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Chapter 3 TRUE/FALSE

Business Processes

1. A support process performs necessary, value-added activities of an organization. Answer: False Reference: Business Processes Difficulty: Easy Keywords: support, process, primary 2. Mapping creates a common understanding of process activities, their results, and who performs the steps. Answer: True Reference: Mapping Business Processes Difficulty: Easy Keywords: mapping, process, activity 3. The primary focus of a swim lane process map is to depict flows of objects, information, and money. Answer: False Reference: Mapping Business Processes Difficulty: Easy Keywords: swim lane map, process map, flow 4. In a process map, a circle represents a step or activity in the process. Answer: False Reference: Mapping Business Processes Difficulty: Easy Keywords: map, process, symbol, circle 5. Productivity is measured as the ratio of inputs to outputs. Answer: False Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: productivity, output, input 6. A laundry tracks clean linen output in pounds and their inputs of gas, water, electricity, and labor. A productivity measure incorporating all of these inputs is a multifactor measure. Answer: True Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: productivity, output, input, multifactor 7. A person that fails to meet output standards could still have an efficiency measurement of more than 100%. Answer: False Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: efficiency, output, standard AACSB: Reflective Thinking, Analytic Skills

8. Cycle time is the total time needed to complete a business process. Answer: True Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: cycle time, cycle 9. While efficiency can exceed 100%, percent value-added time has a maximum of 100%. Answer: True Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: efficiency, percent, value-added AACSB: Analytic Skills 10. Your university sends a contingent of top-ranking officials to Las Vegas hotels to study ways to improve dormitory living conditions. This is an example of process benchmarking. Answer: True Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: process, benchmarking AACSB: Reflective Thinking 11. When McDonalds studies the drive through operations of Burger King, they are engaging in competitive benchmarking. Answer: True Reference: Managing and Improving Business Processes Difficulty: Easy Keywords: competitive, benchmarking AACSB: Reflective Thinking 12. A Six Sigma Champion is a full time Six Sigma expert that is responsible for training, mentor, deployment, and results. Answer: False Reference: Managing and Improving Business Processes Difficulty: Easy Keywords: six sigma, champion, master black belt 13. A check sheet, also called an Ishikawa diagram, is used to record how frequently a certain event occurs. Answer: False Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: check sheet, Ishikawa 14. The Five Whys can be used during all three phases of construction of a Pareto chart. Answer: False Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: five whys, Pareto

15. The magnitude of changes created by a continuous improvement program is generally larger than those created by a business process reengineering program. Answer: False Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: reengineering, business, process, continuous, improvement 16. Level 1 of the SCOR model is organized around the five core management processes: plan, source, make, deliver, and return. Answer: True Reference: The Supply-Chain Operations Reference (SCOR) Model Difficulty: Easy Keywords: SCOR, supply chain 17. One reason the SCOR model is widely accepted is its consistency. It mandates the same information and physical flows for all products, regardless of the degree of customization. Answer: False Reference: The Supply-Chain Operations Reference (SCOR) Model Difficulty: Moderate Keywords: SCOR, supply chain MULTIPLE CHOICE 18. The majority of the total operating budget for most organizations is: a. engineering costs. b. advertising costs. c. supply chain costs. d. equipment maintenance costs. Answer: c Reference: Introduction Difficulty: Moderate Keywords: supply chain, cost 19. A set of logically related tasks or activities performed to achieve a defined business outcome is a: a. process. b. primary process. c. support process. d. development process. Answer: a Reference: Business Processes Difficulty: Easy Keywords: process, task, activity

20. A set of tasks or activities that addresses the main value-added activities of an organization is a: a. process. b. primary process. c. support process. d. development process. Answer: b Reference: Business Processes Difficulty: Easy Keywords: process, primary, primary process 21. Which of the following statements best describes current thinking regarding processes? a. If companies concentrate on how functional areas like marketing, finance, and operations are organized, then everything will be fine. b. Managing functional areas like marketing, finance, and operations is essentially the same thing as managing what a business does. c. If the individual functional strategies of marketing, finance, and accounting are aligned with the overall business strategy, then everything will be fine. d. Developing superior business processes requires a cross-functional and crossorganizational perspective. Answer: d Reference: Business Processes Difficulty: Moderate Keywords: process, cross-functional, cross-organizational 22. Mapping does NOT: a. create a common understanding of the content of a process. b. define the boundaries of a process. c. provide a detailed view of all elements external to the process. d. provide a baseline against which to measure the impact of improvement efforts. Answer: c Reference: Mapping Business Processes Difficulty: Moderate Keywords: process, mapping, process map 23. An arrow in a process map represents a: a. move activity. b. start or finish point. c. delay. d. creation of a document. Answer: a Reference: Mapping Business Processes Difficulty: Moderate Keywords: map, relationship map

