May 13, 2013
Answers to Homework: Chapter 1
Discussion Review Questions:
1. The term production/operations management relates to the management of systems or processes that create goods and/or provide services. These processes involve the planning, coordination, and execution of all activities that create goods and services.
3. The operations function consists of all activities that are directly related to producing goods or providing services. It is the core of most business organizations because it is responsible for the creation of an organization’s goods or services. Its essence is to add value during the transformation process (the difference between the cost of inputs and value and price of outputs).
4. Among the important differences between manufacturing and service operations are:
a. The nature and consumption of output.
b. Uniformity of input.
c. Labor content of jobs.
d. Uniformity of output.
e. Measurement of productivity.
5. a. The Industrial Revolution began in the 1770s in England, and spread to the rest of Europe and to the U.S. in the late eighteenth century and the early nineteenth century. A number of inventions such as the steam engine, the spinning Jenny, and the power loom helped to bring about this change. There were also ample supplies of coal and iron ore to provide the necessary materials for generating the power to operate and build the machines that were much stronger and more durable than the simple wooden ones they replaced.
b. Frederick W. Taylor, who is often referred to as the father of scientific management, spearheaded the scientific management movement. The science of management was based on observation, measurement, analysis, improvement of work methods, and economic incentives. Management should be responsible for planning, carefully selecting and training workers, finding the best way to perform each job, achieving cooperation between management and workers, and separating management activities from work activities.
c. Parts of a product made to such precision that each part would fit any of the identical items bring produced. It meant that individual parts would not have to be custom made because they were standardized.
d. Breaking up a production process into a series of tasks, each performed by a different worker. It enabled workers to learn jobs and become proficient at them more quickly; avoiding the delays of workers shifting from one activity to another.
8. Degree of customization has important implications throughout a business organization. Generally, higher degrees of customization involve more complexity in terms of production or service, involve different forms of layout (arrangement of the workplace), require higher worker skills, and have lower productivity.
11. Workers may not like to work in a lean production environment because there are fewer opportunities for employee advancement, more worker stress due to higher levels of responsibility and greater variability and expansion of job requirements.
13. There are four basic sources of variation:
1. The variety of goods or services being offered: The greater the variety of goods and
services, the greater the variation in production or service requirements.
2. Structural variation in demand, such as trends and seasonal variations. These are
generally predictable. They are particularly important for capacity planning.
3. Random variation. This natural variability is present to some extent in all processes,
and it also present in demand for services and products, and cannot generally be
influenced by managers.
4. Assignable causes of variation: Variation caused by defective inputs, incorrect work
methods, out of adjustment equipment, and so on. This type of variation can be
reduced or eliminated by analysis and corrective action.
Variations can be disruptive to operations and supply chain processes, interfering with optimal functioning. Variations result in additional cost, delays and shortages, poor quality, and inefficient work systems. Poor quality and product shortages or service delays can lead to dissatisfied customers and damage an organization’s reputation and image.
16. Outsourcing can result in lower costs, the ability to take advantage of others’ expertise, and allow businesses to focus on their core business. Outsourcing generally results in layoffs and some loss of control. Also, outsourcing to companies in other nations may result in problems due to cultural or language differences, and increased shipping times for products.
Taking Stock Question:
2. It is important for the various functional areas to collaborate because collaboration will lead to improved communication among the departments (functions) that in turn will improve the performance of the firm. Collaboration will reduce the chance of sub-optimization by a functional area due to the possibility that a particular functional area does not have enough information about the other areas and their constraints or decisions.
Critical Thinking Question:
3. Innovations might be product or service related, or process related. These typically
involve added cost and time for training and possibly new equipment or equipment changes, and potential changes for the supply chain (e.g., new suppliers, new delivery requirements, etc.) New products or services will also probably involve new advertising campaigns or other promotions, and the need for consumer education. Consumers will have to adjust to new products or services, and may have some difficulty if innovations entail increased complexity.
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