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| Section | Weight | Objectives |
|---|---|---|
| Quality Management Methods | 25% | - Quality Tools and Techniques
|
| Process Design and Analysis | 20% | - Process Types
|
| Supply Chain and Inventory Management | 20% | - Inventory Control
|
| Forecasting and Project Management | 20% | - Demand Forecasting
|
| Capacity Planning and Facility Layout | 15% | - Layout Design
|
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NEW QUESTION # 62
A company manufactures and distributes its own products.
When should the company consider outsourcing its distribution?
Answer: A
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 # 63
What do assignable causes of variation indicate?
Answer: C
Explanation:
Assignable causes of variation indicate thatout-of-control signals were found in the process.
In Statistical Process Control (SPC), variation is classified into:
* Common causes(natural, inherent to the process)
* Assignable causes(specific, identifiable, and correctable)
Assignable causes signal that something unusual has occurred, such as equipment malfunction, incorrect material, improper setup, or procedural deviation. These causes result inprocess instabilityand are detected using control charts when data points fall outside control limits or exhibit non-random patterns.
Importantly, assignable causes donot automatically blame individuals. TQM philosophy stresses that most quality problems are systemic, and the goal is toidentify root causes, not assign fault.
The other options are either overly specific or misleading:
* A computer virus is not a standard quality interpretation
* Operator fault may or may not be the cause
* Equipment issues are one possible assignable cause, not the definition Recognizing assignable causes allows organizations to takecorrective action, restore process stability, and prevent recurrence-key objectives of quality control.
NEW QUESTION # 64
What helps an organization identify and plan the actions necessary to meet current and future customer demands?
Answer: A
Explanation:
Capacity planningis the process that helps organizations identify and plan the actions required to meet current and future customer demand.
In Operations Management, capacity planning ensures that an organization has theright amount of resources at the right time. These resources may include labor, equipment, facilities, and technology.
Capacity planning involves:
* Forecasting demand
* Evaluating existing capacity
* Identifying capacity gaps
* Selecting capacity adjustment strategies (e.g., overtime, subcontracting, expansion) Without capacity planning, organizations risk:
* Excess capacity and high costs
* Insufficient capacity and lost sales
* Poor service levels and customer dissatisfaction
Production capacity alone is static, while capacity planning isdynamic and forward-looking. Economic conditions influence demand but do not provide actionable operational plans.
Capacity planning aligns operations strategy with business strategy and supports sustainable growth.
NEW QUESTION # 65
What is the measure of how much supply chain is owned or operated by the manufacturer?
Answer: B
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 # 66
What is the name of the model that has been created to examine the four different supply chain perspectives of reliability, flexibility, expenses, and assets/utilization?
Answer: A
Explanation:
TheSCOR (Supply Chain Operations Reference) modelevaluates supply chains across four key dimensions:
reliability, responsiveness/flexibility, cost, and asset utilization.
Developed by the Supply Chain Council, SCOR provides:
* Standardized performance metrics
* Best-practice process definitions
* A common supply chain language
Operations Management uses SCOR to benchmark performance, identify gaps, and align supply chain strategy with business objectives.
The other options are not recognized industry models.
NEW QUESTION # 67
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