Exam #1 Review Flashcards by Morgan A.

A gracious welcome by an employee at the hotel check-in counter is an example of:
a. social sustainability
b. predictive analytics
c. a service blueprint
d. a moment of truth

d. a moment of truth

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Building a high-performing organization with capable leadership and workforce is an example of _____ sustainability.
a. economic
b. technological
c. political
d. environmental

a. economic

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What are the three types of sustainability?

Economic
Environmental
Social

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Identify a difference between goods and services
a. goods can be stored as a physical inventory, whereas services cannot be stored as a physical inventory
b. goods-producing firms rely solely on soft tech, whereas service-providing firms rely solely on hard tech
c. the demand for goods cannot be predicted, whereas the demand for services can be easily predicted
d. customers directly participate in goods-producing activities, whereas customers do not participate in service-producing activities

a. goods can be stored as a physical inventory, whereas services cannot be stored as a physical inventory

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_____ refers to raw materials, work-in process
a. throughput
b. a variant
c. a subsidy
d. inventory

d. inventory

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_____ is the act of qualifying the performance of organizational units, goods and services, processes, people, and other business activities
a. measurement
b. forecasting
c. fulfillment
d. litigating

a. measurement

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In the context of the triple bottom line (TBL), which of the following measures includes the number of ethical violations?
a. responsiveness
b. service quality
c. social sustainability
d. customer retention rate

c. social sustainability

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_____ measures the degree to which the output of a process meets customer requirements
a. learning
b. innovation
c. variability
d. quality

d. quality

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According to research, which of the following is a key dimension that customers use to assess service quality?
a. operational efficiency
b. flexibility
c. empathy
d. queue time

c. empathy

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What are the five dimensions?

Empathy
Assurance
Responsiveness
Tangibles
Reliability

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Which of the following performance perspectives in the balanced scorecard model measures the ultimate value that a business provides to its shareholders?
a. financial perspective
b. internal perspective
c. learning perspective
d. customer perspective

a. financial perspective

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What are the four models of organizational performance?

Baldridge performance excellence framework
Balanced scorecard
Value chain model
Service-profit chain

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What are the four balance scorecard performance perspectives?

Describe each

Financial: value that the business provides to its shareholders
Customer: customer wants and needs and satisfaction as well as market share and growth in market share
Innovation and Learning: future success—the organization’s people and infrastructure
Internal: performance of the key internal processes that drive the business

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_____ is the ratio of the output of a process to an input.
a. productivity
b. flexibility
c. variability
d. reliability

a. productivity

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_____ is the willingness to help customers and provide prompt recovery to service upsets.
a. responsiveness
b. empathy
c. assurance
d. reliability

a. responsiveness

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What is reliability?

Perform the promised service dependably and accurately

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What is assurance?

Knowledge, and courtesy of the service providers and their ability to inspire trust and confidence in customers

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What is tangibility?

Physical facilities, uniforms, equipment, vehicles, and appearance of employees (i.e., the physical evidence)

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What is responsiveness?

Willingness to help customers and provide prompt recovery to service upsets

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What is empathy?

Caring attitude and individualized attention provided to customers

The time required to ramp up to an increased production output level in response to a surge in sales of a product is a measure of _____.
a. budget variance
b. volume flexibility
c. product recalls
d. service upset

b. volume flexibility

The quantitative modeling of cause-and-effect relationships between external and internal performance criteria is called _____.
a. productivity
b. operational efficiency
c. interlinking
d. sustainability

c. interlinking

_____ represent the strategic emphasis that a firm place on certain performance measures and operational capabilities within a value chain
a. competitive priorities
b. order satisfiers
c. search attributes
d. order winners

a. competitive priorities

Basic customer expectations are generally considered the minimum performance level required to stay in business and are often called _____.
a. order qualifiers
b. credence attributes
c. experience attributes
d. order winners

a. order qualifiers

What are order qualifiers? What are order winners?

Meet basic expectations to stay in business (Wi-Fi in an airport) Differentiate from rivals, win the customers' business (free checked bags)

Rules and West Inc manufactures various electronic goods. It uses mass-customization strategies to make its products available to all consumers at any place in the world. It also manufactures carious electronic goods in the same assembly line. Given this information, Rues and West Inc’s operations are aligned around _____. a. sustainability b. flexibility c. reliability d. durability

b. flexibility

Flexibility = _____ _____

mass customization

_____ is an example of innovation in services. a. optical fibers b. internet banking c. customer satisfaction surveys d. smart tags

b. internet banking

According to Professor Terry Hill’s generic strategy framework, which of the following statements is true of the first loop? a. It ties together an organizations corporate strategy and marketing strategy b. it describes how operations evaluate the implications of competitive priorities in terms of process choice c. It determines if process choice decisions are consistent with infrastructure decisions d. It represents operations’ input into the corporate and marketing strategy

b. it describes how operations evaluate the implications of competitive priorities in terms of process choice

What are the four decision loops?

#1 Ties together corporate strategy and marketing strategy #2 Describes how operations evaluate competitive priorities in terms of process choice #3 Determines if process choice decisions are consistent with infrastructure decisions #4 Represents operations’ input into the corporate and marketing strategy

At Ritufa Food Corp, flexibility is the key competitive priority. Food products are manufactured according to customers’ requirements, at any volume and globally delivered at any time. Given this information, Ritufa Food Corp’s operations strategy is based on _____. a. compensation b. mass customization c. mass standardization d. cost reduction

c. mass standardization

_____ attributes are any aspects of a good or service that a customer must believe in but cannot personally evaluate even after a purchase and consumption a. search b. experience c. credence d. variant

c. credence

What are the three attributes customers use when evaluating the quality of goods?

