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Chapters 1 & 2: Problem Set

Operations management requires:
Knowledge of the facts and how to interpret information.
Why does operations management require constant improvement?
Due to competition in the marketplace and advances in technology.
Good product and process design is ____________ ____________.
Customer driven
What question must operations managers answer?
What type of process is best suited to fulfill our customer’s needs?
What is the goal in selecting a supplier?
Best product for the best price.
The global market enables the operations manager:
To choose the most cost effective supplier.
Honda’s relationship with their suppliers is based on ____________.
Trust
Why did Hillerich & Bradsby implement ERP?
To simplify their processes.
When do Hillerich & Bradsby start their production process?
When an order is entered.
What was the purpose of Disney’s Fast Pass?
Remove the need to wait in line by using a virtual queue.
How do you know if your process is the most efficient for your product or service?
By measuring.
Monitoring the consistency and repeatability of a process is called ____________ ____________ ____________.
Statistical Process Control
What technique does Gortrac use to support continuous improvement?
Daily production meetings
How did ABTCO increase capacity without adding space or investing capital?
By closing down unprofitable lines and starting up idle lines.
Operations management incorporates what groups?
Suppliers, employees, distributors, and retailers
What would cause a business to change its product or service design?
Changes in the market.
What is the first step in creating a new operation?
The design of the product and the process that will produce it.
What statement best describes Hillerich & Bradsby’s ERP system?
All information is stored in one database, and production is based solely on demand.
Which statement best describes the reason for opening the Hotel Monaco?
Changes in the market forced the company to rethink its service design by opening a boutique hotel providing specialized services.
Operations management involves continuous decision making; hopefully most decisions made are ____________.
Informed
Measurements taken at various points in the transformation process for control purposes are called ____________.
Feedback
Product design and process selection are examples of ____________ decisions.
System design
The responsibilities of the operations manager are:
Planning, organizing, staffing, directing, and controlling.
Farming is an example of:
Nonmanufactured goods
Marketing depends on operations for information regarding ____________ ____________.
Lead time
Supplying operations with parts and materials, performing work on products, and/or performing services are part of the firm’s ____________ ____________ ____________.
Internal supply chain
How should Hazel expand next year?
Develop new lawn care services based on current customer requests.
What is the best slogan to put on neighborhood fliers to advertise her business?
Your neighbor cares about your lawn like you do!
How should she go about hiring new workers?
Hire people she knows or people who share her sense of community.
How can she make her business more sustainable/green?
Compost weeds and grass clippings to make her own fertilizer.
How can Hazel increase her service efficiency?
Schedule adjacent yards on the same day to care for them as one ‘big’ yard.
The amount of work Hazel has fluctuates from day to day; how can she get a more regular income stream?
Agree upon regular weekly schedules of care for her customers.
A large professional service offers to buy her out, what should she do?
Resist selling because her customers buy because of her. Also, she enjoys this job.
What operations strategy is Hazel following?
Superior customer service
Hazel cut 10 lawns last year and plans to cut 12 this year. What will her productivity growth be?
20%
If Hazel uses 2 workers to cut 20 lawns, what is the partial labor productivity?
10
Which implication would occur if sustainability was Hazel’s organizational strategy?
Waste management
Hazel makes $1,200 by using $400 of labor and $200 of materials. What is the multifactor productivity?
2
An operation scheduled to produce 100 items has 10% scrap. Material input is 50. If scrap was eliminated, by how much would productivity increase?
0.2
A catering company prepared and served 395 meals at an anniversary celebration last week using seven workers. The week before, five workers prepared and served 260 meals at a wedding reception.
– Calculate the labor productivity for each event.
– For which event was the labor productivity higher?
Labor productivity
Anniversary: 56.4 meals/worker
Wedding: 52 meals/worker

Higher labor productivity: Anniversary

Compute the multifactor productivity measure for each of the weeks shown for production of chocolate bars. Assume 40-hour weeks and an hourly wage of $14. Overhead is 1.5 times weekly labor cost. Material cost is $9 per pound.

Week 1: 29,000 output; 5 workers; 480 lbs material
Week 2: 33,000 output; 7 workers; 470 lbs material
Week 3: 31,000 output; 8 workers; 540 lbs material
Week 4: 35,000 output; 9 workers; 540 lbs material

*Use excel to solve.

Multifactor productivity (Output / Total Cost)
Week 1 = 2.56
Week 2 = 2.35
Week 3 = 1.93
Week 4 = 2.01
A company that makes shopping carts for supermarkets and other stores recently purchased some new equipment that reduces the labor content of the jobs needed to produce the shopping carts. Prior to buying the new equipment, the company used 5 workers, who together produced an average of 80 carts per hour. Workers receive $11 per hour, and machine cost was $50 per hour. With the new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $11 per hour while output increased by 6 carts per hour.