24. Which tool should be used to track the movement of a customers complaint from one department to the next until it is resolved? a. Process map. b. Swim lane map. c. Entity map. d. Data flow map. Answer: b Reference: Mapping Business Processes Difficulty: Moderate Keywords: map, swim lane map 25. A car wash services 200 customers in a 4 hour span on a lovely Saturday afternoon. The car wash employs 5 washers at $6 per hour. An appropriate measure of productivity is: a. 200 cars/hour b. 0.6 $/car c. 8.3 cars/$ d. 1.7 cars/$ Answer: d Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: productivity, single-factor AACSB: Analytic Skills 26. A car wash services 200 customers in an hour on a lovely Saturday afternoon. The car wash employs 5 washers at $6 per hour and uses $50 of water and $5 of electricity per hour. An appropriate measure of productivity is: a. 80% b. 2.35 cars/$ c. 8 cars/$ d. 0.425 $/car Answer: b Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: productivity, multifactor AACSB: Analytic Skills 27. A professor is expected to cover 16 chapters in an operations management text each semester. One semester the professor dismisses class 30 minutes early every Monday and Friday and is able to cover only 12 chapters. What is the professors efficiency? a. 75% b. 4 c. 133% d. -4 Answer: a Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: efficiency, standard, actual AACSB: Analytic Skills

28. A maintenance worker maintains an alibi sheet of all work activities performed in an 8 hour shift. If the work standard is such that 90% efficiency is expected, what is the actual amount of time that should be documented? a. 8.9 hours b. 111% c. 7.2 hours d. 0.8 hours Answer: c Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: efficiency, standard, actual AACSB: Analytic Skills 29. It takes one day for Peter Gibbons to complete a TPS report and attach the cover sheet. During that day, Peter spends about 15 minutes a day performing actual work and the other 7 hours and 45 minutes spacing out. Which of the following statements is correct? a. Peters cycle time is 7 hours and 30 minutes. b. Peters efficiency is 25%. c. Peters productivity is 8 hours per TPS report. d. Peters percent value added time is just over 3%. Answer: d Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: value, value added time AACSB: Analytic Skills 30. Which of the following approaches to process improvement could be described as competitive benchmarking? a. Employees at XEROX ignore the way they have always processed customer orders and design an entirely new way to do so. b. Employees at XEROX visit GM to pick up ideas on processing customer orders. c. Employees at XEROX purchase a Canon copier and take it apart to get design ideas for their next generation of copiers. d. Employees at XEROX take classes in quality improvement and make small, incremental changes to their order filling processes. Answer: c Reference: Managing and Improving Business Processes Difficulty: Easy Keywords: competitive, benchmarking AACSB: Reflective Thinking 31. In statistical terms, a process that achieves Six Sigma quality will generate about: a. Zero defects per million opportunities. b. Six defects per million opportunities. c. Three defects per million opportunities. d. Thirty-four defects per million opportunities. Answer: c Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: Six Sigma, statistical, defects, ppm

32. Green Belts have: a. More Six Sigma training than Black belts but less Six Sigma training than Champions. b. More Six Sigma training than Champions but less Six Sigma training than Team Members. c. More Six Sigma training than Black belts but less Six Sigma training than Master Black Belts. d. More Six Sigma training than Team Members but less Six Sigma training than Black Belts. Answer: d Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: Six Sigma, green belt 33. Which of these steps is NOT part of the Six Sigma process sequence? a. Design b. Measure c. Analyze d. Improve Answer: a Reference: Managing and Improving Business Processes Difficulty: Easy Keywords: Six Sigma, DMAIC 34. When constructing a fishbone diagram, brainstorming takes place during the: a. closed phase. b. narrow phase. c. wide phase. d. open phase. Answer: d Reference: Managing and Improving Business Processes Difficulty: Easy Keywords: open, root cause, fishbone, brainstorming 35. Which two continuous improvement tools are most similar in appearance? a. scatter plot and check sheet b. Pareto chart and histogram c. histogram and fishbone diagram d. check sheet and fishbone diagram Answer: b Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: Pareto, histogram, tool AACSB: Reflective Thinking

