Review Questions

Operations Management Review Questions
1. Explain what is meant in service design by the “moment of truth.”

2. What is time-based competition?
3. Describe the differences between joint ventures and alliances.
4. Describe four organizational approaches to product development. Which of these is
generally thought to be best?
5. Explain how the house of quality translates customer desires into product/service
attributes.
6. Explain how improving quality can lead to reduced costs.
7. List the seven concepts that are necessary for an effective TQM program. How are
these related to Deming’s 14 points?
8. What is the purpose of using a Pareto chart for a given problem?
9. What are the four broad categories of “causes” to help initially structure an Ishikawa
diagram or cause-and-effect diagram?
10. Consider the everyday task of getting to work on time or arriving at your first class on
time in the morning. Draw a fish-bone chart showing reasons why you might arrive
late in the morning.
11. Use Pareto analysis to investigate the following data collected on a printed-circuit-
board assembly line:
a. Prepare a graph of the data.
b. What conclusions do you reach?

12. Mary Beth Marrs, the manager of an apartment complex, feels overwhelmed by the
number of complaints she is receiving. Below is the check sheet she has kept for the
past 12 weeks. Develop a Pareto chart using this information. What recommendations
would you make?
13. Develop a flowchart for one of the following:
a) Filling up with gasoline at a self-serve station.
b) Determining your account balance and making a withdrawal at an ATM.
c) Getting a cone of yogurt or ice cream from an ice cream store.
14. What type of process is used for making each of the following products?
(a) beer
(b) wedding invitations
(c) automobiles
(d) paper
(e) Big Macs
(f ) custom homes
(g) motorcycles
15. What is service blueprinting?

16. What are the techniques for improving service productivity?
17. Name the four quadrants of the service process matrix. Discuss how the matrix is used
to classify services into categories.
18. Tim Urban, owner/manager of Urban’s Motor Court in Key West, is considering
outsourcing the daily room cleanup for his motel to Duffy’s Maid Service. Tim rents
an average of 50 rooms for each of 365 nights (365 3 50 equals the total rooms rented
for the year). Tim’s cost to clean a room is $12.50. The Duffy’s Maid Service quote is
$18.50 per room plus a fixed cost of $25,000 for sundry items such as uniforms with
the motel’s name. Tim’s annual fixed cost for space, equipment, and supplies is
$61,000. Which is the preferred process for Tim, and why?
19. Prepare a flowchart for one of the following:
a) the registration process at a school
b) the process at the local car wash
c) a shoe shine
d) The process of buying food at one of the school vendors.
20. Prepare a process chart for one of the activities in Q20.

21. Prepare a time-function map for one of the activities in Q20.
22. Prepare a service blueprint for one of the activities in Q20.
23. How are Value Stream Maps, Process charts and Time Function maps different?
24. What is random stocking?
25. What information is necessary for random stocking to work?
26. Explain the concept of cross-docking.
27. What is a heuristic? Name several that can be used in assembly line balancing.
28. A Missouri job shop has four departments—machining (M), dipping in a chemical
bath (D), finishing (F), and plating (P)—assigned to four work areas. The operations
manager, Mary Marrs, has gathered the following data for this job shop as it is
currently laid out (Plan A).
It costs $0.50 to move 1 workpiece 1 foot in the job shop. Marrs’s goal is to find a layout
that has the lowest material handling cost.
a) Determine cost of the current layout, Plan A, from the data above.
b) One alternative is to switch those departments with the high loads, namely, finishing
(F) and plating (P), which alters the distance between them and machining (M) and
dipping (D), as follows:
What is the cost of this layout?
c) Marrs now wants you to evaluate Plan C, which also switches milling (M) and drilling
(D), below.
What is the cost of this layout?
d) Which layout is best from a cost perspective?
29. Samuel Smith’s company wants to establish an assembly line to manufacture its new
product, the iStar phone. Samuel’s goal is to produce 60 iStars per hour. Tasks, task
times, and immediate predecessors are as follows:
a) What is the theoretical minimum for the number of workstations that Samuel can achieve
in this assembly line?
b) Use the most following tasks heuristic to balance an assembly line for the iStar phone.
c) How many workstations are in your answer to (b)?
d) What is the efficiency of your answer to (b)?
30. As manager of the St. Cloud Theatre Company, you have decided that concession
sales will support themselves. The following table provides the information you have
been able to put together thus far:
Last year’s manager, Jim Freeland, has advised you to be sure to add 10% of variable cost as
a waste allowance for all categories. You estimate labor cost to be $250.00 (5 booths with 2
people each). Even if nothing is sold, your labor cost will be $250.00, so you decide to
consider this a fixed cost. Booth rental, which is a contractual cost at $50.00 for each booth
per night, is also a fixed cost.
a) What is the break-even volume per evening performance?
b) How much wine would you expect to sell each evening at the break-even point?
31. An electronics firm is currently manufacturing an item that has a variable cost of $.50
per unit and a selling price of $1.00 per unit. Fixed costs are $14,000. Current volume
is 30,000 units. The firm can substantially improve the product quality by adding a
new piece of equipment at an additional fixed cost of $6,000. Variable cost would
increase to $.60, but volume should jump to 50,000 units due to a higher-quality
product. Should the company buy the new equipment?
32. The electronics firm in Q313 is now considering the new equipment and increasing
the selling price to $1.10 per unit. With the higher-quality product, the new volume is
expected to be 45,000 units. Under these circumstances, should the company purchase
the new equipment and increase the selling price?
33. Amy Xia’s plant was designed to produce 7,000 hammers per day but is limited to
making 6,000 hammers per day because of the time needed to change equipment
between styles of hammers. What is the utilization?
34. If a plant has an effective capacity of 6,500 and an efficiency of 88%, what is the
actual (planned) output?
35. Southeastern Oklahoma State University’s business program has the facilities and
faculty to handle an enrollment of 2,000 new students per semester. However, in an
effort to limit class sizes to a “reasonable” level (under 200, generally), Southeastern’s
dean, Holly Lutze, placed a ceiling on enrollment of 1,500 new students. Although
there was ample demand for business courses last semester, conflicting schedules
allowed only 1,450 new students to take business courses. What are the utilization and
efficiency of this system?
36. The three-station work cell at Pullman Mfg., Inc. is illustrated in the figure below. It
has two machines at station 1 in parallel (i.e., the product needs to go through only
one of the two machines before proceeding to station 2).
a) What is the throughput time of this work cell?
b) What is the bottleneck time of this work cell?
c) What is the bottleneck station?
d) If the firm operates 8 hours per day, 6 days per week, what is the weekly capacity of this
work cell?

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Operations Management Review Questions

1. Explain what is meant in service design by the “moment of truth.”

a. Prepare a graph of the data.

b. What conclusions do you reach?

13. Develop a flowchart for one of the following:

a) Filling up with gasoline at a self-serve station.

b) Determining your account balance and making a withdrawal at an ATM.

c) Getting a cone of yogurt or ice cream from an ice cream store.

(b) wedding invitations

15. What is service blueprinting?

a) the registration process at a school

b) the process at the local car wash

d) The process of buying food at one of the school vendors.

20. Prepare a process chart for one of the activities in Q20.

What is the cost of this layout?

d) Which layout is best from a cost perspective?

c) How many workstations are in your answer to (b)?

d) What is the efficiency of your answer to (b)?

a) What is the break-even volume per evening performance?

b) What is the bottleneck time of this work cell?

c) What is the bottleneck station?

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