Questions and Answers of Service Management Operations Strategy

Suppose backorders are allowed in the EOQ model that was discussed in Section 5.4.3. Each item backordered results in some cost of b per item per year backordered. Derive the new EOQ formula.Economic
In Example 5.8, suppose the lead time is reduced from 1 week to 4 days.What R should be used? What would the resulting safety stock be?Example 5.8 A retail outlet orders item A1 from a regional DC.
In Example 5.8, sketch a plot of safety stock versus service level. Useα values of 0.01, 0.02, 0.03, 0.05, 0.075, 0.10, 0.125, and 0.150. What can you conclude from the graph?Example 5.8 A retail
Demand is normally distributed with a mean of 500 and a standard deviation of 200. Newsvendor assumptions hold. The selling price per unit is $400, cost per unit is $200, and salvage per unit is
Suppose a distributor faces an annual demand for a car horn for small cars that is normally distributed with a mean of 2300 items and a standard deviation of 300.The cost of placing an order is $150
The bookstore orders Penn State Volleyball shirts once for a selling season from a manufacturer in Malaysia. They estimate that the demand is according to a triangular distribution with a = 1500, b =
Suppose for Exercise 5.24, there is a second car horn for medium-sized cars with demand that is normally distributed with a mean of 1500 and a standard deviation of 200.All other information from
Techtronic operates a single DC in St. Louis. Annual demand for a product they carry is normally distributed with a mean of 80.6 and a standard deviation of 58.81. There is a 3-week lead time and the
Demands over time for two products (D1 and D2) are given in Table 5.45. Determine the correlation between them. TABLE 5.45 Data for Exercise 5.28 Time D1 D2 1 100 100 2 130 80 3 90 100 4 150 110 5
For Exercise 5.26 (c), what would the answer be if the correlation between the two horns is −0.6? What would it be if the correlation is 0? What would it be if the correlation is 0.4? Exercise
Demand for an item over the next five periods is forecasted to be 10, 20, 15, 16, and 18.There are currently 20 items on hand. The order cost is $100 per order, and each item costs $50. The time
Distance from a DC to two customers is 130 and 70 miles, respectively.Demands from each are 150 and 260 cases, respectively. Find the best mode of delivery from among the three choices:a. Contract
In Example 5.7, consider the addition of two more locations: (12, 12)with a demand of 13, and (3, 11) with a demand of 5.a. Ignore capacity (and demands) and solve the TSP using the nearest neighbor
For Exercise 5.32, use the Savings Method to solve (using the truck capacities given in Example 5.7). Comment on your solution.Data From Exercise 5.32:In Example 5.7, consider the addition of two
The Gap sells seven T-shirts of different colors. U.S. demand for each color is independent and normally distributed with a mean of 100,000 per year and a standard deviation of 34,000. They want a
In and Out burger in Los Angeles orders their beef from a Canadian supplier. The supplier ships directly to the 12 different restaurants in the LA area. In and Out wants to determine if it makes
Consider a two-stage supply chain (A supplies B that supplies customer demand). Customer demand is uniformly distributed between 500 and 1000. The cost to make a unit at A is $100. They sell the item
Search the Web to find estimates of the breakdown of warehouse costs into its components (e.g., labor, equipment, space). Make sure to define your source(s).
Choose an item that you regularly buy at the grocery store. Find what the different handling units are for that item.
Pick a company from the S&P500. Find all of their DC/warehouse locations. Comment on what you find.
Consider a 100% cotton T-shirt sold by Walmart. From the cotton farm to the final customer, list all of the types of warehouses and DCs that would be used.
Go online and pick a men’s clothing store (e.g., Brooks Brothers) and select a style of shirt. List all the SKUs that would exist for that style.
Consider the following items to be stored in a unit load (pallet) storage area, stacked 1-high. Determine the number of pallet locations required for dedicated, randomized, and class-based storage
How would you estimate daily requirements in practice (i.e., how would you get the data for Exercise 6.6)?
Develop several other SKU priority rules. Discuss the advantages and disadvantages of each one.
Re-solve the forward reserve example in Section 6.6. In this case, assume that the restocking cost is $2 rather than $20.Example 6.2 Consider the case that the forward area holds 500 cubic feet.
Compare the benefits and drawbacks to pre-distribution and post-distribution cross docks. In addition, what information requirements would be needed for each strategy?
Modify the formulation in Equation 6.6 to include warehouse capacity. Equation 6.6: N M min== i=1 j=1 + N i=1 Fiyi.
Modify the formulation in Equation 6.6 to include two stages. That is, assume that a supplier supplies a set of DCs that supply a set of local warehouses that supply a set of customers. Equation
Solve the line balancing problem given in the following table with a cycle time of 100 seconds: Task T1 T2 T3 T4 T5 T6 17 Time (seconds) 35 30 45 25 50 47 55 Required Precedence Tasks T1 T1 T1 T4 T2,
Why in bucket brigades are pickers ordered from fastest to slowest (right to left)? What would happen if the ordering were done the other way?
Consider a carton that is 3 feet by 2 feet by 1 foot. This item handling unit will be placed on a shelf that is 5 feet wide, 4 feet high, and 3 feet deep. For the six possible carton orientations,
For Figure 6.19, determine the pick path length using the S-shape and nearest-neighbor heuristics. Next, try to determine the best pick path visually. Compare your results.Figure 6.19: Pick path
Find at least one other order picking heuristic for a rectangular warehouse and describe how it works. Apply it to Figure 6.19.Figure 6.19: Pick path
Explain the meaning of the following terms and discuss why they are important in investing:a. Asset allocationb. Dollar cost averagingc. Investment riskd. Mutual funds
Discuss the differences between the following terms:a. Equities and bondsb. Load and no-load mutual fundsc. Markowitz’s risk and Sharpe’s riskd. Index funds and target date funds
Consider two similar stocks, S1 and S2. Both have averaged 10%annual return, and their risks in terms of standard deviations (STD)are also the same at 20%. The correlation coefficient between the two
Consider two mutual funds for investment. Fund 1 is a bond fund with 5% average return and 10% standard deviation (STD) risk. Fund 2 is a stock fund with 10% average return and 15% STD risk. The
Over the 20-year period (1997–2016), U.S. stocks have averaged 7.7%in annual return, with an STD risk of 15.3%. During the same period, U.S. bonds have averaged 5.3% in annual return, with an SD
A young investor is considering three potential stock mutual funds for investment. Based on the last 20 years of performance data, the average returns and STD risks have been computed as shown in
Jill is interested in determining her asset allocation for her 401-K retirement plan. Her company has 10 mutual funds for investment.Their past performance data are given in Table 7.18.Even though
XYZ stock is valued at $100 per share. It loses 20% in year 1, gains 20% in year 2, and gains 10% in year 3. What is the average annual return? What is the annualized (compounded) average return?
The annual returns of the Russell 2000 index (measures the performance of mid and small company stocks) for 2006–2010 are 18.37% in 2006, −1.57% in 2007, −33.79% in 2008, 27.17% in 2009, and
In this case study, you will be applying Markowitz’s Bi-criteria Quadratic Programming model to generate the entire set of efficient portfolios. An investor is considering 10 potential securities
An investor has $250,000 to invest in mutual funds. She has selected 33 funds for possible investment. In addition, a Federal money market fund is available for holding cash reserve. Table 7.22 gives
What are the pros and cons of overbooking as a revenue management strategy? Why is it necessary?
How does self-service help capacity planning in the service sector?Would you consider self-driving cars as an example of self-service?Why or why not?
Discuss the key benefits and limitations of revenue management for the airlines.
Compare and contrast the practices of Delta Airlines, which uses hub-and-spoke network, and Southwest Airlines, which uses pointto-point network. What do you believe are the advantages and
Consider the no-show data given in Table 8.1.Determine the overbooking policies for the following spoilage cost(C1) and oversold penalty (C2).a. C1 = $100, C2 = $50b. C1 = $100, C2 = $100c. C1 =
Consider Exercise 8.5 again. What will be the total expected cost(TEC) under the following extreme cases, for the different values of(C1, C2).a. No overbookingb. Overbook to the maximum of 15 Compare
A family-operated inn in State College, Pennsylvania, is considering overbooking to minimize their revenue loss due to no-shows and last-minute cancellations. The cost of an empty room is estimated
Consider Exercise 8.7 again. What will be the overbooking policy for the inn if the no-shows follow a Normal distribution with a mean of 20 and a standard deviation of 5.Data From Exercise 8.7:A
A small riverfront hotel is interested in developing an overbooking policy for its rooms. The no-show data are given in Table 8.4. The cost of an empty room is $100. The overbooking penalty cost is
A fly-by-night airline offers “red-eye” flights between San Francisco and Washington D.C. The full fare ticket price is $700 and the advance purchase discount fare is $400. The demand for full
Redo Exercise 8.10, assuming now that the demand for full fare passengers follows a Uniform distribution over the interval (50, 200).Data From Exercise 8.10:A fly-by-night airline offers
For a given flight with a capacity of 85 seats, price and demand are as follows (assume a marginal cost is $0):a. What is the maximum profit that can be achieved with only a single price?b. A fence
Consider the airline network with capacities as shown in Figure 8.9.The price and demand data are shown in Table 8.5.a. Formulate and solve the primal LP problem. How should the capacity be
For the data in Exercise 8.13, the ticket requests received are given in Table 8.6. Determine whether or not to accept each one, and update the bid prices after each transaction. Only accept a
Develop an approach to construct threshold curves for the business customers.
Given the demand data in Table 8.7, estimate the parameters for the non-business booking curve. TABLE 8.7 Demand Data for Exercise 8.16 Day to Departure Demand -10 -9 2 4 -8 3 -7 8 -6 12 -5 a -4 3 -3
Gather recent information about any two retailers that you consider to be competitors. Make sure at least one of these retailers is local!You should collect at least the following data:a. Annual
Suppose a new product launch is estimated to have a fixed cost of$83,000, a planned selling price of $98/unit, and a variable cost of$36.5/unit. Calculate the number of units that need to be sold to
Based on past customer traffic in a store, the store manager has to decide how many staff she will schedule to operate checkout counters.Using the past POS data, the parameters of the system have
Do some background searching and determine the main reasons for visiting a physician in the United States.
