Chapter 02 - Operations and Supply Chain StrategyChapter 02 Operations and Supply Chain Strategy Answer KeyMultiple-Choice Questions 1. At Disney, "Making People Happy" is an example of A. operations mission.B. corporate strategy.C. business strategy.D. operations strategy.LO: 2.1Topic: Operations Strategy ModelDifficulty: 1 EasyAACSB: Reflective thinkingBloom’s: UnderstandFeedback: This is Disney’s overarching strategic directive. Business and operations strategies would fall below this statement.2. The four elements that form the heart of operations strategy include A. mission, distinctive competence, objectives, and internal analysis.B. mission, distinctive competence, internal analysis, and external analysis.C. mission, objectives, internal analysis, and external analysis.D. mission, distinctive competence, objectives, and strategic decisions.LO: 2.2Topic: Operations Strategy ModelDifficulty: 1 EasyAACSB: Reflective thinkingBloom’s: RememberFeedback: Operations strategy is defined by these four subcategories (see Figure 2.1).3. According to Michael Porter, the generic types of business strategies include A. differentiation, low cost, focus.B. high price, high quality, fast delivery.C. focus, quality, imitation.D. all of the above.LO: 2.1Topic: Operations Strategy ModelDifficulty: 2 ModerateAACSB: Reflective thinkingBloom’s: UnderstandFeedback: Differentiation (unique or innovative), low cost (commodity markets), and focus (narrow or broad) are the three generic strategies. 2-1Chapter 02 - Operations and Supply Chain Strategy 4. The four common objectives of operations are A. quality, delivery, cost, and innovation.B. quality, cost, flexibility, and agility.C. quality, cost, delivery, and flexibility.D. cost, quality, capacity, and flexibility.LO: 2.2Topic: Operations Strategy ModelDifficulty: 2 ModerateAACSB: Reflective thinkingBloom’s: RememberFeedback: Cost, quality, flexibility, and delivery (see Figure 2.1).5. An example under the capacity area of strategic decisions in operations would be A. centralized or decentralized warehouse.B. one large or several small facilities.C. handmade or machine-made.D. high levels or low levels of inventory.LO: 2.3Topic: Competing with Operations ObjectivesDifficulty: 2 ModerateAACSB: Reflective thinkingBloom’s: UnderstandFeedback: Only B relates to capacity; the others relate to process or inventory decisions (see Table 2.2). 6. The operation objectives of quality, cost, delivery, and flexibility are A. mutually exclusive.B. independent of each other.C. connected.D. unique.LO: 2.2Topic: Operations Strategy ModelDifficulty: 2 ModerateAACSB: Reflective thinkingBloom’s: UnderstandFeedback: All must be connected and in sync with each other for operations strategy to be effective.2-2Chapter 02 - Operations and Supply Chain Strategy 7. In the product imitator strategy, the order winner is _____ for the customer, whereas in the product innovator strategy, the order winner is ______. A. flexibility, priceB. flexibility, qualityC. quality, priceD. price, flexibilityLO: 2.4Topic: Cross-Functional Strategic DecisionsDifficulty: 2 ModerateAACSB: Reflective thinkingBloom’s: UnderstandFeedback: For the imitator strategy, the customer priority is price; it is flexibility for the innovator strategy.8. Make or buy is an example of what type of strategic decision? A. InventoryB. ProcessC. QualityD. CapacityLO: 2.3Topic: Competing with Operations ObjectivesDifficulty: 3 HardAACSB: Reflective thinkingBloom’s: UnderstandFeedback: The decision to make versus buy is fundamental to the need for a production process. 9. Which of the following is NOT a characteristic of a global corporation? A. Facilities and plants are located on a country-by-country basis.B. Global product design and process technology are used.C. Logistics and inventory control systems are global.D. Divisions are organized to have global responsibility for the marketing, R&D, and operations functions.LO: 2.6Topic: Global Operations and Supply ChainsDifficulty: 1 EasyAACSB: Reflective thinkingBloom’s: RememberFeedback: Facilities and plants are located on a worldwide basis, not country by country. 2-3Chapter 02 - Operations and Supply Chain Strategy10. Another term used for operations objectives is A. order winners.B. order qualifiers.C. competitive priorities.D. distinctive competence.LO: 2.2Topic: Operations Strategy Model Difficulty: 2 ModerateAACSB: Reflective thinkingBloom’s: UnderstandFeedback: Operations objectives are derived from the mission and higher-level strategies and are thus competitive priorities.11. Strategic decisions are to be made for which of the following decision areas? A. Quality, process, capacity, and inventoryB. Cost, quality, delivery, and flexibilityC. Mission, distinctive competence, objectives, and tacticsD. All of the aboveLO: 2.2Topic: Strategic DecisionsDifficulty: 2 ModerateAACSB: Reflective thinkingBloom’s: RememberFeedback: Process, quality, capacity, and inventory are the basic set of strategic decisions (see Figure 2.1). 12. A decision has been made that suppliers will be chosen based on quality rather than cost. This is an example of which of the following? A. ObjectiveB. MissionC. Distinctive competenceD. Strategic decisionLO: 2.7Topic: Supply Chain StrategyDifficulty: 2 ModerateAACSB: Reflective thinkingBloom’s: UnderstandFeedback: This is an example of a strategic decision, most likely in support of a quality objective (see Table 2.4).2-4Chapter 02 - Operations and Supply Chain Strategy 13. Next year's goal is to fill 99% of all orders from stock. This is an example of which of the following? A. ObjectiveB. MissionC. Distinctive competenceD. Strategic decisionLO: 2.3Topic: Competing with Operations ObjectivesDifficulty: 1 EasyAACSB: Reflective thinkingBloom’s: RememberFeedback: Service level targets are delivery-related (see Table 2.1). 14. A company uses proprietary computer software to offer services that other companies have not been able to emulate. These services have enabled the company to enter new marketsand have caused new organizational structures to be formed. This is an example of which of the following? A. ObjectiveB. MissionC. Distinctive competenceD. Strategic decisionLO: 2.5Topic: Distinctive CompetenceDifficulty: 3 HardAACSB: Reflective thinkingBloom’s: UnderstandFeedback: The proprietary nature and resistance to emulation indicate the software is a distinctive competence.15. Which operations objective