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90 Cards in this Set
- Front
- Back
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Toyota developed the world-class production system known as ________.
A) businessprocess reengineering B) just-in-time C)total quality management D)benchmarking E)statistical process control |
B) just-in-time
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The sharing of information between companies so that both can improve is called________.
A) reengineering B) baselining C)benchmarking D)interfacing E)data mining |
C)benchmarking
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The goal of ________ benchmarking is to identify and to observe the best practices from one or more benchmark firms.
A) product B) strategic C)process D)financial E)functional |
C)process
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_______ allows initiator firms to assess their competitive position bycomparing products and services with those of target firms.
A) Functional B) Strategic C)Product D)Performance E)Process |
D)Performance
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The process of dismantling competitors' products to understand the strengthsand weaknesses of their designs is referred to as ________.A) benchmarking
B) reengineering C)baselining D)inverse production E)reverse engineering |
E)reverse engineering
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_______ benchmarking involves observing how others compete.
A) Strategic B) Product C)Performance D)Functional E)Process |
A) Strategic
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A benchmarking effort that is limited to studying the purchasing department ofanother firm is referred to as ________ benchmarking.
A) functional B) performance C)process D)strategic E)product |
A) functional
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What is the formula used to calculate scrap efficiency?
A) scrap/cost ofgoods sold B) (cost ofgoods sold — scrap)/scrap C)cost of goods sold/scrap D)(scrap — cost of goods sold) /scrap E)cost of goods sold × scrap |
C)cost of goods sold/scrap
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If the cost of goods sold reported by Champion Cooling Co. is equal to $600,000and the scrap cost amounts to $50,000, what is their scrap efficiency?
A)8.33 B)30.0 C)12.0 D)18.5 E)22.8 |
C)12.0
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Champion Cooling Co. signed an exclusive contract with a scrap metal dealer that is willing to pay 33 cents a pound for scrap copper. If the cost of goods sold reported by Champion amounts to $100,000 and the scrap cost is equal to$20,000 for their 3030 pounds of scrap copper, what is Champion's scrap efficiency?
A)7.60 B)5.00 C)6.26 D)9.33 E)3.18 |
B)5.00
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Ajax Carpet Cleaning promises to clean 100 square feet of carpet for $15.00.Their work standard for such a job is $5.00 for labor and $2.00 for cleaning supplies. Since they use the customer's electricity, there are no other inputs in to the cleaning process. What is their labor productivity?
A)3.00 B)7.50 C)20.00 D)10.0 E)50.0 |
A)3.00
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Make-Do, a national automotive painting service, paints cars for $199. Their work standard for such a job is $20.00 for labor and $30.00 for paint. They consume $10 worth of supplies and $3 of energy during their service. What is their total factor productivity?
A)3.16 B)9.95 C)5.83 D)13.6 E)18.24 |
A)3.16
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Ajax Carpet Cleaning promises to clean 100 square feet of carpet for $20.00.Their work standard for such a job is $5.00 for labor and $2.50 for cleaning supplies. Since they use the customer's electricity, there are no other inputs in to the cleaning process. What is their labor productivity?
A)20.0 B)4.00 C)8.00 D)2.50 E)40.0 |
B)4.00
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Use the following information to answer the question(s) below. A company has gathered the following financial information for itself and a competing firm. The company wishes to compare productivity for the two firms: Firm A Firm B Labor $ 25,000 $ 20,000 Plant and Equipment $ 120,000 $ 150,000 Energy $ 7,500 $ 15,000 Materials $ 240,000 $ 200,000 Sales $ 480,000 $ 520,000 14)Calculate the labor productivity of Firm A.
A)19.2 B)24.0 C)20.8 D)26.0 E)9.6 |
A)19.2
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Calculate the plant and equipment productivity of Firm B.
A)26.00 B)2.60 C)19.20 D)3.47 E)34.67 |
D)3.47
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Calculate the energy productivity of Firm A.
A)34.67 B)64.00 C)19.20 D)27.43 E)69.33 |
B)64.00
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Calculate the materials productivity of Firm B.A)3.47
B)10.40 C)19.20 D)6.80 E)2.60 |
E)2.60
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Calculate the total factor productivity for Firm A.
A)19.20 B)3.31 C)1.22 D)14.77 E)8.68 |
C)1.22
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Calculate the total factor productivity for Firm B.
