Assignment # 4

Q. 1 Can an organization's plans for vertical integration be supported by the tools of make-or-buy
analysis? Explain; provide an example.
Answer:
Yes; the decision to acquire the provider of an upstream operation is the same as choosing to make
whatever has been provided. Not to acquire is the equivalent of "buy." The analysis also holds for
downstream operations: the acquisition of a delivery fleet is equivalent to "make" in the downstream
operation of distribution.
Q-2. When comparing a 70% learning curve versus a 90% learning curve, which one results in a more
rapid reduction in labor requirements? Why?
Answer:
Learning curves are defined in terms of the complements of their improvement rates. A 70% learning
curve implies a 30% decrease in time each time the number of replications is doubled. A 90% learning
curve implies a 10% decrease in time each time the number of replications is doubled. Therefore, the
reduction in labor requirements is more rapid at 70% than at 90%.
Q-3. Your firm has a contract to make 20 specialty lenses for night vision equipment. The first one took
40 hours. Learning is expected at the 85% rate. How long will it take to finish all 20 units?
Answer:
The best solution method uses Table E.3. For 85 percent learning, total time for 20 units, the table factor
is 12.402. Total time for all 20 units is 12.402 * 40 = 496.1 hours.
Q-4. It is said that job expansion has both a vertical component and a horizontal component. Explain,
with reference to such terms as job enrichment, job rotation, job enlargement, and employee
empowerment.
Answer
Vertical expansion gives employees more planning and/or control over their work, which is job
enrichment. Horizontal expansion adds tasks, through job rotation or job enlargement. Job enrichment
relates primarily to increasing the cognitive or intellectual requirements for the job. 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.
Employee empowerment is the practice of enriching jobs so that employees accept responsibility for a
variety of decisions normally associated with staff specialists.