Business Management Principles (1) Test Bank Chapter 7

Business Essentials, 10e (Ebert/Griffin)
Chapter 7 Operations Management and Quality for Producing Goods and Services
1) Firms that make only tangible products are engaged in goods production.
Answer: TRUE
Explanation: Goods are tangible products, while services may be either tangible or intangible.
Difficulty: Easy
Objective: 7.2
Learning Outcome: Discuss the factors that influence decisions about organizational structure.
Skill: Concept
2) In a low-contact system, the customer must be a part of the system to receive the service.
Answer: FALSE
Explanation: An example of a low-contact system is mail delivery, where the customer need not
be present to receive the service.
Difficulty: Easy
Objective: 7.1
Skill: Concept
3) A firm's capacity depends on both how many people it employs and the number and size of its
facilities.
Answer: TRUE
Explanation: Capacity is the amount of a product that a company can produce under normal
conditions.
Difficulty: Easy
Objective: 7.4
Skill: Concept
4) If parts A, B, and C must be produced this week, a detailed schedule will indicate the
sequence of work.
Answer: TRUE
Explanation: Detailed schedules show day-to-day activities that will occur in production.
Difficulty: Easy
Objective: 7.5
Skill: Concept
1
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5) Quality improvement teams are groups of employees from various work areas who define,
analyze, and solve common production problems.
Answer: TRUE
Explanation: Quality improvement teams seek to improve both their own work methods and the
products they make.
Difficulty: Easy
Objective: 7.7
Skill: Concept
6) ISO 9000 is a certification program attesting to the fact that a factory, laboratory, or office has
improved its environmental performance.
Answer: FALSE
Explanation: This is a description of ISO 14000. ISO 9000 is a certification program attesting
that a factory, a laboratory, or an office has met the rigorous quality management requirements
set by the International Organization for Standardization.
Difficulty: Moderate
Objective: 7.7
Learning Outcome: Discuss the roles of ethics and corporate responsibility in business.
Skill: Concept
7) Each stage in the supply chain adds value for the final customer.
Answer: TRUE
Explanation: The suppy chain starts with raw-materials suppliers and continues until the product
reaches the end customer.
Difficulty: Easy
Objective: 7.8
Skill: Concept
8) By turning raw materials into finished goods, production creates form utility.
Answer: TRUE
Explanation: Form utility is created when raw materials and human skills are converted into
finished goods and services.
Objective: 7.1
Skill: Concept
9) When a company turns out ornaments in time for Christmas, it creates time utility.
Answer: TRUE
Explanation: Time utility is created when products are made available for consumers when they
want them.
Objective: 7.1
Learning Outcome: Describe the major components of effective distribution.
Skill: Concept
2
10) Services are more tangible, more customized, and more storable than most products.
Answer: FALSE
Explanation: Services are less tangible and less storable than goods.
Objective: 7.1
Learning Outcome: Describe the major components of effective distribution.
Skill: Concept
11) Getting a haircut and having your lawn mowed are both examples of low-contact services.
Answer: FALSE
Explanation: Getting a haircut is a high-contact service.
Objective: 7.1
Skill: Concept
12) A company should select the same kind of production used by most of its competitors.
Answer: FALSE
Explanation: A company should pick the kind of production that best achieves its larger
business strategy.
Objective: 7.3
Skill: Concept
13) In a same-steps layout, equipment and people are set up to produce one type of good in a
fixed sequence of steps and are arranged according to its production requirements.
Answer: TRUE
Explanation: A same-steps layout allows for the efficient use of an assembly line, where
production operations are set up along a product-flow line.
Objective: 7.4
Skill: Concept
14) An assembly line is an example of a custom-products layout.