A)14.86 B)1.35 C)2.60 D)34.67 E)20.28 |
B)1.35
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Return on assets (ROA) and return on investments (ROI) are examples of________.
A) structuralmeasures B) market sharedata C)productivity ratios D)quality measures E)financial ratios |
E)financial ratios
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________ are useful in measuring the extent to which a firm effectively usesthe scarce resources that are available to the firm.
A) Qualitymeasures B) Financialratios C)Productivity ratios D)Market share data E)Structural measures |
C)Productivity ratios
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________ are important for monitoring and tracking the effectiveness of acompany's cycle times, waste-reduction measures, and value-added measures.
A)Customer-related measures B)Productivity ratios C)Quality measures D)Operating results E)Structural measures |
D)Operating results
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Reject rates, capability information, and performance information are examples of ________.
A) structural measures B) market share data C)productivity ratios D)financial ratios E)quality measures |
E)quality measures
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________ include objectives, policies, and procedures followed by a firm
A) Productivityratios B) Qualitymeasures C)Market share data D)Structural measures E)Operating results |
D)Structural measures
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________ dictates that decisions are made based on the sound collection and analysis of data.
A) Strategic benchmarking B)Baselining C)Business process reengineering D)Management by fact E)Reverse engineering |
D)Management by fact
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________ is based on the concept of 5w2h.
A) Business process benchmarking B) Statistical process control C)Total quality management D)Business process reengineering E)Reverse engineering |
A) Business process benchmarking
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In the ________ process of business process benchmarking, the inputs are aligned together to form the product or service.
A)reconstruction B) control C)reengineering D)transformation E)conversion |
E)conversion
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The ________ process of business process benchmarking results in outputs thatare eventually sold to customers.
A) transformation B) conversion C) control D)reconstruction E)reengineering |
B) conversion
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In the conversion process, the feedback loop that involves gathering,analyzing, and using the data to adjust the process is called the ________process.
A)control B)reengineering C)reconstruction D)development E)transformation |
A)control
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What is the first step in Xerox's 10-step process to benchmarking?
A) determine the current performance gap B) identify whom to benchmark C)decide what to benchmark D)develop action plans E)project future performance levels |
C)decide what to benchmark
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Which of the following steps in Xerox's 10-step process to benchmarking helps companies prioritize which areas are the first candidates for change and improvement?
A) determine the current performance gap B) plan and conduct the investigation C)identify whom to benchmark D)decide what to benchmark E)develop action plans |
A) determine thecurrent performance gap
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Which of the following steps in Xerox's 10-step process to benchmarkin ginvolves predicting whether the performance gap for the benchmarked processes will narrow or widen in the coming years?
A) develop action plans B) determine the current performance D)project future performance levels E)implement specific actions and monitor progress |
D)project future performance levels
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________ is defined as the fundamental rethinking and redesign of business processes
A) Reengineering B) Benchmarking C)Baselining D)Reverse engineering E)Restructuring |
Reengineering
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Which of the following best defines the breadth factor of reengineering?
A) It refers to organizational elements such as responsibilities, measurements, informationtechnology, and skills. B) It refers tothe monitoring of key internal firm performance measures over time to identifytrends such as improvement in managerial decision making. C)It refers to the impact of the reengineering process to the entireorganization. D)It refers to the dismantling of competitors' products to understand thestrengths and weaknesses of their designs.E)It refers to the sharing of information between companies so that both canimprove. |
C)It refers to the impact of the reengineering process to the entire organization.
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35)Which of the following best defines the depth factor of reengineering?
A)It refers to organizational elements such as responsibilities, measurements,information technology, and skills. B)It refers to the monitoring of key internal firm performance measures over timeto identify trends such as improvement in managerial decision making. C)It refers to the impact of the reengineering process to the entire organization. D)It refers to the dismantling of competitors' products to understand thestrengths and weaknesses of their designs.E)It refers to the sharing of information between companies so that both canimprove. |
A)It refers to organizational elements such as responsibilities, measurements,information technology, and skills.
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________ requires the monitoring of key internal firm performance measures overtime to identify trends such as improvement to inform managerial decisionmaking.
A)BaseliningB)Benchmarking C)Reengineering D)Reverse engineering E)Restructuring |
A)Baselining
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The ________ process involves identifying measures, establishing time framesfor future data collection, gathering data, and analyzing data on an ongoingbasis to identify performance trends and changes.
