Ch. 1 Introduction To Operation Managements

For a given level of costs, the higher the revenue, the _blank​_ the profits.

higher

Organizations can improve their business by reducing ___ so that they do not have to sacrifice one performance dimension for another.

inefficiency

A firm that is Pareto dominated by all of its competitors is _blank​_.

inefficient

The cost of power supply cords that a computer manufacturer purchases to package with the computer is an example of a(n) _blank​_ cost.

input

Companies employ individuals to manage acquiring the ___ needed to serve customers.

inputs

If shipping company A offers longer delivery times than shipping company B and has higher delivery costs, then it _blank​_ on the efficient frontier.

is not

The nearer the location the _blank​_ the inconvenience component.

less

For a given level of revenue, the higher the costs, the _blank​_ the profit.

lower

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

Customers with different preferences for the same type of goods are in different ___ segments.

market

Determining customers wants and preferences is the primary function of _blank​_.

marketing

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

marketing

Customers buy products that ___ their utility.

maximize

The further the location the _blank​_ the inconvenience component.

more

The more you have to wait the _blank​_ the inconvenience component.

more

The three sources of inefficiency are also called the three _blank​_ inhibitors.

system

Which expenses are included in the price?

- Financing - Shipping

What are variables that firms may need to consider in addition to the two variables traditionally associated with graphs showing the efficient frontier?

- Human rights - Sustainability

Which statements correctly describe the efficient frontier?

- It is traditionally drawn as a two-dimensional graph. - It is always the goal of firms to achieve the highest customer utility and lowest unit cost. - It may be impacted by variables other than customer utility and unit cost.

Identify the three system inhibitors that make it complicated to match supply with demand, while also making a profit.

- Waste of inputs or resources - Inflexibility of supply at certain times - Variability in supply and demand

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

False

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

False

True or false: McDonald's and Subway have the same capabilities.

False

True or false: The price of an item impacts the consumption utility you associate with it.

False

___ is the system inhibitor that refers to a firm's inability to quickly and cheaply respond to new information.

Inflexibility

A firm is ___ dominated when its competitors perform equally or better on all attributes of the customer's utility function.

Pareto

Suppose a new restaurant, John's Burgers, offers better tasting food that is custom-made, takes less time to prepare, and costs less than what McDonald's offers. John's Burgers ___ dominates McDonald's.

Pareto

___ includes the total cost of owning the product or receiving the service.

Price

True or false: An online retailer offering same-day shipping impacts the inconvenience component of utility.

True

True or false: Freshness is a performance attribute for fruit.

True

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

True

True or false: Matching supply with demand is complicated by inhibitors such as demand variability.

True

True or false: Movie genre is a fit attribute.

True

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

Companies seeking external help with managing and improving their operations often hire ___ ___

consulting companies

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

Inflexibility is the inability of an operation to quickly and ___ change in response to new information.

cheaply

Demand is driven by the ___ utility of the product or service, its price, and the associated inconvenience for customers.

consumption

A firm's capabilities are defined as the dimensions of the ___ utility function it is able to satisfy.

customer

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

customer

In the context of a business where products and services are offered to customers, demand is created by the ___

customers

When an automotive supplier ships a batch of seat belts that do not latch properly, there is variability due to ___

defects

When there are 10 call center operators scheduled but only 9 show up, there is variability due to ___

disruptions

Inefficiency can be visualized as the gap between a firm's current position and the ___ ___

efficient frontier

The set of firms in the industry that are not Pareto-dominated is defined as an ___ ___ in an industry.

efficient frontier

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

performance

Demand is driven by the consumption utility for a product, its ___ , and the inconvenience for customers.

price

When choosing a shipping option when ordering online, customers trade off speed and ___

price

If the first customer to a restaurant wants a salad and the second wants a sandwich, then there is variability in customer _blank​_.

requests

Companies employ individuals to manage the ___ needed to serve their customers.

resources

___ are the things a business uses to help transform inputs into outputs.

resources

A trade-off between responsiveness and costs is referred to as a ___ trade-off.

strategic

If an employee is distracted and takes longer than normal to serve a customer, it shows that Blank______ is a form of variability in supply.

time

When a call center operator spends 5 minutes on the first customer phone call of the day and 10 on the second customer phone call, there is variability in ___ to serve a customer.

time

Economists often refer to the inconvenience component as ___ costs.

transaction

According to economic theory, a consumer buys an SUV--instead of a passenger car--because she or he expects to achieve the highest ___ from buying an SUV.

utility

Customers buy products that maximize their ___

utility

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 _blank​_.

utility

One of the components of utility is consumption ___

utility

When 25 customers arrive between 8:00 am and 9:00 am and 10 customers arrive between 9:00 am and 10:00 am, we are experiencing ___ in demand.

variability

When a computer manufacturer makes 250 personal computers on Monday and 100 on Tuesday, it is experiencing ___ in supply, which is a type of system inhibitor.

variability

Because ___ does not add value to the customers, the customer is not willing to pay for it

waste

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

waste

The three sources of inefficiency are ___ ,___ , and ___

waste; variability; inflexibility