Simpson and Hancock’s Practical Operations Management

CHAPTER ONE: INTRODUCTION TO OPERATIONS MANAGEMENT

Minute Answer Drill- Questions for Instructor Release Only

1. Consider a passenger airline company. Name three inputs to this operation.
Answer: passengers, fuel, aircraft, pilots, airport etc.

2. Productivity refers to a measurement of value creation, calculated as a ratio of the values of what
to what?
Answer: output to input

3. In the hierarchy of decision-making, what level is below tactical decision making?

Answer: implementation

4. Does a service operation usually produce more or less inventory, when compared to manufacturing?
Answer: less

5. Lean is operating without what?

Answer: waste

6. What is continuous investigation of business performance using large volumes of data called?
Answer: business analytics

7. Green refers to assuring what?

Answer: sustainability

8. What are tangible goods awaiting sale or use called?

Answer: inventory

9. Which involves the greatest degree of certainty in planning, Production and Service Management or
Event Management?
Answer: Production and Service Management

10. What is a description of all raw materials and intermediate assemblies required to create a finished
product called, a bill of materials, a supply chain or an incident?
Answer: bill of materials

11. Does a goods operation often have more or less reliance on skilled labor, when compared to a service
operation?
Answer: less

12. Does production and service management imply more or less control than event management?
Answer: more

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Quick Start- Questions for Instructor Release Only

13. A large passenger airline must decide whether or not to purchase a smaller local airline service. Is this
an example of a strategic, tactical, or implementation level of decision?
Answer: strategic

14. A large passenger must decide if a particular passenger route should be terminated. Is this an example
of a strategic, tactical, or implementation level of decision?
Answer: tactical

15. A large passenger has just received notification that one of its small regional commuter airports has
been closed due to adverse weather conditions. The airline must decide whether to re-book the 20
stranded passengers on flights over the next few days from that airport, or bus them to the nearest
functioning airport some 40 miles away where an agreement with a partner airline will allow the
passengers to continue on their journeys that same day. Is this an example of a strategic, tactical, or
implementation level of decision?
Answer: implementation

16. A large passenger must decide whether to sign a mutually beneficial agreement, whereby it and other
local airlines must assist each other in flying out stranded passengers due to regional airport closures in the
event of adverse weather, from November this year to March next year. Is this an example of a strategic,
tactical, or implementation level of decision?
Answer: tactical

17. A service manager has noticed that the office is almost out of envelopes and has decided to purchase
envelopes from a local business, as their strategic supplier has failed to deliver due to adverse weather
conditions. Is this an example of a strategic, tactical, or implementation level of decision?
Answer: implementation

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 Simpson and Hancock’s Practical Operations Management

Ramp Up- Questions for Instructor Release Only

18. Consider the following four situations: car manufacturing, mining coal, telephone sales, and
negotiating a contract. Now consider the following grid, which indicates four positions marked A, B, C,
and D. Each of these positions indicates differing levels of tangibility and control over an operation’s
external environment:

Match each of the four points on the grid to each of the four operations proposed, assuming each grid
location can be used only once.
Answer: A negotiating a contract; B telephone sales; C mining coal; D car manufacturing

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19. Consider the following five situations: construction of a luxury cruise ship, operation of casual dining
restaurant, staging of a professional sports match, manufacturing a patented drug, and rescuing stranded
animals from a flooded area. Now consider the following grid, which indicates five positions marked A,
B, C, D and E. Each of these positions indicates differing levels of tangibility and operation types:

Match each of the five points on the grid to each of the four operations proposed, assuming each grid
location can be used only once.
Answer: A operation of casual dining restaurant; B construction of a luxury cruise ship; C manufacturing a
patented drug; D staging of a professional sports match; E rescuing stranded animals from a flooded area

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 Simpson and Hancock’s Practical Operations Management

Multiple Choice Format- Questions for Instructor Release Only

20. Which of the following is generally not a characteristic of a service operation?
a) intangible output b) high customer contact c) high labor content
d) stockpiling of output for future use e) low uniformity of output
Answer: d

21. The ratio of the total combined value of an operation’s outputs to the total combined value of its
inputs is best known as:
a) a labor productivity measure b) value-added c) sustainability
d) a break-even point e) a total productivity measure
Answer: e
Suggested Partial Credit: b

22. Consider the following three decisions that an organization could be faced with:
I. Deciding whether a particular shipment should be sent by air freight, or over-the-ground trucking.
II. Deciding between Singapore, London or Buffalo as the location for the construction of a new
manufacturing facility.
III. Deciding which of five different branch offices should serve an important new account.

Which of these three decisions would be considered ‘strategic’ planning?

a) I only b) II only c) III only d) II and III e) I, II, and III
Answer: b
Suggested Partial Credit: d

23. Which of the following statements is (are) true?

I. Measurement of productivity in service is more straightforward than in manufacturing since it is not
necessary to take into account the cost of materials.
II. Service involves a much higher degree of customer contact than manufacturing.
III. Local optimization ignores any larger problem of which the local decision being optimized may be a
component.

a) I only b) I and III c) II and III d) II only e) I, II and III are true
Answer: c
Suggested Partial Credit: d or e

24. Which of the following statements is (are) true?

I. ‘Green’ assures very high productivity.
II. To be ‘lean’ is to operate without waste.
III. An example of a strategic operations management decision is choice of location.

a) I only b) I and III c) II and III d) II only. e) I, II and III are true
Answer: c
Suggested Partial Credit: d or e

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25. Consider the following five situations: construction of a luxury cruise ship, operation of casual
dining restaurant, staging of a professional sports match, manufacturing a patented drug, and rescuing
stranded animals from a flooded area. Now consider the following grid, which indicates five positions
marked A, B, C, D and E. Each of these positions indicates differing levels of tangibility and
operation types:

Match each of the five operations to its most appropriate position on this grid, using each position only
once. Please answer the following three questions, based on this exercise.
Which position on the grid best matches operation of casual dining restaurant?
a) position A b) position B c) position C d) position D e) position E
Answer: a
Suggested Partial Credit: c

Which position on the grid best matches manufacturing a patented drug?

a) position A b) position B c) position C d) position D e) position E
Answer: c
Suggested Partial Credit: a or b

Which position on the grid best matches rescuing stranded animals from a flooded area?
a) position A b) position B c) position C d) position D e) position E
Answer: e
Suggested Partial Credit: d

© 2011 Glenochil Associates, LLC

 Simpson and Hancock’s Practical Operations Management

26. Which of the following statements is (are) true?

I. An example of a tactical operations management decision is whether to build a new facility or to
expand an existing one.
II. An organization that is twice as productive as its competitor will be twice as profitable.
III. Ethics are principles governing conduct, delineating ‘good’ from ‘bad’.

a) I only b) I and II c) II and III d) III only. e) I, II and III are true
Answer: d
Suggested Partial Credit: c

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Vocabulary Drills- Questions for Instructor Release Only

27. Consider the following three keyword definitions from your reading in Chapter One:

 A system consisting of all functions within an organization that play some role in adding value to
the organization’s product.
 Continuous investigation of business performance using large volumes of data.
 Tangible products.

Identify the three keywords on the table below that correspond to these five definitions above.
Keyword Keyword
Number Number
1 bill of materials 16 productivity
2 biomimicry 17 project
3 business analytics 18 responsibility
4 ethics 19 scientific management
5 goods 20 services
6 green 21 stockpiling
7 incident 22 strategy
8 inventory 23 supply chain
9 iterative planning 24 sustainability
10 lean 25 tactics
11 local optimization 26 tangibility
12 NGO 27 value chain
13 operations 28 value creation
14 planning horizon 29 value-added
15 processes

Answer: 27, 3 and 5

© 2011 Glenochil Associates, LLC

 Simpson and Hancock’s Practical Operations Management

28. Consider the following three keyword definitions from your reading in Chapter One:

 Operating without waste.

 The degree to which activity with immediate benefit does not incur greater costs in the long
term.
 The farthest point in the future considered in decision making.

Identify the three keywords on the table below that correspond to these five definitions above.
Keyword Keyword
Number Number
1 bill of materials 16 productivity
2 biomimicry 17 project
3 business analytics 18 responsibility
4 ethics 19 scientific management
5 goods 20 services
6 green 21 stockpiling
7 incident 22 strategy
8 inventory 23 supply chain
9 iterative planning 24 sustainability
10 lean 25 tactics
11 local optimization 26 tangibility
12 NGO 27 value chain
13 operations 28 value creation
14 planning horizon 29 value-added
15 processes

Answer: 10, 24 and 14

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