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Exam 9: Production and Operations Management

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Question 61

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___________ utility is the value added by the creation of finished goods and services using raw materials, components, and other inputs.

A) Manufacturing
B) Marginal
C) Consumption
D) Form

E) A) and D)
F) B) and C)

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Question 62

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Alex is a production manager who believes his firm uses more of all types of resources than is necessary to produce its products. He would like to find a way to cut back on labor, and reduce the firm's investment in tools and space as well. It seems that Edwin would like to adopt:

A) mass production.
B) marginal cost management.
C) lean manufacturing.
D) the maximum production method.

E) A) and B)
F) B) and D)

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Question 63

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The Six Sigma approach to quality control:

Facilities layout will depend upon the processes that are to be accomplished in the firm's operation.

Which of the following statements describes past processes that existed in manufacturing that negatively affected a firm's competitive advantage?

Production manager Ryan McNealy wants to link all the divisions and subsidiaries of his firm's computerized functions into a single, integrated software program that uses a single database. In order to achieve this goal, Ryan could make use of:

A major advantage of a just-in-time inventory system is that it reduces costs and the effort for both the producer and its suppliers.

Materials requirement planning relies on the firm's balance sheet to make sure that the right quantities of finished goods are produced.

A basic characteristic of flexible manufacturing is that it:

Maintaining ___________ involves producing what the customer wants while reducing errors before and after delivery to the customer.

ISO 14000 is a new set of product quality standards that has replaced the old ISO 9000 standards.

A production process characterized by long production runs to turn out finished goods over time is known as a(n) :

The production process requires inputs, controls, and outputs.

ISO 9000 refers to a set of international standards for quality management and assurance.

In an effort to improve the quality control process at the Southern Peanut Corporation, management is introducing the importance of the Deming Cycle to employees. This suggests that managers are aware of the need to find potential problems before they occur.

At Stevens Manufacturing workers are organized in teams that combine their efforts to produce complex units of a final product. Stevens is using a facility layout known as a(n) :

Companies that achieve lean manufacturing use less of everything (raw materials, labor, etc.) to produce the same amount of products.

Mini-Case "These are exciting times for our company. We've made a lot of changes over the past two years that have really improved our operations and lowered our costs. Now we are ready to expand into new markets. Minimotors is on its way to becoming a global player." The speaker was Sparky Weyer, president and CEO of Minimotors, Inc., a growing manufacturer of small (some of them downright tiny) electric motors used in a variety of power tools and appliances. Sparky was meeting with potential financial backers in an effort to obtain funding for some expensive new machinery he wanted to purchase. "You may have heard about some of the ways we've cut costs," Sparky continued. "We've developed a new arrangement with several of our biggest suppliers. They've agreed to make more frequent deliveries tied directly to our production schedules. This will help us reduce our inventory costs dramatically. We've also greatly reduced the number of defective motors we produce by carefully keeping tabs on all of our manufacturing processes. In fact, we have set a goal of reducing our defects to 3.4 parts per million. The main purpose of my meeting with you today is because we want to install some sophisticated new machinery and software that will allow us to quickly design and produce motors to the exact specifications of our customers. The machinery is computer-controlled and can produce custom-designed products at very little increase in cost compared to our mass-produced motors. We feel this flexibility and quick response time will give us a tremendous competitive advantage and help us attract new customers. Installing the new equipment and training our workers to use it properly will be a complex project, but I'm confident that once we get everything up and running we'll be able to strengthen our position as the leading maker of high-quality electric motors." -The arrangements Minimotors has worked out with its suppliers to reduce the amount of inventory the company holds at any one time shows that it is committed to a(n) _____________.

Operations management involves inventory management, quality control, and production scheduling.

The production of a bridge, ship, or large airplane usually involves a variable-position facility layout.