CHAPTER 1:

The correct answer for each question is indicated by a .

1 CORRECT
Services reside in manufacturing firms.

A)True

B)False

2 CORRECT
The ski lift at a winter resort would be considered part of the supporting facility.

A)True

B)False

3
INCORRECT Economies tend to develop from agricultural-based to service-based to
production-based.

A)True

B)False

4 CORRECT
Division of labor is the hallmark of the industrial society.

A)True

B)False

5 CORRECT
Service-dominant logic is a view that all economies are service economies in
which value is always co-created in the exchange of doing something for another
party.
 A)True

B)False

6
INCORRECT Based on the service process matrix, a hotel is an example of a mass service.

A)True

B)False

7
INCORRECT _______ is not an element of the service package?

A)Information

B)Implicit Service

C)Facilitating goods

D)Price

8
INCORRECT In which stage of economic activity do services first appear?

A)Secondary

B)Tertiary

C)Quaternary

D)Quinary
9 CORRECT
_________ is not a distinctive characteristic of service operations.

A)Labor intensiveness

B)Simultaneity

C)Perishability

D)Heterogeneity

10
INCORRECT Service-dominant logic has 10 foundation premises; _______ is not one of them.

A)service is the fundamental basis of exchange

B)goods are distribution mechanisms for service provision

C)the enterprise delivers value

D)all economic and social actors are resource integrators

11
INCORRECT Which of the following is not a characteristic of an experience economy?

A)Buyer considered as guest.

B)The function is staged.

C)The seller is a provider.

D)Nature of the service is memorable.

12
CORRECT Which of the following is not considered one of the four realms of a service
experience?

A)Engagement

B)Education

C)Estheticism

D)Escapism

CHAPTER 2:

The correct answer for each question is indicated by a .

1
INCORRECT An example of employing the 'virtual value chain' is using information to control
inventory.

A)True

B)False

2 CORRECT
The 'strategic service vision' is a framework in the form of questions that need to
be addressed when considering a new service.

A)True

B)False

3
INCORRECT The overall cost leadership segments the market in order to achieve high
returns.
 A)True

B)False

4 CORRECT
A service winner over time often becomes a qualifier.

A)True

B)False

5
INCORRECT Distinctive competence achieved is the ultimate competitive stage that service
firms aspire too.

A)True

B)False

6
INCORRECT SWOT analysis is used at the industry level to determine the competitive
intensity and, therefore, attractiveness of a market.

A)True

B)False

7 CORRECT
Procter & Gamble, with its introduction of the home dry-cleaning kit DRYEL, is
attempting to compete with dry cleaners by:

A)Introducing a product substitute

B)Decreasing customer loyalty

 C)Lowering exit barriers

D)Raising entry barriers

8 CORRECT
A service that incorporates self-service is attempting to compete using a ______
strategy.

A)overall cost leadership

B)differentiation

C)focus

D)price

9
INCORRECT ________ is not one of Porter's five forces.

A)Threat of substitutes

B)Potential new entrants

C)Opportunity

D)Bargaining power of customers

10
INCORRECT Which of the following is not a method by which a service provider can use
information to increase revenue?

A)Yield Management

B)Expert Systems
 C)Point-of-Sale

D)Data Envelopment Analysis

11
INCORRECT Which of the following is not a use of information to categorize customers?

A)Routing

B)Sharing

C)Data mining

D)Coding

12
CORRECT In which of the following competitive stages is operations seen as reactive at
best?

A)Available for service

B)Journeyman

C)Distinctive competence achieved

D)World-class service delivery

CHAPTER 3 :

The correct answer for each question is indicated by a .

1
INCORRECT The 'line' that separates the front office from the back office in a service
blueprint is called the 'horizon line'.

A)True
 B)False

2 CORRECT
The Taxonomy of Service Processes does not have an example service that
simultaneously is highly divergent, people processing, and indirect customer
contact.

A)True

B)False

3 CORRECT
'Self-service', 'customer as coproducer' and 'customer empowerment' can be
synonymous.

A)True

B)False

4
INCORRECT Intellectual property rights are exclusive rights over patents.

A)True

B)False

5 CORRECT
In the NSD Process Cycle, analysis follows development and precedes design.

A)True

B)False
6
INCORRECT Delta Airlines introduction of ATM-like boarding pass kiosks at airport terminals is
an example of a service line extension.

A)True

B)False

7
INCORRECT Which of the following does not describe one or more aspects of the new service
development process?

A)Innovations can be described as 'radical' or 'incremental.'

