112 test bank for operations management 11th edition heizer

Test Bank for Operations Management 11th Edition
Heizer
Multiple Choice Questions - Page 1
The fundamental purpose of an organization's mission statement is to:
1.

A) create a good human relations climate in the organization.

2.

B) define the organization's purpose in society.

3.

C) define the operational structure of the organization.

4.

D) generate good public relations for the organization.

5.

E) define the functional areas required by the organization.

Which of the following is true of maquiladoras?
1.

A) They discourage foreign businesses from outsourcing.

2.

B) They assess tariffs only on the value-added work done.

3.

C) They originated in China.

4.

D) None of the above

5.

E) All of the above

Which of the following is an example of competing on quick response?
1.

A) A firm produces its product with less raw material waste than its competitors do.

2.

B) A firm offers more reliable products than its competitors do.

3.

C) A firm's products are introduced into the market faster than its competitors'
products.

4.

D) A firm utilizes its capacity more effectively than its competitors do.

5.

E) A firm advertises more than its competitors do.


Which of the following is an example of competing on the basis of
differentiation?
1.

A) A firm manufactures its product with less raw material waste than its
competitors do.

2.

B) A firm's products are introduced into the market faster than its competitors'
products are.

3.

C) A firm's distribution network routinely delivers its product on time.

4.

D) A firm offers more reliable products than its competitors do.

5.

E) A firm advertises more than its competitors do.

With reference to cultural and ethical issues, the World Trade
Organization has:
1.
2.

A) eliminated bribery.
B) made progress in providing equal protection of intellectual property among
nations.

3.

C) phased out all trade and tariff barriers between the United States and Mexico.

4.

D) eliminated slave labor and child labor.

5.

E) played little role in addressing cultural and ethical issues among nations.

Which of the following does NOT represent a valid reason for globalizing
operations?
1.

A) reduce costs

2.

B) improve the supply chain

3.

C) reduce responsiveness

4.

D) attract and retain global talent

5.

E) understand markets

Which of the following is LEAST likely to be a low-cost leadership
competitive advantage?
1.

A) low overhead


2.

B) effective capacity use

3.

C) inventory management

4.

D) broad product line

5.

E) mass production

The ability of an organization to produce services that, by utilizing the
consumer's five senses, have some uniqueness in their characteristics is:
1.

A) sensory response.

2.

B) time-based competition.

3.

C) differentiation.

4.

D) flexible response.

5.

E) experience differentiation.

Which of the following statements best characterizes delivery reliability?

1.

A) a company that always delivers on the same day of the week

2.

B) a company that always delivers at the promised time

3.

C) a company that delivers more frequently than its competitors

4.

D) a company that delivers faster than its competitors

5.

E) a company that has a computerized delivery scheduling system

Which of the following best describes experience differentiation?
1.

A) immerses consumers in the delivery of a service

2.

B) uses people's five senses to enhance the service

3.

C) complements physical elements with visual and sound elements

4.

D) consumers may become active participants in the product or service

5.

E) All of the above are elements of experience differentiation.


A firm can effectively use its operations function to yield competitive
advantage through all of the following EXCEPT:
1.

A) customization of the product.

2.

B) setting equipment utilization goals below the industry average.

3.

C) speed of delivery.

4.

D) constant innovation of new products.

5.

E) maintaining a variety of product options.

The term maquiladora is most synonymous with:
1.

A) free trade zones in Mexico.

2.

B) Chinese forced labor camps.

3.

C) home-based or cottage industry.

4.

D) areas that do not meet U.S. standards for workplace safety and pollution.

5.

E) tax breaks provided by some South American countries to other South
American countries.

Which of the following statements about organizational missions is
FALSE?
1.

A) They reflect a company's purpose.

2.

B) They indicate what a company intends to contribute to society.

3.

C) They are formulated after strategies are known.

4.

D) They define a company's reason for existence.

5.

E) They provide guidance for functional area missions.

The ability of an organization to produce goods or services that have
some uniqueness in their characteristics is:
1.

A) mass production.

2.

B) time-based competition.


3.

C) competing on productivity.

4.

D) competing on quality.

5.

E) competing on differentiation.

Cost cutting in international operations can take place because of:
1.

A) lower taxes and tariffs.

2.

B) lower wage scales.

3.

C) lower indirect costs.

4.

D) less stringent regulations.

5.

E) all of the above.

Which of the following is the best example of competing on low-cost
leadership?
1.

A) A firm produces its product with less raw material waste than its competitors do.

2.

B) A firm offers more reliable products than its competitors do.

3.

C) A firm's products are introduced into the market faster than its competitors'
products are.

4.

D) A firm's research and development department generates many ideas for new
products.

5.

E) A firm advertises more than its competitors do.

According to the authors, which of the following strategic concepts allow
firms to achieve their missions?
1.

A) productivity, efficiency, and quality leadership

2.

B) differentiation, cost leadership, and response

3.

C) differentiation, quality leadership, and response

4.

D) distinctive competency, cost leadership, and experience

5.

E) differentiation, distinctive competency, quality leadership, and capacity


Which of the following did the authors NOT suggest as a reason for
globalizing operations?
1.

A) reduce costs

2.

B) improve the supply chain

3.

C) pursue stockholder approval ratings

4.

D) understand markets

5.

E) attract and retain global talent

Boeing's new 787 Dreamliner:
1.

A) is assembled in Washington, D.C.

2.

B) uses engines from Japan.

3.

C) has its fuselage sections built in Australia.

4.

D) has increased efficiency from new engine technology.

5.

E) results from a partnership of about a dozen companies.

Multinational organizations can shop from country to country and cut
costs through:
1.

A) lower wage scales.

2.

B) lower indirect costs.

3.

C) less stringent regulations.

4.

D) lower taxes and tariffs.

5.

E) all of the above.

Experience differentiation:
1.

A) isolates the consumer from the delivery of a service.

2.

B) is an extension of product differentiation in the service sector.

3.

C) uses only the consumer's senses of vision and sound.

4.

D) keeps consumers from becoming active participants in the service.


5.

E) attempts to make the service experience different for every single customer.

Which of the following activities takes place most immediately once the
mission has been developed?
1.

A) The firm develops alternative or back-up missions in case the original mission
fails.

2.

B) The functional areas develop their functional area strategies.

3.

C) The functional areas develop their supporting missions.

4.

D) The ten OM decision areas are prioritized.

5.

E) Operational tactics are developed.

Which of the following statements is true?
1.

A) Corporate mission is shaped by functional strategies.

2.

B) Corporate strategy is shaped by functional strategies.

3.

C) Functional strategies are shaped by corporate strategy.

4.

D) External conditions are shaped by corporate mission.

5.

E) Functional area missions are merged to become the organizational mission.

Franz Colruyt has achieved low-cost leadership through:
1.

A) effective use of voice mail.

2.

B) plastic, not paper, shopping bags.

3.

C) background music that subtly encourages shoppers to buy more.

4.

D) converting factories, garages, and theaters into retail outlets.

5.

E) exclusive use of the Euro.

A strategy is a(n):
1.

A) set of opportunities in the marketplace.

2.

B) broad statement of purpose.

3.

C) simulation used to test various product line options.


4.

D) plan for cost reduction.

5.

E) action plan to achieve the mission.

Which of the following represents a reason for globalizing operations?
1.

A) to improve the supply chain

2.

B) to improve operations

3.

C) to expand a product's life cycle

4.

D) to attract and retain global talent

5.

E) all of the above

The purpose of NAFTA is to:
1.

A) substitute cheap labor in Mexico for expensive labor in the United States.

2.

B) curb illegal immigration from Mexico to the United States.

3.

C) phase out all trade and tariff barriers between North America and South
America.

4.

D) phase out all trade and tariff barriers between the United States, Canada, and
Mexico.

5.

E) provide fair and equitable tariff rates for trade between the United States,
Canada, and Mexico.

Which of the following statements regarding the Dreamliner 787 is true?
1.

A) Boeing has found partners in over a dozen countries.

2.

B) The new aircraft incorporates a wide range of aerospace technologies.

3.

C) The new aircraft uses engines from not one, but two manufacturers.

4.

D) Boeing will add only 20 to 30 percent of the aircraft's value.

5.

E) All of the above are true.

57 Free Test Bank for Operations Management 11th
Edition Heizer Multiple Choice Questions - Page 2


Response-based competitive advantage can be:
1.

A) flexible response.

2.

B) reliable response.

3.

C) quick response.

4.

D) all of the above.

5.

E) none of the above.

Which of the following OM strategy/issues should a firm with a product in
the maturity stage of its life cycle be LEAST concerned with at the present
time?
1.

A) increase capacity

2.

B) long production runs

3.

C) standardization

4.

D) cost cutting

5.

E) fewer rapid product changes

Which of the international operations strategies involves low cost
reductions and low local responsiveness?
1.

A) international strategy

2.

B) global strategy

3.

C) transnational strategy

4.

D) multidomestic strategy

5.

E) worldwide strategy

Which of the following has made the LEAST progress along its product

life cycle?
1.

A) drive-through restaurants

2.

