OPS MGT

Goal of Operations Management

1. Match supply with demand

True or false: If price and convenience of two products are equal, the product customers associate with the highest consumption utility is likely to have the highest demand.

Demand is driven by price, inconvenience, and consumption utility.

The price of an item impacts the consumption utility you associate with it.

False

Organizations often trade off responsiveness with ______

Costs

Firm capability is defined as the dimensions of the _________ utility function it is able to satisfy.

Customer

Demand is created by our...?

Customers

True or false: The size of a cellular phone is a performance attribute.

False, some people like big screens and small screens. Performance attribute has to be widely accepted

True or false: It is common for an organization to be able to improve on all three dimensions of customer utility.

False, there is a trade off if you improve in one area

Which expenses are included in the price?

Financing, Shipping, all other price related variables

True or false: Fuel economy is a performance attribute for a car.

MORE DESIRABLE Nearly everyone agrees that the better the fuel economy the better the car.

Customers willing to pay for same day shipping are in a different ________________ segment from those willing to save money by waiting two days for their order to arrive.

Market

Determining customers wants and preferences is the primary function of ______.

Marketing

Understanding how customers derive utility from products and services is the primary function of _________

Marketing

Customers buy products that _________ their utility

Maximize

True or false: How far you have to drive to the store to buy an item impacts the consumption utility you associate with it.

Measures how much you like a product/services regardless of price or inconvenience

A firm on the efficient frontier cannot be ______

Pareto dominated

Businesses (or non-profit organizations) offer products or _____ to customers.

Services

Utility measures..?

Strength of preference

True or false: A pizza delivery chain offering a 30-minutes or less guarantee on their pizza orders impacts the inconvenience component of utility.

Timing, or how long you wait for a product or service, is a sub-component of inconvenience.

Price includes the ______ cost of owning the product or receiving the service.

Total

Economists often refer to the inconvenience component as __________ costs.

Transaction

True or false: The higher the utility associated with an item the more likely you are to choose it

True

True or false: The size of a cell phone is a fit attribute.

True, Fit attributes are those where customer tastes may vary. Some prefer a large cell phone, some a small one.

Economic theory suggests that a consumer's choice of a good or service is based on where he or she expects to achieve the highest ______.

Utility

When 25 customers arrive between 8 am and 9 am and 10 arrive between 9 am and 10 am we are experiencing _______ in demand

Variability

___________ is the inhibitor that refers to the consumption of resources or inputs that do not add value to the customer.

Waste

If one customer spends 5 minutes taking out $20 from an ATM and another spends 2 minutes taking out $20 from the same ATM then there is variability in customer ________

behavior

When organizations make a trade-off they focus on meeting one dimension of _________ utility in favor of another.

customer

For a given level of costs, the higher the revenue the ______ the profits.

higher

A firm that is Pareto dominated by all of its competitors is ______.

inefficient

Organizations can improve their business by making trade-offs among the dimensions of

performance

The cost of robots used on an automotive assembly line would be costs for ________.

resources