Ideas for services can arise from customers, employees or managers and can
B)be precipitated by changes in information, demographics or technology.

Several factors, including the need to train and a natural resistance to

C)change, hamper the adoption of many service innovations.

Due to the impersonal nature of technology, attempts to use automation in

D)the back office normally fail.

8
INCORRECT Which of the following is not a benefit derived from developing a service
blueprint?

Aids in identifying points of interest in the service, such as where customers

A)will wait or where mistakes may be made.

B)Aids in forecasting new service demand.

C)Transforms an idea into a more physical reality.

Clearly separates the front office from the back office, showing where
D)particular care must be taken in order to exceed (and shape) customer
expectations.

9 CORRECT
____________ is not a category of intellectual property.

A)An invention for personal use

 B)A trademark

C)A trade secret

D)Industrial design rights

10
INCORRECT Which of the following is the greatest challenge to adopting new technology in
services?

A)customer acceptance

B)need for standardization

C)imitation by competitors

D)retraining employees

11
INCORRECT In order to successfully implement a production-line approach for a service, that
service must be standardized. The role of the manager is to

A)create clear division of labor.

B)limit discretionary actions of the personnel.

C)substitute technology for people.

D)All of the above

12
CORRECT The structural design elements include all but one of the following.

A)Service encounter
 B)Delivery system

C)Location

D)Capacity planning

CHAPTER 4

The correct answer for each question is indicated by a .

1
INCORRECT In a technology-assisted service encounter only the customer has access to the
technology.

A)True

B)False

2
INCORRECT The 'moment of truth' refers to the moment when the customer pays for the
service.

A)True

B)False

3 CORRECT
The amount of control exerted by each member of the service triad is a function
of the nature of the service provided.

A)True

B)False

4 CORRECT
Corporate culture influences the actions and perceptions of both employees and
customers.
 A)True

B)False

5
INCORRECT There is often a wide discrepancy between the quality that a customer perceives
and the quality that an employee believes is provided.

A)True

B)False

6 CORRECT
An underlying belief behind employee empowerment is that people want to do
good work, and will do so if given the opportunity.

A)True

B)False

7
INCORRECT Getting a manicure is primarily a _________ dominated encounter.

A)service organization

B)contact-personnel

C)customer

D)A and B

8 CORRECT
When screening front line employees, the purpose of the situational vignette is to
determine
 an applicant's instincts, interpersonal capabilities, common sense and
A)judgment.

an applicant's ability to use good judgment in resolving a challenge using

B)past experience.

C)how well an applicant handles stress.

D)whether or not the applicant is being honest.

9
INCORRECT Which of the following is not an unrealistic customer expectation?

A)Demands against policies

B)Breaking societal norms

C)Being acknowledged

D)Drunkenness

10
INCORRECT The idea behind the service profit chain is that

higher profitability leads to more productive employees, which lead to higher

A)service quality.

higher service quality leads to happier employees, which lead to higher

B)profitability.

satisfied customers lead to happy employees, which lead to higher service

C)quality.

happy employees lead to higher service value, which leads to satisfied

D)customers, which lead to higher profitability.

11
CORRECT The ________ customer is often the least loyal.
 A)economizing

B)ethical

C)personalizing

D)convenience

12
INCORRECT In the technology-_______ service encounter both the customer and service
provider have access to the same technology.

A)free

B)assisted

C)facilitated

D)mediated

CHAPTER 5

The correct answer for each question is indicated by a .

1 CORRECT
The wide aisles, bright lighting, and merchandise display at Lowe's encourages
browsing unlike the warehouse feel of its competitor Home Depot that seem
more macho.

A)True

B)False

2 CORRECT
The aspects of the environment that affect our senses are called ambient
conditions.
 A)True

B)False

3
INCORRECT A process layout describes an inflexible sequence of steps or operations that all
customers must experience.

A)True

B)False

4 CORRECT
The servicescape captures the environmental dimensions of a facility that
influence the behavior of both customers and employees.

A)True

B)False

5
INCORRECT The bottleneck of a process is the operation with the shortest cycle time.

A)True

B)False

6 CORRECT
Capacity utilization, particularly of individual operations, is a dangerous
management performance metric.

A)True

B)False
7
INCORRECT One of the following is not a measure of process capability.

A)Capacity

B)Throughput time

C)Bottleneck

D)Rush order flow time

8
INCORRECT The "servicescape" of a facility should be designed with an image and feel that is
consistent with the service concept because:

A)Competition has set the standard for how locations should "feel."