Answer: FALSE
Explanation: An assembly line is a same-steps layout.
Objective: 7.4
Skill: Concept
3
15) A process flowchart identifies the sequence of production activities, movements of materials,
and work performed at each stage of the process.
Answer: TRUE
Explanation: A process flowchart can be analyzed to isolate wasteful activities, sources of delay,
and other inefficiencies.
Objective: 7.4
Skill: Concept
16) Staff schedules identify which products will be produced and when.
Answer: FALSE
Explanation: Staff schedules, in general, specify assigned working times in upcoming days–
perhaps for as many as 30 days or more–for each employee on each work shift.
Objective: 7.5
Skill: Concept
17) Materials management involves the flow of materials inside of the production facility, while
distribution management involves the flow of finished goods.
Answer: FALSE
Explanation: Materials management is the process by which managers plan, organize, and
control the flow of materials from design through distribution of finished goods.
Difficulty: Difficult
Objective: 7.6
Skill: Concept
18) Just-in-time (JIT) production systems normally require large amounts of "safety stock" to be
maintained in a firm's warehouse.
Answer: FALSE
Explanation: JIT production reduces inventory levels by bringing needed materials together only
at the precise time they are needed for production and/or shipment to the customer.
Objective: 7.6
Skill: Concept
4
19) Japanese companies adapted the concept of quality circles from quality improvement teams
used by U.S. companies.
Answer: FALSE
Explanation: Quality improvement teams used throughout the world are patterned after the
Japanese concept of quality circles.
Objective: 7.7
Skill: Concept
20) ISO 9000 is a certification program attesting that a factory, laboratory, or office has met the
rigorous requirements set by the International Organization for Standardization.
Answer: TRUE
Explanation: More than 160 countries have adopted ISO 9000 as a national standard.
Objective: 7.7
Skill: Concept
21) The goal of supply chain management is better overall flow in the system.
Answer: TRUE
Explanation: After several companies work to improve the flow of materials through the system,
the ultimate reward is better value for customers.
Objective: 7.8
Skill: Concept
22) Successful companies, such as 3M and FedEx, use the same operations strategy.
Answer: FALSE
Explanation: Companies adopt the kind of production that achieves their larger business
strategy.
Objective: 7.3
Skill: Concept
23) Operations capability is a special ability that production does especially well to outperform
the competition.
Answer: TRUE
Explanation: The chosen operations capability should be compatible with the overall business
strategy.
Objective: 7.3
Skill: Concept
5
24) Even excellent firms focus on one competence at a time.
Answer: FALSE
Explanation: Excellent firms learn, over time, how to achieve more than just one competence.
Objective: 7.3
Skill: Concept
25) A detailed schedule will indicate how many employees will be working on a given shift.
Answer: FALSE
Explanation: A detailed schedule shows day-to-day activities that will occur in production. A
staff schedule identifies how many employees will be working.
Objective: 7.5
Skill: Concept
26) Operations control includes materials management and quality control.

Answer: TRUE
Explanation: Both activities are a part of operations control and ensure that schedules are met
and products delivered, both in quantity and in quality.
Objective: 7.6
Skill: Concept
27) For manufacturing firms, typical materials costs make up 50 to 75 percent of total product
costs.
Answer: TRUE
Explanation: Materials stakes are high for service firms as well.
Objective: 7.6
Learning Outcome: Discuss strategies for setting and adjusting prices.
Skill: Concept
28) The biggest challenge of TQM is motivating employees throughout the company to achieve
quality goals.
Answer: TRUE
Explanation: The backbone of TQM is motivating employees throughout the company to
achieve quality goals. Leaders of the quality movement use various methods and resources to
foster a quality focus; when those efforts succeed, employees will ultimately accept quality
ownership.
Objective: 7.7
Learning Outcome: Discuss the factors that affect motivation and behavior in the workplace.
Skill: Concept
6
29) Managers of a restaurant eat at a competing restaurant in order to identify desirable
improvements in their own operations; this illustrates quality control.
Answer: FALSE
Explanation: Competitive product analysis is a process by which a company analyzes a
competitor's products to identify desirable improvements.
Objective: 7.7
Learning Outcome: Describe the skills and functions of management.
Skill: Concept
30) Value-added analysis might focus on both the elimination of waste and cost minimization.
Answer: TRUE
Explanation: Value-added analysis refers to the evaluation of all work activities, material flows,
and paperwork to determine the value that they add for customers; it often reveals wasteful or
unnecessary activities that can be eliminated without jeopardizing customer service.
Objective: 7.7
Skill: Concept
31) The sales department relies on the engineering department to send samples and quotes to
prospective customers on a timely basis; the sales department may be considered the engineering
department's internal customer.
Answer: TRUE
Explanation: Customers are both internal and external.
Objective: 7.7
Skill: Concept
32) ISO 14000 may result in a recycling program at a company.

