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business
operations management

Questions and Answers of Operations Management

A specialist media company burns DVDs of movie clips to customers’ specifications. The company’s staff work a 35-hour week and do not expect to work any overtime. Although the company staffed the
A professional institute outsources the marking of its examination papers but then employs specialists in its own offices to check the marking according to the marking scheme. Coordinating the flow
An electronics circuit supplier buys micro chips from a large manufacturer. Last year the company supplied 2000 specialist D/35 chips to customers. The cost of placing an order is $50 and the annual
Estimate the annual usage value and average inventory level (or value) and space occupied by 20 representative items of food used within your household or that of your family. Using Pareto analysis,
Supermedicosupplies.com is an internet supplier of medical equipment. One of its most profitable lines is the ‘thunderer’ stethoscope. Demand for this product is 15,000 per year, the cost of
Obtain the last few years’ annual report and accounts (you can usually download these from companies’ websites) for two materials-processing operations (as opposed to customer- or
Supermedicosupplies.com works a 44-week year. If the lead time between placing an order for stethoscopes and receiving them is two weeks, what is the re-order point for the thunderer stethoscopes?
Make an appointment to visit a large petrol (gas) filling station to meet the manager. Discuss and analyze the inventory planning and control system used for fuel and other items in the shop, such as
The Super Pea Canning Company produces canned peas. It uses 10,000 litres of green dye per month. Because of the hazardous nature of this product it needs special transport; therefore the cost of
Garment retailing has changed. No longer is there a standard look that all retailers adhere to for a whole season.Fashion is fast, complex and furious. Different trends overlap and fashion ideas that
Using product information obtained from web searches, compare three inventory management systems (or software packages) which could be purchased by the general manager of a large state-run hospital
The dressings division of Strital produces sterile wound dressings in clean-room conditions. Because of the risk of cross infection the entire process must be cleaned and sterilized between batches
We already have a star rating system for all of our suppliers. This gives three stars to those suppliers who either have a record of success on one of our supply factors or who could achieve the very
Look, why should we waste our time dealing with suppliers who can merely deliver good product, on time and in full? There are any number of suppliers who can do that. What we are interested in is
If you were the owner of a small local retail shop, what criteria would you use to select suppliers for the goods which you wish to stock in your shop? Visit three shops which are local to you and
The example of the bullwhip effect shown in Table 13.4 shows how a simple 5 per cent reduction in demand at the end of supply chain causes fluctuations that increase in severity the further back an
What is your purchasing strategy? How do you approach buying the products and services that you need (or want)? Classify the types of products and services that you buy and record the criteria you
Three managers are attending a seminar on 'Getting More Value From Your Purchasing Function'. One manager is from a large retail bank, one is from a general hospital and the third is from a printing
Visit a C2C auction site (for example eBay) and analyze the function of the site in terms of the way it facilitates transactions. What does such a site have to get right to be successful?
Find examples of how supply chains try to reduce this bullwhip effect.
A three-stage supply chain is subject to monthly demand fluctuations from its end customers as follows: month 1 – 200 units, month 2 – 300 units, month 3 – 200 units, month 4 – 250 units,
‘Most of our work is for large food manufacturers who place orders for our packaging materials well in advance. The only thing that they get upset about is if we miss a delivery and they run short
'I can't believe how much we have changed in a relatively short time. From being an inward-looking manufacturer, we became a customer-focused 'design and make' operation.Now we are an integrated
Read the short case on Prêt A Manger and, (a) identify the processes in a typical Prêt A Manger shop together with their inputs and outputs. (b) Prêt A Manger also supplies business lunches (of
The table below shows a day in the life of the operations director of a luxury hotel in Malta. How much time is she spending on each operations management activity? Time From To 07:00 07:45 Public
Find a copy of a financial newspaper (Financial Times, The Wall Street Journal, Economist, etc.) and identify one company which is described in the paper that day. Using the list of issues identified
Write down five services that you have ‘consumed’ in the last week. Try to make these as varied as possible. Examples could include public transport, a bank, any shop or supermarket, attendance
What do you think the main dangers are for Acme Whistles (see the short case earlier in the chapter) as a small company?
Visit and observe three restaurants, cafés or somewhere that food is served. Compare them in terms of the volume of demand that they have to cope with, the variety of menu items they serve, the
Compare and contrast Acme Whistles and Prêt A Manger in terms of the way they will need to manage their operations.
Quentin Cakes makes about 20,000 cakes per year in two sizes, both based on the same recipe. Sales peak at Christmas time when demand is about 50 per cent higher than in the more quiet summer period.
