Operations Management: Sustainability and Supply Chain Management 12th Edition by Jay Heizer Test ba

Learning Outcome:  Compare and contrast different sourcing strategies including outsourcing and insourcing
 
5) A(n) ________ is a global network of organizations and activities that supply a firm with goods and services.
Answer:  supply chain
Diff: 1
Key Term:  Supply chain
Learning Outcome:  Compare and contrast different sourcing strategies including outsourcing and insourcing
 
6) Competition in the 21st century is no longer between companies; it is between ________.
Answer:  supply chains
Diff: 2
Key Term:  Supply chain
Learning Outcome:  Compare and contrast different sourcing strategies including outsourcing and insourcing
 
7) Identify up to four phenomena that foster specialization and worldwide supply chains.
Answer:  (1) a more technologically oriented society, (2) specialized expert knowledge, (3) instant communication, and (4) cheaper transportation
Diff: 2
Key Term:  Supply chain
Learning Outcome:  Compare and contrast different sourcing strategies including outsourcing and insourcing
 
Section 4   Why Study OM?
 
1) One reason to study operations management is to learn how people organize themselves for productive enterprise.
Answer:  TRUE
Diff: 1
Key Term:  Operations management
Objective:  LO 1.1 Define operations management
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization
 
2) Reasons to study operations management include:
A) studying how people organize themselves for productive 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) A and D
Answer:  E
Diff: 2
Key Term:  Operations management
Objective:  LO 1.1 Define operations management
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization
 
3) Reasons to study operations management include learning about:
A) how 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.
Answer:  E
Diff: 1
Key Term:  Operations management
Objective:  LO 1.1 Define operations management
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

4) Brandon Production is a small firm focused on the assembly and sale of custom computers. The firm is facing stiff competition from low-priced alternatives, and is looking at various solutions to remain competitive and profitable. Current financials for the firm are shown in the table below. In the first option, marketing will increase sales by 50%. The next option is Vendor (Supplier) changes, which would result in a decrease of 10% in the cost of inputs. Finally, there is an OM option, which would reduce production costs by 25%. Which of the options would you recommend to the firm if it can only pursue one option? In addition, comment on the feasibility of each option.
 
Business Function                     Current Value
Cost of Inputs                                       $50,000
Production Costs                                  $25,000
Revenue                                                 $80,000
Answer:  Marketing would increase sales to $120,000 ($80,000 ∗ 1.5) but increase cost of inputs and production costs to $112,500 (($50,000 + $25,000) ∗ 1.5). This would net an additional $2500 of profit ($120,000 - $112,500 - current profit of $5000). Vendor (Supplier) Changes would decrease cost of inputs to $45,000 ($50,000 ∗ .9), resulting in $5,000 of additional profit (savings) ($50,000 - $45,000). Finally, the OM option would save $6250 ($25,000 - $25,000 ∗ .75), resulting in an additional $6250 of profit. Thus the OM option is the most profitable. Comments on feasibility should center on the near impossibility of increasing revenue by 50%, while noting the other two options are difficult but not impossible.