1. What is operations strategy primarily concerned with?
a) Preparing annual tax statements
b) Designing advertising campaigns
c) Developing operating capabilities that support business goals
d) Setting employee vacation schedules
Answer: c) Developing operating capabilities that support business goals
2. An operations strategy should be closely aligned with:
a) The organization’s overall business strategy
b) Individual employee preferences
c) Competitors’ advertising budgets
d) Short-term accounting procedures only
Answer: a) The organization’s overall business strategy
3. Which statement best describes strategy?
a) A record of past transactions
b) A plan for achieving long-term goals
c) A daily task checklist
d) A list of employee benefits
Answer: b) A plan for achieving long-term goals
4. What is the central purpose of an operations strategy?
a) To eliminate every operational risk
b) To replace marketing and finance
c) To increase the number of reports
d) To guide decisions about processes, resources and capabilities
Answer: d) To guide decisions about processes, resources and capabilities
5. Operations strategy helps an organization determine:
a) How operations will create customer and business value
b) Which employees should receive parking spaces
c) How often annual reports should be printed
d) Which corporate logo should be used
Answer: a) How operations will create customer and business value
6. A strong operations strategy connects customer needs with:
a) Political objectives
b) Operational capabilities
c) Personal preferences
d) Accounting rules only
Answer: b) Operational capabilities
7. Which of the following is a strategic operations decision?
a) Correcting one invoice error
b) Replacing a broken lightbulb
c) Selecting the long-term capacity of a facility
d) Rescheduling one employee’s lunch break
Answer: c) Selecting the long-term capacity of a facility
8. Which decision is generally tactical rather than strategic?
a) Choosing a global facility network
b) Selecting a long-term process technology
c) Defining the company’s competitive priorities
d) Preparing next week’s production schedule
Answer: d) Preparing next week’s production schedule
9. Strategic operations decisions usually have:
a) Long-term effects and significant resource commitments
b) No effect on customers
c) Only temporary financial consequences
d) Little connection to organizational goals
Answer: a) Long-term effects and significant resource commitments
10. Which question is most relevant to operations strategy?
a) Who should attend today’s meeting?
b) What capabilities must operations develop to compete successfully?
c) Which invoice should be paid first today?
d) What color should an internal form use?
Answer: b) What capabilities must operations develop to compete successfully?
11. Operations strategy should be reviewed when:
a) Customer needs, technology or competition changes
b) One employee arrives late
c) A routine meeting is canceled
d) Office furniture is rearranged
Answer: a) Customer needs, technology or competition changes
12. Which term refers to something an organization does especially well?
a) Operating liability
b) Strategic weakness
c) Core capability
d) Market regulation
Answer: c) Core capability
13. A capability becomes strategically valuable when it:
a) Is easy for every competitor to copy
b) Helps deliver value customers care about
c) increases paperwork without improving results
d) Has no connection to market needs
Answer: b) Helps deliver value customers care about
14. Which is an example of an operations capability?
a) Rapid product delivery
b) A corporate mission statement alone
c) A stock-market forecast
d) A legal ownership document
Answer: a) Rapid product delivery
15. A distinctive competence is a capability that:
a) Is unrelated to customers
b) Exists only in financial reports
c) Provides an advantage that competitors find difficult to copy
d) Is available equally to all organizations
Answer: c) Provides an advantage that competitors find difficult to copy
16. Which function is responsible for translating market requirements into operating processes?
a) Operations
b) Public relations
c) Corporate legal affairs
d) Investor relations
Answer: a) Operations
17. Why must operations managers understand business strategy?
a) To avoid cooperating with other functions
b) To make decisions that support the organization’s direction
c) To replace senior leadership
d) To focus exclusively on daily problems
Answer: b) To make decisions that support the organization’s direction
18. An operations strategy that conflicts with the marketing promise will likely cause:
a) Better alignment
b) Lower customer expectations automatically
c) Delivery and customer-satisfaction problems
d) Perfect operating performance
Answer: c) Delivery and customer-satisfaction problems
19. Which statement best reflects strategic alignment?
a) Each department pursues unrelated goals
b) Operations capabilities support the value promised to customers
c) Operations ignores changing customer needs
d) Marketing makes commitments without operational input
Answer: b) Operations capabilities support the value promised to customers
20. A company competing through rapid delivery should invest most directly in:
a) Fast, reliable and responsive operating processes
b) Longer approval chains
c) Larger amounts of unnecessary inventory
d) More complex organizational titles
Answer: a) Fast, reliable and responsive operating processes
21. What is usually the first step in developing an operations strategy?
a) Purchase new equipment immediately
b) Understand the organization’s mission, market and business strategy
c) Hire additional employees
d) Copy a competitor’s process
Answer: b) Understand the organization’s mission, market and business strategy
22. After understanding business strategy, operations leaders should identify:
a) Customer needs and competitive priorities
b) Employee parking preferences
c) The length of the annual report
d) The number of internal emails sent
Answer: a) Customer needs and competitive priorities
23. Environmental scanning involves examining:
a) Internal records only
b) Past financial statements only
c) External trends, competitors, technology and market conditions
d) Employee attendance only
Answer: c) External trends, competitors, technology and market conditions
24. Why should an organization assess its current capabilities?
a) To identify strengths and gaps relative to strategic needs
b) To eliminate all performance measures
c) To avoid making future investments
d) To reduce communication with customers
Answer: a) To identify strengths and gaps relative to strategic needs
25. A capability gap exists when:
a) Current operating abilities do not meet strategic requirements
b) Customer demand exactly equals capacity
c) Employees complete all assigned training
d) A company earns a profit
Answer: a) Current operating abilities do not meet strategic requirements
26. Which action should follow the identification of capability gaps?
a) Ignore them until customers complain
b) Develop initiatives to close the most important gaps
c) Stop measuring performance
d) Increase advertising regardless of operations
Answer: b) Develop initiatives to close the most important gaps
27. Why should strategic operations initiatives be prioritized?
a) Resources and management attention are limited
b) Every project has equal value
c) Prioritization prevents accountability
d) All initiatives can be completed immediately
Answer: a) Resources and management attention are limited
28. Which tool is commonly used to evaluate internal strengths and weaknesses and external opportunities and threats?
a) Income statement
b) Process invoice
c) SWOT analysis
d) Attendance report
Answer: c) SWOT analysis
29. In SWOT analysis, a highly skilled workforce is usually classified as:
a) A threat
b) A strength
c) An opportunity
d) An external regulation
Answer: b) A strength
30. In SWOT analysis, a new competitor entering the market may represent:
a) A strength
b) An internal capability
c) An opportunity only
d) A threat
Answer: d) A threat
31. In SWOT analysis, growing demand for a new service may represent:
a) An opportunity
b) A weakness
c) A production defect
d) An accounting liability
Answer: a) An opportunity
32. Outdated production technology would most likely be classified as:
a) A market opportunity
b) An external threat only
c) An internal weakness
d) A customer benefit
Answer: c) An internal weakness
33. What should leaders do after choosing operations initiatives?
a) Define ownership, resources, timelines and performance measures
b) Avoid communicating the initiatives
c) Eliminate all existing processes
d) Wait for competitors to act first
Answer: a) Define ownership, resources, timelines and performance measures
34. Why are performance measures included in strategy execution?
a) To determine whether initiatives are producing the intended results
b) To create additional paperwork only
c) To prevent employees from making decisions
d) To replace customer feedback
Answer: a) To determine whether initiatives are producing the intended results
35. Which practice best supports effective strategy execution?
a) Assigning initiatives without resources
b) Establishing clear accountability
c) Changing priorities every day
d) Keeping goals confidential
Answer: b) Establishing clear accountability
36. An operations strategy should be treated as:
a) A permanent plan that never changes
b) A financial document only
c) A dynamic plan reviewed as conditions evolve
d) A confidential operations-only activity
Answer: c) A dynamic plan reviewed as conditions evolve
37. Which factor is most likely to require a change in operations strategy?
a) A major shift in customer expectations
b) A routine employee lunch break
c) A minor spelling error in an email
d) A temporary office decoration
Answer: a) A major shift in customer expectations
38. What is the purpose of strategic feedback?
a) To compare actual outcomes with objectives and adjust the strategy
b) To eliminate performance reviews
c) To keep unsuccessful initiatives unchanged
d) To avoid learning from results
Answer: a) To compare actual outcomes with objectives and adjust the strategy
39. Which activity helps convert operations strategy into action?
a) Creating a portfolio of specific improvement projects
b) Increasing the number of mission statements
c) Avoiding cross-functional planning
d) Measuring results without setting goals
Answer: a) Creating a portfolio of specific improvement projects
40. Which sequence best describes the operations strategy process?
a) Buy technology, set goals, then identify customers
b) Understand strategy, identify priorities, assess capabilities, execute and review
c) Reduce employees, increase prices and stop measuring
d) Advertise, outsource everything and eliminate planning
Answer: b) Understand strategy, identify priorities, assess capabilities, execute and review
41. Competitive priorities define:
a) The operating dimensions on which a company chooses to compete
b) Employee reporting relationships only
c) Tax and legal requirements
d) The organization’s office layout
Answer: a) The operating dimensions on which a company chooses to compete
42. Which of the following is a common competitive priority?
a) Quality
b) Organizational title
c) Office decoration
d) Financial reporting frequency
Answer: a) Quality
43. Competing on low cost requires operations to emphasize:
a) Efficient use of labor, materials, technology and capacity
b) Maximum product complexity
c) Frequent process interruptions
d) High levels of avoidable waste
Answer: a) Efficient use of labor, materials, technology and capacity
44. A company emphasizing premium design and superior performance is primarily competing on:
a) Minimum variety
b) Quality
c) Employee seniority
d) Facility ownership
Answer: b) Quality
45. Which competitive priority focuses on providing products quickly?
a) Delivery speed
b) Product ownership
c) Environmental scanning
d) Financial leverage
Answer: a) Delivery speed
46. Delivering products when promised reflects:
a) Product customization
b) Delivery reliability
c) Market research
d) Employee flexibility
Answer: b) Delivery reliability
47. The ability to change output volume quickly is called:
a) Design quality
b) Cost leadership
c) Volume flexibility
d) Market ownership
Answer: c) Volume flexibility
48. The ability to offer many product or service variations reflects:
a) Variety flexibility
b) Delivery reliability
c) Financial efficiency
d) Market stability
Answer: a) Variety flexibility
49. Customization means:
a) Producing exactly the same offering for every customer
b) Adapting goods or services to individual customer needs
c) Eliminating all product choices
d) Increasing delivery time intentionally
Answer: b) Adapting goods or services to individual customer needs
50. Innovation as a competitive priority focuses on:
a) Introducing new or improved offerings and processes
b) Maintaining every product without change
c) Reducing customer communication
d) Avoiding new technology
Answer: a) Introducing new or improved offerings and processes
51. Which competitive priority is most important for an emergency medical service?
a) Slow customization
b) Response speed and reliability
c) Product variety only
d) Lowest advertising cost
Answer: b) Response speed and reliability
52. Which priority is especially important for a luxury automobile brand?
a) Premium quality and design
b) Lowest possible service level
c) Minimum product reliability
d) Elimination of innovation
Answer: a) Premium quality and design
53. An online retailer promising next-day delivery must develop strong capabilities in:
a) Logistics speed and delivery reliability
b) Product disposal only
c) Corporate governance only
d) Employee recruitment only
Answer: a) Logistics speed and delivery reliability
54. A low-cost airline primarily competes through:
a) Cost efficiency and standardized service
b) Unlimited customization
c) Maximum process complexity
d) Highly varied aircraft for every route
Answer: a) Cost efficiency and standardized service
55. Which capability would best support product customization?
a) Flexible processes and responsive information systems
b) Fixed processes with no variation
c) Long approval chains
d) Large batches of identical products only
Answer: a) Flexible processes and responsive information systems
56. Which competitive priority focuses on preventing errors and defects?
a) Conformance quality
b) Advertising reach
c) Capital ownership
d) Market regulation
Answer: a) Conformance quality
57. Design quality refers to:
a) The features and performance built into an offering
b) The amount of inventory held
c) The number of employees assigned
d) The speed of financial reporting
Answer: a) The features and performance built into an offering
58. A company that consistently meets promised delivery dates is demonstrating:
a) Delivery dependability
b) High customization
c) Product innovation
d) Financial flexibility
Answer: a) Delivery dependability
59. Time to market measures:
a) How quickly a new offering moves from concept to launch
b) How long products remain in inventory
c) How quickly invoices are paid
d) How long employees remain with the company
Answer: a) How quickly a new offering moves from concept to launch
60. Which competitive priority is supported by reducing product-development time?
a) Innovation speed
b) Employee seniority
c) Facility ownership
d) Accounting accuracy only
Answer: a) Innovation speed
61. Sustainability can become a competitive priority when customers value:
a) Responsible environmental and social performance
b) Increased operational waste
c) Higher energy consumption
d) Less transparent sourcing
Answer: a) Responsible environmental and social performance
62. A manufacturer that uses less energy per unit may improve both:
a) Cost and sustainability performance
b) Product defects and waiting time
c) Inventory and rework
d) Complexity and waste
Answer: a) Cost and sustainability performance
63. Which priority is most directly supported by strong after-sales assistance?
a) Service quality
b) Machine utilization
c) Capacity expansion
d) Cost accounting
Answer: a) Service quality
64. Which competitive priority allows customers to obtain help when needed?
a) Customer service and support
b) Product standardization only
c) Facility location only
d) Employee scheduling
Answer: a) Customer service and support
65. Why must competitive priorities be clearly communicated?
a) Employees need to understand which operating outcomes matter most
b) Every employee should select unrelated priorities
c) Priorities should remain confidential from operations
d) Communication removes the need for resources
Answer: a) Employees need to understand which operating outcomes matter most
66. Which is a possible trade-off between competitive priorities?
a) Greater customization may increase cost or delivery time
b) Better quality must always increase defects
c) Faster delivery always lowers customer value
d) Lower waste always reduces efficiency
Answer: a) Greater customization may increase cost or delivery time
67. An order qualifier is:
a) A minimum requirement needed for customers to consider an offering
b) A feature that always guarantees the sale
c) A financial ratio
d) A supplier payment method
Answer: a) A minimum requirement needed for customers to consider an offering
68. An order winner is:
a) A characteristic that causes customers to choose one offering over another
b) A minimum legal requirement only
c) A routine employee responsibility
d) A financial reporting standard
Answer: a) A characteristic that causes customers to choose one offering over another
