Western Governors University
P E R P AO • 0 2 7 C
✦ ✦
WGU College of Business · C720 Operations & Supply Chain Management
A NEW KIND OF U. · AFFORDABLE, ACCREDITED, ONLINE.
EST. 1997
C720 — Operations & Supply Chain Management
CO M P L E T E O BJ E C T I V E A SS E SS M E N T P R E PA R AT I O N G U I D E
INSTITUTION Western Governors University (WGU) COURSE CODE C720
PROGRAM Bachelor of Science in Business ACADEMIC YEAR
Management
RESOURCE TYPE OA Preparation Practice Exam TOTAL QUESTIONS 25 Questions
COURSE TITLE Operations & Supply Chain Management FORMAT Multiple Choice — Select the Single Best
Answer
OA PREPAR ATION INSTRUCTIONS
▸ This comprehensive OA prep guide covers operations management, supply chain, quality, inventory, capacity planning,
JIT/LEAN, and forecasting.
▸ Questions are mapped directly to the C720 objective assessment blueprint.
▸ Select the single best answer for each question. Correct answers and detailed rationales follow each question.
▸ Key formulas: Total Cost = VC(x) + FC; Capacity Utilization = Actual Output / Design Capacity; Efficiency = Actual Output /
Effective Capacity.
SECTION I — OPERATIONS STRATEGY, QUALITY, INVENTORY & SUPPLY Questions 1 –
CHAIN 25
1. In operations management, inputs are transformed into outputs. Which of the following best represents the inputs
of an operations system?
A. Services and goods delivered to customers
B. People, capital, material, and money
C. Customer feedback and satisfaction surveys
D. Finished goods inventory and transportation
CORRECT ANSWER B — People, capital, material, and money
RATIONALE Inputs in an operations system are the resources used to produce outputs — specifically people (labor),
capital (equipment/facilities), material (raw materials), and money (financial resources). Outputs are the
services and goods produced. Finished goods inventory and transportation are types of inventory within the
system, not primary inputs. Customer feedback is external data used for improvement, not an operational
input.
, 2. Productivity is mathematically calculated as:
A. Inputs divided by total costs
B. Outputs achieved divided by inputs consumed
C. Total revenue divided by number of employees
D. Design capacity minus effective capacity
CORRECT ANSWER B — Outputs achieved divided by inputs consumed
RATIONALE Productivity is a mathematical calculation — the ratio of outputs achieved divided by the inputs consumed to
achieve those outputs. It measures how efficiently resources are being used. Total revenue per employee is a
related but different metric (labor productivity variant). Design capacity minus effective capacity is not a
productivity formula. Productivity = Output / Input is the fundamental definition tested on the C720 OA.
3. The VIRAL framework for competitive advantage requires that an advantage must provide Value, be Inimitable,
Rare, and the organization must have the Aptitude and ________ to earn appropriate returns.
A. Leverage
B. Lifespan
C. Liquidity
D. Logistics
CORRECT ANSWER B — Lifespan
RATIONALE VIRAL stands for: Value (provides value to consumers), Inimitable (not easily imitated), Rare, Aptitude
(organizational capability to execute), and Lifespan (sustainability to earn appropriate returns over time). This
is a framework for evaluating competitive advantage in operations and supply chain management. The other
options — leverage, liquidity, and logistics — are not components of the VIRAL acronym as defined in C720
course material.
4. Which of the following is NOT one of the six types of inventory?
A. Raw Materials
B. Work-in-process (WIP)
C. Marketing materials
D. Transportation (pipeline)
CORRECT ANSWER C — Marketing materials
RATIONALE The six types of inventory are: (1) Raw Materials — obtained from suppliers; (2) Work-in-process (WIP) — partly
finished components; (3) Finished Goods — ready to ship; (4) Replacement Parts Inventory — to replace worn
parts; (5) Supplies — support production (lubricants, cutting tools); (6) Transportation (pipeline) — inventory
being shipped through distribution. Marketing materials are not one of the six inventory types defined in
operations management.
