Operations Management
Student Name:………………………………………………………………
Module: / Operations ManagementModule Tutor: / Dr. Vassilis C. Gerogiannis (VG)
E-mail:
Required Knowledge: / Basic Concepts in Operations Management
Refer to:
First Lecture (Introduction to OM)
First Chapter of Slack et al. “Operations Management”
Type of Test: / Homework:
A. Multiple Choice
B. Discussion Questions
C. Problem
D. Short Case Study
A. Multiple Choice
1. The management process consists of
q planning and organizing
q staffing and leading
q controlling
q all of the above
2. Which of the following is the least likely decision to be made by Operations Managers?
q How much capacity is required to balance demand
q Designing and improving the jobs of the workforce
q Selecting the location and layout of a facility
q Deciding which market areas to manufacture products for
q How to use quality techniques to reduce waste
3. The "father" of scientific management is:
q Henry Ford
q Michael Schumacher
q Eli Whitney
q Frederick W. Taylor
4. A large percentage of the revenue of most firms is spent in the OM function
q True
q False
5. Core functions in all organizations are:
q marketing, finance, operations
q marketing, personnel, operations
q marketing, accounting, personnel
q marketing, accounting, product/services development
q product/services development, operations, marketing (including sales)
6. The systematic processing of data to yield information is a part of
q scientific management
q information sciences
q industrial engineering
q management science
7. Which of the following would not normally be considered a general characteristic of a service?
q Low contact services can often be made more efficient than high contact services
q Many services involve both tangible and intangible outputs
q Production and consumption can always be spatially separated
q Production and consumption are simultaneous
q Production and sales cannot easily be separated functionally
8. Operations can be classified according to their volume and variety of production as well as the degree of variation and visibility. Which of the following operations would be classified as high volume, low variety?
q A family doctor
q A fast food restaurant
q A front office bank
q A carpenter
9. Which of the following would not be normally considered as a key feature of Operations Management?
q Operations is the part of an organisation which creates wealth through the management of the transformation process
q Operations researches mathematical techniques for optimising processes
q World class Operations can give an organisation competitive advantage
q Most new technology is implemented in Operations areas
q Operations is the area of a business where most people work
10. Operations can be classified according to the degree of variation in demand and visibility of the operation as well as their volume and variety of production. Which of the following operations would be classified as high variation and high visibility?
q A front office bank
q A fast food restaurant
q A carpenter
q A family doctor
11. One difference between a good and a service is that services are often produced and consumed simultaneously.
q True
q False
12. Most operations produce a mixture of both products and services. Which of the following businesses is closest to producing “pure” services?
q Counsellor/therapist
q Steel company
q A Restaurant
q IT company
13. Operations management (OM) is the creation of goods and services.
q True
q False
14. Which of the following activities is not a direct responsibility of operations management?
q Determining the exact mix of products and services that customers will want
q Developing an operations strategy for the operation
q Planning and controlling the operation
q Designing the operation’s products, services and processes
15. Productivity increases when
q inputs increase while outputs remain the same
q inputs decrease while outputs remain the same
q outputs decrease while inputs remain the same
q inputs and outputs increase proportionately
16. Organizations that produce something other than physical products are called
q transformation organizations
q data transfer groups
q service organizations
q cultural goods transformation
B. Discussion Questions
1. Define operations management in your own words (3 sentences most).
2. Describe briefly the nature of operations in companies you have worked for. Classify them according to the scheme of “core/support organization functions” (max. 120 words)
3. What is the difference between production and operations? (3 sentences most)
4. Identify the potential contribution of information science to OM. Why is the management of information of such importance in the management of operations? (max. 120 words).
C. Problem
Vassilis G. (V.G.) operates at a local bakery in Larissa, Greece. Because of excellent product the bakery produces and its excellent location, demand was increased by 25% in the last year. On far too many occasions, customers have not been able to purchase the bread of their choice. Because of the size of the store, no new ovens can be added. At a staff meeting, one employee suggested ways to load the ovens differently so that more loaves of brad can be cooked at one time. This new process will take additional workers, which is the only thing that can be changed.
If they made 1,500 loaves this time last year with a labour productivity of 2.344 loaves per labour hour, how many workers will V.G. need to add? (each worker works 160 hours per month)
Hint:
Consider that productivity is defined as:
Productivity = Units Produced / Input Used.
Consider that Input Used can be the labor hours.
D. Short Case-Study
Swatch revolutionizes watch manufacture
In the early 1980s the Swiss watch industry was nearly dead. Competition from cheap but often high-quality products from Far Eastern manufacturers such as Seiko and Casio had almost obliterated the traditional Swiss industry. Trying to protect their investments, the Swiss banks organized a merger of the two largest companies on the advice of Nicolas Hayek, now boss of Swatch’s parent company SMH, formed from the merger. He saw the potential of a new plastic-cased watch which was already being developed inside one of the companies. One of its major advantages was that it could be made in high volume at very low cost. The quartz mechanism was built directly into the all-plastic case using very few components, less than half the number in most other watches. Fewer components also meant that the manufacture of the watch could be fully automated. This made Swatches cheap to produce even in Switzerland, which has one of the highest labour costs in the world.
The innovative design, some creative marketing, but above all else the operation’s success at producing the watch cheaper than anyone else brought the company significant rewards. In the early 1980s the total market share for all Swiss watches was around 25 %; ten years later it had more than doubled. The ability to offer a good watch at a low price had released the potential of the watch to become a fashion accessory. Swatch’s operations reaped the benefits of high volume but had to cope with an ever-increasing variety of product designs. Through automation and rigid standardization of the internal mechanism of the watch, the company managed this increase in variety without it crippling its costs. It is the success of the company’s operations managers in keeping their costs low (direct labour cost is less than 7 % of the total cost of production) that has allowed Swatch to succeed. Not that everything the company has done has been successful. Some designs never caught the public imagination and some distribution and marketing mistakes were made, especially in the United States. However, continuing innovation, high quality and low cost make it much easier to overcome such problems.
Questions
1 What do you think has been the contribution of the marketing function, the product design function and the operations function to the success of Swatch?
2 How do you think Swatch compares with other watch manufacturers (Hint: make a 4V’s analysis?
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