WGU C215 Operations Management (2026) OA/PA Exam
Review: 200 Practice Questions with Correct Answers and
Detailed Explanations – Complete Study Guide"
Section 1: Operations Strategy & Productivity (Questions 1–30)
1. What is the primary goal of operations management?
A) Maximize employee satisfaction
B) Minimize the cost of production only
C) Transform inputs into outputs efficiently and effectively
D) Increase the number of product features
\Answer: C
Explanation: Operations management is the administration of business practices to create the highest
level of efficiency possible within an organization. It is concerned with converting materials and labor
into goods and services as efficiently as possible to maximize profit.
2. Which of the following is NOT one of the three major functions of a business organization?
A) Finance
B) Marketing
C) Operations
D) Human Resources
\Answer: D
Explanation: The three primary functions of any business organization are Finance (securing and
managing funds), Marketing (generating demand and selling products), and Operations (producing
goods and services). Human Resources is a supporting function, not a primary line function.
3. Productivity is defined as:
A) Output divided by input
B) Input divided by output
C) Revenue minus expenses
D) Output multiplied by input
\Answer: A
Explanation: Productivity is a measure of efficiency: units of output per unit of input. Higher
productivity means producing more with the same or fewer resources. It can be measured as labor
productivity (units per labor hour) or multifactor productivity.
,4. A company produces 500 units using 100 labor hours. What is the labor productivity?
A) 0.2 units per hour
B) 5 units per hour
C) 500 units per hour
D) 100 units per hour
\Answer: B
Explanation: Labor productivity = Output / Labor hours = 500 units / 100 hours = 5 units per labor hour.
Productivity improvements are key to competitiveness.
5. Which strategy focuses on achieving high volume production at the lowest possible cost?
A) Differentiation
B) Focus
C) Low-cost leadership
D) Niche marketing
\Answer: C
Explanation: Low-cost leadership (or cost leadership) is a competitive strategy where a company aims
to produce products at the lowest possible cost relative to competitors, often through economies of
scale, efficient processes, and tight cost controls.
6. Which of the following is an example of an external factor affecting operations management?
A) Technology used in production
B) Employee training levels
C) Government regulations
D) Inventory policies
\Answer: C
Explanation: External factors are outside the organization’s immediate control. Government regulations
(environmental, safety, labor laws), economic conditions, competition, and customer preferences are
external. Technology, training, and inventory policies are internal decisions.
7. Which of the following is NOT a typical competitive priority in operations strategy?
A) Cost
B) Quality
C) Sustainability
D) Speed (delivery)
,\Answer: C
Explanation: Traditional competitive priorities include cost, quality, time (speed/reliability), and
flexibility. Sustainability is increasingly important but is often considered a strategic objective or
corporate social responsibility goal rather than a core competitive priority in classic operations strategy
frameworks.
8. Value-added activities in a process are those that:
A) Increase the cost without benefit
B) The customer is willing to pay for
C) Are required by government regulation
D) Take the most time
\Answer: B
Explanation: Value-added activities are those that transform inputs into outputs that customers value
and are willing to pay for. Non-value-added activities (waste) should be eliminated or reduced in lean
operations.
9. A company measures its productivity
as 50,000output/1,000laborhours.Itthenimprovesto50,000output/1,000laborhours.Itthenimprovesto6
0,000 output / 1,000 labor hours. The productivity increase is:
A) 10%
B) 20%
C) 50%
D) 100%
\Answer: B
Explanation: Initial productivity = 50perhour;newproductivity=50perhour;newproductivity=60 per hour.
Percentage change = (60-50)/50 = 20% increase.
10. Which of the following is NOT a reason why productivity is important to a nation?
A) Higher standard of living
B) Lower inflation
C) Greater international competitiveness
D) Guaranteed full employment
\Answer: D
Explanation: Productivity improvements lead to better living standards, lower costs, and
competitiveness. However, they do not guarantee full employment; sometimes productivity gains can
lead to job displacement in specific sectors unless new jobs are created.
, 11. Which operations strategy emphasizes customization and flexibility to meet specific customer
needs?
A) Mass production
B) Lean production
C) Mass customization
D) Job shop production
\Answer: C
Explanation: Mass customization combines the low cost of mass production with the flexibility of
customization. It uses modular design and flexible processes to produce individualized products at
near-mass-production efficiency.
12. The balanced scorecard approach to performance measurement includes which four perspectives?
A) Financial, Customer, Internal Process, Learning & Growth
B) Cost, Quality, Speed, Flexibility
C) Input, Process, Output, Outcome
D) Strategic, Tactical, Operational, Support
\Answer: A
Explanation: The balanced scorecard (Kaplan & Norton) integrates financial and non-financial measures
across four perspectives: Financial (profitability), Customer (satisfaction), Internal Business Processes
(efficiency), and Learning & Growth (innovation, employee skills).
13. A company uses the following inputs: labor 500 hours @ 20/hr,materials20/hr,materials5,000,
overhead 2,000.Outputis10,000unitssoldat2,000.Outputis10,000unitssoldat5 each. Multifactor
productivity (using dollars) is:
A) 2.0
B) 2.5
C) 3.0
D) 5.0
\Answer: C
Explanation: Output = 10,000 × 5=5=50,000. Total input cost = (500×20) + 5,000 + 2,000 = 10,000 +
5,000 + 2,000 = $17,000. Multifactor productivity = Output / Input = 50,,000 ≈ 2.94, rounded to
3.0.
14. Which of the following is a characteristic of a service operation as opposed to a manufacturing
operation?
