Q&A Hero

Q: Which of the following did the authors not suggest as a reason for globalizing operations? A) reduce costs B) improve the supply chain C) stockholder approval ratings D) understand markets E) None of the above were suggested.

Q: Flack Corporation provides the following information for its December budgeting process: The November 30 inventory was 1,800 units. Budgeted sales for December are 4,000 units. Desired December 31 inventory is 2,840 units. Budgeted purchases are: A.5,040 units. B.1,240 units. C.6,840 units. D.4,000 units. E.5,800 units.

Q: Cost cutting in international operations can take place because of A) lower taxes and tariffs B) lower wage scales C) lower indirect costs D) less stringent regulations E) all of the above

Q: Which of the following is an example of globalization of operations strategy? A) Boeing's Dreamliner has engines with higher fuel/payload efficiency. B) Ford's new auto models have dent-resistant panels. C) A Chinese manufacturer, Haier, now operates plants in the United States. D) Hard Rock Caf provides an "experience differentiation" at its restaurants. E) All of the above are examples.

Q: Bengal Co. provides the following sales forecast for the next three months: July August September Sales units 5,000 5,700 5,560 The company wants to end each month with ending finished goods inventory equal to 25% of the next month's sales. Finished goods inventory on June 30 is 1,250 units. The budgeted production units for August are: A.6,950 units. B.4,310 units. C.7,090 units. D.5,665 units. E.4,135 units.

Q: Examples of response to the global environment include A) Boeing's worldwide sales and production B) Benneton's flexibility in design, production, and distribution C) a Chinese manufacturer, Haier, opening plants in the United States D) Ford's partnerships with Volvo and Mazda E) all of the above

Q: Boeing's new 787 Dreamliner A) is assembled in Washington, D.C. B) uses engines from Japan C) has its fuselage sections built in Australia D) has increased efficiency from new engine technology E) results from a partnership of about a dozen companies

Q: A July sales forecast projects that 6,000 units are going to be sold at a price of $10.50 per unit. The management forecasts 2% growth in sales each month. Total July sales are anticipated to be: A.$63,000. B.$67,500. C.$61,250. D.$64,260. E.$60,000.

Q: Which of the following statements regarding the Dreamliner 787 is true? A) Boeing has found partners in over a dozen countries. B) The new aircraft incorporates a wide range of aerospace technologies. C) The new aircraft uses engines from not one, but two manufacturers. D) Boeing will add only 20 to 30 percent of the aircraft's value. E) All of the above are true.

Q: Cameroon Corp. manufactures and sells electric staplers for $16 each. If 10,000 units were sold in December, and management forecasts 4% growth in sales each month, the number of electric stapler sales budgeted for March should be: A. 10,000 B. 11,249 C. 10,400 D. 10,816 E. 11,000

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

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

Q: A multinational corporation has extensive international business involvements.

Q: Key Success Factors are those activities that are key to achieving competitive advantage.

Q: For the greatest chance of success, an organization's operations management strategy must support the company's strategy.

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

Q: Key success factors and core competencies are synonyms.

Q: The master budget of a merchandising company includes a: A.Production budget. B.Direct materials budget. C.Factory overhead budget. D.Direct materials budget. E.Purchases budget.

Q: Southwest Airlines' core competence is operations.

Q: Operating budgets include all the following except the: A.Sales budget. B.Budgeted balance sheet. C.Production budget. D.Selling expense budget. E.General and administrative expense budget.

Q: Errors made within the location decision area may overwhelm efficiencies in other areas.

Q: Manufacturing organizations have ten strategic OM decisions, while service organizations have only eight.

Q: The master budgeting process typically begins with the sales budget and ends with a cash budget and: A.Budgeted financial statements. B.Forecast budget. C.Capital expenditures budget. D.Rolling budget. E.Production budget.

Q: Decisions that involve what is to be made and what is to be purchased fall under the heading of supply-chain management.

Q: The relative importance of each of the ten operations decisions depends on the ratio of goods and services in an organization.

Q: Most services are tangible; this factor determines how the ten decisions of operations management are handled differently for goods than for services.

Q: The usual budget period for most companies is: A.An annual period of 250 working days. B.A monthly period separated into daily budgets. C.A quarterly period separated into weekly budgets. D.An annual period separated into weekly budgets. E.An annual period separated into quarterly and monthly budgets.

Q: Low-cost leadership is the ability to distinguish the offerings of the organization in any way that the customer perceives as adding value.

Q: An organization's ability to generate unique advantages over competitors is central to a successful strategy implementation.

Q: 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.

Q: In a company that employs continuous budgeting on a quarterly basis and has an accounting period that ends December 31 of each year, what period would the first revision and update to the January through December 2015 budget cover? A. February 2015"January 2016 B. March 2015"February 2016 C. December 2015"November 2016 D. April 2015"March 2016 E. January 2016"December 2016

Q: Operations strategies are implemented in the same way in all types of organizations.

Q: Budgets that are periodically revised and have new periods added to replace those that have lapsed are called: A.Production budgets. B.Sales budgets. C.Cash budgets. D.Rolling budgets. E.Capital expenditures budgets.

