Certified Production & Operations Manager (POM) Practice Exam

Which of the following is NOT categorized as a strategic operations management decision?

1. Capacity planning

2. Location selection

3. Price

4. Process design

The correct answer is: Price

Strategic operations management decisions typically focus on long-term, overarching choices that shape the direction of an organization’s operations. These decisions involve significant resources and have a lasting impact on the organization’s ability to compete effectively in the market. Capacity planning involves determining the production capacity needed to meet varying levels of demand, which is crucial for ensuring that an organization can fulfill customer orders efficiently. Location selection pertains to where to establish production facilities or service centers, influencing logistics, costs, and access to markets. Process design refers to the planning of workflows and processes to enhance efficiency and quality in production, affecting the entire operational framework of an organization. In contrast, pricing is primarily a tactical decision. While it can influence an organization's competitive position, it is often adjusted in response to market conditions, customer demands, and competitive pressures, rather than being a foundational aspect of the operational strategy itself. Thus, pricing does not align with the long-term strategic nature of the other options. This distinction highlights why pricing is not categorized as a strategic operations management decision.