BASE2102 Operations Management

Question 1

What are the four criteria for regression

Answer 1

1. Logic: Can we expect causal relationship between predictors & response var.?
2. Fit: Does regression show significant relationship?
3. Parsimony: Does each predictor contribute?
4. Stability: are predictors related TOO strongly?

Question 2

What does R^2, the coefficient of determination, denote? What is a good and bad R^2?

Answer 2

Denotes how closely the data fit the regression line. Range is 0-1, 1 is stronger.

Question 3

How do we determine the significance of a model?

Answer 3

Is the p-value on the F stat less than α (for example, 0.05)? If p < 0.05, model is significant.

Question 4

What does the population regression model look like?

Answer 4

y = ß0 + ß1x1 + ß2x2 + … + ßkxk + e (a constant)

Question 5

What are the four competitive dimensions?

Answer 5

Cost
Quality
Time
Flexibility

Question 6

What are the three basic corporate strategies?

Answer 6

1. Product leadership: Design a creative, innovative product.
2. Customer intimacy: Not as worried about product innovation - focus on customers (long-term relationships).
3. Operational excellence: Low price, your logistics.

Question 7

Competitive priorities

Answer 7

Elements of the four competitive dimensions that a business has chosen to focus on.
Ex. FedEx focuses on time - their strategy is “on-time delivery”

Question 8

In terms of quality, what competitive priority does Noodles focus on?

Answer 8

Consistent quality

Question 9

In terms of time, what competitive priority does Noodles focus on?

Answer 9

On-time delivery. They do NOT want delivery speed, because having food coming out in 30 seconds doesn’t seem fresh.

Question 10

In terms of flexibility, what problems was Noodles having? How did they address these?

Answer 10

They were focused on providing customization AND variety, which led to confused customers. They have slimmed down their menu to focus on one competitive priority.

Question 11

Operations plan

Answer 11

The plan a business creates by defining its four competitive priorities.

Question 12

What are two distinctions of a service business

Answer 12

1. Relationships are important!
2. Capabilities must be flexible
3. Information created during process remains in use by others.

Question 13

Service process matrix

Answer 13

ADD PHOTO

Question 14

Service package

Answer 14

ADD PHOTO

Question 15

What are the five elements of a service blueprint?

Answer 15

1. Physical evidence: Physical tools that a customer uses during the process. Ex. HydroFlask for coffee, coffee cups.
2. Customer action: All actions customer does. Foundation for rest of blueprint. Ex. Customer schedules coffee order.
3. Onstage/visible contact employee actions: All interaction employees have directly w customer. Ex. Runner delivers coffee to customer.
4. Backstage/invisible contact employee actions. Ex. Runner makes coffee at home.
5. Support processes: Systems in place to help service to be completed. Ex. Website ordering system, reservation system.

Question 16

What are the five service quality dimensions?

Answer 16

Reliability: Consistency. Service is accurate every time. Ex. Chai tea from SBUX is the same taste and temp every time.
Responsiveness: Responding to a customer’s needs. Ex. Free Prime shipping, but 1-day shipping available at customer’s request.
Assurance: Trust. Can the customer trust the service provider is knowledgable and service has been completed properly? Ex. Car damaged in accident. Can I trust the repair shop to fix it correctly?
Empathy: Caring. Service provider CARES that the customer is satisfied, addresses issues with concern. Ex. Airline waiving change fee if it’s a family emergency.
Tangibles: The physical, tangible items associated with service are good; clean environment. Ex. Forks at restaurant are always clean; Mercedes has lounge.

Question 17

What is the primary reason businesses don’t like idle time?

Answer 17

When employees stand around more, they make more mistakes. Being busy –> higher accuracy.

Question 18

How do businesses deal with long waits?

Answer 18

1. Animate. Ex. Disneyland lines usually have distractions like cave decorations (Indiana Jones) or screens (Space Mountain).
2. Discriminate. Ex. Avis frequent renters get their cars without waiting.
3. Automate. Ex. Use computers to address simple questions so customer service waits are shorter.
4. Obfuscate (bewilder). Ex. Disneyland Haunted Mansion wait is an entire story.

Question 19

Calling population (queuing)

Answer 19

The population of people that can enter an establishment. Usually assumed to be infinite, or very large.

Question 20

Which queue goes faster - single queue or multi-lane queue?

Answer 20

Single queue, but the line will be physically longer.

Question 21

Utilization

Answer 21

The ratio of customer arrivals to customer serviced.
Sweet spot –> arrivals/serviced =85%.
If utilization is over 100%, the line is getting continuously longer and longer!

Question 22

The exponential distribution is often used to model what in a queuing system?

Answer 22

The time between arrivals and service completions

Question 23

TRUE or FALSE: The Poisson probability distribution is used in waiting line management when one is interested in the number of arrivals to a queue during some fixed time period.

Answer 23

True. People arrive usually in a Poisson distribution.