Full Name: Vũ Thị Hoàng Diệu

ID: 20198064
INDIVIDUAL ASSIGNMENT 1

CHAPTER 1: OPERATIONS AND PRODUCTIVITY

1. Why should one study opearations management?
Four reasons to study operations management:
- We study how people organize themselves for productive enterprise. OM is one of the three major functions of any organization
(Marketing; Production operations; Finance/Accounting) and it related to all the other business functions. All organizations
market (sell), finance (account) and produce (operate) and it is vital to know how the OM activity functions.
- We want to know how goods and services are produced.
- We understand what operations managers job. If you understand what operations managers do, you can perform better
regardless of your job in an organization. In addition, understand OM help you explore the numerous and lucrative (béo bở)
career chances in the field.
- OM is such a costly part of an organization. A large revenue of most firms is spent in the OM functions. OM provides a major
opportunity for an organization to improve its profitability via the production function.

7 . Identify the 10 stragic operations management decisions.

Decision
1 Design of goods and services
2 Managing quality
3 Process and capacity strategy
Function
Product design usually determines the lower limits of cost and the upper limits
of quality, as well as major implications for sustainability and the human
resources required.
Determines the customer’s quality expectations and establishes policies and
procedures to identify and achieve that quality.
Determines how a good and service is produced and commits management to
specific technology, quality, human resources and capital investments that
determine much of the firm’s basic cost structure.
 Requires judgments regarding nearness to customers, suppliers and talent while
4 Location strategy
considering costs, infrastructure, logistics and government.
Requires integrating capacity needs, personnel levels, technology and inventory
5 Layout strategy requirements to determine the efficient flow of materials, people and
information.
Human resources and job Determines how to recruit, motivate and retain personnel with the required talent
6
design and skills.
Decides how to integrate the supply chain into the firm’s strategy, including
7 Supply chain management decisions that determine what is to be purchased, form whom and under what
conditions.
Considers inventory ordering and holding decisions and how to optimize them
8 Inventory management as customer satisfaction, supplier capability and production schedules are
considered.
Determines and implements intermediate and short-term schedules that
9 Scheduling effectively and efficiently utilize both personnel and facilities while meeting
customer demands.
Requires decisions that consider facility capacity, production demands and
10 Maintenance
personnel necessary to maintain a reliable and stable process.

12. What are the five reasons productivity is difficult to improve in the service sector?
1. Typically labor intensive (teaching…)
2. Frequently focused on unique individual attributes or desires (investment advice…)
3. Often an intellectual task performed by professionals (medical diagonsis…)
4. Often difficult to mechanize and automate (beauty care…)
5. Often difficult to evalute for quality (performance of law firm…)
1.8 Lillian Fok is president of Lakefront Manufacturing a producer of bicycle tires. For makes 1,000 tires per day with the following
resources:
Labor 400 hours per day @ $12.50 per hour
Raw material 20,000 pounds per day @ $1 per pound
Energy $5,000 per day
Capital costs $10,000 per day

a) What is the labor productivity per labor-hour for these tires at Lakeforn Maufacturing?

1000 𝑡𝑖𝑟𝑒𝑠 𝑝𝑒𝑟 𝑑𝑎𝑦

𝑙𝑎𝑏𝑜𝑟 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦 = = 2.5 𝑡𝑖𝑟𝑒𝑠 𝑝𝑒𝑟 𝑙𝑎𝑏𝑜𝑟 − ℎ𝑜𝑢𝑟𝑠
400 ℎ𝑜𝑢𝑟𝑠 𝑝𝑒𝑟 𝑑𝑎𝑦
b) What is the multifactor productivity for these tires at Lakeforn Maufacturing?

1000 𝑡𝑖𝑟𝑒𝑠 𝑝𝑒𝑟 𝑑𝑎𝑦

𝑚𝑢𝑙𝑡𝑖𝑓𝑎𝑐𝑡𝑜𝑟 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦 = = 0.0251 𝑡𝑖𝑟𝑒𝑠 𝑝𝑒𝑟 𝑑𝑜𝑙𝑙𝑎𝑟
400 × $12.05 + 20,000 × $1 + $5,000 + $10,000

c) What is the percent change in multifactor productivity if Fok can reduce the energy bill by $1,000 per day without cutting
production or changing any other inputs?

 If Fok can reduce the energy bill by $1,000 per day:

1000 𝑡𝑖𝑟𝑒𝑠 𝑝𝑒𝑟 𝑑𝑎𝑦
𝑚𝑢𝑙𝑡𝑖𝑓𝑎𝑐𝑡𝑜𝑟 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦 = = 0.0257 𝑡𝑖𝑟𝑒𝑠 𝑝𝑒𝑟 𝑑𝑜𝑙𝑙𝑎𝑟
400 × $12.05 + 20,000 × $1 + $4,000 + $10,000

0.0257 − 0.0251
The percent change of multifactor productivity: = 0.023 𝑜𝑟 2.3%
0.0251

1.15 In December, General Motors produced 6,600 customized vans at its plant in Detroit. The labor productivity at this plant is
known to have been 0.10 vans per labor-hour during that month. 300 laborers were employed at the plant that month.
a) How many hours did the average laborer work that month?
𝑙𝑎𝑏𝑜𝑟 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦 = 0.01 𝑣𝑎𝑛𝑠 𝑝𝑒𝑟 𝑙𝑎𝑏𝑜𝑟 − ℎ𝑜𝑢𝑟
 𝑢𝑛𝑖𝑡𝑠 𝑝𝑟𝑜𝑑𝑢𝑐𝑒𝑑 = 6,600 𝑣𝑎𝑛𝑠
6,600
=> 𝐼𝑛𝑝𝑢𝑡 𝑙𝑎𝑏𝑜𝑟 ℎ𝑜𝑢𝑟𝑠 𝑢𝑠𝑒𝑑 = = 66,000
0.10
66,000
300 𝑙𝑎𝑏𝑜𝑟𝑒𝑟𝑠 𝑤𝑒𝑟𝑒 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑑 => 𝑇ℎ𝑒 𝑎𝑣𝑒𝑟𝑎𝑔𝑒 ℎ𝑜𝑢𝑟𝑠 𝑙𝑎𝑏𝑜𝑟𝑒𝑟 𝑤𝑜𝑟𝑘𝑒𝑠 𝑡ℎ𝑎𝑡 𝑚𝑜𝑛𝑡ℎ = = 220 ℎ𝑜𝑢𝑟𝑠 𝑝𝑒𝑟 𝑙𝑎𝑏𝑜𝑟𝑒𝑟
300

b) If productivity can be increased to 0.11 vans per labor-hour, how many hours would the average laborer work that month?
𝑙𝑎𝑏𝑜𝑟 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦 = 0.11 𝑣𝑎𝑛𝑠 𝑝𝑒𝑟 𝑙𝑎𝑏𝑜𝑟 − ℎ𝑜𝑢𝑟
𝑢𝑛𝑖𝑡𝑠 𝑝𝑟𝑜𝑑𝑢𝑐𝑒𝑑 = 6,600 𝑣𝑎𝑛𝑠
6,600
=> 𝐼𝑛𝑝𝑢𝑡 𝑙𝑎𝑏𝑜𝑟 ℎ𝑜𝑢𝑟𝑠 𝑢𝑠𝑒𝑑 = = 60,000
0.11
60,000
300 𝑙𝑎𝑏𝑜𝑟𝑒𝑟𝑠 𝑤𝑒𝑟𝑒 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑑 => 𝑇ℎ𝑒 𝑎𝑣𝑒𝑟𝑎𝑔𝑒 ℎ𝑜𝑢𝑟𝑠 𝑙𝑎𝑏𝑜𝑟𝑒𝑟 𝑤𝑜𝑟𝑘𝑒𝑠 𝑡ℎ𝑎𝑡 𝑚𝑜𝑛𝑡ℎ = = 200 ℎ𝑜𝑢𝑟𝑠 𝑝𝑒𝑟 𝑙𝑎𝑏𝑜𝑟𝑒𝑟
300

CHAPTER 4: FORECASTING
4.26 George Kyparisis owns a company that manufactures sailboats. Actual demand for George’s sailboats during each of the past
four seasons was as follows:
George has forecasted that annual demand for his sailboats in year 5 will equal 5,600 sailboats. Based on this data and the multiplicative
seasonal model, what will the demand level be for George’s sailboats in the spring of year 5?
Solve:
YEAR
SEASON 1 2 3 4 Average period Average seasonaly Seasonal index
demand demand
Winter 1,400 1,200 1,000 900 1,125 1,250 0.9 (=1,125/1,250)
Spring 1,500 1,400 1,600 1,500 1,500 1,250 1.2 (=1,500/1,250)
Summer 1,000 2,100 2,000 1,900 1,750 1,250 1.4 (=1,750/1,250)
Fall 600 750 650 500 625 1,250 0.5 (=625/1,250)

1,125 + 1,500 + 1,750 + 625

𝑇𝑜𝑡𝑎𝑙 𝑎𝑣𝑒𝑟𝑎𝑔𝑒 𝑎𝑛𝑛𝑢𝑎𝑙 𝑑𝑒𝑚𝑎𝑛𝑑 = = 1,250
4
George has forecasted that annual demand for his sailboats in year 5 will equal 5,600 sailboats:
Season Demand
Winter 5,600
= × 0.9 = 1,260
4
Spring 5,600
= × 1.2 = 1,680
4
Summer 5,600
= × 1.4 = 1,960
4
Fall 5,600
= × 0.5 = 700
4

 The demand level be for George’s sailboats in the spring of year 5 is 1,680.