36. Which of these continuous improvement tools would be best suited for showing all of the steps required to change your major to operations management? a. process map b. cause-and-effect diagram c. Pareto chart d. scatter plot Answer: a Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: process map, tool, continuous improvement AACSB: Reflective Thinking 37. The procedure of rethinking and radical redesign of business processes to achieve dramatic organizational improvements is called: a. competitive benchmarking. b. continuous improvement. c. process benchmarking. d. business process reengineering. Answer: d Reference: Managing and Improving Business Processes Difficulty: Easy Keywords: business, process, reengineering 38. Which of these SCOR model flows moves in the opposite direction from the others? a. Plan b. Return c. Source d. Make Answer: b Reference: The Supply-Chain Operations Reference (SCOR) Model Difficulty: Easy Keywords: SCOR, return, supply chain AACSB: Reflective Thinking 39. Which of these statements about the SCOR model is best? a. The SCOR model consists of four levels that describe supply chain processes in increasing detail. b. The core management processes of the model are Source, Collaborate, Operations, and Return. c. The model makes provisions for different levels of customization. d. The process types detailed in level one are Planning, Execution, and Enable. Answer: c Reference: The Supply-Chain Operations Reference (SCOR) Model Difficulty: Moderate Keywords: SCOR, return, supply chain

FILL IN THE BLANK 40. A __________ process performs the main, value-added activities of an organization. Answer: primary Reference: Business Processes Difficulty: Easy Keywords: primary, process 41. A process that seeks to improve the performance of main value-added and necessary, non value-added activities is a __________ process. Answer: development Reference: Business Processes Difficulty: Easy Keywords: development, process 42. When an employee team develops a process map, they should document the process __________. Answer: as it is Reference: Mapping Business Processes Difficulty: Moderate Keywords: process map, document 43. __________ is a measure of process performance that is a ratio of output to inputs. Answer: Multifactor productivity Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: productivity, ratio, multifactor 44. The elapsed time needed to complete a business process is called __________. Answer: cycle time Reference: Managing and Improving Business Processes Difficulty: Easy Keywords: time cycle time 45. A(n) __________ is used to record how frequently a certain event occurs. Answer: check sheet Reference: Managing and Improving Business Processes Difficulty: Easy Keywords: check, sheet, tool 46. When an organization compares their processes to those of another firm outside their industry, they are engaging in __________. Answer: process benchmarking Reference: Managing and Improving Business Processes Difficulty: Easy Keywords: process benchmarking

47. __________ is a process improvement philosophy that results in small, incremental changes while __________ is a process improvement philosophy that results in dramatic organizational changes. Answer: Continuous improvement, business process reengineering Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: Continuous, improvement, business, process, reengineering, BPR 48. Level two of the SCOR model divides SCM activities into what are referred to as __________. Answer: process types Reference: The Supply-Chain Operations Reference (SCOR) Model Difficulty: Moderate Keywords: SCOR, process types, supply 49. __________ is the SCOR model process that addresses the movement of defective product from the customer Answer: Return Reference: The Supply-Chain Operations Reference (SCOR) Model Difficulty: Moderate Keywords: SCOR, process types, return ESSAY 50. Describe the three types of processes and the relationships between them. Answer: The three types of processes are primary, support, and development. A primary process is one that addresses the main value-added activities of an organization. A process is value-added if a customer is willing to pay for the resulting outputs. A support process is one that performs necessary, albeit not value-added, activities. A development process is one that seeks to improve the performance of primary and support processes. Without development process, a firm will become frozen at the point in time that development ceased. Customers go to a firm and reap the benefits of their primary processes and are often unaware of the firms support and development processes. The firm must be keenly aware of all three, and apply development processes to primary and support processes in order to remain competitive and stay in business. Reference: Business Processes Difficulty: Easy Keywords: primary, support, development, process AACSB: Reflective Thinking

