Homework Questions

Three issues are at the core of operations management efficiency, cost, and quality.

Resource and capacity management is a key activity of operations managers that involves ensuring that the right amount of resources (labor, equipment, materials, and information) is available when needed.

The concepts and methods of OM are applicable in any job

difference between goods and services is that goods are tangible, whereas services are intangible.

Scheduling in service-providing firms focuses on when to assign employees and equipment to accomplish the work most efficiently without the benefit of physical inventory

Goods-producing firms use inventory to ensure constant availability of products despite demand fluctuations

The value of goods and services can be determined by dividing perceived benefits by cost to the customer

In the context of the scope of business and operations performance measurement,

equipment utilization is an organizational-level productivity and operational efficiency measure.

Budget variance is a financial performance measure at an operational level.

The triple bottom line refers to the measurement of environmental, social, and economic sustainability.

Number of students per teacher is an example of a productivity measure.

Key measures of innovation and learning include intellectual asset growth

The customer satisfaction measurement system uses financial, flexibility, sustainability metrics to determine the relationship between customer ratings and a customer’s likely future buying behavior.

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Productivity is found by dividing quantity of output by quantity of input

In the context of TBL, corporate ethics and government is a social sustainability measure.

The value of a loyal customer (VLC) quantifies the total revenue each target market customer generates over the buyer’s life cycle. Goods-producing and service-producing organizations benefit from understanding the value of a loyal customer performance relationship.

While computing the VLC, the customer defection rate is used to determine the

buyer’s life cycle

. This is computed as 1/defection rate and is expressed as a fraction.

Actionable measures reflect how an organization generates value to customers

The internal perspective includes all types of internal processes such as value-creation processes, support processes, and general management or business processes

The financial perspective includes measures the ultimate value that a business provides to its shareholders.

Creating a competitive advantage requires management to build and leverage operational capabilities

ABC automobiles include remote self-parking assist. This autonomous system allows a car to park itself even when the owner is not inside the car. This service differentiates ABC from other automobile manufacturers that do not offer this feature. This is an example of a(n) order winner

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Many people are hesitant to use online banking or bill paying because customers perceive a greater risk because they cannot evaluate the service prior to using it

The statement that illustrates the difference between the evaluation of goods and the evaluation of services by customers is that they mcannot look at or touch services prior to the purchase decision, whereas they can feel a product prior to purchase

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Experience attributes can be recognized only after purchase or during consumption or use of goods and/or services.

In general, organizations can compete on five key competitive priorities: cost, quality, time, flexibility, and innovation

Mass customization requires companies to design goods, services, and operations around

flexibility

Customer satisfaction surveys is an innovation in management practices.

Many firms, such as Apple, Unilever, and 3M, focus on research and development for innovation as a core component of their strategy. These companies focus on outstanding product research, design, and development

Sustainability is best described as a(n) organizational strategy using three dimensions: environmental, social, and economic .

Effective strategies develop around a few key competitive priorities

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Infrastructure focuses on the nonprocess features and capabilities of an organization. This does NOT include the area of value chain organization

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Loop #2 of Hill’s generic strategy framework describes how operations evaluates the implications of competitive priorities in terms of process choice and infrastructure

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According to Hill’s generic strategy framework, the first two stages tie together an organization’s corporate strategy and marketing strategy

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Hard technology refers to equipment and devices that perform a variety of tasks in the creation and delivery of goods and services; an example is a fire detector

Radio-frequency identification (RFID) tags can help identify genuine products from counterfeit knock-offs

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The roots of computer-integrated manufacturing systems (CIMSs) began with numerical control

An example of a soft technology that can be used in smart phones would be voice recognition software

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Computer-aided design/computer-aided engineering (CAD/CAE) allows engineers to

design, analyze, test, simulate, and manufacture products before they physically exist.

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Electronic transaction capability allows all parts of the value chain to immediately recognize and react to the changes in demand and supply.

A typical customer relationship management (CRM) system includes pre- and postproduction processes

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When considering a typical customer relationship management (CRM) system, the

value chain must be capable of delivering what the customer wants.

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Monitoring the environment and health of the planet is a benefit of adopting technology.

Job shift and displacement is a challenge of adopting technology.

Making decisions about customers’ privacy and security is NOT included in an operation manager’s process of designing the sociotechnical system.

JJ Wedding Planning performs a high degree of customization to provide a dream wedding for its clients. Therefore, JJ Wedding would have low scalability.

The Internet has provided the opportunity for organizations such as online newspapers to serve more customers at zero incremental cost. These organizations have infinite scalability.

A conservative, risk-averse manger would use the maximin criterion, while an aggressive, risk-taking manager would use the maximax criterion.

For manufactured goods, the form attribute addresses the important customer need of aesthetics

Unlike the customer benefit package design and configuration stage of designing goods and services, the detailed goods, services, and process design focuses on implementation

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Building a House of Quality begins by identifying the voice of the customer and technical features of the design plus listing them in the appropriate places in the diagram.

