Chapter 2
StRATEGY and sustAINABILITY
Review and Discussion Questions
1.
Can a factory be fast,
dependable, flexible, produce high-quality products, and still provide poor
service from a customer’s perspective?
2.
Why should a service
organization worry about being world class if it does not compete outside its
own national border? What impact does the Internet have on this?
3.
What are the major priorities
associated with operations and supply chain strategy? How has their relationship to each other
changed over the years?
Bad question, sorry for assigning this one.
If you know the competitive priorities,
what they mean and how they affect an overall strategy, you will be OK (this is
what we covered in the class and is on the slides)
10. Identify an operations and supply chain – related
“disruption” that recently impacted a company. What could the company have done to have
minimized the impact of this type of disruption prior to it occurring?

Problems

1. As Operations Manager, you
are concerned about being able to meet sales requirements in the coming
months. You have just been given the
following production report.

JAN

FEB

MAR

APR

Units
Produced

2300

1800

2800

3000

Hours
per Machine

325

200

400

320

Number
of Machines

3

5

4

4

Find the average monthly productivity (units per machine hour).

2. Sailmaster makes
high-performance sails for competitive windsurfers. Below is information about the inputs and
outputs for one model, the Windy 2000.

Units sold 1,217
Sale price each $1,700
Total labor hours 46,672
Wage rate $12/hour
Total materials $60,000
Total energy $4,000

3. Live
Trap Corporation received the data below for its
rodent cage production unit. Find the total
productivity?
$$

Output

Input

50,000 cages

Production time

620 labor hours

Sales
price: $3.50 per unit

Wages

$7.50 per hour

Raw materials (total cost)

$30,000

Component
parts (total cost)

$15,350

Total productivity could be expressed two
ways here based on how you express output: in units sold, or dollars of sales.
Units
sold:
50,000
/ ((620 * $7.50) + 30,000 + 15,350) = 1.00 units sold per dollar input
Dollars
of sales:
(50000*3.5) / ((620
* $7.50) + 30,000 + 15,350) = 3.5 dollars in sales per dollar input

4. (deleted)

5. A U.S. manufacturing company operating a
subsidiary in an LDC (less-developed country) shows the following results:
U.S. LDC
Sales (units) 100,000 20,000
Labor (hours) 20,000 15,000
Raw materials
(currency) $20,000 FC 20,000
Capital equipment
(hours) 60,000 5,000

a.
Calculate
partial labor and capital productivity ?gures for the parent and subsidiary. Do
the results seem misleading?

b.
Compute the multifactor productivity ?gures for labor and capital
together. Do the results make more sense?

c.
Calculate raw material productivity ?gures (units/$ where $1 = FC 10).
Explain why these ?gures might be greater in the subsidiary.

6. Various ?nancial data for the
past two years follow. Calculate the total productivity measure and the partial
measures for labor, capital, and raw materials for this company for both years.
What do these measures tell you about this company?

Last Year This
Year
Output: Sales
$200,000 $220,000
Input: Labor 30,000 40,000
Raw materials 35,000 45,000
Energy 5,000 6,000
Capital 50,000
50,000
Other 2,000
3,000