OPMT 303

What are the five types of customer-induced variability that affect service operations, according to Frei?

(1) Arrival variability (2) Request variability (3) Capability variability (4) Effort variability (5) Subjective preference variability

Provide a definition of a bottleneck. Why is it important to find the bottleneck?

A bottleneck is a resource that limits the capacity of the entire system. The bottleneck is identified by finding the minimum of the capacity of all resources required in the process. The resource with the minimum capacity is called the bottleneck. It is important to find the bottleneck since it limits the capacity of the entire system. Additional output from the bottleneck will provide more output from the system provided demand and supply are not constraining the system.

Order Winner/Order Qualifier

A high level of performance (C, Q, D, F) on the order winner is required to get the customer order. An order qualifier is a minimum level of performance required to be considered for the order. A high level on an order qualifier will not win the order; only high performance on the order winner can win the order.

Apply the concepts of plant-within-a-plant (PWP) and mass customization to service organizations. Discuss.

A plant-within-a-plant (PWP) approach is an example of focused operations wherein a facility is divided into several mini-plants, each having a specific mission and with all of its operations focused on achieving that particular mission. A PWP approach could be applied to service operations. For example, in the case of general hospitals, focused operations could be achieved by separating the emergency units and trauma units from the rest of the facility. Another example would be the functioning of Shouldice Hospital, which provides hernia therapy and hence has only a single focused operation.Mass customization, the concept of achieving high variety at the same cost of a mass producer, could be applied to services. An example would be the mass customization services provided by Hertz Rental Car.

Which of the following statements is/are correct? 1) It is important for flowchart analysis to have a specific improvement goal in mind (e.g., reduce throughput time). (2) It is important for flowchart analysis to only use the common flowchart symbols when creating the flowchart to avoid any confusion. A. Only statement (1) is correct. B. Only statement (2) is correct. C. Both statements are correct. D. Both statements are incorrect.

A. Only statement (1) is correct.

Pricing decisions typically require interface with which aspects of operations? A. Quality, capacity, and inventory B. Process, quality, and inventory C. Process, inventory, and supply chain D. Pricing decisions do not require interfacing with operations.

A. Quality, capacity, and inventory

Contemporary challenges facing operations today include all of the following EXCEPT A. scientific management. B. integration with other functions. C. environmental concerns. D. advancing service operations. E. globalization of operations.

A. scientific management.

Hayes and Wheelwright argued that it is profitable for firms to operate along the diagonal of the product-process matrix. Justify the reason surrounding their argument. Can you think of situations in which firms could move away from the diagonal and yet remain profitable?

According to Hayes and Wheelwright, rational firms match their product structural decisions with the process structural decisions and hence stay along the diagonal of the product-process matrix. A match between the product choices and process decisions would remove inefficiencies from the system and could provide competitive advantage to the firm. However, the advent of advanced manufacturing technologies (AMT) and flexible manufacturing technologies (FMT) has created situations wherein firms could move away from the diagonal and remain competitive.

Give an example of service-profit chain for movie theaters. Define each of the components in the chain and explain how you would measure each.

An example of the service-profit chain for the movie theaters may simply be explained by satisfied customers frequently going to movie theaters. If the admission price to a movie is $10 and a typical person goes to a movie theater once per month, this generates $120 annual revenue. This revenue is divided among many stakeholders, including the movie theater, movie production company, movie producers, directors, writers, actors, etc. Customer loyalty, namely repeat business, which is driven by satisfied customers generates a large sum of the annual revenues.

what technique can be used for designing process layouts? What are the steps for this technique?

Block diagramming can be used for design process layouts. There are three steps for block diagramming analysis. 1. Create load summary chart 2. Calculate composite (two way) movements 3. Develop trial layouts minimizing number of nonadjacent loads.

Which of the following statements concerning the relationship among corporate, business, and functional strategies is correct? A. Functional strategies guide the development of corporate strategies, which guide the development of business strategies. B. Business strategies guide the development of corporate strategies, which guide the development of functional strategies. C. Corporate strategies guide the development of business strategies, which guide the development of functional strategies. D. Corporate strategies guide the development of functional strategies, which guide the development of business strategies.

C. Corporate strategies guide the development of business strategies, which guide the development of functional strategies.

