2. Is a highly standardized product usually produced through a make-to-order or a make-to-stock processing strategy?

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1 1. In a vision statement, an organization carefully describes its desires concerning what? 2. Is a highly standardized product usually produced through a make-to-order or a make-to-stock processing strategy? 3. Does providing customized products generally involve less capital investment or less skilled labor, when compared to more standardized products? 4. If a product is produced in high volume by a few large organizations, what phase of the product life cycle is it most likely in? 5. The product life cycle suggests that what will happen to the price of a product as it ages? 6. At what phase of the product life cycle are the most organizations offering the product to the customer? Chapter Two Providing Goods And Services, Minute Answer Questions #1 to 12 PDF A1M020-01

2 7. When calculating productivity measures, do higher or lower results indicate improvement? 8. If two different departments in the same organization each develop strategies that bring them into competition for the same customer, that organization is suffering from a problem with what? 9. At what stage of the product life cycle is price competition likely to be the greatest? 10. Is a core competency believed to be a source of competitive advantage or corporate vision? 11. If a customer considers a feature a necessity but is not impressed by it, is this feature an order qualifier or an order winner? 12. In theory, if the total combined value of every output of a system could be compared to the total combined value of every input to that same system, the resulting ratio would be called what? Chapter Two Providing Goods And Services, Minute Answer Questions #1 to 12 PDF A1M020-01

3 If the multifactor productivity measure of one electrical generation plant is , while the same measure when calculated for a second plant is , which plant is more productive? Chapter Two Providing Goods And Services, Quick Start Question #13 PDF A1Q020-01

4 In a machine shop, six employees repaired 45 engines during a 5 day workweek. How would the productivity of the machine shop best be described? Five Customs and Immigration officers worked 7 hours each to check visas and stamp the passports of 673 arriving visitors at an airport terminal. What is the labor productivity of this group of five officers? Eight part-time workers at an airline catering facility prepared 2,010 meals in 6 hours. What is the labor productivity of the part-time workers at this facility? Chapter Two Providing Goods And Services, Quick Start Questions #14 to 16 PDF A1Q020-02

5 A road-paving crew required 8 hours to repave a 3mile stretch of road, using $5,000 in materials. The crew consisted of three workers who each earn $25 an hour. Calculate a multifactor estimate of productivity for this crew. Chapter Two Providing Goods And Services, Quick Start Question #17 PDF A1Q020-03

6 An automobile assembly plant produces 600 cars during a 5day workweek. It then produced 500 cars the following week, although it only operated 4 days due to a national holiday. During which week was the plant more productive? Chapter Two Providing Goods And Services, Ramp Up Question #18 PDF A1R020-01

7 One road-paving crew of six people worked 8 hours to pave 25 miles of twolane road, while a smaller crew of four people worked 12 hours to pave 15 miles of four-lane road. Which crew was more productive, and by how much? Chapter Two Providing Goods And Services, Ramp Up Question #19 PDF A1R020-02

8 2 nd Ed. Two projects of equal value have been evaluated using a multifactor productivity measure that combined labor-hours at $30 per hour and overhead expense calculated as 20% of labor expense for the first project. The two projects were judged to have been equally productive, although the first project used twice as many labor-hours. At what rate was overhead expense being charged to the second project? Chapter Two Providing Goods And Services, Ramp Up Question #20 PDF A2R020-03

9 Link s Lumber creates pressure-treated utility poles from pine logs bought from several surrounding pine plantations. At the Link s Lumber operation, a batch of 100 pine logs yields 85 utility poles with 5 labor-hours required to process the entire batch. Link s Lumber is owned by Artemis Link, whose brother Devious Link is planning to marry Betty Davis, owner of Northlands Pine Plantation. Artemis expects that his future sister-in-law will sell him pine logs for the same price he is paying to purchase them from other growers right now. The difference in Northlands Pine Plantation logs, however, is that they are considerably higher quality wood than the logs he purchases from his current suppliers. If Betty agrees to sell him Northlands Pine Plantation pine logs, each batch of 100 logs can be expected to yield 100 utility poles, although it will take an additional 4 labor-hours per batch to process the higher quality wood. a. What is the current labor productivity at Link s Lumber? b. What will happen to labor productivity at Link s Lumber if indeed Artemis Link is able to purchase Northlands Pine Plantation lumber from Betty? Chapter Two Providing Goods And Services, Scenario Question #21 PDF A1F020-01

