BEC Operations Management and Process Improvement 2 — Questions and Answers
Question 1: The Theory of Constraints (TOC) recommends focusing improvement efforts on:
- The binding constraint that limits the system's overall output (Correct answer)
- All processes simultaneously to maximize efficiency gains
- Non-bottleneck processes with the most available capacity
- Reducing fixed costs across every department
Correct answer: The binding constraint that limits the system's overall output
TOC states that a system's output is limited by its single binding constraint, so improvement efforts should focus on identifying and elevating that constraint before moving on to others.
Question 2: Lean manufacturing primarily focuses on eliminating:
- Waste (non-value-adding activities) from production processes (Correct answer)
- Product variety to simplify manufacturing
- All forms of employee overtime
- Dependence on external suppliers
Correct answer: Waste (non-value-adding activities) from production processes
Lean manufacturing identifies and systematically eliminates eight categories of waste (overproduction, waiting, transport, over-processing, inventory, motion, defects, underutilized talent) to maximize value delivery.
Question 3: Supply chain management coordinates which of the following activities?
- Procurement, production, inventory, logistics, and customer delivery (Correct answer)
- Financial reporting and investor relations
- Employee recruitment and performance management
- Marketing, advertising, and brand management
Correct answer: Procurement, production, inventory, logistics, and customer delivery
Supply chain management integrates the flow of materials, information, and finances from raw material suppliers through production to the final customer delivery.
Question 4: Kaizen is a Japanese business philosophy that refers to:
- Continuous, incremental improvement involving all employees (Correct answer)
- Radical process redesign to achieve breakthrough performance
- Setting aggressive performance targets for senior management only
- Eliminating all manual processes through automation
Correct answer: Continuous, incremental improvement involving all employees
Kaizen ('change for the better') is a philosophy of ongoing small, incremental improvements made by all employees at every level of the organization.
Question 5: A master budget in operations typically includes:
- All functional area budgets integrated into a comprehensive financial plan (Correct answer)
- Only the capital expenditure budget for the coming year
- The budget prepared exclusively by the CFO without departmental input
- A single projected income statement for board approval
Correct answer: All functional area budgets integrated into a comprehensive financial plan
The master budget integrates all subsidiary budgets (sales, production, direct materials, direct labor, overhead, SG&A, capital) into a comprehensive financial plan including projected financial statements.
Question 6: Project risk management involves which of the following key steps?
- Identifying, assessing, and developing responses to potential project risks (Correct answer)
- Eliminating all sources of uncertainty from the project timeline
- Transferring all project risk to subcontractors through contracts
- Reporting all risks to external auditors for review
Correct answer: Identifying, assessing, and developing responses to potential project risks
Project risk management is a structured process of identifying potential risks, analyzing their probability and impact, and developing strategies to avoid, mitigate, transfer, or accept them.
BEC Operations Management and Process Improvement 2
The Theory of Constraints (TOC) recommends focusing improvement efforts on: