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Q:
Although the number of people employed in manufacturing in the United States has decreased since 1950, each person is now producing almost 20 times more than in 1950.
Q:
Imelda reports only half the cash from the vending machines on her cash flow statement and income tax returns. Her purpose in doing so is:
a. to reduce her income tax liability. b. to increase her net income on the financial statement.
c. to retain the cash for reinvestment in the business. d. to make the business more attractive to a buyer.
Q:
Manufacturing now constitutes the largest economic sector in postindustrial societies.
Q:
Having worked professionally for 10 years, Tom and Kate have decided to start a new franchise. Considering their background, a disadvantage for them becoming franchisees is
a. the restrictions on business operations.
b. unlimited company growth.
c. the expectation to work more than a 40 hour work week.
d. an increase in entrepreneurial independence.
Q:
Customer interaction is often high for manufacturing processes, but low for services.
Q:
Operations managers should be well versed in what disciplines in order to make good decisions?
Q:
When evaluating the financial data of a 10-year-old business that is being considered for purchase, which issue will be of least concern?
a. Understated income in an effort to minimize taxes
b. Unrealistically reduced levels of advertising cost
c. Business expenses related to personal use of vehicles
d. Not having the books for Years 1-5 due to a fire
Q:
Identify the items that Fredrick W. Taylor believed management should be more responsible for.
Q:
Abner signed a contract allowing him to use Brians business model and sell products approved by Brian. Abner is:
a. a franchise. b. a franchisor.
c. a franchisee. d. an independent business operator.
Q:
Henry Ford and ________ are credited with the development of the moving assembly line.
Q:
The franchise contract Pamela signed with DEF Company specified she would have an exclusive sales territory. While the contract was still in force, DEF opened a corporate-owned store within her territory. DEF is guilty of:
a. master licensing. b. encroachment.
c. due diligence. d. churning.
Q:
When is a bargain price for an existing business not a good deal for the buyer?
a. When the seller intends to open a competing business in the same locality b. When the business is losing money
c. When the neighborhood is deteriorating d. all of the above
Q:
Which of the following statements is TRUE?
A) The person most responsible for initiating the use of interchangeable parts in manufacturing was Eli Whitney.
B) The origins of management by exception are generally credited to Frederick W. Taylor.
C) The person most responsible for initiating the use of interchangeable parts in manufacturing was Walter Shewhart.
D) The origins of the scientific management movement are generally credited to Henry Ford.
E) The person most responsible for initiating the use of interchangeable parts in manufacturing was Henry Ford.
Q:
RST, Inc., a franchisor, is requiring its franchisee, Raymond, to make significant changes to the equipment and interior appearance of his business as a condition of renewing the contract. RST claims this is necessary because:
a. RST has changed its marketing plan and Raymonds store did not keep up with the changes. b. Raymonds contract has a lower royalty fee than current contracts.
c. sales from Raymonds franchise are lower than those in newer facilities. d. Raymonds customers have complained about the appearance of his facility.
Q:
The field of operations management is shaped by advances in which of the following fields?
A) chemistry and physics
B) industrial engineering and management science
C) biology and anatomy
D) information technology
E) all of the above
Q:
What question is the least important when developing a franchise from an independent business?
a. Who will develop the operations manual?
b. Is the business replicable?
c. How will growth be financed?
d. What expert assistance will be needed for legal matters?
Q:
Who among the following is associated with contributions to quality control in operations management?
A) Charles Babbage
B) Henry Ford
C) Frank Gilbreth
D) W. Edwards Deming
E) Henri Fayol
Q:
Edward signed a contract allowing Francine to use sell products using his brand name so long as the product meets Edwards quality standards. Edward is:
a. a franchise. b. a franchisor.
c. a franchisee. d. an independent business owner.
Q:
Henry Ford is noted for his contributions to:
A) material requirements planning.
B) statistical quality control.
C) assembly line operations.
D) scientific management.
E) time and motion studies.
