CH 03 - Process Strategy

Operations Management: Processes and Supply Chains, 10e (Krajewski et al.
)
Chapter 3 Process Strategy
1) Process decisions are strategic in nature.

Answer: TRUE
Reference: Introduction
Difficulty: Moderate
Keywords: process strategy
2) No process can exist without at least one product or service.

Answer: TRUE
Reference: Process Strategy Across The Organization
Difficulty: Easy
Keywords: process, product, service
3) Supply chain processes are simply business processes that have either external customers or external
suppliers.
Answer: TRUE
Difficulty: Easy
Keywords: supply chain process, business process
4) Processes, by their nature, are found only in the operations function of an organization.
Answer: FALSE
Difficulty: Easy
Keywords: operations function, process
5) Process structure is the mix of equipment and human skills in a process.

Answer: FALSE
Reference: Process Strategy Decisions
Keywords: process, process structure, equipment, human skills
6) Resource flexibility determines whether resources are organized around products or processes.
Answer: FALSE
Keywords: resource flexibility, products, processes
7) Fixed automation maximizes efficiency and results in the lowest variable cost per unit possible with
high output volume.
Answer: TRUE
Reference: Capital Intensity
Difficulty: Easy
Keywords: resource flexibility, fixed automation
3-1
8) Customer involvement reflects the ways in which customers become part of the process and the extent
of their participation.
Answer: TRUE
Keywords: customer contact, customer participation, customer involvement
9) Capital intensity is the ease with which employees and equipment can handle a wide variety of
products, output levels, duties, and functions.
Answer: FALSE
Keywords: capital intensity, equipment
10) Service providers with a line process tend to move customers, materials, or information in a fixed
sequence from one operation to the next.
Answer: TRUE
Reference: Process Structure in Services
Keywords: line process, service provider, standard process
Learning Outcome: Describe the main types of operations processes and layouts in manufacturing and in
services.
11) A moment of truth or service encounter is face-to-face interaction between the customer and a service
provider.
Answer: TRUE
Keywords: moment of truth, face-to-face interaction, customer, service provider
12) Physical presence does not occur in a manufacturing service process.

Answer: FALSE
Keywords: physical presence, process structure in manufacturing
13) Services that process possessions or information are more likely to be found in a front office instead of
a back office.
Answer: FALSE
Keywords: service process structuring, dimensions of customer contact
services.
3-2
14) Active contact in services means that the customer is very much part of the creation of the service.
Answer: TRUE
Difficulty: Easy
Keywords: active contact, service
15) Divergence is the extent to which the process is customized with considerable latitude on how the
tasks are performed.
Answer: TRUE
Difficulty: Easy
Keywords: divergence, customization
16) A front office structure features high levels of customer contact where the service provider interacts
directly with the internal or external customer.
Answer: TRUE
Difficulty: Easy
Keywords: front office process structure, customer contact, service provider interaction
services.
17) Back office work is typically routine, with many steps having considerable divergence.
Answer: FALSE
Difficulty: Easy
Keywords: back office process structure, divergence
services.
18) A continuous flow process is characterized by a high degree of job customization.

Answer: FALSE
Reference: Process Structure in Manufacturing
Keywords: continuous flow process, customization
services.
19) A job process has a relatively high level of customization.

Answer: TRUE
Keywords: job process, customization
services.
3-3
20) A job process has the highest level of customization of the process choices.
Answer: TRUE
Keywords: job process, customization
services.
21) Job processes generally have higher volumes than batch processes.
Answer: FALSE
Keywords: job process, batch process, volume
services.
22) In a line process, there is little variability in the products manufactured, and production and material
handling equipment are often specialized.
Answer: TRUE
Keywords: line process, product variability, specialized equipment
services.
23) Petroleum refineries typically use continuous flow processes.

Answer: TRUE
Keywords: continuous flow process
services.
24) Continuous flow processes have a high level of customization.

Answer: FALSE
Difficulty: Easy
Keywords: continuous flow process, customization
services.
25) The product-process matrix brings together the elements of volume, process, and quality.
Answer: FALSE
Keywords: product-process matrix, manufacturing volume, process, quality
services.
3-4
26) An off-diagonal position in the product-process matrix is typically more profitable than a position on
the diagonal.
Answer: FALSE
Keywords: product-process matrix, diagonal
27) A make-to-stock strategy involves holding items in stock for immediate delivery and is feasible for
standardized products with high volumes and reasonably accurate forecasts.
Answer: TRUE
Difficulty: Easy
Keywords: make-to-stock strategy, standardized products, volume, product forecasts
services.
28) Mass production is a production strategy that uses batch processes in a make-to-stock strategy.
Answer: FALSE
Keywords: mass production, batch process, make-to-stock strategy
services.
29) The degree of process divergence is what keeps a large batch process from being economically
produced using a line process.
Answer: TRUE
Keywords: batch process, line process, divergence
services.
30) Assemble-to-order strategy produces a wide variety of products from relatively few assemblies and
components after orders are received.
Answer: TRUE
Keywords: assemble-to-order strategy
31) The principle of postponement is modeled by the worker that has known his assignment for several
weeks, but waits until the day before the product is to be delivered to begin production.
Answer: FALSE
Difficulty: Easy
Keywords: postponement, procrastination
3-5
32) A layout is the physical arrangement of human and capital resources used by processes clustered
together into operations.
Answer: TRUE
Reference: Layout
Difficulty: Easy
Keywords: layout, operation
services.
33) A block plan allocates space and indicates the placement of each department within the framework of
a new or existing facility.
Answer: TRUE
Reference: Layout
Difficulty: Easy
Keywords: block plan
services.
34) A block plan is a table that gives a measure of the relative importance of each pair of centers being
located close together.
Answer: FALSE
Reference: Layout
Difficulty: Easy
Keywords: block plan, closeness matrix, relative importance
services.
35) A closeness matrix can reflect the qualitative judgments of managers and employees, or can be the
number of trips between each pair of departments.
Answer: TRUE
Reference: Layout
Keywords: closeness matrix, judgment
services.
36) Euclidean distance calculations are usually more realistic than rectilinear distance calculations when
determining the walking distance between operations in a building.
Answer: FALSE
Reference: Layout
Keywords: Euclidean distance, rectilinear distance
3-6
37) High customer involvement increases service provider productivity and makes quality measurement
easier.
Answer: FALSE
Reference: Customer Involvement
Keywords: customer involvement, productivity, quality
38) High task divergence requires less flexibility of the process's resources.
Answer: FALSE
Reference: Resource Flexibility
Difficulty: Easy
Keywords: resource flexibility, divergence
39) Capital intensive automation is appropriate for high and low volume operations.
Answer: FALSE
Keywords: automation, capital intensity
40) Fixed automation is appropriate for line and continuous flow operations.
Answer: TRUE
Keywords: fixed automation, continuous flow
41) The ability to reprogram machines is useful for both low-customization and high-customization
processes.
Answer: TRUE
Keywords: customization, programmable automation
42) A toaster is an example of flexible automation.

