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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Capacity Planning and Facility Layout | 15% | - Capacity Concepts
|
| Topic 2: Process Design and Analysis | 20% | - Process Performance
|
| Topic 3: Quality Management Methods | 25% | - Quality Tools and Techniques
|
| Topic 4: Forecasting and Project Management | 20% | - Project Management
|
| Topic 5: Supply Chain and Inventory Management | 20% | - Supply Chain Design
|
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NEW QUESTION # 50
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 # 51
What are two product system differences between the push and pull processes?
Choose 2 answers
Answer: A,F
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 # 52
What is meant by "duration of the change"?
Answer: A
Explanation:
Comprehensive and Detailed Explanation (#270 words):
In capacity and aggregate planning,"duration of the change"refers tohow long the organization expects to operate at a different capacity level-higher or lower than normal. This is exactly what optionAstates.
In operations planning, managers must decide not onlyhow muchcapacity to change, but alsofor how longthe change will be required. That time horizon directly drives which capacity option is appropriate. If the change is short-lived, the firm typically chooses flexible, reversible options (overtime, temporary labor, subcontracting). If the change is long-lived, it may justify structural commitments (new equipment, new facility, permanent staffing).
This ties to hierarchical planning logic: the planning and control system exists to "harmonize the client's requests with the available resources" and uses staged planning levels (strategic capacity, aggregate planning, operational planning, scheduling). At the aggregate planning level, the organization validates whether it has enough capacity to meet expected workloads and selects a combination of resources.
Duration matters because longer changes increase the cost of relying on short-term measures (fatigue, overtime premiums, quality risk) while making long-term investments more economically rational. In short:
duration is the time component of the capacity decision, and it guides the selection of the most suitable planning lever.
NEW QUESTION # 53
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: A,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 # 54
Which two factors affect a service location decision? Choose 2 answers
Answer: B,C
Explanation:
For service organizations,proximity to customersandquality-of-life issuesare two dominant factors in location decisions.
Unlike manufacturing, service operations requiredirect customer contact. Being close to customers reduces travel time, improves convenience, enhances responsiveness, and increases perceived service quality.
Examples include hospitals, banks, restaurants, and consulting offices, where location accessibility directly influences demand.
Quality-of-life issues-such as education, healthcare, housing, safety, climate, and cultural amenities-affect the ability toattract and retain skilled service employees. Human capital is a critical input in service operations, and workforce availability often outweighs cost considerations.
The other options are less relevant:
* Manufacturing proximity matters mainly for production facilities
* Warehouse storage is a logistics concern, not a service driver
Operations Management emphasizes that service location decisions balancecustomer accessandemployee satisfaction, since both directly influence service quality, productivity, and long-term sustainability.
NEW QUESTION # 55
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