Customers and employees are influenced on a deep, emotional level by their

B)surroundings.

C)Customers are always looking for something new and exciting.

D)None of the above

9 CORRECT
Signs and symbols in a service facility are helpful because they:

A)Orient customers and promote acceptable behavior

B)Cause customers to spend more money per visit

C)Reduce anxiety associated with waiting

D)Cause employees to be more helpful

10
CORRECT When attempting to halve the cycle time of a service, doubling the capacity of
the bottleneck is often insufficient because:

A)The bottleneck simply moves from one service activity to another.

B)The relationship between the cycle time and the bottleneck is not linear.

C)There is no direct relationship between the bottleneck and the cycle time.

D)Doubling the capacity of a bottleneck is rarely feasible.

11
INCORRECT Operations sequence analysis is a method used to determine the

A)lowest possible cycle time for a service.

B)sequence of steps in a service.

C)appropriate layout for departments that provide related services.

D)None of the above

12
INCORRECT A ________ is an example of a service facility layout in which minimizing total
travel-distance is not an important consideration.

A)convenience store

B)supermarket

C)post office

D)school

CHAPTER 6
The correct answer for each question is indicated by a .

1
INCORRECT A process is said to be in control when all the variation that is noticed can be
assigned to specific causes.

A)True

B)False

2
INCORRECT When implementing an unconditional service guarantee, a company should make
the guarantee difficult to invoke so that few customers will demand
compensation.

A)True

B)False

3 CORRECT
'GAPS' refer to differences in perceptions, expectations, goals and understanding
among management, employees and customers.

A)True

B)False

4 CORRECT
A walk-through audit is a service delivery process-oriented survey given to
customers and mangers to evaluate the perception of the customer experience.

A)True

B)False

5 CORRECT
Service recovery is most successful when accomplished by empowered frontline
employees.
 A)True

B)False

6
INCORRECT Quality function deployment is a service design tool to translate customer
expectations into measurable conformance specifications.

A)True

B)False

7
INCORRECT According to customers, __________ is the most important dimension of service
quality?

A)prompt service

B)courtesy of employees

C)the attractiveness of the service facility

D)the dependability and accuracy of the service

8
INCORRECT Companies often "manage the evidence". For example, a motel will place a
plastic liner on the toilet seat to show that it has been cleaned. Which 'GAP' is
this activity attempting to close?

A)GAP 5: difference between what customers expect and what they perceive

GAP 4: difference between what is provided and what customers think is

B)provided

GAP 3: difference between what management wants to provide and what is

C)actually provided
 GAP 1: difference between what customers want and what management
D)thinks they want

9 CORRECT
There are four basic approaches to service recovery; _________ is not one of
them.

A)refund with apology

B)early intervention

C)substitute service

D)systematic protocol

10
INCORRECT Which category of the 'Cost-Of-Quality' is most closely related with
Shingo's Poka-Yoke?

A)Internal failure costs

B)External failure costs

C)Detection costs

D)Prevention costs

11
INCORRECT Which is not a direct benefit normally associated with an unconditional service
guarantee?

A)Increases customer loyalty.

B)Helps increase quality and quantity of feedback.

C)Increases market share.

 D)Clearly tells employees what is required.

12
INCORRECT The implementation of an effective process control cycle for service systems is
hampered by:

A)The constantly changing environment of services.

B)The intangibility of services making direct measurement difficult.

The heretofore undefined range of what is acceptable and what is

C)unacceptable.

D)The fact that accurate, timely feedback for services is difficult to obtain.

CHAPTER 7

The correct answer for each question is indicated by a .

1
INCORRECT A process capability index is a statistical measure of process variability.

A)True

B)False

2
INCORRECT Six-sigma is a quality improvement program developed by General Electric.

A)True

B)False

3
INCORRECT Several countries require that foreign companies become Malcolm Baldridge
certified.

A)True
 B)False

4 CORRECT
The increased importance of quality is a direct function of increased competition.

A)True

B)False

5 CORRECT
Lean service is an extension of principles pioneered by the Toyota Production
System.

A)True

B)False

6 CORRECT
The PDCA cycle is a general framework that companies can use to increase the
quality of their processes.

A)True

B)False

7
INCORRECT ______________ is not step in the Six-Sigma DMAIC process.

A)Define

B)Measure

C)Act
 D)Control

8
INCORRECT ____________ is not a major category in the fishbone chart.

A)Personnel

B)Process

C)Procedures

D)Customers

9 CORRECT
The main aspect of ISO 9000 is ___________

A)compliance to documented practices.

