Chapter 15 Sears uses batch-process operations to buy

Lussier, Management Fundamentals, 7e

Answers to Questions in the Text

Chapter 15: Operations, Quality, and

Productivity

WORK APPLICATION SAMPLE ANSWERS

Most of the answers are actual student answers or based on student answers. You may give these answers

as part of your lecture before, after, or in place of getting student answers.

15–1. Is your present or past organization concerned about time-based competition? If so, what

functional areas are primarily responsible for speed?

I work for Domino’s Pizza, which is concerned about time-based competition. Both the pizza

15–2. Using Exhibit 15–2, identify the operations system where you work or have worked based on

product tangibility, customer involvement, flexibility, and resources.

I work for Sears.

1. We sell tangible products, but we offer service warranties on our appliances; therefore, we sell

15–3. List the product mix for an organization for which you work or have worked. Be sure to

identify the number of major product lines, the number of products within one of the major lines

offered, and the mixture of goods and services within that one major line.

I work at McDonald’s. There are eight different major product lines at McDonald’s: sandwiches,

15–4. Identify the facility layout used where you work or have worked. Draw the physical

arrangement of the facilities.

I worked at a pharmacy, which used a process layout with three aisles. When you walked in the

Lussier, Management Fundamentals, 7e

15–5. Identify which priority scheduling method(s) the organization for which you work or have

worked uses.

15–6. Give an example of a project in an organization for which you work or have worked that is

suitable for scheduling using the planning sheet.

The Mail Box store taught me how to prepare mass mailings that would go out in bulk mail. The

15–7. Give an example of a project in an organization for which you work or have worked that

would be appropriate to schedule using a Gantt chart.

I was an intern at Springfield Marketing Services. On a wall in the office was a giant Gantt chart that

15–8. Give an example of a project in an organization for which you work or have worked that

would be appropriate to schedule using a PERT network.

15–9. Identify the type of inventory and how it is controlled where you work or have worked.

I worked at a company that manufactured boxes. We used pulp raw material that the purchasing

department bought for us. The pulp was transformed into boxes quickly, but most boxes were sent to

15–10. Explain quality control in an organization where you work or have worked.

I worked as an auto mechanic. The service manager would assign cars to be repaired. When we were

15–11. Are any of the gurus’ quality contributions used where you work or have worked? Explain

how.

Lussier, Management Fundamentals, 7e

I work for a Ford auto dealership. “Quality Is Job One” signs are on the walls. We are repeatedly

REVIEW QUESTION ANSWERS

15–1. What does the operations department do?

15–2. Is the level of customer involvement highest with make-to-stock, assemble-to-order, or make-

to-order operations?

15–3. Which type of process operations is the most flexible? Least flexible?

15–4. Which type of process operation is most commonly used by retailers and service

organizations?

Individual-process operations are most commonly used by retailers and service organizations.

15–5. Are services generally more capital or labor intensive than manufacturing? Why?

15–6. Why is it important to balance time-based competition and design?

While companies need to increase innovation and speed products to market, they also need to have

15–7. Which two facility layouts are the most flexible? Which two layouts are the least flexible?

15–8. Why is capacity planning so important?

Capacity planning is a decision made under conditions of uncertainty and high risk, because it

Lussier, Management Fundamentals, 7e

15–9. Why is scheduling important?

Scheduling is the process of listing activities that must be performed to accomplish an objective.

15–10. What does a Gantt chart show that a planning sheet and PERT network don’t show?

The Gantt chart has an advantage over the planning sheet in that it places progress toward the

15–11. When would you use a PERT network rather than a Gantt chart?

15–12. What are the four types of inventory?

15–13. What does materials requirement planning integrate?

15–14. What is the relationship between inventory and quality control?

Quality control is the process of ensuring that all types of inventory meet standards.

15–15. What are the five rules of customer relations?

The five rules of customer relations are:

1. Put people before things.

15–16. Why should you measure productivity rather than just production?

Lussier, Management Fundamentals, 7e

COMMUNICATION SKILLS ANSWERS

15–1. Why are some companies (such as Apple) innovative when it comes to changing products and

processes, while others (such as Eastman Kodak) are slow to innovate and change?

15–2. Can a standard make-to-stock product (such as soda) also be made to order? If so, how?

15–3. Is the trend towards broader product mix with unrelated diversification? Why or why not?

No. The general trend is to keep the product mix to related diversification. The major reason for this

15–4. Think about your career and the ideal job you are planning to obtain. Use Exhibit 15–2 to

classify the operations systems and Exhibit 15–4 to identify the facility layout where you will work.

15–5. Assume you are planning a major event or project, such as a big wedding. (If you have an

actual future event or project, use it rather than selecting an assumed event.) Would you use the

planning sheet, Gantt chart, or PERT to plan and control the event? Why? Identify the major

things that you need to plan for and make, and put them on the actual form using either Exhibit

15–5, 15–6, or 15–7 as a guide.

15–6. Many companies are now using radio-frequency identification (RFID) technology. RFID is

revolutionary and is helping businesses improve supply chain management. However, critics are

concerned about protecting people’s privacy. For example, with RFID, businesses will better know

consumers’ shopping habits and purchases. Do you want businesses to know where you live and the

products you have in your house? Explain.

15–7. What is your view of the quality of products you have purchased over the past year compared

to previous years? Did you have to return and exchange products or have them repaired? Do you

think that quality is getting better with time?

