Chapter 01 Test Bank KEY
1. Supply is a set of products or services a business offers to its customers.
TRUE
Supply is a set of products or services a business offers to its customers.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-01 Identify the drivers of customer utility.
Topic: The Customers View of the World
2. Consumption utility is composed of price and convenience.
FALSE
Consumption utility is composed of performance and fit.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-01 Identify the drivers of customer utility.
Topic: The Customers View of the World
3. Firm A Pareto dominates firm B means that firm A’s product or service is inferior to
that of firm B on all dimensions of the customer utility function.
FALSE
Firm A Pareto dominates firm B means that firm A’s product or service is superior to that
of firm B on all dimensions of the customer utility function.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-02 Explain inefficiencies and determine if a firm is on the efficient frontier.
Topic: A Firms Strategic Trade-Offs
4. A firm reduces inefficiencies by making trade-offs.
FALSE
A firm reduces inefficiencies so that it does not have to sacrifice one performance
dimension versus another.
AACSB: Analytical Thinking
, Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Gradable: automatic
Learning Objective: 01-02 Explain inefficiencies and determine if a firm is on the efficient frontier.
Topic: Overcoming Inefficiencies: The Three System Inhibitors
5. Reducing inefficiencies will increase a firm’s profitability.
TRUE
Reducing inefficiencies by increasing what the customer is willing to pay and/or
decreasing costs will increase a firm’s profitability.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-02 Explain inefficiencies and determine if a firm is on the efficient frontier.
Topic: Overcoming Inefficiencies: The Three System Inhibitors
6. Every work requires operations.
TRUE
Every work requires operations to do the work and/or to improve the work.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-04 Explain what work in operations management looks like.
Topic: Operations Management: An Overview of the Book
7. "Who are the customers?" is NOT an operations management–related question.
FALSE
"Who are the customers?" is an operations management–related question because it
corresponds to the consumption utility component of the consumer utility function.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-05 Articulate the key operational decisions a firm needs to make to match supply with demand.
Topic: Operations Management: An Overview of the Book
8. The set of products or services a business offers to its customers is called:
A. demand.
B. bundle.
C. supply.
D. value.
,Supply is the set of products or services offered by a business to its customers.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-01 Identify the drivers of customer utility.
Topic: Introduction
Topic: The Customers View of the World
9. The set of products or services customers want is called:
A. demand.
B. bundle.
C. supply.
D. value.
Demand is the set of products or services customers want.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-01 Identify the drivers of customer utility.
Topic: Introduction
Topic: The Customers View of the World
10. "Match supply with demand" means:
A. tell customers what they want.
B. offer customers what they want.
C. explain to customers what they want.
D. invest in marketing.
"Offer customers what they want" is another way of saying "match supply with demand."
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-05 Articulate the key operational decisions a firm needs to make to match supply with demand.
Topic: Introduction
Topic: The Customers View of the World
11. Which of the following is NOT a goal of operations management?
A. Understanding the drivers of customer utility
B. Match supply with demand
C. Make a profit while providing customers what they want
D. Provide great products at low prices to customers
Understanding demand is a goal of marketing.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-05 Articulate the key operational decisions a firm needs to make to match supply with demand.
Topic: Introduction
Topic: The Customers View of the World
12. Which of the following is NOT a challenge of matching supply with demand?
A. Delivering better products at low prices
B. Attempting to predict demand
, C. Providing customers with what they want at a low cost
D. Reducing demand to match supply
The challenge of matching supply with demand is to understand demand so that better products or
services are offered to customers at low cost.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Gradable: automatic
Learning Objective: 01-05 Articulate the key operational decisions a firm needs to make to match supply with demand.
Topic: Introduction
Topic: The Customers View of the World
13. A customer’s desire for a product or service is measured by its:
A. popularity.
B. costs.
C. utility.
D. advertisement.
According to economic theory, utility measures one’s desire for a product or service.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-01 Identify the drivers of customer utility.
Topic: The Customers View of the World
14. Economic theory suggests that a customer chooses a product or service to obtain the
highest _______________.
A. demand
B. supply
C. utility
D. satisfaction
A customer chooses a product or service that gives him/her the highest utility.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-01 Identify the drivers of customer utility.
Topic: The Customers View of the World
15. Utility is composed of the following components EXCEPT:
A. customer loyalty.
B. price.
C. inconvenience.
D. consumption utility.
Utility is composed of consumption utility, price, and inconvenience .
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-01 Identify the drivers of customer utility.