69. If acceptable quality is required merely to enter a market, quality is acting as:
a) An order qualifier
b) An order winner in every case
c) A capacity measure
d) A financial objective
Answer: a) An order qualifier
70. If customers choose a supplier mainly because it delivers faster than competitors, speed is:
a) An order winner
b) A legal requirement
c) A financial liability
d) A workforce measure
Answer: a) An order winner
71. Why can order winners change over time?
a) Customer expectations and competitors’ capabilities evolve
b) Customers never change their preferences
c) Technology remains constant
d) Markets always remain stable
Answer: a) Customer expectations and competitors’ capabilities evolve
72. A feature that was once an order winner may become an order qualifier when:
a) Most competitors begin offering it
b) Customers stop caring about minimum standards
c) Its quality becomes worse
d) The company stops measuring it
Answer: a) Most competitors begin offering it
73. Which approach best avoids an unclear competitive position?
a) Prioritize the operating capabilities most valued by target customers
b) Claim to be best at every priority without making choices
c) Copy every competitor’s strategy
d) Change priorities daily
Answer: a) Prioritize the operating capabilities most valued by target customers
74. A company following a focused operations strategy should:
a) Design processes around a clear market segment and value proposition
b) Serve every market with the same process regardless of need
c) Ignore customer differences
d) Avoid making strategic choices
Answer: a) Design processes around a clear market segment and value proposition
75. Why should competitive priorities be translated into measurable objectives?
a) To guide decisions and evaluate progress
b) To make the strategy less understandable
c) To eliminate accountability
d) To avoid operational action
Answer: a) To guide decisions and evaluate progress
76. Strategic planning establishes:
a) The organization’s long-term direction and major objectives
b) Only next week’s work schedule
c) Individual lunch assignments
d) Daily invoice-processing steps
Answer: a) The organization’s long-term direction and major objectives
77. A mission statement generally explains:
a) The organization’s purpose and reason for existing
b) The daily production schedule
c) The number of suppliers used
d) The annual maintenance budget only
Answer: a) The organization’s purpose and reason for existing
78. A vision statement describes:
a) The organization’s desired future position
b) Yesterday’s operational results
c) A detailed employee schedule
d) A supplier invoice
Answer: a) The organization’s desired future position
79. Strategic objectives should ideally be:
a) Specific, measurable and aligned with the organization’s direction
b) Vague and impossible to evaluate
c) Unrelated to customer needs
d) Changed every day
Answer: a) Specific, measurable and aligned with the organization’s direction
80. Which planning level converts corporate goals into decisions about processes and capabilities?
a) Operations strategy
b) Personal planning
c) Daily attendance planning
d) Informal social planning
Answer: a) Operations strategy
81. Which is an example of a long-term operations decision?
a) Building a new manufacturing facility
b) Assigning tomorrow’s workstation
c) Correcting one order error
d) Approving one hour of overtime
Answer: a) Building a new manufacturing facility
82. Capacity strategy determines:
a) How much capability the organization should provide and when
b) Which advertisements should run
c) Which employee should prepare minutes
d) How dividends should be declared
Answer: a) How much capability the organization should provide and when
83. A capacity cushion is:
a) Extra capacity maintained above expected demand
b) Inventory that has become obsolete
c) A type of customer complaint
d) A financial reserve only
Answer: a) Extra capacity maintained above expected demand
84. Why might a hospital maintain a capacity cushion?
a) To respond to unpredictable demand and emergencies
b) To guarantee that facilities remain unused
c) To eliminate service flexibility
d) To increase patient waiting times
Answer: a) To respond to unpredictable demand and emergencies
85. Facility-location decisions should consider:
a) Customers, suppliers, labor, infrastructure, costs and risk
b) Office paint color only
c) Employee job titles only
d) The length of company reports
Answer: a) Customers, suppliers, labor, infrastructure, costs and risk
