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business
operations management

Questions and Answers of Operations Management

5. Does the system perform basic planning and control calculations in an appropriate and realistic manner?
4. Does the planning and control system interface with suppliers to promote a supplier experience that is in your long-term interests?
3. Does the system interface with customers to encourage a positive customer experience?
2. Have any recent failures in planning and control been used to reconsider how the planning and control system operates?
1. Is appropriate effort devoted to planning and controlling the operation’s resources and activities?
3. Are core planning and control activities effective?
2. Do resource planning and control have the right elements?
1. Are resource planning and control information integrated?
5 Revisit the example on the Blood and Transplant service at the beginning of the chapter.(a) What are the factors that constitute inventory holding costs, order costs and stock-out costs in a
4 ‘Our suppliers often offer better prices if we are willing to buy in larger quantities. This creates a pressure on us to hold higher levels of stock. Therefore, to find the best quantity to order
3 A fruit canning plant has a single line for three different fruit types. Demand for each type of tin is reasonably constant at 50,000 per month (a month has 160 production hours). The tinning
2 A local shop has a relatively stable demand for tins of sweetcorn throughout the year, with an annual total of 1,400 tins. The cost of placing an order is estimated at £15 and the annual cost of
1 A supplier makes monthly shipments to ‘House & Garden Stores’, in average lot sizes of 200 coffee tables.The average demand for these items is 50 tables per week, and the lead time from the
5 What recommendations would you give to the company?
4 Calculate the EOQs for the A Items.
3 Based on the sample, analyse the underlying causes of the availability problem described in the text.
2 Calculate the inventory weeks for each item, for each classification, and for all the items in total.Does this suggest that the operations manager’s estimate of inventory weeks is correct? If so,
1 Prepare a spreadsheet-based ABC analysis of usage value. Classify as follows:A Items: top 20 per cent of usage value B Items: next 30 per cent of usage value C Items: remaining 50 per cent of usage
10. Does the inventory information system integrate all inventory decisions?
9. Are items controlled by their usage value?
8. Are probabilistic estimates of demand and lead time used to determine safety stock levels?
7. Have the relative merits of continuous and period inventory review been assessed?
6. Do these use a probabilistic estimate of demand?
5. Have cost minimisation methods been used to determine order quantity?
4. Have methods of reducing inventory in these categories been explored?
3. What proportion of inventory is there:– as an insurance against uncertainty?– to counteract a lack of flexibility?– to allow operations to take advantage of short-term opportunities?– to
2. Have all the costs and negative effects of inventory been assessed?
1. Have all inventories been itemised and costed?
5. Is the role of inventory understood?
4. Why should there be any inventory?
3. Is inventory being controlled effectively?
2. Is the right quantity being ordered?
1. Are inventory orders placed at the right time?
5 Revisit the example, ‘United drags passengers off its plane’. (a) How should the airline have handled the situation? (b) After the incident attracted so much negative publicity, United
4 Seasonal demand is particularly important to the greetings card industry. Mother’s Day, Father’s Day Halloween, Valentine’s Day and other occasions have all been promoted as times to send
3 A German car manufacturer defines ‘utilisation’ as the ratio of actual output for a process to its design capacity, where design capacity is the capacity of a process as it is designed to
2 In a typical 7-day period, the planning department of the pizza company programs its ‘Pizzamatic’ machine for 148 hours. It knows that changeovers and set-ups take 8 hours and breakdowns
1 A Pizza Company has a demand forecast for the next 12 months that is shown in Table 8.5 .The current workforce of 100 staff can produce 1500 cases of pizzas per month.(a) Prepare a production plan
2 What advice would you give Jim and Mandy regarding this year’s ‘new venture’?
1 How could the farm’s day-to-day operations be improved?
14. How does the method of deciding period-by-period capacity levels reflect previous experience?
13. Is the method of deciding period-by-period capacity levels effective?
12. Is there scope for using cumulative representations of demand and capacity for planning purposes?
11. If variation is unpredictable, have methods of speeding up the operation’s reaction to demand–capacity mismatches been explored?
10. Have alternative methods of adjusting (or not) capacity been fully explored and assessed?
9. Does the operations base capacity reflect all the factors that should be influencing its level?
8. Does an understanding of the market include the extent to which the behaviour of customers and/or suppliers can be influenced to reduce variability?