B) Boeing 787


3.

C) iPods

4.

D) 3-D game players

5.

E) Xbox 360

Which of the international operations strategies involves high cost
reductions and high local responsiveness?
1.

A) international strategy

2.

B) global strategy

3.

C) transnational strategy

4.

D) multidomestic strategy

5.

E) worldwide strategy

Outsourcing is simply an extension of the long-standing practice of:
1.

A) subcontracting.

2.

B) importing.

3.

C) exporting.

4.

D) postponement.

5.

E) e-procurement.

Standardization is an appropriate strategy in which stage of the product
life cycle?
1.

A) introduction

2.

B) growth

3.

C) maturity

4.

D) decline

5.

E) retirement


Before establishing and implementing strategy, a resources view would
ensure that which of the following resources are available?

1.

A) financial

2.

B) physical

3.

C) human

4.

D) technological

5.

E) all of the above

Porter's Five Forces Model contains which of the following?
1.

A) immediate rivals

2.

B) potential entrants

3.

C) customers

4.

D) suppliers

5.

E) all of the above

Given the position of the 3D printer in the growth stage of its life cycle,
which of the following OM Strategy/Issues should the makers of 3D
printers be least concerned with at the current time?
1.

A) forecasting

2.

B) cost cutting

3.

C) increasing capacity

4.

D) product and process reliability

5.

E) enhancing distribution

Which of the following is not an advantage of outsourcing?
1.

A) cost savings

2.

B) gaining outside expertise

3.

C) improving operations and service


4.

D) outsourcing core competencies

5.

E) accessing outside technology

Advantages of outsourcing do NOT include:
1.

A) cost savings.

2.

B) gaining outside expertise.

3.

C) maintaining a focus on core competencies.

4.

D) accessing outside technology.

5.

E) potential creation of future competition.

What theory implies that you should allow another firm to perform work
activities for your company if that company can do it more productively
than you can?
1.

A) theory of competitive advantage

2.

B) theory of core competencies

3.

C) theory of comparative advantage

4.

D) theory of outsourcing

5.

E) theory of offshoring

Caterpillar and Texas Instruments are two firms that have benefited from
the use of:
1.

A) the multidomestic strategy option.

2.

B) the international strategy option.

3.

C) the transnational strategy option.

4.

D) the maquiladora system in Europe.

5.

E) the global strategy option.

Which of the following statements is most accurate?
1.

A) Nearly all outsourcing relationships do not last beyond two years.


2.

B) Nearly all U.S. firms that outsourced processes to India have backsourced
them.

3.

C) Approximately half of all outsourcing agreements fail.

4.

D) Outsourcing is a relatively risk-free activity.

5.

E) More than 90% of outsourcing agreements succeed.

Porter's Five Forces Model is used to evaluate competition based on
which 5 aspects?
1.

A) research and development, cost, legal regulations, suppliers, customers

2.

B) immediate rivals, potential entrants, customers, suppliers, and substitute
products

3.

C) potential entrants, customers, suppliers, legal regulations, and cost

4.

D) immediate rivals, potential entrants, cost, substitute products, and legal
regulations

5.

E) cost, legal regulations, advertising effectiveness, potential entrants, and
immediate rivals

Which of the international operations strategies uses import/export or
licensing of existing products?
1.

A) international strategy

2.

B) global strategy

3.

C) transnational strategy

4.

D) multidomestic strategy

5.

E) worldwide strategy

Who introduced the concept of value-chain analysis?
1.

A) Ford

2.

B) Toyota

3.

C) Porter

4.

D) Smith

5.

E) Gates

Outsourcing manufacturing is also known as:
1.

A) license manufacturing.

2.

B) sublease manufacturing.

3.

C) concurrent manufacturing.

4.

D) hollow manufacturing.

5.

E) contract manufacturing.

Which of the following statements is most correct?
1.

A) KSFs are often necessary, but not sufficient for competitive advantage.

2.

B) KSFs are often sufficient, but not necessary for competitive advantage.

3.

C) KSFs are neither necessary nor sufficient for competitive advantage.

4.

D) KSFs are both necessary and sufficient for competitive advantage.

5.

E) None of the above statements is correct.

The acronym MNC stands for
1.

A) Mexican National Committee (for international trade)

2.

B) Maquiladora Negates Competition

3.

C) Maytag-Nestlé Corporation

4.

D) Multinational Corporation

5.

E) Maritime Navigation Company

Which of the international operations strategies uses the existing
domestic model globally?
1.

A) international strategy

2.

B) global strategy

3.

C) transnational strategy


4.

D) multidomestic strategy

5.

E) worldwide strategy

Which of the following has progressed the FURTHEST along its product
life cycle?
1.

A) drive-through restaurants

2.

B) Boeing 787

3.

C) iPods

4.

D) 3-D game players

5.

E) Xbox 360

Value-chain analysis can be used to determine if a business is adding
unique value in which of the following areas?
1.

A) product research

2.

B) human resources

3.

C) process innovation

4.

D) quality management

5.

E) all of the above

An SWOT analysis determines:
1.

A) internal strengths and weaknesses and internal opportunities and threats.

2.

B) internal strengths and weaknesses and external opportunities and threats.

3.

C) external strengths and weaknesses and internal opportunities and threats.

4.

D) external strengths and weaknesses and external opportunities and threats.

5.

E) internal strengths and opportunities and external weaknesses and threats.

Cost minimization is an appropriate strategy in which stage of the product
life cycle?
1.

A) introduction


2.

B) growth

3.

C) adolescence

4.

D) decline

5.

E) retirement

Which of the following is not part of value-chain analysis?
1.

A) product research

2.

B) quality management

3.

C) supply chain management

4.

D) marketing

5.

E) human resources

What is the practice of transferring a firm's activities that have
traditionally been internal to external suppliers?
1.

A) nearshoring

2.

B) farshoring

3.

C) offshoring

4.

D) outsourcing

5.

E) backsourcing

Which of the following environmental factors has not contributed to
Microsoft's changing strategy?
1.

A) Google

2.

B) security issues

3.

C) faster processors

4.

D) the Internet

5.

E) global warming

True - False Questions


SWOT analysis is a method of determining external strengths and
weaknesses and internal opportunities and threats.
1.

True

2.

False

The World Trade Organization helps provide governments and industries
around the world with protection from firms that engage in unethical
conduct.
1.

True

2.

False

Key success factors are those activities that are key to achieving
competitive advantage.
1.

True

2.

False

An organization's strategy is the purpose or rationale for its existence.
1.

True

2.

False

To attract and retain global talent, and to expand a product's life cycle, are
both reasons to globalize.
1.

True

2.

False

One reason for global operations is to gain improvements in the supply
chain.
1.

True

2.

False


Outsourcing is the practice of moving a business process to a foreign
country but retaining control of it.
1.

True

2.

False

The theory of comparative advantage implies that you should allow
another firm to perform work activities for your company if that company
can do it more productively than you can.
1.

True

2.

False

The theory of competitive advantage implies that you should allow
another firm to perform work activities for your company if that company

can do it more productively than you can.
1.

True

2.

False

The multidomestic OM strategy maximizes local responsiveness while
achieving a significant cost advantage.
1.

True

2.

False

Firms using the global strategy can be thought of as "world companies."
1.

True

2.

False

Production processes are being dispersed to take advantage of national
differences in labor costs.

1.

True

2.

False


One reason to globalize is to learn to improve operations.
1.

True

2.

False

The World Trade Organization has helped to significantly reduce tariffs
around the world.
1.

True

2.

False

Core competencies are good candidates for outsourcing.
1.

True

2.

False

A multinational corporation is a firm with extensive international business
involvement.
1.

True

2.

False

Boeing's development of the 787 Dreamliner is an example of a company
obtaining a competitive advantage through product
differentiation/innovation.
1.

True

2.

False

Key success factors and core competencies are synonyms.
1.

True

2.

False


Experience differentiation is an extension of product differentiation,
accomplished by using people's five senses to create an experience
rather than simply providing a service.
1.

True

2.

False

NAFTA seeks to phase out all trade and tariff barriers among Canada,
Mexico, and the United States.
1.

True

2.

False

Low-cost leadership is the ability to distinguish the offerings of the

organization in a way that the customer perceives as adding value.
1.

True

2.

False

The term renewal has been created to describe the return of business
activity to the originating country.
1.

True

2.

False

NAFTA seeks to phase out all trade and tariff barriers between the United
States and Asia.
1.

True

2.

False

A product will always be in the same stage of its product life cycle

regardless of the country.
1.

True

2.

False


Outsourcing is the practice of transferring a firm's activities that have
traditionally been internal to external suppliers.
1.

True

2.

False

Free Text Questions - Page 1
________ is the practice of transferring a firm's activities that have
traditionally been internal to external suppliers.
Answer Given

Outsourcing

________ is a free trade agreement among Canada, Mexico, and the United
States.
Answer Given

NAFTA—North American Free Trade Agreement

What is SWOT analysis? List its four elements and describe its purpose.
Answer Given

The four elements of SWOT are strengths, weaknesses, opportunities, and
threats. Its purpose is to maximize opportunities and minimize threats in the
environment, while maximizing the advantages of the organization's strengths and
minimizing the weaknesses.