Q:
Rick was so successful with his Sweet Treats franchise that he opened several other Sweet Treats locations. Rick could best be described as:
a. a franchisor. b. a franchisee.
c. a master licensee. d. a multiple-unit owner.
Q:
The "Father of Scientific Management" is:
A) Henry Ford.
B) Frederick W. Taylor.
C) W. Edwards Deming.
D) Frank Gilbreth.
E) just a figure of speech, not a reference to a person.
Q:
Cameron has established a successful business and would like to expand. He is considering becoming a franchisor. Before taking that step, Cameron should:
a. make sure his business model is reproducible. b. have a technical writer create an owners manual.
c. partner with a lender to offer franchisee financing. d. hire a master licensee to locate prospective franchisees.
Q:
Who was the person most responsible for popularizing interchangeable parts in manufacturing?
A) Frederick Winslow Taylor
B) Henry Ford
C) Eli Whitney
D) Whitney Houston
E) Lillian Gilbreth
Q:
Quality Dining, Inc. operates several different restaurant franchises including Burger King, Olive Garden, Dairy Queen, and several others. Quality Dining has its own corporate structure and stockholders. This corporation is an example of:
a. master licensing. b. multibrand franchising.
c. piggyback franchising. d. co-branding.
Q:
Eli Whitney, in the ________, provided the foundations for ________ in operations management.
A) 1920s; statistical sampling
B) United Kingdom; mass production
C) U.S. Army; logistics
D) nineteenth century; interchangeable parts
E) 1890s; queuing theory
Q:
Walter Shewhart, in the ________, provided the foundations for ________ in operations management.
A) 1920s; statistical sampling
B) United Kingdom; mass production
C) U.S. Army; logistics
D) nineteenth century; interchangeable parts
E) 1900s; queuing theory
Q:
Belinda signed a _____________ that is a legal agreement between two parties in a franchise arrangement.
a. master license.
b. franchise contract.
c. requirements contract.
d. franchise consent draft.
Q:
Walter Shewhart is listed among the important people of operations management because of his contributions to:
A) assembly line production.
B) measuring productivity in the service sector.
C) just-in-time inventory methods.
D) statistical quality control.
E) information technology.
Q:
Annabell has been granted the right to conduct business according to specified methods and terms of another party. Annabell is a:
a. franchisor.
b. franchisee.
c. franchise.
d. licensee.
Q:
Shewhart's contributions to operations management came during the Scientific Management Era.
Q:
Which one of these is not listed by the Small Business Administration as part of the necessary due diligence one should do before purchasing a business?
a. Reviewing zoning requirements
b. Acquiring licenses and permits
c. Doing Internet research on the current business owner
d. Hiring an accountant and attorney
Q:
An entrepreneur would choose a franchise over an independent startup most likely because of the
a. freedom in decision making.
b. guidance provided for organizational structure.
c. probability of success.
d. opportunities to meet and share ideas with other executives.
Q:
Henry Ford is known as the Father of Scientific Management.
Q:
The purchase price of a business is determined by negotiation between
a. lender and seller.
b. seller and broker.
c. buyer and seller.
d. lender and buyer.
Q:
Identify the 10 strategic OM decisions.
Q:
Sister Mary Cupcake has partnered with the management of the toll road to operate her stores in the travel plazas. This arrangement is an example of:
a. master licensing. b. piggyback franchising.
c. area development. d. multibrand franchising.
Q:
Identify two operations-related tasks carried out by Hard Rock Caf. Match each to its related area of the 10 strategic operations management decisions.
Q:
A Starbucks franchise located inside a Target store is called ______ franchising.
a. folded
b. internalized
c. cooperative
d. piggyback
Q:
Which of the following is NOT a strategic operations management decision?
A) maintenance
B) price
C) layout design
D) quality
E) inventory
Q:
Which of the following influences layout design?
A) inventory requirements
B) capacity needs
C) personnel levels
D) technology
E) All of the above influence layout decisions.
Q:
The offer and sale of a franchise are regulated by
a. state laws exclusively.
b. federal laws exclusively.
c. both state and federal laws.
d. Federal Trade Commission laws exclusively.
