Operations Management

1. A large shoe factory in Addis Ababa produces thousands of pairs daily using standardized
processes and assembly lines. This is an example of which type of operation?
A. Manufacturing Operation
B. Service Operation
C. Hybrid Operation
D. Custom Production
Answer: A

2. A local tour guide agency in Ethiopia tailors tours based on individual client preferences. This
is an example of;
A. Manufacturing Operation
B. Service Operation
C. Mass Production
D. Continuous Flow Production
Answer: B

3. Frederick Winslow Taylor is known for his scientific management approach, which focused on
optimizing worker efficiency through time and motion studies. What is the primary goal of
scientific management?
A. Continuous improvement
B. Employee satisfaction
C. Increased worker efficiency
D. Reduced production costs
Answer: C

4. A clothing manufacturer in Ethiopia needs to decide between building a new factory in a rural
area with lower labor costs or expanding its existing facility in the city with better access to
suppliers. This decision falls under which category of operations management?
A. Capacity planning
B. Quality management
C. Inventory management
D. Facility location
Answer: D

5. A honey producer in Ethiopia is considering investing in new equipment to automate the bottling
process. This decision would be influenced by factors related to which area of operations
management?
A. Capacity planning
B. Facility location
C. Quality management
D. Inventory management
Answer: A

6. A small coffee roaster in Ethiopia focuses on sourcing high-quality beans from a single farm,
allowing them to offer a unique flavor profile. This strategy aligns with which competitive
advantage?
A. Cost leadership
B. Product differentiation
C. Focus
D. Time-based competition
Answer: B

7. A large shoe manufacturer in Ethiopia implements lean manufacturing principles to reduce

waste and increase production efficiency. This strategy aims to achieve which competitive
advantage?
A. Focus
B. Product differentiation
C. Cost leadership
D. Time-based competition
Answer: C
8. A clothing company in Ethiopia targets a specific age group with its trendy designs and fast
fashion approach. This strategy aligns with which competitive advantage?
A. Cost leadership
B. Product differentiation
C. Time-based competition
D. Focus
Answer: D

9. A small injera bakery in Logia employs 5 workers and produces 200 injera per hour using 60
kg of Teff. What is the labor productivity of the bakery?
A. 40 B. 50 C. 70 D. 60
Answer: A

10. How did the human relations movement contribute to operations management?
A. It introduced new techniques for machine maintenance.
B. It emphasized the importance of worker motivation and satisfaction.
C. It focused solely on increasing production speed.
D. It disregarded the role of human workers in production.
Answer: B

11. A large furniture company in Ethiopia is considering expanding its operations. Which of the
following is a strategic decision in operations management that the company needs to address?
A. Deciding on the type of wood stain to use for a new chair design.
B. Choosing the color of paint for the factory walls.
C. Selecting the location for a new manufacturing facility.
D. Determining the optimal production schedule for the next week.
Answer: C

12. Why is studying operations management (OM) valuable?

A. To gain in-depth knowledge of specific furniture-making techniques.
B. To memorize formulas for calculating production costs.
C. To learn about the history of different management philosophies.
D. To understand how businesses effectively manage the creation products.
Answer: D

13. Selam owns a popular bakery in Addis Ababa known for its delicious injera and wat. Selam
needs to ensure she has enough flour, yeast, and other ingredients to bake injera throughout the
day. Which function is responsible for managing these supplies?
A. Operations
B. Marketing
C. Finance
D. Human Resources
Answer: A

14. A company is satisfied with its current market position and profitability. They are not seeking
rapid expansion but want to maintain their current market share and financial position. Which
corporate-level strategy best suits their situation?
A. Growth Strategy
B. Stability Strategy
C. Expansion Strategy
D. Retrenchment Strategy
Answer: B

15. A company is in the early stages of developing its strategy. Which of the following is the
MOST important step in this initial phase?
A. Developing a detailed marketing plan to reach target customers.
B. Defining specific performance metrics to track progress.
C. Conducting SWOT analysis
D. Allocating budget resources to different departments.
Answer: C

16. Product design is all about;

A. Creating high-tech, expensive products with the latest features.
B. Designing solutions that are user-friendly, affordable, and culturally relevant.
C. Focusing solely on aesthetics and visual appeal.
D. Implementing complex technologies regardless of user needs.
ANSWER: B

17. What is a primary reason a company redesign a product or service?

A. To prioritize internal efficiency and reduce quality
B. To improve user experience and address unmet user needs.
C. To implement features with no clear benefit to users.
D. To completely overhaul the product or service without considering user feedback.
ANSWER: B

18. A meal kit delivery service experiences high cancellation rates due to missing ingredients.
A. Focus on marketing to attract new customers.
B. Redesign kits to ensure complete ingredient delivery.
C. Increase meal kit prices.
D. Discontinue the meal kit service altogether.
ANSWER: B

19. A local manufacturer notices a rise in injera consumption but limited access to affordable,
portable injera warmers (mitad) in rural areas. They develop a new, insulated warmers (mitad)
design to address this need. This strategy is;
A. Technology push
B. Market pull
C. Inter-functional
D. Utilization
ANSWER: B
20. A mobile phone company implements a network upgrade that enables faster internet speeds in
urban areas without considering the market demand. They then encourage businesses to adopt new
online services.
A. Technology push
B. Market pull
C. Inter-functional
D. Utilization
ANSWER: A

21. Afar-Tech factory, a prominent electronics company based in Ethiopia, aims to introduce a
new line of affordable smartphones tailored to the local market. To gain insights into the latest
technological advancements and features, the company decides to analyze the latest smartphone
model released by a competitor, Tech Innovations Ltd., a global leader in mobile technology.
Through this analysis, Afar-Tech factory intends to identify innovative features and functionalities
to incorporate into their upcoming smartphone models, catering to the needs and preferences of
Ethiopian consumers. Which technique is Afar-Tech factory employing in this scenario?
A. Forward Engineering
B. Indigenous Innovation
C. Reverse Engineering
D. Collaborative Design
ANSWER: C

22. Haile-Motors PLC. is creating cars tailored for Ethiopia's diverse terrain and climate. Their
design philosophy prioritizes performance and reliability in rough conditions, promising a smooth
driving experience.
A. Modular design
B. Computer aided design
C. Robust design
D. Collaborative design
ANSWER: C
23. How can high customer contact potentially disrupt the production process?
A. Customers provide valuable feedback that helps improve product quality.
B. Customers may request special treatment that deviate from the standard production flow.
C. Customers can help identify and troubleshoot production issues.
D. Customers provide a sense of purpose and motivation for production workers.
ANSWER: B

24. What is the primary purpose of creating a service blueprint?

A. To track employee performance metrics for a specific service.
B. To visually map out the entire customer journey for a service.
C. To develop marketing materials for promoting a new service.
D. To create a budget for the operational costs of a service.
ANSWER: B

25. A furniture company is developing a new line of products that can serve as tables, beds, and
chairs, providing multifunctional solutions for different living spaces. Their design approach
emphasizes flexibility and customization, allowing for easy adaptation to various needs and
preferences.
A. Modular design
B. Computer-aided design
C. Robust design
D. Collaborative design
ANSWER: A

26. What does process selection primarily involve?

A. Deciding on the way production of goods or services will be organized
B. Choosing the location of the production facility
C. Determining the marketing strategy for the product or service
D. Setting the pricing strategy for the product or service
ANSWER: A
27. Which aspect of operations management is NOT influenced by process selection?
A. Employee training programs
B. Capacity planning
C. Layout of facilities
D. Selecting suppliers for raw materials
ANSWER: A

28. A small manufacturing company produces custom-made furniture. Each piece of furniture is
unique and requires different materials, tools, and processes. The company receives orders from
clients for various types of furniture, ranging from tables and chairs to cabinets and shelves. Due
to the customization required for each order, the company's production process is flexible and
adaptable. Given the nature of the company's operations described in the case, which type of
production process is most suitable?
A. Continuous production
B. Mass production
C. Job shop
D. Batch production
ANSWER: C

29. A batch process type is characterized by;

A. High volume, standardized products
B. Low volume, high variety of products
C. Continuous flow of materials through a fixed sequence of operations
D. Moderate volume, and a moderate variety of products
ANSWER: D

30. A clothing manufacturer produces a limited range of T-shirt styles in various colors and sizes.
The production process involves cutting fabric, sewing pieces together, printing logos, and final
inspection. While the color and size might change, each style follows the same sequence of steps
on a dedicated assembly line. Which type of production process best describes this scenario?
A. Continuous process
B. Repetitive process
C. Job shop process
D. Batch process
ANSWER: B

31. A large sugar refinery operates continuously to produce refined sugar for various food and
beverage manufacturers. The refinery receives raw sugar cane from local farms, which is then
processed through a series of stages including extraction, clarification, evaporation, crystallization,
and drying. The refined sugar is packaged into bags and shipped to customers across the country.
Based on the operations of the sugar refinery described, which type of production process is being
used?
A. Continuous process
B. Repetitive process
C. Job shop process
D. Batch process
ANSWER: A

32. A construction company is tasked with building a new office complex for a client. The project
involves various stages, including site preparation, foundation laying, structural construction,
interior finishing, and landscaping. The company follows a structured approach to manage the
project efficiently and ensure timely completion. Which term best describes the approach used by
the construction company to manage the project?
A. Continuous process
B. Repetitive process
C. Job shop
D. Project process
ANSWER: D

33. Ethio-telecom operates a large call center to handle customer inquiries and support requests.
The call center receives a high volume of calls daily, with addressing various customer concerns,
such as technical support, and service activations. Each call follows a standardized procedure to
ensure efficient resolution. Which term best describes the service process used by the company's
call center?
A. Moment of truth
B. Service Shop
C. Service recovery
D. Mass service
ANSWER: D

34. An independent marketing consultant in Samara city provides strategic marketing services to
businesses, offering expertise in market analysis, brand development, digital marketing, and
campaign management. The consultant works closely with clients to assess their marketing needs,
develop tailored strategies, implement marketing campaigns, and evaluate their effectiveness.
Which term best describes the service process used by the marketing consultant in Addis Ababa?
A. Professional Service
B. Service Shop
C. Service recovery
D. Cycle of service
ANSWER: A

35. Samara University, located in Samara, Ethiopia, offers a variety of academic programs to its
students, including undergraduate and graduate degrees in fields such as business, health,
engineering, natural sciences, social sciences and so on. The university serves a moderate volume
of students, providing personalized academic support and guidance to help them excel in their
chosen fields. Which term best describes the service process used by Samara University?
A. Professional Service
B. Service shop
C. Service recovery
D. Mass service
ANSWER: B
36. Which of the following represents a key question in capacity planning regarding the type of
capacity needed?
A. What is the current demand level?
B. How many units can be produced in a day?
C. What kind of capacity is needed?
D. How much raw material is required for production?
ANSWER: C

37. A manufacturing facility with a design capacity of 200 units per hour experiences regular
maintenance breaks and adjustments, reducing its effective capacity to 160 units per hour. Despite
these constraints, the facility consistently produces 128 units per hour during its operational hours.
What is the utilization rate of the manufacturing system?
A. 64%
B. 72%
C. 80%
D. 90%
ANSWER: A

38. Safaricom Ethiopia anticipates a significant increase in demand for its services following the
government's initiative to expand internet connectivity across the country. To ensure they can
handle the expected surge in subscribers, the company invests in expanding its network
infrastructure and customer service capabilities well in advance. Which capacity strategy does the
company used?
A. Proactive strategy
B. Reactive strategy
C. Neutral strategy
D. Balanced strategy
ANSWER: A
39. A manufacturing company is considering establishing a new production facility in Ethiopia.
Several factors will influence its decision on the location of the facility. Which of the following is
NOT typically considered as a factor affecting location decisions?
A. Availability of skilled labor
B. Proximity to raw materials suppliers
C. Access to transportation networks
D. The ethnicity of employees
ANSWER: D

40. A multinational company is considering four potential locations for establishing a new
manufacturing plant in Ethiopia. The company has identified key factors and assign a weight;
Based on the factor rating method, which city is the most suitable for establishing the new
manufacturing plant?

