1) Some of the operations-related activities of Hard Rock
Café include designing meals and analyzing them for
ingredient cost and labor requirements.
Answer: TRUE
2) Because Hard Rock Cafés are themed restaurants,
operations managers focus their layout design efforts on
attractiveness while paying little attention to efficiency.
Answer: FALSE
3) All organizations, including service firms such as
banks and hospitals, have a production function.
Answer: TRUE
4) Operations management is the set of activities that
creates value in the form of goods and services by
transforming inputs into outputs.
Answer: TRUE
5) An example of a "hidden" production function is the
transfer of funds between accounts at a bank.
Answer: TRUE
6) Competition in the 21st century is no longer between
companies; it is between supply chains.
Answer: TRUE
7) An accounting firm that provides tax services for a
company would be considered to be part of that
company's supply chain.
Answer: TRUE
8) One reason to study operations management is to
learn how people organize themselves for productive
enterprise.
Answer: TRUE
9) Boeing's development of the 787 Dreamliner is an
example of a company obtaining a competitive
advantage through product differentiation/innovation.
Answer: TRUE
10) NAFTA seeks to phase out all trade and tariff
barriers among Canada, Mexico, and the United States.
Answer: TRUE
11) The World Trade Organization has helped to
significantly reduce tariffs around the world.
Answer: TRUE
12) Production processes are being dispersed to take
advantage of national differences in labor costs.
Answer: TRUE
13) NAFTA seeks to phase out all trade and tariff
barriers between the United States and Asia.
Answer: FALSE
14) One reason for global operations is to gain
improvements in the supply chain.
Answer: TRUE
15) One reason to globalize is to learn to improve
operations.
Answer: TRUE
16) To attract and retain global talent, and to expand a
product's life cycle, are both reasons to globalize.
Answer: TRUE
17) A product will always be in the same stage of its
product life cycle regardless of the country.
Answer: FALSE
18) The World Trade Organization helps provide
governments and industries around the world with
protection from firms that engage in unethical conduct.
Answer: TRUE
19) One phase of a large project is scheduling.
Answer: TRUE
20) A project organization works best for an
organization when the project resides in only one of its
functional areas.
Answer: FALSE
21) One responsibility of a project manager is to make
sure that the project meets its quality goals.
Answer: TRUE
22) Work breakdown structure is a useful tool in project
management because it addresses the timing of
individual work elements.
Answer: FALSE
23) Project managers have their own code of ethics,
established by the Project Management Institute.
Answer: TRUE
24) Ethical issues that can arise in projects include gifts
from contractors, pressure to mask delays with false
status reports, and pressure to compromise project
quality to meet bonuses or avoid penalties related to
schedules.
Answer: TRUE
25) Gantt charts give a timeline for each of a project's
activities, but they do not adequately illustrate the
interrelationships between the activities and the
resources.
Answer: TRUE
26) PERT, but not CPM, has the ability to consider the
precedence relationships in a project.
Answer: FALSE
27) The shortest of all paths through the network is the
critical path.
Answer: FALSE
28) The fundamental difference between PERT and CPM
is that PERT uses the beta distribution for crashing
projects while CPM uses cost estimates.
Answer: FALSE
29) The ES of an activity that has only one predecessor is
simply the EF of that predecessor.
Answer: TRUE
30) Slack is the amount of time an activity can be
delayed without delaying the entire project.
Answer: TRUE
31) Every network has at least one critical path.
Answer: TRUE
32) The critical path can be determined by use of either
the "forward pass" or the "backward pass."
Answer: FALSE
1) ________ is the set of activities that creates value in
the form of goods and services by transforming inputs
into outputs.
Answer: Operations management
2) Marketing, production/operations, and ________ are
the three functions that all organizations must perform
to create goods and services.
Answer: finance/accounting
3) A(n) ________ is a global network of organizations
and activities that supply a firm with goods and
services.
Answer: supply chain
4) Competition in the 21st century is no longer between
companies; it is between ________.
Answer: supply chains
5) ________ are areas located along the United States-
Mexico border in which factories receive preferential
tariff treatment.
Answer: Maquiladoras
6) ________ is a free trade agreement among Canada,
Mexico, and the United States.
Answer: NAFTA—North American Free Trade
Agreement
7) ________ and ________ are two issues where
significant cultural differences are large, yet progress
toward global uniformity is slowly being accepted.
Answer: Bribery, protection of intellectual property
8) An organization that has worked to achieve global
uniformity in cultural and ethical issues such as bribery,
child labor, and environmental regulations is ________.
Answer: the World Trade Organization
9) A(n) ________ is an organization formed to ensure
that programs (projects) receive the proper management
and attention.
Answer: project organization
10) A(n) ________ divides a project into more and more
detailed components.
Answer: work breakdown structure or WBS
11) The ________ has established a code of ethics
especially for project managers.
Answer: Project Management Institute
12) The ________ is a project management technique
using only one time factor per activity that enables
managers to schedule, monitor, and control large and
complex projects.
Answer: critical path method or CPM
Diff: 1
Key Term: Critical path method (CPM)
Learning Outcome: Describe the goals and stages of
project management
13) The ________ is the computed longest time path(s)
through a network.
Answer: critical path
14) The network analysis method that allows activity
times to vary is ________.
Answer: PERT or Program Evaluation and Review
Technique
1) At Hard Rock Café, tasks that reflect operations or
operations management include:
A) designing efficient layouts.
B) providing meals.
C) receiving ingredients.
D) preparing effective employee schedules.
E) all of the above.
2) An operations task performed at Hard Rock Café is:
A) borrowing funds to build a new restaurant.
B) advertising changes in the restaurant menu.
C) calculating restaurant profit and loss.
D) preparing employee schedules.
E) all of the above.
Answer: D
3) Operations management is applicable:
A) mostly to the service sector.
B) to services exclusively.
C) mostly to the manufacturing sector.
D) to all firms, whether manufacturing or service.
E) to the manufacturing sector exclusively.
Answer: D
4) Which of the following are the primary functions of
all organizations?
A) production/operations, marketing, and human
resources
B) marketing, human resources, and finance/accounting
C) sales, quality control, and production/operations
D) marketing, production/operations, and
finance/accounting
E) research and development, finance/accounting, and
purchasing
5) Which of the following pioneers was NOT making a
professional impact during the Scientific Management
Era?
A) Frank Gilbreth
B) W. Edwards Deming
C) Henry L. Gantt
D) Lillian Gilbreth
E) Frederick W. Taylor
6) Which of the following would NOT be an operations
function in a commercial bank?
A) auditing
B) teller scheduling
C) maintenance
D) collection
E) check clearing
 D) a costly part of the enterprise.
7) The marketing function's main concern is with: E) all of the above.
A) producing goods or providing services. Answer: E
B) procuring materials, supplies, and equipment.
C) building and maintaining a positive image.
13) Which of the following statements regarding the
D) generating the demand for the organization's
Dreamliner 787 is true?
products or services.
A) Boeing has found partners in over a dozen countries.
E) securing monetary resources.
B) The new aircraft incorporates a wide range of
Answer: D
aerospace technologies.
C) The new aircraft uses engines from not one, but two
8) Which of the following tasks within an airline
manufacturers.
company are related to operations?
D) Boeing will add only 20 to 30 percent of the aircraft's
A) crew scheduling
value.
B) international monetary exchange
E) All of the above are true.
C) sales
Answer: E
D) advertising
E) accounts payable
14) Boeing's new 787 Dreamliner:
Answer: A
A) is assembled in Washington, D.C.
B) uses engines from Japan.
9) What is a global network of organizations and C) has its fuselage sections built in Australia.
activities that supply a firm with goods and services? D) has increased efficiency from new engine technology.
A) supply tree E) results from a partnership of about a dozen
B) provider network companies.
C) supply chain Answer: D
D) vendor network
E) vendor tree 15) Cost cutting in international operations can take
Answer: C place because of:
A) lower taxes and tariffs.
10) Which of the following fosters specialization and B) lower wage scales.
worldwide supply chains? C) lower indirect costs.
A) more expensive transportation D) less stringent regulations.
B) instant communication E) all of the above.
C) economies of scope Answer: E
D) managers with a broad knowledge of many things
E) high trade tariffs 16) Which of the following did the authors NOT suggest
Answer: B as a reason for globalizing operations?
A) reduce costs
B) improve the supply chain
11) Reasons to study operations management include:
C) pursue stockholder approval ratings
A) studying how people organize themselves for
D) understand markets
productive enterprise.
E) attract and retain global talent
B) knowing how goods and services are consumed.
Answer: C
