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business
service management operations strategy
Questions and Answers of
Service Management Operations Strategy
16.17. A wholesaler encounters a constant demand of 200 cases of one brand and box size of soap flakes per week from his retail accounts. He obtains the soap flakes from the manufacturer at $10 per
16.16. To limit dependence on imported oil, the Four Corners Power Company has de- cided to cover a fixed part of the regional demand for electricity by using coal. The annual demand for coal is
16.15. The Gilbert Air Conditioning Company is considering purchase of a special shipment of portable air conditioners from Japan. Each unit will cost Gilbert $80 and be sold for $125. Gilbert does
16.14. The J & B Card Shop sells calendars with different coral reef pictures shown for each month. The once-a-year order for each year's calendar arrives in September. From past experience, the
16.13. The A & M Hobby Shop carries a line of radio-controlled model racing cars. Demand for these cars is assumed to be a constant rate of 40 cars per month. The cars cost $60 each, and ordering
16.12. Suppose the XYZ Company, which has an annual demand of 12,000 units per year, order cost of $25, and annual holding cost per unit of $0.50, decides to op- erate with a planned shortage
16.11. The Supermart Store is about to place an order for Valentine's Day candy. The candy can be bought for $1.40 per box, and it is sold for $2.90 per box up to Valentine's Day. After Valentine's
16.10. A popular item stocked by the Fair Deal Department Store has an annual de- mand of 600 units. The cost to purchase these units from the supplier is $20 per unit and $12 to prepare the purchase
16.9. River City Cement Co. maintains an inventory of lime that is purchased from a local supplier. River City uses an average of 200,000 pounds of lime annually in its manufacturing operations
16.8. The daily demand for an item is distributed normally, with a mean of 5 and a variance of 2. The cost to place an order is $10, and the carrying charge per day is estimated at 10 percent of the
16.7. Monthly demand for an inventory item is a normally distributed random variable with a mean of 20 units and a variance of 4. Demand follows this distribution every month, 12 months a year. When
16.6. Spanish Interiors imports ceramic floor tiles from Mexico with various patterns in anticipation of contractor needs. These tiles usually are ordered a year before delivery, and the production
16.5. Books-to-Go, Inc., has a recurring problem of clearing its shelves of hardcover books once the publisher releases the paperback edition. These books take up shelf space, and the sales are slow.
16.4. The local distributor for Macho Heavy Beer is reconsidering its inventory pol- icy now that only kegs will be sold. The sales forecast for next year (200 days) is 600 kegs. The cost to store a
16.3. Dutch Farms imports cheese by the case from Holland for distribution to its Texas retail outlets. During the year (360 days), Dutch Farms sells 1,080 cases of cheese. Because of spoilage, Dutch
16.2. Deep Six Seafood, a restaurant that is open 360 days a year, specializes in fresh Maine lobsters at a cost of $10 each. Air freight charges have increased signifi- cantly, and it now costs Deep
16.1. Annual demand for the notebook binders that Ted's Stationery Shop sells is 10,000 units. Ted operates his business on a 200-workday year. The unit cost of a binder is $2, and the cost of
7. Service capacity (e.g., seats on an aircraft) has characteristics similar to inventories. What inventory model would apply?
6. How is a service level determined for most inventory items?
5. How valid are the assumptions for the simple EOQ model?
4. Discuss how information technology can help to create a competitive advantage. through inventory management.
3. Compare and contrast a continuous review inventory system with a periodic review inventory system.
2. How would one find values for inventory management costs?
1. Discuss the functions of inventory for different organizations in the supply chain (i.e., manufacturing, suppliers, distributors, and retailers).
8. Describe the rationale behind the retail discounting model.
7. Use either expected value or incremental analysis to determine the order quantity for the single-period inventory model.
6. Conduct an ABC analysis of inventory items.
5. Design a continuous or periodic review inventory-control system.
4. Determine the reorder point and safety stock for inventory systems with uncertain demand.
3. Determine the order quantity for various inventory applications.
2. Describe the function, characteristics, and costs of an inventory system.
1. Discuss the role of information technology in the management of inventory.
8. What advantages and disadvantages are there to start- ing work at 8 AM?
7. Would your routes be modified if the employees living at locations 2 and 5 volunteered to use their compact cars and left from home to begin pickups?
6. At what time would the compact car need to leave the office to begin its pickups to be finished by 8 AM? By 9 AM?
5. If the compact car were used, what routes would you recommend to minimize the gasoline expense? What would the daily cost of gasoline be for this proposal?
4. If the employee living at location 6 offered to keep the van overnight, how is the route changed? To use the C-W algorithm, what must we now consider to be the origin?
3. What time would the van need to leave the office to re- tum with all employees by 8 AM? By 9 AM?
2. Find the least costly route for a car pool using the nine- passenger van. What would be the cost of gasoline per day for this arrangement?
1. What is the total cost of gasoline per day under the cur- rent arrangement of employees driving their own cars? Assume that fuel economy is 10 miles per gallon.
15.8. The city refuse collection department uses a fleet of small trucks that collect trash around the city and make periodic deliveries to four staging sites. Currently, two dump trucks transport
15.7. Wal-Mart has five distribution centers and one central warehouse. Below are the distances between all nodes (0=-warehouse). Construct the net savings matrix for this problem, and determine a
15.6. A university is planning to serve four off-campus apartments with a shuttle bus service. Given the net savings matrix below, recommend a bus route that mini- mizes the distance traveled. 1 2 3
15.5. The Lone Star Beer distributor makes deliveries to four taverns from a central warehouse, as shown in the figure below. Distances are given in miles.a. Construct a shortest-route matrix for
15.4. A florist has received orders to deliver flowers to four office buildings. The ma- trix below contains the shortest distance in miles between the florist's shop and the offices. Construct a net
15.3. The New York Times delivery service has customers at four apartments in the north- west part of town. Recommend an efficient route given the shortest-distance matrix in miles below for travel
15.2. For the following net savings matrix, find the recommended route. 1 2 3 4 1 2 4 3 2 57 3 2
15.1. For the following net savings matrix, find the recommended route. 1 2 3 4 1 3 2 7 27 2 5 9 3 8
3. Discuss the implications of service outsourcing on employees, stockholders, cus- tomers, and host country economy when a firm outsources a call center overseas.
2. Discuss the similarities and differences in the product postponement strategy used by Hewlett-Packard and Taco Bell.
1. What are some possible disadvantages associated with the product postponement strategy?
6. Prepare a delivery route using the Clarke-Wright algorithm.
5. Discuss the challenges of delivering services in the field.
4. Discuss the managerial considerations to be addressed in outsourcing services.
3. Classify business services based on the focus of the service and its importance to the outsourcing organization.
2. Discuss the challenges of managing service supply relationships.
1. Contrast the supply chain for physical goods with the customer-supplier duality of services.
4. The clinic is considering adopting a queue priority sys- tem that is determined by the time of entry into the sys- tem at the receptionist. How might patients waiting for the doctor react to this
3. What would be the impact on the above calculations of adding a second doctor to the clinic and sharing the doc- tor queue between them on a "first MD available" basis?
