Operations and Productivity

1.

The production function is clearly visible to the customer in the operations

of both goods and services producers.

Your Answer: True

Correct Answer: False

INCORRECT. In organizations that do not create physical products, the

production function may be hidden from the public and even from the
customer.

Some service providers have no operations function.

2.
Your Answer: True

Correct Answer: False

INCORRECT. Since all organizations have three functions, all must have a
production/operations function. A service-producing production function is
very different from a goods-producing production function.

3.

A large percentage of the revenue of most firms is spent in the OM

function.

Your Answer: True

CORRECT.

Eli Whitney is known as the father of scientific management.

4.
Your Answer: True

Operations and Productivity

Correct Answer: False

INCORRECT. Eli Whitney is credited with popularizing interchangeable

parts.

The sale of most goods includes a service.

5.
Your Answer: True

CORRECT.

In the U.S., the service sector provides almost 80% of all jobs.

6.
Your Answer: True

CORRECT.

Labor contributes over 50% of the increase in productivity.

7.
Your Answer: True

Correct Answer: False

INCORRECT. Management contributes over 50% of the increase in

productivity.

8.

One difference between a good and a service is that services are often
produced and consumed simultaneously.

Operations and Productivity

Your Answer: True

CORRECT.

9.

Operations managers are increasingly concerned with designing products

and processes that are environmentally friendly.

Your Answer: True

CORRECT.

10
.

Operations managers now devote more energy to price negotiation with

their suppliers as a means of staying competitive.

Your Answer: True

Correct Answer: False

INCORRECT. Suppliers supply over half the value of products and longterm relationships cannot be based on zero-sum negotiations.

11
.

Productivity in the service sector has proven difficult to improve because it

is typically labor-intensive.

Your Answer: True

CORRECT.

Operations and Productivity

12
.

A country's standard of living can improve only through increases in

productivity.

Your Answer: True

CORRECT.

13
.

Two bricklayers work together to build a 320 brick wall in an 8 hour work
day. If they are paid $10 per hour, their productivity is $2/brick.

Your Answer: True

Correct Answer: False

INCORRECT. Output divided by input is 320 bricks over 16 hours of labor,

20 bricks per hour or 2 bricks per dollar of wages.