Answer: FALSE
Keywords: flexible automation
43) Economies of scope reflect the ability to produce multiple products more cheaply in combination than
separately.
Answer: TRUE
Keywords: economies of scope
3-7
44) In a service process, capital intensity varies with volume in both front office and back office
operations.
Answer: TRUE
Reference: Strategic Fit
Keywords: capital intensity, front office service, back office service
45) The common denominator for decisions on service processes is primarily customer contact.
Answer: TRUE
Keywords: service process, customer contact
46) Reengineering is the fundamental rethinking and radical redesign of processes to improve
performance dramatically.
Answer: TRUE
Reference: Strategies For Change
Difficulty: Easy
Keywords: process reengineering, redesign, rethinking
47) With a dramatic flourish, the team leader tore the employee orientation guidelines into pieces. He
then distributed blank pieces of paper to the team and asked them to envision the perfect orientation
process without regard to how it has always been done. This team is probably engaging in process
reengineering.
Answer: TRUE
Keywords: process reengineering, clean-slate
48) Which one of the following statements concerning process management is best?
A) Process management is a short-term decision, and thus it has a tactical rather than a strategic focus.
B) Process changes should be made only when introducing new products or services.
C) The variable underlying all four major process decisions is volume.
D) A company's operations strategy is the primary output of its major process decisions.
Answer: C
Keywords: process management decisions
49) People processing services require:

A) a high degree of process structure.
B) high capital intensity.
C) physical presence.
D) hybrid low volume—capital intensive operations.
Answer: C
Keywords: people processing services, physical presence
3-8
50) A politician conducting a town hall meeting is an example of:
A) back office.
B) passive contact.
C) active contact.
D) hybrid office.
Answer: C
Difficulty: Easy
Keywords: service processes, passive contact
51) A yacht maker produces customized yachts for a clientele that wants a one-of-a-kind watercraft. This
process can be described as:
A) divergent.
B) complex.
C) specialized.
D) hybrid.
Answer: A
Keywords: service processes, process divergence
52) The process structure that best describes a waiter's position at a restaurant would be classified as:
A) front office.
B) back office.
C) hybrid office.
D) inner office.
Answer: A
Difficulty: Easy
Keywords: services processes, process structure, front office
53) Field service representatives are classified as a:

A) back office.
B) hybrid office.
C) front office.
D) mid office.
Answer: C
Difficulty: Easy
3-9
54) A process that is primarily back office is:
A) a taxi driver.
B) loan officer at a bank.
C) the payroll clerk that calculates your paycheck.
D) the hostess at a restaurant.
Answer: C
Difficulty: Easy
Keywords: service processes, process structure, back office
55) Front offices typically emphasize:

A) low cost operations and on-time delivery.
B) top quality and customization.
C) on-time delivery and standardization.
D) top quality and low cost operations.
Answer: B
Difficulty: Easy
56) Back offices typically emphasize:

A) low cost operations and on-time delivery.
B) top quality and customization.
C) on-time delivery and customization.
D) top quality and low cost operations.
Answer: A
Difficulty: Easy
Keywords: service processes, process structure, back office
57) Which of the following is sometimes called mass production?

A) batch process and make-to-order strategy
B) line process and make-to-stock strategy
C) continuous flow process and assemble-to-order strategy
D) job process and make-to-order strategy
Answer: B
Keywords: manufacturing processes, mass production, line, line process
services.
3-10
58) A job process should be preferred when:
A) workforce and equipment are specialized.
B) products are made to stock type.
C) customization is high and volume is low.
D) customization is low and volume is high.
Answer: C
Keywords: manufacturing processes, job process, customization, volume
services.
59) When the process choice is a job process, it requires:

A) organizing the resources around the process.
B) a line flow strategy.
C) perfectly predictable customer demands.
D) same sequence of processing steps for each job.
Answer: A
Keywords: manufacturing processes, job process, resources
services.
60) Which of the following statements about process choice is best?

A) A batch process typically has a standard sequence of operations through the facility.
B) Automobiles and appliances are examples of products created using a continuous flow process.
C) Continuous flow processes are very capital intensive.
D) A custom cake operation is an example of a batch process.
Answer: C
Keywords: manufacturing processes, process choice, continuous flow, capital, intensity
services.
61) The product-process matrix used to analyze manufacturing operations brings together the elements
of:
A) volume, process, and intensity.
B) process, intensity, and product design.
C) intensity, volume, and process.
D) customization, volume, and process.
Answer: D
Keywords: manufacturing processes, product-process matrix
services.
3-11
62) Which one of the following statements about process management is best?
A) When customization must be high, equipment should be general purpose, and employees need to
perform a broader range of duties.
B) The traditional relationship between capital intensity and resource flexibility is that if one is high, so is
the other.
C) Creating a more capital-intensive process tends to reduce the fixed cost and raise the variable unit cost.
D) Economies of scope mean that a process should be devoted to a single product or service to achieve
high volumes.
Answer: A
Difficulty: Hard
Keywords: manufacturing processes, process management, customization
63) A manufacturer that produces standard products in large volumes is likely to be using a(n):
A) make-to-stock strategy.
B) make-to-order strategy.
C) assemble-to-order strategy.
D) engineer-to-order strategy.
Answer: A
Difficulty: Easy
Keywords: production and inventory strategies, make-to-stock
64) The principle of postponement is employed by a producer using a(n):

