Operations and Supply Chain Management
SOLUTION MANUAL
Operations and Supply Chain Management, 16th Edition
by F. Robert Jacobs and Richard Chase
Chapters 1 - 22 | Complete
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TABLE OF CONTENTS
Chapter 1: Introduction
Chapter 2: Strategy
Chapter 3: Design of Products and Services
Chapter 4: Projects
Chapter 5: Strategic Capacity Management
Chapter 6: Learning Curves
Chapter 7: Manufacturing Processes
Chapter 8: Facility Layout
Chapter 9: Service Processes
Chapter 10: Waiting Line Analysis and Simulation
Chapter 11: Process Design and Analysis
Chapter 12: Quality Management
Chapter 13: Statistical Quality Control
Chapter 14: Lean Supply Chains
Chapter 15: Logistics and Distribution Management
Chapter 16: Global Sourcing and Procurement
Chapter 17: The Internet of Things and ERP
Chapter 18: Forecasting
Chapter 19: Sales and Operations Planning
Chapter 20: Inventory Management
Chapter 21: Material Requirements Planning
Chapter 22: Workcenter Scheduling
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CHAPTER 1
OPERATIONS AND SUPPLY CHAIN MANAGEMENT
Discussion Questions
1. Using Exhibit 1.3 as a model, describe the source-make-deliver-return relationships in the
following systems:
a. An airline
Source: Aircraft manufacturer, in-flight food, repair parts, computer systems
Make: Aircraft and flight crew scheduling, ground services provided at airports, aircraft maintenance and
repair
Deliver: Outbound and arriving passenger service, baggage handling Return: Resolve any
post-service issues such as lost or damaged luggage
b. An automobile manufacturer
Source: Suppliers of components and raw materials
Make: Manufacturing of vehicles and components or subassemblies to be sold as spare parts
Deliver: Delivery to and sales from dealerships, delivery of spare parts to the wholesale system
Return: Warranty and recall repairs, trade-ins
c. A hospital
Source: Medical supplies, cleaning services, disposal services, food services, qualified personnel
Make: Inpatient rooms, outpatient clinics, emergency room, operating rooms
Deliver: Scheduling patients, providing treatment, ambulance service, family counseling Return: Billing
errors, follow up visits
d. An insurance company
Source: Supplies needed for the office, underwriters, legal authority to operate
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Make: Establish policy guidelines and pricing, field agent/representative and facility network, develop
Internet service capabilities, establish preferred vehicle repair service network
Deliver: Meet with and advise clients, write policies, process and pay claims Return: refund
of overpayments
2. Define the service package of your college or university. What is its strongest element? What is its
weakest one?
The categories with examples are:
Supporting facility - location, buildings, labs, parking Facilitating goods –
class schedules, computers, books, chalk
Explicit services – classes with qualified instructors, placement offices Implicit services
– status and reputation (e.g., Ivy League schools)
At Indiana University and the University of Southern California, among their strongest elements are their
business schools and their Operations Management programs (of course). Both also have very dedicated alumni
networks. A weak element of Indiana University is its weak football program; for USC, weak elements are on-
campus parking and housing.
3. What service industry has impressed you the most with its innovativeness?
Our vote goes to cruise lines which have introduced such onboard innovations as wave machines for belly boarding
and rock climbing walls, as well as all sorts of other amenities to keep cruisers involved. The industry is doing
record business as well.
Some of the standout companies in less innovative industries are Bank of America (has a formalized research
program to try out new customer services/amenities such as video screens in next to teller lines), Intuit (e.g., putting
Quicken money management software online), Ikea, JetBlue Airlines, and Progressive Insurance (discussed later in
the book).
4. What is product-service bundling and what are the benefits to customers?
Product-service bundling is adding Value-added services to a firm’s product offerings to create more value for the
customer. This provides benefits in two areas. First, this differentiates the organization from the competition.
Secondly, these services tie customers to the organization in a positive way. Alternatively, bundling can also involve
adding products to a service, for example, adding the sale of convenience items and snacks at a hotel.
5. What is the difference between a service and a good?
A service is an intangible process (you can’t hold it in your hands), while a good is the physical output of a process.