A company uses proprietary computer software to offer services that other companies have not been able to emulate. These services have enabled the company to enter new markets and have caused new organizational structures to be formed. This is an example of which of the following? A. Objective B. Mission C. Distinctive competence D. Strategic decision

C. Distinctive competence

Make-to-stock (MTS) and make-to-order (MTO) choices each offer relative advantages and disadvantages. Which of the following statements is true? A. MTO typically allows faster customer order response times.B. MTS typically results in higher production system costs.C. MTO typically allows for higher flexibility in product design offerings D. MTO builds to replenish system inventories, rather than to customer orders.

C. MTO typically allows for higher flexibility in product design offerings

neighborhood hardware store mixes a gallon of paint to match a customer's color choice while the customer waits. This is which form of mass customization? A. Modular production B. Fast changeover C. Postponement D. Additive manufacturing

C. Postponement

When a company develops a report card for evaluating its suppliers, this best represents what type of decision? A. Process B. Quality C. Supply chain D. Capacity

C. Supply chain

Which of the following is NOT a correct statement? A. A service is produced and consumed simultaneously. B. Services are provided in a bundle of services and goods. C. The service delivery system should be designed primarily around the employees in the system. D. Low-contact services can usually be made more efficient than high-contact services.

C. The service delivery system should be designed primarily around the employees in the system.

A service recovery process A. follows every service transaction. B. is an implicit service. C. is rapid compensation for a service failure. D. is none of the above.

C. is rapid compensation for a service failure.

Desired Cycle Time

Cd=production time available/desired units of output

What are the difference between corporate strategy and business strategy? Using an example to explain it.

Corporate strategy defines the business that the company is pursuing. For example, Walt Disney Corporation considers itself in the business of "making people happy." Disney Corporation includes not only theme parks but the production of cartoons, movie production, merchandizing, and a variety of entertainment-related business. Business strategy follows from the corporate strategy and defines how each particular business will compete. Most large corporations have several different businesses, each competing in different market segments.

What are the four common objectives of operations?

Cost, Quality, Delivery and Flexibility

Which of the following is NOT a typical application of analytics in operations and supply chain management? A. Forecasting B. Capacity and scheduling C. Logistics and sourcing D. All of the above are typical applications.

D. All of the above are typical applications.

Which of the following is NOT an example of a high-contact service? A. Retail trade B. Personal services C. Business services D. Auto repair

D. Auto repair

The focus of the factory may take shape around several dimensions. Which of the following is NOT a dimension for focusing operations? A. Process type B. Volume of sales C. Technology D. Capacity

D. Capacity

Which of the following statements about the evolution of production process and product life cycles is FALSE? A. The process evolution typically begins with a jumbled flow job-shop process and proceeds towards increasing product standardization, process mechanization, and automation. B. Examining the interrelationship between product and process life cycles facilitates the understanding of the strategic operations options available to a company. C. Companies may seek a certain position on the product-process matrix to achieve a competitive advantage and a market niche. D. Companies that can move the furthest off the product-process matrix diagonal are the most successful.

D. Companies that can move the furthest off the product-process matrix diagonal are the most successful.

Which of the following is NOT included in internal service quality in the service profit chain? A. Workplace design B. Job design C. Employee selection D. Product design

D. Product design

In the product imitator strategy, the order winner is _____ for the customer, whereas in the product innovator strategy, the order winner is ______. A. flexibility, price B. flexibility, quality C. quality, price D. price, flexibility

D. price, flexibility

The five major decision responsibilities of operations management are A. process, quality, capacity, sourcing, and human resources. B. process, quality, human resources, logistics, and inventory. C. quality, inventory, human resources, capacity, and supply chain. D. process, capacity, quality, supply chain, and inventory.

D. process, capacity, quality, supply chain, and inventory.

Classify the following types of processes as continuous, assembly line, batch, job shop, or project. Doctor's office Automatic car wash College curriculum Studying for an exam Registering for classes Electric utility

Doctor's office - job shop or project. All patients do not require the same procedures, namely the service(s) offered are custom in nature. Automatic car wash - assembly line flow. There is a linear sequence of operations common to all cars. College curriculum - can be any: Assembly line flow: if same curriculum is required of all students (e.g., core courses) Batch: if curriculum is tailored to some degree (e.g., courses in one's major) Project: if curriculum is tailored to individual students (e.g., independent study courses) Studying for an exam - project. The studying process is unique to each student for different, unique exams. Registration for classes - assembly line. All students must largely complete the same sequence of steps which vary little regardless of the program of study. Electric utility - continuous process as the product is highly standardized and can be automated to a great degree in order to better achieve a low unit cost.

What are the elements of service-product bundle?

Explicit service (explicit service) Implicit service (the psychological benefits of the service) Facilitating goods (the physical goods)

littles law

I=R*T n=DT/C

Describe the difference in service delivery system design for customer-routed services versus provider-routed services.

In customer-routed services, the service delivery system consists of many process pathways.Flows of work or customers tend to be jumbled and complex, with many exceptions (i.e., each customer or customer project is different).In provider-routed services, there are a limited number of process pathways.Flows of work or customers tend to be linear and with low complexity (i.e., most customers or customer-related work tasks are similar to one another).

Discuss how lean thinking can lead to a reduction of costs (material, labor, overhead), other than inventory. Be Specific

Lean reduces costs by using value stream mapping and kaizen methods to identify and remove waste from the system. Lean also reduces inventory costs when using a pull system of production control. Lean reduces material costs by adhering to strict quality control methods. For example, when a production line is not functioning properly, it is stopped and repaired immediately. This results in less scrap and rework than with other production approaches such as a push system.

what technique can be used for designing product layouts? What are the steps for this technique?

Line balancing can be used for design product layout. There are in general 6 steps for line balancing. 1. Draw and label a precedence diagram 2. Calculate the desired cycle time required for the line 3. Calculate the theoretical min number of stations 4. Group elements into workstations, so that the sum of the element times at each workstation is less than or equal to the . recognizing cycle time and precedence constraints 5. Calculate the efficiency of the line 6. Determine if the theoretical min number of workstations or an acceptable efficiency level has been reached. If not, go back to step 4.

Explain Little's Law in your own words. How can it be used, and what are its limitations?

Little's Law says the average number of items in a system is the multiplied product of the average flow rate into the system and the average length of time an item spends in the system. Little's Law can be used to calculate the number of inventory units that will accumulate in a system or the number of people that will be waiting in line for a given flow rate and throughput time. It can also be used to calculate the flow rate or throughput time when the other two variables are known. Little's Law applies when the system is in steady state, where the average input rate equals the average output rate. It only applies to average values of the variables. It does not provide an estimate of the variance that might be found in the three variables.

What are the seven forms of waste that a lean system is intended to prevent?

Overproduction, waiting time, unnecessary transportation, excess processing, too much inventory, unnecessary motion, and defects.

Identify some of the prominent differences between service operations and manufacturing operations. Describe the challenges that are unique to service operations, and describe some methods to overcome them.

Table 5.1 provides some of the differences between manufacturing and service operations. Some of the challenges unique to service operations are (i) Most service transactions are difficult to quantify or measure when compared to manufacturing operations; (ii) service operations are often characterized by simultaneous production and consumption in which the customer is a co-producer in the service process and, therefore, the customer can introduce uncertainty into the system; (iii) no resale is possible in the case of service operations and hence they are consumed as they are delivered; (iv) services cannot be held in inventory and cannot be stored, so they also cannot be transported (although some services, particularly electronic services, can be delivered remotely).

Distinctive competence

The distinctive competence is what operations must excel at relative to the competition to provide competitive advantage. It is generally not possible to excel on several different dimensions, thus the distinctive competence of a firm requires focus.

What are the five tenets of lean thinking? In your own words, provide a road map for implementing lean thinking in a manufacturing or service operations.

The five basic elements of lean thinking are(1) Specify precisely what about a product or service creates value from the customer's perspective.(2) Identify, study, and improve the value stream of the process for each product or service.(3) Ensure that flow within a process is simple, smooth, and error-free, thereby avoiding waste.(4) Produce only what is pulled by the customer.(5) Strive for perfection.The road map for implementation of lean thinking should begin by identifying the value that the customer desires. The current state of the process should be identified in the next step. A value stream map is drawn describing the overall operations. This helps in eliminating the waste from the customer's point of view. The next step is to minimize the setup or changeover times and redesign the process to achieve a constant flow through the system. Then the process should be pulled from the customer's viewpoint, based on the customer rate of demand (or takt time). A lean thinking approach should strive for continuous improvement to meet the changing customer requirements.

