The four factors that derive from a company distinctive competencies and which create competitive advantage are
These are the four factors that create competitive advantage.
Efficiency is the relationship between inputs and outputs, and superior efficiency leads to lower costs which
leads to higher profitability and competitive advantage.
A product has superior quality when its customers consider that its attributes give them higher utility than do
the attributes of competing products.
Innovation in products and processes is perhaps the most important component of competitive advantage,
because competition is driven by innovation.
Superior responsiveness to customers means the company does a better job than its competition of
identifying customer needs and satisfying them.
Which of the following statements is not true about the application of Theory of Constraints to production called the drum-buffer-rope (DBR) system:
The sequence of processes prior to (not after) the constraint is the rope. There are different steps in
managing bottleneck operations through the use of the theory of constraints (TOC) analysis. The constrained
process is the drum and the sequence of processes prior to the constraint is the rope. The objective is to
balance the flow of production through the rope by timing and scheduling activity for all processes leading up
to the drum.
In an attempt to improve operations, companies often go
through analyses and redesign of the way processes are performed.
Which of the following is not considered to be an aspect
of a business process that may be focused on to achieve improvement?
(d) The requirement is to identify the aspect of business
process improvement that is not generally a focus. Answer (d) is
correct because examination of strategic goals is part of strategic
planning, not part of business process management. Answers
(a), (b) and (c) are incorrect because they all represent ways to
improve business processes.
Management of organizations that engage in business process
management view business processes as
(c) The requirement is to identify how business process
managers view business processes. Answer (c) is correct because
business process managers view processes as strategic assets that
can create value and competitive advantage. Answers (a), (b)
and (d) are incorrect because they all describe very limited views
of business processes.
At which phase in the business process management lifecycle
does management simulate performance of the process in a
(b) The requirement is to identify the phase that involves
simulation of performance of the process in a test environment.
Answer (b) is correct because this describes the modeling
phase. Answer (a) is incorrect because the design phase
involves design of the new process. Answer (c) is incorrect because
the execution phase involves implementing the process.
Answer (d) is incorrect because optimization involves identifying
additional improvements in the process after it is implemented.
In the theory of constraints, an operation or resource where
the work performed approaches or exceeds the available is referred
(a) The requirement is to identify a component of the
theory of constraints. Answer (a) is correct because a bottleneck
is any resource or operation where the capacity is less than the
demand placed upon it. Answers (b), (c), and (d) are incorrect
because they are not components of the theory of constraints.
Three of the basic measurements used by the Theory of
Constraints (TOC) are
(c) The requirement is to identify the three basic measurements
used by the Theory of Constraints. Answer (c) is
correct because the Theory of Constraints focuses on throughput
contribution, investment (or inventory), and operational expense
(operating costs). Answers (a), (b), and (d) are incorrect because
they represent other types of performance measures.
Which statement best describes the objective of the theory
Throughput contribution . . Investment . . Operating costs
(a) The requirement is to describe the objectives of the
theory of constraints (TOC). The objective of TOC is to increase
throughput contribution while decreasing investment and
operating costs. Throughput contribution is revenues minus the
direct materials cost of goods sold. Investment is the sum of
materials cost in direct materials; work in process and finished
goods inventories; research and development costs; and the costs
of equipment and buildings. Operating costs include salaries
and wages, rental expense, utilities, and depreciation.