Answer: TRUE
Explanation: ISO 14000 certifies improvements in environmental performance, extending the
ISO approach into the arena of environmental protection and hazardous waste management.
Objective: 7.7
Skill: Concept
7
33) A value chain includes an entire network of firms, beginning with suppliers and ending when
production is complete.
Answer: FALSE
Explanation: A value chain, also known as a supply chain, includes the flow of information,
materials, and services that starts with raw-materials suppliers and continues adding value
through other stages in the operations process until the product reaches the end customer.
Difficulty: Difficult
Objective: 7.8
Skill: Concept
34) Because supply chain strategy is based on the collective effort of a number of firms, no one
firm in the chain gains a competitive advantage.
Answer: FALSE
Explanation: Supply chain strategy is based on the idea that members of the chain will gain
competitive advantage by working as a coordinated unit.
Objective: 7.8
Skill: Concept
35) Which term refers to all the activities involved in making products-goods and services-for
customers?
A) operations
B) processes
C) planning
D) scheduling
E) performance
Answer: A
Explanation: A) "Operations" and "production" refer to the same activities.
Difficulty: Easy
Objective: 7.1
Skill: Concept
36) Which of the following is the ability of a product to satisfy a human want or need?
A) utility
B) relative advantage
C) content
D) satisfaction
E) capacity
Answer: A
Explanation: A) Production adds customer value by providing utility.
Difficulty: Easy
Objective: 7.1
Skill: Concept
8
37) Which type of utility is created when a company makes products available where consumers
want them?
A) time
B) place
C) possession
D) form
E) operations
Answer: B
Explanation: B) An example of place utility is a theater showing a wide selection of movies in a
popular shopping mall.
Difficulty: Easy
Objective: 7.1
Skill: Concept
38) Which term refers to a set of methods and technologies used to produce a good or service?
A) contingency plan
B) production episode
C) reduction
D) methods plan
E) operations process
Answer: E
Explanation: E) Banks use document shredding and data encryption to protect confidential
information. Both are examples of operations processes.
Difficulty: Easy
Objective: 7.1
Skill: Concept
39) In which of the following is the customer part of the system during service delivery?
A) a high-contact system
B) a low-contact system
C) a customer system
D) a quality system
E) a utility system
Answer: A
Explanation: A) A manicure is an example of a high-contact system.
Difficulty: Easy
Objective: 7.1
Skill: Concept
9
40) What term describes a special ability that production does especially well to outperform the
competition?
A) supply chain management
B) total quality management
C) process engineering
D) operations capability
E) value-added analysis
Answer: D
Explanation: D) A company chooses an operations capability that is compatible with its overall
business strategy.
Difficulty: Easy
Objective: 7.3
Skill: Concept
41) Which of the following is the amount of a product that a company can produce under normal
working conditions?
A) capacity
B) output
C) efficiency
D) burden
E) performance
Answer: A
Explanation: A) A firm's capacity depends on how many people it employs and the number and
size of its facilities.
Difficulty: Easy
Objective: 7.4
Skill: Concept
42) Equipment and people are grouped according to function in which type of production layout?
A) cellular
B) same-steps
C) custom-products
D) supply-chain
E) service
Answer: C
Explanation: C) A custom-products layout is well suited to make-to-order shops.
Difficulty: Easy
Objective: 7.4
Skill: Concept
10
43) Thousands of empty jugs move down a conveyor belt at Colgate-Palmolive before stopping
to be filled and moving on to be labeled. What type of layout is utilized?
A) supply-chain
B) custom-products
C) hybrid
D) fixed-position
E) same-steps
Answer: E
Explanation: E) An assembly line is a same-steps layout.
Difficulty: Easy
Objective: 7.4
Skill: Application
44) Which term refers to how well a product does what it is supposed to do?
A) capacity
B) consistency
C) reliability
D) performance
E) quality control
Answer: D
Explanation: D) The performance of a fast-food meal might be judged by whether it tastes good
and is reasonably filling.
Difficulty: Easy
Objective: 7.4
Skill: Concept
45) The sameness of product quality from unit to unit is referred to by which term?
A) utility
B) reliability
C) performance
D) consistency
E) quality control
Answer: D
Explanation: D) High consistency at its many locations has made Courtyard by Marriott a leader
in the lodging industry.
Difficulty: Easy
Objective: 7.4
Skill: Concept
11
46) Which of the following is a scheduling tool that breaks down large projects into steps to be
performed and specifies the time required to perform each one?
A) Myers graphic
B) critical path chart
C) Gantt chart
D) process analysis graph
E) master schedule
Answer: C
Explanation: C) A project manager uses a Gantt chart to keep the project moving on schedule.
Difficulty: Easy
Objective: 7.5
Skill: Concept
47) Which type of system is designed for smooth production flow to avoid inefficiencies,
eliminate unnecessary inventories, and continuously improve production processes?
A) quality system
B) lean system
C) managed system
D) production system
E) flexible system
Answer: B
Explanation: B) Lean production systems were pioneered by Toyota.
Difficulty: Easy
Objective: 7.6
Skill: Concept
48) Which of the following is NOT a major objective of JIT production?

