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producing firms.
17. The service-positioning matrix suggests that services should try to position themselves off the
diagonal in order to achieve superior performance.
18. In service operations, significant volume increases can and frequently are made without
changes in the service process, as would be expected in manufacturing.
19. In designing processes, one often starts at the detail level and moves progressively toward the
aggregate.
20. A group of tasks needed to create and deliver an intermediate or final output is called an
activity.
21. As one moves up the hierarchy of work, the total number of tasks that must be coordinated
becomes larger.
22. A process map and a value stream map are two terms for the same thing.
23. The "line of customer visibility" shows the separation between the back office and front office
activities in a service flowchart.
24. In service applications, flowcharts generally highlight the points of contact with the customer.
25. To improve process designs, one must focus on increasing costs through better technology.
26. Process mapping is defined as the fundamental rethinking and radical redesign of business
processes.
27. Service facilities have a greater range of resource utilization than manufacturing.
28. A bottleneck is the work activity that effectively limits the throughput of an entire process.
29. Little's Law states that Throughput = Flow Time × Work-In-Process.
30. Flow time is the average time an entity takes to complete one cycle of a process
Case Study Questions (To reward students who attend class, listen and learn, and take good
class notes on the case discussion and/or student team presentation.)
1. Which statement is TRUE regarding the Community Medical Association (CMA) case study in
Chapter 17 that we discussed in class?
a.
The case describes how the 5Ss were used by CMA’s 50 databases.
b.
Total savings was over $50 million from implementing an integrated operating system
with a common database compared to the previous system.
c.
Doctor total changeover and setup (i.e., system relog) time per patient increased after
the new integrated operating system was implemented.
d.
The quality of medical diagnosis and decisions (i.e., clinical quality) improved with the
new system.
Problems for Manual Grading, Take-Home Exams and Partial Credit (Also, review the OM
Instructor’s Manual for end-of-chapter questions/problems)
1. Differentiate between custom, option, and standard goods and services. Also, give a goods and
a service example of each.
2. Explain and differentiate between the characteristics of a project, job shop, flow shop, and
continuous flow process.
3. Give three examples of goods or services associated with each of the process types: project, job
shop, flow shop, and continuous flow.
15
4. Explain the relationship between custom, option, and standard goods and services as they relate
to project, job shop, flow shop, and continuous flow processes.
5. Explain how a product's life cycle has important implications in terms of process design and
choice.
6. Explain each axis of the product-process matrix. Where is the most appropriate match? Also,
discuss the importance of the matrix to a company's life cycle.
ANS:
16
7. Some argue that modern technology invalidates the application of the product-process matrix.
Explain their logic.
8. Compare and contrast a product-process matrix with a service-positioning matrix.
9. Explain why the product-process matrix does not transfer well to services.
10. Differentiate between a customer-routed service and a provider-routed service. Include
examples of each.
ANS:
17
11. What are the major activities in designing a goods-producing or service-providing process?
12. Explain the concept of hierarchy of work. Why is it useful in process design activities?
13. Define a value stream map. How does this differ from a regular process map?
14. What are some management strategies to improve process designs?
15. Define reengineering. How does it differ from other approaches to process improvement?
16. Explain Little's Law and how it can be used.
17. An automobile emission testing center has six (6) inspectors and tests 60 vehicles per hour.
Each inspector can inspect thirteen (13) vehicles per hour. What is the center's utilization?
18. An automobile emissions testing center has six (6) inspectors and tests 40 vehicles per hour.
Each inspector can inspect ten (10) vehicles per hour. If the center wants a utilization of 95%,
how many inspectors are required?
19. An automobile emission testing center has six (6) inspectors and tests 50 vehicles per hour.
Each inspector can inspect twelve (12) vehicles per hour. What would the service rate need to be
in order to achieve 90% utilization?
20. What is the implied service rate per service-counter employee at an airport automobile rental
counter if customer demand is 30 customers per hour, two service-counter employees are on duty,
and their labor utilization is 65%?
21. What is the implied service rate at a bank teller's window if demand is 26 customers per hour,
and the bank staffs 3 tellers with an average utilization of 80%?
22. How many computer repair technicians should be on duty from 8:00 p.m. to midnight if the
total demand during that period is 60 calls? The service rate is five (5) calls per hour and the
target utilization is 90%.
20
23. A company is able to process 100 customer statements (bills) per day per processing clerk. It
has to process 270 customer statements per day. How many full-time processing clerks are
needed if the company wants a processing clerk utilization rate as close to .90 as possible?
24. A company is able to process 400 customer statements (bills) per day. The average processing
time is six (6) days. What is the average number of statements (bills) the company has in process
at any time?
25. A custom machine shop is able to process 40 orders per day. The average processing time is
5 days. What is the average number of orders that are in process at any time?
26. An accounting firm is capable of processing 30 EZ tax forms per day, and the average number
of forms on hand in the office is 74 forms. What is the average processing time per EZ tax form?
27. The Department of Motor Vehicle (DMV) testing center has ten (10) testers who test 75
drivers per day. Each tester can test eight (8) drivers per day. What would the service rate need to
be in order to achieve 85% utilization?
28. The Department of Motor Vehicle (DMV) testing center has eight (8) testers who test 60
drivers in total per day. Each tester can test ten (10) drivers per day. What is the center's
utilization?
29. The Department of Motor Vehicle (DMV) testing center currently has six (6) testers who test
80 drivers per day. Each tester can test fourteen (14) drivers per day. Testers are complaining
about being too busy and the center being understaffed. In order to achieve 80% utilization of the
testers, how many testers should be added at the center?
21
30. An order fulfillment process normally operates three shifts a day, five days per week. Under
normal conditions, 460 orders can be processed per shift. What is the weekly capacity?
31. A manufacturer's average work-in-process inventory for Part 1234 is 1,450 parts. The
workstation produces parts at the rate of 170 parts per day. What is the average amount of time a
part spends at this workstation?
32. The average number of hotel rooms occupied per day during the month of March is 275.
Rooms are booked on average for 2.5 days. On average, how many new bookings occur each
day?
33. A car rental company at a major airport has 80% of its fleet of 200 cars rented each day on
average. Cars are rented for an average of 5 days. How many rentals are processed each day on
average?
34. For a Marriott hotel call center the expected service rate was 2.0 minutes per telephone call
per customer service representative (CSR). With 3 telephone CSRs on duty during the 6:30 to
7:00 a.m. time period, and assuming a 90% target CSR labor utilization rate, how many telephone
calls can these 3 CSRs handle during this time period?