Q: An organization's strategy is its purpose or rationale for an organization's existence.

Q: The central guidance of the budget process is the responsibility of the: A.Chief Accounting Officer. B.Chief Executive Officer (CEO). C.Chief Financial Officer (CFO). D.Budget Committee. E.Board of Directors.

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

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

Q: A product will always be in the same stage of its product life cycle regardless of the country.

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

Q: One reason to globalize is to learn to improve operations.

Q: All of the following are necessary for budgets to be effective except: A.Goals should be attainable. B.Employees affected by a budget should be consulted when it is prepared. C.Evaluations should be made carefully with opportunities to explain differences between actual and budgeted amounts. D.Managers must be aware of potential negative outcomes of budgeting, such as budgetary slack. E.All budgeted amounts must be spent to ensure that budgets aren"t reduced for the next period.

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

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

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

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

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

Q: The manufacturing budgets include the sales budget and the budgeted income statement.

Q: Production budgets always show both budgeted units of product and total costs for the budgeted units.

Q: Perform a SWOT analysis for Franz Colruyt, using the information presented within the text.

Q: Perform a SWOT analysis of Hard Rock Caf, using the information presented within Chapters 1 and 2 of the text.

Q: The financial statement effects of the budgeting process are summarized on the cash budget and the capital expenditures budget.

Q: Perform a SWOT analysis of Boeing's 787 Dreamliner using the information presented within the text.

Q: The budgeted balance sheet and income statement are normally completed after preparation of operating and capital expenditure budgets.

Q: Starbucks is one of the best known coffeehouse chains in the world. Each store sells a variety of innovative products to complement the array of coffee choices available. However, 75% of current stores are located in the United States and the expensive nature of the coffee leaves Starbucks vulnerable to changes in consumer spending behavior (such as recessions). Recently Starbucks has begun initiatives to sell its specialty coffee beans for home use, presenting a chance for a large increase in revenue and diversification. However, Starbucks faces fierce competition seeking a piece of its lucrative market share and the threat of consumer behavior changes, given its reputation rides on a singular product. Perform a SWOT analysis for Starbucks.

Q: The budgeted balance sheet is prepared primarily from data contained in the previously prepared components of the master budget.

Q: Nike is the world's largest athletic brand. Its innovative and broad product line helps drive sales, however a large majority of those sales are in the footwear business. Most of Nike's goods are produced overseas in low-cost factories and then imported to the final market. Nike currently has many of the top U.S. athletes under contract (Michael Jordon, Tiger Woods, Dwayne Wade) but international sales are still small in emerging markets. However, many competitors have attempted to copy Nike's business model (high-value branded products manufactured at low-cost), including Adidas and Reebok, while many retailers have attempted to pass on the low-cost pressure of retail consumers. Perform a SWOT analysis for Nike.

Q: A cash budget shows the expected cash receipts and cash expenditures during the budget period.

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

Q: Are strategies static or dynamic? What are the forces that lead to this result?

Q: What is SWOT analysis? List its four elements and describe its purpose.

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 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: A manufacturing budget shows dollar amounts estimated to be spent to purchase additional plant assets and amounts expected to be received from plant asset disposals.

Q: The local fast food store experienced the following number of customers on the night shift Hour----------------Customers 12 AM 23 1 AM 20 2 AM 15 3 AM 5 4 AM 2 5 AM 1 If the store was staffed by two workers, what was the average productivity per worker, in customers/hour?

Q: An industrial plant needs to make 100,000 parts per month to meet demand. Each month contains 20 working days, each of which allows for 3 separate 8 hour shifts. a. If a worker can produce 10 parts/hour, how many workers are needed on each shift? b. If each shift has 100 workers, what is the productivity of an individual worker? c. If material costs are $10/part, capital costs are $100,000 and labor costs are $10/hour, what is the multifactor productivity of the plant from part A?

Q: A swimming pool company has 100,000 labor hours available per summer and with a labor productivity of 5 pools per 6,000 hours. a. How many pools can the company install this summer? b. Suppose the multifactor productivity was one pool per $25,000. How much should the company expect to spend this summer constructing the pools?

Q: A grocery chain is considering the installation of a set of 4 self-checkout lanes. The new self-checkout lane setup will replace 2 old cashier lanes that were staffed by a cashier and bagger on each lane. One cashier mans all 4 self-checkouts (answering questions, checking for un-scanned items, taking coupons, etc). Checkout on the new lanes takes 2 minutes (customers bag their own orders) while checkout with the old lanes took only 45 seconds. In addition the electricity costs for both setups are $.05 per checkout while bagging (material) costs are $.1 per checkout with the old system and $.15 for the new system. The new lanes also require $100 in capital costs. Assume that the lanes are always in use for 8 hours per day (1 shift) and that a worker makes $10/hour. a. How many checkouts did the old system provide in a shift? b. How many checkouts does the new system provide? c. What is the multifactor productivity for each system?

Q: A local university is considering changes to its class structure in an effort to increase professor productivity. The old schedule had each professor teaching 5 classes per week, with each class meeting an hour per day on Monday, Wednesday, and Friday. Each class contained 20 students. The new schedule has each professor teaching only 3 classes, but each class meets daily for an hour. New classes contain 50 students. a. Calculate the labor productivity for the initial situation (students/hour). b. Calculate the labor productivity for the schedule change (students/hour). c. Are there any ethical considerations that should be accounted for? d. Suppose that each teacher also is required to have 2 hours of Office Hours each day he/she taught class. Is the schedule change a productivity increase?

Q: Gibson Products produces cast bronze valves for use in offshore oil platforms. Currently, Gibson produces 1600 valves per day. The 20 workers at Gibson work from 7 a.m. until 4 p.m., with 30 minutes off for lunch and a 15 minute break during the morning work session and another at the afternoon work session. Gibson is in a competitive industry, and needs to increase productivity to stay competitive. They feel that a 20 percent increase is needed. Gibson's management believes that the 20 percent increase will not be possible without a change in working conditions, so they change work hours. The new schedule calls on workers to work from 7:30 a.m. until 4:30 p.m., during which workers can take one hour off at any time of their choosing. Obviously, the number of paid hours is the same as before, but production increases, perhaps because workers are given a bit more control over their workday. After this change, valve production increased to 1800 units per day. a. Calculate labor productivity for the initial situation b. Calculate labor productivity for the hypothetical 20 percent increase c. What is the productivity after the change in work rules? d. Write a short paragraph analyzing these results.

Q: The Dulac Box plant produces wooden packing boxes to be used in the local seafood industry. Current operations allow the company to make 500 boxes per day, in two 8-hour shifts (250 boxes per shift). The company has introduced some moderate changes in equipment, and conducted appropriate job training, so that production levels have risen to 300 boxes per shift. Labor costs average $10 per hour for each of the 5 full-time workers on each shift. Capital costs were previously $3,000 per day, and rose to $3,200 per day with the equipment modifications. Energy costs were unchanged by the modifications, at $400 per day. What is the firm's multifactor productivity before and after the changes?

Q: Felicien grows mirlitons (that's Cajun for Chayote squash) in his 100 by 100 foot garden. He then sells the crop at the local farmers' market. Two summers ago, he was able to produce and sell 1200 pounds of mirlitons. Last summer, he tried a new fertilizer that promised a 50% increase in yield. He harvested 1900 pounds. Did the fertilizer live up to its promise?

Q: The budget process rarely coincides with the accounting period.

Q: Martin Manufacturing has implemented several programs to improve its productivity. They have asked you to evaluate the firm's productivity by comparing this year's performance with last year's. The following data are available: Last Year This Year Output 10,500 units 12,100 units Labor Hours 12,000 13,200 Utilities $7,600 $8,250 Capital $83,000 $88,000 Has Martin Manufacturing improved its productivity during the past year?

Q: Part of the budgeting process is summarizing the financial statement effects on the budgeted income statement and the budgeted balance sheet.

Q: Mark's Ceramics spent $4000 on a new kiln last year in the belief that it would cut energy usage 25% over the old kiln. This kiln is an oven that turns "greenware" into finished pottery. Mark is concerned that the new kiln requires extra labor hours for its operation. Mark wants to check the energy savings of the new oven, and also to look over other measures of their productivity to see if the change really was beneficial. Mark has the following data to work with: Last Year This Year Production (finished units) 4000 4000 Greenware (pounds) 5000 5000 Labor (hrs) 350 375 Capital ($) 15000 19000 Energy (kWh) 3000 2600 Were the modifications beneficial?

Q: The master budget includes individual budgets for sales, production or purchases, various expenses, capital expenditures, and cash.

Q: The Dulac Box plant produces wooden packing boxes to be used in the local seafood industry. Current operations allow the company to make 500 boxes per day, in two 8-hour shifts (250 boxes per shift). The company has introduced some small changes in equipment, and conducted appropriate job training, so that production levels have risen to 300 boxes per shift. These changes did not require any change in the amount of capital spending or energy use. What is the firm's new labor productivity?

Q: A firm cleans chemical tank cars in the Bay St. Louis area. With standard equipment, the firm typically cleaned 70 chemical tank cars per month. They utilized 10 gallons of solvent, and two employees worked 20 days per month, 8 hours a day. The company decided to switch to a larger cleaning machine. Last April, they cleaned 60 tank cars in only 15 days. They utilized 12 gallons of solvent, and the two employees worked 6 hours a day. 1. What was their raw material and their labor productivity with the standard equipment? 2. What is their raw material and their labor productivity with the larger machine? 3. What is the change in each productivity measure?

Q: Susan has a part-time "cottage industry" producing seasonal plywood yard ornaments for resale at local craft fairs and bazaars. She currently works 8 hours per day to produce 16 ornaments.a. What is her productivity?b. She thinks that by redesigning the ornaments and switching from use of a wood glue to a hot-glue gun she can increase her total production to 20 ornaments per day. What is her new productivity?c. What is her percentage increase in productivity?

Q: As the administrative manager in a law office, you have been asked to develop a system for evaluating the productivity of the 15 lawyers in the office. What difficulties are you going to have in doing this, and how are you going to overcome them?

Q: What are some of the ethical and social challenges faced by operations managers?