Production and Operations Management

Discussion Questions

Prepared by Dr. Stephen Hartman, School of Management, New York Institute of Technology.

Chapter 1

1. Define production operations management in your own words. Will your definition accommodate both manufacturing and service operations?

Productions/operations management can be defined as the management of all activities directly related to the creation of goods and/or services through the transformation of inputs into output.

2. Consider the potential contribution of information sciences to P/OM. Why is the management of information of such great importance in the management of "production"?

The management of information is of great importance to produc-tions/operations management since:

(a) without "information" one would have no knowledge of the state of input resources, process performance, or output goods and/or services;

(b) properly developed information systems can contribute to the overall integration required to allow a firm to produce on a competitive basis:

(c) "good" decisions require "good" information - the right information, at the right place, at the right time.

3. The marketing, operations, and finance accounting functions can be outlined . Prepare a chart outlining the same functions for:

a) a large metropolitan newspaper

b) a local drugstore

c) a college library

d) a local service organization (Boy Scouts, Girl Scouts, Rotary International, Lions, Grange etc.)

e) a doctor's or dentist's office

f) a jewelry factory

The actual charts will differ depending upon the specific organization considered. The important thing is that students come to recognize- that all organizations require, to a greater or lesser extent, (a) the three primary functions of operations, finance/acoounting, and marketing; and (b) that the emphasis or detailed breakdown of these functions is dependent upon the specific competitive strategy employed by the firm.

4. Do the preceding assignment for some other enterprise of your choosing, perhaps an organization where you have worked.

The answer to this question may be similar to that for question 3. Here, however, the student should use more detailed knowledge of a past employer and indicate on the chart additional information such as the number of persons employed to perform the various functions, and perhaps the position of the functional areas within the overall organization hierarchy.

5. What is the difference between production and operations?

We tend to use the term "Production management" when the result is a physical product, and "operations management" when the output is a ''service".

6. Identify three disciplines that will contribute in a major way to the future development of P/OM.

(a) Information Systems: organizations can usually produce most efficiently when they are integrated (i.e., one is able to consider all relevant factors, not just some, in making decisions. This integration will be accomplished by properly designed information systems.

(b) Physical Science: work in the physical sciences will lead to new materials and more efficient processes of manufacturing.

(c) management Science: Management Science will contribute to better decision making as we learn more about the most appropriate process for making decisions and how to best include the more appropriate varieties or factors in the decision making process.

7. What are the three classic functions of a firm?

The three classic functions are:

(a) Marketing

(b) operations

(c) Finance

8. What departments might you find in the P/OM function of a home appliance manufacturer?

One would expect to find in a home appliance manufacturer most, if not all, of the departments listed below:

Research and Development (R & D): conducts product research, product development, and product engineering. In this firm might also conduct product testing at the consumer level.

Industrial engineering (IE): determines the most efficient use of productive resources; may also develop product costing.

Methods engineering: industrial engineers working toward improving procedures in the work place.

Facilities planning, construction: plans, constructs, maintains, and repairs facilities.

Quality assurance/qualitv control (QA & OC): reviews designs, products, and processes to ensure quality objectives are met.

Production planning and inventory control (PIC): schedules the manufacturing processes to ensure quality objectives are met.

Manufacturing systems: applies the methodology, models, and the procedures of mathematics or management information systems to manufacturing operations. This function might assume more importance in the home appliance market as manufacturers from outside the Ups provide increased competition.

Process Engineering: design:, develops, and evaluates production tools, equipment, and processes.

Product Engineering: fine tunes the product design to enhance production efficiency.

Maintenance: focuses on designing systems and procedures and develops personnel who will create and maintain a reliable system.

Purchasing: determines the best sources for a given set of specifications, delivery, and price.

Since the "home appliance" is a basic, consumer good and competition occurs on parameters other than price. One might also find that the organization's competitive strategy dictates that the operations function include the additional department:

Service: responsible for the overall management and provision of

on-site and carry-in customer service.

In attempting to identify the departments of a "typical" manufacturer, one should recognize that the operations (not necessarily the department assignments) noted above are common to some degree among all manufacturers. The question is really as to what degree, and the decision as to degree is often based on Competitive strategy in the marketplace rather than any "necessity" of prescribed organizational structure.

Chapter 7

Process Strategies

1. What are the advantages of standardization? How do we obtain variety while maintaining standardization?

(a) Some advantages of standardization are:

- equipment can often be special purpose rather than general purpose

- equipment operators may be less highly skilled

- orders and job instructions are typically

- raw materials inventory is usually lower

- ratio of work-in-process inventory to output is usually lower

- one can often "produce to stock"

- scheduling is usually simpler because of the reduced number and

standardization of machine routings

- quality control is usually more readily accomplished

(b) We typically obtain variety while maintaining a degree of standardization by following a modular strategy where-in specific standard modules are assembled to get a quasi-custom product.

2. In an affluent society, how do we produce a wide number of options for products at low cost?

We produce a wide variety of product options at low cost by employing a modular production strategy.

3. Why has the utilization of robotics proven to be a popular production process:

Some of the reasons that robots have proven popular are:

- the typical robot has a low re-programring cost

- production becomes more uniform and quality more consistent than under

human control

- use of robots may lower high labor costs in some labor intensive industries

- robots may replace human labor in difficult, monotonous, or dangerous jobs

4. Where does the manager obtain data for beak-even analysis?

The manager obtains data for use in break even analysis from.:

- cost data: industrial engineering and accounting

- marketing: demand and revenue data

5. What keeps plotted variable and fixed-cost data from failing on a straight line?

Variable and fixed-cost data, when plotted, do not fall on a straight line because:

- not all changes in cost are volume related

- we have difficulty accurately measuring these costs

6. What keeps plotted revenue data from falling on a straight line?

Revenue data, when plotted, do not fall on a straight line because of volume discounts, etc.

7. What are the assumptions of break-even analysis?

The fundamental assumptions of break-even analysis are:

fixed costs do not vary with volume

unit variable costs do not vary with volume

unit revenues do not vary with volume

8. How might we isolate the production/operations process from the customer?

We can isolate the customer from the process by:

- restricting the product offerings, options, or degree of customization allowed (limited number of factory installed options on a new automobile)

- customizing at time or delivery or in the final stages of the process (dealer installed versus factory installed options on automobiles, boats, etc.)

- structuring the service such that the customer must go where the service is offered (a medical facility)

- utilizing routing services that may lend themselves to automation (automatic teller machines)

- making the customization of the product on a self-service basis (Wendy's Hamburgers)

9. Identify two services located at the recurrent side of the process strategy continuum.

Examples of services providers located at the recurrent side of the process strategy continuum include:

- hospitals and most other health Care providers

- gourmet restaurants

- general business consultants

- most human service agencies

- "charter" fishing boats

Chapter 14

Material Requirements Planning (MRP)

1. Once a material requirements plan (MRP) has been established, what other managerial applications might be found for the technique?

Once the MRP system is in place, it provides information to assist decision makers in other functional areas such as the amounts of labor required, cash needs, purchase requirements and timing, etc.

2. What do we mean by closed loop MRP?

Closed loop MRP indicates (a) that there is both a planning and execution phase, and (b) that information from the execution phase is fed back to the planning phase. Once planning is complete, an attempt is made to execute a "planned" schedule. Information is fed back from the execution of this schedule to the planning phase so the plans can be modified as necessary.

Chapter 15

Short Term Scheduling Tactics

  1. Name five priority sequencing rules. Explain how each works to assign jobs.
  2. Five priority sequencing rules are:

    - First come, first served (FCFS): or first in, first out (FIFO): Jobs are sequenced in the order in which they arrive at the work station.

    - Earliest due date CEDE): Jobs are sequenced in the d L which they are due for delivery to the

    - Shortest processing time (SPT): Jobs are sequenced in order of the processing time required at the work station, with the job requiting the least processing time at the work station scheduled first.

    - Longest processing time (LOT): Jobs are sequenced in order of the processing time required at the work stations with the job requiring the longest processing time at the work station scheduled first.

    - Critical ratio (CR): Jobs are sequenced in order of increasing critical ratio (the ratio of time required by work left to be done to time left to do the work)

    2. Describe the differences between forward and backward scheduling.

     Forward scheduling begins With the date of order release and schedules forward in time to determine when the job will be completed. Backward scheduling begins by specifying a completion date and scheduling backward to determine the required order release date.

  3. What is the difference between a Gantt load chart and a Gantt schedule chart?
  4. The Gantt load chart indicates a planned allocation of capacity in the allocation Gantt schedule chart indicates, for each job or order, the relative adherence to the particular time schedule, i.e., what fraction of total time to be expended on an of the capacity of a department or work center to a particular job or order. The order has been expended.

  5. Briefly describe the planning and control files needed in a job shop activity system..
  6. The Planning Files:

    Item Master File: contains all manufacturing and inventory data relevant to an item. Data elements include: part number, descriptions, lead time: on-hand, allocated, and on-order quantities; and lot sizes.

    Shop Order Detail File: contains all information relevant to the planning, scheduling, actual progress, and priority, related to an operation required by a shop order. Similar to the Master File, except each detail file record refers to a single operation. Data elements include. actual set-up time, run time, and quantity disbursed as each operation is recorded.

  7. Why is the scheduling of services a difficult problem?

Scheduling of services is particularly difficult because:

- emphasis is not on materials but on staffing levels and weekly work schedules.

- service systems cannot store inventories

- services are very labor intensive and the demand for this labor can be highly variable.

 6. What is input output control? How does it help the operations manager?

Input/output control keeps track of planned versus actual inputs and outputs, highlighting deviations and indicating bottlenecks.

7. What are the advantages of level material flow?

Advantages of level material use are:

- lower inventory costs

- faster product throughput Shorter lead times)

- improved Component and product quality

- reduced floor space requirement

- improved communication between employees because they are closer together

- smoother Production process because large lots do not have hidden problems

Chapter 10

Human Resource Strategy

1. What are some of the worst jobs you know about? Why are they bad jobs? Why do people want these jobs?

 There is obviously no "right" answer to this question. Jobs have been considered "bad" because they are physically dangerous, "dirty", or "noisy"; psychologically repulsive, too monotonous; present too great a physical or intellectual challenge; or offend one or another of an individual's preferences with regard to general life-style or employment.

2. If you were redesigning a job described to suit a worker better, what changes would you make? Are your changes realistic? Would they improve productivity (not just production, but productivity)?

Again, there is no set answer to this question. The important considerations are:

- The changes suggested should address the reasons that the original job was considered "bad"- not merely make the job different.

- The changes must be realistic - resources must exist or must be able to be developed which would allow implementation of the suggested job changes.

3. How would you define a good quality of work life?

Here again, the answer rust be developed on an individual basis. One would expect, however, that elements of Maslow s needs hierarchy, Herzberg's Dual Factor theory and Englestad's guidelines, would be contained in the answer.

4. What is the different between job enrichment, job enlargement, job rotation, and job specialization?

Job enrichment relates primarily to increasing the cognitive or intellectual requirements for the job, often by increasing authority and responsibility.

Job enlargement relates primarily to an increase in the number of tasks to be performed.

 Job rotation implies a formal arrangement for job switching among a particular group of workers within a specific set of jobs. usually the workers are cross-trained on all or most jobs within the set.

 Job specialization implies the opposite of job enrichment or job enlargement wherein the job becomes very narrow, and the range of responsibility and authority very restricted.

 5. Do you know of any jobs that push the man-machine interface to the limits of human capabilities?

 Jobs which push the man-machine interface to the limit of man's capacity usually require a high rate of information processing, a high rate and accuracy of physical response, or both. Examples would be found in terms of pilots of high performance jet or rocket powered aircraft, and a safety monitor for working at a nuclear power station.

6. Why prepare flow diagrams and process charts for tasks that are poorly done?

 One should prepare flow diagrams and process charts for tasks which are poorly done because these documents could be used to form the basis for improved job design. Until one has documented what is presently being done, he or she cannot say what changes must be made to perform the task as it should be done.

7. What do Maslow s hierarchy of needs and Herzberg's dualfactor theory tell us about job design?

 Maslow's Hierarchy of Needs and Herzberg's Dual Factor Theory should suggest that:

- a job is used by the worker to fulfill and identifiable set of needs

- the degree to which particular workers required their individual needs to be fulfilled varies

- the presence of specific factors provides satisfaction; the presence of others, dissatisfaction

- the absence of a motivator does not produce dissatisfaction the presence of a hygiene factor, does not produce satisfaction

 8. What are the major characteristics of a good job design?

 Obviously the specific factors vary depending upon the specific job to be designed. However, the student should be encouraged to include both psychological and physical aspects of the job as major considerations.

Chapter 11

Procurement and Just-in-Time Strategies

 I. Under what conditions might a firm decide to organize its procurement function as a materials management function? As a supply management function? As a source management function?

 A firm might decide to organize its procurement function as:

 a. materials management function: when transportation and inventors costs are substantial and exist on both input and output sides of the production function.

 b. supply management function: when future reliable supplies are critical, or if the dollar value of purchases or fluctuations in cost are substantial.

c. source management function: when the development of new, reliable suppliers is necessary. The product may be a high-technology, custom-made, or specialty item for which there are few, if any suppliers.

2. What can the procurement function do to implement just-in-time techniques with suppliers?

- work with suppliers to improve reliability and quality so as to eliminate activities such as formal counting, inspection and testing procedures

 - work with suppliers to improve the reliability of deliveries so as to reduce in-plant inventory

 - work with suppliers to develop optimal storage areas for inventory so as to reduce in-transit inventories

 - provide the suppliers with the information necessary to appropriately plan and schedule their activities

3. What information does purchasing receive from other functional areas of the firm?

Purchasing receives information from other functional areas with respect to:

- what is needed, when, and how much or how many

- what is available, when, and how much or how many

- resources which are available for procurement functions

- the success or failure of its performance

- long range goals and strategies of the organization.

4. How does a traditional adversarial relationship with suppliers change when a firm makes a decision to move to Just-in-time deliveries?

The traditional adversarial purchaser/supplier relationship must be completely re-developed. JIT requires extremely close cooperation, coordination, and trust. i. What are the three basic approaches to negotiations?

5. What are the three basic approaches to negotiations?

The three basic approaches to negotiation are:

- the cost based model

- the market based model

- competitive bidding

6. What reservations do suppliers have about JIT purchasing?

 Suppliers may:

- be reluctant to tie themselves to long-term contracts with a single customer

- have little faith in the purchaser's ability to develop a smooth, coordinated schedule of orders.

 - expect customers to require frequent implementation of engineering change orders with insufficient lead time.

 - not consider production with zero defeats realistic

 - not wish to produce the small lot sizes required by the purchaser.

 - not see frequent delivery as economical.

Chapter 17

Total Quality Management

 1. Provide your own definition of product quality.

 Individuals differ on their definitions of quality. Probably the most all-encompassing, and perhaps ultimate definition, is "suitability for use." However, Dr. Deming said there were two basic definitions. First and foremost, quality is giving the customer what they want and expect, and second, quality is conforming to specifications.

2. Name several products that do not require high quality.

If one adopts a definition of quality based upon "suitability for use", it is difficult to imagine any product which would not be required to be of high quality, i.e., suitable for use.

3. Has the establishment of the Malcolm Baldrige Quality Award had much effect on the quality of products actually produced in the U.S.?

If the prestige of this award grows as has that of the Deming Award in Japan, we can expect significant impact. The increasing competition for the award suggests that such growth in prestige is indeed securing - winners have also shown a proclivity to note receipt of the award in product and organizational advertising.

4. How can a university control the quality of its output (that is, its graduates)?

 A university can seek to control the quality of its graduates by:

- setting specific goals for its overall accomplishments

- employing quality faculty

- setting appropriate standards (pre-requisites, GPA, required credit hours, etc.)

- employing appropriate evaluation devices (quizzes, examinations, term papers, etc.)

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5. What are the major components of the QC system?

 The major components of a quality control system should include:

- a process for setting appropriate standards

- an appropriate set of standards for each product and process

- a procedure for including quality control considerations in the design of the product and process

- procedures for measuring adherence to standard procedures for correcting deviations from the standard

6. What are recent articles on quality circles saying? Do you think quality circles will be commonplace in all U.S. firms? Why?

Articles discussing the merits or implementation of quality circles are relatively frequent. The main point of discussion with respect to their wide implementation within the United states appears to concern the role of cultural differences between Japan, where quality circles appear to make a positive contribution, and the United States. It appears appropriate for the present to conclude that the widespread implementation of quality circles in the U S will require modifications to the concept to deal with some of the more important cultural differences.

8. Data reveal that the Japanese have a substantial net production cost advantage over the United States for typical subcompact cars. Of this total, 20% is due to Japanese QC systems (excluding quality circles). Why do you think this is so? Can the U.S. automakers narrow this gap?

 Many of the costs of poor quality are hidden in a) overhead and b) inventories. These costs are not simply the relatively easy to identify scrap costs, but also costs for additional compensatory inventory, rework. storage space, decreased morale, customer perception, and a host of others. U.S. auto makers have only recently recognized these costs. Until these true costs of poor quality are addressed, it is unlikely that U.S. automakers will narrow this gap by very much.

9. What are the three basic concepts for the Taguchi method?

 The three basic concepts in the Taguchi method are:

- quality robustness

- quality loss factor

- target specification

10. Why is target-oriented performance better than conformance oriented performance?

Target-oriented performance is to be preferred over conformance-oriented performance because it tends to produce fewer products farther from the target.

11. According to the Berry, Zeithaml, Parasuraman study, what are ten determinants of service quality?

According to Berry, Zeithaml, & Parasuraman, the ten determinants of service quality are:

- reliability

- responsiveness

- competence

- access

- courtesy

- communication

- credibility

- security

- understanding/knowing the customer

- tangibles

12. What is the quality loss function (QLF)?

 The quality loss fraction identifies all costs connected with poor quality and shows how these costs increase as the product moves away from being exactly what the customer wants.


Chapter 6

Product Strategy

 1. What management techniques may prove helpful in making the transition from R & D to production?

It may prove necessary to arbitrarily cut off the R & D program and move into the production phase.

2. Why is it necessary to explicitly document a product?

 Explicit documentation accomplishes two things:

a) it provides the information necessary to Produce the product in the appropriate fashion

b) if the product which we produce does not perform as we anticipated, the documentation provides the basis for finding and correcting the problems in a logical manner

3. What techniques do we use to document a product?

 Documentation includes: working drawings, written specifications, assembly drawings, assembly Charts, route sheets, bill-of-materials, and process sheets

4. Configuration management has proved particularly useful in what industries? Why?

 Configuration management is a system by which a product's planned and Changing configurations are managed. Such a system is of particular value where the product is rapidly and continually evolving, or where safety is a particular issue. examples of industries which practice configuration management include those which manufacture airframes or micro-computers.

