DISCUSSION AND REVIEW QUESTIONS
Chapter 1: Introduction to Operation Management:
Operation Management refers to the administration of processes that aid in the creation of goods and the provision of services whereas supply chain refers to the sequential buildup of activities that a particular organization is involved in producing and delivering a particular good or service.
5. Discuss each of the following terms as related to the historical evolution of Operations Management
a) Industrial Revolution – this refers a period where the transition in the management of industries experienced constant change for the better part of today’s operations.
b) Scientific Management – this relates to a type of the directorate that is geared towards the planning, the selection and developing skills in workers to find out the best way to perform a job.
c) Interchangeable Parts – refers to the division of components that are identical in nature and they nearly fit into any similar kind of assembly.
d) Division of Labor – Refers to the division of a particular job to various specialization parts that people get assigned to on basis of specialization
15. Explain the term value-added
The value added of a product refers to the net cost a product incurs in its production and supply chain: the profit, the labor cost involved, and the depreciation cost. Moreover, value added can be used to refer to the unique enhancements that a firm gives its products so that it appears attractive to them as compared to those of their competitors. Most of the products that need value addition are homogenous in nature and the adding on of features adds sense to the product’s value.
Chapter 2 – Competitiveness, Strategy, and Productivity
4. Select two stores you shop at, and state how they compete
The stores I would select are the best buy and e-bay online stores. These stores ensure that they sell their products at very low prices and try their level best to reach to their customers directly without the involvement of middlemen in the supply chain.
12. Boeing Strategy appears to focus on its 777 midsize plane’s ability to fly into smaller, non-hub airports. Rival Europeans Airbus’s strategy seems to focus on large aircraft. Compare the advantages and Disadvantages of these two strategies
It is clear that Boeing does concentrate on selling small planes in larger volumes as compared to the smaller companies that sell planes. The advantage of producing smaller planes is the fact that they can produce large quantities of planes at a lower production cost. The disadvantage is that the profit margin is less and large amounts have to be sold so that good income is generated. Moreover, the company hardly benefits from the large economies of scale. The advantage that the European Airbus has by producing large planes is that it has higher profit margins, and the company can afford to produce smaller quantities to generate the same income as their rivals, Boeing. The disadvantage that the company has is that the risk of producing large planes is so high and so is the cost of production.
15. Identify two companies that have time-based strategies, and the two that have Quality-based strategies
Companies with time-based strategy:
Amazon.com: this is an American e-commerce company that aims at winning the competition by employing time-based strategies. Amazon ensures that products are delivered to their respective customers in two business days in the USA.
Ford: this is a motor manufacturing company in the USA. Through recent developments, the company is aiming at maximizing their product throughput by providing services promptly to their customers instead of focusing solely on production.
Companies with quality-based strategy:
Benz: this is a motor manufacturing company in Germany. Though Benz does not do a mass production of cars, the company can maintain the quality of their cars thus keeping their loyal customers.
Apple Inc.: this a computer manufacturing company in the USA. The company is famous for its precise development phases in computers to ensure that the right quality is delivered to their customers. The failure rate of their gadgets also appears to be very low.
Chapter 3: Forecasting:
What are the main advantages that quantitative techniques of forecasting have over qualitative techniques? What limitations do quantitative techniques have?
Quantitative techniques are usually preferred over qualitative forecasting techniques because they are objective, are impersonal because they based on data and facts. Qualitative techniques of forecasting are personal to the people who are involved thus are subjective and very unreliable.
The limitation of quantitative techniques is that they cannot be employed when there is a sharp change in market conditions since the time to gather data in such situations and analyze lacks so, in most cases, such situations rely on the opinions and experience of the managers.
7. Contrast the use of MAD and MSE in evaluating forecasts
MAD refers to a forecasting technique used that weighs all of the errors involved in computation in an even manner whereas MSE refers to a forecasting technique used those ways the errors involved in computation in a squared way. The similarity between these techniques is that the statistical results obtained are used in different methods, and they fit various forecasting techniques. The difference between MSE and MAD is that MAD penalizes a forecast with much more deviations than it does for smaller ones.
13. Contrast the terms sales and demand
Sales refer to the paying of money or other means of value to acquire what one requires, on the contrary, demand refers to the ability and the desire to own something that you can easily afford. The similarity between demand forecasting and sales forecasting is that the computation results you get from each have a significant impact on the profitability. The differences between the sales forecasting and demand forecasting are the nature of the historical inputs into the computation algorithms.
