1) The goal of operations management is to manage the process of turning labor and raw
materials into goods and services of some type.
Answer: TRUE
Explanation: Operations management is the act of controlling and managing the process that
turns inputs, such as raw materials, labor, and equipment into products that customers buy.
Diff: 1 Page Ref: 374
Objective: 14.1
2) Operations management is part of the transformation process.
Answer: FALSE
Explanation: The opposite is true—the transformation process is part of operations
management. Operations management is how you manage, control, and apply the
transformation process.
Diff: 2 Page Ref: 374
Objective: 14.1
3) The three inputs in the transformation process are people, equipment, and materials.
Answer: FALSE
Explanation: In addition to people, equipment, and materials, the inputs include capital,
technology, and information.
Diff: 2 Page Ref: 374
Objective: 14.1
4) Operations management includes service industries but not manufacturing firms.
Answer: FALSE
Explanation: Operations management includes both service and manufacturing industries.
Diff: 1 Page Ref: 374
Objective: 14.1
5) When inputs are turned into goods and services, value is created.
Answer: TRUE
Explanation: By definition, the transformation process creates value when it transforms
inputs into goods and services that customers want to buy.
Diff: 2 Page Ref: 375
Objective: 14.1
6) Manufacturing organizations produce both physical and nonphysical outputs.
Answer: FALSE
Explanation: Manufacturing organizations produce physical outputs only. A car company, for
example, produces cars.
Diff: 2 Page Ref: 375
Objective: 14.1
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The Malcolm Baldrige National Quality Award is given each year to companies that meet rigorous standards of quality. The Baldrige criteria are (1) leadership, (2) information and analysis, (3) strategic planning, (4) human resources development and management, (5) process management, (6) business results, and (7) customer focus and satisfaction. The criteria have become a worldwide framework for driving business improvement. Four organizations won the award in 2014 representing three different categories: PricewaterhouseCoopers Public Sector Practice (service); Hill Country Memorial and St. David's HealthCare (health care); and Elevations Credit Union (nonprofit).29