C) understanding what human resource managers do.
D) learning about a costly part of the enterprise.
17) Multinational organizations can shop from country
E) A and D
to country and cut costs through:
Answer: E
A) lower wage scales.
B) lower indirect costs.
12) Reasons to study operations management include
C) less stringent regulations.
learning about:
D) lower taxes and tariffs.
A) how people organize themselves for productive
E) all of the above.
enterprise.
Answer: E
B) how goods and services are produced.
C) what operations managers do.
18) The term maquiladora is most synonymous with: 23) With reference to cultural and ethical issues, the
A) free trade zones in Mexico. World Trade Organization has:
B) Chinese forced labor camps. A) eliminated bribery.
C) home-based or cottage industry. B) made progress in providing equal protection of
D) areas that do not meet U.S. standards for workplace intellectual property among nations.
safety and pollution. C) phased out all trade and tariff barriers between the
E) tax breaks provided by some South American United States and Mexico.
countries to other South American countries. D) eliminated slave labor and child labor.
Answer: A E) played little role in addressing cultural and ethical
issues among nations.
19) Which of the following is true of maquiladoras? Answer: B
A) They discourage foreign businesses from
outsourcing.
24) Which of the following statements regarding Bechtel
B) They assess tariffs only on the value-added work
is true?
done.
A) Its competitive advantage is project management.
C) They originated in China.
B) Bechtel was the construction contractor for the
D) None of the above
Hoover Dam.
E) All of the above
C) While helping to rebuild Iraq, Bechtel's crews had to
Answer: B
travel under armed escort.
D) Bechtel's procurement program is global in nature.
20) Which of the following represents a reason for
E) All of the above are true.
globalizing operations?
Answer: E
A) to improve the supply chain
B) to improve operations
25) Which of the following statements about Bechtel is
C) to expand a product's life cycle
true?
D) to attract and retain global talent
A) Even though Bechtel is over 100 years old, the
E) all of the above
Kuwaiti oil fields was its first "project."
Answer: E
B) Bechtel is the world's premier manager of massive
construction and engineering projects.
21) Which of the following does NOT represent a valid
C) Bechtel's competitive advantage is supply chain
reason for globalizing operations?
management.
A) reduce costs
D) While its projects are worldwide, its network of
B) improve the supply chain
suppliers is largely in the United States
C) reduce responsiveness
E) All of the above are true.
D) attract and retain global talent
Answer: B
E) understand markets
Answer: C
26) Which of the following projects were completed by
Bechtel?
22) The purpose of NAFTA is to:
A) Hoover Dam
A) substitute cheap labor in Mexico for expensive labor
B) Boston Central Artery/Tunnel
in the United States.
C) Rebuilding Kuwait after Iraq's invasion in 1990
B) curb illegal immigration from Mexico to the United
D) Rebuilding Iraq after the U.S. invasion, starting in
States.
2003
C) phase out all trade and tariff barriers between North
E) All of the above were Bechtel projects
America and South America.
Answer: E
D) phase out all trade and tariff barriers between the
United States, Canada, and Mexico.
27) The phases of project management are:
E) provide fair and equitable tariff rates for trade
A) planning, scheduling, and controlling.
between the United States, Canada, and Mexico.
B) planning, programming, and budgeting.
Answer: D
C) planning, organizing, staffing, leading, and
controlling.
D) different for manufacturing projects than for service III. The work contains interrelated tasks requiring
projects. specialized skills.
E) GANTT, CPM, and PERT. IV. The project is temporary but unimportant to long-
Answer: A term organizational success.
V. The project cuts across organizational lines.
28) Which of the following is NOT one of the phases of A) I, II, III, IV, V
project management? B) None of the above conditions need to be satisfied.
A) planning C) I, III, V
B) scheduling D) I, II, III, V
C) controlling E) I, III, IV, V
D) budgeting Answer: C
E) All of the above are project management phases. Diff: 2
Answer: D Key Term: Project organization
Learning Outcome: Describe the goals and stages of
29) A project organization:
project management
A) is effective for companies with multiple large
projects.
B) is appropriate only in construction firms.
33) A project organization that becomes permanent is
C) often fails when the project cuts across organizational
often referred to as a:
lines.
A) fixed project organization.
D) is most helpful for ongoing projects with no
B) matrix organization.
termination date.
C) normal organization.
E) is most helpful when the work contains simple and
D) standard organization.
unrelated tasks.
E) permanent project organization.
Answer: A
Answer: B