The Taguchi loss function is L(x) = k(x – T) 2 , k is a constant that translates the deviation into dollars?

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Reliability is the probability that a manufactured good, piece of equipment, or system performs its intended function for a stated period of time under specified operating conditions

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Machine A has a reliability of 0. Machine B has a reliability of 0.49. Machine C has a reliability of 0.7. Machine D has a reliability of 1. Which machine is the most reliable? Machine D

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People around the world recognize the consistency in McDonald’s restaurants: the golden arches, schemes and colors, packaging, etc. This is known as servicescape and helps to establish its brand image.

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In the context of the servicescape, building facades are examples of spatial layout and functionality

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The decision of where to locate emergency service facility, such as a fire station or police station is crucial to ensuring customer value creation, service delivery, and firm competitiveness.

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A(n) hospital is an example of an elaborate servicescape environment.

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High customer contact systems would most likely be found in front office operations

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Jessa manages a small-town movie theater. Her boss allows her to compensate up to $25, in addition to refunds, to resolve customer complaints. This is an example of empowerment

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Happy Cruises promises to authorize a full refund if 100% satisfaction is not met while on vacation. This is an example of a service guarantee

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The perception of a firm and its goods and/or services is created at the service-encounter design stage.

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Strategic mission is the first step that LensCrafters uses to integrate goods and services.

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Fund raisingx is NOT one of the eleven supply chain design decisions listed in the text.

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Zara’s supply chain design consists of point-of-sale data that drives many flexible decision processes. This is an example of a(n)

pull system supply chain design.

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Zara’s global supply chain addresses many key supply chain decisions. For example, although the firm outsources when appropriate, it maintains a high degree of supply chain control. It has resisted the industry trend to transfer its fast-fashion production approach to developing countries.

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Efficient supply chains work best for goods and services with highly predictable demand.

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Push systems work best when there are few distribution centers and products. On the contrary, pull systems work best when there are many production facilities and many points of distribution.

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Backward integration refers to acquiring capabilities toward supplies, whereas forward integration refers to acquiring capabilities toward distribution.

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When computing the total cost of manufacturing in-house, the formula, TCI = FCI + CI x Q is used. The variable CI represents the unit cost of manufacturing in-house.

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Direct labor costs is NOT a noneconomic factor in location decisions.

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The center-of-gravity method is used to determine the x and y coordinates for a single facility. The first step in this procedure is to place the locations of existing supply and demand points on a coordinate system

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Maximizing the total miles driven between facilities is NOT an example of supply chain optimization.

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The transportation problem is a linear optimization model that can be used to

ship between sources and destinations The final decision is made by comparing total costs

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Option goods and services are configurations of standard parts, subassemblies, or services that can be selected by customers from a limited set, whereas standard goods and services are made according to a fixed design.

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Automobile production is an example of a flow shop process.

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Make-to-stock processes is NOT one of the principal types of processes that are used to produce goods and services.

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Consider the product-process matrix. As one moves down the diagonal, the emphasis on both product and process structure shifts from low volume and high flexibility to higher volume and more standardization

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Customer-routed services are those that offer customers the broad freedom to select the pathways that are best suited to their immediate needs and wants. On the contrary, provider-routed services constrain customers to follow a very small number of possible and predefined pathways through the service system.

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A low degree of repeatability encourages more customization and more flexible equipment process designs.

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Mapping is NOT one of the four hierarchical levels of work.

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Eliminating non-value-added activities in a process design is one of the most important procedures of operation managers. This is often accomplished using value stream mapping

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The key difference between a value stream map and an ordinary process map is that a value stream map highlights value-added versus non-value-added activities

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Identifying defects and errors and place blame on workers is NOT one of the three ways to prevent mistakes.

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Poka-yoke is an approach for mistake-proofing processes using automatic devices or simple methods to avoid human error.

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A beeper on an ATM machine reminds customers to remove their cards. This is a poka-yoke related to the service error: customer errors during an encounter

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The goal of reengineering is to achieve quantum leaps in performance. This often involves asking basic questions about business processes

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One focus of management strategies to improve process designs is increasing agility. This is done by

improving flexibility and response to changes in demand and customer expectations

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A key difference between a process layout and a product layout is that process layouts provide more flexibility

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Cellular layouts facilitate the processing of families of parts with similar processing requirements. The procedure of classifying parts into such families is called

group technology

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Compared to other type of layouts, fixed-position layouts require a high level of planning and control

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Service organizations that provide highly standardized services, such as a pizza kitchen or a Chipotle restaurant, tend to use a product type of facility layout.

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A(n) lack-of-work delay causes bottlenecks, which limits the throughput of the entire process.

