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OMIS 2010 || Solved Correctly., Exams of Supply Management

University of Wisconsin (UW) - MadisonSupply Management

OMIS 2010 || Solved Correctly.

Typology: Exams

2025/2026

Available from 05/15/2026

Sirvnton
Sirvnton 🇺🇸

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OMIS 2010 || Solved Correctly.
1. What is operations management correct answers • Management of activities and resources that
create goods and/or provide services.
• The design, operation, and improvement of manufacturing and service systems that make
products, control inventory, maintain equipment, and provide services to customers
2. What is operations correct answers • A function or system that transforms inputs into outputs
of greater value. The transformation process can be physical, locational, exchange, psychological,
physiological, and informational
3. What is a value chain correct answers • A series of activities from supplier to customer that
add value to a product or service
4. What are the four primary functional areas of a firm correct answers • Marketing,
finance/accounting, human resources, and operations/suppliers
5. What is craft production correct answers • The process of handcrafting products or services for
individual customers
6. What is the difference between goods vs. services correct answers • Goods are tangible, low
customer contact, high uniformity of input and output, low labour content, and easy to measure
productivity and quality.
• Services are acts, deeds, or performances, are intangible, output is variable, high customer
contact, perishable, service and service delivery are inseparable, services are decentralized and
geographically dispersed, and services are consumed more often than products, low uniformity of
input and output, high labour content, difficult to measure quality and productivity, and easily
emulated
7. What is mass production vs. lead production correct answers • An adaptation of mass
production that prizes quality and flexibility.
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OMIS 2010 || Solved Correctly.

