Operations Management Is Part of a Production System That Can

question 55

Multiple Choice

Operations management is part of a production system that can be described in the following manner: Organization: inputs→processes→outputs.
Which one of the following correctly describes a production system?

• A) Airline: pilots→planes→transportation
• B) Bank: tellers→computer equipment→deposits
• C) Furniture manufacturer: wood→sanding→chair
• D) Telephone company: satellites→cables→communication

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Definitions:

Sales Volume Variance

The difference between the actual units sold and the budgeted units sold, multiplied by the standard selling price per unit.

Average Price

The mean price of a good or service calculated by dividing the sum of the prices of all the items by the number of items.

Overhead Volume Variance

Overhead volume variance is the difference between the budgeted overhead at standard production volumes and the actual overhead incurred due to variance in production volume.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels.