James Madison University COB 300C Operations Management

 

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Sample Questions

 

 

Chapter 02 Test Bank – Static

1.	An example of a strategic operations management decision is the choice of where to locate. TRUE   Location decisions are strategic in nature.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-04 Discuss and compare organization strategy and operations strategy and explain why it is important to link the two. Topic: Operations Strategy

 

2.	An example of an operational operations management decision is inventory level management. TRUE   Inventory management is an operational decision.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-04 Discuss and compare organization strategy and operations strategy and explain why it is important to link the two. Topic: Operations Strategy

 

3.	Government statistics are a good source of data about productivity trends in the service sector. FALSE   The service sector is often omitted in government statistics.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-06 Define the term productivity and explain why it is important to organizations and to countries. Topic: Productivity

 

4.	An example of a tactical operations management decision is determining employment levels. TRUE   Staffing is an ongoing, tactical decision.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-04 Discuss and compare organization strategy and operations strategy and explain why it is important to link the two. Topic: Operations Strategy

 

5.	Productivity is defined as the ratio of output to input. TRUE   Divide outputs by inputs to get productivity.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-06 Define the term productivity and explain why it is important to organizations and to countries. Topic: Productivity

 

6.	Productivity is defined as the ratio of input to output. FALSE   Productivity is the ratio of outputs to inputs.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-06 Define the term productivity and explain why it is important to organizations and to countries. Topic: Productivity

 

7.	Competitiveness relates to the profitability of an organization in the marketplace. FALSE   Competitiveness relates to how effectively an organization meets the wants and needs of customers relative to other organizations that offer similar goods or services.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-01 List several ways that business organizations compete. Topic: Competitiveness

 

8.	If people would only work harder, productivity would increase. FALSE   Working harder can actually reduce productivity in some cases.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-07 Describe several factors that affect productivity. Topic: Productivity

 

9.	Tracking productivity measures over time enables managers to judge organizational performance and decide where improvements are needed. TRUE   Productivity trends direct attention toward problems and opportunities.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-07 Describe several factors that affect productivity. Topic: Productivity

 

10.	Productivity is directly related to the ability of an organization to compete. TRUE   A more productive organization is a more competitive organization.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-06 Define the term productivity and explain why it is important to organizations and to countries. Topic: Productivity

 

11.	A characteristic that was once an order winner may become an order qualifier. TRUE   Order qualifiers and order winners are shaped by the environment.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-03 Define the terms mission and strategy and explain why they are important. Topic: Mission and Strategies

 

12.	Outsourcing tends to improve quality but at the cost of lowered productivity. FALSE   Outsourcing can lead to both quality and productivity improvements.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-07 Describe several factors that affect productivity. Topic: Productivity

 

 

13.	Productivity tends to be only a very minor factor in an organization’s ability to compete. FALSE   An organization’s ability to compete is directly affected by its productivity.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-06 Define the term productivity and explain why it is important to organizations and to countries. Topic: Productivity

 

14.	An organization that is twice as productive as its competitor will be twice as profitable. FALSE   Productivity advantages don’t necessarily translate into profitability advantages.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-06 Define the term productivity and explain why it is important to organizations and to countries. Topic: Productivity

 

15.	National productivity is determined by averaging the productivity measures of various companies or industries. FALSE   National productivity is determined by dividing inputs by outputs across a national economy; averaging industry measures would lead to a distorted estimate.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-06 Define the term productivity and explain why it is important to organizations and to countries. Topic: Productivity

 

16.	Wage and salary increases that are not accompanied by productivity increases tend to exert inflationary pressures on a nation’s economy. TRUE   True increases in standards of living come about through productivity improvements.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-06 Define the term productivity and explain why it is important to organizations and to countries. Topic: Productivity

 

17.	Global competition really only applies to multinational organizations. FALSE   Domestic-only organizations experience competition from organizations in other countries.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-03 Define the terms mission and strategy and explain why they are important. Topic: Mission and Strategies

 

18.	A business that is rated highly by its customers for service quality will tend to be more profitable than a business that is rated poorly. TRUE   Service quality is a powerful tool for improving profitability.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 02-01 List several ways that business organizations compete. Topic: Competitiveness

 

19.	Services often don’t fit simple yield measurements. TRUE   Comparing one service output to another is difficult to do accurately.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-06 Define the term productivity and explain why it is important to organizations and to countries. Topic: Productivity

 

20.	A mission statement should provide a guide for the formulation of strategies for the organization. TRUE   Strategy-making is constrained by the mission statement.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-03 Define the terms mission and strategy and explain why they are important. Topic: Mission and Strategies

 

