Production and Operations Management

Chapter 1
1. Define production operations management in your own words. Will
your definition accommodate both manufacturing and service
operations?
Productions/operations management can be
defined as the management of all activities
directly related to the creation of goods and/or
services through the transformation of inputs into
output.
2. Consider the potential contribution of information sciences to P/OM.
Why is the management of information of such great importance in the
management of "production"?
The management of information is of great
importance to produc-tions/operations
management since:
(a) without "information" one would have no
knowledge of the state of input resources,
process performance, or output goods and/or
services;
(b) properly developed information systems can
contribute to the overall integration required to
allow a firm to produce on a competitive basis:
(c) "good" decisions require "good" information the right information, at the right place, at the
right time.
3. The marketing, operations, and finance accounting functions can be
outlined . Prepare a chart outlining the same functions for:
a) a large metropolitan newspaper
b) a local drugstore

c) a college library
d) a local service organization (Boy Scouts, Girl
Scouts, Rotary International, Lions, Grange etc.)
e) a doctor's or dentist's office
f) a jewelry factory
The actual charts will differ depending upon the
specific organization considered. The important
thing is that students come to recognize- that all
organizations require, to a greater or lesser
extent, (a) the three primary functions of
operations, finance/acoounting, and marketing;
and (b) that the emphasis or detailed breakdown
of these functions is dependent upon the specific
competitive strategy employed by the firm.
4. Do the preceding assignment for some other enterprise of your
choosing, perhaps an organization where you have worked.
The answer to this question may be similar to that
for question 3. Here, however, the student should
use more detailed knowledge of a past employer
and indicate on the chart additional information
such as the number of persons employed to
perform the various functions, and perhaps the
position of the functional areas within the overall
organization hierarchy.
5. What is the difference between production and operations?
We tend to use the term "Production
management" when the result is a physical
product, and "operations management" when the
output is a ''service".
6. Identify three disciplines that will contribute in a major way to the
future development of P/OM.

(a) Information Systems: organizations can

usually produce most efficiently when they are
integrated (i.e., one is able to consider all relevant
factors, not just some, in making decisions. This
integration will be accomplished by properly
designed information systems.
(b) Physical Science: work in the physical
sciences will lead to new materials and more
efficient processes of manufacturing.
(c) management Science: Management Science
will contribute to better decision making as we
learn more about the most appropriate process
for making decisions and how to best include the
more appropriate varieties or factors in the
decision making process.
7. What are the three classic functions of a firm?
The three classic functions are:
(a) Marketing
(b) operations
(c) Finance
8. What departments might you find in the P/OM function of a home
appliance manufacturer?
One would expect to find in a home appliance
manufacturer most, if not all, of the departments
listed below:
Research and Development (R & D): conducts
product research, product development, and
product engineering. In this firm might also
conduct product testing at the consumer level.

Industrial engineering (IE): determines the most

efficient use of productive resources; may also
develop product costing.
Methods engineering: industrial engineers
working toward improving procedures in the work
place.
Facilities planning, construction: plans,
constructs, maintains, and repairs facilities.
Quality assurance/qualitv control (QA & OC):
reviews designs, products, and processes to
ensure quality objectives are met.
Production planning and inventory control (PIC):
schedules the manufacturing processes to ensure
quality objectives are met.
Manufacturing systems: applies the methodology,
models, and the procedures of mathematics or
management information systems to
manufacturing operations. This function might
assume more importance in the home appliance
market as manufacturers from outside the Ups
provide increased competition.
Process Engineering: design:, develops, and
evaluates production tools, equipment, and
processes.
Product Engineering: fine tunes the product
design to enhance production efficiency.
Maintenance: focuses on designing systems and
procedures and develops personnel who will
create and maintain a reliable system.
Purchasing: determines the best sources for a
given set of specifications, delivery, and price.

Since the "home appliance" is a basic, consumer

good and competition occurs on parameters other
than price. One might also find that the
organization's competitive strategy dictates that
the operations function include the additional
department:
Service: responsible for the overall management
and provision of
on-site and carry-in customer service.
In attempting to identify the departments of a
"typical" manufacturer, one should recognize that
the operations (not necessarily the department
assignments) noted above are common to some
degree among all manufacturers. The question is
really as to what degree, and the decision as to
degree is often based on Competitive strategy in
the marketplace rather than any "necessity" of
prescribed organizational structure.
Chapter 7
Process Strategies
1. What are the advantages of standardization? How do we obtain
variety while maintaining standardization?
(a) Some advantages of standardization are:
- equipment can often be special purpose rather
than general purpose
- equipment operators may be less highly skilled
- orders and job instructions are typically
- raw materials inventory is usually lower
- ratio of work-in-process inventory to output is
usually lower

- one can often "produce to stock"

- scheduling is usually simpler because of the
reduced number and
standardization of machine routings
- quality control is usually more readily
accomplished
(b) We typically obtain variety while maintaining a degree of
standardization by following a modular strategy where-in specific
standard modules are assembled to get a quasi-custom product.
2. In an affluent society, how do we produce a wide number of options
for products at low cost?
We produce a wide variety of product options at
low cost by employing a modular production
strategy.
3. Why has the utilization of robotics proven to be a popular production
process:
Some of the reasons that robots have proven
popular are:
- the typical robot has a low re-programring cost
- production becomes more uniform and quality
more consistent than under
human control
- use of robots may lower high labor costs in
some labor intensive industries
- robots may replace human labor in difficult,
monotonous, or dangerous jobs
4. Where does the manager obtain data for beak-even analysis?

The manager obtains data for use in break even

analysis from.:
- cost data: industrial engineering and accounting
- marketing: demand and revenue data
5. What keeps plotted variable and fixed-cost data from failing on a
straight line?
Variable and fixed-cost data, when plotted, do not
fall on a straight line because:
- not all changes in cost are volume related
- we have difficulty accurately measuring these
costs
6. What keeps plotted revenue data from falling on a straight line?
Revenue data, when plotted, do not fall on a
straight line because of volume discounts, etc.
7. What are the assumptions of break-even analysis?
The fundamental assumptions of break-even
analysis are:
fixed costs do not vary with volume
unit variable costs do not vary with volume
unit revenues do not vary with volume
8. How might we isolate the production/operations process from the
customer?
We can isolate the customer from the process by:
- restricting the product offerings, options, or
degree of customization allowed (limited number
of factory installed options on a new automobile)

- customizing at time or delivery or in the final

stages of the process (dealer installed versus
factory installed options on automobiles, boats,
etc.)
- structuring the service such that the customer
must go where the service is offered (a
medical facility)
- utilizing routing services that may lend
themselves to automation (automatic teller
machines)
- making the customization of the product on a
self-service basis (Wendy's Hamburgers)
9. Identify two services located at the recurrent side of the process
strategy continuum.
Examples of services providers located at the recurrent side of the
process strategy continuum include:
- hospitals and most other health Care providers
- gourmet restaurants
- general business consultants
- most human service agencies
- "charter" fishing boats
Chapter 14
Material Requirements Planning (MRP)
1. Once a material requirements plan (MRP) has been established, what
other managerial applications might be found for the technique?
Once the MRP system is in place, it provides
information to assist decision makers in other
functional areas such as the amounts of labor

required, cash needs, purchase requirements and

timing, etc.
2. What do we mean by closed loop MRP?
Closed loop MRP indicates (a) that there is both a
planning and execution phase, and (b) that
information from the execution phase is fed back
to the planning phase. Once planning is complete,
an attempt is made to execute a "planned"
schedule. Information is fed back from the
execution of this schedule to the planning phase
so the plans can be modified as necessary.
Chapter 15
Short Term Scheduling Tactics
1. Name five priority sequencing rules. Explain how each works to
assign jobs.
Five priority sequencing rules are:
- First come, first served (FCFS): or first in, first out (FIFO): Jobs
are sequenced in the order in which they arrive at the work station.
- Earliest due date CEDE): Jobs are sequenced in the d L which
they are due for delivery to the
- Shortest processing time (SPT): Jobs are sequenced in order of
the processing time required at the work station, with the job
requiting the least processing time at the work station scheduled
first.
- Longest processing time (LOT): Jobs are sequenced in order of
the processing time required at the work stations with the job
requiring the longest processing time at the work station
scheduled first.
- Critical ratio (CR): Jobs are sequenced in order of increasing
critical ratio (the ratio of time required by work left to be done to
time left to do the work)

2. Describe the differences between forward and backward

scheduling.
Forward scheduling begins With the date of order release and
schedules forward in time to determine when the job will be
completed. Backward scheduling begins by specifying a
completion date and scheduling backward to determine the
required order release date.
2. What is the difference between a Gantt load chart and a Gantt
schedule chart?
The Gantt load chart indicates a planned allocation of capacity in
the allocation Gantt schedule chart indicates, for each job or order,
the relative adherence to the particular time schedule, i.e., what
fraction of total time to be expended on an of the capacity of a
department or work center to a particular job or order. The order
has been expended.
3. Briefly describe the planning and control files needed in a job shop
activity system..
The Planning Files:
Item Master File: contains all manufacturing and inventory data
relevant to an item. Data elements include: part number,
descriptions, lead time: on-hand, allocated, and on-order
quantities; and lot sizes.
Shop Order Detail File: contains all information relevant to the
planning, scheduling, actual progress, and priority, related to an
operation required by a shop order. Similar to the Master File,
except each detail file record refers to a single operation. Data
elements include. actual set-up time, run time, and quantity
disbursed as each operation is recorded.
4. Why is the scheduling of services a difficult problem?
Scheduling of services is particularly difficult because:
- emphasis is not on materials but on staffing
levels and weekly work schedules.

- service systems cannot store inventories

- services are very labor intensive and the
demand for this labor can be highly variable.
6. What is input output control? How does it help the operations
manager?
Input/output control keeps track of planned
versus actual inputs and outputs, highlighting
deviations and indicating bottlenecks.
7. What are the advantages of level material flow?
Advantages of level material use are:
- lower inventory costs
- faster product throughput Shorter lead times)
- improved Component and product quality
- reduced floor space requirement
- improved communication between employees
because they are closer together
- smoother Production process because large lots
do not have hidden problems
Chapter 10
Human Resource Strategy
1. What are some of the worst jobs you know about? Why are they bad
jobs? Why do people want these jobs?
There is obviously no "right" answer to this question. Jobs have been
considered "bad" because they are physically dangerous, "dirty", or
"noisy"; psychologically repulsive, too monotonous; present too great a
physical or intellectual challenge; or offend one or another of an
individual's preferences with regard to general life-style or employment.

2. If you were redesigning a job described to suit a worker better, what

changes would you make? Are your changes realistic? Would they
improve productivity (not just production, but productivity)?
Again, there is no set answer to this question. The important
considerations are:
- The changes suggested should address the reasons that the original
job was considered "bad"- not merely make the job different.
- The changes must be realistic - resources must exist or must be able
to be developed which would allow implementation of the suggested job
changes.
3. How would you define a good quality of work life?
Here again, the answer rust be developed on an individual basis. One
would expect, however, that elements of Maslow s needs hierarchy,
Herzberg's Dual Factor theory and Englestad's guidelines, would be
contained in the answer.
4. What is the different between job enrichment, job enlargement, job
rotation, and job specialization?
Job enrichment relates primarily to increasing the cognitive or
intellectual requirements for the job, often by increasing authority and
responsibility.
Job enlargement relates primarily to an increase in the number of tasks
to be performed.
Job rotation implies a formal arrangement for job switching among a
particular group of workers within a specific set of jobs. usually the
workers are cross-trained on all or most jobs within the set.
Job specialization implies the opposite of job enrichment or job
enlargement wherein the job becomes very narrow, and the range of
responsibility and authority very restricted.
5. Do you know of any jobs that push the man-machine interface to the
limits of human capabilities?

Jobs which push the man-machine interface to the limit of man's

capacity usually require a high rate of information processing, a high
rate and accuracy of physical response, or both. Examples would be
found in terms of pilots of high performance jet or rocket powered
aircraft, and a safety monitor for working at a nuclear power station.
6. Why prepare flow diagrams and process charts for tasks that are
poorly done?
One should prepare flow diagrams and process charts for tasks which
are poorly done because these documents could be used to form the
basis for improved job design. Until one has documented what is
presently being done, he or she cannot say what changes must be made
to perform the task as it should be done.
7. What do Maslow s hierarchy of needs and Herzberg's dualfactor
theory tell us about job design?
Maslow's Hierarchy of Needs and Herzberg's Dual Factor Theory should
suggest that:
- a job is used by the worker to fulfill and identifiable set of needs
- the degree to which particular workers required their individual needs
to be fulfilled varies
- the presence of specific factors provides satisfaction; the presence of
others, dissatisfaction
- the absence of a motivator does not produce dissatisfaction the
presence of a hygiene factor, does not produce satisfaction
8. What are the major characteristics of a good job design?
Obviously the specific factors vary depending upon the specific job to
be designed. However, the student should be encouraged to include
both psychological and physical aspects of the job as major
considerations.
Chapter 11
Procurement and Just-in-Time Strategies

I. Under what conditions might a firm decide to organize its

procurement function as a materials management function? As a supply
management function? As a source management function?
A firm might decide to organize its procurement function as:
a. materials management function: when transportation and inventors
costs are substantial and exist on both input and output sides of the
production function.
b. supply management function: when future reliable supplies are
critical, or if the dollar value of purchases or fluctuations in cost are
substantial.
c. source management function: when the development of new, reliable
suppliers is necessary. The product may be a high-technology, custommade, or specialty item for which there are few, if any suppliers.
2. What can the procurement function do to implement just-in-time
techniques with suppliers?
- work with suppliers to improve reliability and
quality so as to eliminate activities such as formal
counting, inspection and testing procedures
- work with suppliers to improve the reliability of
deliveries so as to reduce in-plant inventory
- work with suppliers to develop optimal storage
areas for inventory so as to reduce in-transit
inventories
- provide the suppliers with the information
necessary to appropriately plan and schedule
their activities
3. What information does purchasing receive from other functional areas
of the firm?
Purchasing receives information from other functional areas with
respect to:

- what is needed, when, and how much or how

many
- what is available, when, and how much or how
many
- resources which are available for procurement
functions
- the success or failure of its performance
- long range goals and strategies of the
organization.
4. How does a traditional adversarial relationship with suppliers change
when a firm makes a decision to move to Just-in-time deliveries?
The traditional adversarial purchaser/supplier relationship must be
completely re-developed. JIT requires extremely close cooperation,
coordination, and trust. i. What are the three basic approaches to
negotiations?
5. What are the three basic approaches to negotiations?
The three basic approaches to negotiation are:
- the cost based model
- the market based model
- competitive bidding
6. What reservations do suppliers have about JIT purchasing?
Suppliers may:
- be reluctant to tie themselves to long-term
contracts with a single customer
- have little faith in the purchaser's ability to
develop a smooth, coordinated schedule of
orders.

- expect customers to require frequent

implementation of engineering change orders
with insufficient lead time.
- not consider production with zero defeats
realistic
- not wish to produce the small lot sizes required
by the purchaser.
- not see frequent delivery as economical.
Chapter 17
Total Quality Management
1. Provide your own definition of product quality.
Individuals differ on their definitions of quality. Probably the most allencompassing, and perhaps ultimate definition, is "suitability for use."
However, Dr. Deming said there were two basic definitions. First and
foremost, quality is giving the customer what they want and expect, and
second, quality is conforming to specifications.
2. Name several products that do not require high quality.
If one adopts a definition of quality based upon "suitability for use", it is
difficult to imagine any product which would not be required to be of
high quality, i.e., suitable for use.
3. Has the establishment of the Malcolm Baldrige Quality Award had
much effect on the quality of products actually produced in the U.S.?
If the prestige of this award grows as has that of the Deming Award in
Japan, we can expect significant impact. The increasing competition for
the award suggests that such growth in prestige is indeed securing winners have also shown a proclivity to note receipt of the award in
product and organizational advertising.
4. How can a university control the quality of its output (that is, its
graduates)?

A university can seek to control the quality of its graduates by:

- setting specific goals for its overall
accomplishments
- employing quality faculty
- setting appropriate standards (pre-requisites,
GPA, required credit hours, etc.)
- employing appropriate evaluation devices
(quizzes, examinations, term papers, etc.)
Go to Top of Form
5. What are the major components of the QC system?
The major components of a quality control system should include:
- a process for setting appropriate standards
- an appropriate set of standards for each product and process
- a procedure for including quality control considerations in the design
of the product and process
- procedures for measuring adherence to standard procedures for
correcting deviations from the standard
6. What are recent articles on quality circles saying? Do you think
quality circles will be commonplace in all U.S. firms? Why?
Articles discussing the merits or implementation of quality circles are
relatively frequent. The main point of discussion with respect to their
wide implementation within the United states appears to concern the
role of cultural differences between Japan, where quality circles appear
to make a positive contribution, and the United States. It appears
appropriate for the present to conclude that the widespread
implementation of quality circles in the U S will require modifications to
the concept to deal with some of the more important cultural
differences.

8. Data reveal that the Japanese have a substantial net production cost
advantage over the United States for typical subcompact cars. Of this
total, 20% is due to Japanese QC systems (excluding quality circles).
Why do you think this is so? Can the U.S. automakers narrow this gap?
Many of the costs of poor quality are hidden in a) overhead and b)
inventories. These costs are not simply the relatively easy to identify
scrap costs, but also costs for additional compensatory inventory,
rework. storage space, decreased morale, customer perception, and a
host of others. U.S. auto makers have only recently recognized these
costs. Until these true costs of poor quality are addressed, it is unlikely
that U.S. automakers will narrow this gap by very much.
9. What are the three basic concepts for the Taguchi method?
The three basic concepts in the Taguchi method are:
- quality robustness
- quality loss factor
- target specification
10. Why is target-oriented performance better than conformance
oriented performance?
Target-oriented performance is to be preferred over conformanceoriented performance because it tends to produce fewer products
farther from the target.
11. According to the Berry, Zeithaml, Parasuraman study, what are ten
determinants of service quality?
According to Berry, Zeithaml, & Parasuraman, the ten determinants of
service quality are:
- reliability
- responsiveness
- competence
- access

- courtesy
- communication
- credibility
- security
- understanding/knowing the customer
- tangibles
12. What is the quality loss function (QLF)?
The quality loss fraction identifies all costs connected with poor quality
and shows how these costs increase as the product moves away from
being exactly what the customer wants.

Chapter 6
Product Strategy
1. What management techniques may prove helpful in making the
transition from R & D to production?
It may prove necessary to arbitrarily cut off the R & D program and move
into the production phase.
2. Why is it necessary to explicitly document a product?
Explicit documentation accomplishes two things:
a) it provides the information necessary to
Produce the product in the appropriate fashion
b) if the product which we produce does not
perform as we anticipated, the documentation
provides the basis for finding and correcting the
problems in a logical manner
3. What techniques do we use to document a product?

Documentation includes: working drawings, written specifications,

assembly drawings, assembly Charts, route sheets, bill-of-materials, and
process sheets
4. Configuration management has proved particularly useful in what
industries? Why?
Configuration management is a system by which a product's planned
and Changing configurations are managed. Such a system is of
particular value where the product is rapidly and continually evolving, or
where safety is a particular issue. examples of industries which practice
configuration management include those which manufacture airframes
or micro-computers.
5. How does computer-aided design help other departments?
CAD aids other departments by:
a) feeding information forward to such
departments as purchasing, manufacturing, and
technical documentation
b) encouraging integration of information with all
departments of a manufacturing organization
6. What is group technology and why is it proving helpful in our quest
for productivity improvement?
Group Technology is basically a procedure which encourages like
components to be produced by the same process in the same work area.
Successful implementation leads to:
- improved product design
- reduced raw material and parts purchases
- simplified production and planning
- improved routing and machine loading
- reduced tooling setup time, work-in-process
inventory, and production time

- a systematic way to reduce component

proliferation by reviewing existing component
designs to ascertain if an existing component can
be used in a new design
Hams has summarized the major benefits of a well-designed
classification and coding system for group technology as:
a) It facilitates the formation of part families and machine cells
b) It permits quick retrieval of designs, drawings, and process plans.
c) It reduces design duplication.
d) It provides reliable work piece statistics.
e) It facilitates accurate estimation of machine tool requirements and
logical machine loadings.
f) It permits rationalization of tooling setups, reduces setup time, and
reduces production throughput time.
h) It allows rationalization and improvement in tool design.
i) It aids production planning and scheduling procedures.
j) It improves cost estimation and facilitates cost accountings
procedures.
k) It provides for better machine tool utilization and better use of tools,
mixtures, and manpower.
l) It facilitates NC part programming.
7. What savings can be expected by computer-aided design?
CAD produces savings in numerous ways; among them:
a) reducing the amount of time necessary to design a product
b) often developing the data which would otherwise be obtained by
developing a prototype of the product

c) providing a greater variety of design options and the logical

processes needed for their evaluation than would otherwise be available
d) encouraging the implementation of standard designs
e) providing information to be used by other departments in the
production, documentation marketing, costing, etc., of the product
8. How does computer aided design help computer aided manufacture?
a) providing working drawings
b) providing the information needed to develop the tooling for the
machines used to produce the
c) providing the information needed to develop the programs for the
numerically controlled machines used to produce the product
9. What are the four phases of the product life cycle?
The four phases of the product life cycle are:
a) Introduction
b) growth
c) maturity
d) decline
l0. How does product selection (and design) affect quality?
Many quality variables are determined at the product design stage.
Chapter 7
Supplement: Information Technology in P/OM
Discussion Questions:
1. In what kind of situations are expert systems being used?

Expert systems are most reasonably used in situations which require

multiple criteria for management commitment and include relatively
complex relationships, and where the firm wishes to:
- make decisions faster than an expert would be capable of doing
- derive the benefits of having an expert at its disposal without having
the expert present
- equal or surpass, at least in terms of consistency, the human expert
- free the human expert for other work
- disseminate the expert system to those who need it
2. What is the difference between a management information system
(MlS) and a decision support system (DSS)?
There are many differences between a management information system
and a decision support system. The text notes that a management
information system is dedicated to obtaining, formatting, manipulating,
and presenting date/information to managers, while a decision support
system aids managers in modeling and decision-making. Another View
is that the management information system describes the past and
current performance of the organization, while the decision support
system helps one to explore and understand the relationships within the
organization and helps to predict future performance based Upon a
specific set of assumptions, While an MIS is "organization" based, a
DSS may, in the limit, be developed to be used by a single individual to
explore the consequences of making a single decision.
3. Give some recent examples of information technology successfully
applied to new products and new processes in (a) manufacturing and b)
services
Examples of information technology applied to new products and
processes include:
- integration of operations functions within a hotel customer services
within a hotel (billing from the customer's room, etc.)

- use of information technology by drug wholesalers to gather

inventory/ordering information from drugstores and to develop billing
order picking, and shipping information
- use of small, special purpose computers to monitor performance and
troubleshoot automobiles systems
- use by the baseball major leagues of decision support system to
schedule umpires assignments and travel
- use of satellite-based navigation and off course warning systems for
large oil tankers operating in high-traffic waters.
4. Distinguish between flexible manufacturing systems (FMS) and
computer-integrated manufacturing (CIM)
A Flexible Manufacturing System CAMS) is basically a sub-system
within a larger Computer Integrated Manufacturing (CIM) system. A CIM
includes elements of computer-aided design, computer-aided
engineering, computer-aided drafting, production, inventors control,
etc., as well as flexible manufacturing systems.