1|Page
WGU C720 OA Exam | Latest Questions
& Correct Verified Answers | 100%
Guaranteed Pass | Operations
Management & Business Exam Prep
Exam Structure:
Subject: Operations & Supply Chain Management
Source: WGU C720 OA Exam
Format: Multiple Choice and Short Answer
1. A new, energy-efficient furnace is being installed in a steel factory.
Because it would have added 10% to the cost of the furnace,
management has decided not to install the optional safety override for
the furnace. This decision is most likely to lead to which of the
following?
A. An increase in legal costs
B. A decrease in insurance premiums
C. Improved employee morale
D. Lower energy consumption
Correct Answer: A. An increase in legal costs
Rationale:
1. Failure to install a safety override increases the risk of workplace
accidents.
2. Accidents can lead to lawsuits, fines, and increased legal expenses.
3. This decision prioritizes short-term cost savings over long-term risk
management.
2. Refers to the organizational issue of balancing financial profitability
with environmental responsibility.
A. Sustainability
, 2|Page
B. Benchmarking
C. Outsourcing
D. Lean production
Correct Answer: A. Sustainability
Rationale:
1. Sustainability in operations management involves balancing economic,
environmental, and social goals.
2. It addresses the "triple bottom line": profit, planet, and people.
3. Operations managers rarely become involved with worker safety or
environmental pollution complaints because such ethical issues are
only handled by an organization's legal department. True or False?
Correct Answer: False
Rationale:
1. Operations managers are directly responsible for workplace safety and
environmental compliance.
2. They oversee production processes that impact both worker safety and
environmental outcomes.
4. SWOT analysis is used as a tool when a firm crafts a strategy that
helps distinguish itself among competitors, develops competitive
advantages, and avoids barriers within the business environment.
Correct Answer: strategic
Rationale:
1. SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is a
strategic planning tool.
2. It helps firms formulate strategies by assessing internal and external
factors.
5. The difference between the lowest cost producer of a good and the
next lowest cost producer of the same good is known as a:
A. Competitive parity
B. Absolute advantage
C. Relative advantage
D. Cost differential
Correct Answer: C. Relative advantage
Rationale:
, 3|Page
1. Relative advantage is the cost gap between the lowest-cost producer
and the next-lowest-cost producer.
2. It represents a sustainable competitive advantage in cost leadership.
6. Characteristics associated with a perpetual inventory system:
A. When a company needs to know exact inventory balances at all times
B. When a company wants accurate financial statements
C. When a company has low-value items
D. When a company uses periodic physical counts
Correct Answer: A and B
Rationale:
1. Perpetual inventory systems continuously track inventory balances in
real time.
2. They provide accurate, up-to-date information for financial reporting.
7. Under what two conditions should a periodic review system be
adopted?
A. When a supplier will only deliver at a specific interval
B. When a company must manually track inventory levels
C. When demand is highly unpredictable
D. When inventory holding costs are very low
Correct Answer: A and B
Rationale:
1. Periodic review systems are used when suppliers have fixed delivery
schedules.
2. They are also appropriate when manual inventory tracking is required.
8. SWOT analysis is used as a tool when used to uncover exploitable
opportunities within the competitive landscape.
Correct Answer: simple
Rationale:
1. SWOT analysis is a straightforward, simple tool for strategic
assessment.
2. It helps identify opportunities that can be exploited based on strengths.
9. What best describes a competitive advantage?
A. A capability valued by customers that gives a firm an edge over its rivals
, 4|Page
B. The ability to produce goods at the lowest cost
C. Having the largest market share
D. A temporary advantage that competitors can easily copy
Correct Answer: A. A capability valued by customers that gives a firm an
edge over its rivals
Rationale:
1. Competitive advantage is any characteristic that allows a firm to
outperform its rivals.
2. It must be valued by customers and difficult to imitate.
10. A technique used to analyze the flow of materials, ideas, and
information to understand how processes function. Each activity in
the process is defined as value added or non-value added.
A. Value stream mapping
B. Process mapping
C. Flowcharting
D. Benchmarking
Correct Answer: A. Value stream mapping
Rationale:
1. Value stream mapping visualizes the flow of materials and information
through a process.
2. It distinguishes value-added activities from waste (non-value-added).
11. In a JIT environment, the master schedule usually has a planning
horizon of:
A. 2-3 months
B. 6-12 months
C. 12-18 months
D. 1-2 weeks
Correct Answer: A. 2-3 months
Rationale:
1. Just-in-time (JIT) environments have shorter planning horizons due to
reduced lead times.
2. A 2-3 month horizon allows for flexibility and responsiveness.
12. What production system uses general purpose machinery and is
level scheduled?