A) increasing stop-and-go production
B) reducing goods in process
C) complying with schedules
D) eliminating disruptions by continuous improvement
E) reducing inventory levels
Answer: A
Explanation: A) JIT production replaces stop-and-go production with smooth movement.
Difficulty: Easy
Objective: 7.6
Skill: Critical Thinking
12
49) Which term refers to the acquisition of the raw materials a company needs to produce its
products?
A) development
B) purchasing
C) goods control
D) quality control
E) wholesaling
Answer: B
Explanation: B) Most large firms have purchasing departments to buy proper services and
materials in the amounts needed.
Difficulty: Easy
Objective: 7.6
Skill: Concept
50) Which of the following refers to the receiving, storing, handling, and counting of all raw
materials, partly finished goods, and finished goods?
A) materials handling
B) inventory control
C) quality control
D) wholesaling
E) distribution control
Answer: B
Explanation: B) Inventory control ensures that enough materials inventories are available to
meet production schedules, while at the same time avoiding expensive excess inventories.
Difficulty: Easy
Objective: 7.6
Skill: Concept
51) Which of the following terms includes all activities involved in getting quality products into
the marketplace?
A) quality control
B) quality reliability
C) total quality management
D) performance quality
E) quality overview
Answer: C
Explanation: C) TQM must consider all aspects of a business, including customers, suppliers,
and employees.
Difficulty: Easy
Objective: 7.7
Skill: Concept
13
52) Which term describes the idea that quality belongs to each person who creates it while
performing a job?
A) quality control
B) quality ownership
C) quality circles
D) total quality management
E) quality improvement teams
Answer: B
Explanation: B) A goal of total quality management is to motivate employees to accept quality
ownership.
Difficulty: Easy
Objective: 7.7
Skill: Concept
53) What name is given to the process by which a company analyzes another company's product
to identify desirable improvements in its own product?
A) quality reliability analysis
B) benchmarking
C) performance quality analysis
D) competitive product analysis
E) quality outsourcing
Answer: D
Explanation: D) Using competitive analysis, for example, Toshiba might take apart a Xerox
copier and test each component.
Difficulty: Easy
Objective: 7.7
Skill: Concept
54) Which of the following is patterned after the successful Japanese concept of quality circles?
A) supply chain management
B) quality improvement team
D) quality ownership
Answer: B
Explanation: B) Quality improvement teams organize their own work, select leaders, and
address problems in the workplace.
Difficulty: Easy
Objective: 7.7
Skill: Concept
14
55) Which term refers to the flow of information, materials, and services from raw-materials
suppliers through stages in the operations process until the product reaches the end customer?
A) distribution chain
B) supply chain
C) service channel
D) distribution channel
E) performance channel
Answer: B
Explanation: B) The term supply chain refers to the group of companies and stream of activities
that work together to create a product.
Difficulty: Easy
Objective: 7.8
Skill: Concept
56) Which of the following is another term for the supply chain?
A) the distribution chain
B) the distribution network
C) the value chain
D) the supply network
E) the wholesale network
Answer: C
Explanation: C) Each stage in the value chain adds value for the final customer.
Difficulty: Easy
Objective: 7.8
Skill: Concept
57) Which term refers to the strategy of paying suppliers and distributors to perform certain
business processes or to provide needed materials or services?
A) outsourcing
B) reengineering
C) controlling
D) scheduling
E) warehousing
Answer: A
Explanation: A) The decision to outsource expands supply chains.
Difficulty: Easy
Objective: 7.8
Skill: Concept
15
58) When a company turns out costumes in time for Halloween, it creates which type of utility?
A) ownership
B) time
C) form
D) place
E) value
Answer: B
Explanation: B) Time utility is created when products are made available when customers want
them.
Objective: 7.1
Skill: Application
59) When a company makes products available where they are convenient for consumers, it
creates which type of utility?
A) time
B) form
C) place
D) possession
E) leisure
Answer: C
Explanation: C) A fast-food restaurant located in a college union is an example of place utility.
Objective: 7.1
Skill: Concept
60) In a business, whose job is it to draw up plans to transform resources into products and bring
together basic resources, such as knowledge, physical materials, equipment, and labor?
A) CEO
B) operations manager
C) quality manager
D) floor foreman
E) supply manager
Answer: B
Explanation: B) Operations managers are responsible for ensuring that operations processes
create value and provide benefits to customers.
Objective: 7.1
Skill: Concept
16
61) Which term describes services that cannot be produced ahead of time?
A) transformed
B) low-contact
C) unstorable
D) intangible
E) consistent
Answer: C
Explanation: C) Unstorable services cannot be used at a later time.
Objective: 7.1
Skill: Concept
62) Which of the following would be considered a low-contact service?

A) surgery
B) haircut
C) massage
D) electric power
E) piano lesson
Answer: D
Explanation: D) All of the other choices are considered high-contact services in which the
consumer must be present during the service transaction.
Objective: 7.1
Skill: Application
63) The check-processing operations at your bank would be considered to be which type of
system?
A) high-contact
B) low-contact
C) dynamic
D) synthetic
E) performance
Answer: B
Explanation: B) Check-processing operations can be completed without the consumer being
present.
Objective: 7.1
Skill: Application
17
64) Which of the following would be considered a high-contact system?
A) gas company
B) electric company
C) lawn care company
D) barber shop
E) postal delivery
Answer: D
Explanation: D) A barber's services require that the consumer be present during the service
transaction.
AACSB: Analytical thinking
Objective: 7.1
Skill: Critical Thinking
65) Save-A-Lot grocery stores use which type of strategy for attracting customers?
A) flexibility
B) quality
C) low-cost
D) dependability
E) consistency
Answer: C
Explanation: C) Save-A-Lot offers items at savings up to 40 percent less than conventional food
chains.
Objective: 7.4
Skill: Application
66) 3M uses which strategy for attracting customers?

A) quality
B) low-cost
C) dependability
D) flexibility
E) consistency
Answer: D
Explanation: D) The flexibility strategy at 3M emphasizes new product development.
Objective: 7.4
Skill: Application
18
67) Machine, woodworking, and dry cleaning shops typically use which type of layout?
A) product
B) custom-products
C) same-steps
D) hybrid
E) make-to-stock
Answer: B
Explanation: B) In a custom-products layout, machines and people are grouped by function in
the production facility; custom-products layouts allow for greater flexibility and are well suited
to make-to-order shops.
Objective: 7.4
Skill: Application
68) Which type of layout is designed to move resources through a smooth, fixed sequence of
steps?
A) same-steps
B) location
C) custom-products
D) quality
E) make-to-order
Answer: A
Explanation: A) A same-steps layout is set up to make one type of product in a fixed sequence
and is arranged according to its production requirements.
Objective: 7.4
Skill: Concept
69) Automobile, food-processing, and television assembly plants use which type of layout?
A) make-to-order
B) location
C) custom-products
D) quality
E) same-steps
Answer: E
Explanation: E) These production processes require a fixed sequence that is arranged according
to production requirements.
Objective: 7.4
Skill: Application
19
70) Which term is defined as the combination of "characteristics of a product or service that bear
on its ability to satisfy stated or implied needs"?
A) quality
B) production
C) quantity
D) clarification
E) capacity
Answer: A
Explanation: A) Such characteristics can include a reasonable price.
Objective: 7.4
Skill: Concept
71) Performance refers to which of the following?

A) the principle that quality belongs to each person who creates it while performing a job
B) the consistency of product quality from unit to unit
C) how well the product does what it is supposed to do