P E R P AO • 0 2 7 C
✦ ✦
WGU College of Business · C720 Operations & Supply Chain Management
A NEW KIND OF U. · AFFORDABLE, ACCREDITED, ONLINE.
EST. 1997
C720 — Operations & Supply Chain Management
CO M P L E T E O BJ E C T I V E A SS E SS M E N T P R E PA R AT I O N G U I D E
INSTITUTION Western Governors University (WGU) COURSE CODE C720
PROGRAM Bachelor of Science in Business ACADEMIC YEAR
Management
RESOURCE TYPE OA Preparation Practice Exam TOTAL QUESTIONS 25 Questions
COURSE TITLE Operations & Supply Chain Management FORMAT Multiple Choice — Select the Single Best
Answer
OA PREPAR ATION INSTRUCTIONS
▸ This comprehensive OA prep guide covers operations management, supply chain, quality, inventory, capacity planning,
JIT/LEAN, and forecasting.
▸ Questions are mapped directly to the C720 objective assessment blueprint.
▸ Select the single best answer for each question. Correct answers and detailed rationales follow each question.
▸ Key formulas: Total Cost = VC(x) + FC; Capacity Utilization = Actual Output / Design Capacity; Efficiency = Actual Output /
Effective Capacity.
SECTION I — OPERATIONS STRATEGY, QUALITY, INVENTORY & SUPPLY Questions 1 –
CHAIN 25
1. In operations management, inputs are transformed into outputs. Which of the following best represents the inputs
of an operations system?
A. Services and goods delivered to customers
B. People, capital, material, and money
C. Customer feedback and satisfaction surveys
D. Finished goods inventory and transportation
CORRECT ANSWER B — People, capital, material, and money
RATIONALE Inputs in an operations system are the resources used to produce outputs — specifically people (labor),
capital (equipment/facilities), material (raw materials), and money (financial resources). Outputs are the
services and goods produced. Finished goods inventory and transportation are types of inventory within the
system, not primary inputs. Customer feedback is external data used for improvement, not an operational
input.
, 2. Productivity is mathematically calculated as:
A. Inputs divided by total costs
B. Outputs achieved divided by inputs consumed
C. Total revenue divided by number of employees
D. Design capacity minus effective capacity
CORRECT ANSWER B — Outputs achieved divided by inputs consumed
RATIONALE Productivity is a mathematical calculation — the ratio of outputs achieved divided by the inputs consumed to
achieve those outputs. It measures how efficiently resources are being used. Total revenue per employee is a
related but different metric (labor productivity variant). Design capacity minus effective capacity is not a
productivity formula. Productivity = Output / Input is the fundamental definition tested on the C720 OA.
3. The VIRAL framework for competitive advantage requires that an advantage must provide Value, be Inimitable,
Rare, and the organization must have the Aptitude and ________ to earn appropriate returns.
A. Leverage
B. Lifespan
C. Liquidity
D. Logistics
CORRECT ANSWER B — Lifespan
RATIONALE VIRAL stands for: Value (provides value to consumers), Inimitable (not easily imitated), Rare, Aptitude
(organizational capability to execute), and Lifespan (sustainability to earn appropriate returns over time). This
is a framework for evaluating competitive advantage in operations and supply chain management. The other
options — leverage, liquidity, and logistics — are not components of the VIRAL acronym as defined in C720
course material.
4. Which of the following is NOT one of the six types of inventory?
A. Raw Materials
B. Work-in-process (WIP)
C. Marketing materials
D. Transportation (pipeline)
CORRECT ANSWER C — Marketing materials
RATIONALE The six types of inventory are: (1) Raw Materials — obtained from suppliers; (2) Work-in-process (WIP) — partly
finished components; (3) Finished Goods — ready to ship; (4) Replacement Parts Inventory — to replace worn
parts; (5) Supplies — support production (lubricants, cutting tools); (6) Transportation (pipeline) — inventory
being shipped through distribution. Marketing materials are not one of the six inventory types defined in
operations management.