21.	The hierarchy and sequence of planning and decision making is: mission, organizational strategy, tactics, and operational decisions. TRUE   Mission is at the highest level of the hierarchy, while operational decisions are at the lowest.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-03 Define the terms mission and strategy and explain why they are important. Topic: Mission and Strategies

 

22.	Strategy includes both organizational and functional strategies. TRUE   Organizational strategies shape functional strategies.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-03 Define the terms mission and strategy and explain why they are important. Topic: Mission and Strategies

 

23.	Organizational strategy should be determined without considering the realities of functional area strengths and weaknesses since they can be changed to meet our strategy. FALSE   Functional strengths and weaknesses serve as the building blocks of organizational strategy.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-03 Define the terms mission and strategy and explain why they are important. Topic: Mission and Strategies

 

24.	Mission statements should be as specific as possible regarding exactly how they will be accomplished. FALSE   Mission statements are very long-term and should provide enough room to accommodate major changes in direction.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-03 Define the terms mission and strategy and explain why they are important. Topic: Mission and Strategies

 

25.	Improving efficiency will guarantee a similar improvement in productivity. FALSE   Efficiency is narrower than productivity.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-07 Describe several factors that affect productivity. Topic: Productivity

 

26.	As long as we match a competitor on quality and price we will gain market share. FALSE   We usually have to better a competitor to win market share.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 02-02 Name several reasons that business organizations fail. Topic: Competitiveness

 

27.	Environmental scanning is a search for events or trends that present either threats or opportunities to the organization. TRUE   These events or trends should be taken into account when strategy is being formulated.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-03 Define the terms mission and strategy and explain why they are important. Topic: Mission and Strategies

 

 

28.	Standardization has the advantage of reducing variability. TRUE   Standardization leads to reduced variability.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 02-07 Describe several factors that affect productivity. Topic: Productivity

 

29.	Traditional strategies of business organizations have tended to emphasize cost minimization or product differentiation. TRUE   Time- and quality-based strategies are more recent developments.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-05 Describe and give examples of time-based strategies. Topic: Operations Strategy

 

30.	Tactics support established functional strategies. TRUE   This represents the majority of ongoing decision making in operations.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-03 Define the terms mission and strategy and explain why they are important. Topic: Mission and Strategies

 

31.	Which of the following is least likely to affect the cost an organization incurs in producing its products or services? A. price B. productivity C. location D. quality E. inventory management   Relative to the other choices, price is least likely to affect cost.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-01 List several ways that business organizations compete. Topic: Competitiveness

 

32.	Where a firm locates would typically not affect that firm’s: A. costs. B. convenience for customers. C. delivery times. D. strategy. E. transportation costs.   Typically, strategy dictates where firms will locate, rather than location dictating strategy.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-01 List several ways that business organizations compete. Topic: Mission and Strategies

 

 

33.

Which of the following is not among the chief reasons organizations fail? A. overemphasis on short-term financial performance B. emphasizing labor productivity in labor-intensive environments C. poor internal communications D. not investing in capital and human resources E. overemphasis on product (or service) design   In labor-intensive environments, emphasizing labor productivity is a good idea.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-02 Name several reasons that business organizations fail. Topic: Competitiveness

 

34.

The key to successfully competing is understanding what customers want and then __________ satisfy those wants. A. training production workers to B. finding suppliers who can C. finding the best way to D. designing products and services that E. hiring enough workers to   To successfully compete, two basic issues must be addressed: What do the customers want? What is the best way to satisfy those wants?

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-02 Name several reasons that business organizations fail. Topic: Competitiveness

 

35.	An organization’s mission statement serves as the basis for: A. environmental scanning. B. core competencies. C. operating procedures. D. distinctiveness. E. organizational goals.   Organizations’ missions serve as the broad underpinning for their goals.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-03 Define the terms mission and strategy and explain why they are important. Topic: Competitiveness

 

36.

Which of the following would be least important in the pursuit of a time-based strategy? A. cost minimization B. quick changeover times C. operational agility D. reduced complaint resolution times E. flexible technology   Many means for minimizing cost would have the effect of making a time-based strategy less feasible.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-05 Describe and give examples of time-based strategies. Topic: Mission and Strategies

 

37.	Competitiveness doesn’t include: A. productivity. B. effectiveness. C. profitability. D. operations strategy. E. operations management.   A company can be competitive relative to similar companies and still be unprofitable if the competitive environment is inherently unprofitable.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 3 Hard Learning Objective: 02-01 List several ways that business organizations compete. Topic: Competitiveness

 

38.	Product design and choice of location are examples of _______ decisions. A. strategic B. tactical C. operational D. customer-focused E. design   These decisions are made high in the hierarchy.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 3 Hard Learning Objective: 02-03 Define the terms mission and strategy and explain why they are important. Topic: Mission and Strategies

 

39.	Scheduling personnel is an example of an operations management: A. mission implementation. B. operational decision. C. organizational strategy. D. functional strategy. E. tactical decision.   Scheduling decisions are made low in the hierarchy.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-04 Discuss and compare organization strategy and operations strategy and explain why it is important to link the two. Topic: Operations Strategy

 

40.	Productivity is expressed as: A. output plus input. B. output minus input. C. output times input. D. output divided by input. E. input divided by output.   Productivity is the ratio of outputs to inputs.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-06 Define the term productivity and explain why it is important to organizations and to countries. Topic: Productivity

 

 

41.