B)to achieve total customer satisfaction.

C)to achieve and maintain high improvement rate.

D)None of the above

10
INCORRECT ________ promotes exceptional leadership behaviors as a way of life in society.

A)ISO 9000

B)Baldrige Award

C)Six-Sigma
 D)None of the above

11
INCORRECT A Pareto chart

is a visual representation of the process and helps analysts determine

A)potential problem areas.

B)presents data as a frequency distribution in bar chart form.

visually shows the relationship between two variables to aid in identifying

C)correlation.

D)sorts problems by their relative frequency in a descending bar graph.

12
INCORRECT Which of the following is not considered a quality tool for analysis and problem
solving?

A)Control chart

B)Histogram

C)Scatter diagram

D)Poka-yoke

CHAPTER 8

The correct answer for each question is indicated by a .

1 CORRECT
The complete process of locating a service facility moves from the general to the
specific, e.g. first the geographic area is determined, then the neighborhood, and
then the specific site.

A)True

B)False
2 CORRECT
For many services the front and back office need not be co-located.

A)True

B)False

3
INCORRECT In choosing a location, a solution space that has an infinite number of
possibilities is referred to as a 'network'.

A)True

B)False

4 CORRECT
The maximal covering location problem is concerned with maximizing the
population covered within a desired service distance, whereas the location set
covering problem is concerned with the minimum number of facility locations
that will serve all demand points within some specified maximal distance.

A)True

B)False

5
INCORRECT Two service providers (A and B) are equal in every way except that service B is
twice as far away as service A. According to the Huff model, if the appropriate
Lambda ( ) is four, service B is eight times less attractive than service A.

A)True

B)False

6 CORRECT
A facility's location can have an impact on smoothing demand.
 A)True

B)False

7
INCORRECT The first step in choosing a location for a service facility involves answering
which of the following questions?

A)What is the purpose of the service and how will success be measured?

B)How many facilities will be constructed?

Are the potential sites limited due to access, zoning restrictions, labor
C)availability…?

D)All of the above questions must be asked.

8
INCORRECT Which of the following is not an element that is normally considered when
selecting a specific site?

A)Accessibility

B)Previous uses

C)Traffic flow

D)Competition

9
INCORRECT Consider factory outlet centers that are often located upwards of thirty miles
away from an urban center. Compared to neighborhood supermarkets, the
lambda ( ) in the Huff model for these outlet centers is:

A)Greater
 B)Smaller

C)The same

D)Unrelated, since outlet centers and supermarkets are not comparable

10
INCORRECT Which of the following is a tool that is used when attempting to locate more than
one facility?

A)Euclidian metric

B)Huff analysis

C)Metropolitan metric

D)Location set covering

11
INCORRECT The "Food Court" often found at malls is an example of _________.

A)saturation marketing

B)competitive clustering

C)deliberate cannibalization

D)poor planning

12
INCORRECT The Internet has begun to change the rules of location selection. What location
criterion is most important for pure Internet services such as 'eBay?

A)Proximity to customers
 B)Distance from competition

C)Availability of a well-educated workforce

D)Proximity to overnight shipping

CHAPTER 9

The correct answer for each question is indicated by a .

1
For a professional service firm leverage is defined by the ratio of staff per
partner.

A)True

B)False

2 CORRECT
Conversion is a term used to describe value creation.

A)True

B)False

3
INCORRECT Mobile employees normally have less discretion than back-office employees.

A)True

B)False
4
INCORRECT Bi-directional optimization can only occur if the customer's needs are given
higher priority than the company's.

A)True

B)False

5 CORRECT
Cross-training employees is one method of managing perishability.

A)True

B)False

6 CORRECT
Customer-supplier duality referrers to the fact that customers also act as
suppliers in the service delivery process.

A)True

B)False

7 CORRECT
_______ is not a transaction cost incurred in seeking and maintaining an
outsourced relationship.

A)Negotiation

B)Search

C)Bargaining

D)Enforcement
8
INCORRECT In what way do service chains differ from product supply chains?

A)Conversion occurs near the end of the process.

B)Distribution occurs before production.

C)The customer can be a co-producer the production process.

D)All of the above

9
INCORRECT Which of the following is not an example of managing productive capacity?

A)The use of bulletin boards.

B)The use of a FAQ website.

C)Interviewing job candidates using focus groups.

D)Teaching a patient to measure their blood pressure.

10
INCORRECT ______ is the first level of a professional body of knowledge

A)System understanding

B)Advanced skills

C)Self-motivated creativity

D)Cognitive knowledge
11
INCORRECT In which category of the business service taxonomy is it most important that the
vendor be located close to the customer?

A)Employee support services

B)Equipment support services

C)Facilitator services

D)Facility support services

12
INCORRECT Which of the following is not an implication of bi-directional relationships?

A)Service supply relationships are hubs, not chains.

B)Service capacity is analogous to inventory.

C)Customer supplied inputs can vary in quality.

D)None of the above.

CHAPTER 10
he correct answer for each question is indicated by a .

1 CORRECT
Multi-country expansion is easiest when the day-to-day activities of the service
are routine.

A)True

B)False

2
INCORRECT Because of the costs associated with importing customers, companies that
adhere to this strategy normally must pay their employees below the industry
average.
 A)True

B)False

3 CORRECT
Often, service businesses are forced to expand globally in order to keep their
customers that have already done so.

A)True

B)False

4
INCORRECT If a company expands into Spain and decides to remain open during the midday
siesta when all other businesses are closed, it is using a 'beat the clock' strategy.

A)True

B)False

5
INCORRECT The single-mindedness of the franchiser and the franchisee normally leads to an
amicable relationship between the two.

A)True

B)False

6 CORRECT
A diversified network is a term used to describe a business that performs
multiple services at multiple locations.

A)True

B)False
7 CORRECT
The __________ strategy is not a generic international strategy?

A)diversified network

B)global

C)multi-domestic

D)transnational

8
INCORRECT Which of the following is not a benefit derived from purchasing a franchise?

A)Immediate national name recognition

B)Break-even point hit sooner

C)Unlimited freedom

D)Management training

9
INCORRECT Which of the following is not true of today's "borderless" world?

A)Competitors are often needed as partners.

Expansion is driven by companies' needs to increase sales to cover high

B)variable costs.

C)Global expansion smoothes earnings through a geographic 'portfolio effect'.

Customers worldwide are aware of the best services available and expect to
D)be able to purchase them.
10
INCORRECT What is the main reason that franchise contracts are so stringent?

A)Poorly operated facilities are less profitable than well-operated ones.

B)The actions of a single franchisee can hurt the entire chain.

A franchisee's overstating expenses will result in less revenue for the

C)franchiser.

D)Most franchisees are 'mavericks' that want to do everything their own way.

11
INCORRECT Which of the following is not true of global expansion?

Differences in culture dictate that certain elements of a service be eliminated

A)while other elements must be added.

B)Differences in language make employee training difficult.

Host governments may act in ways contradictory to the 'greater global good'
C)in order to protect domestic businesses.

Smaller businesses have an easier time expanding globally than do large

D)businesses.

12
INCORRECT Which of the following is not true of service offshoring?

A)Quality and coordination are often a problem.

Many countries have unemployed but highly educated citizens that can
B)perform the tasks.

Focuses only on those aspects of a service that requires face-to-face

C)interaction.

D)Home office employee morale may suffer.

CHAPTER 11
The correct answer for each question is indicated by a .

1 CORRECT
Managing capacity and demand is important because service capacity is
perishable.

A)True

B)False

2
INCORRECT Smoothing demand involves improving forecasting techniques.

A)True

B)False

3
INCORRECT The use of major sports stadiums for monster truck shows or county fairs is an
example of partitioning demand.

A)True

B)False

4 CORRECT
Strategies for managing customer-induced variability fall into two categories:
accommodation and reduction.

A)True

B)False

5 CORRECT
Yield management is a combination of several demand manipulation strategies,
such as reservations, demand partitioning, and overbooking.
 A)True

B)False

6
INCORRECT A service with a cost of overestimating demand of $10 and a cost of
underestimating demand of $7 would have a critical fractile of 0.7.

A)True

B)False

7
INCORRECT Which of the following is not a way by which services can manipulate demand to
match capacity?

Segmenting customers into distinct groups with different needs, and letting
A)(or forcing) these groups use the service at different times.

B)Offering price incentives at off-peak times.

C)Using reservation systems.

D)Using part-time help.

8
INCORRECT Which of the following is not a way by which services can manipulate capacity to
match demand?

A)Cross training employees to perform different tasks.

Adding complementary services (i.e. a bookstore that opens an espresso

B)bar)

C)Increasing customer participation in the service

D)Sharing resource with competitors.

