A construction company produces furnished pre-fabricated manufactured homes. The production manager has discovered the following challenges within one of the facilities:
* Production quantities are low and only a small number of homes are built efficiently.
* The facility space allows for low handling of materials.
* There is limited space available for employees to operate.
Which hybrid layout should be used to address the company's needs?
The appropriate hybrid layout is group technology.
Group technology combines the efficiency of product layouts with the flexibility of process layouts by grouping similar products into families and arranging workstations into cells. Each cell is designed to handle a specific family of products from start to finish.
In the case of prefabricated homes:
Production volumes are low
Product designs share similarities
Space is constrained
Material handling must be minimized
Group technology reduces:
Movement of materials
Setup times
Work-in-process inventory
Congestion in limited spaces
The other options are not layouts:
Process performance metrics are measurement tools
Manufacturing technology refers broadly to automation
Statistical reduction control is not a recognized layout concept
Operations Management promotes group technology as an effective solution for low-volume, moderate-variety environments, especially where space efficiency and flow improvement are critical.
Which function does marketing play in a just-in-time (JIT) organization?
In a just-in-time (JIT) organization, marketing focuses on customer-driven quality.
Marketing provides critical input on:
Customer expectations
Demand patterns
Product features
Service requirements
This information allows operations to design processes that meet actual customer needs rather than internal assumptions. JIT requires precise alignment between demand and production, and marketing ensures that quality is defined externally by customers.
The other options confuse marketing's role with operational execution:
Inventory flow is managed by operations
Assembly synchronization is a production function
Producer-driven quality contradicts TQM principles
Operations Management stresses that JIT succeeds only when marketing and operations are tightly integrated, with marketing acting as the voice of the customer.
A company suddenly finds demand has increased to 140% of its previous capacity. It has been able to hire only a fraction of the employees previously laid off, and a warehouse fire destroyed 80% of its inventory.
Which two options does the company have to rapidly meet the new demand?
Choose 2 answers
When demand rises suddenly to 140% of existing capacity, the firm must rely on short-term, flexible capacity options to respond quickly.
The two appropriate options are:
Hiring temporary workers
Subcontracting a portion of production capacity
Temporary workers can be deployed rapidly with minimal onboarding time, allowing the firm to increase output without long-term labor commitments. This option is especially effective when the demand surge may be temporary or uncertain.
Subcontracting provides immediate access to external capacity without requiring capital investment. It allows the firm to meet demand while avoiding the risks associated with permanent expansion.
The other options are not viable in the short term:
Building new facilities is capital-intensive and slow
Hiring and training full-time employees requires time and long-term commitment
Operations Management distinguishes capacity-based options into short-term (temporary labor, overtime, subcontracting) and long-term (facilities, permanent workforce). In crisis situations, speed and flexibility dominate decision-making.
What is one advantage of a periodic review system?
A key advantage of a periodic review inventory system is that all items are reviewed at the same time interval.
In a periodic review system:
Inventory levels are checked at fixed intervals (e.g., weekly, monthly)
Orders are placed to raise inventory to a target level
Multiple items can be ordered together
This approach simplifies administration and reduces ordering costs, making it especially suitable for:
Retail environments
Low-value or slow-moving items
Situations where continuous monitoring is impractical
The other options describe continuous review systems:
Individual item handling
Real-time inventory updates
Lower safety stock requirements
Operations Management recognizes periodic review as a trade-off between control and simplicity. While it may require higher safety stock, it offers operational efficiency and cost savings in many contexts.
Which two areas should managers consider in order to adapt to the business dynamics affecting their company?
Choose 2 answers
Managers must consider control over internal operations and influence and leverage over suppliers to adapt effectively to changing business dynamics.
Internal operational control determines how quickly a firm can:
Adjust capacity
Improve quality
Reduce cost
Respond to demand changes
Supplier influence is equally critical in modern supply chains. Strong supplier relationships improve:
Reliability
Cost stability
Innovation
Responsiveness
Operations Management emphasizes that competitiveness increasingly depends on supply chain coordination, not isolated firm performance.
The other options are less relevant:
Firms rarely influence future legislation
Advertising costs relate to marketing strategy, not operational adaptability
Thus, effective supply chain management requires both internal excellence and external collaboration.
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