D) the process by which a company analyzes a competitor's products to identify desirable
improvement
E) providing value by making products available when customers want them
Answer: C
Explanation: C) Planning for quality begins when products are being designed. Early in the
process, goals are established for both performance and consistency.
Objective: 7.4
Skill: Concept
72) Consistency refers to which of the following?

B) the sameness of product quality from unit to unit
C) the sum of all activities involved in getting high-quality products into the marketplace
improvements
E) providing value by making products available where customers want them
Answer: B
Explanation: B) This consistency is achieved by controlling for consistent raw materials,
encouraging conscientious work, and maintaining equipment.
Objective: 7.4
Skill: Concept
20
73) Managers can work to reduce waste, inefficiency, and poor performance by examining
procedures on a step-by-step basis. Which term describes this process?
A) advance planning
B) materials management
C) methods improvement
D) quality planning
E) quality ownership
Answer: C
Explanation: C) A process flowchart is sometimes used to assist in methods improvement.
Objective: 7.4
Skill: Concept
74) Logan Aluminum makes coils of aluminum that it supplies to customer companies that use it
to make beverage cans. Logan uses a schedule that specifies how many tons of each type of coil
will be produced each week. What is this schedule called?
A) master production schedule
B) detailed schedule
C) Gantt chart
D) staff schedule
E) PERT chart
Answer: A
Explanation: A) The master production schedule shows which products will be produced, and
when, in upcoming time periods.
Objective: 7.5
Skill: Application
75) In operations control, production managers monitor production performance by which

method?
A) comparing results with detailed plans and schedules
B) checking on each worker on the production floor
C) observing activities from a platform above the workers
D) constantly talking with employees involved
E) performing spot checks of worker performance
Answer: A
Explanation: A) If schedules or quality standards aren't met, managers can take corrective
action.
Objective: 7.6
Skill: Concept
21
76) Which of the following is NOT one of the areas of materials management?
A) transportation
B) warehousing
C) purchasing
D) supplier selection
E) customer service
Answer: E
Explanation: E) Materials management includes supplier selection, purchasing, transportation,
warehousing, and inventory control.
Objective: 7.6
Skill: Concept
77) What is the name for a production system in which all the needed materials and parts arrive
at the precise moment they are required for each production stage?
A) quality control system
B) process control system
C) just-in-time production
D) standardized production
E) custom-products production
Answer: C
Explanation: C) JIT production brings together all needed materials at the precise moment they
are required for each production stage, not before, creating efficient responses to customer
orders.
Objective: 7.6
Skill: Concept
78) Which of the following is greatly reduced in a just-in-time production system?

