Production and Operations Management

61. Inputs come from and outputs are transferred to the_________________ of a system.

  1. Environment
  2. Sub-system
  3. Comparator
  4. Effector
Correct answer: (A)
Environment

62. When evaluating alternative capacity decisions, qualitative concerns exclude:

  1. Cash flow.
  2. Uncertainties about demand.
  3. Competitive reaction.
  4. Technology change.
Correct answer: (A)
Cash flow.

63. When demand exceeds capacity, a firm should

  1. Lower prices.
  2. Add workers.
  3. Temporarily lay-off workers.
  4. Advertise.
Correct answer: (B)
Add workers.

64. The marketing concept should be central to business strategy because:

  1. Business strategy is aimed at customers.
  2. Companies have a moral responsibility to care for their customers.
  3. Marketing enables firms to persuade their customers to buy things they do not really need.
  4. Customers will only spend money with firms that look after their needs.
Correct answer: (D)
Customers will only spend money with firms that look after their needs.

65. One way to decouple the production system and the sales system is:

  1. To introduce a feedback loop
  2. To treat the systems as black boxes
  3. To decrease sales
  4. To introduce an inventory
Correct answer: (D)
To introduce an inventory

66. Long-term capacity planning deals with which of the following factors?

  1. Overtime budgets
  2. Workforce size
  3. Inventories
  4. Investment in new facilities
Correct answer: (D)
Investment in new facilities

67. Efficiency is given by

  1. Actual output divided by design capacity.
  2. Capacity divided by utilization.
  3. Effective capacity divided by actual output.
  4. Actual output divided by effective capacity.
Correct answer: (D)
Actual output divided by effective capacity.

68. The most aggressive and risky approach to capacity planning is

  1. Capacity lags with incremental expansion.
  2. Leading demand with one-step expansion.
  3. Leading demand with incremental expansion.
  4. Attempts to have an average capacity that straddles demand with incremental expansion.
Correct answer: (B)
Leading demand with one-step expansion.

69. Demand is created when:

  1. A need is identified.
  2. A significant group of people want to buy something.
  3. People who can afford something want to buy it.
  4. Marketers persuade people to want something.
Correct answer: (C)
People who can afford something want to buy it.

70. Input measures of capacity are preferred when there is/are:

  1. Service processes.
  2. High-volume processes.
  3. Flexible flow processes.
  4. Low customization.
Correct answer: (A)
Service processes.
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