Three managers from a large 'retail' bank (the type of bank that you use) were discussing the processes that they managed. They were managers of a call centre that dealt with customer enquiries, a
There are many luxurious hotels in the South-East Asia region but few can compare with the Penang Mutiara, a 440-room, top-of-the-market hotel which nestles in the lush greenery of Malaysia's Indian
A translation company offers its services to businesses that need their documents and sales literature translated into many different languages. Currently it has annual sales of €5 million wages of
The same company is considering two further options. The first would involve growing its annual sales volume to €8 million by hiring extra sales staff. This would increase its wage bill to €2.75
At the beginning of the chapter some of the activities of TNT Express were described. In fact, this is only one of three divisions of TPG, the other two being international mail and logistics. Visit
A large automobile company pays its dealer service centres if a part has to be replaced on one of its cars. The company then claims back the cost of doing this from parts suppliers. It has a small
The ‘forensic science’ service of a European country has traditionally been organized to provide separate forensic science laboratories for each police force around the country. In order to save
Visit the websites of two or three large oil companies such as Exon, Shell, Elf, etc. Examine how they describe their policies towards their customers, suppliers, shareholders, employees and society
The health clinic described in the worked example earlier in the chapter has expanded by hiring one extra member of staff and now has six employees. It has also leased some new health-monitoring
Long Ridge Gliding Club is based at an old military airfield on the crest of a ridge about 400 metres above sea level.The facilities are simple but comfortable. A bar and basic catering services are
Consider the automobile plant illustrated in various figures throughout the chapter. For such a plant, think about how each performance objective can affect the others within the operation. In other
A publishing company plans to replace its four proofreaders who look for errors in manuscripts with a new scanning machine and one proofreader in case the machine breaks down. Currently the
The following information compares the approximate productivity in hours-per-vehicle (HPV) for some automobile manufacturers and their profit-per-vehicle (PPV) (source: The Harbour Report 2005) –
Bongo’s Pizzas has a service guarantee that promises you will not pay for your pizza if it is delivered more than 30 minutes from the order being placed. An investigation shows that 10 per cent of
Explain how the four perspectives of operations strategy would apply to Ryanair.
One of the most famous examples of focus is that of the Shouldice Hospital in Canada. This hospital concentrates exclusively on treating hernias using its own 'Shouldice method'. This involves using
Visit the Kwik-Fit (described earlier in the chapter) website at www.kwik-fit.com. Examine the history of the company which is described there. Use this to think about how the company’s operations
Compare the operations strategies of Ryanair and Flextronics.
Search the internet site of Intel, the best-known microchip manufacturer, and identify what appear to be its main structural and infrastructural decisions in its operations strategy.
Revisit the example of how process mapping helped Intel to improve its expense claims process (Figure 4.16).(a) This example describes how Intel used a flow process chart. What was the nature of the
Compare the operations strategies of Ryanair and a full-service airline such as British Airways or KLM.
McDonald’s has come to epitomize the ‘fast-food’ industry. When the company started in the 1950s it was the first to establish itself in the market. Now there are hundreds of ‘fast-food’
What do you think are the qualifying and order-winning factors for (a) A top-of-the-range Ferrari, (b) A Renault Clio?
What do you think are the qualifying or order-winning factors for IKEA?
The Central Evaluation Unit (CEU) of the XIII Directorate evaluated applications from academics bidding for research grants available under the 'cooperation and foundations' scheme of the European
An insurance company has six centres that process claims from customers. Each of the centres has been asked to measure its productivity in terms of the number of claims processed per employee per
Read again the description of fast-food drive-through processes at the beginning of this chapter. (a) Draw a process map that reflects the types of process described. (b) What advantage do you think
Visit a drive-through quick-service restaurant and observe the operation for half an hour. You will probably need a stop watch to collect the relevant timing information. Consider the following
A laboratory process receives medical samples from hospitals in its area and then subjects them to a number of tests that take place in different parts of the laboratory. The average response time
Visit a branch of a retail bank and consider the following questions:(a) What categories of service does the bank seem to offer?(b) To what extent does the bank design separate processes for each of
The 'meter installation' unit of a water utility company installs water meters. When a customer requests an installation a supervisor visits the customer and transfers the results of the survey to
Choose a process with which you are familiar. For example, registration for a university course, joining a video rental shop service, enrolling at a sports club or gym, registering at a library,
The regional government office that deals with passport applications is designing a process that will check applications and issue the documents. The number of applications to be processed is 1600
Every operation has to choose between different processes for delivering its products and services. For example, a bank can offer its services through its branch network, using telephone-based call
For the passport office described above, the total work content of all the activities that make up the total task of checking, processing and issuing a passport is, on average, 30 minutes. How many
The same passport office has a 'clear desk' policy that means that all desks must be clear of work by the end of the day. How many applications should be loaded onto the process in the morning in
A repair service centre receives faulty or damaged computers sent in by customers, repairs them and despatches them back to the customer. Each computer is subject to the same set of tests and repair
Swell Productions is sponsoring an outdoor conclave for owners of collectible and classic Fords. The concession stand in the T-Bird area will sell clothing such as T-shirts and official Thunderbird
What improvement can you make in the process shown in Figure 2.17?Data from figure 2.17 Process: Changing engine oil Subject: Mechanic Beginning: Direct customer arrival Ending: Total charges,
Managers at the First Community Bank are attempting to shorten the time it takes customers with approved loan applications to get their paperwork processed. The flowchart for this process, consisting
Assume you had your hair styled in a hair salon after making an online booking. Calculate a combined score for the overall customer contact after considering each of the five dimensions of customer
Return to Problem 20. Using OM Explorer’s Learning Curves Solver, how long do you estimate the time required to install the fifth pool? What is your estimate of the total time for all five
Identify potential bottlenecks in the following activities:a. Driving to your universityb. Shopping in a supermarketc. Joyrides in an amusement parkd. Check-in process at an airporte. Sale offers in
A company is setting up an assembly line to produce 192 units per 8-hour shift. The following table identifies the work elements, times, and immediate predecessors:a. What is the desired cycle time
Using the same process as in question 1, identify the main reason for the bottleneck?Data from Question 1Identify potential bottlenecks in the following activities:a. Driving to your universityb.
