D464 Managing Operations
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Free D464 Managing Operations Questions
Which of the following is a characteristic feature of mass production?
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High customization of products
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Use of highly skilled workers
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Repetitive tasks due to division of labour
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Low setup costs
Explanation
Mass production is characterized by producing large quantities of standardized products using specialized machinery and a division of labor. This involves repetitive tasks performed by workers or machines, allowing for high efficiency and consistency in output. While mass production reduces per-unit costs and increases productivity, it typically limits customization and may require less skilled labor for routine tasks rather than highly skilled workers.
A company specializing in mass production of electronic gadgets faces a sudden increase in demand. Which of the following strategies would best help the company meet this demand while minimizing potential drawbacks?
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Invest in additional machinery to increase production capacity.
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Reduce the workforce to cut costs.
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Switch to job production to enhance customization.
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Limit production to maintain quality control.
Explanation
To meet a sudden surge in demand for mass-produced products, investing in additional machinery is an effective strategy. This approach increases production capacity without significantly altering existing workflows, enabling the company to produce larger quantities while maintaining efficiency and quality. Reducing the workforce or limiting production would hinder output, and switching to job production would slow production and reduce the ability to meet high-volume demand, making additional machinery the most practical solution.
Which term describes utilization of an operational resource?
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Proportion of available resources that are transported
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Proportion of available resources that are used
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Proportion of available resources that are wasted
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Proportion of available resources that are idle
Explanation
Explanation
Correct answer: (B.) Proportion of available resources that are used
Utilization in operations management refers to how much of an available resource’s capacity is actually being used for productive work. It is typically expressed as the ratio of used capacity to total available capacity. Therefore, higher utilization means more of the resource is actively engaged in operations, while idle time represents unused capacity.
What is the role of a return facilitator in handling customer merchandise returns after the holiday season?
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Intermediary
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Buyer
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Seller
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Distributor
Explanation
Explanation
Correct answer: (A.) Intermediary
A return facilitator acts as an intermediary in the reverse logistics process, coordinating and managing the flow of returned goods between customers, retailers, and sometimes manufacturers. Their role is not to own the goods as a buyer or seller, nor to primarily distribute new products. Instead, they specialize in handling returns efficiently—processing, routing, and sometimes refurbishing or redistributing returned merchandise, especially during high-return periods like after the holiday season.
An automobile maker procures gears for its motorcar engine directly from a supplier that manufactures them. What is the core value-added activity of the gear supplier for the automobile maker?
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Production
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Maintenance
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Repairs
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Audits
Explanation
Explanation
Correct answer: (A.) Production
A value-added activity is one that directly contributes to creating or enhancing a product. In this case, the supplier manufactures gears that become essential components of the automobile engine. This manufacturing process transforms raw materials into usable parts, which is a clear example of production. The other options—maintenance, repairs, and audits—do not involve creating the product itself and therefore do not add core value in this context.
What is an example of an ethical dilemma in a business?
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Delivering products on time and expecting higher customer ratings
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Analyzing customer reviews and improving the services accordingly
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Increasing product functionality and charging premium pricing for the improvement
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Respecting customer privacy and using customer data for online marketing
Explanation
Explanation
Correct answer: (D.) Respecting customer privacy and using customer data for online marketing
An ethical dilemma arises when a business faces a conflict between two competing moral principles or stakeholder interests, where choosing one option may compromise the other. Option D represents such a conflict: respecting customer privacy suggests limiting data use, while using customer data for targeted marketing raises concerns about consent, transparency, and privacy rights. The other options describe routine business decisions that do not inherently involve a moral conflict.
A manufacturing company has recently adopted a Just in Time (JIT) inventory system. If there is a sudden surge in demand for one of its products, what potential issue might the company face, and how could it mitigate this risk?
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The company may run out of stock; it could mitigate this by increasing buffer stock.
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The company may face increased storage costs; it could mitigate this by reducing production.
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The company may experience delays in fulfilling orders; it could mitigate this by improving supplier relationships.
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The company may have excess inventory; it could mitigate this by lowering prices.
Explanation
In a JIT inventory system, stock is delivered and produced only as needed to minimize storage and reduce waste. A sudden surge in demand can cause the company to run out of stock because there is little to no buffer inventory. To mitigate this risk, the company can strengthen relationships with suppliers to ensure faster replenishment or strategically maintain minimal buffer stock for critical items. Effective supplier coordination is crucial in JIT systems to balance low inventory levels with the ability to respond to unexpected demand spikes.
Which of the factors of production involves taking risks and combining resources to produce a good or service?
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land
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capital
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labor
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entrepreneurs
Explanation
A company is considering shifting from mass production to job production. Which of the following factors should they assess to ensure this transition is viable?
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The potential for increased customization and customer satisfaction.
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The likelihood of government subsidies for mass production.
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The availability of low-cost raw materials.
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The need for a larger workforce to maintain mass production.
Explanation
Transitioning from mass production to job production requires careful consideration of customization potential and customer satisfaction. Job production focuses on creating unique, one-off products tailored to individual customer needs, which can enhance customer experience and allow premium pricing. The company must assess whether the market demand supports such customization and if the workforce and processes can adapt to smaller, specialized production runs without compromising quality or profitability.
Explain how the image and reputation of a manufacturer can influence customer perceptions of product quality.
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Customers are more likely to trust products from well-established firms, believing they offer higher quality.
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New companies are always perceived as offering better quality products.
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The price of a product is the only factor that influences customer perceptions of quality.
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Customers do not consider the manufacturer's reputation when assessing product quality.
Explanation
The reputation and image of a manufacturer play a critical role in shaping customer perceptions of product quality. Well-established firms that have a history of delivering reliable and high-quality products are often trusted more by consumers, leading them to perceive new purchases from these companies as safer and of higher quality. This trust can influence buying decisions, increase customer loyalty, and justify premium pricing. Conversely, companies with poor reputations may struggle to convince customers of the quality of their products, regardless of actual performance.
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