Business Services Business Services Operations Management 2 — Questions and Answers
Question 1: What is 'capacity planning' in operations management?
- Designing the company's office floor plan
- Determining the production or service output a business can handle (Correct answer)
- Setting annual marketing budgets
- Scheduling employee vacations
Correct answer: Determining the production or service output a business can handle
Capacity planning ensures a business has sufficient resources (staff, equipment, space) to meet current and future demand efficiently.
Question 2: What does 'inventory turnover ratio' measure?
- How often a company hires new staff
- How many times inventory is sold and replaced in a period (Correct answer)
- The ratio of finished goods to raw materials
- Customer return rates for products
Correct answer: How many times inventory is sold and replaced in a period
Inventory turnover ratio shows how many times a company sells and replaces its inventory during a given period, indicating sales efficiency.
Question 3: What is 'Total Quality Management' (TQM)?
- A financial auditing standard
- An organization-wide approach to embedding quality in all processes and culture (Correct answer)
- A government certification for manufacturers
- A software system for tracking defects
Correct answer: An organization-wide approach to embedding quality in all processes and culture
TQM is a management philosophy that focuses on long-term success through customer satisfaction by involving all employees in continuous process improvement.
Question 4: What is a 'bottleneck' in a business process?
- A pricing strategy for premium products
- A point in a process that limits overall throughput or speed (Correct answer)
- A type of supplier contract clause
- A legal term for contract disputes
Correct answer: A point in a process that limits overall throughput or speed
A bottleneck is any step in a business process where the flow is constrained, slowing down the entire operation and reducing overall output.
Question 5: What does 'just-in-time' (JIT) inventory management aim to achieve?
- Delivering products ahead of schedule
- Receiving goods only as they are needed in production to reduce inventory costs (Correct answer)
- Stocking large reserves to avoid supply disruptions
- Pre-ordering a full year's supply at once
Correct answer: Receiving goods only as they are needed in production to reduce inventory costs
JIT inventory management minimizes inventory holding costs by receiving materials precisely when needed for production or sale.
Question 6: What is 'business continuity planning'?
- A strategy for expanding into new markets
- Preparing procedures to maintain operations during and after a disruption (Correct answer)
- An HR process for succession planning
- A method for launching new product lines
Correct answer: Preparing procedures to maintain operations during and after a disruption
Business continuity planning creates systems and procedures to ensure critical business functions continue during disasters, outages, or other disruptions.
Business Services Business Services Operations Management 2
What is 'capacity planning' in operations management?