Operations and Production Management MGMT 405 Answer set 1

MGMT 405 Operations and Production Management

Answer set 1

(Reference chapters 1 William J. Stevenson-2007, ninth edition)

Discussion Questions
1. What do you understand by the term Operations Management?
ANS:
Operations Management is the management of that part of an
organization that is responsible for producing goods and/or services.
The management of systems or processes that create goods and/or
provide services.
i.e. Every book you read, every e-mail you send or every medical
treatment you receive involves the operation function of one or more
organizations

2. Identify the three major functional areas of business organizations and

briefly describe how they interrelate.
ANS:
Finance- is responsible for securing financial resources at favourable
prices as well as analysing investment proposal and providing funds
for marketing and operations.
Marketing is responsible for assessing consumer needs or wants and
selling and promoting the organizations goods and services.
Operations is responsible for producing the goods or providing the
services offered by the organization.

3. Describe the nature of operations function.

ANS: The operations function consists of all activities that directly

related to producing goods or providing services. It is the core of most
business organizations because it is responsible for the creation of
organizations goods or services. Its essence is to add value during the

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Operations and Production Management MGMT 405 Answer set 1

transformation process. The operations function involves the

conversion of inputs into outputs. In other words, this process (value
added) is the difference between the cost of inputs and the value or
price of outputs.

4. List five important differences between goods production

(Manufacturing) and service operation.
ANS:
1. The nature and consumption of output
2. Uniformity of input
3. Labor content of jobs
4. Uniformity of output
5. Measurement of productivity

5. Briefly discuss each of these terms related to the historical evolution

of operations management?
a. Industrial Revolution
b. Science management
c. Interchangeable parts
d. Division of Labor

ANS:
a. The Industrial revolution was the transformation of a society from
peasant and local occupation into a society with world wide
connections in terms of great use of machinery and large-scale
commercial operations. It began in the 1770s in England, and spread
to the rest of Europe and to the USA in the late eighteenth century and
early nineteenth century. A number of inventions such as the steam
engine, the spinning Jenny, and the power loom helped to bring about
this change. Ample supplies of coal and iron ore are also help for
generating the power to operate and build the machines.
b. Frederick Taylor (1911) who is often referred to as the father of
scientific management, published the priciples of scientific
management. The science of management was based on observation,
measurement, analysis, improvement of work methods and economic
incentives. Management should be responsible for planning and

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Operations and Production Management MGMT 405 Answer set 1

finding the best way to perform each job as well as achieving

cooperation between management and workers.
c. Eli Whitney (1798) found out and introduced the concepts of
standardised parts and interchangeable parts. Interchangeable parts
are parts of a product made to such precision that each part would fit
any of the identical items bring produced. This meant that individual
parts would not have to be custom made because they were
standardized.
d. Adam Smiths The wealth of nations (1776) pointed out the
importances and advantages of the division of labor where the
production process was broken down into series of small tasks and
each performed by a different worker. It enabled workers to learn jobs
and become proficient at them more quickly as well as avoding the
delays of workers shifting from one activity to another.

6. What are the main differences between manufacturing and services

sectors? Use examples to justify your answer.

ANS:
Manufacturing and Service are often different in terms of what is done
but quite similar in terms of how it is done.
For example, manufacturers decide what size factory needed and service
organizations must decide what size building is needed.
Manufacturing and Service differ because manufacturing is goods-
oriented and service is act-oriented.

7. Can you think of a business that does not have operation

management?
ANS:
No, operations of function consists of all activities directly related to
producing goods or providing services. Therefore operation management
is a core function for any type of business and it exists in manufacturing
and service organizations regardless of the type and the nature of
business.

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Operations and Production Management MGMT 405 Answer set 1

8. Describe each of these systems: craft production, mass production,

and lean production?
ANS:
Craft production involves producing high variety of customized goods,
low volume output with skilled workers, and utilizing general-purpose
equipment. The main advantage is the flexibility to produce a wide
variety of outputs providing many choices for the need of customers. The
main disadvantage is its inability to produce at low cost. Example:
tailoring, machine shop, print shop, and landscaping.
Mass production involves producing a few standardized goods at high
volume of output with low skilled workers utilizing specialized
equipment. The main advantage is the low cost, efficient production. The
main disadvantage is that it does not allow easy changes in volume of
output, product or process design. Example: automobiles, computer, mail
sorting, appliances, paper, soft drink bottling, etc.
Lean production involves producing more variety of goods than most
production at moderate to high volume of output. It requires high skilled
workers, quality, employee involvement, teamwork and flatter
organizational structure with fewer levels of management. It combines
the advantages of both mass production (high volume, low cost) and craft
production (variety, flexibility). Example: similar to mass production.

Multiple Choice Questions

Choose the one alternative that best completes the statement or answers the question.
1) Production/Operations Management is
A) responsible for producing goods
B) responsible for providing services
C) system that create goods or services
D) often referred to as the core of scientific management
Ans: C

2) Operations Management does not affect

A) The collective success or failure of companies POM

B) companies financial resources
C) Nations ability to compete internationally
D) Companies ability to compete

Ans: B

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Operations and Production Management MGMT 405 Answer set 1

3) Which of the following part indicates the three Basic Functions?

A) Finance, marketing and management

B) Finance, human resources and management
C) Marketing, operations and finance
D) Operations, finance and scientific management
Ans: C

4) The steps of the conversion of inputs into outputs are:

A) Input, process, transformation
B) Labor, control, goods
C) capital, land, service
D) Input, conversion process, output
Ans: D

5) The operations function involves __________

A) The transformation process of inputs into outputs
B) Feedback control
C) Value added process
D) Only goods process
Ans: A

6) Which of the following is not one of the input concepts?

A) Labor
B) Information
C) Services
D) Legal constraints
Ans: C

7) In profit organization, value-added of output __________

A) is measured by prices that customers are willing to pay for only those goods
B) is measured by prices that customers are willing to pay for those goods and services.
C) is their value to society.
D) none of the above
Ans: B

8) Which of the following shows that it is the roots of the Industrial Revolution?
A) Egyptian pyramids
B) Ancient Roads
C) Ancient aqueduct
D) The great wall.

Ans: A

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Operations and Production Management MGMT 405 Answer set 1

9) The steam engine and advanced the use of mecanical power to increase productivity
indicate__________

A) The concepts of standardised parts and interchangeable parts.

B) The handicraft era
C) The Industrial revolution era
D) The advantages of the division of labor
Ans: C

10) Lean production indicates__________

A) efficiency
B) quantity
C) The Industrial revolution era
D) The Industrial globalization era
Ans: D

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