  1. What is operations management correct answers • Management of activities and resources that create goods and/or provide services.
  • The design, operation, and improvement of manufacturing and service systems that make products, control inventory, maintain equipment, and provide services to customers
  1. What is operations correct answers • A function or system that transforms inputs into outputs of greater value. The transformation process can be physical, locational, exchange, psychological, physiological, and informational
  2. What is a value chain correct answers • A series of activities from supplier to customer that add value to a product or service
  3. What are the four primary functional areas of a firm correct answers • Marketing, finance/accounting, human resources, and operations/suppliers
  4. What is craft production correct answers • The process of handcrafting products or services for individual customers
  5. What is the difference between goods vs. services correct answers • Goods are tangible, low customer contact, high uniformity of input and output, low labour content, and easy to measure productivity and quality.
  • Services are acts, deeds, or performances, are intangible, output is variable, high customer contact, perishable, service and service delivery are inseparable, services are decentralized and geographically dispersed, and services are consumed more often than products, low uniformity of input and output, high labour content, difficult to measure quality and productivity, and easily emulated
  1. What is mass production vs. lead production correct answers • An adaptation of mass production that prizes quality and flexibility.
  • The high volume production of a standardized product for a mass market
  1. What is the quality revolution correct answers • An emphasis on quality and the strategic role of operations - production tied to consumer demand
  2. What is competitiveness correct answers • The ability and performance of an organization in the marketplace as compared to other organizations that offer similar goods or services- based on qualities such as cost, quality, flexibility, and delivery
  3. What is productivity correct answers • The ratio of output to input - efficient resource use - difficult to measure for services
  • Affected by methods and management techniques, equipment and technology, and labour (i.e., the skill levels of the workers)
  1. What is strategy correct answers • Strategies: plans for directing organization to achieve mission/vision/goals including balanced scorecard and SWOT analysis.
  • Operations strategy: coordinated set of policies, objectives, and action plans related to operations function in nine categories.
  1. What is the difference between projects vs. processes correct answers • Projects: Occurs just once. There is only one set of deliverables.
  • Processes: Occurs repeatedly. Many deliverables that occur regularly over a long period of time
  1. What is strategy formulation correct answers • Defining a primary task - What is the firm in the business of doing
  • Assessing core competencices
  • Determining order winners and order qualifiers
  • Positioning the firm
  • Deploying the Strategy
  1. What is SCM correct answers • Supply chain management is managing the flow of information through the supply chain to make it more responsive to customer needs while lowering costs
  • Key to effective supply chain management are information, communication, cooperation, and trust
  1. How do supply chains deal with demand uncertainty correct answers • Reduce uncertainty - making demand predictable, avoid uncertainty by reducing lead times and increasing supply chain flexibility so product can be made/assembled to order, and hedge against uncertainty with buffers of excess capacity
  2. What is the difference between BTO vs. BTS correct answers • Build-to-order mange market responsive supply chains characterized by high product variety, highly variable customer demand, and short product life cycles - leads to make to order or assemble to order
  • Build to stock or make to stock supply chains are where customer orders are met from stocks of an inventory of finished products that are kept at various points in the network to reduce delay and increase sales
  1. What is the bullwhip effect correct answers • Occurs when slight demand variability is magnified as information moves back upstream (production) due to lack of accurate demand information which leads to stockpiling extra inventory to compensate for uncertainty.
  • To cope with bullwhip effect, supply chain should exhibit transparency, then members can have access to information to reduce uncertainty
  1. What is an effective supply chain correct answers • A well managed supply chain should enable members to: o Share, communicate, form relationships. o Determine the status of orders in real-time. o Access forecasts, sales data, shortages, shipment status, and inventory data of partners (transparency). o Create jointly beneficial performance targets.
  • Requires linking the market, distribution channels processes, and suppliers
  1. Where should we hold stock correct answers • Risk Pooling: Safety stock in one central location (+ variations in regional demand cancel out) versus in multiple regional locations.
  • Delayed Differentiation: Adding differentiating features later to the standard components in the process (+ risk pooling + closer inventory to customer)
  1. What are the different types of warehouse storage correct answers • Consolidating: Combine shipments of different products into one larger shipment. This takes advantage of economies of scale in transportation.
  • Deconsolidating: Split a large shipment into smaller ones that are headed to different customers (the opposite of consolidating).
  • Cross-docking: Goods arriving at a warehouse from a supplier, are unloaded from the supplier's truck, and immediately loaded onto outbound trucks. Completely avoids warehouse storage (e.g., Wal-Mart)
  1. What are efficient replenishment methods correct answers • Quick Response: Just-in-time (JIT) replenishment - Used in retailing - Orders based on actual sales, not periodic.
  • Efficient Consumer Response (ECR) - Expanded version of quick response initiative which includes some collaboration. - Used in grocery industry.