Search: those that a customer can determine prior to purchase (color, price, style) Experience: those that can be recognized only after purchase, or during consumption/use (taste, safety) Credence: any aspects that the customer must believe in but cannot personally evaluate even after purchase and consumption (expertise of a surgeon)

_____ machine tools enable the machinist’s skills to be duplicated by a programmable device that controls the movements of a tool used to make complex shapes a. virtual control (VC b. numerical control (NC) c. revision control (RC) d. movement control (MC)

b. numerical control (NC)

Which of the following is a difference between firms that have high scalability and rims that have low scalability? a. Firms with high scalability incur extremely low fixed costs, whereas firms with low scalability incur extremely high fixed costs b. Firms with high scalability have variable costs as 80 to 85 percent of total costs, whereas firms with low scalability have variable costs as zero to five percent of total costs c. Firms with high scalability serve additional customers at extremely low marginal costs, whereas firms with low scalability serve additional customers at high marginal costs d. Firms with high scalability have a low contribution margin, whereas firms with low scalability have a high contribution margin

c. Firms with high scalability serve additional customers at extremely low marginal costs, whereas firms with low scalability serve additional customers at high marginal costs

How do you calculate total cost? Marginal cost? What changes when quantity changes?

TC = change in fixed cost + change in variable cost MC = change in total cost / change in quantity Variable cost (VC)

_____ refers to equipment ad devices that perform a variety of tasks in the creation and delivery of goods and services. a. hard b. soft c. assistive d. adaptive

b. soft

What is hard technology? Soft technology?

Equipment and devices that perform a variety of tasks in the creation and delivery of goods and services Refers to the application of the internet, computer software, and information systems that help provide data, information, and analysis and facilitate the creation and delivery of goods and services

In the context of the servicescape, in the service-delivery system design the smell of the store are examples of a. ambient condition b. artifact c. spatial layout and functionality d. signs and symbols

a. ambient condition

In the context of service encounter design, high-contact systems would most commonly found in: a. distribution systems b. process designs c. front office operations d. construction services

c. front office operations

_____ design focuses on the interaction, directly or indirectly, between the service provider(s) and the customer a. service process b. service-encounter c. lean servicescape d. customer benefit package

b. service-encounter

Which of the following is one of the principal elements of service-encounter design? a. customer benefit package design b. market introduction c. recognition and reward d. quality function development

c. recognition and reward

What are the four principal elements of service encounter design?

Customer contact behavior and skills Service provider selection, development, and empowerment Recognition and reward Service recovery and guarantees

_____ should begin immediately after a service upset occurs and when the customer is visibly upset. a. service guarantee b. servicescape design c. service recovery d. service process design

c. service recovery

A hamburger factory produces 60,000 hamburgers per year. The equipment used costs $10,000 and the labor cost per year is $13,500. What is the productivity measure of “units of output per dollar of input”? a. 0.39 b. 4.44 c. 2.55 d. 6.00

Productivity = output/input 60,0000 / (10,0000 + 13,000) = 2.55

The fixed cost of the laboratory equipment located in the hospital is $800,000 and the average variable cost per test in-house is $28.75. A third-party lab will perform the same tests and distributes the results electronically to the hospital for $31.00. If the annual volume last year was 250,000 tests, which option should the hospital choose? a. third-party lab b. in-house c. none of them d. split tests between two options

TC (outsource) = 31.00 * 250,000 = 7,750,000 TC = FC + VC VC = Q * C (cost per unit) TC (in-house) = 800,000 + 28.75 * 250,000 = 7,987,000 a. third-party lab

A mortgage loan approval process consists of three steps performed by clerks A, B, and C. A study found that clerks A and B had average reliability of only 0.85, which results in the paperwork having errors. Clerk C performs the final review catches nearly all mistakes and has a reliability of 0.99, but the work involved is causing a considerable backlog. After studying the process, the loan manager decided to add an additional two clerks, D and E, with more experience to each of the first two steps to check the work, having a reliability of 0.95. How much does adding this redundancy improve the reliability of the original process? a. 0.1802 b. 0.225 c. 0.2599 d. no difference

Initial reliability: Rs = PA * PB * PC Rs = 0.85 * 0.85 * 0.99 = 0.7152 After adding D and E: Rp = 1- (1- PA) (1 - PD) or 1- (1- PB) (1 - PE) Rp = 1- (1 – 0.85) (1 - 0.95) = 0.9925 End Reliability: PAD * PBE * PC 0.9925 * 0.9925 * 0.99 = 0.9752 Reliability improvement: end - initial 0.9752 – 0.7152 = 0.26 c. 0.2599

A quality characteristic has a specification (in cm) of 0.40, +- 0.03. If the value of the quality characteristic exceeds 0.40 by the tolerance of 0.03 on either side, the product will require a $180.00 repair. In the given scenario, the Taguchi function is correctly represented by which of the following equations? a. L(x) = 200 (x – 0.03) ^2 b. L(x) =2,000 (x- 0.43) ^2 c. L(x) =20,000 (x – 0.37) ^2 d. L(x) =200,000 (x – 0.40) ^2

Taguchi function: L(x) = k (x – T) ^2 L(x) = monetary value k = constant T = target T = 0.40 Standard deviation = 0.03 L(x) = 180 Find k: 180 = k (0.03) ^2 k = 200,000 L(x) = 200,000 (x – 0.40) ^2 d. L(x) =200,000 (x – 0.40) ^2