In the 1970s and early 1980s in the United States, organizations concentrated on: A. operations strategies. B. improving quality. C. marketing and financial strategies. D. revising mission statements. E. environmental issues.   This led to U.S. firms being not very competitive with regard to their operations.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-04 Discuss and compare organization strategy and operations strategy and explain why it is important to link the two. Topic: Operations Strategy

 

42.	Which of the following is not a factor that affects productivity? A. computer viruses B. design of the workspace C. use of the Internet D. standardizing processes E. product price   These don’t lead to fundamental changes in operations.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-07 Describe several factors that affect productivity. Topic: Productivity

 

 

43.	Which of these factors would be least likely to affect productivity? A. methods and technology B. workers C. management D. product mix E. advertising   Advertising could increase the value of the outputs, but it is less likely to affect productivity than these other factors.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-07 Describe several factors that affect productivity. Topic: Productivity

 

44.

Which of the following is not a key step toward improving productivity? A. developing productivity measures for all operations B. improving the bottleneck operations C. establishing reasonable goals for improvement D. considering incentives to reward workers E. converting bond debt to stock ownership   A firm’s productivity is independent of its capital structure.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-07 Describe several factors that affect productivity. Topic: Productivity

 

 

45.

For an organization to grow its market share, it must:   A. advertise using multimedia. B. reduce prices. C. exceed minimum standards of acceptability for its products or services. D. establish an Internet Web site. E. broaden its mission statement.   Only by exceeding standards can an organization grow its market share.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 3 Hard Learning Objective: 02-03 Define the terms mission and strategy and explain why they are important. Topic: Mission and Strategies

 

46.	The ratio of good output to quantity of raw material input is called A. nondefective productivity. B. process yield. C. worker quality measurement. D. total quality productivity. E. quantity/quality ratio.   This is sometimes a useful productivity measure in service industries.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-06 Define the term productivity and explain why it is important to organizations and to countries. Topic: Productivity

 

47.	The fundamental purpose for the existence of any organization is described by its: A. policies. B. procedures. C. corporate charter. D. mission statement. E. bylaws.   A mission statement is the organization’s attempt to justify its existence.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-03 Define the terms mission and strategy and explain why they are important. Topic: Mission and Strategies

 

48.	A productivity increase in one operation that does not improve overall productivity of the business is not A. worthwhile. B. trivial. C. competence-destroying. D. an order winner. E. an order qualifier.   Only system-wide productivity improvement makes the organization more productive.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 3 Hard Learning Objective: 02-07 Describe several factors that affect productivity. Topic: Productivity

 

49.

Productivity growth can be calculated by: A. outputs minus inputs. B. inputs divided by the outputs. C. outputs divided by the inputs. D. input plus output divided by two. E.  (current productivity – previous productivity) x 100 / (previous productivity)   Productivity growth is a key factor in a country’s rate of inflation and the standard of living of its people.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-06 Define the term productivity and explain why it is important to organizations and to countries. Topic: Productivity

 

50.

Which of the following is true? A. Corporate strategy is shaped by functional strategies. B. Corporate mission is shaped by corporate strategy. C. Functional strategies are shaped by corporate strategy. D. External conditions are shaped by corporate mission. E. Corporate mission is shaped by functional strategies.   Corporate strategy shapes strategies at lower levels.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 3 Hard Learning Objective: 02-04 Discuss and compare organization strategy and operations strategy and explain why it is important to link the two. Topic: Mission and Strategies

 

51.	Core competencies in organizations generally do not relate to: A. cost. B. quality. C. time. D. flexibility. E. sales price.   What a firm charges for its outputs is not a core competency. What it can charge, however, is potentially related to a core competency.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-03 Define the terms mission and strategy and explain why they are important. Topic: Mission and Strategies

 

52.

With regard to operations, organization strategy should, ideally, take into account: A. operations’ strengths and weaknesses. B. inventory levels. C. labor productivity. D. product mix. E. production processes.   Formulation of organization strategy should take into account the realities of operations’ strengths and weaknesses, capitalizing on strengths and dealing with weaknesses.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 02-03 Define the terms mission and strategy and explain why they are important. Topic: Mission and Strategies

 

53.

Which of the following is not typically considered a cure for poor competitiveness? A. Remove communications barriers within organizations. B. Minimize attention to the operations function. C. Put less emphasis on short-term financial results. D. Recognize labor as a valuable asset and act to develop it. E. Improve quality.   Operations is a prime area for improving competitiveness.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 3 Hard Learning Objective: 02-02 Name several reasons that business organizations fail. Topic: Competitiveness

 

54.

Time-based approaches of business organizations focus on reducing the time to accomplish certain necessary activities. Time reductions seldom apply to: A. product/service design time. B. processing time. C. delivery time. D. response time for complaints. E. internal audits.   Internal audits have little to do with core value-adding efforts.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-05 Describe and give examples of time-based strategies. Topic: Operations Strategy

 

55.	The external elements of SWOT analysis are: A. strengths and weaknesses. B. strengths and threats. C. opportunities and threats. D. weaknesses and opportunities. E. strengths and opportunities.   Opportunities and threats relate to the organization and its external environment.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-03 Define the terms mission and strategy and explain why they are important. Topic: Mission and Strategies

 

56.

In an assembly operation at a furniture factory, six employees assembled an average of 450 standard dining chairs per five-day week. What is the labor productivity of this operation? A. 90 chairs/worker/day B. 20 chairs/worker/day C. 15 chairs/worker/day D. 75 chairs/worker/day E. 60 chairs/worker/day   Divide the output of 450 chairs by the input of 30 worker-days.

 

AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-06 Define the term productivity and explain why it is important to organizations and to countries. Topic: Productivity

 

57.

Which of the following is not a reason for poor performance of our organization in the marketplace? A. placing too much emphasis on product/service design and too little on process design B. failing to take into account customer wants and needs C. putting too much emphasis on short-term financial performance D. taking advantage of strengths/opportunities, and recognizing competitive threats E. failing to monitor the external environment   Taking advantage of strengths/opportunities and recognizing competitive threats would enable good performance.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 3 Hard Learning Objective: 02-02 Name several reasons that business organizations fail. Topic: Competitiveness

 

58.

The manager of a carpet store is trying to determine the best installation crew size. He has tried various crew sizes with the results shown below. Based on productivity, what crew size do you recommend? Crew Size Yards Installed 2 716 4 1298 3 1017 3 1002 4 1278 2 702     A. 2 B. 3 C. 4 Crews of two workers are most productive with an average of ((716 + 702) / 2 ) / 2) = 354.5 yards/worker installed. The average productivity of three-worker crews is 336.5 yards/worker and for four-worker crews it is 322 yards/worker.

 

AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Evaluate Difficulty: 2 Medium Learning Objective: 02-06 Define the term productivity and explain why it is important to organizations and to countries. Topic: Productivity

 

 

59.	Which of the following is not a key factor of competitiveness? A. price B. product differentiation C. flexibility D. after-sale service E. size of organization   Competitiveness often has nothing to do with organization size.

 

AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 3 Hard Learning Objective: 02-02 Name several reasons that business organizations fail. Topic: Productivity

 

60.

Gourmet Pretzels bakes soft pretzels on an assembly line. It currently bakes 800 pretzels each eight-hour shift. If the production is increased to 1,200 pretzels each shift, then productivity will have increased by: A. 50 percent. B. 33 percent. C. 25 percent. D. 67 percent.   Divide the difference in productivity by the original productivity. Original productivity = 800 pretzels/eight-hour shift. New productivity = 1200 pretzels/eight-hour shift. Increase in productivity = (1200 – 800) × 100 / 800 = 50%

 

AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-06 Define the term productivity and explain why it is important to organizations and to countries. Topic: Productivity

 

61.

The weekly output of a fabrication process is shown below, together with data for labor and material inputs. Standard selling price is $125 per unit. Overhead is charged weekly at the rate of $1,500 plus .5 times direct labor cost. Assume a 40-hour week and an hourly wage of $16. Material cost is $10 per foot. What is the average multifactor productivity? Week Output #Workers Material (ft) 1 392 5 2720 2 408 6 2790   A. 1.463 B. 1.457 C. 1.431 Calculate multifactor productivity for each week, then average the two. Week 1: (392*$125)/((5 × 40 × $16) + ($1,500 + 0.5 × (5 × 40 × $16)) + (2720 × $10)) = 1.4627 Week 2: (408*$125)/((6 × 40 × $16) + ($1,500 + 0.5 × (6 × 40 × $16)) + (2790 × $10)) = 1.4505 Average = (1.4627 + 1.4505) / 2 = 1.4566 or 1.457

 

AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-06 Define the term productivity and explain why it is important to organizations and to countries. Topic: Productivity