7. Realistically, what potential is there for making unpredictable variability more predictable through better forecasting?
6. What is the balance between predictable variation and unpredictable variation in demand and capacity?
5. Is there scope for using the overall equipment effectiveness (OEE) measure of capacity?
4. What capacity ‘leakage’ is normal, and have options for minimising capacity leakage been explored?
3. If so, are all the assumptions inherent in the measurement of capacity made fully explicit?
2. Is the operation’s current capacity measured?
1. Is the importance of effective capacity management fully understood?
6. Is capacity management integrated across levels?
5. What is the operation’s current capacity?
4. How should capacity be controlled?
3. How can demand–capacity mismatches be managed?
2. What should be the operation's base capacity?
1. How well are demand–capacity mismatches understood?
5 Many companies devise a policy on ethical sourcing covering such things as workplace standards and business practices, health and safety conditions, human rights, legal systems, child labour,
4 If you were the owner of a small local retail shop, what criteria would you use to select suppliers for the goods that you wish to stock in your shop? Visit three shops that are local to you and
3 The example of the bullwhip effect shown in Table 7.2 shows how a simple 5 per cent reduction in demand at the end of the supply chain causes fluctuations that increase in severity the further back
2 A chain of women’s apparel retailers had all their products made by Lopez Industries, a small but high-quality garment manufacturer. They worked on the basis of two seasons: Spring/Summer season
1 The COO of Super Cycles was considering her sourcing strategy. ‘I have two key questions, for each of our outsourced parts, what is the risk in the supply market, and what is the criticality of
21. Has there been a risk assessment to assess supply chain vulnerability?
20. Have mechanisms for reducing the impact of the bullwhip effect been explored?
19. Has the idea of customer development been explored?
18. Could the adoption of new technologies such as IoT have any benefit?
17. Is the potential for outsourcing logistics services regularly explored?
16. Is the difference between dependent and independent demand understood?
15. Are actual and potential mismatches of perception in the supplier relationships explored?
14. Is sufficient effort put into supplier development?
13. Are service-level agreements used? And do they develop over time?
12. Is the purchasing activity making full use of internet-based mechanisms?
11. Is the approach to single or multi-sourcing appropriate?
10. Are the trade-offs inherent in supplier selection understood?
9. Are suppliers and potential suppliers rigorously assessed using some scoring procedure?
8. Are ‘partnership’ relationships really partnerships or are they just called that?
7. Are customer and supplier relationships at an appropriate point on the transactional to partnership spectrum?
6. Is the position on the’ transactional to partnership’ spectrum understood for each customer and supplier relationship?
5. Therefore, which products or service groups need ‘lean’ and which need ‘agile’supply chain management?
4. Which product or service groups are ‘functional’ and which are ‘innovative’?
3. Are supply chain objectives understood in the context of the whole chain rather than the single operation?
2. Are supply chain concepts applied internally as well as externally?
1. Is it understood that the performance of any one operation is partly a function of all the other operations in the supply chain?
5. How should the supply side be managed. How should the demand side be managed?
4. Are supply chain dynamics under control?
3. How should supply chain relationships be managed?
2. Is the importance of supply chain management understood?
1. Are supply chain objectives clear?
6 A gourmet burger shop has a daily demand for 250 burgers and operates for 10 hours. (a) What is the required cycle time in minutes? (b) Assuming that each burger has 7.2 minutes of work required,
5 At the theatre, the interval during a performance of ‘King Lear’ lasts for 20 minutes and in that time 86 people need to use the toilet cubicles. On average, a person spends 3 minutes in the
4 A company has decided to manufacture a general-purpose ‘smoothing plane’, a tool which smooths and shapes wood. Its engineers estimated the time it would take to perform each element in the
3 The headquarters of a major creative agency offered a service to all its global subsidiaries that included the preparation of a budget estimate that was submitted to potential clients when making a
2 ‘It is a real problem for us’, said Angnyeta Larson, ‘We now have only ten working days between all the expense claims coming from the departmental coordinators and authorizing payments on
1 One of the examples at the beginning of the chapter described ‘drive-through’ fast food processes. Think about (or better still, visit) a drive-though service and try mapping what you can see
3 How could the ARAPU process be improved?
2 What is the main problem with the current ARAPU processes?’
1 What objectives should the ARAPU process be trying to achieve?

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