  • Vendor-Managed Inventory (VMI) - agreement for a supplier to access and maintain customer's inventory. - used in convenience stores
  1. What is a purchasing manager and what are their duties correct answers • Purchasing Manager: Responsible for obtaining the materials, parts, supplies and services needed by the company.
  • Identifying sources of supply, Negotiating contracts, Maintaining a database of suppliers, Establishing partnerships, Managing supplies Obtaining goods and services
  1. What is the purchase cycle correct answers • Purchasing Cycle: Requisition received, Supplier selected, Decide how to purchase, Monitor orders, Receive orders, Pay suppliers
  1. What is CPFR correct answers • Collaborative planning, forecasting, and replenishment (CPFR): a process for 2 or more companies in a supply chain to synchronize their demand forecasts into a single plan to meet customer demand
  2. What is ERP correct answers • Enterprise resource planning: software that integrates components of company by sharing and organizing information and data
  3. What is the difference between on-demand deliveries vs. continuous replenishment correct answers • On-demand (direct-response) delivery: requires the supplier to deliver goods when demanded by the customer.
  • Continuous replenishment: supplying orders in a short period of time according to a predetermined schedule
  1. What is e-procurement and e-marketplaces correct answers • E-procurement is part of the B2B commerce being conducted on Internet, in which buyers make purchases directly from suppliers through their websites which provide lower transaction costs, lower prices, fast delivery, and reduced labour costs.
  • E-marketplaces: website where companies and suppliers conduct B2B activities.
  • Reverse auction: a company posts orders on the Internet for suppliers to bid on
  1. What is distribution correct answers • Distribution encompasses all of the channels, processes, and functions including warehousing and transportation that a product passes through on its way to the final customer.
  • Most important factor in transportation and distribution is speed. Order fulfillment: process of ensuring on-time delivery of order
  1. What is logistics vs. reverse logistics correct answers • Logistics: Refers to the transport and warehousing of materials and products:
    • Includes use of information and IT programs
    • Movement of goods in one's own facility
    • Shipping of goods to other companies
    • Management of incoming and outgoing shipments (Traffic management)
    • overseeing the delivery of incoming and outgoing goods.
  • Reverse logistics: the backward flow of goods returned by consumers or retailers
  1. What are the different modes of transportation correct answers • Railroads: cost effective for transporting low-value, high-density, bulk products such as raw materials over long distances but operate on less flexible and slower schedules than trucks and have worst record of quality performance and higher incidence of damage and late deliveries than trucking.
  • Trucks: provide flexible point-to-point service, delivering small loads over short and long distanced and are generally more reliable and less damage-prone than railroads.
  • Package carriers transport small packages through various modes of transportation and increased business due to growth of e-business and innovative in use of bar codes and Internet to arrange and track shipments.
  • Air freight: most expensive, fastest mode of freight transportation, shorter transport times help reduce chances for theft and other losses, used by companies with high-value goods, perishable goods, and where speed is important, used when lack of ground infrastructure makes rail and trucking transport difficult.
  • Water transport: low-cost but slowest form of shipping, primary means of international shopping, limited to heavy, bulk items, north American waterways
  • Intermodal transportation: combines several modes of shipping: truck, water, and rail where key component is containers.
  • Pipeline: transports oil and products in liquid forms, high capital cost, economical use, long life, low operating cost
  1. What is postponement correct answers • Moves some manufacturing steps into the distribution centre used as whoever gets the desired product to the customer first gets the sale which allows lead times to be reduced so that demand can be met more quickly
  2. What is WMS correct answers • Warehouse management system is an automated system that runs the day-to-day operations of a distribution centre which includes transportation, order, yard, labour management, and warehouse optimization
  • Reasons we keep inventory: Improve customer service, Economies of purchasing, Economies of production, Transportation savings, Hedge against future inflation, Unplanned shocks (labor strikes, natural disasters, surges in demand, etc.), To maintain independence of supply chain
  • Inventory management is how much and when to order
  1. Why not hold inventory correct answers • It's not free (Storage costs, Opportunity cost of capital)
  • It's risky - Short product life cycles increase obsolescence risk
  • It may not be needed - Information substitution
  • It hides problems - Just-in-time or lean manufacturing
  1. What are the four categories of inventory costs correct answers • Ordering or setup costs, Inventory-holding costs, Shortage costs, Unit cost of the stock-keeping units (SKUs)
  2. What is an SKU correct answers • A stock-keeping unit (SKU) is a single item or asset stored at a particular location
  3. What are demand characteristic correct answers • Independent demand is demand for an SKU that is unrelated to the demand for other SKUs and needs to be forecast. (Cars, appliances, computers)
  • Dependent demand is demand directly related to demand for other SKUs and calculated without needing to be forecast.
  • Demand can either be constant (deterministic) or uncertain (stochastic). (Tires, ink)
  • Static demand is stable demand. Dynamic demand varies over time
  1. What happens when you don't have enough inventory to satisfy demand correct answers • A stockout occurs. It is the inability to satisfy demand for an item. Two scenarios can happen:
  • A backorder occurs when a customer is willing to wait for an item to be delivered in the future.
  • A lost sale occurs when the customer is unwilling to wait and purchases the item elsewhere