Chicken Palace periodically offers carryout five-piece chicken dinners at special prices. Let Y be the number of dinners sold and X be the price. On the basis of the historical observations and
An e-commerce fashion retailer is measuring the productivity of its warehouse employees. Productivity is measured by counting the number of orders picked by employees every hour. Management has
The monthly demand for units manufactured by the Acme Rocket Company has been as follows:a. Use the exponential smoothing method to forecast the number of units for June to January. The initial
Management of Erudition, an online learning platform, is keen to motivate students to work hard. In order to quantify the degree of effort put in by each learner, the company has decided to collect
A regional distributor purchases discontinued appliances from various suppliers and then sells them on demand to retailers in the region. The distributor operates 5 days per week, 52 weeks per year.
Nelson's Hardware Store stocks a 19.2-volt cordless drill that is a popular seller. Annual demand is 5,000 units, the ordering cost is $15, and the inventory holding cost is $4/unit/year.a. What is
Car manufacturers such as BMW and Toyota are also known as original equipment manufacturers (OEMs). They perform the final assembly and installation of components delivered by suppliers. For ease of
Booker's Book Bindery divides SKUs into three classes according to their dollar usage. Calculate the usage values of the following SKUs and determine which is most likely to be classified as class A.
The Northville Post Office experiences a seasonal pattern of daily mail volume every week. The following data for two representative weeks are expressed in thousands of pieces of mail:a. Calculate a
The order policy is to produce end item A in lots of 50 units. Using the data shown in Figure 11.24 and the FOQ lot-sizing rule, complete the projected on-hand inventory and MPS quantity rows. Then,
Suppose that a periodic review (P) system is used at the distributor in Solved Problem 4, but otherwise the data are the same.a. Calculate the P (in workdays, rounded to the nearest day) that gives
The MPS start quantities for product A calls for the assembly department to begin final assembly according to the following schedule: 100 units in week 2; 200 units in week 4; 120 units in week 6;
Assume you had your hair styled in a hair salon after making an online booking. Calculate a combined score for the overall customer contact after considering each of the five dimensions of customer
The Arid Company makes canoe paddles to serve distribution centers in Worchester, Rochester, and Dorchester from existing plants in Battle Creek and Cherry Creek.Arid is considering locating a plant
London, New York, Tokyo, Singapore, and Shanghai are some of the world's largest cities. Discuss from a logistical perspective the reason behind the success of these cities?
The operations manager for Mile-High Lemonade narrowed the search for a new facility location to seven communities. Annual fixed costs (land, property taxes, insurance, equipment, and buildings) and
The following coordinates are the locations of different warehouse facilities of an e-commerce retailer: (15,15), (40,5), and (40,50). The coordinates are in kilometers.a. Calculate the Euclidean
Select two organizations, one in services and one in manufacturing. What are the key factors that each organization would consider in locating a new facility? What data would you want to collect
The new Health-Watch facility is targeted to serve seven census tracts in Erie, Pennsylvania, whose latitudes and longitudes are shown in Table 13.1, along with the population in each census tract
Active Model 13.1 is available online. It allows you to find the location that minimizes the total load-distance score.QUESTIONS1. What is the total load-distance score to the new Health Watch
Canon, a Japanese manufacturer of photographic equipment, decided against offshoring and kept its manufacturing and new product development processes in Japan, which has relatively high labor costs.
Grey Wolf Lodge is a popular 500-room hotel in the North Woods. Managers need to keep close tabs on all room service items, including a special pine-scented bar soap. The daily demand for the soap is
Return to Problem 20. Using OM Explorer's Learning Curves Solver, how long do you estimate the time required to install the fifth pool? What is your estimate of the total time for all five pools?Data
The Bull Grin Company produces a feed supplement for animal foods produced by a number of other companies. Producing 1,000 pounds of supplement costs $810 on regular time and $900 on overtime. These

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