A) make-to-stock strategy.
B) make-to-order strategy.
C) assemble-to-order strategy.
D) engineer-to-order strategy.
Answer: C
Difficulty: Easy
Keywords: production and inventory strategies, assemble-to-order
65) Combining a line process with the make-to-stock strategy is sometimes called:
A) make-to-order.
B) assemble-to-order.
C) a hybrid process.
D) mass production.
Answer: D
Keywords: production and inventory strategies, mass production, line process, make-to-stock
services.
3-12
Use the following to answer the questions below.
Acme Machine is a job shop that makes specialty parts for the airline industry. Figure #1 below shows the
block plan for key manufacturing operations in its current facility. Acme believes there may be a way to
reduce the total distance traveled between departments. Consider the two revisions that have been
suggested, based on the closeness matrix shown below the block plans. The aisles are shown by the
dotted lines in Figure 1.
Original Revision #1
Closeness Distance Distance Revision #2
Dept. Pair Factor (w) (dO) w dO (d1) w d1 Distance (d2) w x d2
1—2
1—3
1—4
1—5
1—6
2—3
2—4
2—5
2—6
3—4
3—5
3—6
4—5
4—6
5—6
TOTAL
3-13
66) If travel between departments is restricted to the aisles shown in Figure 1, what is the total weighted-
distance (wd) score for the block plan shown in Figure 1?
A) less than or equal to 30
B) greater than 30 but less than or equal to 60
C) greater than 60 but less than or equal to 90
D) greater than 90
Answer: D
Reference: Layout
Keywords: layout, block plan, closeness matrix, total weighted-distance (wd) score
AACSB: Analytic skills
distance (wd) score for the block plan shown in Revision 1?
D) greater than 90
Answer: B
Reference: Layout
distance (wd) score for the block plan shown in Revision 2?
D) greater than 90
Answer: C
Reference: Layout
69) Considering the current facility situation and the two suggested revisions, if Acme wishes to
minimize the total weighted-distance score, which option should be selected?
A) current situation–stay with Figure 1
B) Revision 1
C) Revision 2
D) either Revision 1 or Revision 2–they have the same what is the total weighted-distance (wd) score
Answer: B
Reference: Layout
3-14
70) By picking Revision 1, how much would the total wd score be reduced if the revision that minimizes
the total wd score were chosen?
A) None–the current situation in Figure 1 provides the lowest total weighted-distance (wd) score.
B) less than or equal to 30
D) greater than 60 but less than or equal to 90
Answer: C
Reference: Layout
3-15
A department store chain is designing a layout for a new store. The store manager wants to provide as
much convenience as possible for her customers. Based on historical data, the number of trips between
departments per hour is given in the following closeness matrix. A block plan showing a preliminary
layout is also shown.
Customer travel between departments is restricted to the aisles shown in the block plan as dotted lines.
3-16
Closeness Original Revision 1
Dept. Pair Factor (w) Distance (d O) w dO Distance (d1) w d1
1—2
1—3
1—4
1—5
1—6
2—3
2—4
2—5
2—6
3—4
3—5
3—6
4—5
4—6
5—6
TOTAL
71) Refer to the instruction above. What is the total weighted-distance (wd) score between Office Supplies
and Hardware?
D) greater than 250
Answer: C
Reference: Layout
Keywords: layout, block plan, closeness matrix, weighted-distance (wd) score
72) Refer to the instruction above. What is the total weighted-distance (wd) score between Hardware and
Toys?
D) greater than 250
Answer: C
Reference: Layout
Keywords: process layout, block plan, closeness matrix, weighted-distance (wd) score
3-17
73) Refer to the instruction above. What is the total weighted-distance (wd) score for the entire store?
A) less than or equal to 1,500
B) greater than 1,500 but less than or equal to 2,000
C) greater than 2,000 but less than or equal to 2,500
D) greater than 2,500
Answer: B
Reference: Layout
74) Refer to the instruction above. A suggestion has been made to switch Hardware and Automotive.
What would the total weighted-distance (wd) score for the entire store if these two departments were
switched?
A) less than or equal to 1,000
B) greater than 1,000 but less than or equal to 1,500
C) greater than 1,500 but less than or equal to 2,000
D) greater than 2,000
Answer: C
Reference: Layout
75) Refer to the instruction above. Based on your calculations, would you recommend that Hardware and
Toys be switched?
A) Yes, and this is an improvement of 100 — 300 in the weighted-distance (wd) score.
B) No, the travel distances are the same.
C) Yes, and this is a difference of over 300 feet in the weighted-distance (wd) score.
D) We don't have enough information to determine this.
Answer: A
Reference: Layout
Keywords: process layout, block plan, closeness matrix, weighted-distance (wd) score
3-18
Figure 3.1
The information systems and operations management department of a small college is now designing its
layout for newly built office space. An overhead view of the available office space reveals the following
(note: assume all locations are measured from center point to center point):
76) Use the information in Figure 3.1. What is the Euclidean distance between offices A and C?
A) less than or equal to 25 feet
B) greater than 25 but less than or equal to 45 feet
C) greater than 45 but less than or equal to 65 feet
D) greater than 65 feet
Answer: C
Reference: Layout
Keywords: Euclidean distance, layout
77) Use the information in Figure 3.1. What is the rectilinear distance between offices A and C?
A) less than or equal to 25 feet
D) greater than 65 feet
Answer: D
Reference: Layout
Keywords: rectilinear distance
78) Use the information in Figure 3.1. What is the rectilinear distance between offices B and D?
A) greater than 65 feet
D) less than or equal to 25 feet
Answer: B
Reference: Layout
Keywords: rectilinear distance, layout
3-19
79) Use the information in Figure 3.1. What is the Euclidean distance between offices B and D?
A) greater than 65 feet
D) less than or equal to 25 feet
Answer: C
Reference: Layout
Keywords: Euclidean distance, layout
80) Use the information in Figure 3.1. What pair of locations has Euclidean and rectilinear distances that
are identical?
A) C and D
B) F and E
C) D and E
D) B and A
Answer: D
Reference: Layout
Difficulty: Hard
Keywords: Euclidean distance, rectilinear distance, layout
Figure 3.2
A company of four departments has the following closeness factors and current locations of all
departments. Assume rectilinear distance.
81) Use the information in Figure 3.2. Which pair of departments has the greatest weighted-distance
score?
A) 1 & 2
B) 1 & 3
C) 1 & 4
D) 2 & 3
Answer: C
Reference: Layout
Keywords: weighted-distance score, layout
3-20
82) Use the information in Figure 3.2. What is the overall weighted-distance score for the arrangement?
A) 52
B) 48
C) 63
D) 58
Answer: A
Reference: Layout
Keywords: weighted-distance score, layout
83) Using the information in Figure 3.2, which of these arrangements has the best weighted-distance
score?
A)
B)
C)
D)
Answer: A
Reference: Layout
Keywords: weighted distance score, layout
3-21
Figure 3.3
A company of four departments has the following closeness factors and current locations of all
departments:
84) Use the information from Figure 3.3. The departmental pair that has the greatest weighted distance
between them is:
A) A & B.
B) A & C.
C) A & D.
D) A & E.
Answer: B
Reference: Layout
Keywords: weighted distance, facility layout
85) Use the information from Figure 3.3. What is the total weighted distance for the current layout?
A) 69
B) 73
C) 77
D) 81
Answer: D
Reference: Layout
Keywords: weighted distance, layout
3-22
86) Which of the following statements about customer involvement is best?
A) In service industries, customer contact is of minor importance.
B) High task divergence and flexible process flows require more flexibility of the process's employees,
facilities and equipment.
C) A firm that produces standardized products often seeks customer specifications.
D) When customer involvement is highly customized, a process is more likely to use a standardized-
services process rather than a customized-services process.
Answer: B
Keywords: customer involvement
services.
87) Active customer contact and personalized attention can lower cost to the customer by:
A) increasing the capital intensity.
B) trading fixed costs for an equivalent variable cost.
C) substituting customer efforts for those of the service provider.
D) lowering the level of technology involved.
Answer: C
Difficulty: Easy
Keywords: customer contact, cost
88) An advantages of customer involvement in a service process is that:

A) if the customers are price sensitive, they might feel they are receiving more value.
B) dealing with the unique needs of each customer make the process more capital intensive.
C) accommodating the needs of each different customer can make the process less divergent.
D) measurement of quality becomes more difficult.
Answer: A
Keywords: customer involvement, price sensitivity, value
3-23
A company must decide on the type of equipment to buy in order to manufacture a new product line.
The company can purchase an all-purpose machine, with fixed costs amounting to $20,000 per year, and
it will cost $40 / unit to produce the new line on this machine. It can also buy a special-purpose machine,
with fixed costs of $50,000 per year, and the per unit cost on this machine is $30.
89) Refer to the instruction above. What is the break-even quantity between the two machines?
A) 7,000 units
B) 10,000 units
C) 3,000 units
D) 5,000 units
Answer: C
Difficulty: Easy
Keywords: capital-intensive operations, automation, general-purpose equipment, special-purpose
equipment, break even quantity
90) Refer to the instruction above. Which alternative should be selected if annual requirements are 5,000
units?
A) all-purpose machine
B) special-purpose machine
C) either machine; costs are the same for either option at 5,000 units
D) alternative to be selected; can't be determined with information given.
Answer: B
Difficulty: Easy
Keywords: general-purpose equipment, special-purpose equipment, total cost
91) Refer to the instruction above. What does the company save for the year by selecting this low-cost
option (for annual requirements of 5,000 units)?
A) $15,000
B) $5,000
C) $10,000
D) $20,000
Answer: D
3-24
A company is considering two options for the production of a part needed downstream in the
manufacturing process. Particulars are as follows:
Specialized automation Fixed Costs = $9,000 / month Variable Cost / Unit = $2

General automation: Fixed Costs = $3,000 / month Variable Cost / Unit = $5
92) Refer to the instruction above. What is the monthly break-even quantity for choosing between the two
automation approaches?
A) 1,000 units
B) 2,000 units
C) 6,000 units
D) 12,000 units
Answer: B
Difficulty: Easy
Keywords: capital-intensive operations, automation, break even quantity
93) Refer to the instruction above. For a monthly volume of 3,000 units, which automation approach
should be chosen?
A) specialized automation
B) general automation
C) Either approach is acceptable, because costs are the same for either option at 3,000 units.
D) Can't be determined with information given.
Answer: A
Difficulty: Easy
Keywords: automation, total cost, low-cost option
94) Refer to the instruction above. What does the company save each month by selecting this low-cost
option (for monthly requirements of 3,000 units)?
A) $1,000
B) $3,000
C) $6,000
D) Can't be determined with information given.
Answer: B
Keywords: automation, total cost
3-25
You currently purchase a part used in your production process from an outside supplier, and have
decided to begin making this part in-house. You have two equipment options for moving production in-
house: special-purpose equipment and general-purpose equipment. Cost information for these two
options is as follows:
ALTERNATIVE FIXED COST VARIABLE COST

Special-Purpose Equipment $200,000 per year $15 per unit
General-Purpose Equipment $50,000 per year $20 per unit
95) Refer to the instruction above. What is the break even quantity between the two options?
A) 30,000 units per year
B) 40,000 units per year
C) 50,000 units per year
D) 60,000 units per year
Answer: A
Difficulty: Easy
Keywords: capital-intensive operations, general-purpose equipment, special-purpose equipment, break
even quantity
96) Refer to the instruction above. What are total costs under the Special-Purpose Equipment option for
an annual quantity of 40,000 units?
A) $400,000
B) $500,000
C) $800,000
D) $850,000
Answer: C
Difficulty: Easy
97) Refer to the instruction above. What are total costs under the General-Purpose Equipment option for
an annual quantity of 40,000 units?
A) $400,000
B) $450,000
C) $800,000
D) $850,000
Answer: D
Difficulty: Easy
3-26
98) Refer to the instruction above. For what range of output is the General-Purpose Equipment the low-
cost option?
A) 0-30,000 units per year
B) 30,000 or more units per year
C) 40,000 or more units per year
D) 0-40,000 units per year
Answer: A
Difficulty: Easy
99) Refer to the instruction above. For what range of output is the Special-Purpose Equipment the low-
cost option?
A) 30,000 or more units per year
B) 0 - 30,000 units per year
C) 0 - 40,000 units per year
D) 40,000 or more units per year
Answer: A
Difficulty: Easy
Keywords: general-purpose equipment, special-purpose equipment, total cost, low-cost option
100) Refer to the instruction above. At an annual requirement of 40,000 units, what does the company
save per year by selecting the low-cost option?
A) $150,000
B) $300,000
C) $50,000
D) $40,000
Answer: C
Difficulty: Easy
Keywords: general-purpose equipment, special-purpose equipment, total cost, low-cost option
101) More fixed automation typically means:

A) decreased labor productivity.
B) longer cycle time.
C) higher demand volumes.
D) lower sales.
Answer: C
Difficulty: Hard
Keywords: fixed automation, volume
3-27
102) Which of the following statements regarding capital intensity is NOT true?
A) Capital intensity can be a prohibitive investment for low-volume operations.
B) Decreased amounts of automation increase capital intensity.
C) Automation refers to a system or piece of equipment that is self-regulating and self-acting.
D) Leasing is a method to acquire equipment while defraying financial risk.
Answer: B
Difficulty: Hard
Keywords: capital intensity, automation
103) Which one of the following statements about flexible automation is best?
A) Investment cost is lower when a transfer machine handles many operations.
B) Chemical processing plants and oil refineries mainly utilize programmable automation.
C) It is an automatic process that can be reprogrammed to handle various products.
D) It achieves top efficiency; accommodating new products is difficult and costly.
Answer: C
Keywords: flexible automation, reprogramming
104) With flexible automation, the ability to reprogram instructions can be useful in:
A) line flow, but not flexible flow, operations.
B) flexible flow, but not line flow, operations.
C) either line flow or flexible flow operations.
D) situations in which top efficiency is mandatory, but only if volumes are high.
Answer: C
Keywords: flexible automation, reprogramming, line flow
105) Higher volume in a process is generally associated with:

A) more resource flexibility.
B) more capital intensity.
C) greater customer involvement.
D) fewer opportunities for standardization.
Answer: B
Keywords: volume, process, capital intensity
3-28
106) Low capital intensity is generally associated with:
A) low resource flexibility.
B) high customer involvement.
C) high levels of fixed automation.
D) high volumes.
Answer: B
Keywords: capital intensity, customer involvement
107) As it relates to process management, the concept of a flexible workforce is defined as:
A) a labor force that often changes in size because of hirings and firings.
B) workers who are willing to work large amounts of overtime when necessary.
C) workers who are capable of performing many different tasks.
D) a labor force with a high turnover rate.
Answer: C
Keywords: flexible workforce
108) Which of the following statements regarding resource flexibility is best?

