1 - Managing Productions and Service Operations

Question 1

______________ are designed to produce products or services. If these must survive and grow, the operations function must be undertaken in the most economical manner possible.

Answer 1

Organizations

Question 2

______________ refers to “any process that accepts inputs and uses resources to change those inputs in useful ways.” The inputs include land, labor, capital, and entrepreneurship. The transformation process converts the inputs into final goods or services.

Answer 2

Operations

Question 3

_____________ refers to goal accomplishment.

When one reaches his objectives, say produce 10,000 units in one month, he is said to be effective.

Answer 3

Effectiveness

Question 4

_________ is related to “the cost of doing something, or the resource utilization involved.”

When a person performs a job at lesser cost than when another person performs the same job, he is more efficient than the other person.

Answer 4

Efficiency

Question 5

__________________ must be performed in coordination with the other functions like those for marketing and finance. Although the specific activities of the operations divisions of firms differ slightly from one another, the basic function remains the same, i.e., to produce products or services.

Answer 5

Operations management

Question 6

If he is assigned as the _______________________, his function is “to determine and define the equipment, tools,
and processes required to convert the design of the desired product into reality in an efficient manner.”

Answer 6

manufacturing engineer

Question 7

The typical operations manager is one with several years of ___________________ in the operations division and possesses an academic background in _____________.

Answer 7

experience
engineering

Question 8

TYPES OF TRANSFORMATION PROCESS

Answer 8

1. Manufacturing processes
   a.) job shop
   b.) batch flow
   c.) worker-paced line flow
   d.) machine-paced line flow
   e.) batch/continuous flow hybrid
   f.) continuous flow
2. Service processes
   a.) service factory
   b.) service shop
   c.) mass service
   d.) professional service

Question 9

The type of layout used by job shops is the ______________, where similar machines are grouped together.

The typical size of the operation is _______. Job shops are labor _______, and machines are frequently ______.

Answer 9

process layout
small

intensive
idle

Question 10

The worker-paced assembly line is characterized by the following:

Answer 10

1. The products manufactured are mostly standardized.
2. There is a clear process pattern.
3. Specialized equipment is used.
4. The size of the operation is variable.
5. The process is worker-paced.
6. The type of layout used is the line flow.
7. Labor is still a big cost item.

Question 11

The quality and quantity of output in a worker-paced assembly line depends on the _________________
used. Examples of worker-paced assembly lines are food marts like McDonalds and Shakey’s.

Answer 11

skill of the labor

Question 12

This type of production process produces mostly standard products with machines playing a significant role.

Answer 12

Machine-Paced Assembly Line

Question 13

Features of machine-paced assembly line

Answer 13

1. The process is of clear, rigid pattern.
2. Specialized types of equipment are used.
3. The line flow layout is used.
4. Capital equipment is a bigger cost item than labor.
5. Operation is large.
6. The process is machine-paced.

Question 14

Examples of _____________________ are automobile manufacturers like General Motors and Ford
Motors.

Answer 14

machine-paced assembly lines

Question 15

The ________________ processing is characterized by “the rapid rate at which items move through the system.”

This processing method is very appropriate for producing highly standardized products like calculators, typewriters, automobiles, televisions, cellular phones, etc.

Answer 15

continuous flow

Question 16

Its other characteristics are as follows:

(Continuous Flow)

Answer 16

1. There is an economy of scale in production, resulting in a low per unit cost of production.
2. The process is clear and very rigid.
3. Specialized equipment is used.
4. The line flow layout is used.
5. Operations are highly capital intensive.
6. The size of operations is very large.
7. Processing is fast.

Question 17

This method of processing is a combination of the batch and the continuous flow.

Two distinct layouts are used, one for batch and one for the continuous flow.

The typical size of the operation is also very ______, giving opportunities for economies of scale.

Answer 17

Batch/continuous flow hybrid

large

Question 18

A ________________ offers a limited mix of services which results in some economies of scale in operations. This also allows the company to compete in terms of price and speed of producing the service.

The process layout preferred by the service factory is the ___________________________.

McDonalds and Shakey’s are also examples of service factories.

