BCOR 3050 MIDTERM QUESTIONS AND ANSWERS
Why should you study Operations Management? - Answer -- It tells you how to manage
transformations from inputs to outputs
- It tells you how to make money
- It teaches you how to think logically
The role of operations is to use resources to transform inputs into outputs. From this
perspective, what is the output of an airline? - Answer -Passengers at their destination
The role of operations is to use resources to transform inputs into outputs. From this
perspective, what is the main input for an airline? - Answer -Passengers
The role of operations is to use resources to transform inputs into outputs. From this
perspective, what is a resource for an airline? - Answer -Airplanes, crew, ticket agents,
etc.
Value Equation for the University of Utah Health System - Answer -Value = (Quality +
Service)/Cost
What is the "waiting room" in a process flow diagram? - Answer -Triangles
Create more value for the customers by: - Answer -- Increasing quality (raise
customer's "reservation price")
- Reducing the price, p
- Increasing the quantity, q
- Consumer surplus = sum of the surpluses, or, (avg s) q
Capture more value for the firm by: - Answer -- Increasing the price, p
- Reducing the unit cost, c
- Increasing the quantity, q
- Producer surplus = profit = (p - c) q = p
What is the work-in-progress (WIP) in a process flow diagram? - Answer -Rectangle or
circle
WIP (work-in-progress) is: - Answer -The name for the inputs that are not yet outputs
What is the output for a law firm? - Answer -A case that is resolved in some way
(maybe it was dropped, or settlement achieve, or a court decision rendered)
What is the input for a hospital? - Answer -A sick or injured patient
What happens if cost is reduced? - Answer -Quantity goes up, price goes down, value
accruing to customer goes up, value captured by the firm goes up.
, What happens if operations is able to increase quality? - Answer -The demand curve
shifts upward.
In which of these areas did the Healthcare industry outperform the Airline industry in the
first decade of this century? - Answer -Stock market returns
What is double marginalization? - Answer -Each of 2 firms in a supply chain adds a
margin to a product (hence, "double margins").
Double marginalization occurs when: - Answer -- Full transparency (no hidden info;
each player has full info)
- Each player in the supply chain acts optimally (in its own best interests)
- No hidden actions; each player knows what other player will do
- Myopic profit maximization
What does TIRP stand for? - Answer -Transparency, incentive compatibility,
robustness, pinch point
TIRP: Transparency - Answer -Ex: Starting with the relationship between the borrower
and the mortgage broker, loans were created which did not require the borrower to
document income, and the mortgage broker may not have always fully detailed the full
terms of the loan.
TIRP: Incentive Compatibility - Answer -The incentives of individual players in the
supply chain are not compatible with supply chain optimization.
TIRP: Robustness - Answer -A supply chain must be strong to disruptions such as
earthquakes or a supplier bankruptcy.
TIRP: Pinch Point - Answer -The entity that is acting to coordinate the chain. It is a well-
known principle of supply chain management that unless there is some coordination
mechanism, optimal supply chain performance will not be achieved when each entity
within the chain acts in its own self interests.
Very roughly, what are the relative fractions of transportation of good globally? -
Answer -Boat 40%, Plane 30%, Truck 20%
Let's say you have one pile of goods that is high-dollar-value but low weight and
volume. You have another pile of goods that is low-dollar-value but high weight and
volume. You are going to ship one pile by boat and the other by plane. Other things
being equal, which pile will you ship by boat? - Answer -The low-dollar-value but high
weight and volume.
Hyperglobalization (largely) due to: - Answer -- Invention and adoption of shipping
container
Why should you study Operations Management? - Answer -- It tells you how to manage
transformations from inputs to outputs
- It tells you how to make money
- It teaches you how to think logically
The role of operations is to use resources to transform inputs into outputs. From this
perspective, what is the output of an airline? - Answer -Passengers at their destination
The role of operations is to use resources to transform inputs into outputs. From this
perspective, what is the main input for an airline? - Answer -Passengers
The role of operations is to use resources to transform inputs into outputs. From this
perspective, what is a resource for an airline? - Answer -Airplanes, crew, ticket agents,
etc.
Value Equation for the University of Utah Health System - Answer -Value = (Quality +
Service)/Cost
What is the "waiting room" in a process flow diagram? - Answer -Triangles
Create more value for the customers by: - Answer -- Increasing quality (raise
customer's "reservation price")
- Reducing the price, p
- Increasing the quantity, q
- Consumer surplus = sum of the surpluses, or, (avg s) q
Capture more value for the firm by: - Answer -- Increasing the price, p
- Reducing the unit cost, c
- Increasing the quantity, q
- Producer surplus = profit = (p - c) q = p
What is the work-in-progress (WIP) in a process flow diagram? - Answer -Rectangle or
circle
WIP (work-in-progress) is: - Answer -The name for the inputs that are not yet outputs
What is the output for a law firm? - Answer -A case that is resolved in some way
(maybe it was dropped, or settlement achieve, or a court decision rendered)
What is the input for a hospital? - Answer -A sick or injured patient
What happens if cost is reduced? - Answer -Quantity goes up, price goes down, value
accruing to customer goes up, value captured by the firm goes up.
, What happens if operations is able to increase quality? - Answer -The demand curve
shifts upward.
In which of these areas did the Healthcare industry outperform the Airline industry in the
first decade of this century? - Answer -Stock market returns
What is double marginalization? - Answer -Each of 2 firms in a supply chain adds a
margin to a product (hence, "double margins").
Double marginalization occurs when: - Answer -- Full transparency (no hidden info;
each player has full info)
- Each player in the supply chain acts optimally (in its own best interests)
- No hidden actions; each player knows what other player will do
- Myopic profit maximization
What does TIRP stand for? - Answer -Transparency, incentive compatibility,
robustness, pinch point
TIRP: Transparency - Answer -Ex: Starting with the relationship between the borrower
and the mortgage broker, loans were created which did not require the borrower to
document income, and the mortgage broker may not have always fully detailed the full
terms of the loan.
TIRP: Incentive Compatibility - Answer -The incentives of individual players in the
supply chain are not compatible with supply chain optimization.
TIRP: Robustness - Answer -A supply chain must be strong to disruptions such as
earthquakes or a supplier bankruptcy.
TIRP: Pinch Point - Answer -The entity that is acting to coordinate the chain. It is a well-
known principle of supply chain management that unless there is some coordination
mechanism, optimal supply chain performance will not be achieved when each entity
within the chain acts in its own self interests.
Very roughly, what are the relative fractions of transportation of good globally? -
Answer -Boat 40%, Plane 30%, Truck 20%
Let's say you have one pile of goods that is high-dollar-value but low weight and
volume. You have another pile of goods that is low-dollar-value but high weight and
volume. You are going to ship one pile by boat and the other by plane. Other things
being equal, which pile will you ship by boat? - Answer -The low-dollar-value but high
weight and volume.
Hyperglobalization (largely) due to: - Answer -- Invention and adoption of shipping
container