A) Training is a small part of worker flexibility.
B) Specialization of employees is consistent with worker flexibility.
C) Worker flexibility is not a priority if the process is subject to hourly or seasonal peaks in demand.
D) Resource flexibility requires employees to be able to perform a broad range of duties, and equipment
usually must be more general purpose.
Answer: D
Keywords: resource flexibility, flexible workforce
109) Which of the following statements concerning resource flexibility is best?

A) Flexible equipment is useful to companies with low production volumes and high customization.
B) Investment in general-purpose equipment is warranted if the firm expects to sell more than the break-
even amount.
C) Manufacturing efficiency increases with general-purpose equipment.
D) Resource flexibility is crucial for line-flow processing.
Answer: A
Keywords: resource flexibility, volume, customization
3-29
110) Suppose that competitive priorities call for offering a wide variety of customized services. Which of
the following process decisions would be more likely?
A) more capital intensity
B) more resource flexibility
C) more process automation
D) less customer involvement
Answer: B
Difficulty: Hard
Keywords: resource flexibility, customized service
111) Under which one of the following environments would you opt for a higher degree of resource
flexibility?
A) a firm using a flexible flow strategy
B) a firm facing a stable demand
C) a firm using a line flow strategy
D) a firm producing only one product
Answer: A
Keywords: resource flexibility, flexible flow
112) Which statement about economies of scope is not true?

A) Economies of scope are often attained through programmable automation.
B) Economies of scope bring together two competitive priorities–customization and low price.
C) Economies of scope reflect the ability to produce multiple products more cheaply in combination than
separately.
D) Economies of scope reflect low capital intensity and high resource flexibility.
Answer: D
Keywords: economies of scope, capital intensity, resource flexibility
113) Which one of the following statements on the concept of focused factories is best?
A) emphasizes economies of scale, rather than diseconomies of scale
B) prefers larger facilities producing all of the products or services the company offers
C) reduces the range of demands placed on an operation so management can concentrate on fewer tasks
D) emphasizes flexibility rather than cost
Answer: C
Keywords: focused factory
3-30
114) One method for a factory to gain operational focus is to:
A) build large enough factories to produce all products and services the company offers.
B) hire more specialists and supervisors to control the operations.
C) reorganize existing facilities to the plant-within-plant approach.
D) remodel stores to create the effect of many small boutiques under one roof.
Answer: C
Difficulty: Hard
Keywords: focus, process, plants within plants
115) A firm that chooses to compete based on delivery speed and variety would most likely have:
A) a make-to-order production and inventory strategy.
B) an assemble-to-order production and inventory strategy.
C) a make-to-stock production and inventory strategy.
D) an engineer-to-order production and inventory strategy.
Answer: B
Keywords: assemble-to-order, delivery speed
116) A firm that uses large batch, line, or continuous-flow process most likely have:
A) low-cost operations as a competitive priority.
B) top quality as a competitive priority.
C) flexibility as a competitive priority.
D) on-time delivery as a competitive priority.
Answer: A
Difficulty: Easy
Keywords: low-cost, batch process, line process, continuous-flow
117) Which one of the following statements on the concept of gaining focus is best?
A) Focused factories maximize the amount of customization.
B) Small sizes of many focused factories make it difficult to compete on the basis of shorter lead times.
C) Plants within plants are different operations within a facility that can have individualized competitive
priorities and processes.
D) Focused factories are large factories producing all the products that the company offers.
Answer: C
Keywords: focus, process, plants within plants
3-31
118) Which one of the following statements concerning the role of process reengineering is best?
A) Reengineering is the fundamental rethinking and radical design of business processes.
B) Reengineering efforts should focus on functional departments.
C) Information technology should be kept separate from reengineering initiatives.
D) Reengineering requires an attitude of incremental improvement.
Answer: B
Keywords: reengineering, radical redesign, information technology
119) Which statement on reengineering and process improvement is best?

A) Only process improvement programs make use of cross-functional teams.
B) Process improvement focuses only on critical or core processes such as order fulfillment.
C) Reengineering starts with a "clean slate" whereas process improvement looks for ways to
incrementally improve.
D) Only reengineering focuses on business processes.
Answer: C
Keywords: reengineering, process improvement
120) A back office operation most closely resembles a:

A) continuous flow process.
B) batch process.
C) job process.
D) line process.
Answer: D
Keywords: back office, line process
121) A primary enabler of process reengineering is:

A) the service-product matrix.
B) a process flow chart.
C) information technology.
D) employee training.
Answer: C
Keywords: process reengineering, information technology
3-32
122) A team consisting of members from each functional area affected by the process change is referred to
as a(n):
A) reengineering team.
B) cross-functional team.
C) process team.
D) improvement team.
Answer: B
Keywords: cross-functional team
123) A process selected for reengineering should be a:

A) core process.
B) front-office process.
C) hybrid office.
D) back office process.
Answer: A
Keywords: reengineering, core process
124) A distribution center that receives shipments from manufacturers and breaks these bulk shipments
into smaller amounts that can be sold at a retail location might use ________ to perform this supply chain
process.
Answer: crossdocking
Keywords: crossdocking, supply chain
125) ________ is the act of selecting, certifying, and evaluating suppliers and managing supplier contracts.
Answer: Sourcing
Keywords: sourcing, supply chain
126) ________ is the ease with which employees and equipment can handle a wide variety of products,
output levels, duties, and functions.
Answer: Resource flexibility
Keywords: resource flexibility
127) ________ reflects the ways in which customers become part of the process and the extent of their
participation.
Answer: Customer involvement
Keywords: customer involvement, customer participation
3-33
128) ________ is the mix of equipment and human skills in a process.
Answer: Capital intensity
Keywords: capital intensity, equipment, human skills
129) Customer, materials, or information move in diverse ways in processes that have ________.
Answer: active contact
Difficulty: Easy
Keywords: active contact, service, customer contact
130) A(n) ________ process has high customer contact where the service provider interacts directly with
the internal or external customer.
Answer: front-office
Difficulty: Easy
Keywords: front-office, customer contact, service, internal customer, external customer
131) A(n) ________ process would probably not be used to produce products before a customer has
placed a firm order.
Answer: job
Difficulty: Easy
Keywords: job process, make-to-order
132) A(n) ________ allocates space and indicates placement of each department.
Answer: block plan
Reference: Layout
Keywords: block plan, space allocation, department placement
services.
133) A(n) ________ gives the relative importance of each pair of operations or departments being located
close together.
Answer: closeness matrix
Reference: Layout
Keywords: closeness matrix
services.
3-34
134) The ________ method is a mathematical model used to evaluate layouts based on proximity factors.
Answer: weighted distance
Reference: Layout
Keywords: weighted distance, proximity factors
135) The ________ method measures distance between two points with a series of 90-degree turns.
Answer: rectilinear distance
Reference: Layout
Difficulty: Easy
Keywords: rectilinear distance, weighted distance
136) ________ automation produces one type of product or part in a sequence of simple operations.
Answer: Fixed
Keywords: fixed automation
services.
137) ________ automation can handle various products through programmability.

Answer: Flexible
Keywords: flexible automation, programmable automation
138) ________ are different operations within a facility with individualized competitive priorities,
processes, and workforces under the same roof.
Answer: Plants within plants
Keywords: plants within plants, PWP
139) What are three principles of process strategy that should govern choices that process designers
make? Provide examples of well-conceived process strategy choices to illustrate each of your three
principles.
Answer: The three principles discussed in the text are: 1) The key to successful process decisions is to
make choices that fit the situation and that make sense together. They should not work at cross-purposes,
with one process optimized at the expense of other processes. A more effective process is one that
matches key process characteristics and has a close strategic fit. 2) Individual processes are the building
blocks that eventually create the firm's whole supply chain. The cumulative effect on customer
satisfaction and competitive advantage is huge. 3) Whether processes in the supply chain are performed
internally or by outside suppliers and customers, management must pay particular attention to the
interfaces between processes. Dealing with these interfaces underscores the need for cross-functional
coordination. Examples of process strategy choices will vary.
Reference: Introduction
Keywords: process decisions, process strategy
3-35
140) Name four other business functions within a firm besides operations and describe processes within
each function.
Answer: Other business functions include accounting, human resources, training, sales, marketing, etc.
Accounting commonly manages activity-based costing and asset management. Human resources
manages payroll and the new hire processes. Training manages the employee orientation process. The
sales function has ownership of the sales process, etc.
Keywords: processes, business functions
141) What are the different dimensions of customer contact in service processes? Provide an example of a
service that has high levels of customer contact and one that has very low levels of customer contact.
Answer: The dimensions of customer contact are physical presence, what is processed, contact intensity,
personal attention, and method of delivery. Examples will vary.
Keywords: customer contact intensity, physical presence, personal attention, delivery method, what
processed
142) Describe and highlight differences among the three process structures in services.
Answer: The three process structures form a continuum and are front office, hybrid office, and back
office. The front office structure is a process with high customer contact in which the service provider
interacts directly with the customer. This process is more complex and has considerable divergence. The
back office structure is a process with low customer contact in which the service provider interacts little
with the customer. The work tends to be standardized and routine, with line flows from one service
provider to the next with little variation. The hybrid office is a process with moderate levels of customer
contact and standard services with perhaps some options available. Work flow progresses from one
station to the next with some dominant paths apparent. Work is reasonably complex and some
customization exists in how the process is performed.
Keywords: service process structure, front office, back office, hybrid office
services.
3-36
143) Describe the differences among make-to-order, assemble-to-order, and make-to-stock strategies from
the producer's and from the customer's perspective.
Answer: A make-to-order strategy produces to customer specifications in low volumes; typically using
highly divergent job or batch processes that are highly flexible. This level of customization requires a
great deal of planning and control by the producer; the customer receives exactly what has been
requested which may literally be a one-of-a-kind item. The customer must suffer through a lead time
period during which the item is being fabricated. The assemble-to-order strategy produces wide variety
from relatively few assemblies in a line or batch process. The process does not require as much flexibility
and since the subassemblies are standardized, the production planning and supply chain management is
easier for the producer. The customer again receives exactly what is ordered (which may be precisely
what was desired) and the item could be one-of-a-kind. Again, the customer must wait for the item to be
produced, but this wait tends to be shorter than in a make-to-order system. The make-to-stock strategy
allows the producer to manufacture standardized items in high volumes based on a forecast. Production
planning and control is much simpler and inventory can be used as a buffer for variable demand. The
customer's order is filled immediately and the product is far from one-of-a-kind.
Keywords: process strategy, make-to-order, make-to-stock, assemble-to-order
144) Describe the appearance and use of a closeness matrix.

Answer: A closeness matrix is a table that lists each department (or operation) across the top and down
the left side of the table. At the intersection points of each pair of departments there is a closeness factor
that gives a measure of the relative importance of each pair of centers being located together. The layout
planner uses these factors in conjunction with a block plan to assign departments to a physical location in
the facility.
Reference: Layout
Keywords: closeness matrix
services.
145) List and briefly define four different basic types of manufacturing basic processes.
Answer: The four basic process types are job process, batch process, line process, and continuous flow
process. A job process creates the flexibility needed to produce a variety of products or services in
significant quantities. Customization is relatively high, and volume for any one product or service is low.
A batch process differs from the job process with respect to volume, variety, and quantity. The primary
difference is that volumes are higher because the same or similar products or services are provided
repeatedly. A line process lies between the batch and continuous processes on the continuum, volumes
are high, and products or services are standardized. The continuous flow process is the extreme end of
high-volume, standardized production with rigid line flows.
Keywords: batch, job, line, continuous flow
services.
3-37
146) Provide examples of three different processes that rely on the customer for approximately 100% of
the process; about 50%; and about 0%. What unique challenges exist for operations and supply chain
managers and process designer in each one of these scenarios?
Answer: Examples will vary. Some students might argue that the process designer must be more careful
to error-proof the process that relies more heavily on the customer while the manager takes a greater role
in a process that does not rely on the customer. The burden for training shifts from an internal to an
external focus as the customer becomes a bigger part of the production process. Students should also
comment on customer buy-in for the final product and the appropriateness of a limited number and type
of processes for customer involvement.
Keywords: customer involvement
3-38
147) Sketch and discuss the product-process matrix for manufacturing.
Answer: The product-process matrix brings together the elements of volume, product design, and
process. It synchronizes the product to be manufactured with the process. Good manufacturing design
depends first on volume, so if high customization is needed, then volume is usually lower and vice versa.
The vertical dimension of the product-process matrix deals with divergence and flow. Combinations that
are best choices are reflected along the diagonal of the matrix.