2. What are the key assumptions involved in your analysis above? Discuss the appropriateness of each in this situation.
1. Assume the waiting line at the receptionist, the nurse clinician, and the doctor are managed independently with an FCFS priority. Using queuing formulas and the assumption that patients exiting
3. During bad weather, FreeEx has the option of instructing the Washington air controller to place its planes in a holding pattern from which planes are directed to land. either at Washington
2. Given FreeEx's policy of ensuring that its planes do not run out of fuel more than 1 in 20 times while waiting to land, how many reserve gallons (i.e., gallons over and above expected usage)
1. During periods of bad weather, as compared with peri- ods of clear weather, how many additional gallons of fuel on average should FreeEx expect its planes to con- sume because of airport
14.8. Green Valley Airport has been in operation for several years and is beginning to experience flight congestion. A study of airport operations revealed that planes arrive at an average rate of 12
14.7. Last National Bank is concerned about the level of service at its single drive-in window. A study of customer arrivals during the window's busy period revealed that, on average, 20 customers
14.6. Sea Dock, a private firm, operates an unloading facility in the Gulf of Mexico for supertankers delivering crude oil for refineries in the Port Arthur area of Texas. Records show that, on
14.5. A company has a central document-copying service. Arrivals are assumed to follow the Poisson probability distribution, with a mean rate of 15 per hour. Service times are assumed to follow the
14.4. On average, 4 customers per hour use the public telephone in the sheriff's de- tention area, and this use has a Poisson distribution. The length of a phone call varies according to a negative
14.3. The Lower Colorado River Authority (LCRA) has been studying congestion at the boat-launching ramp near Mansfield Dam. On weekends, the arrival rate av- erages 5 boaters per hour, Poisson
14.2. A business school is considering replacing its old minicomputer with a faster model. Past records show that the average student arrival rate is 24 per hour, Poisson distributed, and that the
14.1. A general-purpose auto-repair garage has one mechanic who specializes in muffler installations. Customers seeking service arrive at an average rate of 2 per hour, with a Poisson distribution.
S. Use queuing models and various decision criteria for capacity planning.
4. Describe the relationships between queuing system characteristics.
3. Use queuing models to calculate system performance measures.
2. Describe a queuing model using the A/B/C notation.
1. Discuss the strategic role of capacity planning.
S. Use queuing models and various decision criteria for capacity planning.
4. Describe the relationships between queuing system characteristics.
3. Use queuing models to calculate system performance measures.
2. Describe a queuing model using the A/B/C notation.
1. Discuss the strategic role of capacity planning.
13.8. Electronic Car-diogram (ECG), a firm specializing in the diagnosis of automo- bile engine problems, is planning to open a new service center with two diagnos- tic bays. Based on the experience
13.7. The number of fires occurring during a 24-hour day follows a Poisson distribu- tion with a mean of 4 fires per day as shown in the accompanying table. In examining past records, the fire chief
13.6. Consider the travel network shown in Figure 13.20 in which the probabilities of selecting a route from each node are shown in parentheses.a. Develop a Monte Carlo simulation model to determine
13.5. The project network for building a garage is shown in Figure 13.19 and includes data on activity times and their deviations.a. Develop a Monte Carlo simulation model that can be used to
13.4. The Coast Guard maintains a lighted buoy in the harbor entrance to warn ships of a dangerous reef. The flashing beacon contains two high-intensity quartz halogen bulbs. The supplier has
13.3. The Dell Factory Outlet has the following daily demand distribution for laptop computer carrying cases.
13.2. Constructing a distribution of demand during reorder lead time is complicated if the lead time itself is variable. Consider the following distribution for a reorder point inventory system.
13.1. You have been asked by a retail association to develop an inventory control pro- gram for use on a PC. The program development requires the completion of the following three activities in
6. What other design or operating suggestions could im- prove Pronto Pizza's performance and customer service?
5. What do you think of this service guarantee policy?
4. Based on your simulation recommended staffing level, what is the probability of paying off on the guarantee?
3. Use the ServiceModel computer simulation software and the Pronto.pkg file to determine the number of drivers that minimizes the total cost of salaries and guarantee discounts.
2. Calculate the expected waiting time in the order prepa- ration queue using queuing formula 1.8 found in Appen- dix D. Compare this value with your simulation result and comment on any difference.
1. Draw a process flow diagram and identify the bottleneck operation.
5. What do you think of this service guarantee policy? 6. What other design or operating suggestions could im- prove Pronto Pizza's performance and customer service?
4. Based on your simulation recommended staffing level, what is the probability of paying off on the guarantee?
3. Use the ServiceModel computer simulation software and the Pronto.pkg file to determine the number of drivers that minimizes the total cost of salaries and guarantee discounts.
2. Calculate the expected waiting time in the order prepa- ration queue using queuing formula 1.8 found in Appen- dix D. Compare this value with your simulation result and comment on any difference.
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