What are the five inputs and two outputs of an operations transformation process.

The five inputs include energy, materials, labor, capital, and information.The two outputs include goods and services.

Explain the difference between capacity, flow rate, and demand

The flow rate of a system cannot be more than the minimum of capacity, demand, and supply. Increasing capacity will improve the flow rate only if there is sufficient demand and supply. Likewise, increasing demand will only result in a higher flow rate if there is sufficient capacity. These three quantities are interrelated.

Operations Mission

The mission of operations defines the role of operations within the total business strategy: how operations fit into the overall business plan. The mission should state the relative priority among the operations objectives: cost, quality, delivery, and flexibility.

The operations definition emphasizes decision, function, and process elements of the organization. Briefly discuss the need to address these fundamental elements.

The operations function is responsible for planning and controlling the production system and its interfaces with the organization and with the external environment. The operations definition emphasizes decision, functional relationships and process elements of an organization. The operations function is responsible for making decisions regarding process, quality, capacity and inventory choices, which are vital to any organization. The functional element of operations is responsible for supplying or developing the products or rendering the required services for the business. It also links the manufacturing/service operations to other functions such as marketing, finance, and so on. The process view provides a common ground for defining service and manufacturing operations as a transformation process for converting the right kind of inputs into outputs.These elements are critical for successful functioning of any organization, and it is for these reasons one should address the three fundamental elements of operations.

Explain how the process view of an organization is likely to uncover the need for greater cross-functional cooperation.

The process view allows an organization to analyze the sequence of processes or steps used in converting inputs into outputs. Since processes can include a variety of functional departments, the process view emphasizes the cross-functional nature of decision making. It also illustrates that functions make hand-offs to one another in executing the processes and thus requires greater coordination.

What are the reasons for formulating and implementing an operations and supply chain strategy?

The reasons for formulating and implementing an operations and supply chain strategy include: To renew emphasis on operations and the supply chain: the fundamental creation of value for the customer, To assure consistency between the operations and supply chain strategy and the business strategy, To enable the use of operations and supply chain capabilities as a competitive force in the business.

what are the basic layouts and explain them.

There are three basic layouts: process layouts, product outs, and fixed position layouts. · Process layouts group similar activities together according to process or function they perform. It is also called functional layout. · Product layouts arrange activities in line according to sequence of operations for a particular product or service. · Fixed position layouts are used for projects in which product cannot be moved.

Explain the concept of value stream mapping.

Value stream mapping creates a visual representation of the value stream of a process, like process flowcharting. The value stream identifies all of the processing steps and task undertaken to complete a product or deliver a service from the beginning to end. The goal is studying the value steam is to eliminate the non-value-adding processing steps and tasks. Value stream mapping requires direct observation of work and the flow of work within a process (gemba) so that opportunities for improvement can be identified.

Assume that a plant operates 2,000 hours per year and the demand rate for parts is 100,000 units per year. The circulation time for each Kanban container is 24 hours. a, How many Kanban containers are needed for a container size of 100 parts? b, What would be the effect of reducing the container size of 60 parts? c, What is the takt time for this process? d, What takt time is needed for 80,000 units per year?

a. Demand rate (D) = 100,000 units/year Lead time = 24/2000 = 0.012 portion of a year Container size (C) = 100 parts Number of containers (n) = D(T)/C = 100,000(.012)/100 = 12 containers b. The effect of reducing container size is an increase in the number of containers (n): D(T)/C = 100,000(.012)/60 = 20 containers c. Takt time = 2000 hours(60 minutes)/100,000 units = 1.2 minutes/unit => 72 seconds d. Takt time = 2000 hours(60 minutes)/80,000 units = 1.5 minutes/unit => 90 seconds

Profitability

the amount of profit earned, as net income.

Employee Productivity

the amount of sales produced per employee.

Revenue Growth

the extent of sales growth, as percent per year.

External Service Value

the extent to which customers perceive good value from the movie theater.

Internal Service Quality

the layout of the facility, how jobs are designed, employee reward systems, development of new tools for serving customers (e.g., the movie video and audio technology).

Employee Retention

the number of employees who quit after less than one year.

Customer Loyalty

the proportion of customers who return to the theater within a year.

Employee Satisfaction

the results from a survey of employees.

Customer Satisfaction

the results of customer satisfaction surveys.