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Operations Management 2nd Ed By Gerard Cachon - Test Bank
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,Operations Management, 2e (Cachon)Chapter 1 Introduction to Operations Management
1) Supply is a set of products or services a business offers to its customers.
Answer: TRUE
Explanation: Supply is a set of products or services a business offers to its customers.
Difficulty: 1 Easy
Topic: The Customers View of the World
Learning Objective: 01-01 Identify the drivers of customer utility.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation; Screen Reader Compatible
2) Consumption utility is composed of price and convenience.
Answer: FALSE
Explanation: Consumption utility is composed of performance and fit.
Difficulty: 1 Easy
Topic: The Customers View of the World
Learning Objective: 01-01 Identify the drivers of customer utility.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation; Screen Reader Compatible
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.
Answer: FALSE
Explanation: "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.
Difficulty: 1 Easy
Topic: A Firms Strategic Trade-Offs
Learning Objective: 01-02 Explain inefficiencies and determine if a firm is on the efficient
frontier.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation; Screen Reader Compatible
1
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
,4) A firm reduces inefficiencies by making trade-offs.
Answer: FALSE
Explanation: A firm reduces inefficiencies so that it does not have to sacrifice one performance
dimension versus another.
Difficulty: 2 Medium
Topic: Overcoming Inefficiencies: The Three System Inhibitors
Learning Objective: 01-02 Explain inefficiencies and determine if a firm is on the efficient
frontier.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation; Screen Reader Compatible
5) Reducing inefficiencies will increase a firm's profitability.
Answer: TRUE
Explanation: Reducing inefficiencies by increasing what the customer is willing to pay and/or
decreasing costs will increase a firm's profitability.
Difficulty: 1 Easy
Topic: Overcoming Inefficiencies: The Three System Inhibitors
Learning Objective: 01-02 Explain inefficiencies and determine if a firm is on the efficient
frontier.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation; Screen Reader Compatible
6) Every work requires operations.
Answer: TRUE
Explanation: All work requires operations to do the work and/or to improve the work.
Difficulty: 1 Easy
Topic: Operations Management: An Overview of the Book
Learning Objective: 01-04 Explain what work in operations management looks like.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation; Screen Reader Compatible
2
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
, 7) "Who are the customers?" is a key question in operations management.
Answer: TRUE
Explanation: "Who are the customers and what are their heterogeneous needs?" is a key
operations management question, corresponding to the consumption utility component of the
consumer utility function.
Difficulty: 1 Easy
Topic: Operations Management: An Overview of the Book
Learning Objective: 01-05 Articulate the key operational decisions a firm needs to make to
match supply with demand.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation; Screen Reader Compatible
8) The set of products or services a business offers to its customers is called ________.
A) demand
B) bundle
C) supply
D) value
Answer: C
Explanation: Supply is the set of products or services offered by a business to its customers.
Difficulty: 1 Easy
Topic: The Customers View of the World; Introduction
Learning Objective: 01-01 Identify the drivers of customer utility.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation; Screen Reader Compatible
9) The set of products or services customers want is called ________.
A) demand
B) bundle
C) supply
D) value
Answer: A
Explanation: Demand is the set of products or services customers want.
Difficulty: 1 Easy
Topic: The Customers View of the World; Introduction
Learning Objective: 01-01 Identify the drivers of customer utility.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation; Screen Reader Compatible
3
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
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