A) workers needed on the line
B) goods in process
C) shifts necessary at the plant
D) separate operations on the assembly line
E) forepersons needed at the plant
Answer: B
Explanation: B) As a result, JIT production minimizes inventory costs and saves money by
replacing stop-and-go production with smooth movement.
Objective: 7.6
Skill: Concept
22
79) Which of the following is a component of materials management?
A) promotion
B) distribution
C) marketing
D) warehousing
E) sales
Answer: D
Explanation: D) Materials management includes supplier selection, purchasing, transportation,
warehousing, and inventory control.
Objective: 7.6
Skill: Concept
80) Which of the following BEST describes total quality management?

B) the consistency of a product's quality from unit to unit
improvements
E) a certification program attesting that an operations process has met rigorous requirements
Answer: C
Explanation: C) TQM begins with leadership and a desire for continuously improving both
processes and products; it must consider all aspects of a business, including customers, suppliers,
and employees.
Objective: 7.7
Skill: Concept
81) Which of the following BEST describes quality ownership?

A) an emphasis on intangible factors in customer satisfaction
improvements
E) the principle that quality belongs to each person who creates it while performing a job
Answer: E
Explanation: E) Quality-focused leaders use various methods to foster a quality focus among the
workforce; when these efforts succeed, employees will ultimately accept quality ownership.
Objective: 7.7
Skill: Concept
23
82) Which of the following BEST describes competitive product analysis?
C) the process by which a company analyzes a different company's products to identify desirable
improvements
D) the sum of all activities involved in getting a high-quality product into the marketplace.
E) examining a product to improve its form utility
Answer: C
Explanation: C) This analysis helps managers decide which product features are satisfactory,
which features should be upgraded, and which operations processes need improvement, for
example.
Objective: 7.7
Skill: Concept
83) When a worker at Toshiba takes apart a Xerox copier and tests each component, the worker
is engaging in which activity?
A) competitive product analysis
B) benchmarking
D) quality reliability analysis
Answer: A
Explanation: A) Competitive product analysis is the process by which a company analyzes a
competitor's products to identify desirable improvements.
AACSB: Reflective thinking
Objective: 7.7
Skill: Application
84) Which of the following BEST describes value-added analysis?

A) a TQM tool in which groups of employees work together to improve quality
B) the process of evaluating all work activities, materials flows, and paperwork to determine the
value that they create for customers
C) the process by which a company implements the best practices from its own past performance
and those of other companies to improve its own products
D) the process by which a company analyzes a product to identify possible improvements
E) a total company commitment to quality management at every stage of the process
Answer: B
Explanation: B) Value-added analysis often reveals wasteful or unnecessary activities that can
be eliminated without jeopardizing customer service.
Objective: 7.7
Skill: Concept
24
85) Tootsie Roll Industry's corporate principle, "We run a trim operation and continually strive to
eliminate waste, minimize costs, and implement performance improvements," is an example of
which of the following?
A) just-in-time production
B) benchmarking
C) a quality circle
D) competitive product analysis
Answer: E
Explanation: E) Tootsie Roll Industry evaluates all work activities, material flows, and
paperwork to determine the value that they add for customers.
AACSB: Reflective thinking
Objective: 7.7
Skill: Application
86) Which term refers to collaborative groups of employees from various work areas who meet
regularly to define, analyze, and solve common production problems?
A) quality improvement teams
B) quality assurance teams
C) quality control teams
D) quality evaluation teams
E) quality review teams
Answer: A
Explanation: A) Quality improvement teams organize their own work, select leaders, and
address problems in the workplace.
Objective: 7.7
Skill: Concept
25

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Business Essentials, 10e (Ebert/Griffin)

14) An assembly line is an example of a custom-products layout.

26) Operations control includes materials management and quality control.

32) ISO 14000 may result in a recycling program at a company.

48) Which of the following is NOT a major objective of JIT production?

62) Which of the following would be considered a low-contact service?

66) 3M uses which strategy for attracting customers?

71) Performance refers to which of the following?

72) Consistency refers to which of the following?

75) In operations control, production managers monitor production performance by which

78) Which of the following is greatly reduced in a just-in-time production system?

80) Which of the following BEST describes total quality management?

81) Which of the following BEST describes quality ownership?

84) Which of the following BEST describes value-added analysis?

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