Keywords: product- process matrix, manufacturing, volume, customization, divergence, line-flow
services.
3-39
148) Comment on the need for flexibility in both the workforce and capital equipment. What process
types and production situations require greater flexibility?
Answer: As the authors indicate, high task divergence and flexible process flows require more flexibility
of the process's resources — its employees, facilities, and equipment. Employees need to perform a broad
range of duties, and equipment must be general purpose. Otherwise, resource utilization will be too low
for economical operations. Highly task divergent operations are required when customers have unique
needs; casting these needs in the product-process matrix suggests that job processes and batch processes,
both large and small, would benefit from flexibility. In the customer-contact matrix, both front office and
hybrid office types would reap the benefits of greater worker and equipment flexibility.
Difficulty: Easy
Keywords: resource flexibility, flexible workforce
149) Define economies of scope, and identify how they relate to flexible automation.
Answer: Economies of scope are the ability to produce multiple products more cheaply in combination
than separately. Flexible automation provides economies of scope by allowing the producer to use the
same productive resource to make intermediate volumes of a range of products, resulting in a shorter
payback period for the capital equipment than if it were fixed automation.
Difficulty: Easy
Keywords: economies of scope, flexible automation
150) What is the meaning of process reengineering and how can it be applied to a major process with
which you are familiar? Be as complete as time permits.
Answer: Process reengineering is the fundamental rethinking and radical redesign of processes to
improve performance dramatically in terms of cost, quality, service, and speed. Applications will vary.
Keywords: process reengineering
3-40
151) A firm of four departments has the following trip matrix and current block plan of all departments:
a. What is the weighted-distance score for the current layout? (Assume rectilinear distance and that the
distance between departments A and B is one unit of distance.)
b. What would be the weighted-distance score for the following layout?
Answer:
a.
Department Closeness wd
Pair Factor Distance Score
B-D 2, 4 16 2 32
A-B 1, 2 14 1 14
A-D 1, 4 9 1 9
B-C 2, 3 7 1 7
A-C 1, 3 6 2 12
C-D 3, 4 2 1 2
Total 76
3-41
b.
Department Load wd
B-D 2, 4 16 1 16
A-B 1, 2 14 2 28
A-D 1, 4 9 1 9
B-C 2, 3 7 1 7
A-C 1, 3 6 1 6
C-D 3, 4 2 2 4
Total 7
Reference: Layout
Keywords: weighted-distance, rectilinear
3-42
152) A firm of six departments has the following trip matrix and current block plan of all departments:
a. What is the weighted—distance score for the current layout? (Assume rectilinear distance and that the
distance between departments A and B is one unit of distance.)
b. What would be the weighted—distance score for the following layout?
Answer:
a.
Department Closeness Wd
C-E 3, 5 12 2 24
B-F 2, 6 10 2 20
A-D 1, 4 9 1 9
A-C 1, 3 8 2 16
A-B 1, 2 7 1 7
B-C 2, 3 6 1 6
E-F 5, 6 6 1 6
B-D 2, 4 3 2 6
D-E 4, 5 3 1 3
A-F 1, 6 2 3 6
C-D 3, 4 2 3 6
Total 109
3-43
b.
Department Closeness Wd
C-E 3, 5 12 1 12
B-F 2, 6 10 1 10
A-D 1, 4 9 1 9
A-C 1, 3 8 1 8
A-B 1, 2 7 2 14
B-C 2, 3 6 1 6
E-F 5, 6 6 1 6
B-D 2, 4 3 1 3
D-E 4, 5 3 3 9
A-F 1, 6 2 3 6
C-D 3, 4 2 2 4
Total 88
Reference: Layout
Keywords: weighted distance, rectilinear
3-44
153) A department store chain is designing a layout for a new store. The store manager wants to provide
as much convenience as possible for her customers. Based on historical data, the number of trips between
departments per hour is given in the following closeness matrix. A block plan showing a preliminary
layout is also shown.
Customer travel between departments is restricted to the aisles shown in the block plan as dotted lines.
3-45
CALCULATIONS TABLE
Closeness Original Revision #1
Dept. Pair Factor (w) Distance (dO) w × dO Distance (d1) w × d1
1—2
1—3
1—4
1—5
1—6
2—3
2—4
2—5
2—6
3—4
3—5
3—6
4—5
4—6
5—6
TOTAL
a. What is the total expected weighted-distance score between Office Supplies and Hardware?
b. What is the total weighted-distance score between Hardware and Toys?
c. What is the total weighted-distance score for the entire store?
d. A suggestion has been made to switch Hardware and Automotive. What would the total weighted-
distance score for the entire store if these two departments were switched?
e. Based on your calculations, would you recommend that Hardware and Toys be switched?
Answer:
COMPLETED CALCULATIONS TABLE
Closeness Original Revision #1
Dept. Pair Factor (w) Distance (dO) w ×dO Distance (d1) w × d1
1—2 40 1 40 1 40
1—3 100 2 200 2 200
1—4 50 1 50 1 50
1—5 20 2 40 2 40
1—6 10 3 30 3 30
2—3 100 1 100 1 100
2—4 80 2 160 2 160
2—5 60 1 60 1 60
2—6 80 2 160 2 160
3—4 70 3 210 1 70
3—5 100 2 200 2 200
3—6 50 1 50 1 50
4—5 70 1 70 3 210
4—6 90 2 180 2 180
5—6 60 1 60 1 60
TOTAL N/A 25 1610 25 1610
3-46
a. The weighted-distance score between Office Supplies and Hardware (#1 and #3) is two distance
lengths (see block plan) times the # of trips per hour.
(2 distance lengths)(100 trips per hour) = weighted-distance score of 200
b. The weighted-distance score between Hardware and Toys (#3 and #4) is three distance lengths (see
block plan) times the # of trips per hour.
(3 distance lengths)(70 trips per hour) = weighted-distance score of 210
c. The total weighted-distance score for the entire store is (see completed calculation table above) =
1,610.
d. Switching Hardware and Automotive results in the same total weighted-distance score for the entire
store as the original layout (see completed calculation table, Revision #1): 1,610.
e. The travel distances are the same, so the switch of Hardware and Automotive should not be made.
Reference: Weighted Distance Score
3-47
154) Two manufacturing processes are being considered for making a new product. Process #1 is less
capital intensive, with fixed costs of $50,000 per year and variable costs of $700 per unit. Process #2 has
fixed costs of $400,000 annually, with variable costs of $200 per unit.
a. What is the break-even quantity for the two processes?
b. If annual sales are expected to be 600 units, which process should be selected?
c. If lowest overall costs per year is your overall objective, for what range of annual production quantities
should you select the first process? the second process?
d. Operations and Engineering have found a way to reduce the cost of the second process, such that the
fixed costs for this process decrease from $400,000 to $300,000 annually. All other costs remain the same
st st nd
(1 process fixed = $50,000 / year, 1 process variable = $700 / unit, 2 process variable = $200 / unit).
What is the new break even quantity between the two processes?
e. Does this change the process selection for the annual sales volume of 600 units? If so, for what range of
annual production quantities should you select the first process and the second process?
Answer:
a. $50,000 + $700(Q) = $400,000 +$ 200(Q)
$500(Q) = $350,000  Q = 700 units per year
b. Process #1: $50,000 + $700(600) = $470,000

