MBA Operations Management 3

Question 1

What is 'make-or-buy' analysis in operations?

Accepted Answer

A decision framework for determining whether to produce something internally or purchase it externally

Answer

Make-or-buy analysis compares the costs and strategic implications of producing a component or service in-house versus outsourcing it to determine the most efficient approach.

Question 2

What is 'demand forecasting' and why is it critical in operations?

Accepted Answer

Estimating future customer demand to plan production, inventory, and resource allocation effectively

Answer

Demand forecasting uses historical data, market trends, and statistical models to predict future sales, enabling operations to align capacity and inventory with expected demand.

Question 3

What is the 'economic order quantity' (EOQ) model used to determine?

Accepted Answer

The optimal order quantity that minimizes total inventory holding and ordering costs

Answer

EOQ calculates the order quantity that minimizes the sum of inventory holding costs and ordering costs, balancing these two opposing cost drivers.

Question 4

What does 'continuous improvement' (Kaizen) emphasize in Japanese management philosophy?

Accepted Answer

Making small, incremental, ongoing improvements involving all employees at every level

Answer

Kaizen (Japanese for 'change for better') emphasizes small, continuous improvements made by all employees over time, accumulating to significant performance gains.

Question 5

What is 'aggregate planning' in operations management?

Accepted Answer

Medium-term planning to match production capacity with anticipated demand across product families

Answer

Aggregate planning determines optimal production rates, workforce levels, and inventory policies over a medium-term horizon (typically 3–18 months) to meet projected demand cost-effectively.

MBA - Degree Master of Business Administration Practice Test

MBA - Degree Master of Business Administration Practice Test

MBA Operations Management 3