  1. What are inventory costs correct answers • Carrying costs: the costs of holding an item in inventory ($300 billion in US) including facility storage, material handling, labour, record keeping, borrowing to purchase inventory, product deterioration, spoilage, breakage, obsolescence, pilferage
  • Ordering costs: the costs of replenishing inventory being held.
  • Shortage costs: temporary or permanent loss of sales when demand cannot be met
  1. What are the two different types of inventory systems correct answers • Continuous inventory systems: a continuous amount is ordered when inventory declines to a predetermined level.
  • Periodic inventory systems: an order is placed for a variable amount after a fixed passage of time.
  • Assumptions: Only relevant costs are ordering and holding, Lead times are known and constant, Items are independent from one another, Inventory is only counted at each review period
  1. What is the ABC system correct answers • An inventory classification system in which a small percentage of A items accounts for most of the inventory value
  • In general, about 5% to 15% of all inventory items account for 70% to 80% of total dollar value of inventory which is Class A items. Class B items represent approximately 30% of total inventory units, but only about 15% of total inventory dollar value. C items account for 50% to 60% of all inventory units, but represent only 5% to 10% of total dollar value.
  • A items require close inventory - continuous control system because of their high value; B and C items require less control - periodic inventory systems
  1. What is EOQ and the order cycle correct answers • Economic order quantity (EOQ): the optimal order quantity that will minimize total inventory costs and has the following assumptions: demand is known with certainty and is constant over time, no shortages are allowed, lead time for the receipt of orders is constant, and the order quantity is received all at once.
  • Order cycle: the time between receipts of orders in an inventory cycle.
  • EOQ is a continuous-inventory system
  1. What is a participative problem solving correct answers Employees are directly involved in the quality-management process
  2. What is Kaizen correct answers Involving everyone in a process of continuous improvement
  3. What is a quality circle correct answers • A group of workers and supervisors from the same area who address quality problems.
  • Involves organization, training, problem identification, problem analysis, solution, and presentation
  1. What are process improvement teams correct answers Includes members from the interrelated functions or departments that make up a process
  2. What is quality, why is it hard to define and how does it differ when a firm is selling as service versus a product correct answers • The ability to meet or exceed customer expectations.
  • Customer-centric: - Good performance, more features, timely customer service, comprehensive warranties.
  • Manufacturing-centric: - Conformance to standards, output meets design specifications, few defects.
  • Product-centric: - Specific attributes that can be measured
  1. What are the costs of quality correct answers • Failure costs - costs of defects
  • Internal failures - found during production
  • External Failures - found after customer delivery
  • Appraisal Costs - relate to inspection and analysis of defective products
  • Prevention costs - costs to prevent defects
  • Staffing & Training Costs
  • Support (lawyers, call centers, etc.)
  1. What is total quality management (TQM) correct answers - Encompasses entire organization, from supplier to wholesaler to customer.
  • Stresses a commitment by management to have a continuing, companywide drive toward excellence in all aspects of products and services that are important to the customer.
  • The three pillars:
  • Continuous improvement
  • Involvement of everyone
  • Customer satisfaction
  1. what are the different concepts associated with its successful implementation correct answers
  • Continuous improvement - Kaizen (Continuous Improvement) and Shewhart wheel (PDCA)
  • Six Sigma: Program designed to reduce defects, Requires the use of certain tools and techniques, Overall goal is to reduce costs, increase profits and improve customer satisfaction
  • Employee empowerment
  • Benchmarking
  • Just-in-time (JIT) Designed to produce output while minimizing lead time, reducing production costs and eliminating corporate waste. o - Production occurs only when signaled. o - Inventory levels are reduced. o - Encourages process + quality improvements o • Invented by Toyota in the 1960's. o • Lean production: Anything that does not add value is waste and does not belong in the production or manufacturing process.
  • Taguchi concepts
  • Knowledge of TQM tools
  1. How do you implement six sigma practices correct answers - Define critical outputs and identify gaps for improvement
  • • Follows 3 concepts:
    1. Quality robustness - ability to produce products uniformly even in adverse manufacturing and environmental conditions
    1. Quality loss function - costs increase as the product moves away from what the customer wants
    1. Target-oriented quality - too much quality investment is wasteful; too little, and we are not meeting the customers expectation of quality
  1. What are TQM tools correct answers - Tools are designed to be simple and visual.
  • Workers at all levels can use them easily and provide a means of communication well suited to problem solving.
  • Check sheets - An organized method of recording data
  • Scatter diagrams - A graph of one variable vs. another
  • Cause and effect diagrams - A chart showing the different categories of problem causes
  • Pareto charts - Identify problems or defects in descending order of occurrence.
  • Flow charts - Describes the steps to complete a process
  • Histogram - A distribution showing the frequency of occurrences.
  • Statistical process control chart
  1. What is the critieria for quality excellence correct answers • ISO9001 (international engineering standard)
  • ISO14000 (environmental management)
  • Hazard Analysis Critical Control Point (HACCP)
  • Canadian Awards for Excellence (CAE)
  1. Who are the leaders in quality correct answers - W. Edwards Deming 14 Points for Management o The 14 Management Principles:

Create consistency of purpose

  1. Lead to promote change
  2. Build quality into the product; stop depending on inspection
  3. Build long term relationships based on performance, not price
  4. Continuously improve product, quality, and service
  5. Start training
  6. Emphasize leadership
  7. Drive out fear
  8. Break down barriers between departments
  9. Stop haranguing workers
  10. Support, help, improve
  11. Remove barriers to pride in work
  12. Institute a vigorous program of education and selfimprovement
  13. Put everybody in the company to work on the transformation o • Advocate of statistical process control o • Emphasis on continuous improvement o • PDCA Wheel
  • Joseph M. Juran Top management commitment, fitness for use o Quality "Trilogy"—planning, o control and improvement o • Emphasis on management o • "Quality Handbook"
  • Philip B. Crosby Quality is Free o Zero defects o • 14-step quality implementation program o • Emphasis on "conformance"
  • Variable measure: a product characteristics that is continuous and can be measured (weight, length)
  1. What are the control charts for attributes correct answers • P-chart: uses the proportion of defective items in a sample, total number of observations are known. C-chart uses the number of defective items in a sample where total number of observations are unknown
  2. What are the control charts for variables correct answers • Range (R-) Chart: uses amount of dispersion in sample (largest value - smallest value). Mean (x-bar chart): uses process average
  3. What are the guidelines for identifying patterns correct answers • 8 consecutive points on one side of the centre line, 8 consecutive points up or down, 14 points alternating up or down, 2 out of 3 consecutive points in zone A (on one side of the centre line - 3 sigma), 4 out of 5 consecutive points in Zone A (3 sigma) or zone B (2 sigma zone) (on one side of the centre line). If any of guidelines apply to sample observations in a control chart, it would imply a non-random pattern exists and the cause should be investigated)
  4. What is process capability correct answers • The range of natural variability in a process - what we measure with control charts
  5. What is the service concept and what are its steps correct answers • Service concept: purpose of a service; it defines target market and customer experience
  • Service package: mixture of physical items, sensual benefits, and psychological benefits.
  • Performance specifications: outline expectations and requirements.
  • Design specification: describe the service in enough data to be replicated
  • Delivery specification: specify schedules, deliverables, and location
  1. What is the service process matrix correct answers • Professional service, such as accountant, lawyer, or doctor is highly customized and very labour intensive
  • Service shop, such as schools and hospitals are less customized and labour intensive
  • Mass service, such as retailing offer same basic services to all customers and allows less interaction with service provider
  • Services with least degree of customization and labour intensity such as airlines and trucking are most like manufactured products and thus best processed by a service factory
  • Degree of contact between customer and service provider also impacts how individual services are designed and delivered
  1. What is an infinite queue vs. finite queue correct answers • Infinite queue: a single waiting line of any length
  • Finite queue: the length of the single waiting line is limited
  1. What is a calling population correct answers • The source of customers; infinite or finite
  2. What is an arrival rate correct answers • Frequency at which customers arrive at a waiting line; described by Poisson distribution, arrival rate is less than service rate; λ < μ
  3. What is service time correct answers • Time required to serve customers; most frequently described by a negative exponential distribution
  4. What is a queue discipline correct answers • Order in which customers are serviced, FIFO, random, last-in, first-out
  5. What is the difference between channels and phases correct answers • Channels: number of parallel servers for servicing customers.
  • Phases: number of servers in a sequence a customer must go through
  1. What is Little's Law correct answers • W = L/ λ which states that average number of customers in the system is equal to the product of the mean arrival rate into the system and the average time a customer spends in the system, useful for its simplicity and generality, doesn't require amount of servers, distribution of arrival process or distribution of service times