51. What is the general procedure for developing a swim lane process map? Answer: The steps for developing a swim lane process map are similar to those for a more generic process map, with the exception that the symbols are aligned with different entities in the organization (or process) that are responsible at each step. The steps are as follows: The entity that will serve as the focal point is identified, this can be a tangible good, a customer, a customer order, or any other entity of interest. Clear boundary, starting, and ending points are identified. The process map is developed by thinking about the elemental process steps that are performed. There is a tendency to use too much detail, so it is often helpful to take a macro view and then develop cascading levels of greater detail for portions of the process that are problematic. These process steps can be aligned with rows (or columns) that represent the organizations entities/departments to illustrate the handoffs that occur throughout the process. It is easier if the actual map is developed in two or three steps; first the macro view, then the Boxes representing potential participants are drawn on a blank sheet of paper. The boxes are linked using arrows that indicate the type of flow and its direction Any boxes that do not have any arrows going in or out of them are removed from the map. New boxes may be added as needed. After arrows are roughed out on the first copy of the map, the map may be redrawn to provide a good overview of the relationships between the various process participants. Reference: Mapping Business Processes Difficulty: Moderate Keywords: relationship map, relationship, process, mapping 52. Lisa manages customer service representatives in a call center. The centers computer system tracks a number of metrics for each employee including the total number of customer calls they complete, the amount of time the service representative spends talking to customers, and the total time the service representative was clocked in each day. The work standard developed by the call center is to complete 150 calls in an 8 hour shift. Answer the following questions using the information provided in the table. a. What is the productivity of employee J? b. What is the efficiency of employee K? c. What is the percent value added time for employee M? Employee J K M # Calls Completed 165 140 135 Total Time on Calls 8 hours 7 hours 30 minutes 7 hours 20 minutes Total Time Clocked In 8 hours 8 hours 8 hours

Answer: Employee Js productivity = 165 calls/8 hours = 20.625 calls/hour Employee Ks efficiency = 140/150 = 93.3% Employee Ms percent value added time = 7.333 hours/8 hours = 91.67% Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: productivity, efficiency, value-added, time AACSB: Analytic Skills

53. What is benchmarking and how do the two types differ? Answer: Benchmarking is the process of identifying, understanding, and adapting outstanding practices from within the same organization or from other businesses to help improve performance. Competitive benchmarking requires the comparison of processes with those of a direct competitor. Process benchmarking requires the comparison of processes from a non-competitor; either an outside organization or another internal function. Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: benchmarking, competitive, process 54. Describe the process of root cause analysis and include in your description the tools that it uses Answer: Root cause analysis is a process by which organizations brainstorm about possible causes of problems and then, through structured analysis and data-gathering efforts, gradually narrow the focus to a few root causes. The three phases of root cause analysis are the open, narrow and closed phases. The open phase is devoted to brainstorming, where all team members make suggestions, no matter how wild. Teams use a cause-and-effect diagram to organize their thoughts, often around the Five M categories of manpower, methods, materials, machines, measurements. The second phase of analysis is the narrow phase where the brainstormed list is reduced to a manageable number using the Five Whys. In the closed phase of analysis, the team validates the suspected root causes through the analysis of available data. The data might be collected using a check sheet and analyzed with simple graphical tools like a scatter plot, histogram, bar graph, Pareto chart, or a run chart. Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: root cause, fishbone, cause, effect, analysis 55. Describe continuous improvement and business process reengineering and compare their advantages and disadvantages in relation to each other. Answer: Continuous improvement is the philosophy that small, incremental improvements can add up to significant performance improvements over time. Business process reengineering (BPR) is a procedure that involves the fundamental rethinking and radical redesign of business processes to achieve dramatic organizational improvements in such critical measures of performance as cost, quality, service, and speed. The discrepancy between the two is the magnitude of change in existing processes. Continuous improvement uses the current process as a starting point and allows for an easy transition to the next stage, which is more comfortable for many people and could be sufficient if the existing process is performing well. If a company is suffering due to inadequacy of a process, then continuous improvement may not be fast enough to permit survival in the market. BPR would allow for a quantum leap in process performance as long as all components of an organization are prepared to accept the process changes required. Reference: Managing and Improving Business Processes Difficulty: Moderate Keywords: continuous improvement, business process reengineering, BPR AACSB: Reflective Thinking

56. Briefly describe the five core management processes that comprise Level 1 of the SCOR model. Answer: The five core management processes are plan, source, make deliver, and return. Planning describes processes that balance aggregate resources with requirements, i.e., the ability to match supply with demand. Sourcing processes procure goods and services to meet planned or actual demand. The make process transforms product to a finished state to meet planned or actual demand. Delivery processes provide finished goods and services to meet planned or actual demand and include order management, logistics, and distribution activities. Return processes allow the receipt of products that are returned for any reason, whether they are being returned from customer to primary firm or from the firm to one of its suppliers. Reference: The Supply Chain Operations Reference (SCOR) Model Difficulty: Moderate Keywords: SCOR, SCM

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