Chapter 2

Question 1

What are the three levels of operations performance?

Answer 1

Societal Level - Planet, People, Profit

Strategic Level - Risk, Cost, Learning, Capital, Revenue

Operational Level - Quality, Speed, Dependability, Flexibility, Cost

Question 2

What are trade-offs?

Answer 2

When you choose one thing which causes you to have to give up, or sacrifice, another.

Question 3

What are the characteristics of Operations Processes? (4Vs)

Answer 3

Volume (Output)
Variety (Output)
Variation (Demand)
Visibility (Production)

Question 4

What are the implications of high/low Volume?

Answer 4

High Volume: High repeatability, specialization, capital-intensive, low unit costs.

Low Volume: Low repetition, more tasks per staff, less systemization, high unit costs.

Question 5

What are the implications of high/low Variety?

Answer 5

High Variety: Flexible, complex, meets customer needs, high unit costs.

Low Variety: Well-defined, routine, standardized, low unit costs.

Question 6

What are the implications of high/low Variation?

Answer 6

High Variation: Changing capacity, anticipation & flexibility, in touch with demand, high unit costs.

Low Variation: Stable, routine, predictable, high utilization, low unit costs.

Question 7

What are the implications of high/low Visibility?

Answer 7

High Visibility: Short waiting tolerance, satisfaction based on customer perception, contact skills needed, high unit costs.

Low Visibility: Time lag between production & consumption, low contact skills, high staff utilization, low unit costs.

Question 8

What are the strategies for matching supply and demand?

Answer 8

1) Keep output level - Make Costumer Wait, Queues, Backlogs.

2) Smooth demand fluctuation by shifting demand:

• Vary the service offering to appeal new market segments.
• Communicate with costumers
• Differentiate on Price

3) Adjust capacity to match fluctuations in demand:

-Stretch time and labor (temp workers, part time employees)
- Stretch facilities and equipment