Operations management practice questions.

Which production method involves creating a single, unique, one-off item to a customer's specification?

• job production
• batch production
• flow production
• mass production

Answer: job production

Job production makes one bespoke item at a time (e.g. a tailored suit or a bridge). Batch makes groups; flow/mass produce continuously in large volumes.

In stock control, the 're-order level' is:

• the maximum amount of stock a firm ever holds
• the stock level at which a new order should be placed
• the amount of stock that must never be used
• the quantity of stock delivered each day

Answer: the stock level at which a new order should be placed

When stock falls to the re-order level, a new order is triggered so that fresh stock arrives before the buffer (minimum) stock runs out.

What is the key difference between crisis management and contingency planning?

• Crisis management happens before an emergency, contingency planning happens after
• Contingency planning is prepared in advance; crisis management is the response
• They are identical processes with different names
• Contingency planning only applies to financial crises

Answer: Contingency planning is prepared in advance; crisis management is the response

Contingency planning is proactive ('what if' plans prepared beforehand); crisis management is the reactive handling of an emergency once it occurs. Good contingency plans make crisis management more effective.

Which production method is most suitable for making a single, one-off customised item?

• job production
• batch production
• flow production
• mass production

Answer: job production

Job production makes one unique item at a time to a specific order (e.g. a tailored suit). Flow and mass production make large volumes of identical items.

Which formula correctly calculates capacity utilisation?

• (maximum output / actual output) × 100
• (actual output / maximum possible output) × 100
• (actual output − maximum output) × 100
• (maximum output − actual output) / 100

Answer: (actual output / maximum possible output) × 100

Capacity utilisation = (actual output / maximum possible output) × 100. Higher utilisation spreads fixed costs over more units.

On a stock control chart, 'buffer stock' refers to:

• the minimum stock held as a safety margin
• the maximum stock the warehouse can hold
• the quantity ordered at each reorder
• stock currently in transit from suppliers

Answer: the minimum stock held as a safety margin

Buffer (safety) stock is the minimum level held to avoid running out if demand rises or deliveries are delayed.