Topic: The Customers View of the World
16. The features of a product or service that most, if not all, customers prefer are called:
1. Supply is a set of products or services a business offers to its customers.
TRUE
Supply is a set of products or services a business offers to its customers.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-01 Identify the drivers of customer utility.
Topic: The Customers View of the World
2. Consumption utility is composed of price and convenience.
FALSE
Consumption utility is composed of performance and fit.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-01 Identify the drivers of customer utility.
Topic: The Customers View of the World
3. Firm A Pareto dominates firm B means that firm A’s product or service is inferior to
that of firm B on all dimensions of the customer utility function.
FALSE
Firm A Pareto dominates firm B means that firm A’s product or service is superior to that
of firm B on all dimensions of the customer utility function.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-02 Explain inefficiencies and determine if a firm is on the efficient frontier.
Topic: A Firms Strategic Trade-Offs
4. A firm reduces inefficiencies by making trade-offs.
FALSE
A firm reduces inefficiencies so that it does not have to sacrifice one performance
dimension versus another.
AACSB: Analytical Thinking
, Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Gradable: automatic
Learning Objective: 01-02 Explain inefficiencies and determine if a firm is on the efficient frontier.
Topic: Overcoming Inefficiencies: The Three System Inhibitors
5. Reducing inefficiencies will increase a firm’s profitability.
TRUE
Reducing inefficiencies by increasing what the customer is willing to pay and/or
decreasing costs will increase a firm’s profitability.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-02 Explain inefficiencies and determine if a firm is on the efficient frontier.
Topic: Overcoming Inefficiencies: The Three System Inhibitors
6. Every work requires operations.
TRUE
Every work requires operations to do the work and/or to improve the work.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-04 Explain what work in operations management looks like.
Topic: Operations Management: An Overview of the Book
7. "Who are the customers?" is NOT an operations management–related question.
FALSE
"Who are the customers?" is an operations management–related question because it
corresponds to the consumption utility component of the consumer utility function.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-05 Articulate the key operational decisions a firm needs to make to match supply with demand.
Topic: Operations Management: An Overview of the Book
8. The set of products or services a business offers to its customers is called:
A. demand.
B. bundle.
C. supply.
D. value.
,Supply is the set of products or services offered by a business to its customers.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-01 Identify the drivers of customer utility.
Topic: Introduction
Topic: The Customers View of the World
9. The set of products or services customers want is called:
A. demand.
B. bundle.
C. supply.
D. value.
Demand is the set of products or services customers want.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-01 Identify the drivers of customer utility.
Topic: Introduction
Topic: The Customers View of the World
10. "Match supply with demand" means:
A. tell customers what they want.
B. offer customers what they want.
C. explain to customers what they want.
D. invest in marketing.
"Offer customers what they want" is another way of saying "match supply with demand."
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-05 Articulate the key operational decisions a firm needs to make to match supply with demand.
Topic: Introduction
Topic: The Customers View of the World
11. Which of the following is NOT a goal of operations management?
A. Understanding the drivers of customer utility
B. Match supply with demand
C. Make a profit while providing customers what they want
D. Provide great products at low prices to customers
Understanding demand is a goal of marketing.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-05 Articulate the key operational decisions a firm needs to make to match supply with demand.
Topic: Introduction
Topic: The Customers View of the World
12. Which of the following is NOT a challenge of matching supply with demand?
A. Delivering better products at low prices
B. Attempting to predict demand
, C. Providing customers with what they want at a low cost
D. Reducing demand to match supply
The challenge of matching supply with demand is to understand demand so that better products or
services are offered to customers at low cost.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Gradable: automatic
Learning Objective: 01-05 Articulate the key operational decisions a firm needs to make to match supply with demand.
Topic: Introduction
Topic: The Customers View of the World
13. A customer’s desire for a product or service is measured by its:
A. popularity.
B. costs.
C. utility.
D. advertisement.
According to economic theory, utility measures one’s desire for a product or service.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-01 Identify the drivers of customer utility.
Topic: The Customers View of the World
14. Economic theory suggests that a customer chooses a product or service to obtain the
highest _______________.
A. demand
B. supply
C. utility
D. satisfaction
A customer chooses a product or service that gives him/her the highest utility.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-01 Identify the drivers of customer utility.
Topic: The Customers View of the World
15. Utility is composed of the following components EXCEPT:
A. customer loyalty.
B. price.
C. inconvenience.
D. consumption utility.
Utility is composed of consumption utility, price, and inconvenience .
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Gradable: automatic
Learning Objective: 01-01 Identify the drivers of customer utility.
Topic: The Customers View of the World
16. The features of a product or service that most, if not all, customers prefer are called:
