(1) Explain the role of operation strategy in a business.

An operations manager fills a pivotal role in a business, government or other

organization. The precise tasks of an operations manager depend in large part upon the
nature and size of the enterprise, but she needs a wide range of business and interpersonal
skills to succeed. In general, an operations manager plans, oversees and smooth’s
communication.

Management of Resources

Operations managers play a leading role in managing both raw materials and personnel.
Oversight of inventory, purchasing and supplies is central to the job. Human resources tasks
include determining needs, hiring employees, overseeing assignment of employees and planning
staff development.

Financial Management

Operations managers play a key role in budgeting, controlling costs and keeping the
organization on track financially. Their management of the supply chain and other resources
helps minimize costs of production. They study business forecasts, sales reports and financial
statements to find ways to maximize results. They use methods such as cost-benefit analysis to
improve efficiency. Modern operations management even includes sustainability in the financial
equation.

Goal-setting

Operations managers set goals and objectives and establish policies for various
departments in the organization. For example, operations manager duties include sales
forecasting and planning of sales promotions. In cooperation with other managers, they help
establish procedures and put them into effect.
Communications

Operations managers need good communication and interpersonal skills to help the
different parts of an organization work together. Their job includes creating a positive culture
where the work can get done. They facilitate communication between employees and
departments. At times, operation managers help resolve disputes or disagreements. Operations
managers cooperate in high-level decision making with other top executives of an organization,
such as the president, chief financial officer and chief executive.

Salary

Operations and general managers averaged an annual income of $113,100 in 2010,

according to the Bureau of Labor Statistics. Managers at the 10th percentile received $47,280 per
year, while those at the 75th percentile got $142,030 per year. The government does not report a
specific figure at the 90th percentile, stating only that it was at least $166,400 annually.

Education and Outlook

Most operations managers have a minimum of a bachelor's degree in business, finance or

another field relevant to the organization. Some have a master's in business administration or
other advanced degree. The number of positions for operations managers will remain unchanged
from 2008 to 2018, according to the Bureau of Labor Statistics. As existing operations managers
move to similar positions in different organizations, new applicants will face strong competition.
Those with good leadership skills, a proven ability to get results and foreign language skills have
the best chances of securing jobs.
 (2) (a) Describe the meaning of productivity with suitable examples.

Productivity
Sha

What it is?

Productivity refers to the measure of output (e.g. products) from a production process
per unit of input (e.g. labor and capital).

Productivity — and all it includes — is something we’ve become virtually obsessed with.
Oh, productivity itself isn’t a new idea. In fact, the concept of productivity has been around for
as long as production has been around, so, arguably, since humans first figured out how to stick a
seed in dirt and produce a crop.

Productivity in business became an important, ongoing discussion with industrialization.

Making labor — both human and machine driven — more efficient became an important goal,
because more efficient labor meant more profits. (There are a whole host of side issues that
developed from this increasing issue with labor productivity, but we’ll save those for another
time.)

Business, or economic, productivity continued to be developed and refined through the

second Industrial Revolution, the Second World War, major technological advancements, and
economic globalization. But productivity has also become something much more individual; it’s
become a personal pursuit.

With the technology we use today, we have unlimited information and unlimited
accessibility. That’s great, on many levels, but it also leads to overload: the world is at our
fingertips, literally, every moment. For people prone to distraction and procrastination (read:
every person), the digital age quickly turns into the unproductive age.

Hence the rise of our personal productivity pursuits, in the form of books, blogs, apps,
and all the advice you could ever want. It’s an important pursuit. We’ve lost the boundaries that
used to separate work from personal life that used to limit our options and define our roles. These
are great advancements, but they bring the necessity of building our own filters and boundaries.
If we want to create value in a world of unlimited options, we have to learn to be productive.
HOW IT WORKS (EXAMPLE):

Productivity is usually expressed as a ratio of output to inputs. It can be expressed as

units of a product (e.g. cars) per worker-hour (total number of hours worked by all workers on
that car). Given the cost of the worker-hour, productivity can also measure the efficiency of a
company.

These measures are quantitative and relatively easy to measure. However,

other factors of productivity, such as creativity, innovation, teamwork, and even quality are
qualitative and more difficult to measure.

But first, we have to figure out what we really mean by productive.

Is it better time management you’re after? Or a clarification of your goals? Or something

completely different? Productivity is a big concept. It covers a lot of areas. In order to get the
most from your pursuit of productivity, you need a deeper, more specific definition of
productivity.

Let’s take a look.

1. The Business Definition of Productivity

Defining productivity for business really means talking about productivity in economic terms.
And that’s the history of productivity. All our personal, subjective ideas of what it means to be
productive are spin-offs of a very pragmatic, numbers-based definition of productivity.
Here's how Thanh Pham from Asian Efficiency describes it:

There is another definition used in economics that is important to know. In simple

economic terms, productivity means the output you get per input given. For example, if I give
you 5 apples and you give me 1 liter of apple juice, your productivity is 1 liter per 5 apples.
However, if someone else can get 1 liter of apple juice with 4 apples, then that person is more
productive. It takes that person fewer apples to create the same amount of apple juice.
The metric used in this economics example (as you probably have seen in your economics class
in college) is: Productivity = Output / Input.
That’s the basic business, or economic, definition of productivity. Improving productivity
in the business sense means either a) increasing output relative to input or b) decreasing input
relative to output. You’ll hear this discussed in business terms with phrases like “reducing our
overhead,” “increasing our profit margin,” “cutting down expenses,” “improving our bottom
line,” and “being more efficient.”

2. The Personal Definition of Productivity

The first thing we should look at is how fluid, subjective, or random productivity can
sound when we’re discussing it in personal terms.

Definitions Are Arbitrary As Chris Bailey says at A Life of Productivity,

Productivity means something different to everyone.

One person may define being productive as earning a killing a their job while leading a
team of several hundred employees, while another person may see productivity as retiring at 30
and voluntarily living simply for the rest of their life.
Likewise, one person may define productivity as getting a lot of stuff done in a lot less
time, while another may define productivity as taking their time and deliberately trying to do the
best work they can.

Personal Isn't Personal

The second point to mention here is that “personal” is a bit of a misnomer.

For many who pursue better personal productivity, the goal is greater productivity in
work. We want to be better at what we do, get more done in less time, be able to stay focused on
our most important work, and learn how to handle the flood of information and accessibility
without losing progress on our projects.

The tools we need to achieve all those goals are personal productivity skills: individual systems,
abilities, and behaviors that enable us to manage all of the demands and options and keep getting
stuff done.

Of course, you can apply your personal productivity skills in any area of life: relationships,
hobbies, finances, housekeeping, parenting, so on.

Value vs. Output

My favorite definition of personal productivity is this one, from Steve Pavlina:

Productivity = Value / Time (productivity equals value divided by time)

It’s really simple, and really similar to the economic definition. Instead of output, though,
we’re measuring value. And instead of input, we’re measuring time: that’s because, for most of
us who are pursuing personal productivity, time is both our primary power and our primary
limitation. Pavlina goes on to talk about how we can understand and measure value:

What is the “value” in our productivity equation?

Value is a quality you must define for yourself. Hence, any definition of productivity is relative to
the definition of value.
Pavlina defines value as a product:

Value = Impact x Endurance x Essence x Volume

And therefore:
Productivity = Impact x Endurance x Essence x Volume / Time

3. Bringing It All Together

While the business definition of productivity gives us a good starting point, it’s not quite
enough for a meaningful, daily understanding of productivity.

We need to think about the value of what we’re doing rather than just thinking of our
output in general. Otherwise, we can all work hard to get really efficient at doing meaningless
stuff. If you’ve ever spent hours tweaking some tiny corner of your life, like email management
or your menu planning, only to emerge from that productivity rabbit hole and realize it’s had no
significant impact on your life, overall, you know what I mean.