Process #2: $400,000 + $200(600) = $520,000
Process #1 should be selected, since it will save $50,000 compared to Process #2 at an annual volume
of 600 units.
c. In part b, we have seen that Process #1 is the better choice at volumes below the break even quantity
of 700 units per year. Therefore,
Process #1 should be selected for volumes from 0 - 700 units per year;
Process #2 should be selected for volumes of 700 or more units per year.
d. $50,000 + $700(Q) = $300,000 +$ 200(Q)

$500(Q) = $250,000  Q = 500 units per year
e. In this case,
Process #1: $50,000 + $700(600) = $470,000
Process #2: $300,000 + $200(600) = $420,000
Process #2 should be selected, since it will now save $50,000 compared to Process #1 at an annual
volume of 600 units.
Process #1 should be selected for volumes from 0 - 500 units per year;
Process #2 should be selected for volumes of 500 or more units per year.
Difficulty: Easy
Keywords: general-purpose equipment, special-purpose equipment, break even quantity, total cost, low-
cost option
3-48
155) The break-even graph shown below represents the cost structure associated with a flexible
production process and one that is fixed (less flexible). Using the information displayed in the graph,
determine the cost structures associated with the two alternative production methods.
Answer: The Fixed alternative has a fixed cost of $17,000.

The Flexible alternative has a fixed cost of $28,000.
Their point of intersection is at an output volume of 55,000 units, which results in a cost of $41,750.
For the Fixed alternative, $41,750=$17,000+55,000×VC
VC=($41,750-$17,000)/55,000
VC=$0.45
For the Flexible alternative, $41,750=$28,000+55,000×VC

VC=($41,750-$28,000)/55,000
VC=$0.25
Difficulty: Easy
Keywords: general-purpose equipment, special-purpose equipment, break even quantity, total cost, low-
cost option
3-49
156) An entrepreneur considers three possibilities for the production of her new product. One alternative,
a job process, would have fixed costs of $22,000 and a per unit cost of $11.63. The large batch option
would have a fixed cost of $54,000 and a per unit cost of $8.82. The line process would have a fixed cost of
$85,000 and a per unit cost of $7.33. Graph the total cost lines and determine over what range of output
each production alternative is superior.
Answer: The Line alternative total cost line has the equation 85000+7.33x
The Large Batch alternative total cost line equation is 54000+8.82x
The Job alternative total cost line equation is 22000+11.63x
We know that the alternative with the lowest fixed cost must initially be superior and the alternative with
the lowest variable cost must ultimately be the cheapest alternative, so our answer begins at 0 output with
Job and ends at infinity (or at least very large output with Line.
At a volume of 11,388 the Job process becomes more expensive than the Large Batch process.
54,000 + 8.82x = 22,000 + 11.63x
32,000 = 2.81x
x = 11,388
At a volume of 20,805 the Line process becomes less expensive than the Large Batch process.
85,000+7.33x = 54,000+8.82x
31,000 = 1.49x
x = 20,805
The Line and Job processes' point of indifference is immaterial since the Large Batch process cost is lower
than both at their intersection point.
The ranges for each alternative are:

Job 0 — 11,388 units
Large Batch 11,388 — 20,805 units
Line 20,805 — infinite demand
Keywords: break even quantity, total cost
3-50

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What are the main types of operations processes discussed in manufacturing and services?

What are the main types of operations processes discussed in manufacturing and services?

What factors determine the appropriate process structure for a service?

What factors determine the appropriate process structure for a service?

Operations Management: Processes and Supply Chains, 10e (Krajewski et al.

1) Process decisions are strategic in nature.

2) No process can exist without at least one product or service.

5) Process structure is the mix of equipment and human skills in a process.

12) Physical presence does not occur in a manufacturing service process.

18) A continuous flow process is characterized by a high degree of job customization.

19) A job process has a relatively high level of customization.

23) Petroleum refineries typically use continuous flow processes.

24) Continuous flow processes have a high level of customization.

42) A toaster is an example of flexible automation.

49) People processing services require:

53) Field service representatives are classified as a:

55) Front offices typically emphasize:

56) Back offices typically emphasize:

57) Which of the following is sometimes called mass production?

59) When the process choice is a job process, it requires:

60) Which of the following statements about process choice is best?

64) The principle of postponement is employed by a producer using a(n):

88) An advantages of customer involvement in a service process is that:

Specialized automation Fixed Costs = $9,000 / month Variable Cost / Unit = $2

ALTERNATIVE FIXED COST VARIABLE COST

101) More fixed automation typically means:

105) Higher volume in a process is generally associated with:

108) Which of the following statements regarding resource flexibility is best?

109) Which of the following statements concerning resource flexibility is best?

112) Which statement about economies of scope is not true?

119) Which statement on reengineering and process improvement is best?

120) A back office operation most closely resembles a:

121) A primary enabler of process reengineering is:

123) A process selected for reengineering should be a:

137) ________ automation can handle various products through programmability.

144) Describe the appearance and use of a closeness matrix.

Reference: Process Structure in Manufacturing

(2 distance lengths)(100 trips per hour) = weighted-distance score of 200

(3 distance lengths)(70 trips per hour) = weighted-distance score of 210

b. Process #1: $50,000 + $700(600) = $470,000

d. $50,000 + $700(Q) = $300,000 +$ 200(Q)

Answer: The Fixed alternative has a fixed cost of $17,000.

For the Flexible alternative, $41,750=$28,000+55,000×VC

The ranges for each alternative are:

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