Jennylyn Caspillo BSHM 2-A

BA 217

Operation Management with TQM

Mary Jovelyn F. Abang

Chapter Test 1

1. Identify the three major functional areas pf business organization and briefly describe how they
interrelate.

The three primary functions are operations, finance, and marketing. Operations is concerned with the
creation of goods and services, finance is concerned with provision of funds necessary for operation, and
marketing is concerned with promoting and/or selling goods or services.

2. Briefly discuss each of these terms related to the historical evolution of operations management:

A. Industrial Revolution - Industrial Revolution, in modern history, the process of change from an
agrarian and handicraft economy to one dominated by industry and machine manufacturing. This
process began in Britain in the 18th century and from there spread to other parts of the world.

B. Scientific Management - Scientific management is a theory of management that analyzes and

synthesizes workflows. Its main objective is improving economic efficiency, especially labor productivity.
It was one of the earliest attempts to apply science to the engineering of processes to management.

C. Interchangeable Parts - Interchangeable parts are parts (components) that are, for practical purposes,
identical. They are made to specifications that ensure that they are so nearly identical that they will fit
into any assembly of the same type. One such part can freely replace another, without any custom
fitting, such as filing.

D. Division of Labor - Division of labour, the separation of a work process into a number of tasks, with
each task performed by a separate person or group of persons. It is most often applied to systems of
mass production and is one of the basic organizing principles of the assembly line.

3. Discuss the term sustainability, and its relevance for business organizations.
Sustainability is a business approach to creating long-term value by taking into consideration how a
given organization operates in the ecological, social and economic environment. Sustainability is built on
the assumption that developing such strategies foster company longevity.

Chapter Test 2

1. Productivity should be a concern of every business organization.

A. How is productivity defined?

Productivity is commonly defined as a ratio between the output volume and the volume of inputs. In
other words, it measures how efficiently production inputs, such as labour and capital, are being used in
an economy to produce a given level of output. Productivity describes various measures of the efficiency
of production. Often, a productivity measure is expressed as the ratio of an aggregate output to a single
input or an aggregate input used in a production process, i.e. output per unit of input, typically over a
specific period of time.

B. How is productivity measures used?

One of the most widely used measures of productivity is Gross Domestic Product (GDP) per hour
worked. This measure captures the use of labour inputs better than just output per employee.Measured
productivity is the ratio of a measure of total outputs to a measure of inputs used in the production of
goods and services. Productivity growth is estimated by subtracting the growth in inputs from the
growth in output — it is the residual. There are a number of ways to measure productivity.

C. Why is productivity important?

With growth in productivity, an economy is able to produce—and consume—increasingly more goods

and services for the same amount of work. Productivity is important to individuals (workers and
consumers), business leaders, and analysts (such as policymakers and government statisticians).
productivity growth is important because providing more goods and services to consumers translates to
higher profits. As productivity increases, an organization can turn resources into revenues, paying
stakeholders and retaining cash flows for future growth and expansion.
D. What part of organization has primary responsibility for productivity?

Operations has primary responsibility for productivity. Operations management is responsible for
managing the transformation of numerous inputs into a range of outputs, such as goods or services.

E. How is efficiency different from productivity?

Efficiency relates to a fixed set of tools or conditions. Productivity is wider in scope. Efficiency can be
improved by better use of existing labor and equipment. Productivity can be improved by changing work
methods, but also by changing equipment or conditions. The example of cutting grass with a pair of
scissors is a good one: An efficiency approach would focus on the best way to use the scissors; a
productivity approach would focus on use of a lawn mower. Note: Use of a mower, while more
productive than the use of scissors, still may have room for improvement in its efficiency.

2. How can technology improve

A. Competitiveness - The degree to which a company has a top management with a technical
orientation, selection criteria that support and maintain technology, and systems and structures that
reinforce the company’s technological orientation places that company on a continuum from high to low
exploitation of technology. Technology affects the value activities themselves or allows campanies to
gain competitive advantage by exploiting changes in competitive scope.

B. Productivity - Technology can help to organize every task that you need to complete and improve
productivity along the way. Technology will minimize your employees taking unnecessary steps or
getting overwhelmed with all the tasks they have to complete. Technology improves more effective
productivity, it allows teams streamline and customize workflows. It increases and enhances
collaboration, in enbales the automation of manual tasks and promotes higher value work and also it
increases employee engagement.

Chapter Test 3

1. Define forecasting, and axplain it briefly and concise.

 Forecasting is the process of making predictions based on past and present data and most commonly
by analysis of trends. A commonplace example might be estimation of some variable of interest at some
specified future date. Prediction is a similar, but more general term.

2. What are some of the benefits of good forecast? Explain.

Forecasting. Or, in other words, the ability to see into the future and make educated predictions about
any number of production elements such as material sourcing, job allocation, transport logistics, and
more. In fact, forecasting is such an increasingly valuable proposition for manufacturing companies that
a 2016 study by Gartner indicated forecasting (and the accuracy there of) and demand variability were
two of the greatest obstacles manufacturing companies encounter when overseeing their supply
streams.

In addition, this same report indicated accurate forecasting was one of the top most priorities for
manufacturing companies as modern manufacturing continues to develop, diversify, and expand to new
regions of the world. Whether you’re concerned with demand forecasting (projections based on current
industry demand or level of use for a given product) or supply forecasting (data about current
production trends and the factors that might influence or impact these trends), companies need to be
aware of how and why forecasting is such a critical operations.

3. Contrast the reactive and proactive approaches to forecasting. Give several examples of types of
organization or situations in which type is used.

A proactive approach focuses on eliminating problems before they have a chance to appear and a
reactive approach is based on responding to events after they have happened. The difference between
these two approaches is the perspective each one provides in assessing actions and events.

Chapter Test 4

1. Explain the term "three Rs" and how the three Rs relate to sustainability.

The three R's – reduce, reuse and recycle – all help to cut down on the amount of waste we throw
away. They conserve natural resources, landfill space and energy. Plus, the three R's save land and
money communities must use to dispose of waste in landfills.
2. What are some of the factors that cause organizations to redesign their products or services?

Organizations redesign their products and services for a variety of reasons. Among them are customer
dissatisfaction, government regulation, competition, liability claims, technological innovation (products
and methods), and changes in costs and availability of such inputs as materials, labor, and energy.

3. Explain the importance of service blueprinting and create/research an example of your choice.

A blueprint enables you to design with the big picture in mind. In this way, you can ensure you reach
every milestone and build consistency throughout the curriculum — even when faced with uncertainty
in the project. A blueprint is defined as a copy of a building or engineering plan, reproduced with white
lines on a blue background, or detailed plan of action. An example of a blueprint is a construction
worker's diagram of building plans for a new home.

Chapter Test 5

1. In your own opinion, how do capacity decisions influence productivity?

Capacity designs establish constraints within which operations must function. Matching process
capabilities with product requirements can provide insights to those making process selections as well as
to those managing existing operations.

2. List and briefly explain three factors that may inhibit capacity utilization.

Design capacity - This process may inhibit capacity utilization due to the output rate a facility can handle
because of what the facility is designed for.
Effective capacity - This process can also contribute to capacity utilization when there are internal
problems for example scheduling or balancing operations and prioritizing tasks throughout the facility.

Actual output - Examples of this are having QC problems with the product that’s being produce. Also
having the man power and having shortages of material. These are situation that operation manager has
no control of this occurrences

3. Briefly exlain what bottleneck operation all about.

Bottleneck Operation is a process or a step that limits an entire system's capacity to produce at its
optimum level that results in clogging productivity, profitability, and growth. This is also called
“throughput.”