It’s not that improving the details and daily habits is bad; in fact, the small things and the
daily routines can make or break us. But we need to give appropriate effort to appropriate
endeavors. Feeling more in control of things, temporarily, because you’ve color-coded your files
isn’t as good as being more in control, ultimately, because you’ve learned how to set good
priorities and handle distractions.

If it’s a sad thing to waste your time, how much worse is it to waste your life? You avoid
wasting your time—and life—on meaningless outputs by thinking of the value of what you do,
not just how efficiently you do it.

Our Working Definition of Productivity

A cohesive definition of productivity, then, is one that considers both the economic side
and the ‘personal’ side. I think of it this way:

Productivity = Valuable output / Time and resource inputs

4. Basic Productivity Principles

Now that we have a working definition, let’s take a look at the foundational principles of
productivity.

Start with Priorities

You can go deep and wide with productivity, but you need to get some basics in order
first. If you're going to increase your valuable output, for example, you need to know what it is.
So sorting all the tasks and possibilities into a set of priorities is an important first step.

There are many ways to prioritize. David Masters covers the process and a few different
strategies in his to-do list tutorial, and Lisa Jo Rudy explains how to use Pareto Analysis for
setting priorities.
 (b) What is the importance of productivity to a company?

Business Productivity is the ability of an organization to utilize its available resources in

order to produce profitable goods or services as desired by customers or clients. It is the
productivity that measures the performance of an organization, and it can also be used for
companies themselves in order to assess their own progress. The importance of productivity in
business can be summarized as follows.

Productiveness increases the overall efficiency of an organization. When the efficiency of

the organization increases, the production capacity of the company is utilized to the optimum
level. Thus, all resources are used in an effective and efficient manner to get the best possible
results. As is often indicated by business, the more products you make, the lower your
overhead, and the higher your profits.

Enhanced production lowers the cost per unit of a product which in turn, results in lower
prices for better quality, which enhances a business’ competitiveness in the market. In the
current turbulent world, every organization faces stiff competition from their counterparts.
Hence, lower prices as a result of enhanced production give an edge to businesses to sell
products at more competitive prices. If the rates are competitive, the business is in a better
position to attract more customers and make more sales. This is the primary motive of any
business organization.

Increased production due to efficient utilization of organizational resources leads to a

lower cost production resulting in better sales and profits. If the profits of an organization
shoot up, it increases the confidence of investors in the organization. Moreover, the share
value of the company increases. Due to this, the reputation and goodwill of the organization
increases.

Similarly, the business can share a portion of its profits as a result of enhanced production
with its employees. This boosts the morale of the employees as they get to enjoy a part of the
profits and the satisfaction of a job well done. As a result, their working efficiency tends to
increase which in turn, further increases the production of the company. As you can start to
see, there is a snowball of business success that starts with increased productivity.

Productivity is much more important than revenues and profits of the organization
because profits only reflect the end result whereas productivity reflects the increased
efficiency as well as effectiveness of business policies and processes. Moreover, it enables a
business to find out its strengths and weaknesses. It also lets the business easily identify threats
as well as opportunities that prevail in the market as a result of competition and changes in
business environment.

A company can increase its own business productivity by making suitable changes in its
business process and policies in order to improve the weak areas and capitalize on strengths
for betterment. Similarly, an organization can formulate strategies to turn threats in to
opportunities. This results in increased profitability and stability which is vital for the
continued success of any business organization.

The importance of productivity can never be ignored by any diligent business owner.
Successful ventures are often those that give priority to productivity compared to solely
looking into revenues and profits of the company. On the other hand, businesses that do not
pay attention to productivity pay a huge price in terms of reduced production and high cost of
production, resulting in reduced sales and low profits. Thus, a productivity level can be
considered a measure of success or failure for any business.
 (3) Describe each stages of the product life cycle. What are the demand characteristics
of each stage?

Just like a human every brand and product has also its lifetime in this world. Some brands are
born for a very short time period and people may be customers or competitors rejected them and
compelled them to die.

For instance, a social community website “ORKUT” that almost quit from the market due to
its weak strategies and strong competitors like Facebook and Twitter. But some brands live a
long lasting life that never ends like Pepsi and Coke.

Product life cycle consists of different stages that a product or brand must occupy in its life.
There is a chance of missing one or more stage in product life cycle i.e. one product can be
directly shifted from introduction stage to decline. Market rejects these products and compels to
die.

There are five stages in Product Life Cycle:

1. Product Development or Research and Development Stage Introduction Stage

2. Growth Stage
3. Maturity Stage
4. Decline Stage
All the stages are explained below:

Product Development or Research and Development Stage

This is the pre-lunched and very beginning stage of any product or brand. In this stage, a
product is on the table of experiment and research.

Manufacturers, at this stage, try to make the product according to customers need. Initial
work is done on this stage and research and development that may any product need also done in
this stage.

Very heavy cost occurs in this stage and manufacturer bear the only loss in this stage.
This is not the actual loss but this is a pre-lunched expenditure. But if a product fails in this stage
then all the expenditure turned into a loss.

On the graph, Redline is showing sales made by that particular product or brand and in
this stage sales line is on the X-axis and also parallel to X-axis it means in this stage product
never make any sale as this is the pre-lunched stage of product life cycle.

The blue line which is representing profit is below the X-axis which means the product is
not earning profit it is in the loss.

In this stage, company tries to hide all the information regarding the product from the
market and its competitors because it is too dangerous for one company to spread product’s
information before it launching.

No marketing and advertising expense made on this stage because of secrecy. All the cost
spend on this stage is development and research cost.

Introduction Stage

This is the second stage of product life cycle. After the pre-launched step, product
development, this is the after launching step.

In this step, company launch its product in the market and start selling it. Now the
product is available in the market to all customers.

In this stage, a company tries to invest heavy budget on marketing and advertising on the
product because this is the first step of product in the market and product needs advertisement
and promotions.
 In this stage company also bears more cost because of advertisement and marketing
activities regarding the product.

Although product available in the market and also starts selling but revenue is not enough
to cover all the expenditure so we can say that product starts covering it's all expenditures and
cost.

In the graph, the red line is just above the X-axis which means it just starts it selling and
with the passage of time it will make more and more sale.

And the blue line representing profit is below the X-axis which means no profits earn in
this stage and all the sales are now covering the previous cost.

Growth Stage

After the introduction of the product in the market, the company knows the response of
customer toward its product.

If the company found customers are appreciating its product and purchasing more units
than the product is shifting itself into next stage” Growth stage”.

Growth is the third stage of product life cycle. In this stage company also make the heavy
investment in advertising and marketing of product because the competition is high and product
needs some support from the company in term of advertising.

For becoming no 1 product in the market, manufacturer try to invest more money on the
product but the product also returns to the company.

Now the product is filmier with the market and everyone knows about it. So the product
is now earning the profit for its owner.

In the graph, the red line is now vertically going upward which means the product is now
on the road. The product is generating more revenue and covering it all cast.

Blue line representing profit ratio earned by the brand is now getting above the X-axis
and representing huge profit.

Now the product is in its profit phase. All the expenditure is covered and product is now
bearing cost by itself.

With comparison to introducing stage, growth time period is a little bit short. If market
accepts it then product will quickly pass into growth stage.

With proper backup and support in terms of advertisement, promotions, and marketing
related activities, the product will quickly reach in next era.
Maturity Stage

After growth stage, next stage is maturity stage. The product is mature and very much
familiar with market conditions and on top position. In the maturity stage, product enjoys its high
market share and cashing brand name.

In this stage low investment required for advertisement and promotions because everyone
knows about product and ad displays just for exposure and support.

Now the product is earning a high profit and on its peak time. Market conditions are
mature. Competitors also know about product market share. Graph showing red line parallel to
X-axis but the distance from X-axis is very high. In this stage, the red line remains constant and
no variations occur in the graph.

The blue line which is representing profit is same with sales line but distance with X-axis
is low because profit cannot increase from sales. Profit line is on the peak and horizontal. This is
the last stage of gaining more market share. The product now cannot gain more market share
each and every activity done just for sustaining market share.

Decline Stage

Everything in this world has to die. Here die means quitting from the market. The
product, after long time enjoying profit and sales, goes down in the market.

There may be many reasons for it i.e. technology can be changed and new technology can
make a good product as compare to previous so in this stage, customers change their preferences
and shift to other product. Sales go down and profit also.

No need to invest more money on the product at this stage. You will definitely not waste
your 10 dollars to save your one dollar. Yes, manufacturers try to make other product more
efficient and more attached with customer’s needs.

Redline, on the graph, is now going down which means losing it sales which represent
losing market share. And the same thing happened with the blue line.

Different stages of the product lifecycle represent different activate. it is not necessary
that every product goes in the decline stage and then quit the market.

There are numerous products those are in the maturity stage and continue it i.e. Pepsi
cola, Coke, Nestle brand and much more.
All stages have their own strategies and marketing Mix. With the help of above picture, you can
easily understand what a product need in one stage.

4. Name three service companies and describe their service package.

What is meant by the term service package?

Service package refers to the group of features that comprise the service. The three elements of
the service package are the physical goods, benefits related to the senses, such as taste and smell,
and psychological benefits.

Let’s look at the three service companies of McDonald’s, Border’s bookstore and
Disney theme parks.

At McDonald’s, the physical goods are the food, as well as the functional seating, along
with the play area for children. The sensual benefits are the consistent taste of the food and
the sound of happy children. The psychological benefits are quick food and a more relaxing
time for parents since kids can occupy themselves with the Happy Meal and/or play area.

At Border’s, the physical goods are the books, café items and places to read and/or chat.
The sensual benefits are the smell of the café items and the sight of interesting things to read.
The psychological benefits are the comfort and status of the experience.

At Disney, the physical goods are the rides, shows, restaurants, gift shops, etc. The
sensual benefits are the sight of cartoon characters, sounds of the experience, and feel of the
rides. The psychological
 (5) (A) Describe the TQM philosophy and identify its major characteristics.

TQM focuses on identifying the causes of quality problems and correcting these
problems. TQM emphasizes the need to include every employee in the organization in the
quality improvement efforts. TQM emphasizes the need to define quality based on the
customer’s needs.

Its major characteristics are customer focus, continuous improvement, and quality at the
source, employee empowerment, understanding quality tools, and a team approach,
benchmarking and managing supplier quality.

The essential characteristics of an effective TQM system are:

1. Every company member, from the CEO to the lowest level employee, is focused on product
or service quality. If management is not behind TQM, then it will fail.

2. Everyone must have the required training and be familiar with the necessary TQM
techniques.

3. Anyone can suggest areas for improvement - as general operatives will be more familiar with
their work station than anyone else is, valuable ideas for improvement at a production line
level can, in many cases, come from line workers.

4. All departments are expected to focus on quality and productivity improvement and
implement changes for their area.

5. In addition, all departments interact with each other to fix common problems in the product
or process.

6. Collaboration on external issues (end-user defects for example) is expected from all
departments.

7. Decisions made are based on the best solutions, not on hidden agendas or favoritism.

8. Quality becomes a governing part of operations, with decisions that impact on quality,
rejected immediately, despite perceived cost-savings involved.
An effective TQM implementation will result in:

 Highly trained management (as training is mandatory for effective company-wide

transformation).

 An effective change management process.

 Continuous improvement programs.

 An ability to handle changing market requirements at short notice.