10 NoteBuilder Page for Simpson and Hancock s Practical Operations Management c. Suppose that Link s Lumber currently buys batches of 100 pine logs for $40, but Betty will want $60 for a batch of 100 Northlands Pine Plantation logs. Assuming labor at $30 an hour, what are the appropriate multifactor productivity measures for production from the current logs and production from Northlands Pine Plantation logs? Chapter Two Providing Goods And Services, Scenario Question #21 PDF A1F020-01

11 Archer Contracting repaved 50 miles of two-lane county roadway with a crew of six employees. This crew worked 8 days and used $7,000 worth of paving material. Nearby, Bronson Contracting repaved 30 miles of four-lane interstate roadway working 10 days with a crew of five people using $9,000 of paving material. Both Archer Contracting and Bronson contracting rented the same paving equipment to complete their respective assignments, costing each $1,500 a day. a. Calculate the labor productivity of both Archer and Bronson contracting. Who is the most productive according to this measure? b. Assume that both Archer and Bronson Contracting pay their employees $15 an hour and each employee works 8 hours per day. Calculate the multifactor productivity of each firm. Now who is the most productive and by how much? Chapter Two Providing Goods And Services, Scenario Question #22 PDF A1F020-02

12 NoteBuilder Page for Simpson and Hancock s Practical Operations Management c. Now assume that both Archer and Bronson contracting pay their employees $35 an hour and each employee works 8 hours per day. Calculate the multifactor productivity of each firm. Now who is the most productive and by how much? d. Why does the conclusion concerning who is the most productive differ when employees receive $15 an hour (part b) versus $35 an hour (part c)? Chapter Two Providing Goods And Services, Scenario Question #22 PDF A1F020-02

13 2 nd Edition The Bankston fulfilment center of Universal Logistics is a large warehouse that packs and ships customer orders from client on-line retailers. Five employees have been nominated for a productivity award, although there is disagreement about who should receive the award. These employees, known as pickers, fill incoming orders by locating the requested items and placing them in plastic bins with computer-generated shipping labels, to be transferred to a packing area where other employees put the items in cardboard boxes, add padding and seal, and arrange postage. Bankston awards bonus payments to the two most productive pickers each quarter, based on the total number of items the warehouse information system recorded picked during that time. At the end of this quarter, however, some employees have argued that Bankston needs to define productive more carefully, because the total number of items picked also depends on the total number of shifts an employee was assigned to work during the quarter, an amount that the employee doesn t control. Other employees point out the warehouse information system always assigns the next order to be picked, and a picker who happens to be assigned many small orders will look less productive, because that employee must walk to the packing area and back more often. Furthermore, the pickers don t control the distance they must walk between items in the warehouse, so an unlucky picker might be assigned items that are widely spaced, taking more time to gather. To settle the dispute, Bankston gathered all the relevant data that the warehouse information system could provide on the five top pickers and disguised their names before submitting this information to the regional manager for a decision. The report looked like this: Chapter Two Providing Goods And Services, Scenario Question #23 PDF A2F020-03

14 2 nd Edition Please note that each shift work represents 8 labor hours, the total miles traveled includes all walking between items in the warehouse, as well as walking to and from the packing area. a. Calculate the labor productivity of the five pickers, in terms of the total items picked this quarter. Who are the top two performers according to this measure, and do they differ from the pair of employees who would win the bonus under Bankston s old rules? b. Calculate the labor productivity of the five pickers, in terms of the total shipments picked this quarter. Is the top performer according to this measure also the picker who picked the most shipments? Chapter Two Providing Goods And Services, Scenario Question #23 PDF A2F020-03

15 2 nd Edition c. The regional manager recommends a new system for the bonus competition: pickers will earn points from three categories: labor productivity in terms of total items picked, labor productivity in terms of total shipments picked, and labor productivity in terms of total miles traveled, which is also the average walking speed of the picker throughout the quarter. In each case, a picker earns 2 points for being the top performer in the category, and 1 point for being the second best performer in the category. The two pickers who earn the two highest point scores overall will be awarded the bonus payments. Which pickers will earn those bonuses under this new system, and is this different from the pickers who would have won under Bankston s old system? Picker A Picker B Picker C Picker D Picker E Chapter Two Providing Goods And Services, Scenario Question #23 PDF A2F020-03