9
INCORRECT For the overbooking strategy, why is the optimal number of units (i.e. airline
seats, hotel rooms) overbooked not equal to the expected number of no-shows?

Variability in the number of no-shows makes the number difficult to

A)calculate.

B)The costs associated with overbooking and under-booking are not equal.

C)It is illegal to excessively overbook.

Hotels and airlines reserve some spots for important or emergency

D)situations.

10
INCORRECT Even after shift scheduling, services still find themselves overstaffed at times
because

A)costs are determined in dollars, not hours.

B)employees are not working 100% of the time.

C)demand is variable, while shifts are rigid.

D)capacity and demand are not directly related.

11
INCORRECT Which of the following is not a characteristic of a service for which yield
management is appropriate?

A)Ability to segment markets.

B)Ability to sell services in advance.

C)Low marginal sales costs and high marginal capacity change costs.

D)Underdeveloped information systems.

12
INCORRECT Which of the following is not true for the linear programming formulation of the
weekly workshift scheduling with days-off constraint?

A)The number of variables equals the number of constraints.

B)The problem is solved for integer results.

C)Only one optimum solution results.

D)The diagonal for the constraints contains zeros.

CHAPTER 12

The correct answer for each question is indicated by a .

1
INCORRECT The exponential distribution and Poisson distribution differ in that exponential
distribution is concerned with time and Poisson is concerned with people.

A)True

B)False

2
INCORRECT Queuing results when current demand falls below a company's capacity to serve.

A)True

B)False

3 CORRECT
If a service cannot decrease the length of time that a customer must wait, the
service should consider distractions that alter the customer's perceived wait.

A)True
 B)False

4 CORRECT
The true cost of waiting must be measured both from the external customer's
point of view (e.g. anxiety, anger), and from the internal customer's point of
view (e.g. low utilization).

A)True

B)False

5
INCORRECT If a customer intends to eat at a particular restaurant, but turns away when
he/she sees the length of the waiting line, that customer reneged.

A)True

B)False

6 CORRECT
When a customer calls tech support and hears the message "Your call will be
answered by the next available operator", that customer has entered a single
queue with FCFS queue discipline.

A)True

B)False

7
INCORRECT Which of the following is not one of Maister's laws of service?

A)If perceptions exceed expectations, the customer is pleased.

B)First impressions can influence the remainder of the service experience.

 C)If expectations exceed perceptions, the customer is pleased.

D)None of the above.

8
INCORRECT Which of the following is not normally associated with the psychology of waiting?

A)Distractions, however slight, can reduce a customer's sense of being idle.

B)'In-process' waits seem longer than 'pre-process' waits.

Explanations of the cause of the delay can ameliorate anxieties associated

C)with waiting.

The FCFS queue discipline is considered egalitarian because all customers are
D)treated alike.

9
INCORRECT Which of the following is not an advantage of the "single queue'?

A)Social justice is guaranteed.

B)The line appears short.

C)Servers are fully utilized.

D)Avoid waiting behind a demanding customer.

10
INCORRECT Which of the following is not an advantage of the 'multiple queue'?

A)Service delivered can be differentiated.

B)The customer can select his/her server of choice.

 C)Division of labor is possible.

D)The arrangement guarantees fairness.

11
CORRECT Schlotzky's Deli uses a modified 'Take a Number' system. When a meal is
ordered, the customer receives a coaster-sized box that lights up and vibrates
when the order is ready. What drawback of the 'Take a Number' system is this
method attempting to eliminate?

A)The need for the customer to be vigilant.

B)The impersonal nature of the method.

C)The perceived unfairness of the system.

The mental connection that a customer could make between the restaurant
D)and a post office.

12
INCORRECT Which queue discipline is considered static?

A)Preemptive priority rule

B)First-come, first-served rule

C)Shortest processing time rule

D)Round robin rule

CHAPTER 13

The correct answer for each question is indicated by a .

1 CORRECT
The expected time in a system should equal the expected time in queue plus the
expected time in service.
 A)True

B)False

2
INCORRECT For a queuing system to be feasible in the long run, the arrival rate must exceed
the rate of service.

A)True

B)False

3 CORRECT
Only two sources of empirical data are necessary for using queuing models, the
mean arrival rate and the mean service rate.

A)True

B)False

4 CORRECT
Although some service systems may be in a transient mode for a long time,
steady state models can be useful for long-range capacity planning decisions.

A)True

B)False

5
INCORRECT Little's law describes the relationship between the length of a queue and the
probability that a customer will balk.

A)True

B)False
6 CORRECT
Queuing models can be used for a variety of purposes, such as estimating the
probability that a customer will wait more than a certain length of time.

A)True

B)False

7
INCORRECT Which of the following is not a determinant of a service's capacity?

A)Physical facility

B)Free cash flow

C)Number of employees

D)Type and amount of equipment

8
INCORRECT Which of the following is not a reason that strategic capacity planning is difficult
for services?

Services must balance their desire for high utilization with the customer's
A)desire for prompt service.

Since physical capacity is added in discrete units, demand must be

B)forecasted far into the future and money must be invested long before it
generates sufficient revenue.

C)It is often difficult for services to control the demands placed upon them.

There have been no formal models developed that deal with strategic
D)capacity planning issues.

9
INCORRECT Which of the following is a shortcoming of the naïve approach to capacity
planning?
 A)It can be too simplistic to capture the full scope of the process.

B)It does not take into account varying arrival rates.

C)It results in capacity that matches, but does not exceed, demand.

D)All of the above

10
CORRECT Queuing models use an A/B/C notation. What do these variables represent?

distribution of time between arrivals/distribution of service times/number of

A)parallel servers

average time between arrivals/average service time/number of parallel

B)servers

maximum time between arrivals/maximum allowable service time/maximum

C)number of parallel servers

minimum time between arrivals/minimum allowable service time/minimum

D)number of parallel servers

11
INCORRECT Assume that the arrival of airplanes at a one-runway airport is a Poisson
distribution with a mean rate of = 8 planes per hour. The landing time is an
exponential distribution with a mean of 5 minutes per plane. What is the mean
number of planes in the system?

A)1

B)1.33

C)1.67

D)2
12
INCORRECT Theoretically, service capacity must exceed demand, lest queues become
infinitely long. If capacity does not exceed demand, what is likely to happen?

A)Customers will renege or balk, thereby reducing demand.

B)Servers will decrease time spent per customer, thereby increasing capacity.

Servers will eliminate time-consuming portions of their jobs, thereby

C)increasing capacity.

D)All of the above

CHAPTER 14
The correct answer for each question is indicated by a .

1
INCORRECT The Delphi method is a straightforward, inexpensive way to make forecasts.

A)True

B)False

2 CORRECT
Cross-Impact analysis is interested in determining the probability of future
events given the occurrence of earlier, related events.

A)True

B)False

3 CORRECT
The diffusion curve introduced by Dell Computers, uses past absorption rates to
forecast the adoption of a new product that it introduces. This is an example of
a historical analogy.

A)True

B)False
4 CORRECT
Exponential smoothing is an attractive forecasting method because it is based on
the feedback concept found in control theory.

A)True

B)False

5
INCORRECT 'Exponential smoothing' and 'moving average' models are excellent for long-term
forecasting.

A)True

B)False

6 CORRECT
One of the drawbacks of the moving average model is that some past data points
are ignored.

A)True

B)False

7
INCORRECT In the Delphi method a:

group of experts, over the course of multiple rounds, makes short-term

A)forecasts.

B)single expert, over the course of a single round, makes long-term forecasts.

C)single expert, over the course of multiple rounds, makes long-term forecasts.

group of experts, over the course of multiple rounds, makes long-term

D)forecasts.
8
INCORRECT Assume that the regression equation for the amount of weight that males can
bench press is: Y = 60 + 12.5(hours in gym/wk) + 0.18(father's bench press) -
0.29(number of health magazines read/wk). If a male spends 16 hours in the
gym per week, his father could bench press 270 pounds, and he reads 2 health
magazines per week, what is his bench press forecasted to be?

A)248 lbs.

B)292 lbs.

C)308 lbs.

D)309 lbs.

9
INCORRECT The first forecast for a five period moving average would be in the:

A)First period

B)Fourth period

C)Fifth period

D)Sixth period

10
INCORRECT In simple exponential smoothing, the smaller the α the:

A)better the forecast.

B)less weight given to recent data.

C)more weight given to recent data.

D)None of the above

11
INCORRECT In practice, the appropriate α for a company is determined by

A)industry practice.

B)the number of observations in a moving average forecast.

C)minimizing the mean absolute deviation.

D)the volatility of the market.

12
INCORRECT _______ is not a measure of forecast error.

A)Mean Absolute Deviation

B)Mean Squared Error

C)Mean Absolute Percentage Error

D)Mean Forecast Error

CHAPTER 15
The correct answer for each question is indicated by a .