 A system that can pinpoint negligence with corresponding penalties (including termination of
employment) for deliberate offenses that impact on process or product quality.

Benefits and Conclusion

The benefits of TQM can be classified into two separate areas: those that relate to customer
satisfaction and those that reduce company expenditure (although of course these can overlap in
some cases).
(B) Describe the four dimensions of quality. Which do you think is most important?

The four dimensions of quality are the quality of product or service design, quality of
conformance to design, ease of use and post-sales service. The quality of product or service
design is determined by the features that are included in the final design of the product or
service.

For example:

1. Quality of design

This is determined before the product/service is produced through market research,

design
Concept and specifications. Market research assesses the customer’s needs. A design concept
is developed to meet those needs. The design specifications is developed to identify what the
customer is going to get out of the product/service.

Costco's quality of design:

1. High quality items

2. Brand name products in bulk

3. Great value for money

4. Fresh foods/produce

5. Reputation of high customer satisfaction

2. Quality of Conformance

This is the means of producing a product to meet the specifications. When a product
conforms to specifications, operations considers it a quality product regardless of the quality
of the design specifications.
 Costco has high quality of conformance as they meet to a high degree, the design
specifications. Their ‘smart packaging’ and purchasing items in large volumes translates into
competitive prices creating value for customers. There are many product/service categories
including fresh foods, pharmacy, and jewelry. All Costco locations have a high quality of
conformance and it keeps the name brand strong.

3. The "abilities" Availability, Reliability and Maintainability

Availability- whether the product/service is available for operation and not down for
repairs or maintenance. This defines the continuity of service to the customer.

Costco stores are open M-F 11:00am - 8:30pm, Sat. 9:30am - 6:00pm Sun. 10:00am -
6:00pm. Closed: Easter Sunday, Christmas Day, New Year’s Day.

During the time they are closed restocking of inventory and general maintenance is done.
However, Costco is always open for business online at http://www.costco.com/ which is
down only for routine website maintenance.

Reliability- length of time a product/service can be used before it fails.

Maintainability – how long it takes for the product to be repaired.

For Costco, this would be the time it takes before a customer returns products (e.g.
electronics) for refunds because the product fails in performance. Costco had a $30.3 million
charge to its sales-return reserve, the result of an internal study prompted by rampant returns
on high-ticket consumer electronics. The company changed their return policy for all
electronics purchases. Under the new policy, all electronics purchases as of 2007 can be
returned “no questions asked” for up to 3 months after purchase, and up to 6 months for
defective merchandise. Here is an example of a repair process. A customer calls the customer
call center for a problem regarding a television.

The Costco call center documents the problem and attempts to solve the problem over the
phone. If it is determined that a repair is needed, then the Costco call center looks up the
service call availability by the customer’s zip code on the NSA (National Service Alliance)
website and then schedules the service call through the NSA website. The Costco call center
tracks the status of the repair every step of the way and stays in contact with the customer.
This can take a few days to a few weeks before a repair is done, depending on how big the
job is.

4. Field Service

This refers to the after sale service, warranties, repair and replacement service that the
company offers.

Costco encourages worry free shopping by backing everything it sells with its ‘no
questions asked’ return policy, where a full refund is guaranteed to the customer if he/she is
dissatisfied with the product at any time. For the sale of electronics, Costco has in place for
US Costco members its Costco Concierge Services where members who purchased
televisions, computers, camcorders and iPod/MP3 players can receive free technical support.

Costco also extends the manufacturer’s warranty on televisions and computers to 2 years
from the date of purchase. Costco even offers in-home television set up but members would
have to make an additional payment for this service ($89.99).Guaranteeing purchases made
at Costco in this way shows that customer satisfaction is a priority.

The quality of conformance to design is the result of how well the product or service
meets its specifications. Ease of use is determined by the ease of using the product or
service, its reliability and its maintainability. Post-sales service is the level of service
provided after the product or service has been purchased.