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| Section | Weight | Objectives |
|---|---|---|
| Supply Chain and Inventory Management | 20% | - Inventory Control
|
| Quality Management Methods | 25% | - Total Quality Management (TQM)
|
| Capacity Planning and Facility Layout | 15% | - Layout Design
|
| Process Design and Analysis | 20% | - Process Performance
|
| Forecasting and Project Management | 20% | - Demand Forecasting
|
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NEW QUESTION # 51
What are two strategic objectives for every member of the supply chain?
Choose 2 answers
Answer: A,B
Explanation:
Two universal strategic objectives for all supply chain members areincreasing cost effectivenessand becoming more efficient.
Every organization in the supply chain-suppliers, manufacturers, distributors, and retailers-must manage costs while improving operational efficiency to remain competitive.
Cost effectiveness ensures:
* Sustainable margins
* Competitive pricing
* Resource optimization
Efficiency focuses on:
* Process improvement
* Waste reduction
* Throughput enhancement
* Reliable delivery
While reducing lead times and increasing demand are desirable outcomes, they are not universal strategic objectives for every participant. Distribution location decisions apply only to specific nodes.
Operations Management views supply chains asinterdependent systems, where overall performance depends on efficiency and cost discipline at each stage.
NEW QUESTION # 52
What is one advantage of a periodic review system?
Answer: C
Explanation:
A key advantage of aperiodic review inventory systemis thatall items are reviewed at the same time interval.
In a periodic review system:
* Inventory levels are checked at fixed intervals (e.g., weekly, monthly)
* Orders are placed to raise inventory to a target level
* Multiple items can be ordered together
This approach simplifies administration and reduces ordering costs, making it especially suitable for:
* Retail environments
* Low-value or slow-moving items
* Situations where continuous monitoring is impractical
The other options describe continuous review systems:
* Individual item handling
* Real-time inventory updates
* Lower safety stock requirements
Operations Management recognizes periodic review as a trade-off between control and simplicity. While it may require higher safety stock, it offers operational efficiency and cost savings in many contexts.
NEW QUESTION # 53
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 # 54
Which two statements are true about effective capacity?
Choose 2 answers
Answer: A,D
Explanation:
Effective capacityrepresents themaximum output a system can realistically achieve under normal operating conditions. It is alwayslower than design capacity, which assumes ideal, uninterrupted conditions.
StatementAis correct because effective capacity accounts for:
* Scheduled maintenance
* Breaks and shift changes
* Setup times
* Normal inefficiencies
StatementBis also correct because effective capacity is considered astable, ongoing measureused for operational planning and performance evaluation. It reflects how a system is designed to operate sustainably over time, not temporarily.
StatementCis incorrect because effective capacity is not a short-term or temporary measure; it is used consistently for planning, scheduling, and forecasting.
StatementDis incorrect because effective capacity does not define aminimumoutput level-it defines a realistic maximumunder expected conditions.
In Operations Management, effective capacity is essential for:
* Capacity utilization calculations
* Aggregate planning
* Location and facility decisions
* Bottleneck analysis
By distinguishing between design and effective capacity, managers avoid unrealistic expectations and plan resources more accurately, reducing congestion, overtime, and quality problems.
NEW QUESTION # 55
How do just-in-time (JIT) and lean systems add value?
Answer: A
Explanation:
Just-in-time (JIT) and lean systems add valueby reducing wasteacross all operational processes.
Lean Operations define value strictly from thecustomer's perspective. Any activity that does not add value to the product or service is considered waste (muda). JIT and lean systems systematically identify and eliminate this waste to improve efficiency, quality, and responsiveness.
Common types of waste targeted include:
* Overproduction
* Waiting time
* Excess inventory
* Unnecessary motion
* Transportation
* Defects and rework
* Overprocessing
By reducing waste, organizations achieve:
* Shorter lead times
* Lower costs
* Improved quality
* Greater flexibility
Options such as improving lighting or enhancing responsibility may support efficiency indirectly but do not define the core value mechanism of JIT and lean systems. Increasing simplicity is a result of waste reduction, not the primary method.
Operations Management emphasizes waste elimination as the foundation of sustainable operational excellence, making optionCthe correct answer.
NEW QUESTION # 56
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