1 CORRECT
Decoupling inventories refers to the buffering effect that inventories have at each
stage of the supply chain.

A)True

B)False
2 CORRECT
The holding (or not holding) of inventory can be used in a speculative nature,
whereby companies can profit from changes in the prices of supplies.

A)True

B)False

3
INCORRECT A supplier's offering of volume discounts does not affect the customer's EOQ.

A)True

B)False

4
INCORRECT A service level of .05 implies that a company holds enough safety stock that it
will stockout only 5% of the time.

A)True

B)False

5
INCORRECT Point-of-Sale (POS) data is crucial for a successful periodic review inventory
control system.

A)True

B)False

6 CORRECT
The familiar "bar code" is being replaced by RFID.

A)True
 B)False

7
INCORRECT How has information technology helped inventory management?

A)Bar codes have simplified continuous review systems.

B)Electronic data interchange has lowered ordering costs.

More accurate sales data has enabled companies to improve forecasting

C)techniques.

D)All of the above

8
INCORRECT _______________ is not an inventory holding cost?

A)Taxes or insurance

B)Opportunity cost of capital

C)Negotiating prices

D)Theft or pilferage

9 CORRECT
Which of the following is not a consideration for designing, implementing and
managing an inventory system?

A)How quickly can decisions concerning inventory levels be made?

B)What is the demand like and how it has been changing?

C)How long will demand for this item last?

 D)What is the average lead time and how variable is it?

10
INCORRECT What should be the EOQ; if demand for bicycles is 500 per year, holding cost is
$5 per month, and it costs $24 each time you place an order?

A)14

B)20

C)49

D)69

11
INCORRECT Assume that you sell gold-plated necklaces at the mall. Your daily demand is
uniform between 0 and 9. If your desired service level is 90%, how many
necklaces should you have in your safety stock?

A)3

B)4

C)5

D)8

12
INCORRECT Which of the following statements about inventory control systems is not true?

For any inventory control system two questions, when to place an order and
A)how much to order, must be answered.

The safety stock for the continuous review system is larger than that for the
B)periodic review system.
 The EOQ for the continuous review system and review period for the periodic
C)review system are directly related.

The order quantity varies for the periodic review system and time between
D)orders varies for the continuous review system.

The correct answer for each question is indicated by a .

1 CORRECT
A work breakdown schedule is a hierarchical tree of tasks required to
achieve objectives.

A)True

B)False

2
INCORRECT Project managers generally have limited interpersonal skills but outstanding
analytical skills.

A)True

B)False

3 CORRECT
A project network can be AOA or AON and is a visual tool used to present
the sequence of activities of a project.

A)True

B)False

4
INCORRECT The fact that PERT charts are 'acyclic' means that it is possible to arrive at
any network node by following the arrows stemming from the start node.

A)True
 B)False

5 CORRECT
The Earned Value Chart is a graphical representation of the time, cost and
schedule of a project as compared to its baseline.

A)True

B)False

6 CORRECT
Excluding the 'start' and 'end' nodes, all nodes on the critical path have
immediate successors and predecessors.

A)True

B)False

7
INCORRECT In which stage of a project team's work is morale the lowest?

A)Forming

B)Storming

C)Norming

D)Performing

8
INCORRECT Which of the following is not true. Gantt charts ____________.

force project managers to think in detail about the project's

A)requirements.
 B)are simple and easy to understand.

C)are excellent tools for complicated projects.

D)do not display the precedence requirements of individual tasks.

9 CORRECT
Critical path analysis is not used to determine the _____________.

A)expected profitability of a project.

B)activities that influence project completion time.

C)schedule of project activities.

D)appropriate allocation of resources between individual tasks.

10
INCORRECT Assume that painting an office building normally takes 10 days to complete
and requires two workers, each earning $50/day. However, adding another
worker can reduce the painting time to 8 days. What is the expedite cost
per day for crashing the painting activity?

A)15

B)25

C)50

D)100

11
INCORRECT Assume that your past experience driving to the airport can be described by
three time estimates: if there is no traffic you can make the trip in 30
minutes, your most likely time is one hour, and if there is an accident it
could be 2.5 hours. What is the weighted average duration of your drive?
 A)40 min.

B)60 min.

C)70 min.

D)90 min.

12
CORRECT What characteristic of a non-critical path would make it a good candidate
for becoming a critical path?

A)Having a small amount of slack

B)Having a great deal of slack

C)Containing many activities

D)Containing activities with little variability.