An organization that has worked to achieve global uniformity in cultural
and ethical issues such as bribery, child labor, and environmental
regulations is ________.
Answer Given

the World Trade Organization


The creation of a unique advantage over competitors is called a(n)
________.
Answer Given

competitive advantage

Define core competencies.
Answer Given

A set of skills, talents, and capabilities in which a firm is particularly strong.

________ are areas located along the United States-Mexico border in
which factories receive preferential tariff treatment.
Answer Given

Maquiladoras

________ and ________ are two issues where significant cultural
differences are large, yet progress toward global uniformity is slowly
being accepted.
Answer Given

Bribery, protection of intellectual property

Service organizations can immerse the consumer in the service, or have
the consumer become a participant in the service, as they practice
________.
Answer Given

experience differentiation

How do global operations attract new markets?
Answer Given

Because international operations require interaction with foreign customers,
suppliers, and other competitive businesses, international firms inevitably learn
about opportunities for new products and services.


Since the early 1990s, residents in a number of developing countries have
overcome culture, religious, ethnic, and political productivity barriers.

These disappearing barriers coupled with simultaneous advances in
technology, reliable shipping, and cheap communication have all led to
the growth of what three things?
Answer Given

1. World trade; 2. Global capital markets; 3. International movement of people

State two examples of cultural and ethical issues that face operations
managers in a global environment.
Answer Given

Student responses will vary, but there are several issues on which there are wide
differences from country to country, culture to culture. Among those listed in the
text are bribery, child labor, the environment, and intellectual property rights.
Students may bring forward from an earlier chapter issues such as environmental
regulation or safe work environment, and may raise issues such as product safety.

Identify five countries from which Boeing's 787 Dreamliner has suppliers.
Answer Given

Any five of: France, Germany, UK, Italy, Japan, China, South Korea, Sweden, and
the United States

How can global operations improve the supply chain?
Answer Given

The supply chain can often be improved by locating facilities in countries where
unique resources are available.

Provide an example of an organization that achieves competitive

advantage through experience differentiation. Explain.
Answer Given

Answers will vary, but Disney and Hard Rock Café are illustrated in the text.
Competing on experience differentiation implies providing uniqueness to your
service offering through immersion of the consumer into the service, with visual or
sound elements to turn the service into an experience.


Competitive advantage through operations can be achieved by ________,
________, and/or ________.
Answer Given

differentiation, low cost, response

Perform an SWOT analysis of Boeing's 787 Dreamliner using the
information presented in the text.
Answer Given

Strengths—Technological advances (8% increase in fuel efficiency, electronic
maintenance monitoring)

32 Free Test Bank for Operations Management 11th
Edition Heizer Free Text Questions - Page 2
Identify three factors fueling the continuing growth of outsourcing.
Answer Given

(1) increased technological expertise, (2) more reliable and cheaper
transportation, and (3) the rapid development and deployment of advancements in
telecommunications and computers.

Identify five main disadvantages of outsourcing.
Answer Given

(1) increased logistics and inventory costs, (2) loss of control (quality, delivery,
etc.), (3) potential creation of future competition, (4) negative impact on
employees, and (5) risks may not manifest themselves for years

A(n) ________ is a firm that has extensive involvement in international
business, owning or controlling facilities in more than one country.
Answer Given

multinational corporation (MNC)

The ________ strategy utilizes a standardized product across countries.
Answer Given


global

________ is the stage in product life cycle at which it is a poor time to
change quality.
Answer Given

Maturity

Identify five main advantages of outsourcing.
Answer Given

(1) cost savings, (2) gaining outside expertise, (3) improving operations and

service, (4) maintaining a focus on core competencies, and (5) accessing outside
technology

The ________ is how an organization expects to achieve its missions and
goals.
Answer Given

strategy

Outsourcing is an extension of the long-standing practice of ________
production activities.
Answer Given

subcontracting

Identify and explain the four basic global operations strategies. Give an
example of each strategy.
Answer Given

The multidomestic strategy decentralizes operating decisions to each country to
enhance local responsiveness. An example is Heinz. The global strategy
centralizes operating decisions, with headquarters coordinating the
standardization and learning between facilities. The textbook names Texas
Instruments and Caterpillar. The international strategy uses exports and licenses
to penetrate the global markets. Harley-Davidson is an example. The transnational
strategy exploits the economies of scale and learning, as well as pressure for
responsiveness, by recognizing that core competence does not reside in just the