MBA 505: Operations Management Final Exam

Operational Excellence isn’t a state. It’s a habit; built quietly, practiced daily, earned through effort, critical thought, and respect for people.
This exam is designed to assess your understanding of, and ability to apply, the  foundational concepts of Operations Management. The use of generative AI tools (such as ChatGPT, Gemini, etc.) is prohibited.

 Each question set is worth 5 points. Total: 50 points. Each question is worth 3 points for demonstrating understanding and 2 points for applying the concept. Brevity is appreciated.

1. Productivity and Performance Metrics

a)  Concept (3 pts): Define labor productivity and multifactor productivity.

b)  Application (2 pts): A small bakery produces 1,200 cookies/day with 5 workers working 8-hour shifts. Labor costs $15/hour, materials cost $200/day, and overhead is $150/day.

·        Calculate labor productivity.

·        Calculate multifactor productivity

·        Suggest one qualitative factor that should be considered when interpreting these results.

 2. Competitive Strategy & Alignment

a)  Concept (3 pts): Compare Porter’s cost leadership and differentiation strategies with Blue Ocean strategy. 

b)  Application (2 pts): Choose one real company that follows Porter and one that operates in a Blue Ocean. Describe how their operations reflect their strategic approach (e.g., supply chain, staffing, customer experience).

 3. Lean Thinking & Gemba

a)  Concept (3 pts): What does it mean to “go to gemba”? Why is it central to continuous improvement?

b)  Application (2 pts): Imagine you’re working with a hospital surgical team experiencing delays in patient prep before entering the OR. Outline a plan for how you would apply gemba principles to observe and understand the causes of these delays. Be specific about where you would observe, what you would look for, and how this could inform improvement.

4. PDSA & Continuous Improvement

a)  Concept (3 pts): Explain the purpose of each stage in the PDSA cycle.

b)  Application (2 pts): Propose a quick PDSA experiment to reduce email response time in your workplace. What data would you collect, and how would you determine if the test was successful?

 5. Variation & Statistical Process Control

a)  Concept (3 pts): Differentiate between common cause and special cause variation. 

b)  Application (2 pts): A clinic notices a sudden drop in patient no-show rates. How would you use control charts to determine if the improvement is real? What types of charts would you use? 

6. Capacity & Bottlenecks

a)  Concept (3 pts): Define design capacity, effective capacity, utilization, and efficiency. 

b)  Application (2 pts): A call center has a design capacity of 1,000 calls/day and an effective capacity of 800. They answer 720 calls/day. Calculate utilization and efficiency. Identify one likely bottleneck and suggest how to relieve it.

7. Inventory Models

a)  Concept (3 pts): Describe the EOQ model and its assumptions. When is it most useful? 

b)  Application (2 pts): The hospital must stock grab-and-go salads near the labor and delivery unit. Demand averages 100 salads per day. Ordering cost is $25 per batch, and holding cost is $0.10 per salad per day. However, salads must be sold within 3 days. Calculate EOQ and assess whether this model is appropriate given the perishability. What alternative approach might be better?

8. Supply Chain Disruption & Bullwhip Effect

a)  Concept (3 pts): What is the bullwhip effect and what causes it?

b)  Application (2 pts): A viral social media challenge leads to a surge in demand for a specific protein bar. Describe two strategies the supply chain team could use to reduce disruption and improve responsiveness.

9. Project Management

a)  Concept (3 pts): Distinguish between waterfall and agile project management approaches. When is each most appropriate?

b)  Application (2 pts): A hospital is implementing a new patient scheduling system. Would you recommend waterfall or agile? Why? How would you track progress and manage risk?

10. Process Mapping & Improvement

a)  Concept (3 pts): Compare a process map, swimlane diagram, and value stream map. When is each most useful?

b)  Application (2 pts): Choose a process in healthcare, education, or business (e.g., onboarding a new hire). Recommend the best type of map and explain how it would support improvement efforts across departments.