A) restructuring B) baselining C)reengineering D)reverse engineering E)benchmarking |
B) baselining
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The concept of ________ implies that you must have something to offer thetarget firm in return for sharing information.
A) reciprocity B) baselining C)reengineering D)interfacing E)restructuring |
A) reciprocity
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A benchmark is an organization recognized for its exemplary operational performance.
T/F |
Answer: TRUE
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Toyota developed the world-class production system known as business process reengineering.
T/F |
Answer: FALSE
just-in-time |
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41)Openness can create a competitive advantage through creating psychological barriers to competition.
T/F |
Answer: TRUE
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42)The first step a benchmarking firm must take is to document current performance
T/F |
Answer: TRUE
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43)In a benchmarking relationship, the initiator firm is the firm that is being studied.
T/F |
Answer: FALSE
The Target firm is that begin studied |
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In performance benchmarking, the initiator firm focuses its observation and investigation on business processes.
T/F |
Answer: FALSE
initiatorfirms to assess their competitive position by comparing products and serviceswith those of target firms. |
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Financial benchmarking involves direct interaction between the initiator firm and the target firms.
T/F |
Answer: FALSE
financial benchmarking is to perform financial analysis and to compare the resultsin an effort to assess your overall competitiveness. |
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46)Dismantling competitors' products to understand the strengths and weaknesses of their designs is called reverse engineering.
T/F |
Answer: TRUE
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Strategic benchmarking involves observing how others compete.
T/F |
Answer: TRUE
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In functional benchmarking, a company focuses its benchmarking efforts on a single function to improve the operation of that function.
T/F |
Answer: TRUE
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The scrap efficiency can be calculated by dividing the cost of scrap by the cost of goods sold.
T/F |
Answer: FALSE
costof goods sold/scrap |
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The scrap efficiency formula normalizes the cost of scrap based on the volume of business that a firm does.
T/F |
Answer: TRUE
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The cost of goods sold to scrap ratio is a multiple factor ratio
T/F |
Answer: FALSE
Productivityratios |
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Total factor productivity is less sensitive to differences in costing conventions and accounting practices.
T/F |
Answer: TRUE
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Productivity ratios are useful in measuring the extent to which a firm effectively utilizes the scarce resources that are available to the firm.
T/F |
Answer: TRUE
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Customer satisfaction measures are poor indicators of financial performance.
T/F |
Answer: FALSE
Customer satisfaction measures are important for gauging theeffectiveness of quality improvement because they are good indicators offinancial performance. |
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Cycle times and waste-reduction measures are examples of operating results of benchmarking data.
T/F |
Answer: TRUE
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Quality measures include objectives, policies, and procedures followed by a firm.
T/F |
FALSE
Structuralmeasures |
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Management by fact dictates that decisions are made based on the sound collection and analysis of data.
T/F |
Answer: TRUE
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The 5w2h concept is labeled as such because a business process benchmarking project should result in the answers to five questions.
T/F |
Answer: FALSE
7 question Who? What? When? Where? Why? How? How much? |
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59)The 5w2h questions should be viewed in the context of a process
T/F |
Answer: TRUE
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The conversion process results in outputs that are eventually sold to customers.
T/F |
Answer: TRUE
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In the control process, the inputs are aligned together to form the product or service.
T/F |
Answer: FALSE
conversionprocess |
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The first step in Xerox's 10-step process to benchmarking is identifying whom to benchmark.
T/F |
Answer: FALSE
Isdecide what to benchmark |
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Determining the current performance gap helps the company prioritize which areas are the first candidates for change and improvement.
T/F |
Answer: TRUE
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To begin the management process, a strategy statement outlining the goals and strategies to be used is developed.
T/F |
Answer: TRUE
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Outside consultants should not be used to provide training and coaching on benchmarking and other quality-related efforts.
T/F |
Answer: FALSE
outside consultant should be used to provide training and coaching . |
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Restructuring is defined as a fundamental rethinking and redesign of business processes.
T/F |
Answer: FALSE
Reengineering |
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Breadth refers to the impact of the reengineering process to the entire organization
T/F |
Answer: TRUE
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Depth refers to organizational elements such as responsibilities, measurements,information technology, and skills.
T/F |
Answer: TRUE
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Baselining requires the monitoring of key internal firm performance measures over time to identify trends such as improvement to inform managerial decision making.
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Answer: TRUE
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The reengineering process involves gathering and analyzing data on an on going basis to identify performance trends and changes.
T/F |
Answer: FALSE
Is fundamental rethinking and redesign of business processes. |
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Because business process reengineering affects multiple levels in a firm,abrupt organizational changes are reflected in baselining results.
T/F |
Answer: TRUE
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The concept of interfacing implies that you must have something to offer the target firm in return for sharing information.
T/F |
Answer: FALSE
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Business process maps are used to identify the exact performance measures and metrics needed from the target firm.
T/F |
Answer: TRUE
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Explain the process of benchmarking
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Answer: Benchmarking is the sharing of informationbetween companies so that both can improve. The first step a benchmarking firmmust take is to document current performance. This activity will allow thecompany to pinpoint its goals and find a company (inside or outside theindustry) that already excels at what it is trying to accomplish, study what itdoes, and gather ideas for improvement. Benchmarking is useful for externallyvalidating an organization's approach to its business. If the managers in afirm are unsure that they are pursuing a useful plan of action, benchmarkingcan help them understand how what they are doing stacks up against the masters.
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Differentiate between an initiator firm and a target firm. Are these staticroles?
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Answer: There are two parties to each benchmarkingrelationship: an initiator firm and a target firm. The initiator firm initiatescontact and studies another firm. The target firm is the firm that is beingstudied (also called a benchmarking partner). These are not static roles. Oftenthe target firm enters into a reciprocal agreement to observe the initiatorfirm.
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Describe the concept of performance benchmarking.
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Answer: Performance benchmarking allows initiatorfirms to assess their competitive position by comparing products and serviceswith those of target firms. Performance issues may include cost structures,various types of productivity performance, speed of concept to market, qualitymeasures, and other performance evaluations
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Describe the concept of functional benchmarking
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Infunctional benchmarking, a company focuses its benchmarking efforts on a singlefunction to improve the operation of that function. An example of functionalbenchmarking occurs in purchasing. Often purchasing managers use their networksto share information about the purchasing function in many differentorganizations.
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How is a scrap efficiency ratio calculated?
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Answer: Consider the computation of scrap in which a company computes the ratio of cost of goods sold to scrap. The formula for this computation is: Scrap Efficiency = Cost of Goods Sold/ Scrap This formula normalizes the cost of scrap based on the volume of business that a firm does. The resulting ratio is theproportion of the material inputs to production that is wasted as scrap. Thehigher the ratio, the more efficient is the use of these materials
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Differentiate between financial ratios and productivity ratios of benchmarking data
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Answer: Financial ratios such as return on assets(ROA) or return on investments (ROI) are probably the easiest to obtain and compare. For many financial ratios, all that is needed is an income statement of a firm and a balance sheet. Many of these statistics are available in annual reports and on the Internet.Productivity ratios are useful in measuring the extent to which a firm effectively uses thescarce resources that are available to the firm. These include single-factor,multifactor, and total-factor productivity measures.
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Explain the importance of using customer-related results as benchmarking data.
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Answer: Customer-related results include customer satisfaction, customer dissatisfaction, and comparisons of custome rsatisfaction relative to competitors. These measures may be in the form of retention,gains, losses, customer-perceived value, competitive awards, competitive customer ratings, and independent organization evaluations. Customer satisfaction measures are important for gauging the effectiveness of qualityimprovement because they are good indicators of financial performance.
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Give examples of quality measures and structural measures of benchmarking data.
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Answer: Quality measures include conformance-basedquality information such as reject rates, capability information, performance information, or other measures. These quality measures also can include scrap and rework measures, percentage of defectives, field repairs, costs of quality,and many other metrics. The quality measures also may include data concerningthe performance of processes and time-related statistics.Structuralmeasures include objectives, policies, and procedures followed by a firm. Theymay include safety, production, accounting, financial, engineering, and othertypes of structural measures that are used in determining competitiveness.
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Explain the use of performance measures or indicators in performance improvement
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Answer: A major consideration in performanceimprovement involves the creation and use of performance measures orindicators. Performance measures or indicators are measurable characteristicsof products, services, processes, and operations the company uses to track andimprove performance. The measures or indicators should be selected to best representthe factors that lead to improved customer, operational, and financialperformance. A comprehensive set of measures or indicators tied to customerand/or company performance requirements represents a clear basis for aligningall activities with the company's goals. Through the analysis of data from thetracking processes, the measures or indicators themselves may be evaluated andchanged to better support such goals.
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Describe the concept of 5w2h
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Businessprocess benchmarking is based on the concept of 5w2h developed by AlanRobinson. The 5w2h concept is labeled as such because a business processbenchmarking project should result in the answers to seven questions. Five ofthese questions begin with the letter "w" (who, what, when, where,and why) and the remaining two questions begin with the letter "h"(how and how much). The 5w2h concept is a good starting point because itfocuses the participants in the benchmarking process on the "nuts andbolts" of what is being done.
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Describe the conversion process and the control process in business processbenchmarking.
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Answer: The 5w2h questions should be viewed in thecontext of a process. In a broad sense, inputs include the equipment, people,machines, materials, and design that combine to form a product or service. Theinputs are combined in what is known as the conversion process. In theconversion process, we align the inputs together to form the product orservice. The conversion process results in outputs that are eventually sold tocustomers.Thefirst feedback loop results from gathering data from the process. This is knownas the control process. The control process involves gathering, analyzing, andusing the data to adjust the process. This is often the result of using processcontrol charts.
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managing quality85)State Xerox's formal 10-step process to benchmarking.
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Answer: Xerox was an early adopter of benchmarkingand has used benchmarking effectively to improve processes. This approachincludes a formal 10-step process to benchmarking:
• Decidewhat to benchmark. • Identifywhom to benchmark. • Planand conduct the investigation. • Determinethe current performance gap.• Projectfuture performance levels. • Communicatebenchmarking findings and gain acceptance. • Reviseperformance goals. • Developaction plans. • Implementspecific actions and monitor progress. • Recalibratethe benchmarks. |
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Explain the process of managing the benchmarking effort.
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Answer: Like other quality management efforts,benchmarking is a managed process. Therefore, management must have anunderstanding of the benchmarking process, the participants involved, and theobjectives of the exercise.Managingthe benchmarking process involves establishing, supporting, and sustaining thebenchmarking program. To begin the management process, a strategy statementoutlining the goals and strategies to be used is developed. With the strategystatement in place, management sets expectations for performance relating tothe benchmarking project. At a minimum, the expectations for benchmarking arethat this is an ongoing process that serves as a basis for improvement (not aone time event) and that specific deliverables are to be identified by managementthat must be fulfilled.
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Explain the importance of training in benchmarking.
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Answer: Training is a key to success in all qualitymanagement approaches. This is especially true for benchmarking. Participantsmust have project management skills and be familiar with benchmarkingapproaches and protocols. Benchmarking carries with it legal liabilities thatshould be addressed during the training.Trainingshould include managerial training, cross-functional benchmarking skillstraining, team training, and documentation training (flowcharting). Many ofthese training courses are available from many different consultingorganizations. It is best to obtain training from organizations that areexperienced with benchmarking. Many companies have established externaltraining arms that can be hired by competing firms.
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Define reengineering. State the two factors that are critical to achievingsuccess through reengineering.
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Answer: Reengineering is defined as a fundamentalrethinking and redesign of business processes.Suchchange is often accompanied by the automation of business processes. Twofactors are critical to achieving success through reengineering:Breadthrefers to the impact of the reengineering process to the entire organization.Depthrefers to organizational elements such as responsibilities, measurements,information technology, and skills.
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Explain the concept of baselining
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Answer: A methodology that can be applied inassessing business process reengineering impacts is baselining. Baselining requires the monitoring of key internal firm performance measures over time toidentify trends such as improvement (or decline) to inform managerial decisionmaking. The baselining process involves identifying measures, establishing timeframes for future data collection, gathering data, and analyzing data on anongoing basis to identify performance trends and changes.
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State the four key problems with benchmarking
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* There may be substantial difficulty obtaining cooperation from other firms in your own industry. Most organizations have much less clout. The thing to remember is reciprocity. To be effective, you must have something to offer the target firm in return for sharing information.
* The predominance of functional benchmarking with firms in noncompeting industriesmakes it difficult to benchmark with these firms. It takes much ingenuity toidentify benchmarks properly from noncompeting firms. * Yourefforts will be wasted unless you fully understand your own processes beforeyou benchmark someone else. Using tools such as business process maps, it ispossible to identify the exact performance measures and metrics needed from thetarget firm * Benchmarkingis time-consuming and costly. |