Q:
One of the most important features of the franchise contract is the provision related to
a. the sale or transfer of the franchise to a government entity.
b. changes in management.
c. termination and transfer of the franchise.
d. termination of contracts with suppliers.
Q:
Which of the following are among the 10 strategic operations management decisions?
I. design of goods and services
II. managing quality
III. layout strategy
IV. marketing
V. pricing of goods and services
A) I, II, V
B) I, II, IV
C) II, III, V
D) I, II, III
E) All of the above
Q:
Where would you suggest Xavier look for information about possible franchise opportunities?
a. Barrons Weekly b. Inc, Entrepreneur, or the Wall Street Journal
c. the Small Business Administration d. local newspapers
Q:
Which of the following is one of the 10 strategic operations management decisions?
A) depreciation policy for tax returns
B) advertising
C) process and capacity design
D) pricing
E) debt/equity ratio
Q:
Nardell has operated a successful franchise for a few years and would now like to open another similar business under his own brand. The contract Nardell signed prohibits him from doing so. The contract contains:
a. a non-compete clause. b. a co-branding clause.
c. a piggyback franchise provision. d. an area development provision.
Q:
Which of the following is NOT one of the 10 strategic operations management decisions?
A) layout strategy
B) maintenance
C) process and capacity design
D) mass customization
E) supply chain management
Q:
RST, Inc., a franchisor, is requiring its franchisee, Raymond, to make significant changes to the equipment and interior appearance of his business as a condition of renewing the contract. Raymond suspects:
a. these changes will benefit his bottom line. b. he will be less competitive after the changes are made.
c. the franchisor wants to sell the franchise to someone else. d. his customers will object to the changes.
Q:
The 10 strategic operations management decisions include:
A) layout strategy.
B) maintenance.
C) process and capacity design.
D) managing quality.
E) all of the above.
Q:
Leonard and the seller have agreed to a price for a business. Leonard cannot pay cash for the entire purchase price so he applied for a bank loan. The bank is likely to:
a. check Leonards FICO score before granting the loan. b. require the assets of the company serve as collateral for the loan.
c. check the sellers credit history before approving the loan. d. demand Leonard carry life insurance as a condition of the loan.
Q:
All of the following decisions fall within the scope of operations management EXCEPT for:
A) creating the company income statement.
B) design of goods and services.
C) location strategy.
D) managing quality.
E) human resources and job design.
Q:
A franchise is able to control costs because:
a. franchise networks have greater buying power. b. suppliers prefer to sell to franchises.
c. franchises generally pay only minimum wages. d. franchisees are locked into long-term contracts with vendors.
Q:
An operations manager is NOT likely to be involved in:
A) the design of goods and services to satisfy customers' wants and needs.
B) the quality of goods and services to satisfy customers' wants and needs.
C) the identification of customers' wants and needs.
D) work scheduling to meet the due dates promised to customers.
E) maintenance schedules.
Q:
Martinas franchise agreement allows her to open up to seven new stores within a 100 mile radius of the first one. Martina is best described as:
a. a master licensee. b. a franchisee.
c. a franchisor. d. an area developer.
Q:
Which of the following is NOT an element of the management process?
A) controlling
B) leading
C) planning
D) pricing
E) staffing
Q:
Marvin is selling his business as a total entity. The buyer has offered a very large down payment, but Marvin would prefer a lower down payment and a longer repayment period. What is the most likely reason for this?
a. To reduce Marvins annual tax liability on the profit of the sale. b. To allow the buyer time to turn a profit before having to make large payments.
c. To provide a steady income to Marvin during his retirement. d. To avoid capital gains taxes on the sale of the assets.
Q:
What are the five elements in the management process?
