks are critical in Operations Management for:
* Performance evaluation
* Labor productivity measurement
* Process control
The other formulas measure utilization, velocity, or productivity, but do not directly reference a benchmark.
By comparing actual output to standard output, managers can quickly assess operational effectiveness and identify areas requiring corrective action.
NEW QUESTION # 60
What is the measure of how much supply chain is owned or operated by the manufacturer?
Answer: D
Explanation:
Vertical integrationmeasures how much of the supply chain isowned or controlled by the manufacturer.
In Operations and Supply Chain Management, vertical integration refers to the degree to which a firm performs activities upstream (suppliers) or downstream (distribution, retail) rather than relying on external partners. A highly vertically integrated company may own raw material sources, manufacturing plants, distribution centers, and even retail outlets.
Vertical integration affects:
* Cost structure
* Control over quality
* Lead times
* Supply reliability
* Strategic flexibility
The other options are not standard measures:
* Horizontal integration refers to acquiring competitors at the same stage
* "Insource" and "outsource integration" are not formal OM terms
Operations strategy evaluates vertical integration carefully because while it increases control, it also:
* Requires high capital investment
* Reduces flexibility
* Increases managerial complexity
Thus, vertical integration directly quantifies how much of the supply chain the manufacturer owns or operates.
NEW QUESTION # 61
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