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Multiple Choice Quiz
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1
Net income is critical for profitability measures because:
A)It defines how much money we made.
B)It is the numerator of all three profitability measures.
C)It is easily improved.
D)Is it most easily understood.
2
Operations is critical to net income because:
A)Operations controls sales.
B)Operations generates assets.
C)Operations produces value and creates many costs and both affect net income.
D)Operations generates sales by controlling inventory.
3
Economic value added provides a measure of:
A)How much value is added by the economy
B)How much value is added by operations
C)How much a business affects the economy
D)How much wealth a company is creating compared to its cost of capital
4
Reducing inventory deliveries from monthly to daily results in:
A)A lower average inventory level and greater inventory productivity
B)A higher average inventory level to create fewer stockouts
C)A lower service level because more stockouts will occur
D)No change in inventory because the demand hasn't changed
5
Utilization differs from efficiency in that:
A)Utilization compares actual run time to time available, while efficiency compares actual output to a standard output.
B)Efficiency compares actual run time to time available, while utilization compares actual output to a standard output.
C)Utilization is an actual percentage, while efficiency simply means that something was done well.
D)Efficiency is a real productivity measure, but utilization is not.
6
A critical relationship between local and global productivity measures is:
A)Optimizing local measures will automatically optimize global measures
B)Local measures are never in conflict with each other
C)Global measures are the sum of local measures
D)Optimizing local measures will not guarantee global optimum
7
An important aspect of making business decisions that affect competitiveness is:
A)Focus strictly on the known costs and benefits
B)In addition to costs and benefits, consider the implications of possible actions by competitors
C)Always overestimate costs to provide a buffer for error
D)When making tradeoffs among different alternatives, consider only financial aspects
8
As delivery frequency is increased
A)Service will decline
B)Inventory levels increase
C)Service will increase
D)Inventory levels decrease
9
Productivity measures can be improved by:
A)Increasing the denominator and/or decreasing the numerator
B)Increasing the numerator and/or decreasing the denominator
C)Increasing the numerator and denominator in equal amounts
D)Adding to the inputs so that the productivity measure increases
10
When using breakeven analysis to identify the low-cost alternative among choices, increasing the variable costs of one alternative will make that alternative:
A)Less attractive at high volumes
B)More attractive at high volumes
C)Less attractive at all volumes
D)More attractive at all volumes





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