A) plan, direct, update, lead, and supervise
B) accounting, finance, marketing, operations, and management
C) organize, plan, control, staff, and manage
D) plan, organize, staff, lead, and control
E) plan, lead, organize, manage, and control
Q:
Darin is assembling a team of experts to help him through the process of evaluating a franchise opportunity. This team should include:
a. a union representative, a lawyer, and a technical writer. b. an attorney, an accountant, and a banker.
c. a banker, an accountant, and a contract law consultant. d. an accountant, another franchisee, and a banker.
Q:
In order to have a career in operations management, one must have a degree in statistics or quantitative methods.
Q:
When Konrad purchased his business, he purchased it as a total entity. As a result,
a. Konrad got only the liquid assets of the business. b. Konrad got both liquid assets and the real estate of the business.
c. the seller must pay any outstanding debt held by the business. d. Konrad assumed responsibility for all outstanding debts incurred by the business.
Q:
"Considers inventory ordering and holding decisions" is within the strategic operations management decision area of managing quality.
Q:
The seller of an existing business placed a high value on his experienced employees. The buyer should be wary of this because:
a. their skills may be obsolete. b. the seller wants a higher price for his business.
c. the workers may decide to leave after the sale. d. the buyer will want to bring in his own people.
Q:
The operations manager performs the management activities of planning, organizing, staffing, leading, and controlling of the OM function.
Q:
The buyer of an existing business typically acquires its personnel, inventories, physical facilities, established banking connections, and ongoing relationships with trade suppliers.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
Q:
Brandon Production is a small firm focused on the assembly and sale of custom computers. The firm is facing stiff competition from low-priced alternatives, and is looking at various solutions to remain competitive and profitable. Current financials for the firm are shown in the table below. In the first option, marketing will increase sales by 50%. The next option is Vendor (Supplier) changes, which would result in a decrease of 10% in the cost of inputs. Finally there is an OM option, which would reduce production costs by 25%. Which of the options would you recommend to the firm if it can only pursue one option? In addition, comment on the feasibility of each option.
Business Function Current Value
Cost of Inputs $50,000
Production Costs $25,000
Revenue $80,000
Q:
The Pepsi-Cola Company is an example of a product and trade name franchisor.
a. True
b. False
Q:
Reasons to study operations management include learning about:
A) how people organize themselves for productive enterprise.
B) how goods and services are produced.
C) what operations managers do.
D) a costly part of the enterprise.
E) all of the above.
Q:
Jarrod is reading a detailed statement of the franchisors finances, experience, size, and involvement in litigation. Jarrod is reading a Franchise Disclosure Document.
a. True
b. False
Q:
Reasons to study operations management include:
A) studying how people organize themselves for productive enterprise.
B) knowing how goods and services are consumed.
C) understanding what human resource managers do.
D) learning about a costly part of the enterprise.
E) A and D
Q:
One reason to study operations management is to learn how people organize themselves for productive enterprise.
Q:
In many cases, a franchisor will receive payments in the form of royalties that are based on a percentage of the franchisee's gross income.
a. True
b. False
Q:
Identify up to four phenomena that foster specialization and worldwide supply chains.
Q:
To control costs when purchasing a business, an attorney at the closing can represent both sides.
a. True
b. False
Q:
Competition in the 21st century is no longer between companies; it is between ________.
Q:
As part of the valuation process, a buyer should scrutinize the seller's balance sheet to see whether asset book values are realistic.
a. True
b. False
Q:
A franchising strategy whereby a single franchisee owns more than one unit in a given area is typically referred to as an area developer strategy.
a. True
b. False
Q:
A(n) ________ is a global network of organizations and activities that supply a firm with goods and services.
Q:
Jill sees an advertisement for a franchise opportunity that matches her interests. Her first step in pursuing the franchise is to look for independent, third-party sources of information to verify that the opportunity is legitimate.
a. True
b. False
Q:
Which of the following fosters specialization and worldwide supply chains?
A) more expensive transportation
B) instant communication
C) economies of scope
D) managers with a broad knowledge of many things
E) high trade tariffs
Q:
What is a global network of organizations and activities that supply a firm with goods and services?
A) supply tree
B) provider network
C) supply chain
D) vendor network
E) vendor tree