30) A code of ethics especially for project managers:

34) WBS stands for which of the following project
A) has been established by the Project Management
management tools?
Institute.
A) work break schedule
B) has been formulated by the Federal government.
B) work breakdown status
C) has been formulated by the World Trade
C) work breakdown schedule
Organization.
D) work breakdown structure
D) is inappropriate, since everyone should use the same
E) work break status
guidance on ethical issues.
Answer: D
E) does not exist at this time.
Answer: A
35) A combination of effective Gantt chart use and other
31) Ethical issues that may arise in projects large and tactics allowed Delta to cut the average time for a plane
small include: layover by what % of the original 60 minute duration?
A) gifts from contractors. A) 33%, to 40 minutes
B) exaggerated expense reports. B) 50%, to 30 minutes
C) compromised quality standards to meet bonuses or C) 20%, to 48 minutes
avoid penalties related to schedules. D) 25%, to 45 minutes
D) pressure to mask delays with false status reports. E) 40%, to 36 minutes
E) all of the above. Answer: A
Answer: E

32) The project organization works best when which of
the following conditions are satisfied?
I. Work tasks can be defined with a specific goal and
deadline.
II. The job is typical and familiar to the existing
organization.
36) Which of the following statements regarding Gantt
charts is true?
A) Gantt charts give a timeline and precedence
relationships for each activity of a project.
B) Gantt charts use the four standard spines of Methods,
Materials, Manpower, and Machinery.
C) Gantt charts are visual devices that show the duration
of activities in a project.
D) Gantt charts are expensive.
E) All of the above are true.
Answer: C
37) The control of projects involves close monitoring of
which of the following?
A) resources
B) costs
C) quality
D) budgets
E) all of the above
Answer: E
38) The main difference between PERT and CPM is that:
A) PERT is more accurate than CPM.
B) PERT assumes that activity durations are known.
C) PERT ignores activity costs.
D) CPM assumes activity durations can vary.
E) PERT employs three time estimates for each activity.
Answer: E
39) The difference between AON and AOA networks is
that:
A) AOA networks sometimes require dummy activities.
B) nodes consume no resources or time in AOA
networks.
C) both are acceptable in practice; however, Microsoft
Project uses AON.
D) nodes designate activities in AON, while arrows
designate activities in AOA.
E) All of the above are true.
Answer: E
40) A simple CPM network has five activities, A, B, C, D,
and E. A is an immediate predecessor of C and of D. B is
also an immediate predecessor of C and of D. C and D
are both immediate predecessors of E. Which of the
following statements is true?
A) There are two paths in this network.
B) There are four paths in this network.
C) There are five paths in this network.
D) There are 25 paths in this network.
E) There are six paths in this network.
Answer: B
41) Which of the following statements regarding critical
paths is true?
A) The shortest of all paths through the network is the
critical path.
B) Some activities on the critical path may have slack.
C) Every network has only one critical path.
D) On a specific project, there can be multiple critical
paths, all with exactly the same duration.
E) The duration of the critical path is the average
duration of all paths in the project network.
Answer: D
42) Which of the following statements regarding CPM is
true?
A) The critical path is the shortest of all paths through
the network.
B) The critical path is that set of activities that has
positive slack.
C) Some networks have no critical path.
D) All activities on the critical path have their LS equal
to the maximum EF of all immediate predecessors.
E) All activities on the critical path have their ES equal to
their LF.
Answer: D
43) A simple CPM network has three activities, A, B, and
C. A is an immediate predecessor of B and of C. B is an
immediate predecessor of C. The activity durations are
A=4, B=3, C=8.
A) The critical path is A-B-C, duration 15.
B) The critical path is A-C, duration 12.
C) The critical path is A-B-C, duration 13.5
D) The critical path cannot be determined without
knowing PERT expected activity times.
E) The network has no critical path.
Answer: A
8) A simple CPM network has three activities, D, E, and
F. D is an immediate predecessor of E and of F. E is an
immediate predecessor of F. The activity durations are
D=4, E=3, F=8.
A) The critical path is D-E-F, duration 15.
B) The critical path is D-F, duration 12.
C) Slack at D is 3 periods.
D) Slack at E is 3 periods.
E) Both A and C are true.
Answer: A
44) Activity D on a CPM network has predecessors B
and C, and has successor F. D has duration 6. B's earliest
finish is 18, while C's is 20. F's late start is 26. Which of
the following is definitely true?
A) B is a critical activity.
B) C is completed before B.
C) D has no slack but is not critical.
D) D is critical, and has zero slack.
E) F is critical, and has zero slack.
Answer: D
45) Which of the following statements regarding CPM
networks is true?
A) There can be multiple critical paths on the same
project, all with different durations.
B) The early finish of an activity is the latest early start of
all preceding activities.
C) The late start of an activity is its late finish plus its
duration.
D) If a specific project has multiple critical paths, all of
them will have the same duration.
E) None of the above are true.
Answer: D

46) Activity R on a CPM network has predecessors M

and N, and has successor S. R has duration 5. N's late
finish is 18, while M's is 20. S's late start is 14. Which of
the following is definitely true?
A) R is critical and has zero slack.
B) R has no slack but is not critical.
C) The set of times cannot all be possible.
D) N is a critical activity.
E) S is a critical activity.
Answer: C

47) Which of the following statements concerning CPM

activities is false?
A) The early finish of an activity is the early start of that
activity plus its duration.
B) The late finish is the earliest of the late start times of
all successor activities.
C) The late start of an activity is its late finish less its
duration.
D) The late finish of an activity is the earliest late start of
all preceding activities.
E) The early start of an activity is the latest early finish of
all preceding activities.
Answer: D