MBA Operations Management - Test Bank - Chapter 02a

Operations Management, 12e (Heizer/Render/Munson)
Chapter 2  Operations Strategy in a Global Environment 
Section 1   A Global View of Operations and Supply Chains

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1) Boeing's development of the 787 Dreamliner is an example of a company obtaining a competitive advantage through product differentiation/innovation.
Answer:  TRUE
Diff: 1
Key Term:  NAFTA
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

2) NAFTA seeks to phase out all trade and tariff barriers among Canada, Mexico, and the United States.
Answer:  TRUE
Diff: 2
AACSB:  Diverse and multicultural work environments

3) The World Trade Organization has helped to significantly reduce tariffs around the world.
Answer:  TRUE
Diff: 2
Key Term:  World Trade Organization (WTO)
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

4) Production processes are being dispersed to take advantage of national differences in labor costs.
Answer:  TRUE
Diff: 2
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

5) NAFTA seeks to phase out all trade and tariff barriers between the United States and Asia.
Answer:  FALSE
Diff: 2
Key Term:  NAFTA
Learning Outcome:  Discuss the influences of the global competitive environment on operations management


6) One reason for global operations is to gain improvements in the supply chain.
Answer:  TRUE
Diff: 1
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

7) One reason to globalize is to learn to improve operations.
Answer:  TRUE
Diff: 1
Learning Outcome:  Discuss the influences of the global competitive environment on operations management
8) To attract and retain global talent, and to expand a product's life cycle, are both reasons to globalize.
Answer:  TRUE
Diff: 2
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

9) A product will always be in the same stage of its product life cycle regardless of the country.
Answer:  FALSE
Diff: 2
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

10) The World Trade Organization helps provide governments and industries around the world with protection from firms that engage in unethical conduct.
Answer:  TRUE
Diff: 2
Key Term:  World Trade Organization (WTO)
AACSB:  Ethical understanding and reasoning
Learning Outcome:  Discuss the role of operations management in corporate social responsibility and sustainability

11) Which of the following statements regarding the Dreamliner 787 is true?

1. A) Boeing has found partners in over a dozen countries.
2. B) The new aircraft incorporates a wide range of aerospace technologies.
3. C) The new aircraft uses engines from not one, but two manufacturers.
4. D) Boeing will add only 20 to 30 percent of the aircraft's value.
5. E) All of the above are true.

Answer:  E
Diff: 2
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

12) Boeing's new 787 Dreamliner:

1. A) is assembled in Washington, D.C.
2. B) uses engines from Japan.
3. C) has its fuselage sections built in Australia.
4. D) has increased efficiency from new engine technology.
5. E) results from a partnership of about a dozen companies.

Answer:  D
Diff: 2

13) Cost cutting in international operations can take place because of:

1. A) lower taxes and tariffs.
2. B) lower wage scales.
3. C) lower indirect costs.
4. D) less stringent regulations.
5. E) all of the above.

Answer:  E
Diff: 1
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

14) Which of the following did the authors NOT suggest as a reason for globalizing operations?

1. A) reduce costs
2. B) improve the supply chain
3. C) pursue stockholder approval ratings
4. D) understand markets
5. E) attract and retain global talent

Answer:  C
Diff: 2
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

15) Multinational organizations can shop from country to country and cut costs through:

1. A) lower wage scales.
2. B) lower indirect costs.
3. C) less stringent regulations.
4. D) lower taxes and tariffs.
5. E) all of the above.

Answer:  E
Diff: 2
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

16) The term maquiladora is most synonymous with:

1. A) free trade zones in Mexico.
2. B) Chinese forced labor camps.
3. C) home-based or cottage industry.
4. D) areas that do not meet U.S. standards for workplace safety and pollution.
5. E) tax breaks provided by some South American countries to other South American countries.

Answer:  A
Diff: 2
Key Term:  Maquiladoras
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

17) Which of the following is true of maquiladoras?

1. A) They discourage foreign businesses from outsourcing.
2. B) They assess tariffs only on the value-added work done.
3. C) They originated in China.
4. D) None of the above
5. E) All of the above

Answer:  B
Diff: 2
Key Term:  Maquiladoras
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

18) Which of the following represents a reason for globalizing operations?

1. A) to improve the supply chain
2. B) to improve operations
3. C) to expand a product's life cycle
4. D) to attract and retain global talent
5. E) all of the above

Answer:  E
Diff: 2
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

19) Which of the following does NOT represent a valid reason for globalizing operations?

1. A) reduce costs
2. B) improve the supply chain
3. C) reduce responsiveness
4. D) attract and retain global talent
5. E) understand markets

Answer:  C
Diff: 2
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

20) The purpose of NAFTA is to:

1. A) substitute cheap labor in Mexico for expensive labor in the United States.
2. B) curb illegal immigration from Mexico to the United States.
3. C) phase out all trade and tariff barriers between North America and South America.
4. D) phase out all trade and tariff barriers between the United States, Canada, and Mexico.
5. E) provide fair and equitable tariff rates for trade between the United States, Canada, and Mexico.

Answer:  D
Diff: 2
Key Term:  NAFTA
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

21) With reference to cultural and ethical issues, the World Trade Organization has:

1. A) eliminated bribery.
2. B) made progress in providing equal protection of intellectual property among nations.
3. C) phased out all trade and tariff barriers between the United States and Mexico.
4. D) eliminated slave labor and child labor.
5. E) played little role in addressing cultural and ethical issues among nations.

Answer:  B
Diff: 2
Key Term:  World Trade Organization (WTO)
AACSB:  Ethical understanding and reasoning
Learning Outcome:  Discuss the role of operations management in corporate social responsibility and sustainability
22) ________ are areas located along the United States-Mexico border in which factories receive preferential
tariff treatment.
Answer:  Maquiladoras
Diff: 2
Key Term:  Maquiladoras
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

23) ________ is a free trade agreement among Canada, Mexico, and the United States.
Answer:             NAFTA—North American Free Trade Agreement
Diff: 2
Key Term:  NAFTA
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

24) ________ and ________ are two issues where significant cultural differences are large, yet progress toward global uniformity is slowly being accepted.
Answer:             Bribery, protection of intellectual property
Diff: 3
AACSB:  Ethical understanding and reasoning
Learning Outcome:  Discuss the role of operations management in corporate social responsibility and sustainability

25) An organization that has worked to achieve global uniformity in cultural and ethical issues such as bribery, child labor, and environmental regulations is ________.
Answer:  the World Trade Organization
Diff: 1
Key Term:  World Trade Organization (WTO)
AACSB:  Ethical understanding and reasoning
Learning Outcome:  Discuss the role of operations management in corporate social responsibility and sustainability

26) Identify five countries from which Boeing's 787 Dreamliner has suppliers.
Answer:  Any five of: France, Germany, UK, Italy, Japan, China, South Korea, Sweden, and the United States
Diff: 3
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

27) How can global operations improve the supply chain?
Answer:  The supply chain can often be improved by locating facilities in countries where unique resources are available.
Diff: 2
Learning Outcome:  Discuss the influences of the global competitive environment on operations management
28) How do global operations attract new markets?
Answer:  Because international operations require interaction with foreign customers, suppliers, and other competitive businesses, international firms inevitably learn about opportunities for new products and services.
Diff: 2
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

29) State two examples of cultural and ethical issues that face operations managers in a global environment.
Answer:  Student responses will vary, but there are several issues on which there are wide differences from country to country, culture to culture. Among those listed in the text are bribery, child labor, the environment, and intellectual property rights. Students may bring forward from an earlier chapter issues such as environmental regulation or safe work environment, and may raise issues such as product safety.
Diff: 2
AACSB:  Ethical understanding and reasoning
Learning Outcome:  Discuss the role of operations management in corporate social responsibility and sustainability

30) Since the early 1990s, residents in a number of developing countries have overcome culture, religious, ethnic, and political productivity barriers. These disappearing barriers coupled with simultaneous advances in technology, reliable shipping, and cheap communication have all led to the growth of what three things?
Answer:  1. World trade

2. Global capital markets
3. International movement of people

Diff: 3
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

31) Identify four trade agreements that are facilitating the growth of world.
Answer:  NAFTA, SEATO, MERCOSUR, CAFTA
Diff: 2
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

Section 2   Developing Missions and Strategies

1) An organization's strategy is the purpose or rationale for its existence.
Answer:  FALSE
Diff: 1
Key Term:  Strategy
Objective:  LO 2.1 Define mission and strategy
2) Which of the following activities takes place most immediately once the mission has been developed?

1. A) The firm develops alternative or back-up missions in case the original mission fails.
2. B) The functional areas develop their functional area strategies.
3. C) The functional areas develop their supporting missions.
4. D) The ten OM decision areas are prioritized.
5. E) Operational tactics are developed.

Answer:  C
Diff: 2
Key Term:  Mission
Objective:  LO 2.1 Define mission and strategy

3) Which of the following statements about organizational missions is FALSE?

1. A) They reflect a company's purpose.
2. B) They indicate what a company intends to contribute to society.
3. C) They are formulated after strategies are known.
4. D) They define a company's reason for existence.
5. E) They provide guidance for functional area missions.

Answer:  C
Diff: 2
Key Term:  Mission
Objective:  LO 2.1 Define mission and strategy


4) The fundamental purpose of an organization's mission statement is to:

1. A) create a good human relations climate in the organization.
2. B) define the organization's purpose in society.
3. C) define the operational structure of the organization.
4. D) generate good public relations for the organization.
5. E) define the functional areas required by the organization.

Answer:  B
Diff: 2
Key Term:  Mission
Objective:  LO 2.1 Define mission and strategy

5) Which of the following statements is true?

1. A) Corporate mission is shaped by functional strategies.
2. B) Corporate strategy is shaped by functional strategies.
3. C) Functional strategies are shaped by corporate strategy.
4. D) External conditions are shaped by corporate mission.
5. E) Functional area missions are merged to become the organizational mission.

Answer:  C
Diff: 3
Key Term:  Strategy
AACSB:  Reflective thinking
Objective:  LO 2.1 Define mission and strategy
6) According to the authors, which of the following strategic concepts allow firms to achieve their missions?

1. A) productivity, efficiency, and quality leadership
2. B) differentiation, cost leadership, and response
3. C) differentiation, quality leadership, and response
4. D) distinctive competency, cost leadership, and experience
5. E) differentiation, distinctive competency, quality leadership, and capacity

Answer:  B
Diff: 2
Key Term:  Strategy
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

7) A strategy is a(n):

1. A) set of opportunities in the marketplace.
2. B) broad statement of purpose.
3. C) simulation used to test various product line options.
4. D) plan for cost reduction.
5. E) action plan to achieve the mission.

Answer:  E
Diff: 2
Key Term:  Strategy
Objective:  LO 2.1 Define mission and strategy


8) The ________ is how an organization expects to achieve its missions and goals.
Answer:  strategy
Diff: 2
Key Term:  Strategy
Objective:  LO 2.1 Define mission and strategy

9) What is the difference between a firm's mission and its strategy?
Answer:  A firm's mission is the purpose or rationale for its existence; whereas, a firm's strategy is how it expects to achieve its mission and goals.
Diff: 2
Key Term:  Mission
Objective:  LO 2.1 Define mission and strategy

Section 3   Achieving Competitive Advantage Through Operations

1) Experience differentiation is an extension of product differentiation, accomplished by using people's five senses to create an experience rather than simply providing a service.
Answer:  TRUE
Diff: 2
Key Term:  Experience differentiation
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization
2) Low-cost leadership is the ability to distinguish the offerings of the organization in a way that the customer perceives as adding value.
Answer:  FALSE
Diff: 2
Key Term:  Achieving competitive advantage through operations
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

3) Which of the following is LEAST likely to be a low-cost leadership competitive advantage?

1. A) low overhead
2. B) effective capacity use
3. C) inventory management
4. D) broad product line
5. E) mass production

Answer:  D
Diff: 2
Key Term:  Low-cost leadership
AACSB:  Reflective thinking
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization


4) A firm can effectively use its operations function to yield competitive advantage through all of the following EXCEPT:

1. A) customization of the product.
2. B) setting equipment utilization goals below the industry average.
3. C) speed of delivery.
4. D) constant innovation of new products.
5. E) maintaining a variety of product options.