A) Tangible output
B) High inventory of finished goods
Review: 200 Practice Questions with Correct Answers and
Detailed Explanations – Complete Study Guide"
Section 1: Operations Strategy & Productivity (Questions 1–30)
1. What is the primary goal of operations management?
A) Maximize employee satisfaction
B) Minimize the cost of production only
C) Transform inputs into outputs efficiently and effectively
D) Increase the number of product features
\Answer: C
Explanation: Operations management is the administration of business practices to create the highest
level of efficiency possible within an organization. It is concerned with converting materials and labor
into goods and services as efficiently as possible to maximize profit.
2. Which of the following is NOT one of the three major functions of a business organization?
A) Finance
B) Marketing
C) Operations
D) Human Resources
\Answer: D
Explanation: The three primary functions of any business organization are Finance (securing and
managing funds), Marketing (generating demand and selling products), and Operations (producing
goods and services). Human Resources is a supporting function, not a primary line function.
3. Productivity is defined as:
A) Output divided by input
B) Input divided by output
C) Revenue minus expenses
D) Output multiplied by input
\Answer: A
Explanation: Productivity is a measure of efficiency: units of output per unit of input. Higher
productivity means producing more with the same or fewer resources. It can be measured as labor
productivity (units per labor hour) or multifactor productivity.
,4. A company produces 500 units using 100 labor hours. What is the labor productivity?
A) 0.2 units per hour
B) 5 units per hour
C) 500 units per hour
D) 100 units per hour
\Answer: B
Explanation: Labor productivity = Output / Labor hours = 500 units / 100 hours = 5 units per labor hour.
Productivity improvements are key to competitiveness.
5. Which strategy focuses on achieving high volume production at the lowest possible cost?
A) Differentiation
B) Focus
C) Low-cost leadership
D) Niche marketing
\Answer: C
Explanation: Low-cost leadership (or cost leadership) is a competitive strategy where a company aims
to produce products at the lowest possible cost relative to competitors, often through economies of
scale, efficient processes, and tight cost controls.
6. Which of the following is an example of an external factor affecting operations management?
A) Technology used in production
B) Employee training levels
C) Government regulations
D) Inventory policies
\Answer: C
Explanation: External factors are outside the organization’s immediate control. Government regulations
(environmental, safety, labor laws), economic conditions, competition, and customer preferences are
external. Technology, training, and inventory policies are internal decisions.
7. Which of the following is NOT a typical competitive priority in operations strategy?
A) Cost
B) Quality
C) Sustainability
D) Speed (delivery)
,\Answer: C
Explanation: Traditional competitive priorities include cost, quality, time (speed/reliability), and
flexibility. Sustainability is increasingly important but is often considered a strategic objective or
corporate social responsibility goal rather than a core competitive priority in classic operations strategy
frameworks.
8. Value-added activities in a process are those that:
A) Increase the cost without benefit
B) The customer is willing to pay for
C) Are required by government regulation
D) Take the most time
\Answer: B
Explanation: Value-added activities are those that transform inputs into outputs that customers value
and are willing to pay for. Non-value-added activities (waste) should be eliminated or reduced in lean
operations.
9. A company measures its productivity
as 50,000output/1,000laborhours.Itthenimprovesto50,000output/1,000laborhours.Itthenimprovesto6
0,000 output / 1,000 labor hours. The productivity increase is:
A) 10%
B) 20%
C) 50%
D) 100%
\Answer: B
Explanation: Initial productivity = 50perhour;newproductivity=50perhour;newproductivity=60 per hour.
Percentage change = (60-50)/50 = 20% increase.
10. Which of the following is NOT a reason why productivity is important to a nation?
A) Higher standard of living
B) Lower inflation
C) Greater international competitiveness
D) Guaranteed full employment
\Answer: D
Explanation: Productivity improvements lead to better living standards, lower costs, and
competitiveness. However, they do not guarantee full employment; sometimes productivity gains can
lead to job displacement in specific sectors unless new jobs are created.
, 11. Which operations strategy emphasizes customization and flexibility to meet specific customer
needs?
A) Mass production
B) Lean production
C) Mass customization
D) Job shop production
\Answer: C
Explanation: Mass customization combines the low cost of mass production with the flexibility of
customization. It uses modular design and flexible processes to produce individualized products at
near-mass-production efficiency.
12. The balanced scorecard approach to performance measurement includes which four perspectives?
A) Financial, Customer, Internal Process, Learning & Growth
B) Cost, Quality, Speed, Flexibility
C) Input, Process, Output, Outcome
D) Strategic, Tactical, Operational, Support
\Answer: A
Explanation: The balanced scorecard (Kaplan & Norton) integrates financial and non-financial measures
across four perspectives: Financial (profitability), Customer (satisfaction), Internal Business Processes
(efficiency), and Learning & Growth (innovation, employee skills).
13. A company uses the following inputs: labor 500 hours @ 20/hr,materials20/hr,materials5,000,
overhead 2,000.Outputis10,000unitssoldat2,000.Outputis10,000unitssoldat5 each. Multifactor
productivity (using dollars) is:
A) 2.0
B) 2.5
C) 3.0
D) 5.0
\Answer: C
Explanation: Output = 10,000 × 5=5=50,000. Total input cost = (500×20) + 5,000 + 2,000 = 10,000 +
5,000 + 2,000 = $17,000. Multifactor productivity = Output / Input = 50,,000 ≈ 2.94, rounded to
3.0.
14. Which of the following is a characteristic of a service operation as opposed to a manufacturing
operation?
A) Tangible output
B) High inventory of finished goods