5. How does computer-aided design help other departments?

 CAD aids other departments by:

a) feeding information forward to such departments as purchasing, manufacturing, and technical documentation

b) encouraging integration of information with all departments of a manufacturing organization

6. What is group technology and why is it proving helpful in our quest for productivity improvement?

 Group Technology is basically a procedure which encourages like components to be produced by the same process in the same work area. Successful implementation leads to:

- improved product design

- reduced raw material and parts purchases

- simplified production and planning

- improved routing and machine loading

- reduced tooling setup time, work-in-process inventory, and production time

- a systematic way to reduce component proliferation by reviewing existing component designs to ascertain if an existing component can be used in a new design

Hams has summarized the major benefits of a well-designed classification and coding system for group technology as:

a) It facilitates the formation of part families and machine cells

b) It permits quick retrieval of designs, drawings, and process plans.

c) It reduces design duplication.

d) It provides reliable work piece statistics.

e) It facilitates accurate estimation of machine tool requirements and logical machine loadings.

f) It permits rationalization of tooling setups, reduces setup time, and reduces production throughput time.

h) It allows rationalization and improvement in tool design.

i) It aids production planning and scheduling procedures.

j) It improves cost estimation and facilitates cost accountings procedures.

k) It provides for better machine tool utilization and better use of tools, mixtures, and manpower.

l) It facilitates NC part programming.

7. What savings can be expected by computer-aided design?

CAD produces savings in numerous ways; among them:

 a) reducing the amount of time necessary to design a product

b) often developing the data which would otherwise be obtained by developing a prototype of the product

c) providing a greater variety of design options and the logical processes needed for their evaluation than would otherwise be available

d) encouraging the implementation of standard designs

e) providing information to be used by other departments in the production, documentation marketing, costing, etc., of the product

8. How does computer aided design help computer aided manufacture?

a) providing working drawings

b) providing the information needed to develop the tooling for the machines used to produce the

c) providing the information needed to develop the programs for the numerically controlled machines used to produce the product

9. What are the four phases of the product life cycle?

 The four phases of the product life cycle are:

 a) Introduction

b) growth

c) maturity

d) decline

l0. How does product selection (and design) affect quality?

 Many quality variables are determined at the product design stage.

Chapter 7

Supplement: Information Technology in P/OM

 Discussion Questions:

 1. In what kind of situations are expert systems being used?

 Expert systems are most reasonably used in situations which require multiple criteria for management commitment and include relatively complex relationships, and where the firm wishes to:

- make decisions faster than an expert would be capable of doing

- derive the benefits of having an expert at its disposal without having the expert present

- equal or surpass, at least in terms of consistency, the human expert

- free the human expert for other work

- disseminate the expert system to those who need it

2. What is the difference between a management information system (MlS) and a decision support system (DSS)?

 There are many differences between a management information system and a decision support system. The text notes that a management information system is dedicated to obtaining, formatting, manipulating, and presenting date/information to managers, while a decision support system aids managers in modeling and decision-making. Another View is that the management information system describes the past and current performance of the organization, while the decision support system helps one to explore and understand the relationships within the organization and helps to predict future performance based Upon a specific set of assumptions, While an MIS is "organization" based, a DSS may, in the limit, be developed to be used by a single individual to explore the consequences of making a single decision.

3. Give some recent examples of information technology successfully applied to new products and new processes in (a) manufacturing and b) services

Examples of information technology applied to new products and processes include:

 - integration of operations functions within a hotel customer services within a hotel (billing from the customer's room, etc.)

- use of information technology by drug wholesalers to gather inventory/ordering information from drugstores and to develop billing order picking, and shipping information

- use of small, special purpose computers to monitor performance and troubleshoot automobiles systems

- use by the baseball major leagues of decision support system to schedule umpires assignments and travel

- use of satellite-based navigation and off course warning systems for large oil tankers operating in high-traffic waters.

4. Distinguish between flexible manufacturing systems (FMS) and computer-integrated manufacturing (CIM)

 A Flexible Manufacturing System CAMS) is basically a sub-system within a larger Computer Integrated Manufacturing (CIM) system. A CIM includes elements of computer-aided design, computer-aided engineering, computer-aided drafting, production, inventors control, etc., as well as flexible manufacturing systems.

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