Look up ways that prostate cancer can be treated. What do you think are the key factors that determine the choice of treatment? What are ways that the patient could be empowered to help make this
What are benefits and drawbacks of ACOs?
A major problem with EDs is the long wait times to be seen. This can lead to negative health consequences as well as patient dissatisfaction.What are the possible approaches to address this
Construct a value stream map of getting ready to go to school or work.
Why do you think OR scheduling is challenging? What do you believe are the key factors for low utilization of OR rooms?
Suppose that you are worried that you might have a rare disease.You decide to get tested; the testing methods for this disease are correct 99% of the time (in other words, if you have the disease, it
Consider the ICU. Determine the impact of the following (assuming M/M/c) assuming an arrival rate of 3.9:(i) adding another bed, (ii) reducing the squared coefficient of variation of arrivals by 25%.
For the ICU., suppose that the maximum number of boarded patients before the hospital is put on diversion is 6. What is the probability that the hospital goes on diversion if the arrival rate is 3.8?
Consider the publicly available heart disease data set at (http://archive.ics.uci.edu/ml/datasets/heart+Disease). Use the 13 attributes given to predict angiographic disease (binary
For the data below, suppose we are using that a person tests positive for a disease if their value of A ≥ 4. Determine the sensitivity and specificity of this test (note that sensitivity = TP/(TP +
Consider a simple hospital system that consists of two non–revenue-generating functions (A and B) and two revenue-generating functions(C and D). Over the past month, the services provided are given
An ICU has 20 beds. The average length of time a patient stays in the ICU once placed there is 5 days. The standard deviation of this time is 7 days. Patients arrive to the ICU at a rate of 3.7 per
We developed a severity score (1 to 5) based on a set of measures(e.g., temperature, blood pressure) to determine if a patient has sepsis.Answer the following:a. Suppose we use a score of 3 or higher
An IE has determined that a hospital ward has a need for the following number of nurses on the 7 a.m. to 3 p.m. shift for Sunday to Saturday, respectively:If only full-time nurses are used, and they
In the formulation in Exercise 10.16, the implicit assumption made was that the problem was separable by shift. Why might this not be the case in practice? What other factors might affect the
Research any two major payment networks and compare them in terms of annual revenue, number of cardholders, the number of places where each one is accepted worldwide, and any consumer protection they
Discuss various factors a consumer would consider in selecting a payment mode.
Discuss some of the incentives offered by card issuers to attract consumers.
Research Bitcoin and briefly describe payments using this currency.
Discuss NFC, an emerging payment mode.
Compare PayPal and Google Wallet from a consumer perspective and from a merchant perspective.
A gas station is forecasted to sell 4000 gallons per day. Approximately 70% of the customers use credit/debit card, and the rest use cash. It costs the gas station owner 5 cents per gallon to process
Illustrate the “Distinctive” characteristics of services (customer participation, simultaneity, perishability, intangibility, heterogeneity) for the United States Postal Service Operation.
Discuss the pros and cons of the following on the performance of service systems:a. Increasing self-serviceb. Allowing employees to exercise judgment in meeting customer needsc. Introducing an
Illustrate the five dimensions of service quality for a service of your choice.
As discussed in Section 1.9.1, SERVQUAL is a survey tool that was designed in the late 1980s that measures the customer’s perception of service quality in terms of reliability, responsiveness,
Explain in one or two sentences the differences between the following terms:a. Type I and Type II errorsb. Run chart and histogramc. Flowchart and fishbone diagramd. X–Y plot and Pareto chart
State whether each of the following statements is true or false, or whether the answer depends on other factors (which you should identify):i. Airlines fall under the category of “high labor/low
A family-owned convenience store is interested in monitoring the quality of customer service at the checkout counter. Five service times in minutes have been randomly recorded daily for a week and
A call center, providing software support for customers, is concerned about the amount of time a customer has to wait before talking to a service technician. They have randomly selected 10 calls each
Company XYZ, a Six Sigma listed company, receives and delivers mails across the United States. Once each day, a sample of 125 mails delivered is drawn from the “Delivery” log that the company
Late departure statistics of all airlines are available online to the travelling public. A major carrier is concerned about its late departures at one of its hub airports. The airline has 100 flights
Consider the Record of Problems faced by EZ Access Clinic given in Table 1.8 (Example 1.3, Section 1.9.3). Draw the run charts for the following problem areas:a. Overtime daysb. Medical errorsc.
Consider the data given in Table 1.8 (Example 1.3) again. Draw the histograms for the following problem areas:a. No-showsb. Overtime daysc. Medical errors What can you conclude based on the above
For the data given in Table 1.8, draw the scatterplots of the following variables and discuss your conclusions:a. No-shows and overtimeb. Medical errors and billing errorsc. Overtime and billing

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