Answer:  B
Diff: 2
Key Term:  Competitive advantage
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

5) The ability of an organization to produce goods or services that have some uniqueness in their characteristics is:

1. A) mass production.
2. B) time-based competition.
3. C) competing on productivity.
4. D) competing on quality.
5. E) competing on differentiation.

Answer:  E
Diff: 2
Key Term:  Differentiation
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization
6) Which of the following statements best characterizes delivery reliability?

1. A) a company that always delivers on the same day of the week
2. B) a company that always delivers at the promised time
3. C) a company that delivers more frequently than its competitors
4. D) a company that delivers faster than its competitors
5. E) a company that has a computerized delivery scheduling system

Answer:  B
Diff: 3
Key Term:  Response
AACSB:  Reflective thinking
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

7) Which of the following is an example of competing on the basis of differentiation?

1. A) A firm manufactures its product with less raw material waste than its competitors do.
2. B) A firm's products are introduced into the market faster than its competitors' products are.
3. C) A firm's distribution network routinely delivers its product on time.
4. D) A firm offers more reliable products than its competitors do.
5. E) A firm advertises more than its competitors do.

Answer:  D
Diff: 2
Key Term:  Differentiation
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

8) The ability of an organization to produce services that, by utilizing the consumer's five senses, have some uniqueness in their characteristics is:

1. A) sensory response.
2. B) time-based competition.
3. C) differentiation.
4. D) flexible response.
5. E) experience differentiation.

Answer:  E
Diff: 2
Key Term:  Experience differentiation
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

9) Which of the following best describes experience differentiation?

1. A) immerses consumers in the delivery of a service
2. B) uses people's five senses to enhance the service
3. C) complements physical elements with visual and sound elements
4. D) consumers may become active participants in the product or service
5. E) All of the above are elements of experience differentiation.

Answer:  E
Diff: 1
Key Term:  Experience differentiation
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization
10) Experience differentiation:

1. A) isolates the consumer from the delivery of a service.
2. B) is an extension of product differentiation in the service sector.
3. C) uses only the consumer's senses of vision and sound.
4. D) keeps consumers from becoming active participants in the service.
5. E) attempts to make the service experience different for every single customer.

Answer:  B
Diff: 2
Key Term:  Experience differentiation
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

11) Which of the following is the best example of competing on low-cost leadership?

1. A) A firm produces its product with less raw material waste than its competitors do.
2. B) A firm offers more reliable products than its competitors do.
3. C) A firm's products are introduced into the market faster than its competitors' products are.
4. D) A firm's research and development department generates many ideas for new products.
5. E) A firm advertises more than its competitors do.

Answer:  A
Diff: 3
Key Term:  Low-cost leadership
AACSB:  Reflective thinking
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

12) Franz Colruyt has achieved low-cost leadership through:

1. A) effective use of voice mail.
2. B) plastic, not paper, shopping bags.
3. C) background music that subtly encourages shoppers to buy more.
4. D) converting factories, garages, and theaters into retail outlets.
5. E) exclusive use of the Euro.

Answer:  D
Diff: 2
Key Term:  Low-cost leadership
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

13) Which of the following is an example of competing on quick response?

1. A) A firm produces its product with less raw material waste than its competitors do.
2. B) A firm offers more reliable products than its competitors do.
3. C) A firm's products are introduced into the market faster than its competitors' products.
4. D) A firm utilizes its capacity more effectively than its competitors do.
5. E) A firm advertises more than its competitors do.

Answer:  C
Diff: 3
Key Term:  Response
AACSB:  Reflective thinking
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization
14) Response-based competitive advantage can be:

1. A) flexible response.
2. B) reliable response.
3. C) quick response.
4. D) all of the above.
5. E) none of the above.

Answer:  D
Diff: 2
Key Term:  Response
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

15) The creation of a unique advantage over competitors is called a(n) ________.
Answer:  competitive advantage
Diff: 2
Key Term:  Competitive advantage
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization


16) Service organizations can immerse the consumer in the service, or have the consumer become a participant in the service, as they practice ________.
Answer:  experience differentiation
Diff: 2
Key Term:  Experience differentiation
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

17) Competitive advantage through operations can be achieved by ________, ________, and/or ________.
Answer:  differentiation, low cost, response
Diff: 2
Key Term:  Competitive advantage
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

18) Provide an example of an organization that achieves competitive advantage through experience differentiation. Explain.
Answer:  Answers will vary, but Disney and Hard Rock Café are illustrated in the text. Competing on experience differentiation implies providing uniqueness to your service offering through immersion of the consumer into the service, with visual or sound elements to turn the service into an experience.
Diff: 2
Key Term:  Experience differentiation
Objective:  LO 2.2 Identify and explain three strategic approaches to competitive advantage
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization
Section 4   Issues in Operations Strategy

1) Before establishing and implementing strategy, a resources view would ensure that which of the following resources are available?

1. A) financial
2. B) physical
3. C) human
4. D) technological
5. E) all of the above

Answer:  E
Diff: 2
Key Term:  Resources view
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

2) Porter's Five Forces Model is used to evaluate competition based on which 5 aspects?

1. A) research and development, cost, legal regulations, suppliers, customers
2. B) immediate rivals, potential entrants, customers, suppliers, and substitute products
3. C) potential entrants, customers, suppliers, legal regulations, and cost
4. D) immediate rivals, potential entrants, cost, substitute products, and legal regulations
5. E) cost, legal regulations, advertising effectiveness, potential entrants, and immediate rivals

Answer:  B
Diff: 2
Key Term:  Five forces analysis
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

3) Porter's Five Forces Model contains which of the following?

1. A) immediate rivals
2. B) potential entrants
3. C) customers
4. D) suppliers
5. E) all of the above

Answer:  E
Diff: 2
Key Term:  Five forces analysis
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

4) Who introduced the concept of value-chain analysis?

1. A) Ford
2. B) Toyota
3. C) Porter
4. D) Smith
5. E) Gates

Answer:  C
Diff: 2
Key Term:  Value-chain analysis
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization
5) Value-chain analysis can be used to determine if a business is adding unique value in which of the following areas?

1. A) product research
2. B) human resources
3. C) process innovation
4. D) quality management
5. E) all of the above

Answer:  E
Diff: 2
Key Term:  Value-chain analysis
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

6) Which of the following is NOT part of value-chain analysis?

1. A) product research
2. B) quality management
3. C) supply chain management
4. D) project management
5. E) human resources

Answer:  D
Diff: 2
Key Term:  Value-chain analysis
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization


7) Which of the following environmental factors has not contributed to Microsoft's changing strategy?

1. A) Google
2. B) security issues
3. C) faster processors
4. D) the Internet
5. E) global warming

Answer:  E
Diff: 2
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

8) Standardization is an appropriate strategy in which stage of the product life cycle?

1. A) introduction
2. B) growth
3. C) maturity
4. D) decline
5. E) retirement

Answer:  C
Diff: 2
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization
9) Cost minimization is an appropriate strategy in which stage of the product life cycle?

1. A) introduction
2. B) growth
3. C) adolescence
4. D) decline
5. E) retirement

Answer:  D
Diff: 2
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

10) Which of the following OM strategy/issues should a firm with a product in the maturity stage of its life cycle be LEAST concerned with at the present time?

1. A) increase capacity
2. B) long production runs
3. C) standardization
4. D) cost cutting
5. E) fewer rapid product changes

Answer:  A
Diff: 2
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization


11) Given the position of the 3D printer in the growth stage of its life cycle, which of the following OM Strategy/Issues should the makers of 3D printers be least concerned with at the current time?

1. A) forecasting
2. B) cost cutting
3. C) increasing capacity
4. D) product and process reliability
5. E) enhancing distribution

Answer:  B
Diff: 2
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

12) Which of the following has progressed the FURTHEST along its product life cycle?

1. A) Video physical rentals
2. B) Boeing 787
3. C) Apple SmartWatch
4. D) 3-D game players
5. E) Xbox 360

Answer:  A
Diff: 2
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization
13) Which of the following has made the LEAST progress along its product life cycle?

1. A) Video physical rentals
2. B) Boeing 787
3. C) Apple SmartWatch
4. D) 3-D game players
5. E) Xbox 360

Answer:  C
Diff: 2
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

14) ________ is the stage in product life cycle at which it is a poor time to change quality.
Answer:  Maturity
Diff: 2
Key Term:  Issues in operations strategy

Section 5   Strategy Development and Implementation

1) Key success factors and core competencies are synonyms.
Answer:  FALSE
Diff: 2
Key Term:  Key success factors (KSFs)
Objective:  LO 2.3 Understand the significance of key success factors and core competencies
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization


2) SWOT analysis is a method of determining external strengths and weaknesses and internal opportunities and threats.
Answer:  FALSE
Diff: 2
Key Term:  SWOT analysis
Objective:  LO 2.3 Understand the significance of key success factors and core competencies
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

3) Key success factors are those activities that are key to achieving competitive advantage.
Answer:  TRUE
Diff: 2
Key Term:  Key success factors (KSFs)
Objective:  LO 2.3 Understand the significance of key success factors and core competencies
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization
4) Which of the following statements is most correct?

1. A) KSFs are often necessary, but not sufficient for competitive advantage.
2. B) KSFs are often sufficient, but not necessary for competitive advantage.
3. C) KSFs are neither necessary nor sufficient for competitive advantage.
4. D) KSFs are both necessary and sufficient for competitive advantage.
5. E) None of the above statements is correct.

Answer:  A
Diff: 3
Key Term:  Key success factors (KSFs)
Objective:  LO 2.3 Understand the significance of key success factors and core competencies
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

5) An SWOT analysis determines:

1. A) internal strengths and weaknesses and internal opportunities and threats.
2. B) internal strengths and weaknesses and external opportunities and threats.
3. C) external strengths and weaknesses and internal opportunities and threats.
4. D) external strengths and weaknesses and external opportunities and threats.
5. E) internal strengths and opportunities and external weaknesses and threats.

Answer:  B
Diff: 1
Key Term:  SWOT analysis
Objective:  LO 2.3 Understand the significance of key success factors and core competencies
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

6) Define core competencies.
Answer:  A set of skills, talents, and capabilities in which a firm is particularly strong.
Diff: 2
Key Term:  Core competencies
Objective:  LO 2.3 Understand the significance of key success factors and core competencies
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization


7) What is SWOT analysis? List its four elements and describe its purpose.
Answer:  The four elements of SWOT are strengths, weaknesses, opportunities, and threats. Its purpose is to maximize opportunities and minimize threats in the environment, while maximizing the advantages of the organization's strengths and minimizing the weaknesses.
Diff: 2
Key Term:  SWOT analysis
Objective:  LO 2.3 Understand the significance of key success factors and core competencies
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization
8) Starbucks is one of the best known coffeehouse chains in the world. Each store sells a variety of innovative products to complement the array of coffee choices available. However, over half of the current stores are located in the United States and the expensive nature of the coffee leaves Starbucks vulnerable to changes in consumer spending behavior (such as recessions). Starbucks has begun initiatives to sell its specialty coffee beans for home use, presenting a chance for a large increase in revenue and diversification. However, Starbucks faces fierce competition seeking a piece of its lucrative market share and the threat of consumer behavior changes, given its reputation rides on a singular product. Perform an SWOT analysis for Starbucks.
Answer:
Strengths—High profit specialty coffee, well-known brand image
Weakness—Most stores located in the United States, most profits come from coffee (both are lack of
diversification)
Opportunities—Emerging market in coffee beans for home use, chance for global expansion
Threats—Intense competition, consumer behavior changes (less spending during a recession on its luxury coffee, change in beverage preferences)
Diff: 2
Key Term:  SWOT analysis
AACSB:  Reflective thinking
Objective:  LO 2.3 Understand the significance of key success factors and core competencies
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization

9) Perform an SWOT analysis of Boeing's 787 Dreamliner using the information presented in the text.
Answer:  Strengths—Technological advances (8% increase in fuel efficiency, electronic maintenance monitoring)
Weaknesses—Diverse suppliers and assembly locations leave Boeing vulnerable to currency exchange rates and make quality control difficult
Opportunities—one of fastest-selling commercial jets ever gives Boeing a chance to increase market share, Boeing can parlay its use of diverse supplier locations into diversifying customer base
Threats—competition from Airbus, divestment of the manufacture process risks losing company trade secrets (competitive advantage)
Diff: 3
Key Term:  SWOT analysis
AACSB:  Reflective thinking
Objective:  LO 2.3 Understand the significance of key success factors and core competencies
Learning Outcome:  Discuss operations and operations management as a competitive advantage for the organization


Section 6   Strategic Planning, Core Competencies, and Outsourcing

1) Outsourcing is the practice of transferring a firm's activities that have traditionally been internal to external suppliers.
Answer:  TRUE
Diff: 2
Key Term:  Outsourcing
Learning Outcome:  Discuss the influences of the global competitive environment on operations management
2) Outsourcing is the practice of moving a business process to a foreign country but retaining control of it.
Answer:  FALSE
Diff: 2
Key Term:  Outsourcing
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

3) Core competencies are good candidates for outsourcing.
Answer:  FALSE
Diff: 1
Key Term:  Outsourcing
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

4) The theory of competitive advantage implies that you should allow another firm to perform work activities for your company if that company can do it more productively than you can.
Answer:  FALSE
Diff: 2
Key Term:  Theory of comparative advantage
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

5) The theory of comparative advantage implies that you should allow another firm to perform work activities for your company if that company can do it more productively than you can.
Answer:  TRUE
Diff: 2
Key Term:  Theory of comparative advantage
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

6) The term renewal has been created to describe the return of business activity to the originating country.
Answer:  FALSE
Diff: 2
Learning Outcome:  Discuss the influences of the global competitive environment on operations management


7) What is the practice of transferring a firm's activities that have traditionally been internal to external suppliers?

1. A) nearshoring
2. B) farshoring
3. C) offshoring
4. D) outsourcing
5. E) backsourcing

Answer:  D
Diff: 2
Key Term:  Outsourcing
Learning Outcome:  Discuss the influences of the global competitive environment on operations management
8) Outsourcing is simply an extension of the long-standing practice of:

1. A) subcontracting.
2. B) importing.
3. C) exporting.
4. D) postponement.
5. E) e-procurement.

Answer:  A
Diff: 1
Key Term:  Outsourcing
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

9) Outsourcing manufacturing is also known as:

1. A) license manufacturing.
2. B) sublease manufacturing.
3. C) concurrent manufacturing.
4. D) hollow manufacturing.
5. E) contract manufacturing.

Answer:  E
Diff: 2
Key Term:  Outsourcing
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

10) What theory implies that you should allow another firm to perform work activities for your company if that company can do it more productively than you can?

1. A) theory of competitive advantage
2. B) theory of core competencies
3. C) theory of comparative advantage
4. D) theory of outsourcing
5. E) theory of offshoring

Answer:  C
Diff: 2
Key Term:  Theory of comparative advantage
Learning Outcome:  Discuss the influences of the global competitive environment on operations management


11) Which of the following statements is most accurate?

1. A) Nearly all outsourcing relationships do not last beyond two years.
2. B) Nearly all U.S. firms that outsourced processes to India have backsourced them.
3. C) Approximately half of all outsourcing agreements fail.
4. D) Outsourcing is a relatively risk-free activity.
5. E) More than 90% of outsourcing agreements succeed.

Answer:  C
Diff: 2
Key Term:  Outsourcing
Learning Outcome:  Discuss the influences of the global competitive environment on operations management
12) Which of the following is not an advantage of outsourcing?

1. A) cost savings
2. B) gaining outside expertise
3. C) improving operations and service
4. D) outsourcing core competencies
5. E) accessing outside technology

Answer:  D
Diff: 1
Key Term:  Outsourcing
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

13) Advantages of outsourcing do NOT include:

1. A) cost savings.
2. B) gaining outside expertise.
3. C) maintaining a focus on core competencies.
4. D) accessing outside technology.
5. E) potential creation of future competition.

Answer:  E
Diff: 1
Key Term:  Outsourcing
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

14) An operations manager is performing a factor-rating analysis to help her choose an outsourcing provider. She is focusing on three factors: A, B, and C, with weights of .50, .20, and .30, respectively. She has scored one potential outsourcer, Ling Services, on each of the factors using a scale of 10-50. Ling Services received a score of 30 for factor A, 46 for factor B, and 22 for factor C. What is the factor-rating score for Ling Services?

98. A) 98.0
99. B) 32.7
100. C) 21.8
101. D) 29.2
102. E) 30.8

Answer:  E
Diff: 2
AACSB:  Analytical thinking
Objective:  LO 2.4 Use factor rating to evaluate both country and outsource providers
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

15) An operations manager is performing a factor-rating analysis to help him choose an outsourcing provider. He is focusing on two factors: A and B, using a weight of 75% for factor A and 25% for factor B. He has scored five different potential providers on both factors, using a scale of 1-5, with 1 representing the BEST score. Based on the scores provided in the table below, which provider should be chosen?

Provider	Factor A	Factor B
Alpha	1	5
Beta	3	3
Gamma	4	1
Phi	2	1
Omega	3	5

1. A) Alpha
2. B) Beta
3. C) Gamma
4. D) Phi
5. E) Omega

Answer:  D
Diff: 2
AACSB:  Analytical thinking
Objective:  LO 2.4 Use factor rating to evaluate both country and outsource providers
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

16) ________ is the practice of transferring a firm's activities that have traditionally been internal to external suppliers.
Answer:  Outsourcing
Diff: 2
Key Term:  Outsourcing
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

17) Outsourcing manufacturing is also known as ________.
Answer:  contract manufacturing
Diff: 2
Key Term:  Outsourcing
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

18) Outsourcing is an extension of the long-standing practice of ________ production activities.
Answer:  subcontracting
Diff: 2
Key Term:  Outsourcing
Learning Outcome:  Discuss the influences of the global competitive environment on operations management
19) The theory of ________ implies that you should allow another firm to perform work activities for your company if that company can do it more productively than you can.
Answer:  comparative advantage
Diff: 2
Key Term:  Theory of comparative advantage
Learning Outcome:  Discuss the influences of the global competitive environment on operations management


20) Identify three factors fueling the continuing growth of outsourcing.
Answer:  (1) increased technological expertise, (2) more reliable and cheaper transportation, and
(3) the rapid development and deployment of advancements in telecommunications and computers.
Diff: 3
Key Term:  Outsourcing
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

21) Identify five main advantages of outsourcing.
Answer:  (1) cost savings, (2) gaining outside expertise, (3) improving operations and service,
(4) maintaining a focus on core competencies, and (5) accessing outside technology
Diff: 2
Key Term:  Outsourcing
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

22) Identify five main disadvantages of outsourcing.
Answer:  (1) increased logistics and inventory costs, (2) loss of control (quality, delivery, etc.), (3) potential creation of future competition, (4) negative impact on employees, and (5) risks may not manifest themselves for years
Diff: 2
Key Term:  Outsourcing
Learning Outcome:  Discuss the influences of the global competitive environment on operations management
23) A company is choosing an outside firm to provide its payroll services. It has chosen four comparative categories of interest: client reviews, financial condition, IT capabilities, and government stability. These categories have been assigned weights of 30%, 10%, 20%, and 40%, respectively. Three potential providers were scored on each of those factors (see table below) using a scale of 1-10, with a score of 1 meaning worst possible and 10 meaning best possible. Using the factor-rating method, which provider should be chosen?

	Provider A	Provider B	Provider C
Client reviews	2	6	10
Financial condition	8	4	2
IT capabilities	5	8	2
Government stability	3	1	2

Answer:  Provider A: 2(.3) + 8(.1) + 5(.2) + 3(.4) = 3.6
Provider B: 6(.3) + 4(.1) + 8(.2) + 1(.4) = 4.2
Provider C: 10(.3) + 2(.1) + 2(.2) + 2(.4) = 4.4
Since a high score implies best performance in this problem, Provider C should be chosen.
Diff: 2
AACSB:  Analytical thinking
Objective:  LO 2.4 Use factor rating to evaluate both country and outsource providers
Learning Outcome:  Discuss the influences of the global competitive environment on operations management


24) A company is deciding between 2 foreign firms to provide its call center services. A factor-rating method is used. Factors are rated on a scale of 1-10, with 10 being the best score.
A: If the factors are weighted equally (respective weights of .3333), which firm is preferred?
B: Suppose a consultant recommended that Factor 2 be twice as important as Factor 1, while Factor 3 should be four times as important as Factor 1. Which firm is best now using a weighted method? (Round your weights to the nearest four decimal places.)

Firm	Factor 1	Factor 2	Factor 3
A	10	7	4
B	5	8	6

Answer:
A: Firm A = 10(.3333) + 7(.3333) + 4 (.3333) = 7.00, Firm B = 5(.3333) + 8(.3333) + 6(.3333) = 6.33, so Firm A is preferred
B: To find the new weights, let X = weight of Factor 1. Then 100% = X + 2X + 4X, or 1 = 7X, or X = .1429. Thus, Factor 1 has a weight of 14.29%, Factor 2 has a weight of 2(14.29%) = 28.58%, and Factor 3 has a weight of 4(14.29%) = 57.16%.
The scores are: Firm A = 10(.1429) + 7(.2858) + 4(.5716) = 5.72. Firm B = 5(.1429) + 8(.2858) + 6(.5716) = 6.43, so Firm B is preferred.
Diff: 2
AACSB:  Analytical thinking
Objective:  LO 2.4 Use factor rating to evaluate both country and outsource providers
Learning Outcome:  Discuss the influences of the global competitive environment on operations management
Section 7   Global Operations Strategy Options

1) A multinational corporation is a firm with extensive international business involvement.
Answer:  TRUE
Diff: 1
Key Term:  Multinational corporation (MNC)
Objective:  LO 2.5 Identify and explain four global operations strategy options
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

2) The multidomestic OM strategy maximizes local responsiveness while achieving a significant cost advantage.
Answer:  FALSE
Diff: 2
Key Term:  Multidomestic strategy
Objective:  LO 2.5 Identify and explain four global operations strategy options
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

3) Firms using the global strategy can be thought of as "world companies."
Answer:  FALSE
Diff: 2
Key Term:  Global strategy
Objective:  LO 2.5 Identify and explain four global operations strategy options
Learning Outcome:  Discuss the influences of the global competitive environment on operations management


4) Which of the international operations strategies involves high cost reductions and high local responsiveness?

1. A) international strategy
2. B) global strategy
3. C) transnational strategy
4. D) multidomestic strategy
5. E) worldwide strategy

Answer:  C
Diff: 2
Key Term:  Transnational strategy
Objective:  LO 2.5 Identify and explain four global operations strategy options
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

5) Which of the international operations strategies involves low cost reductions and low local responsiveness?

1. A) international strategy
2. B) global strategy
3. C) transnational strategy
4. D) multidomestic strategy
5. E) worldwide strategy

Answer:  A
Diff: 2
Key Term:  International strategy
Objective:  LO 2.5 Identify and explain four global operations strategy options
Learning Outcome:  Discuss the influences of the global competitive environment on operations management
6) Which of the international operations strategies uses import/export or licensing of existing products?

1. A) international strategy
2. B) global strategy
3. C) transnational strategy
4. D) multidomestic strategy
5. E) worldwide strategy

Answer:  A
Diff: 2
Key Term:  International strategy
Objective:  LO 2.5 Identify and explain four global operations strategy options
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

7) Which of the international operations strategies uses the existing domestic model globally?

1. A) international strategy
2. B) global strategy
3. C) transnational strategy
4. D) multidomestic strategy
5. E) worldwide strategy

Answer:  D
Diff: 2
Key Term:  Multidomestic strategy
Objective:  LO 2.5 Identify and explain four global operations strategy options
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

8) The acronym MNC stands for

1. A) Mexican National Committee (for international trade)
2. B) Maquiladora Negates Competition
3. C) Maytag-Nestlé Corporation
4. D) Multinational Corporation
5. E) Maritime Navigation Company

Answer:  D
Diff: 1
Key Term:  Multinational corporation (MNC)
Objective:  LO 2.5 Identify and explain four global operations strategy options
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

9) Caterpillar and Texas Instruments are two firms that have benefited from the use of:

1. A) the multidomestic strategy option.
2. B) the international strategy option.
3. C) the transnational strategy option.
4. D) the maquiladora system in Europe.
5. E) the global strategy option.

Answer:  E
Diff: 2
Key Term:  Global strategy
Objective:  LO 2.5 Identify and explain four global operations strategy options
Learning Outcome:  Discuss the influences of the global competitive environment on operations management
10) A(n) ________ is a firm that has extensive involvement in international business, owning or controlling facilities in more than one country.
Answer:  multinational corporation (MNC)
Diff: 2
Key Term:  Multinational corporation (MNC)
Objective:  LO 2.5 Identify and explain four global operations strategy options
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

11) The ________ strategy utilizes a standardized product across countries.
Answer:  global
Diff: 2
Key Term:  Global strategy
Objective:  LO 2.5 Identify and explain four global operations strategy options
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

12) The ________ strategy uses exports and licenses to penetrate globally.
Answer:  international
Diff: 2
Key Term:  International strategy
Objective:  LO 2.5 Identify and explain four global operations strategy options
Learning Outcome:  Discuss the influences of the global competitive environment on operations management


13) The ________ strategy uses subsidiaries, franchises, or joint ventures with substantial independence.
Answer:  multidomestic
Diff: 2
Key Term:  Multidomestic strategy
Objective:  LO 2.5 Identify and explain four global operations strategy options
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

14) The ________ strategy describes a condition in which material, people, and ideas cross or transgress national boundaries.
Answer:  transnational
Diff: 2
Key Term:  Transnational strategy
Objective:  LO 2.5 Identify and explain four global operations strategy options
Learning Outcome:  Discuss the influences of the global competitive environment on operations management
15) Identify and explain the four basic global operations strategies. Give an example of each strategy.
Answer:  The multidomestic strategy decentralizes operating decisions to each country to enhance local responsiveness. An example is Heinz. The global strategy centralizes operating decisions, with headquarters coordinating the standardization and learning between facilities. The textbook names Texas Instruments and Caterpillar. The international strategy uses exports and licenses to penetrate the global markets. Harley-Davidson is an example. The transnational strategy exploits the economies of scale and learning, as well as pressure for responsiveness, by recognizing that core competence does not reside in just the "home" country, but can exist anywhere in the organization. An example is Coca-Cola.
Diff: 3
Objective:  LO 2.5 Identify and explain four global operations strategy options
Learning Outcome:  Discuss the influences of the global competitive environment on operations management

----------------------------------

OPERATIONS MANAGEMENT - 2017 - COLLECTION

FREE DOWNLOAD

EBOOKS

Operations Management, 2015, 12th Edition, William J. Stevenson - Free Download Link
Operations Management, Sustainability and Supply Chain Management, 11th Edition, 2014, Jay Heizer, Barry Render - Free Download Link

Operations Management: Sustainability and Supply Chain Management, 12th Edition, Jay Heizer, Barry Render, Chuck Munson, 2017
Principles of Operations Management: Sustainability and Supply Chain Management, 10th Edition, 2017
Operations Research: An Introduction, 10th Edition, Hamdy A. Taha, 2017
Introduction to Operations and Supply Chain Management, 4th Edition, Cecil B. Bozarth, Robert B. Handfield, 2016 
Operations Management: Processes and Supply Chains, 11th Edition, Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman, 2016

Free Online Course Materials

1. Operations Management Ebooks - Free Downloads

2. Slides - 11th Edition - Free Downloads

3. Slides - 12nd Edition - Free Downloads

4. Full List of Videos Case Studies - Link

5. All articles about Operations Management

http://top20mba.com/mba-cases/94-mba-operation-management

2017 Updates

6. QUIZ, Multiple choice questions and answers

7. CASE STUDY GUIDES

8. Video Case study guides

For Test Bankz, Quiz Answers and Case study Guides, email to: wincapsimtips@gmail.com

All Free downloads - LINK

Buy All Collections for USD 19.99 – Buy now LINK (Click here)

Any inquiry and support, please email: wincapsimtips@gmail.com

FREE DOWNLOADS:

1. Operations Management: Sustainability and SCM, 12th Edition, Jay Heizer, 2017

2. Operations Management, Sustainability and SCM, 11th Ed, 2014, Jay Heizer

Free Download Link

3. Principles of Operations Management: Sustainability and SCM, 10th Ed, Jay Heizer, 2017

Free Download Link
4. Operations Management, 2017, 12th Edition, William J. Stevenson

Free Download Link
5. Operations Management: Processes and Supply Chains, 11th Edition, Lee J. Krajewski, 2016

6. Operations Research: An Introduction, 10th Edition, Hamdy A. Taha, 2017
7. Introduction to Operations and SCM, 4th Edition, Cecil B. Bozarth, Robert B. Handfield, 2016 

8. Hotel Operations Management, 3rd Edition, David K. Hayes, 2017Ebooks – Free Download Links

Videos – Youtube channel links

Good Luck and Success, Enjoy Your Study !

MBA Operations Management - Test Bank - Chapter 03a

Operations Management, 12e (Heizer/Render/Munson)
Chapter 3  Project Management

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Section 1   The Importance of Project Management

1) One phase of a large project is scheduling.
Answer:  TRUE
Diff: 1
Learning Outcome:  Describe the goals and stages of project management

2) Which of the following statements regarding Bechtel is true?

1. A) Its competitive advantage is project management.
2. B) Bechtel was the construction contractor for the Hoover Dam.
3. C) While helping to rebuild Iraq, Bechtel's crews had to travel under armed escort.
4. D) Bechtel's procurement program is global in nature.
5. E) All of the above are true.

Answer:  E
Diff: 1
Learning Outcome:  Describe the goals and stages of project management

3) Which of the following statements about Bechtel is true?

1. A) Even though Bechtel is over 100 years old, the Kuwaiti oil fields was its first "project."
2. B) Bechtel is the world's premier manager of massive construction and engineering projects.
3. C) Bechtel's competitive advantage is supply chain management.
4. D) While its projects are worldwide, its network of suppliers is largely in the United States
5. E) All of the above are true.

Answer:  B
Diff: 2
Learning Outcome:  Describe the goals and stages of project management

4) Which of the following projects were completed by Bechtel?

1. A) Hoover Dam
2. B) Boston Central Artery/Tunnel
3. C) Rebuilding Kuwait after Iraq's invasion in 1990
4. D) Rebuilding Iraq after the U.S. invasion, starting in 2003
5. E) All of the above were Bechtel projects

Answer:  E
Diff: 2
Learning Outcome:  Describe the goals and stages of project management

5) The phases of project management are:

1. A) planning, scheduling, and controlling.
2. B) planning, programming, and budgeting.
3. C) planning, organizing, staffing, leading, and controlling.
4. D) different for manufacturing projects than for service projects.
5. E) GANTT, CPM, and PERT.

Answer:  A
Diff: 2
Learning Outcome:  Describe the goals and stages of project management

6) Which of the following is NOT one of the phases of project management?

1. A) planning
2. B) scheduling
3. C) controlling
4. D) budgeting
5. E) All of the above are project management phases.

Answer:  D
Diff: 2
Learning Outcome:  Describe the goals and stages of project management

7) What are the three phases of a project? Describe each in a sentence or two.
Answer:  The three phases are planning, scheduling, and controlling. Planning includes goal setting, defining the project, and team organization. Scheduling relates people, money, and supplies to specific activities and relates activities to each other. Controlling is where the firm monitors resources, costs, quality, and budgets. It also revises or changes plans and shifts resources to meet time and cost demands.
Diff: 2
Learning Outcome:  Describe the goals and stages of project management

Section 2   Project Planning

1) A project organization works best for an organization when the project resides in only one of its functional areas.
Answer:  FALSE
Diff: 2
Key Term:  Project organization
Learning Outcome:  Describe the goals and stages of project management

2) One responsibility of a project manager is to make sure that the project meets its quality goals.
Answer:  TRUE
Diff: 2
Learning Outcome:  Describe the goals and stages of project management

3) Work breakdown structure is a useful tool in project management because it addresses the timing of individual work elements.
Answer:  FALSE
Diff: 2
Key Term:  Work breakdown structure (WBS)
AACSB:  Reflective thinking
Learning Outcome:  Describe the goals and stages of project management

4) Project managers have their own code of ethics, established by the Project Management Institute.
Answer:  TRUE
Diff: 2
AACSB:  Ethical understanding and reasoning
Learning Outcome:  Describe the goals and stages of project management

5) Ethical issues that can arise in projects include gifts from contractors, pressure to mask delays with false status reports, and pressure to compromise project quality to meet bonuses or avoid penalties related to schedules.
Answer:  TRUE
Diff: 1
AACSB:  Ethical understanding and reasoning
Learning Outcome:  Describe the goals and stages of project management

6) A project organization:

1. A) is effective for companies with multiple large projects.
2. B) is appropriate only in construction firms.
3. C) often fails when the project cuts across organizational lines.
4. D) is most helpful for ongoing projects with no termination date.
5. E) is most helpful when the work contains simple and unrelated tasks.

Answer:  A
Diff: 2
Key Term:  Project organization
Learning Outcome:  Describe the goals and stages of project management

7) A code of ethics especially for project managers:

1. A) has been established by the Project Management Institute.
2. B) has been formulated by the Federal government.
3. C) has been formulated by the World Trade Organization.
4. D) is inappropriate, since everyone should use the same guidance on ethical issues.
5. E) does not exist at this time.

Answer:  A
Diff: 2
AACSB:  Ethical understanding and reasoning
Learning Outcome:  Describe the goals and stages of project management

8) Ethical issues that may arise in projects large and small include:

1. A) gifts from contractors.
2. B) exaggerated expense reports.
3. C) compromised quality standards to meet bonuses or avoid penalties related to schedules.
4. D) pressure to mask delays with false status reports.
5. E) all of the above.

Answer:  E
Diff: 1
AACSB:  Ethical understanding and reasoning
Learning Outcome:  Describe the goals and stages of project management

9) The project organization works best when which of the following conditions are satisfied?

1. Work tasks can be defined with a specific goal and deadline.
2. The job is typical and familiar to the existing organization.

III.  The work contains interrelated tasks requiring specialized skills.

1. The project is temporary but unimportant to long-term organizational success.
2. The project cuts across organizational lines.
3. A) I, II, III, IV, V
4. B) None of the above conditions need to be satisfied.
5. C) I, III, V
6. D) I, II, III, V
7. E) I, III, IV, V

Answer:  C
Diff: 2
Key Term:  Project organization
Learning Outcome:  Describe the goals and stages of project management

10) A project organization that becomes permanent is often referred to as a:

1. A) fixed project organization.
2. B) matrix organization.
3. C) normal organization.
4. D) standard organization.
5. E) permanent project organization.

Answer:  B
Diff: 3
Key Term:  Project organization
Learning Outcome:  Describe the goals and stages of project management

11) WBS stands for which of the following project management tools?

1. A) work break schedule
2. B) work breakdown status
3. C) work breakdown schedule
4. D) work breakdown structure
5. E) work break status

Answer:  D
Diff: 2
Key Term:  Work breakdown structure (WBS)
Learning Outcome:  Describe the goals and stages of project management

12) Match the following steps in Microsoft's development of Windows 8 to their respective WBS level.

Step                                                                  Level
Develop Windows 8 Operating System        ?
System Testing                                                  ?
Compatible with Windows 7                          ?
Develop GUI's                                                   ?
Module Testing                                                 ?

1. A) Level 1, Level 2, Level 4, Level 3, Level 3
2. B) Level 1, Level 2, Level 3, Level 4, Level 5
3. C) Level 0, Level 1, Level 2, Level 3, Level 4
4. D) Level 0, Level 2, Level 2, Level 3, Level 3
5. E) Level 5, Level 3, Level 4, Level 1, Level 2

Answer:  A
Diff: 3
Key Term:  Work breakdown structure (WBS)
AACSB:  Information technology
Learning Outcome:  Describe the goals and stages of project management

13) A(n) ________ is an organization formed to ensure that programs (projects) receive the proper management and attention.
Answer:  project organization
Diff: 1
Key Term:  Project organization
Learning Outcome:  Describe the goals and stages of project management

14) A(n) ________ divides a project into more and more detailed components.
Answer:             work breakdown structure or WBS
Diff: 2
Key Term:  Work breakdown structure (WBS)
Learning Outcome:  Describe the goals and stages of project management

15) The ________ has established a code of ethics especially for project managers.
Answer:  Project Management Institute
Diff: 2
AACSB:  Ethical understanding and reasoning
Learning Outcome:  Describe the goals and stages of project management

16) Identify the responsibilities of project managers.
Answer:  Project managers are directly responsible for making sure that (1) all necessary activities are finished in proper sequence and on time; (2) the project comes in within budget; (3) the project meets its quality goals; and (4) the people assigned to the project receive the motivation, direction, and information needed to do their jobs.
Diff: 2
Learning Outcome:  Describe the goals and stages of project management


17) What is a project organization?
Answer:  A project organization is an organization formed to ensure that programs (projects) receive the proper management and attention.
Diff: 2
Key Term:  Project organization
Learning Outcome:  Describe the goals and stages of project management
18) What are some of the ethical issues faced by project managers?
Answer:  A project manager can be exposed to a wide variety of ethical issues. These include, but are not limited to, gifts from contractors, pressure to mask delays with false status reports, falsifying (exaggerating) expense reports, and compromising quality with substandard materials or practices to meet bonuses or avoid penalties related to schedules.
Diff: 2
AACSB:  Ethical understanding and reasoning
Learning Outcome:  Describe the goals and stages of project management

Section 3   Project Scheduling

1) Gantt charts give a timeline for each of a project's activities, but they do not adequately illustrate the interrelationships between the activities and the resources.
Answer:  TRUE
Diff: 2
Key Term:  Gantt charts
Objective:  LO 3.1 Use a Gantt chart for scheduling
Learning Outcome:  Describe the goals and stages of project management

2) PERT, but not CPM, has the ability to consider the precedence relationships in a project.
Answer:  FALSE
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
Objective:  LO 3.1 Use a Gantt chart for scheduling
Learning Outcome:  Describe the goals and stages of project management

3) A combination of effective Gantt chart use and other tactics allowed Delta to cut the average time for a plane layover by what % of the original 60 minute duration?

1. A) 33%, to 40 minutes
2. B) 50%, to 30 minutes
3. C) 20%, to 48 minutes
4. D) 25%, to 45 minutes
5. E) 40%, to 36 minutes

Answer:  A
Diff: 2
Key Term:  Gantt charts
AACSB:  Analytical thinking
Objective:  LO 3.1 Use a Gantt chart for scheduling
Learning Outcome:  Describe the goals and stages of project management


4) Which of the following statements regarding Gantt charts is true?

1. A) Gantt charts give a timeline and precedence relationships for each activity of a project.
2. B) Gantt charts use the four standard spines of Methods, Materials, Manpower, and Machinery.
3. C) Gantt charts are visual devices that show the duration of activities in a project.
4. D) Gantt charts are expensive.
5. E) All of the above are true.

Answer:  C
Diff: 2
Key Term:  Gantt charts
Objective:  LO 3.1 Use a Gantt chart for scheduling
Learning Outcome:  Describe the goals and stages of project management
5) Identify each of the purposes of project scheduling.
Answer:  Project scheduling shows the relationship of each activity to others and to the whole project. It identifies the precedence relationship among activities. It encourages the setting of realistic time and cost estimates for each activity. It helps make better use of people, money, and material resources by identifying critical bottlenecks in the project.
Diff: 3
Learning Outcome:  Describe the goals and stages of project management

6) Describe the differences between a Gantt chart and a PERT/CPM network.
Answer:  The differences between a Gantt chart and a PERT/CPM network are mainly that PERT/CPM has the ability to consider precedence relationships and interdependence of activities.
Diff: 2
Key Term:  Gantt charts
Objective:  LO 3.1 Use a Gantt chart for scheduling
Learning Outcome:  Describe the goals and stages of project management

Section 4   Project Controlling

1) Agile project management is a type of work breakdown structure (WBS).
Answer:  FALSE
Diff: 1
Learning Outcome:  Describe the goals and stages of project management

2) Ill-defined projects are typified by software development and new technology.
Answer:  TRUE
Diff: 1
Learning Outcome:  Describe the goals and stages of project management

3) The control of projects involves close monitoring of which of the following?

1. A) resources
2. B) costs
3. C) quality
4. D) budgets
5. E) all of the above

Answer:  E
Diff: 1
Learning Outcome:  Describe the goals and stages of project management

4) Projects such as road building and plane building are:

1. A) ill-defined
2. B) well-defined
3. C) agile
4. D) not defined
5. E) none of the above

Answer:  B
Diff: 1
Learning Outcome:  Describe the goals and stages of project management
5) The waterfall approach is used most often for:

1. A) well-defined projects
2. B) projects whose changes tend to be minor
3. C) projects with step-by-step progress
4. D) controlling projects
5. E) all of the above

Answer:  E
Diff: 1
Learning Outcome:  Describe the goals and stages of project management

6) Describe some of the challenges faced in the construction of the new 11-story building at Arnold Palmer Hospital in Orlando, Florida.
Answer:  Prior to beginning actual construction, regulatory and funding issues added, as they do with most projects, substantial time to the overall project. Cities have zoning and parking issues, the EPA has drainage and waste issues, and regulatory authorities have their own requirements, as do issuers of bonds.
Diff: 3
Learning Outcome:  Describe the goals and stages of project management

Section 5   Project Management Techniques: PERT and CPM

1) The shortest of all paths through the network is the critical path.
Answer:  FALSE
Diff: 2
Key Term:  Critical path
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

2) The fundamental difference between PERT and CPM is that PERT uses the beta distribution for crashing projects while CPM uses cost estimates.
Answer:  FALSE
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management


3) The main difference between PERT and CPM is that:

1. A) PERT is more accurate than CPM.
2. B) PERT assumes that activity durations are known.
3. C) PERT ignores activity costs.
4. D) CPM assumes activity durations can vary.
5. E) PERT employs three time estimates for each activity.

Answer:  E
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
Learning Outcome:  Describe the goals and stages of project management
4) The difference between AON and AOA networks is that:

1. A) AOA networks sometimes require dummy activities.
2. B) nodes consume no resources or time in AOA networks.
3. C) both are acceptable in practice; however, Microsoft Project uses AON.
4. D) nodes designate activities in AON, while arrows designate activities in AOA.
5. E) All of the above are true.

Answer:  E
Diff: 2
Key Term:  Activity-on-node (AON)
Objective:  LO 3.2 Draw AOA and AON networks
Learning Outcome:  Describe the goals and stages of project management

5) A simple CPM network has five activities, A, B, C, D, and E. A is an immediate predecessor of C and of D. B is also an immediate predecessor of C and of D. C and D are both immediate predecessors of E. Which of the following statements is true?

1. A) There are two paths in this network.
2. B) There are four paths in this network.
3. C) There are five paths in this network.
4. D) There are 25 paths in this network.
5. E) There are six paths in this network.

Answer:  B
Diff: 2
Key Term:  Activity-on-node (AON)
AACSB:  Analytical thinking
Objective:  LO 3.2 Draw AOA and AON networks
Learning Outcome:  Describe the goals and stages of project management

6) The ________ is a project management technique using only one time factor per activity that enables managers to schedule, monitor, and control large and complex projects.
Answer:  critical path method or CPM
Diff: 1
Key Term:  Critical path method (CPM)
Learning Outcome:  Describe the goals and stages of project management

7) The ________ is the computed longest time path(s) through a network.
Answer:  critical path
Diff: 1
Key Term:  Critical path
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

8) The network analysis method that allows activity times to vary is ________.
Answer:  PERT or Program Evaluation and Review Technique
Diff: 1
Key Term:  Program evaluation and review technique (PERT)
Learning Outcome:  Describe the goals and stages of project management
9) Identify, in order, the six steps basic to both PERT and CPM.
Answer:  1. Define the project and prepare the WBS.

2. Develop the relationships among the activities.
3. Draw the network connecting all of the activities.
4. Assign the time and/or cost estimates to each activity.
5. Compute the critical path–the longest time path through the network.
6. Use the network to help plan, schedule, monitor, and control the project.

Diff: 3
Key Term:  Program evaluation and review technique (PERT)
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

10) What is the basic difference between PERT and CPM?
Answer:  The basic difference between PERT and CPM is that PERT requires three time estimates of activity completion time, whereas CPM uses only a single estimate.
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
Learning Outcome:  Describe the goals and stages of project management

Section 6   Determining the Project Schedule

1) The ES of an activity that has only one predecessor is simply the EF of that predecessor.
Answer:  TRUE
Diff: 2
Objective:  LO 3.3 Complete forward and backward passes for a project
Learning Outcome:  Describe the goals and stages of project management

2) Slack is the amount of time an activity can be delayed without delaying the entire project.
Answer:  TRUE
Diff: 2
Key Term:  Slack time
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

3) Every network has at least one critical path.
Answer:  TRUE
Diff: 2
Key Term:  Critical path
AACSB:  Reflective thinking
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management


4) The critical path can be determined by use of either the "forward pass" or the "backward pass."
Answer:  FALSE
Diff: 2
Key Term:  Critical path
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management
5) Which of the following statements regarding critical paths is true?

1. A) The shortest of all paths through the network is the critical path.
2. B) Some activities on the critical path may have slack.
3. C) Every network has only one critical path.
4. D) On a specific project, there can be multiple critical paths, all with exactly the same duration.
5. E) The duration of the critical path is the average duration of all paths in the project network.

Answer:  D
Diff: 2
Key Term:  Critical path
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

6) Which of the following statements regarding CPM is true?

1. A) The critical path is the shortest of all paths through the network.
2. B) The critical path is that set of activities that has positive slack.
3. C) Some networks have no critical path.
4. D) All activities on the critical path have their LS equal to the maximum EF of all immediate predecessors.
5. E) All activities on the critical path have their ES equal to their LF.

Answer:  D
Diff: 2
Key Term:  Critical path
AACSB:  Analytical thinking
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

7) A simple CPM network has three activities, A, B, and C. A is an immediate predecessor of B and of C. B is an immediate predecessor of C. The activity durations are A=4, B=3, C=8.

15. A) The critical path is A-B-C, duration 15.
16. B) The critical path is A-C, duration 12.
17. C) The critical path is A-B-C, duration 13.5
18. D) The critical path cannot be determined without knowing PERT expected activity times.
19. E) The network has no critical path.

Answer:  A
Diff: 2
Key Term:  Critical path
AACSB:  Analytical thinking
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

8) A simple CPM network has three activities, D, E, and F. D is an immediate predecessor of E and of F. E is an immediate predecessor of F. The activity durations are D=4, E=3, F=8.

15. A) The critical path is D-E-F, duration 15.
16. B) The critical path is D-F, duration 12.
17. C) Slack at D is 3 periods.
18. D) Slack at E is 3 periods.
19. E) Both A and C are true.

Answer:  A
Diff: 2
Key Term:  Critical path
AACSB:  Analytical thinking
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

9) Activity D on a CPM network has predecessors B and C, and has successor F. D has duration 6. B's earliest finish is 18, while C's is 20. F's late start is 26. Which of the following is definitely true?

1. A) B is a critical activity.
2. B) C is completed before B.
3. C) D has no slack but is not critical.
4. D) D is critical, and has zero slack.
5. E) F is critical, and has zero slack.

Answer:  D
Diff: 3
Key Term:  Critical path
AACSB:  Analytical thinking
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

10) Which of the following statements regarding CPM networks is true?

1. A) There can be multiple critical paths on the same project, all with different durations.
2. B) The early finish of an activity is the latest early start of all preceding activities.
3. C) The late start of an activity is its late finish plus its duration.
4. D) If a specific project has multiple critical paths, all of them will have the same duration.
5. E) None of the above are true.

Answer:  D
Diff: 2
Key Term:  Critical path
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

11) Activity R on a CPM network has predecessors M and N, and has successor S. R has duration 5. N's late finish is 18, while M's is 20. S's late start is 14. Which of the following is definitely true?

1. A) R is critical and has zero slack.
2. B) R has no slack but is not critical.
3. C) The set of times cannot all be possible.
4. D) N is a critical activity.
5. E) S is a critical activity.

Answer:  C
Diff: 3
Key Term:  Critical path
AACSB:  Analytical thinking
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

12) Which of the following statements concerning CPM activities is false?

1. A) The early finish of an activity is the early start of that activity plus its duration.
2. B) The late finish is the earliest of the late start times of all successor activities.
3. C) The late start of an activity is its late finish less its duration.
4. D) The late finish of an activity is the earliest late start of all preceding activities.
5. E) The early start of an activity is the latest early finish of all preceding activities.

Answer:  D
Diff: 3
Key Term:  Critical path method (CPM)
AACSB:  Analytical thinking
Objective:  LO 3.3 Complete forward and backward passes for a project
Learning Outcome:  Describe the goals and stages of project management

13) The critical path for the network activities shown below is ________ with duration ________.

Activity	Duration	Immediate Predecessors
A	4	---
B	2	A
C	7	--
D	4	A
E	5	B,C,D

1. A) A-B-D; 10
2. B) A-B-E; 11
3. C) C-E; 12
4. D) A-D-E; 13
5. E) A-B-C-D-E; 22

Answer:  D
Diff: 2
Key Term:  Critical path
AACSB:  Analytical thinking
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

14) The critical path for the network activities shown below is ________ with duration ________.

Activity	Duration	Immediate Predecessors
A	2	--
B	4	--
C	6	A,B
D	1	A,B
E	2	B,C,D

1. A) A-D-E; 5
2. B) B-E; 6
3. C) B-D-E; 7
4. D) A-C-E; 10
5. E) B-C-E; 12

Answer:  E
Diff: 3
Key Term:  Critical path
AACSB:  Analytical thinking
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

15) The critical path for the network activities shown below is ________ with duration ________.

Activity	Duration	Immediate Predecessors
A	10	---
B	8	---
C	2	A
D	4	A
E	5	B,C, D

1. A) A-C; 12
2. B) A-D-E; 19
3. C) B-E; 13
4. D) A-B-C-D-E; 29
5. E) none of the above

Answer:  B
Diff: 2
Key Term:  Critical path
AACSB:  Analytical thinking
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management


16) ________ is the amount of time an individual activity in a network can be delayed without delaying the entire project.
Answer:  Slack time
Diff: 1
Key Term:  Slack time
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management
17) What is the objective of critical path analysis?
Answer:  Critical path analysis determines the longest path through a network of activities. This longest path is the key to making the schedule that provides for completing all activities in the shortest time. Critical path analysis identifies those activities critical to timely completion of all activities so they can receive management focus.
Diff: 2
Key Term:  Critical path analysis
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

18) Explain why the critical path is the longest, not the shortest, path through a network.
Answer:  The critical path is that set of activities in a project network that controls the duration of the entire project. The controlling element to completion of all activities is the longest path; any shorter path will not allow for all activities to be completed.
Diff: 2
Key Term:  Critical path
AACSB:  Reflective thinking
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

19) Define slack time.
Answer:  Slack time is the length of time an activity can be delayed without delaying the entire project.
Diff: 2
Key Term:  Slack time
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

20) What are the earliest activity start time and latest activity start time, and how are they computed?
Answer:  The earliest start time (ES) is the earliest time at which an activity may start and still satisfy all precedence requirements. ES = Max{EF of all immediate predecessors}. The latest start time is the latest time at which an activity may start and still satisfy both precedence requirements and the overall project completion time. LS = LF - Activity time.
Diff: 2
Objective:  LO 3.3 Complete forward and backward passes for a project
Learning Outcome:  Describe the goals and stages of project management

21) A network consists of the activities in the following list. Times are given in weeks.

Activity	Preceding	Time
A	--	8
B	--	3
C	A	7
D	A, B	3
E	C	4
F	D	6

1. Draw the network diagram.
2. Calculate the ES, EF, LS, LF, and Slack for each activity.
3. What is project completion time?

Answer:  (a)

(b ,c)

Results
Task	Early Start	Early Finish	Late Start	Late Finish	Slack
A	0	8	0	8	0
B	0	3	7	10	7
C	8	15	8	15	0
D	8	11	10	13	2
E	15	19	15	19	0
F	11	17	13	19	2
	Project	19

Diff: 3
Key Term:  Program evaluation and review technique (PERT)
AACSB:  Analytical thinking
Objective:  LO 3.3 Complete forward and backward passes for a project
Learning Outcome:  Describe the goals and stages of project management

22) The network below represents a project being analyzed by the critical path method. Activity durations are A = 5, B = 2, C = 12, D = 3, E = 5, F = 1, G = 7, H = 2, I = 10, and J = 6.

1. What task must be on the critical path, regardless of activity durations?
2. What is the duration of path A-B-E-H-J?
3. What is the critical path of this network?
4. What is the length of the critical path?
5. What is slack time at activity H?
6. What is the Late Finish of activity H?
7. If activity C were delayed by two time units, what would happen to the project duration?

Answer:  (a) J; (b) 20; (c) A-B-G-I-J; (d) 30; (e) 5; (f) 24; (g) no impact.

Results
Task	Early Start	Early Finish	Late Start	Late Finish	Slack
A	0	5	0	5	0
B	5	7	5	7	0
C	5	17	10	22	5
D	0	3	10	13	10
E	7	12	17	22	10
F	3	4	13	14	10
G	7	14	7	14	0
H	17	19	22	24	5
I	14	24	14	24	0
J	24	30	24	30	0
	Project	30

Diff: 3
Key Term:  Critical path analysis
AACSB:  Analytical thinking
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

23) A network consists of the following list. Times are given in weeks.

Activity	Preceding	Duration
A	--	9
B	A	2
C	A	12
D	A	5
E	B	6
F	B	8
G	C, F	3
H	D	2
I	H	8
J	G, I	6
K	E, J	2

1. Draw the network diagram.
2. Which activities form the critical path?
3. How much slack exists at activities A and F?
4. What is the duration of the critical path?

Answer:
(a)  Network diagram


(b)  paths A-D-H-I-J-K and A-C-G-J-K are critical;
(c)   A has no slack; F has 2 units
(d)  32 weeks
Diff: 3
Key Term:  Critical path analysis
AACSB:  Analytical thinking
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

24) The network below represents a project being analyzed by the critical path method. Activity durations are indicated on the network.

1. Identify the activities on the critical path.
2. What is the duration of the critical path?
3. Calculate the amount of slack time at activity H.
4. If activity I were delayed by ten time units, what would be the impact on the project duration?

Answer:  (a) Critical activities are A-C-J-K; (b) The critical path is 26 time units; (c) Slack at H is 9 units; (d) I has 11 units slack—a ten unit delay would have no impact on the project.

Task	Early Start	Early Finish	Late Start	Late Finish	Slack
A	0	5	0	5	0
B	0	3	6	9	6
C	5	16	5	16	0
D	0	4	9	13	9
E	3	10	9	16	6
F	4	10	15	21	11
G	3	7	17	21	14
H	4	7	13	16	9
I	10	15	21	26	11
J	16	22	16	22	0
K	22	26	22	26	0
	Project	26

Diff: 2
Key Term:  Critical path analysis
AACSB:  Analytical thinking
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management
25) Draw the AOA and AON networks for the following project and calculate the minimum project duration.

Activity	Duration (days)	Immediate Predecessors
A	10	---
B	8	---
C	2	A
D	4	A
E	5	B,C, D

Answer:
AON


AOA


Minimum duration is the longest of the three paths, ADE, or a total of 19 days.
Diff: 3
Key Term:  Critical path analysis
AACSB:  Analytical thinking
Objective:  LO 3.2 Draw AOA and AON networks
Learning Outcome:  Describe the goals and stages of project management

26) Given the project within the table below, calculate the following:

1. The critical path
2. The minimum project duration
3. The amount of slack for each activity

Activity	Duration (hours)	Immediate Predecessors
A	4	None
B	3	None
C	10	None
D	7	B,C
E	1	D
F	1	E
G	5	A,F

Answer:

(A) The critical path is CDEFG
(B) Minimum duration is (10+7+1+1+5) or 24 hours
(C) CDEFG have no slack since on the critical path. BDEFG takes 17 hours, so B has 7 hours of slack. AG takes 9 hours, so A has 15 hours of slack.
Diff: 3
Key Term:  Critical path analysis
AACSB:  Analytical thinking
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

27) Consider the network presented in the following table. Calculate

1. All possible paths
2. The critical path
3. The slack available at any non-critical points
4. The minimum project duration

Task	Duration (Days)	Immediate Predecessors
A	5	None
B	3	A
C	4	A
D	2	C
E	1	B,D

Answer:

(A) Two paths are possible, ACDE and ABE.
(B) The critical path is ACDE
(C) The slack available at point B is Duration (ACDE) - Duration (ABE) = 3 days. All other points have no slack because they are on the critical path.
(D) The minimum project duration is the length of the critical path ACDE which is = 12 days
Diff: 2
Key Term:  Critical path analysis
AACSB:  Analytical thinking
Objective:  LO 3.4 Determine a critical path
Learning Outcome:  Describe the goals and stages of project management

Section 7   Variability in Activity Times

1) The PERT pessimistic time estimate is an estimate of the minimum time an activity will require.
Answer:  FALSE
Diff: 2
Key Term:  Pessimistic time
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management

2) The standard deviation of project duration is the average of the standard deviation of all activities on the critical path.
Answer:  FALSE
Diff: 2
Key Term:  Critical path
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management

3) In PERT analysis, the identification of the critical path can be incorrect if a noncritical activity takes substantially more than its expected time.
Answer:  TRUE
Diff: 3
Key Term:  Program evaluation and review technique (PERT)
AACSB:  Reflective thinking
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management

4) The time an activity will take assuming very unfavorable conditions is:

1. A) the optimistic time.
2. B) the pessimistic time.
3. C) the activity variance.
4. D) the minimum time.
5. E) exactly twice as long as the expected time.

Answer:  B
Diff: 2
Key Term:  Pessimistic time
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management

5) The ________ distribution is used by PERT analysis to calculate expected activity times and variances.

1. A) Normal
2. B) Beta
3. C) Alpha
4. D) Gaussian
5. E) Binomial

Answer:  B
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management


6) The expected activity time in PERT analysis is calculated as:

1. A) the simple average of the optimistic, pessimistic, and most likely times.
2. B) the weighted average of a, m, and b, with m weighted 4 times as heavily as a and b.
3. C) the sum of the optimistic, pessimistic, and most likely times.
4. D) the sum of the optimistic, pessimistic, and most likely times, divided by six.
5. E) the sum of the activity variances, divided by six.

Answer:  B
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management
7) Which of the following statements regarding PERT times is true?

1. A) The optimistic time estimate is an estimate of the minimum time an activity will require.
2. B) The optimistic time estimate is an estimate of the maximum time an activity will require.
3. C) The expected time estimate is calculated as t = (a + 4m + b).
4. D) The pessimistic time estimate is an estimate of the minimum time an activity will require.
5. E) The most likely time estimate is an estimate of the maximum time an activity will require.

Answer:  A
Diff: 2
Key Term:  Optimistic time
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management

8) Which of the following statements regarding PERT times is true?

