MBA Operations Management 1 — Questions and Answers
Question 1: What is the primary objective of supply chain management?
- Maximizing the number of suppliers
- Coordinating the flow of goods, information, and finances to deliver value to the end customer efficiently (Correct answer)
- Reducing the workforce in logistics
- Increasing inventory levels at all stages
Correct answer: Coordinating the flow of goods, information, and finances to deliver value to the end customer efficiently
Supply chain management coordinates all activities from raw material sourcing through production and delivery to optimize cost, speed, and customer satisfaction.
Question 2: What does 'just-in-time' (JIT) inventory management aim to achieve?
- Maximizing safety stock levels
- Receiving goods only as they are needed in production to minimize inventory costs (Correct answer)
- Stockpiling raw materials for six months in advance
- Eliminating all supplier relationships
Correct answer: Receiving goods only as they are needed in production to minimize inventory costs
JIT minimizes inventory carrying costs by scheduling deliveries to arrive precisely when needed in the production process, reducing waste and storage requirements.
Question 3: What is 'Six Sigma' in operations management?
- A method to increase production speed by 6x
- A data-driven methodology to reduce defects and process variation to near-perfect quality (Correct answer)
- A six-step planning framework for new product launches
- A labor scheduling system for shift workers
Correct answer: A data-driven methodology to reduce defects and process variation to near-perfect quality
Six Sigma uses statistical tools and the DMAIC process (Define, Measure, Analyze, Improve, Control) to reduce defects to fewer than 3.4 per million opportunities.
Question 4: What is 'capacity planning' in operations management?
- Designing the physical layout of a factory floor
- Determining the production capacity needed to meet future demand (Correct answer)
- Scheduling employee work shifts and breaks
- Calculating the budget for raw materials
Correct answer: Determining the production capacity needed to meet future demand
Capacity planning ensures a business has sufficient production capacity to meet anticipated demand while avoiding costly overcapacity or lost sales from undercapacity.
Question 5: What is the 'bullwhip effect' in supply chains?
- A strategy to reduce lead times progressively
- Increasing variability in orders as you move upstream in the supply chain, amplifying demand fluctuations (Correct answer)
- A ripple effect of cost reductions across supply chain tiers
- A quality control problem caused by inconsistent supplier standards
Correct answer: Increasing variability in orders as you move upstream in the supply chain, amplifying demand fluctuations
The bullwhip effect occurs when small fluctuations in end-consumer demand get amplified at each upstream level of the supply chain, causing erratic ordering patterns.
Question 6: What is 'total quality management' (TQM)?
- A department responsible for final product inspection
- A company-wide philosophy of continuous improvement involving all employees in quality initiatives (Correct answer)
- A statistical sampling method for defect detection
- A customer return and refund management system
Correct answer: A company-wide philosophy of continuous improvement involving all employees in quality initiatives
TQM is an organization-wide approach to improving quality by engaging every employee in continuous process improvement and customer satisfaction efforts.
MBA Operations Management 1
What is the primary objective of supply chain management?