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| Section | Objectives |
|---|---|
| Topic 1: Process Design and Analysis | - Capacity Planning and Bottlenecks - Process Mapping and Flow |
| Topic 2: Quality Management | - Total Quality Management (TQM) - Six Sigma and Continuous Improvement |
| Topic 3: Project and Operations Scheduling | - Project Management Basics - Scheduling Techniques |
| Topic 4: Forecasting and Planning | - Demand Forecasting Methods - Aggregate Planning |
| Topic 5: Operations Management Foundations | - Operations Strategy and Competitiveness - Introduction to Operations and Productivity |
| Topic 6: Supply Chain and Inventory Management | - Just-in-Time (JIT) and Lean Operations - Supply Chain Design and Logistics - Inventory Models and Control Systems |
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NEW QUESTION # 16
A company manufactures and distributes its own products.
When should the company consider outsourcing its distribution?
Answer: B
Explanation:
A company should consider outsourcing distributionwhen it determines that distribution is no longer a core function.
Operations Management defines core functions as activities that:
* Create competitive advantage
* Differentiate the firm
* Require proprietary knowledge or capabilities
If distribution does not meet these criteria, outsourcing can:
* Lower costs
* Improve service reliability
* Increase scalability
* Allow management to focus on strategic priorities
The other options do not justify outsourcing:
* Forecasting difficulty is a management issue
* Lowest-cost operators should retain distribution
* Regulations do not eliminate strategic relevance
Outsourcing decisions must align with long-term operations strategy, not short-term cost fluctuations.
NEW QUESTION # 17
Which capacity planning measurement tells how much capacity a company is using?
Answer: D
Explanation:
Comprehensive and Detailed Explanation (#250 words):
Capacity utilizationmeasures how much of a company's available capacity is actually being used.
It is calculated as:
Capacity Utilization = Actual Output / Design or Effective Capacity
In Operations Management, capacity utilization provides insight into:
* Operational efficiency
* Resource usage
* Potential bottlenecks or underutilization
High utilization may indicate efficiency but can also lead to congestion, fatigue, and quality problems. Low utilization suggests excess capacity and higher unit costs.
The other terms describe different concepts:
* Design capacityis the maximum theoretical output
* Effective capacityaccounts for normal disruptions
* Capacity focusrefers to strategic specialization
Capacity utilization helps managers balance efficiency with flexibility, making it a core performance metric in both manufacturing and service operations.
NEW QUESTION # 18
A manufacturing company decides to open a new distribution center location in order to minimize distribution costs to warehouses or stores.
What tool should the manufacturing company use to determine where the new distribution center should be located?
Answer: A
Explanation:
Thecenter-of-gravity approachis the most appropriate tool for determining the optimal location of a distribution center when the goal is tominimize total transportation costs.
This method calculates a weighted average location based on:
* Geographic coordinates of demand points
* Volume shipped to each location
The result identifies a location that minimizes the overall distance-weighted transportation cost.
Other options serve different purposes:
* Load-distance models compare alternative sites
* Transportation methods optimize shipping routes, not facility location
* Break-even analysis compares cost structures, not spatial efficiency
In Operations Management, the center-of-gravity approach is widely used for strategic distribution planning because it provides aquantitative, objective basisfor location decisions.
NEW QUESTION # 19
A company suddenly finds demand has increased to 140% of its previous capacity. It has been able to hire only a fraction of the employees previously laid off, and a warehouse fire destroyed 80% of its inventory.
Which two options does the company have to rapidly meet the new demand?
Choose 2 answers
Answer: B,C
Explanation:
When demand rises suddenly to140% of existing capacity, the firm must rely onshort-term, flexible capacity optionsto respond quickly.
The two appropriate options are:
* Hiring temporary workers
* Subcontracting a portion of production capacity
Temporary workers can be deployed rapidly with minimal onboarding time, allowing the firm to increase output without long-term labor commitments. This option is especially effective when the demand surge may be temporary or uncertain.
Subcontracting provides immediate access toexternal capacitywithout requiring capital investment. It allows the firm to meet demand while avoiding the risks associated with permanent expansion.
The other options are not viable in the short term:
* Building new facilities is capital-intensive and slow
* Hiring and training full-time employees requires time and long-term commitment Operations Management distinguishescapacity-based optionsinto short-term (temporary labor, overtime, subcontracting) and long-term (facilities, permanent workforce). In crisis situations, speed and flexibility dominate decision-making.
NEW QUESTION # 20
What are two product system differences between the push and pull processes?
Choose 2 answers
Answer: A,E
Explanation:
The two correct differences between push and pull systems are:
* Push moves the product forward in anticipation of demand
* Pull eliminates excessive inventory
Push systems rely on forecasts and schedule production in advance, often leading to overproduction and excess inventory if forecasts are inaccurate.
Pull systems, by contrast, produce only what is needed when it is needed, significantly reducing inventory levels and associated costs.
The incorrect options describe misconceptions:
* Overproduction increases cost, not lowers it
* Pull systems do not create additional products
* Employee relations are not defining characteristics
* Quality control exists in both systems
Operations Management favors pull systems in environments where demand variability and cost control are critical, reinforcing lean principles.
NEW QUESTION # 21
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