Answer 18

service factory

rigid pattern of line flow processing

Question 19

A _______________ provides a diverse mix of services. The layout used are those for job shops or fixed position and are adaptable to various requirements.

These abound throughout the Philippines. Examples are Servitek and Megashell.

Among the services provided by these shops are car engine tune-up, change oil, etc.

Answer 19

service shop

Question 20

A ____________ company provides services to many people simultaneously. A unique processing method is, therefore, necessary to satisfy this requirement.

To be able to serve many people, these companies offer a limited mix of services. The process layout used is typically a _________________ where customers move through the layout.

Answer 20

mass service
fixed position

Question 21

Examples of professional services firms:

Answer 21

1. Engineering or management consulting services which help in improving the plant layout or the efficiency of a company.
2. Design services which supply designs for a physical plant, products, and promotion materials.
3. Advertising agencies which help promote a firm’s products.
4. Accounting services.
5. Legal services.
6. Data processing services.
7. Health services.

Question 22

These are companies that provide specialized services to other firms or
individuals.

Answer 22

Professional services

Question 23

_________________ offer a diverse mix of services. There is a lower utilization of capital equipment compared to the service factory and the service shop.

The process pattern used is very ____________.

The process layout used is identical to the _____________.

Answer 23

Professional service firms

loose

job shop

Question 24

Professional service firms are, oftentimes, faced with delivery problems brought about by non
uniform demand. Strategies that may be used depending on the situation are as follows:

Answer 24

1. The use of staggered work-shift schedules.
2. The hiring of part-time staff.
3. Providing the customer with the opportunity to select the level of service.
4. Installing auxiliary capacity or hiring subcontractors.
5. Using multi-skilled floating staff.
6. Installing customer self-service.

Question 25

IMPORTANT PARTS OF PRODUCTIVE SYSTEMS

Productive systems consist of six important activities as follows:

Answer 25

1. Product Design
2. Production Planning and Scheduling
3. Purchasing And Materials Management
4. Inventory Control
5. Workflow Layout
6. Quality Control

Question 26

This is where customers expect that the products they buy will perform according to assigned functions.

Customers avoid buying products with _____________. An example is that certain brand of ballpen which fails to write after one or two days of actual use.

Answer 26

Product Design
poor product design.

Question 27

_____________ refers to “the process of creating a set of product specifications appropriate to the demands of the situation.”

Answer 27

Product design

Question 28

Companies wanting to maintain or improve their market share keep a product design team composed of ____________________________________________________________

Answer 28

engineers, manufacturing, and marketing specialists.

Question 29

________________ is a very important activity because it helps management to make decisions regarding capacity.

When the right decisions are made, there will be less opportunities for __________.

Answer 29

Production planning
wastage

Question 30

The _______________ of supplies and materials needed adds to the necessity of proper management and purchasing of materials.

Answer 30

wider variety

Question 31

Too many reserves of stock will penalize the firm in terms of ___________________ and other related risks like _______________________.

Too little reserves, on the
other hand, may mean _______________________ if production activities are hampered. A balance between the two extremes must be determined.

Answer 31

high storage costs
obsolescence and theft

lost income opportunities

Question 32

Work-flow layout is the process of determining the physical arrangement of
the production system. In the transformation process, the flow of work may be done either haphazardly or
orderly.

Question 33

______________________ breeds customer complaints, returned merchandise, expensive lawsuits, and
huge promotional expenditures.

Answer 33

Poor quality control

Question 34

___________________ refers to the measurement of products or services against standards set by the company.

Certain standard requirements are maintained by the management to facilitate production and to keep customers satisfied.

Answer 34

Quality control

Question 35

The operations manager’s job is to ensure a cost-effective work-flow layout is installed.

A good work- flow layout will have the following benefits:

Answer 35

1. Minimize investment in equipment.
2. Minimize overall production time.
3. Use existing space most effectively.
4. Provide for employee convenience, safety, and comfort.
5. Maintain flexibility of arrangement and operation.
6. Minimize material handling cost.
7. Minimize variation in types of material-handling equipment.
8. Facilitate the manufacturing (or service) process.
9. Facilitate the organizational structure.