WGU C720 OA Exam | Latest Questions
& Correct Verified Answers | 100%
Guaranteed Pass | Operations
Management & Business Exam Prep
Exam Structure:
Subject: Operations & Supply Chain Management
Source: WGU C720 OA Exam
Format: Multiple Choice and Short Answer
1. A new, energy-efficient furnace is being installed in a steel factory.
Because it would have added 10% to the cost of the furnace,
management has decided not to install the optional safety override for
the furnace. This decision is most likely to lead to which of the
following?
A. An increase in legal costs
B. A decrease in insurance premiums
C. Improved employee morale
D. Lower energy consumption
Correct Answer: A. An increase in legal costs
Rationale:
1. Failure to install a safety override increases the risk of workplace
accidents.
2. Accidents can lead to lawsuits, fines, and increased legal expenses.
3. This decision prioritizes short-term cost savings over long-term risk
management.
2. Refers to the organizational issue of balancing financial profitability
with environmental responsibility.
A. Sustainability
, 2|Page
B. Benchmarking
C. Outsourcing
D. Lean production
Correct Answer: A. Sustainability
Rationale:
1. Sustainability in operations management involves balancing economic,
environmental, and social goals.
2. It addresses the "triple bottom line": profit, planet, and people.
3. Operations managers rarely become involved with worker safety or
environmental pollution complaints because such ethical issues are
only handled by an organization's legal department. True or False?
Correct Answer: False
Rationale:
1. Operations managers are directly responsible for workplace safety and
environmental compliance.
2. They oversee production processes that impact both worker safety and
environmental outcomes.
4. SWOT analysis is used as a tool when a firm crafts a strategy that
helps distinguish itself among competitors, develops competitive
advantages, and avoids barriers within the business environment.
Correct Answer: strategic
Rationale:
1. SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is a
strategic planning tool.
2. It helps firms formulate strategies by assessing internal and external
factors.
5. The difference between the lowest cost producer of a good and the
next lowest cost producer of the same good is known as a:
A. Competitive parity
B. Absolute advantage
C. Relative advantage
D. Cost differential
Correct Answer: C. Relative advantage
Rationale:
, 3|Page
1. Relative advantage is the cost gap between the lowest-cost producer
and the next-lowest-cost producer.
2. It represents a sustainable competitive advantage in cost leadership.
6. Characteristics associated with a perpetual inventory system:
A. When a company needs to know exact inventory balances at all times
B. When a company wants accurate financial statements
C. When a company has low-value items
D. When a company uses periodic physical counts
Correct Answer: A and B
Rationale:
1. Perpetual inventory systems continuously track inventory balances in
real time.
2. They provide accurate, up-to-date information for financial reporting.
7. Under what two conditions should a periodic review system be
adopted?
A. When a supplier will only deliver at a specific interval
B. When a company must manually track inventory levels
C. When demand is highly unpredictable
D. When inventory holding costs are very low
Correct Answer: A and B
Rationale:
1. Periodic review systems are used when suppliers have fixed delivery
schedules.
2. They are also appropriate when manual inventory tracking is required.
8. SWOT analysis is used as a tool when used to uncover exploitable
opportunities within the competitive landscape.
Correct Answer: simple
Rationale:
1. SWOT analysis is a straightforward, simple tool for strategic
assessment.
2. It helps identify opportunities that can be exploited based on strengths.
9. What best describes a competitive advantage?
A. A capability valued by customers that gives a firm an edge over its rivals
, 4|Page
B. The ability to produce goods at the lowest cost
C. Having the largest market share
D. A temporary advantage that competitors can easily copy
Correct Answer: A. A capability valued by customers that gives a firm an
edge over its rivals
Rationale:
1. Competitive advantage is any characteristic that allows a firm to
outperform its rivals.
2. It must be valued by customers and difficult to imitate.
10. A technique used to analyze the flow of materials, ideas, and
information to understand how processes function. Each activity in
the process is defined as value added or non-value added.
A. Value stream mapping
B. Process mapping
C. Flowcharting
D. Benchmarking
Correct Answer: A. Value stream mapping
Rationale:
1. Value stream mapping visualizes the flow of materials and information
through a process.
2. It distinguishes value-added activities from waste (non-value-added).
11. In a JIT environment, the master schedule usually has a planning
horizon of:
A. 2-3 months
B. 6-12 months
C. 12-18 months
D. 1-2 weeks
Correct Answer: A. 2-3 months
Rationale:
1. Just-in-time (JIT) environments have shorter planning horizons due to
reduced lead times.
2. A 2-3 month horizon allows for flexibility and responsiveness.
12. What production system uses general purpose machinery and is
level scheduled?
