Ch 2: Strategy

Question 1

transformation model

Answer 1

inputs -> production -> output

Question 2

strategy

Answer 2

describes how a firm will create /sustain value forshareholders

Question 3

sustainability

Answer 3

meeting value goals without compromising the ability of future generations to meet their own needs

Question 4

OSCM strategy

Answer 4

policies/plans for using the resources of a firm – must be integrated with corporate strategy

Question 5

competitive dimensions (6)

Answer 5

price (cheap)
quality (great product)
delivery speed
delivery reliability (deliver when promised)
coping w/ changes in demand (changing volume)
flexibility and new product introduction speed (change it up)

Question 6

agile production

Answer 6

being able to jump from product-product; evolve quickly

Question 7

trade-off

Answer 7

mgmt must decide which parameters of performance are critical and concentrate resources on those characteristics

Question 8

straddling

Answer 8

seeking to match a successful competitor by adding features/services to existing products

often risky – may not meet expectations as someone else did it first; may not have talent/capacity to actually mimic someone else’s core competencies

Question 9

core competencies

Answer 9

skills and capabilities that give a business an advantage over its competitors

Question 10

world-class firms

Answer 10

no longer view cost/quality/speed/etc. as tradeoffs

must focus on all to be order qualifiers

Question 11

order qualifiers

Answer 11

features customers will not forego

dimensions that are necessary for a firms products to be considered for purchase by customers

Question 12

order winners

Answer 12

features customers use to determine which product to ultimately purchase

criteria used by customers to differentiate the products/services of one firm from those of other firms

Question 13

productivity

Answer 13

measure of effective use of resources

Question 14

productivity is usually expressed as…

Answer 14

ratio of output to input (out/in)

Question 15

partial measure =

Answer 15

(output/labor) OR
(output/capital) OR
(output/materials) OR
(output/energy)

Question 16

multi-factor measure =

Answer 16

(output/[labor + capital + energy]) OR
(output/[labor + capital + materials])

Question 17

total measure =

Answer 17

(outputs/inputs) OR
(goods produced/all resources used)

Question 18

operations effectiveness

Answer 18

performing activities that implements strategic priorities at minimum cost

Question 19

Ex. Live Trap Corporation received data below for its rodent cage production unit. Find total productivity.

Output:
50k cages
SP $3.50/cage

Input:
Production time: 620 labor hours
Wages: $7.50/hour
Raw Materials (total cost): $30k
Component Parts (total cost): $15,350

Answer 19

Two answers here:

Units sold:
50k/((620*7.5)+30k+15350)= 1 unit sold per dollar input

Dollars of sales:
(50k3.5)/((6207.5))+30k+15350)= $3.5 in sales per dollar input

Question 20

A retail store had sales of $45,000 in April and $56,000 in May. The store employs eight full-time workers who work a 40-hour week. In April the store also had seven part-time workers at 10 hours per week, and in May the store had nine part-timers at 15 hours per week (assume four weeks in each month). Using sales dollars as the measure of output, what is the percentage change in productivity from April to May?

Answer 20

April: (840 + 710)*4= 15.60
45k/1560= 28.85

May: 56k/1820= 30.77

Percentage Change:
(30.77-28.85)/28.85= 6.66%