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Cycle time cannot be smaller than the largest operation time, nor can it be larger than the sum of all operation times

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Total idle time is calculated using the equation:. (N)(CT) − Σt

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Work centers with a large number of moves between them should be located close to one another

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Implementing new work procedures regardless of cost is NOT an example of a use of work measurement.

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Normal time is the expected time required to perform some work activity at a normal pace, under normal operating conditions, and using a prescribed method. This can be found using the equation OT x PRF

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Job enlargement is the horizontal expansion of the job to give the worker more variety, whereas job enrichment is the vertical expansion of job duties to give the worker more responsibility.

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To increase the cost of training is NOT an objective of ergonomics.

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Field and call center service training is located in the “Keeping the Customer ” aspect of the Value Chain.

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A time series provides the data for understanding how the variable that we wish to forecast has changed historically.

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Seasonal patterns are characterized by repeatable periods of ups and downs over short periods of time, whereas cyclical patterns are regular patterns in a data series that take place over long periods of time.

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Random variation is caused by short-term, unanticipated, and nonrecurring factors.

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Mean square error is calculated by squaring the individual forecast errors and then averaging the results over all T periods of data in the time series.

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Which of the following is a key difference between mean square error and mean absolute deviation? Mean square error is influenced much more by large forecast errors than by small errors.

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In a moving average forecast, as the value of k increases , the forecast reacts slowly to recent changes in the time series. As the value of k decreases , the forecast reacts more quickly.

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A small value of the smoothing constant is preferred when the time series contains substantial random variability

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Regression analysis is a method for building a statistical model that defines a relationship between a single dependent variable and one or more independent variables, all of which are numerical.

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The method of least squares minimizes the sum of the squared deviations between the actual

time-series values and the estimated values of the dependent variable.

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Judgmental forecasting relies upon opinions and expertise of people in developing forecasts, whereas grassroots forecasting is asking those who are close to the end consumer about the customers’ purchasing plans.

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A tracking signal provides a method for monitoring a forecast to determine when it might be advantageous to change or update the model. The method most often used is to compute the cumulative forecast error divided by the value of the mean absolute deviation at that point in time.

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Which of the following is NOT one of the Ten Practical Principles of Forecasting? Combine forecasts from approaches that are either the same or very similar.

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Capacity is the capability of a manufacturing or service system, such as a facility, process, workstation, or piece of equipment, to accomplish its purpose or to produce output in a period of time.

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Economies of scale occur when the average unit cost of a good or service decreases as the capacity and/or volume of throughput increases. Meanwhile,

diseconomies of scale occur when the average unit cost of the good or service begins to increase as the capacity and/or volume of throughput increases.

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Theoretical capacity can be determined by finding the amount of an output that can be produced in a short period of time and extrapolating the maximum rate of an output that can be produced over a longer period of time using simple logic.

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Planned capacity is calculated by adding safety capacity and effective capacity

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Large capacity increases that match demand is NOT one of the capacity expansion options.

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When capacity is above the demand curve, there is excess capacity ; when it is below, there is a shortage of capacity to meet demand

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Which of the following is NOT one of the short-term adjustments to capacity? Store unused capacity.

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A benefit of using reservations is that operations managers can better plan their equipment and workforce schedules and rely less on forecasts due to advanced knowledge of when customer demand will occur.

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The four components of a revenue management system , which are forecasting, allocation, overbooking, and pricing , must work in unison if the objective is to maximize the revenue generated by a perishable asset.

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The learning curve concept is that direct labor unit cost decreases in a predictable manner as the experience in producing the unit increases

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The experience curve states that the cost of doing any repetitive task, work activity, or project decreases as the accumulated experience of doing the job increases.

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The two ways of computing resource utilization are resources used divided by resources available and demand rate divided by service rate times number of servers

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All of the following are true about computing resource utilization except the dimensions of the numerator and denominator must be different when calculating utilization

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If you are measuring parts per day or transactions per minute, you likely are calculating throughput

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In a process, whenever one resource’s utilization is greater than 100 percent, the work orders will endlessly back up in front of that resource

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Little’s Law is a simple equation that explains the relationship among throughput, flow time , and work-in-process.

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In a queueing system, a customer might be a machine waiting for repair or a phone call awaiting a customer service representative. A(n) server might be a repairperson or a customer service representative.

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All of the following are true about queueing theory except actual time spent in the queue is more important than customer perception

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Analytical queueing models assume a Poisson probability distribution for arrivals and an exponential distribution for service times

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In a(n) fixed-time modeling system, the number of arrivals is counted and whether or not a customer is being serviced during each one-minute interval is determined. Then what happens during the next one-minute interval is considered, and so forth.

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In the Theory of Constraints (TOC), a constraint is defined as anything in an organization that limits it from moving toward or achieving its goal, and a non-bottleneck work activity is one in which idle capacity exists

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All of the following are basic principles of the Theory of Constraints except use a smaller order (also called lot or transfer batches) sizes at bottleneck workstations

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