– Compute labor productivity under each system. Use carts per worker per hour as the measure of labor productivity.
– Compute the multifactor productivity under each system. Use carts per dollar cost (labor plus equipment) as the measure.
– Comment on the changes in productivity according to the two measures.

Labor productivity:
Before = 16 carts per worker per hour
After = 21.5 carts per worker per hour

Multifactor productivity:
Before = .76 carts/dollar cost
After = .82 carts/dollar cost

Changes in productivity:
Labor productivity increased by 34.38%
Multifactor productivity increased by 7.89%

True or false: An example of a strategic operations management decision is the choice of where to locate.
True
True or false: An example of a tactical operations management decisions is determining employment levels.
True
True or false: Tracking productivity measures over time enables managers to judge organizational performance and decide where improvements are needed.
True
Which of the following would be least important int he pursuit of a time-based strategy?
Cost minimization
Competitiveness doesn’t include ____________.
Profitability
Product design and choice of location are examples of ____________ decisions.
Strategic
Which of these factors would be least likely to affect productivity?
Advertising
The fundamental purpose for the existence of any organization is described by its ____________ ____________.
Mission statement
Time-based approaches of business organizations focus on reducing the time to accomplish certain necessary activities. Time reductions seldom apply to ____________ ____________.
Internal audits
Unique attributes of firms that give them a competitive edge are called ____________ ____________.
Core competencies
Suppose a country’s productivity last year was 84. If this country’s productivity growth rate of 5 percent is to be maintained, this means that this year’s productivity will have to be:
88.2
Which statement best describes Subaru of Indiana?
The only US-based auto plant whose pristine grounds have been designated a wildlife habitat.
Since 2004, how much landfill material has the Subaru of Indiana automotive assembly plant generated?
Zero landfill
What are the three ways that Subaru achieved zero landfill?
Reduce, reuse, recycle
What is the best way to achieve zero landfill?
Reduce
What is the most environmentally friendly way to handle waste?
Reduce
Who developed the sealant recovery method?
Associates
What technique do most automotive manufacturers use for testing car welds?
Destructive testing
Which statement best describes some of the benefits of ultrasonic weld testing?
Saves money, uses less material, and produces safer cars.
What technique does Subaru use to ensure that their car welds are free of defects?
Ultrasonic testing
In which ability does ultrasonic weld testing surpass destructive weld testing?
Ability to determine internal defects.
The Manager of Safety & Environmental Compliance attributes the relative ease of their success to what factors?
Smaller facility, flatter organization, and the employees’ complete understanding of the process.
What is the benefit of the employees’ complete understanding of the process?
They understand where changes can be made.
What are some of the benefits Subaru achieved by cutting back the box flaps?
Easier to open, less cardboard, and safer.
Redesigning the cardboard boxes by cutting back the box flaps is an example of ____________.
Reduction
Why is reduction considered the best way to handle waste?
Most cost effective.
Why has Subaru been so successful in their efforts to reduce waste?
Proactive rather than reactive; they look forward.
Subaru has found that sometimes their most effective solutions:
Are the simplest.
Which statement best describes the Subaru of Indiana employees?
They have a total understanding of the process and know where changes can be made.
Which statement best describes the structure of Subaru of Indiana?
Small facility with a flat organization.
Which statement best describes Subaru’s model for achieving zero landfill?
Tracking waste and eliminating it at the source.
List the steps involved in getting gasoline into your car for full service and for self-service. Assume paying cash is the only means of payment.
Self-service:
1. Customer selects station.
2. Select octane level.
3. Customer pumps desired amount of gas and performs other services.
4. Pay cashier for gas and other products (cash) inside station.
5. Return to auto and drive off.

Full service:
1. Customer selects station.
2. Tell attendant type and amount of gas and services desired.
3. Attendant pumps desired amount of gas and performs other services.
4. Pay attendant cash for gas and other services.
5. Drive off.

Which of the following is an example of a postponement tactic?
Delayed differentiation
Designing for recycling helps facilitate:
Compliance with regulatory environments.
One way to increase reliability is to:
Improve preventive maintenance procedures.
A disadvantage of global teams for product design is that:
Ease of face-to-face meetings is absent since members are located everywhere.
The research and development activity which starts after positive research results are available and attempts to turn these results into useful commercial applications is ____________.
Development
Excitement characteristics are categories in the ____________ model.
Kano
Which of the following statements about CAD is not true?
It is used successfully by all manufacturing companies.
The process of dismantling and inspecting a competitor’s new or revised product for the purpose of gleaning design ideas is called ____________ ____________.
Reverse engineering
The term “degrees of newness” is associated with:
Degree of design change
The term “standardization” is closely associated with ____________.
Interchangeability
Service design generally differs from product design in which of the following ways?
There is less latitude in detecting and correcting errors prior to delivery.
Characteristics of a well-designed service system
– User friendly
– Robust
– Cost effective
– Easy to sustain
Elements of the service process in which there is little to no contact with the customer are referred to as:
Back-of-the-house

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