CHAPTER 1: Introduction to Operations Management 

TRUE /FALSE

1. Some of the operations-related activities of Hard Rock Café include designing meals and analyzing them for 

ingredient cost and labor requirements. 

True (Global company profile, easy) 

2. The production process at Hard Rock Café is limited to meal preparation and serving customers. 

False (Global company profile, easy) 

3. All organizations, including service firms such as banks and hospitals, have a production function. 

True (What is operations management? moderate) 

4. Operations management is the set of activities that create value in the form of goods and services by transforming 

inputs into outputs. 

True (What is operations management? easy) 

5. An example of a "hidden" production function is money transfers at banks. 

True (What is operations management? moderate) 

6. One reason to study operations management is to learn how people organize themselves for productive enterprise. 

True (Why study OM, easy) 

7. The operations manager performs the management activities of planning, organizing, staffing, leading, and 

controlling of the OM function. 

True (What operations managers do, easy) 

8. "How much inventory of this item should we have?" is within the critical decision area of managing quality. 

False (What operations managers do, easy) 

9. In order to have a career in operations management, one must have a degree in statistics or quantitative methods. 

 False (What operations managers do, easy) 

10. Henry Ford is known as the Father of Scientific Management. 

False (The heritage of operations management, easy) 

11. Shewhart’s contributions to operations management came during the Scientific Management Era. 

False (The heritage of operations management, easy) 

12. Students wanting to pursue a career in operations management will find multidisciplinary knowledge beneficial. 

True (Where are the OM jobs? easy) 

13. Customer interaction is often high for manufacturing processes, but low for services. 

False (Operations in the service sector, moderate) 

14. Productivity is more difficult to improve in the service sector. 

True (The productivity challenge, moderate) 

15. Manufacturing now constitutes the largest economic sector in postindustrial societies. 

False (Operations in the service sector, moderate) 

16. In the past half-century, the number of people employed in manufacturing has more or less held steady, but each 

manufacturing employee is manufacturing about 20 times as much. 

True (Operations in the service sector, easy) 

Operations Management – Test Bank Page 2 

17. A knowledge society is one that has migrated from work based on knowledge to one based on manual work. 

False (The productivity challenge, easy) 

18. Productivity is the total value of all inputs to the transformation process divided by the total value of the outputs 

produced. 

False (The productivity challenge, easy) 

19. Measuring the impact of a capital acquisition on productivity is an example of multi-factor productivity. 

False (The productivity challenge, moderate) 

20. Ethical and social dilemmas arise because stakeholders of a business have conflicting perspectives. 

True (Ethics and social responsibility, easy) {AACSB: Ethical Reasoning} 

MULTIPLE CHOICE 

21. At Hard Rock Café, tasks that reflect operations or operations management include 

 a. designing meals 

 b. testing meals (recipes) 

 c. analyzing meals for the cost of ingredients 

 d. preparing employee schedules 

 e. all of the above 

 e (Global company profile, easy) 

22. An operations task performed at Hard Rock Café is 

a. borrowing funds to build a new restaurant 

 b. advertising changes in the restaurant menu 

 c. calculating restaurant profit and loss 

 d. preparing employee schedules 

 e. all of the above 

 d (Global company profile, moderate) 

23. Operations management is applicable 

 a. mostly to the service sector 

 b. to services exclusively 

 c. mostly to the manufacturing sector 

 d. to all firms, whether manufacturing and service 

 e. to the manufacturing sector exclusively 

 d (What is operations management? moderate) 

24. Which of the following are the primary functions of all organizations? 

 a. operations, marketing, and human resources 

 b. marketing, human resources, and finance/accounting 

 c. sales, quality control, and operations 

 d. marketing, operations, and finance/accounting 

 e. research and development, finance/accounting, and purchasing 

 d (Organizing to produce goods and services, moderate) 

25. Budgeting, paying the bills, and collection of funds are activities associated with the 

Operations Management – Test Bank Page 3 

a. management function 

b. control function 

c. finance/accounting function 

d. production/operations function 

e. staffing function 

c (Organizing to produce goods and services, moderate) 

26. Which of the following would not be an operations function in a fast-food restaurant? 

a. advertising and promotion 

b. designing the layout of the facility 

c. maintaining equipment 

d. making hamburgers and fries 

e. purchasing ingredients 

a (Organizing to produce goods and services, moderate) 

27. The marketing function's main concern is with 

a. producing goods or providing services 

b. procuring materials, supplies, and equipment 

c. building and maintaining a positive image 

d. generating the demand for the organization's products or services 

e. securing monetary resources 

d (Organizing to produce goods and services, moderate) 

28. Reasons to study Operations Management include 

a. studying why people organize themselves for free enterprise 

b. knowing how goods and services are consumed 

c. understanding what human resource managers do 

d. learning about a costly part of the enterprise 

e. all of the above 

d (Why study OM? moderate) 

29. Reasons to study Operations Management include learning about 

a. why people organize themselves for productive enterprise 

b. how goods and services are produced 

c. what operations managers do 

d. a costly part of the enterprise 

e. all of the above 

e (Why study OM? easy) 

30. The five elements in the management process are 

a. plan, direct, update, lead, and supervise 

b. accounting/finance, marketing, operations, and management 

c. organize, plan, control, staff, and manage 

d. plan, organize, staff, lead, and control 

e. plan, lead, organize, manage, and control 

d (What do operations managers do? easy) 

Operations Management – Test Bank Page 4 

31. Illiteracy and poor diets have been known to cost countries up to what percent of their productivity? 

a. 2% 

b. 5% 

c. 10% 

d. 20% 

e. 50% 

d (Productivity variables, moderate) {AACSB: Multiculture and Diversity} 

32. Which of the following is not an element of the management process? 

 a. controlling 

 b. leading 

 c. planning 

 d. pricing 

 e. staffing 

 d (What do operations managers do? easy) 

33. An operations manager is not likely to be involved in 

a. the design of goods and services to satisfy customers' wants and needs 

b. the quality of goods and services to satisfy customers' wants and needs 

c. the identification of customers' wants and needs 

d. work scheduling to meet the due dates promised to customers 

e. maintenance schedules 

c (What do operations managers do? easy) 

34. All of the following decisions fall within the scope of operations management except for 

a. financial analysis 

b. design of goods and processes 

c. location of facilities 

d. managing quality 

e. All of the above fall within the scope of operations management. 

a (What do operations managers do? easy) 

35. The Ten Critical Decisions of Operations Management include 

a. Layout strategy 

b. Maintenance 

c. Process and capacity design 

d. Managing quality 

e. all of the above 

e (Why study OM? easy) 

36. Which of the following is not one of The Ten Critical Decisions of Operations Management? 

a. Layout strategy 

b. Maintenance 

c. Process and capacity design 

d. Mass customization 

e. Supply chain management 

Operations Management – Test Bank Page 5 

d (Why study OM? moderate) 

37. The Ten Critical Decisions of Operations Management include 

a. Finance/accounting 

b. Advertising 

c. Process and capacity design 

d. Pricing 

e. all of the above 

c (Why study OM? moderate) 

38. Walter Shewhart is listed among the important people of operations management because of his contributions to 

a. assembly line production 

b. measuring the productivity in the service sector 

c. just-in-time inventory methods 

d. statistical quality control 

e. all of the above 

d (The heritage of operations management, moderate) 

39. Walter Shewhart, in the _____, provided the foundations for ______ in operations management. 

a. 1920s; statistical sampling 

b. United Kingdom; mass production 

c. U.S. Army; logistics 

d. nineteenth century; interchangeable parts 

e. none of the above 

a ( The heritage of operations management, moderate) 

40. Eli Whitney, in the _____, provided the foundations for ______ in operations management. 

a. 1920s; statistical sampling 

b. United Kingdom; mass production 

c. U.S. Army; logistics 

d. nineteenth century; interchangeable parts 

e. none of the above 

d (The heritage of operations management, moderate)