86. Process strategy determines:
a) How work will be organized and performed
b) How shares will be traded
c) How taxes will be collected
d) How annual reports will be distributed
Answer: a) How work will be organized and performed
87. Technology strategy should be based primarily on:
a) How technology supports customer value and operating priorities
b) Whether the technology is fashionable
c) The number of features offered
d) Competitors’ purchases alone
Answer: a) How technology supports customer value and operating priorities
88. Workforce strategy addresses:
a) The skills, roles, organization and development of employees
b) Only employee attendance records
c) Product advertising
d) Investor communications
Answer: a) The skills, roles, organization and development of employees
89. A supply-chain strategy should define:
a) How suppliers, logistics and partners support the value proposition
b) Only the company’s internal accounting process
c) How employee vacations are approved
d) The format of marketing brochures
Answer: a) How suppliers, logistics and partners support the value proposition
90. Outsourcing means:
a) Obtaining selected goods or services from an external provider
b) Producing every input internally
c) Eliminating suppliers completely
d) Selling all company facilities
Answer: a) Obtaining selected goods or services from an external provider
91. Which factor should be considered before outsourcing a process?
a) Strategic importance, capability, cost, quality and risk
b) The supplier’s logo only
c) The number of emails exchanged
d) Employee parking capacity
Answer: a) Strategic importance, capability, cost, quality and risk
92. A core activity is less likely to be outsourced when it:
a) Provides important competitive differentiation
b) Has no connection to customers
c) Is widely available from all suppliers
d) Requires no specialized knowledge
Answer: a) Provides important competitive differentiation
93. Vertical integration refers to:
a) Owning or controlling additional stages of the value chain
b) Increasing the height of a facility
c) Creating more reporting levels
d) Producing only one product
Answer: a) Owning or controlling additional stages of the value chain
94. Backward integration occurs when a company:
a) Gains control over activities performed by suppliers
b) Moves closer to final customers
c) Eliminates all internal production
d) Reduces its product quality
Answer: a) Gains control over activities performed by suppliers
95. Forward integration occurs when a company:
a) Gains greater control over distribution or customer-facing activities
b) Purchases a raw-material supplier
c) reduces customer contact
d) stops managing its value chain
Answer: a) Gains greater control over distribution or customer-facing activities
96. Why should operations participate in strategic planning?
a) Strategic promises must be supported by feasible operating capabilities
b) Operations has no knowledge of resources
c) Strategy concerns only financial reporting
d) Customers are unrelated to operations
Answer: a) Strategic promises must be supported by feasible operating capabilities
97. Which practice best promotes cross-functional strategic alignment?
a) Joint planning among operations, marketing, finance and technology
b) Allowing each function to set conflicting goals
c) Keeping customer information within marketing
d) Preventing operations from reviewing sales commitments
Answer: a) Joint planning among operations, marketing, finance and technology
98. What is a likely result when business growth exceeds operating capacity?
a) Delays, quality problems and dissatisfied customers
b) Automatic improvement in reliability
c) Lower employee workload
d) Elimination of process bottlenecks
Answer: a) Delays, quality problems and dissatisfied customers
99. What should leaders do when strategic demand exceeds current capabilities?
a) Prioritize investments, partnerships or process changes to close the gap
b) Continue making commitments without a plan
c) Stop monitoring customer needs
d) Hide capacity limitations
Answer: a) Prioritize investments, partnerships or process changes to close the gap
100. Which statement best summarizes operations strategy?
a) It aligns processes, people, technology and supply networks with the organization’s competitive goals
b) It focuses only on reducing labor cost
c) It is limited to daily scheduling
d) It operates independently of customers and business strategy
Answer: a) It aligns processes, people, technology and supply networks with the organization’s competitive goals