Question 36

_______________________ is the process of establishing and maintaining appropriate levels of reserve stocks of goods. “As supplies and materials are required by firms in the production process, these must be kept available when they are needed.

Answer 36

Inventory control

Question 37

There are ways of achieving proper inventory control.

Answer 37

1. Determining reorder point and reorder quantity
2. Determining economic order quantity
3. The use of just-in-time (JIT) method of inventory control
4. The use of the material requirement planning (MRP) method of planning and controlling
   inventories.

Question 38

______________refers to “the approach that seeks efficiency of operation through integration of all material acquisition, movement, and storage activities in the firm.”

Answer 38

Materials management

Question 39

Firms need to purchase supplies and materials required in the various production activities.

The ___________________________________must be undertaken with a high degree of efficiency and effectiveness, especially in firms engaged in high volume production.

Answer 39

management of purchasing and materials

Question 40

____________________ may be defined as “forecasting the
future sales of a given product, translating this forecast into the demand it generates for various production facilities, and arranging for the procurement of these facilities.”

Answer 40

Production planning

Question 41

________________ is the “phase of production control involved in developing timetables that specify how long each operation in the production process takes.”

____________________ assures the optimization of the
use of human and nonhuman resources.

Answer 41

Scheduling
Efficient scheduling

Question 42

____________ refer to the provision of services to persons by hand or with machinery.

Answer 42

Service processes

Question 43

An _______________ refers to a production layout arranged in a sequence to accommodate processing of large volumes of standardized products or services.

Answer 43

assembly line

Question 44

Examples of factories using the______________ are wineries, scrap-metal reduction plants, and road-repair contractors.

Answer 44

large batch flow

Question 45

Batch flow is further characterized by the following:

Answer 45

1. There is flexibility to produce either low or high volumes.
2. Not all procedures are performed on all products.
3. The type of equipment used is mostly for general purposes.
4. The process layout is used.
5. The operation is labor intensive, although there is less machine idleness.
6. The size of the operation is medium-sized.

Question 46

The _____________ is where lots of own designed products are manufactured.

Answer 46

batch flow process

Question 47

Job shops produce ___________ products, in general.

Products may be manufactured within _______________.

The equipment used is of the ____________ type.

Answer 47

custom
short notice
general-purpose

Question 48

A _____________ is one whose production is “based on sales orders for a variety of small lots.”

These are very useful components of the entire production effort, since they manufacture products in small lots that are needed by but cannot be produced economically by many companies.

Depending upon the customer’s needs, this may produce a lot consisting of 20 to 200 or more similar parts.

Answer 48

job shop

Question 49

The engineer, as ______________, must find ways to contribute to the production of quality goods or services and the reduction of costs in his department.

Answer 49

operations manager

Question 50

The engineer in charge of ____________________ is responsible for the actual construction of whatever bridge or road his company has agreed to put up. He is required to do it using the least expensive and the easiest methods.

Answer 50

operations in a construction firm

Question 51

The engineer manager is expected to produce some output at _______________________.

Answer 51

whatever management level he is

Question 52

__________________ accurately defined operations management as “the process of planning, organizing, and controlling operations to reach objectives efficiently and effectively.

Answer 52

Aldag and Stearns

Question 53

_____________ is an activity that needs to be managed by competent people.

Answer 53

Operations

Question 54

Examples of final goods and services:

Answer 54

1. Industrial chemicals like methylene chloride, borax powder, phosphoric acid, etc., which are
   produced by chemical manufacturing firms;
2. Services like those for the construction of ports, high-rise buildings, roads, bridges, etc., which
   are produced by constructions firms;
3. Electrical products like transformers, circuit breakers, switch gears, power capacitors, etc., which
   are produced by electrical manufacturing firms;
4. Electronic products like oscilloscope, microwave tests systems, transistors, cable testers, etc.,
   which are produced by electronics manufacturing firms;
5. Mechanical devices like forklifts, trucks, loaders, etc., which are produced by manufacturing
   firms;
6. Engineering consultancy services like those for construction management and supervision,
   project management services, etc., are produced by engineering consultancy firms.