Test Bank for Operations
Management, 2025
Consumption Utility - ANSWERSA measure of how much you like a product or service. Ignoring the
effects of price and of the inconvenience of obtaining the product or service
Transactions Costs - ANSWERSAnother term for the inconvenience of obtaining a product or service
System Inhibitors - ANSWERSWaste, Variability, and Inflexibility
Market Segment - ANSWERSA set of customers who have similar utility functions
Process - ANSWERSA set of activities that take a collection of inputs, perform some work or activities
with those inputs, and then yield a set of outputs
Flow Unit - ANSWERSThe focus of the process analysis we select; for example, patients in a hospital,
scooters in a kick-scooter plant, and calls in a call center
Little's Law - ANSWERSThe relationship between three key process metrics: Inventory, flow rate, and
flow time
Flow Rate - ANSWERSThe minimum of demand or capacity that represent the number of flow units
through a process per unit of time
Resource - ANSWERSA group of people and/or equipment that transforms inputs into outputs
Cycle Time - ANSWERSThe interval between completing two consecutive flow units
Which of the following is NOT a goal of operations management?
(A) Understanding the drivers of customer utility
(B) Match supply with demand
,(C) Make a profit while providing customers what they want
*D) Provide great products at low prices to customers - ANSWERSA
Utility is composed of the following components EXCEPT:
(A) customer loyalty.
(B) price.
(C) inconvenience.
(D) consumption utility. - ANSWERSA
Beyond just executing the current way of doing things, operations management is about:
(A) Eliminating inefficiencies to move the firm away from the efficient frontier.
(B) Making strategic trade-offs to do well on all dimensions of the customers' utility function.
(C) Managing inputs and resources to move the firm away from the efficient frontier.
(D) Innovating its operations to shift the efficient frontier. - ANSWERSA
Which of the following statements about resources of a process flow diagram is TRUE
(A) Resources are outputs of a process.
(B) Resources are represented as arrows pointing to a process.
(C) Resources are not relevant to a process.
(D) Outputs of some resources can be used as inputs to other resources. - ANSWERSD
Little's Law relates inventory, flow rate, and flow time as:
(A) Inventory = Flow rate + Flow time.
(B) Inventory = Flow rate - Flow time.
(C) Inventory = Flow rate × Flow time.
(D) Inventory = Flow rate/Flow time. - ANSWERSC
You are filling your prescription at a pharmacy and are waiting in line in front of the pickup window.
Which one of the following processes will be upstream relative to your current position in the
process?
(A) Paying for the prescription
(B) Waiting to take the prescription
, (C) Inspecting the prescription
(D) Dropping off the prescription - ANSWERSD
Process utilization is the ratio between __________ and ______________.
(A) flow time, flow rate
(B) flow rate, process capacity
(C) process capacity, flow time
(D) process time, process capacity - ANSWERSB
When will the utilization of a bottleneck resource be less than 100%?
(A) When the process is capacity constrained
(B) When the process is demand constrained
(C) When demand is higher than process capacity
(D) When demand is equal to process capacity - ANSWERSB
Supply - ANSWERSProducts or services a business offers to its customers
Demand - ANSWERSSimply the set of products and services our customers want
Utility - ANSWERSA measure of the strength of customer preferences for a given product or service.
Customers buy the product or service that maximizes their utility.
Consumption Utility - ANSWERSA measure of how much you like a product or service, ignoring the
effects of price and of the inconvenience of obtaining the product or service.
Performance - ANSWERSA subcomponent of the consumption utility that captures how much an
average consumer desires a product or service.
Fit - ANSWERSA subcomponent of the consumption utility that captures how well the product or
service matches with the unique characteristics of a given consumer
Heterogeneous Preferences - ANSWERSThe fact that not all consumers have the same utility
function.
Management, 2025
Consumption Utility - ANSWERSA measure of how much you like a product or service. Ignoring the
effects of price and of the inconvenience of obtaining the product or service
Transactions Costs - ANSWERSAnother term for the inconvenience of obtaining a product or service
System Inhibitors - ANSWERSWaste, Variability, and Inflexibility
Market Segment - ANSWERSA set of customers who have similar utility functions
Process - ANSWERSA set of activities that take a collection of inputs, perform some work or activities
with those inputs, and then yield a set of outputs
Flow Unit - ANSWERSThe focus of the process analysis we select; for example, patients in a hospital,
scooters in a kick-scooter plant, and calls in a call center
Little's Law - ANSWERSThe relationship between three key process metrics: Inventory, flow rate, and
flow time
Flow Rate - ANSWERSThe minimum of demand or capacity that represent the number of flow units
through a process per unit of time
Resource - ANSWERSA group of people and/or equipment that transforms inputs into outputs
Cycle Time - ANSWERSThe interval between completing two consecutive flow units
Which of the following is NOT a goal of operations management?
(A) Understanding the drivers of customer utility
(B) Match supply with demand
,(C) Make a profit while providing customers what they want
*D) Provide great products at low prices to customers - ANSWERSA
Utility is composed of the following components EXCEPT:
(A) customer loyalty.
(B) price.
(C) inconvenience.
(D) consumption utility. - ANSWERSA
Beyond just executing the current way of doing things, operations management is about:
(A) Eliminating inefficiencies to move the firm away from the efficient frontier.
(B) Making strategic trade-offs to do well on all dimensions of the customers' utility function.
(C) Managing inputs and resources to move the firm away from the efficient frontier.
(D) Innovating its operations to shift the efficient frontier. - ANSWERSA
Which of the following statements about resources of a process flow diagram is TRUE
(A) Resources are outputs of a process.
(B) Resources are represented as arrows pointing to a process.
(C) Resources are not relevant to a process.
(D) Outputs of some resources can be used as inputs to other resources. - ANSWERSD
Little's Law relates inventory, flow rate, and flow time as:
(A) Inventory = Flow rate + Flow time.
(B) Inventory = Flow rate - Flow time.
(C) Inventory = Flow rate × Flow time.
(D) Inventory = Flow rate/Flow time. - ANSWERSC
You are filling your prescription at a pharmacy and are waiting in line in front of the pickup window.
Which one of the following processes will be upstream relative to your current position in the
process?
(A) Paying for the prescription
(B) Waiting to take the prescription
, (C) Inspecting the prescription
(D) Dropping off the prescription - ANSWERSD
Process utilization is the ratio between __________ and ______________.
(A) flow time, flow rate
(B) flow rate, process capacity
(C) process capacity, flow time
(D) process time, process capacity - ANSWERSB
When will the utilization of a bottleneck resource be less than 100%?
(A) When the process is capacity constrained
(B) When the process is demand constrained
(C) When demand is higher than process capacity
(D) When demand is equal to process capacity - ANSWERSB
Supply - ANSWERSProducts or services a business offers to its customers
Demand - ANSWERSSimply the set of products and services our customers want
Utility - ANSWERSA measure of the strength of customer preferences for a given product or service.
Customers buy the product or service that maximizes their utility.
Consumption Utility - ANSWERSA measure of how much you like a product or service, ignoring the
effects of price and of the inconvenience of obtaining the product or service.
Performance - ANSWERSA subcomponent of the consumption utility that captures how much an
average consumer desires a product or service.
Fit - ANSWERSA subcomponent of the consumption utility that captures how well the product or
service matches with the unique characteristics of a given consumer
Heterogeneous Preferences - ANSWERSThe fact that not all consumers have the same utility
function.
