Certified Production & Operations Manager (POM) Practice Exam

Which of the following is an example of an operational operations management decision?

1. Inventory level management

2. Marketing strategy formulation

3. Financial forecasting

4. Human resource allocation

The correct answer is: Inventory level management

Operational operations management decisions focus on the day-to-day activities and processes that are essential for producing goods or providing services efficiently. Managing inventory levels directly influences the effectiveness of production and customer service. It involves determining the optimal amount of stock to hold, balancing costs associated with inventory while meeting demand levels, and ensuring the availability of products for operations. This is a critical component of operations management that impacts lead times, operational efficiency, and cost control. The other options, while important in their own contexts, fall outside the core scope of operational decision-making in production and operations management. Marketing strategy formulation, for example, is concerned with market positioning and promotional tactics, which are broader and more strategic in nature. Similarly, financial forecasting pertains to predicting economic outcomes, which is essential for the overall financial health of an organization but does not focus directly on operational capabilities. Human resource allocation, although important for operational effectiveness, tends to be more strategic than purely operational in terms of managing a workforce at a high level rather than the daily management of operations themselves.