1. A) The expected time is an estimate of the time an activity will require if everything goes as planned.
2. B) The optimistic time estimate is an estimate of the maximum time an activity will require.
3. C) The expected time estimate is calculated as t = (a + 4m + b)/6.
4. D) The pessimistic time estimate is an estimate of the minimum time an activity will require.
5. E) The most likely time estimate is an estimate of the maximum time an activity will require.

Answer:  C
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management

9) The beta distribution is used in project management to:

1. A) calculate slack on activities not on the critical path.
2. B) calculate the probability that a project will be completed within its budget.
3. C) calculate pessimistic and optimistic activity times.
4. D) determine which activity should be crashed.
5. E) none of the above

Answer:  E
Diff: 3
Key Term:  Program evaluation and review technique (PERT)
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management


10) The beta distribution is used in project management to:

1. A) determine which activity should be crashed.
2. B) calculate the probability that a project will be completed within its budget.
3. C) calculate expected activity times.
4. D) calculate slack for activities on the critical path.
5. E) none of the above

Answer:  C
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management
11) In a PERT network, non-critical activities that have little slack need to be monitored closely:

1. A) because PERT treats all activities as equally important.
2. B) because near-critical paths could become critical paths with small delays in these activities.
3. C) because slack is undesirable and needs to be eliminated.
4. D) because they are causing the entire project to be delayed.
5. E) because they have a high risk of not being completed.

Answer:  B
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management

12) Which of the following statements regarding PERT analysis is true?

1. A) Each activity has two estimates of its duration.
2. B) Project variance is the sum of all activity variances.
3. C) Project standard deviation is the sum of all critical activity standard deviations.
4. D) Only critical activities contribute to the project variance.
5. E) The most likely time is equivalent to the expected activity time.

Answer:  D
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management

13) A project being analyzed by PERT has 60 activities, 13 of which are on the critical path. If the estimated time along the critical path is 214 days with a project variance of 100, what is the probability that the project will take 224 days or more to complete?

1. A) near zero
2. B) 0.0126
3. C) 0.1587
4. D) 0.8413
5. E) 2.14

Answer:  C
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
AACSB:  Analytical thinking
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management

14) An activity on a PERT network has these time estimates: optimistic = 2, most likely = 5, and pessimistic = 10. What is its expected activity time?

5. A) 5.00
6. B) 5.33
7. C) 5.67
8. D) 10.67
9. E) 32.00

Answer:  B
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
AACSB:  Analytical thinking
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management
15) An activity on a PERT network has these time estimates: optimistic = 1, most likely = 2, and pessimistic = 5. What is its expected activity time?

2. A) 2.00
3. B) 2.33
4. C) 2.67
5. D) 4.67
6. E) 14.00

Answer:  B
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
AACSB:  Analytical thinking
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management

16) An activity on a PERT network has these time estimates: optimistic = 2, most likely = 3, and pessimistic = 8. What is its expected activity time and variance?

3. A) 3.67; 1
4. B) 3.67; 6
5. C) 4.33; 1
6. D) 4.33; 6
7. E) none of the above

Answer:  A
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
AACSB:  Analytical thinking
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management


17) A local project being analyzed by PERT has 42 activities, 13 of which are on the critical path. If the estimated time along the critical path is 105 days with a project variance of 25, what is the probability that the project will be completed in 95 days or less?

1. A) -0.4
2. B) 0.0228
3. C) 0.3444
4. D) 0.9772
5. E) 4.2

Answer:  B
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
AACSB:  Analytical thinking
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management
18) A project being analyzed by PERT has 38 activities, 16 of which are on the critical path. If the estimated time along the critical path is 90 days with a project variance of 25, what is the probability that the project will be completed in 88 days or less?

1. A) 0.0228
2. B) 0.3446
3. C) 0.6554
4. D) 0.9772
5. E) 18

Answer:  B
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
AACSB:  Analytical thinking
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management

19) A PERT project has 45 activities, 19 of which are on the critical path. The estimated time for the critical path is 120 days. The sum of all activity variances is 64, while the sum of variances along the critical path is 36. What is the probability that the project can be completed between days 108 and 120?

2. A) -2.00
3. B) 0.0227
4. C) 0.1058
5. D) 0.4773
6. E) 0.9773

Answer:  D
Diff: 3
Key Term:  Program evaluation and review technique (PERT)
AACSB:  Analytical thinking
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management


20) A contractor's project being analyzed by PERT has an estimated time for the critical path of 120 days. The sum of all activity variances is 81; the sum of variances along the critical path is 64. What is the probability that the project will take 130 or more days to complete?

1. A) 0.1057
2. B) 0.1335
3. C) 0.8512
4. D) 0.8943
5. E) 1.29

Answer:  A
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
AACSB:  Analytical thinking
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management
21) Analysis of a PERT problem shows the estimated time for the critical path to be 108 days with a variance of 64. There is a .90 probability that the project will be completed before approximately day:

98. A) 98.
99. B) 108.
100. C) 109.
101. D) 115.
102. E) 118.

Answer:  E
Diff: 3
Key Term:  Program evaluation and review technique (PERT)
AACSB:  Analytical thinking
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management

22) A project whose critical path has an estimated time of 120 days with a variance of 100 has a 20% chance that the project will be completed before which day (rounded to nearest day)?

1. A) 98
2. B) 112
3. C) 120
4. D) 124
5. E) 220

Answer:  B
Diff: 3
Key Term:  Program evaluation and review technique (PERT)
AACSB:  Analytical thinking
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management


23) A project whose critical path has an estimated time of 820 days with a variance of 225 has a 20% chance that the project will be completed before which day (rounded to nearest day)?

1. A) 631
2. B) 689
3. C) 807
4. D) 833
5. E) 1009

Answer:  C
Diff: 3
Key Term:  Program evaluation and review technique (PERT)
AACSB:  Analytical thinking
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management
24) Contract requirements state that a project must be completed within 180 working days, or it will incur penalties for late completion. Analysis of the activity network reveals an estimated project time of 145 working days with a project variance of 400. What is the probability that the project will be completed before the late-payment deadline?

1. A) 0.0401
2. B) 0.4599
3. C) 0.8056
4. D) 0.9599
5. E) near 1.0000, or almost certain

Answer:  D
Diff: 3
Key Term:  Program evaluation and review technique (PERT)
AACSB:  Analytical thinking
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management

25) The ________ distribution is appropriate for calculating expected activity times and activity variances in PERT networks.
Answer:  beta
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management

26) PERT calculations typically include the duration variance of each activity. What is the purpose of this calculation, i.e. what's the role of variances in PERT analysis?
Answer:  The activity variances influence the probability of project completion. Specifically, the sum of the variances of the critical tasks equals the variance of the project. Further, large variances on noncritical tasks need to be monitored. Such an activity might have an actual completion time so large that the task becomes a critical task.
Diff: 3
Key Term:  Program evaluation and review technique (PERT)
AACSB:  Reflective thinking
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management


27) How is the expected completion time of a project activity, and of a PERT project, computed?
Answer:  The expected completion time of a project activity uses the beta distribution; expected time is the weighted average of optimistic, most likely, and pessimistic time estimates. The formula is
t = (a + 4m + b) / 6. Expected completion of a PERT project is the sum of the expected times for individual activities that are on the critical path.
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management
28) Describe in words how to calculate a project's standard deviation. What assumption allows that calculation to be accurate?
Answer:  Add the variances of the activities on the critical path and then take the square root. We can do this because we assume that the activities are independent.
Diff: 3
Key Term:  Program evaluation and review technique (PERT)
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management

29) A partially solved PERT problem is detailed in the table below. Times are given in weeks.

Activity	Preceding	Optimistic Time	Probable Time	Pessimistic Time	Expected Time	Variance
A	--	7	9	14		1.361
B	A	2	2	8		0
C	A	8	12	16		0
D	A	3	5	10		1.361
E	B	4	6	8		0
F	B	6	8	10		0
G	C, F	2	3	4		0
H	D	2	2	8		1.000
I	H	6	8	16		2.778
J	G, I	4	6	14		2.778
K	E, J	2	2	5		0.250

1. Calculate the expected time for each activity. Enter these values in the appropriate column in the table above.
2. Which activities form the critical path?
3. What is the estimated time of the critical path?
4. What are the project variance and the project standard deviation?
5. What is the probability of completion of the project after week 40?

Answer:  (a) A=9.5 B=3 C=12 D=5.5 E=6 F=8 G=3 H=3 I=9 J=7 K=2.5
(b) A-D-H-I-J-K; (c) 36.5; (d) 9.53, 3.09; (e) 0.13
Diff: 3
Key Term:  Program evaluation and review technique (PERT)
AACSB:  Analytical thinking
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management

30) Consider the network described in the table below.

Activity	Immediate Predecessor(s)	Pessimistic	Probable	Optimistic
J	--	15	10	8
K	--	9	8	7
L	J	10	6	5
M	J	3	3	3
N	K,M	9	5	1
O	K,M	10	7	4
P	L,N	10	8	3

1. Calculate the expected duration of each activity.
2. Calculate the expected duration and variance of the critical path.
3. Calculate the probability that the project will be completed in fewer than 30 time units.

Answer:  (a) See table below. (b) Tasks J-M-N-P are critical. The sum of their expected durations is 26.00; the sum of their variances is 4.50. (c) The standard deviation along the path is = 2.12; the probability that Duration < 30 is the probability that z < (30 - 26.00)/2.12 = 1.89. The associated normal curve area is 0.97062.

Task	Early Start	Early Finish	Late Start	Late Finish	Slack	Mean	Variance
J	0	10.5	0	10.5	0	10.5	1.361111
K	0	8	5.5	13.5	5.5	8
L	10.5	17	19.5	26	9	6.5
M	10.5	13.5	10.5	13.5	0	3	0
N	13.5	18.5	13.5	18.5	0	5	1.777778
O	13.5	20.5	19	26	5.5	7
P	18.5	26	18.5	26	0	7.5	1.361111
	Project	26				Project	4.5
						Std.dev	2.12132

Diff: 3
Key Term:  Program evaluation and review technique (PERT)
AACSB:  Analytical thinking
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management
31) A network consists of the following list. Times are given in weeks.

Activity	Preceding	Optimistic	Probable	Pessimistic
A	--	5	11	14
B	-	3	3	9
C	--	6	10	14
D	A, B	3	5	7
E	B	4	6	11
F	C	6	8	13
G	D, E	2	4	6
H	F	3	3	9

1. Draw the network diagram.
2. Calculate the expected duration and variance of each activity.
3. Calculate the expected duration and variance of the critical path.
4. Calculate the probability that the project will be completed in less than 28 weeks.

Answer:
(a)


(b, c)

Task	Expected time	Variance	Std. dev.	Slack	Variance
A	10.5	2.25	1.5	3
B	4	1	1	8
C	10	1.778	1.333	0	1.778
D	5	0.444	0.667	3
E	6.5	1.361	1.167	8
F	8.5	1.361	1.167	0	1.361
G	4	0.444	0.667	3
H	4	1	1	0	1
Project	22.5			Project	4.139
				Std. dev.	2.034

(d) z = (28 - 22.5)/2.03 = 2.71, (P ≤ 28) = .997
Diff: 3
Key Term:  Program evaluation and review technique (PERT)
AACSB:  Analytical thinking
Objective:  LO 3.5 Calculate the variance of activity times
Learning Outcome:  Describe the goals and stages of project management
Section 8   Cost-Time Trade-offs and Project Crashing

1) Shortening the project's duration by deleting unnecessary activities is called "project crashing."
Answer:  FALSE
Diff: 2
Key Term:  Crashing
Objective:  LO 3.6 Crash a project
Learning Outcome:  Describe the goals and stages of project management

2) In project management, crashing an activity must consider the impact on all paths in the network.
Answer:  TRUE
Diff: 2
Key Term:  Crashing
Objective:  LO 3.6 Crash a project
Learning Outcome:  Describe the goals and stages of project management


3) A project manager is interested in crashing a project with variable activity times. Which of the following tools should he/she employ?

1. A) PERT
2. B) CPM
3. C) Gantt Chart
4. D) either PERT or CPM
5. E) PERT, CPM, or a Gantt chart are fine.

Answer:  A
Diff: 3
Key Term:  Crashing
Objective:  LO 3.6 Crash a project
Learning Outcome:  Describe the goals and stages of project management

4) Which of these statements regarding time-cost tradeoffs in CPM networks is true?

1. A) Crashing is not possible unless there are multiple critical paths.
2. B) Crashing a project often reduces the length of long-duration, but noncritical, activities.
3. C) Activities not on the critical path can never be on the critical path, even after crashing.
4. D) Crashing shortens the project duration by assigning more resources to one or more of the critical tasks.
5. E) The crash time always exceeds the normal time.

Answer:  D
Diff: 2
Key Term:  Crashing
Objective:  LO 3.6 Crash a project
Learning Outcome:  Describe the goals and stages of project management

5) Project management at the Tour de France races can be complex because:

1. A) a team is like a "large travelling circus."
2. B) there is a wide variety of support staff.
3. C) there are races being held simultaneously.
4. D) each team has over two dozen riders.
5. E) all of the above

Answer:  E
Diff: 2
Objective:  LO 3.6 Crash a project
Learning Outcome:  Describe the goals and stages of project management
6) Which of the following statements regarding time-cost tradeoffs in CPM networks is false?

1. A) Crashing shortens project duration by assigning more resources to critical tasks.
2. B) Crashing sometimes has the reverse result of lengthening the project duration.
3. C) Crashing must consider the impact of crashing an activity on all paths in the network.
4. D) Activities not on the critical path can become critical after crashing takes place.
5. E) A negative crash cost per period would imply that either crashing is cheaper than not crashing or that the crash time was slower than the normal time.

Answer:  B
Diff: 2
Key Term:  Crashing
AACSB:  Analytical thinking
Objective:  LO 3.6 Crash a project
Learning Outcome:  Describe the goals and stages of project management

7) If an activity whose normal duration is 13 days can be shortened to 10 days for an added cost of $1,500, what is the crash cost per period?

1. A) $500
2. B) $1,500
3. C) $750
4. D) $13,000
5. E) $15,000

Answer:  A
Diff: 2
Key Term:  Crashing
AACSB:  Analytical thinking
Objective:  LO 3.6 Crash a project
Learning Outcome:  Describe the goals and stages of project management

8) Two critical path activities are candidates for crashing on a CPM network. Activity details are in the table below. To cut one day from the project's duration, activity ________ should be crashed first, adding ________ to project cost.

Activity	Normal Time	Normal Cost	Crash Time	Crash Cost
One	8 days	$6,000	6 days	$6,800
Two	10 days	$4,000	9 days	$5,000

1. A) One; $400
2. B) One; $6,800
3. C) Two; $1,000
4. D) Two; $5,000
5. E) One or Two should be crashed; $1,400

Answer:  A
Diff: 2
Key Term:  Crashing
AACSB:  Analytical thinking
Objective:  LO 3.6 Crash a project
Learning Outcome:  Describe the goals and stages of project management
9) If an activity whose normal duration is 15 days can be shortened to 10 days for an added cost of $2,000, what is the crash cost per period?

1. A) $400
2. B) $2,000
3. C) $10,000
4. D) $20,000
5. E) $30,000

Answer:  A
Diff: 2
Key Term:  Crashing
AACSB:  Analytical thinking
Objective:  LO 3.6 Crash a project
Learning Outcome:  Describe the goals and stages of project management


10) A network has been crashed to the point where all activities are critical. Additional crashing:

1. A) is unnecessary.
2. B) is impossible.
3. C) is prohibitively expensive.
4. D) may require crashing multiple tasks simultaneously.
5. E) can be done, but all critical tasks must be reduced in duration.

Answer:  D
Diff: 3
Key Term:  Crashing
AACSB:  Reflective thinking
Objective:  LO 3.6 Crash a project
Learning Outcome:  Describe the goals and stages of project management

11) Two critical path activities are candidates for crashing on a CPM network. Activity details are in the table below. To cut one day from the project's duration, activity ________ should be crashed first, adding ________ to project cost.

Activity	Normal Time	Normal Cost	Crash Time	Crash Cost
B	4 days	$6,000	3 days	$8,000
C	6 days	$4,000	4 days	$6,000

1. A) B; $2,000
2. B) B; $8,000
3. C) C; $1,000
4. D) C; $2,000
5. E) C; $6,000

Answer:  C
Diff: 2
Key Term:  Crashing
AACSB:  Analytical thinking
Objective:  LO 3.6 Crash a project
Learning Outcome:  Describe the goals and stages of project management
12) ________ is decreasing activity time in a network to reduce time on the critical path so total completion time is reduced.
Answer:  Crashing
Diff: 1
Key Term:  Crashing
Objective:  LO 3.6 Crash a project
Learning Outcome:  Describe the goals and stages of project management


13) Three critical path activities are candidates for crashing on a CPM network. Activity details are in the table below.

Activity	Normal Time	Normal Cost	Crash Duration	Crash Cost
X	8 days	$6,000	6 days	$8,000
Y	3 days	$1,800	2 days	$2,400
Z	12 days	$5,000	9 days	$7,700

1. What is the crash cost per unit time for each of the three activities?
2. Which activity should be crashed first to cut one day from the project's duration; how much is added to project cost?
3. Which activity should be the next activity crashed to cut a second day from the project's duration; how much is added to project cost?

Answer:
(a) crash cost X = $1,000 per day; crash cost Y = $600 per day ; crash cost Z = $900 per day
(b) select Y, adding $600; (c) select Z, adding $900
Diff: 2
Key Term:  Crashing
AACSB:  Analytical thinking
Objective:  LO 3.6 Crash a project
Learning Outcome:  Describe the goals and stages of project management

14) Three critical path activities are candidates for crashing on a CPM network. Activity details are in the table below.

Activity	Normal Time	Normal Cost	Crash Duration	Crash Cost
A	9 days	$8,000	7 days	$12,000
B	5 days	$2,000	3 days	$10,000
C	12 days	$9,000	11 days	$12,000

1. What is the crash cost per unit time for activity A?
2. What is the crash cost per unit time for activity B?
3. Which activity should be crashed first to cut one day from the project's duration; how much is added to project cost?
4. Which activity should be the next activity crashed to cut a second day from the project's duration; how much is added to project cost?
5. Assuming no other paths become critical, how much can this project be shortened at what total added cost?

Answer:  (a) $2,000; (b) $4,000; (c) A, $2,000; (d) A again, $2,000 additional; (e) 5 days, $15,000
Diff: 2
Key Term:  Crashing
AACSB:  Analytical thinking
Objective:  LO 3.6 Crash a project
Learning Outcome:  Describe the goals and stages of project management

15) Pirmin's Bike Shop is behind on a custom bike and needs to crash 8 hours of time from the 8-step project. Given the project table below calculate the crash cost for 8 hours of time-savings. Suppose Pirmin calls the customer and asks for a project extension, reducing the amount of time he needs to crash. Calculate both the maximum time-savings available on a $25 crash budget and the cost to crash four hours of savings.

Activity	Normal Duration (hours)	Normal Cost ($)	Crash Duration (hours)	Crash Cost (S)	Immediate Predecessors
A	2	10	2	0	None
B	3	15	2	23	A
C	5	25	4	30	B
D	3	20	1	24	C
E	6	30	4	45	C
F	1	5	1	0	C,E
G	7	35	6	50	F
H	10	50	7	80	D,G

Answer:

The critical path is ABCEFGH with a time of 34 hours. The cost per crash hour for these activities is 8(B), 5(C), 2(D), 7.5(E), 15(G), 10(H). C will be crashed first for a savings of 1 hour. Next E will be crashed for a savings of 2 hours. Then B can be crashed for a savings of 1 hour. Next H will be crashed for a savings of 3 hours, netting 7 hours total at a cost of (5 + 15 + 8 + 30) = $58. Only 1 more hour is needed, so G will be crashed for an additional 15 dollars, netting 8 hours saved at a cost of 58 +15 = $73. D was not crashed because it does not lie on the critical path after any amount of crashing (E always > D). With $25 only C and E can be crashed, saving 3 hours of time and spending $20. A fractional component of B could be crashed (5/8) of an hour to spend the entire $25, however most students should interpret this question as only whole-hour increments. The cost to crash four hours would be C + E + B crashing = $28.
Diff: 3
Key Term:  Crashing
AACSB:  Analytical thinking
Objective:  LO 3.6 Crash a project
Learning Outcome:  Describe the goals and stages of project management

16) Given the critical path below, calculate the following:

1. The crash cost per unit time savings for each activity.
2. The maximum total crash time savings and cost.
3. The maximum total time-savings with a $3000 budget.

Activity	Normal Time	Normal Cost	Crash Duration	Crash Cost
A	8 days	$8,000	7 days	$12,000
B	5 days	$2,000	3 days	$10,000
C	10 days	$9,000	9 days	$12,000

Answer:
(a)  A saves 1 day for $4000/day, B saves 2 days for $4000/day, C saves 1 day at $3000/day.
(b)  Max time savings is A + B + C = 4 days for a total of $15,000
(c)   1 day could be crashed from C. This means maximum savings is 1 day.
Diff: 2
Key Term:  Crashing
AACSB:  Analytical thinking
Objective:  LO 3.6 Crash a project
Learning Outcome:  Describe the goals and stages of project management

Section 9   A Critique of PERT and CPM

1) Which of the following is NOT a limitation of PERT?

1. A) Project activities have to be clearly defined, independent, and stable in their relationships.
2. B) Precedence relationships must be specified and networked together.
3. C) Only one time estimate can be used for each activity.
4. D) Time estimates tend to be subjective and are subject to fudging by managers.
5. E) There is the inherent danger of placing too much emphasis on the critical path.

Answer:  C
Diff: 1
Key Term:  Program evaluation and review technique (PERT)
Learning Outcome:  Describe the goals and stages of project management

2) Identify several advantages of using PERT (and CPM).
Answer:  The advantages include (1) its usefulness for scheduling and controlling large projects, (2) its straightforward concept, (3) its graphical displays of relationships among activities, (4) its critical path and slack time analyses, (5) its ability to document processes, (6) its wide range of applicability, (7) and its usefulness in monitoring schedules and costs.
Diff: 2
Key Term:  Program evaluation and review technique (PERT)
Learning Outcome:  Describe the goals and stages of project management

Section 10   Using Microsoft Project to Manage Projects

1) Which of the following is NOT performed by Microsoft Project?

1. A) drawing the project AON network
2. B) identifying the critical path
3. C) providing PERT probability calculations
4. D) tracking the progress of the project
5. E) creating the project Gantt chart

Answer:  C
Diff: 2
Learning Outcome:  Describe the goals and stages of project management

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OPERATIONS MANAGEMENT - 2017 - COLLECTION

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Operations Management, 2015, 12th Edition, William J. Stevenson - Free Download Link
Operations Management, Sustainability and Supply Chain Management, 11th Edition, 2014, Jay Heizer, Barry Render - Free Download Link

Operations Management: Sustainability and Supply Chain Management, 12th Edition, Jay Heizer, Barry Render, Chuck Munson, 2017
Principles of Operations Management: Sustainability and Supply Chain Management, 10th Edition, 2017
Operations Research: An Introduction, 10th Edition, Hamdy A. Taha, 2017
Introduction to Operations and Supply Chain Management, 4th Edition, Cecil B. Bozarth, Robert B. Handfield, 2016 
Operations Management: Processes and Supply Chains, 11th Edition, Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman, 2016

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3. Principles of Operations Management: Sustainability and SCM, 10th Ed, Jay Heizer, 2017

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4. Operations Management, 2017, 12th Edition, William J. Stevenson

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5. Operations Management: Processes and Supply Chains, 11th Edition, Lee J. Krajewski, 2016

6. Operations Research: An Introduction, 10th Edition, Hamdy A. Taha, 2017
7. Introduction to Operations and SCM, 4th Edition, Cecil B. Bozarth, Robert B. Handfield, 2016 

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