15–8. The balanced scorecard (BSC) calls for measuring performance in four areas. If a business is

making good profits, should it bother with the other three nonfinancing measures? Why or why

not?

Lussier, Management Fundamentals, 7e

Yes. Customer service performance, internal business performance, and learning and growth

APPLYING THE CONCEPT ANSWERS

Applying the Concept 15–1: Level of Customer Involvement

Identify each product by its level of customer involvement.

A. make-to-stock

B. assemble-to-order

C. make-to-order

1. Berkline theater chairs with subwoofer speakers.

2. Amazon having FedEx deliver a package overnight to a customer.

3. A Samsung Galaxy smartphone at a Sprint store.

A. Make-to-stock. The smartphone is a standard product. The customer has a low level of involvement

because he or she either takes the product as is or doesn’t buy it.

4. A Nicole French Salon facial.

5. A bag of Frito-Lay Doritos.

A. Make-to-stock. Snack foods are standardize prepackaged items..

6. Special-of-the-day ice cream in a sugar cone at the local Joe’s Diner.

Applying the Concept 15–2: Flexibility of Operations

Identify the operations system that would be used to produce each product.

A. Continuous Process Operations (CPO)

B. Repetitive Process Operations (RPO)

C. Batch Process Operations (BPO)

D. Individual Process Operations (IPO)

E. Project Process Operations (PPO)

Lussier, Management Fundamentals, 7e

7. Packages of Wonder white, whole wheat, and rye breads.

8. The new dormitory built at Salem State University.

E. PPO. Project process operations are used in the construction industry

10. A swimming pool installed by Pool Man pools.

11. The concrete delivered for the slab foundation for a new house.

A. CPO. Concreat is not delivered in discrete units, it continuously flows until you fill the foundation slab.

Applying the Concept 15–3: Facility Layout

Identify the facility layout that would be used to produce each product.

A. product

B. process

C. cellular

D. fixed-position

12. Salads being made at the Olive Garden restaurant.

13. A Mustang car being built in a Ford plant.

15. A woman comes to Mercy Hospital to have a baby.

B. Process. The women would go to the maturity ward.

Applying the Concept 15–4: Scheduling Tools

Select the most appropriate scheduling tool for each situation.

A. planning sheet

B. Gantt chart

C. PERT network

16. You want to use a tool to develop procedures for opening and closing the facility.

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17. You want to use a tool to schedule rooms and human resources courses.

18. You want to use a tool for building a new submarine.

19. You want a tool to schedule the making of eight products on six different types of machines.

B. Gantt chart. Gantt charts can show the progress of multiple products.

20. You want a tool for building a new office facility to rent out 10 units.

C. PERT network. Building an office building requires a set sequence of relatively complex activities.

21. You want a tool to develop a procedure for a new method of reporting absenteeism.

Applying the Concept 15–5: Measuring Productivity

The standard monthly productivity rate in your department is

For the first five months of the year, calculate the current productivity rate and show it as a ratio and a

percentage. Also, calculate the percentage productivity change, compared to the standard, stating

whether it is an increase or a decrease.

22. January: outputs of 5,900, inputs of $9,000

_____ ratio, _____%, increase/decrease of _____%

23. February: outputs of 6,200, inputs of $9,000

_____ ratio, _____%, increase/decrease of _____%

24. March: outputs of 6,000, inputs of $9,300

_____ ratio, _____%, increase/decrease of _____%

.65:1 ratio, 65%, increase/decrease of 2.99%

25. April: outputs of 6,300, inputs of $9,000

_____ ratio, _____%, increase/decrease of _____%

26. May: outputs of 6,300, inputs of $8,800

Lussier, Management Fundamentals, 7e

_____ ratio, _____%, increase/decrease of _____%

JOIN THE DISCUSSION

Join the Discussion 15–1: Factory Conditions

Many companies in the past, including Gap, have been criticized for not monitoring factory conditions.

To address the criticism, the firm set standards for its manufacturers and developed a thorough factory

inspecting system. Gap’s vendor compliance officers (VCOs) inspect factories around the world and

check compliance with Gap factory standards. These standards include suppliers not employing anyone

under the age of 14 and factories not permitting physical or nonphysical abuse. Gap will terminate its

business relationship or require the factory to implement a corrective action plan if this code is violated.

In fact, since 2003, Gap has closed some 200 factories due to persistent or severe violations of

standards.

1. Is it ethical and socially responsible for Gap to revoke contracts, causing poor workers to lose their

jobs?

2. Is it ethical and socially responsible to Gap’s stockholders to pay higher labor costs than necessary,

thus possibly reducing profits and their dividends?

Join the Discussion 15–2: Social Accountability International

Social Accountability International, or SAI (www.sa-intl.org), is a U.S.-based nonprofit organization

dedicated to the development, implementation, and oversight of voluntary verifiable social

accountability standards. SAI works to improve workplaces and combat sweatshops through the

expansion and further development of the current international workplace standards. SAI gets key

stakeholders to develop consensus-based voluntary standards and promotes understanding and

implementation of standards worldwide. Like ISO 9000 certification, SA8000 certification verifies

compliance of qualified organizations with international workplace standards.

1. Should global multinationals eliminate sweatshops by having SA8000-certified facilities?

2. Should global multinationals require all their suppliers to get SA8000 certification?

Answers vary

3. How might working toward SA8000 certification affect cost, revenues, and profits?