A. City D
B. City C
C. City B
D. City A
ANSWER: B

41. A manufacturer of solar panels is exploring three potential locations, namely Asayita, Samara,
and Chifra, for establishing a new production facility. Cost assessments reveal the annual fixed
costs at these sites to be Birr 400,000, Birr 500,000, and Birr 600,000, respectively. Moreover,
variable costs are estimated at Birr 750 per unit in Asayita, Birr 300 per unit in Samara, and Birr
200 per unit in Chifra. With the expected volume of 200 units, which location offers the lowest
total annual cost for production?
A. Asayita
B. Chifra
C. Samara
D. Logia
ANSWER: A

42. As the marketing manager of a new electronics brand, you're tasked with analyzing data on
product distribution across four different locations. These locations are characterized by their X
and Y coordinates, along with the weekly quantity of devices distributed;

Based on the given information, which Location is suitable for your company?
A. Gambela
B. Adama
C. Assosa
D. Gondar
ANSWER: B

43. What is a primary consideration for a service company when deciding its location?
A. Proximity to competitors
B. Availability of raw material
C. Proximity to customer
D. Political view of business owner
ANSWER: C
44. Among operational activities, what characterizes the nature of location decisions?
A. They are primarily short-term decisions.
B. They don't consider the cost of production.
C. They are made infrequently.
D. They ignore the risk of the company.
ANSWER: C

45. Which of the following statements accurately describes these capacity concepts?
A. The actual capacity is higher than the design capacity.
B. Effective capacity represents the output achievable under ideal conditions.
C. Actual capacity considers the maximum output achievable without any constraints.
D. Effective capacity accounts for allowances such as equipment maintenance and breaks.
ANSWER: D

46. Ethio-Crafts PLC expects increased demand for traditional handicrafts due to Ethiopian new
year celebrations. They seek an aggregate production planning strategy to meet this demand over
six months.
A. Chase
B. Level
C. Variable Work Hours
D. Hybrid
ANSWER: A

47. Kuruftu resort is a popular ski resort restaurant in Samara City. During peak ski season, the
cafe experiences a surge in demand for food and beverages. During peak season, experienced staff
can work overtime to handle the increased orders. Conversely, during the off-season, the same
staff can work reduced hours (undertime), avoiding layoffs and the associated costs of retraining
new employees each season. This approach seems to like;
A. Chase
B. Variable Work Hours
C. Level
D. Hybrid
ANSWER: B

48. Afro Shoe Company manufactures athletic shoes. Demand for specific shoe styles fluctuates
throughout the year based on seasonal trends and marketing campaigns. Maintaining consistent
production levels can lead to excess inventory during slow periods, while ramping up production
for surprise trends can be challenging.
A. Chase
B. Variable Work Hours
C. Hybrid
D. Level
ANSWER: C

49. Harmony Pharmaceuticals produces different medications with consistent demand throughout
the year. Frequent production changes can disrupt quality control procedures and risk medication
purity. Additionally, stockpiling large quantities of medicine is necessary to ensure uninterrupted
supply in case of unforeseen disruptions.
A. Chase
B. Variable Work Hours
C. Hybrid
D. Level
ANSWER: D

50. One of the following is the merit of chase strategy;

A. No inventory investment
B. Less cost for adjusting workforce levels
C. Better productivity and quality
D. Convenient for industries which require highly skilled labor
ANSWER: A
51. Dubai furniture Company produce table in Logia city. The production cost per table is Birr
200. The beginning workforce consists of 50 workers, and each employee can produce 10 tables
per week with an inventory carrying cost of Birr 1 per table. The forecasted demand for the next
five weeks is presented below. Based on the above stated information, how much is total
production cost through level strategy;
A. 400,500
B. 500,400
C. 500,500
D. 400,400
ANSWER: B

52. The hiring cost is Birr 200 per worker and the firing cost is Birr 400 per worker. Each employee
can produce 100 units, and the beginning workforce consists of 500 workers. The forecasted
demand for the next five month is presented below. Based on chase strategy, how many employees
will be hired thought five production months?
A. 10
B. 200
C. 100
D. 20
ANSWER: B

53. Which factor does NOT affect location decisions?

A. Total costs
B. Infrastructure
C. Supplier quality
D. Color of the building
ANSWER: D

54. What is a 'moment of truth' in service delivery?

A. The point when a service is completed
B. Any time the customer comes in contact with the service system
C. The final stage of service delivery
D. The first impression of the service facility
ANSWER: B

55. What characterizes a high-contact service system?

A. High efficiency and standardization
B. Low customer involvement in the production process
C. Low prices and high standardization
D. Minimal customer interaction
ANSWER: C

56. A company has four branches in different location, and wants to determine a warehouse either
of these cities. Base on the given data below, which is optimal location for the company?

A. Asayita
B. Awash
C. Dessie
D. Jimma
ANSWER: B