6. Look at the job postings at http://www.indeed.com and evaluate the opportunities for an
OSM major with several years of experience.
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There are pages and pages of these when you do a search on operations supply chain management. Here
are some examples:
Global Active Ingredient Supply Planner FMC
Corporation
US - PA - Philadelphia
This is your opportunity to join the Agricultural Products Group (APG) and work on the team responsible for
global active ingredient planning. You'll serve as a central Supply Planner working in tandem ...
Purchasing Manager (Buyer)
Texas Dow Employees Credit Union (TDECU)
US - TX - Lake Jackson - Nearest Metro area - South Houston
Education Accredited university degree in Business or Marketing with certification in Purchasing, Inventory
Management, or Logistics. Accredited Purchasing Practitioner (APP) or Certified Purchasing ...
Product Line Manager
Cintas Corporation
US - OH - Mason
High School diploma or GED required, 4 year degree preferred Knowledge of and experience using Internet and
Microsoft Office (Word, Excel, PowerPoint, and Email) 3 years management experience preferred ...
Director Purchasing
Legendary Baking US
- CO - Denver
CERTIFICATIONS & LICENSES • Valid Driver’s License and car insurance. • Certified Purchasing
Manager certification (C.P.M.) preferred. • Certified Food Purchasing Manager ...
Process Improvement Manager
ARAMARK Corporation
US - TX - Houston
Bachelor's Degree required. Technical Engineering discipline within Industrial, Mechanical, Chemical, or Food
Operations strongly preferred. • Minimum 5 years Lean manufacturing experience coupled ...
7. Recent outsourcing of parts and services that had previously been produced internally is
addressed by which current issue facing operations and supply management today?
The coordination of relationships between mutually supportive but separate organizations.
8. What factors account for the resurgence of interest in OSCM today?
With companies facing competition on a global scale, and ever-advancing manufacturing and information
technologies, firms realize the competitive advantage their OSCM functions can
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provide if properly managed. Many have found that the same old way of doing business leaves them unable to
compete successfully.
9. As the field of OSCM has advanced, new concepts have been applied to help companies
compete in a number of ways, including the advertisement of the firm’s products or services. One
recent concept to gain the attention of companies is promoting sustainability. Discuss how you
have seen the idea of sustainability used by companies to advertise their goods or services.
There of course will be a number of examples that students will bring up, though they may need some prodding to jog
their memories. Some examples to start with might be IBM’s “I’m an IBMer” campaign where they advertise how
they are “building a smarter planet.” Bottled
water manufacturers have reduced the amount of plastic used in many of their products, thus saving production and
distribution costs, but also allowing them to advertise how the new bottles are better for the environment because they
result in less waste.
10. Some people tend to use the terms effectiveness and efficiency interchangeably, though we’ve
seen they are different concepts. But is there any relationship at all between them? Can a firm
be effective but inefficient? Very efficient but essentially ineffective? Both? Neither?
Firms can be anywhere on these two dimensions. It is possible for a firm to be the best at what they do in serving their
market, but be very wasteful in doing so. Alternatively, a firm could squeeze every last dollar out of their processes
but fail to deliver what the market expects and desires. Of course, the best firms will provide the goods and services
that the market desires, exactly as the market desires, and do so at a minimum cost. Firms that are both inefficient
andineffective do not survive for long in any market.
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Objective Questions
1. What are the three elements that require integration to be successful in operations and
supply chain management? (Appendix E)
Strategy, Processes, and Analytics
2. Operations and supply chain management is concerned with the design and management of the
entire system that has what function?
Produces a product or delivers a service
3. Match the following OSCM job titles with the appropriate duties and responsibilities.
A: Plans and coordinates staff activities such as new product
C Plant manager development and new facility location
B: Oversees the movement of goods throughout the supply
D Supply chain manager chain
C: Oversees the workforce and resources required to produce
A Project manager the firm’s products
Business process D: Negotiates contracts with vendors and coordinates the flow
E improvement analyst of material inputs to the production process
E: Applies the tools of lean production to reduce cycle time
B Logistics manager and eliminate waste in a process
4. What high-level position manager is responsible for working with the CEO and company
president to determine the company’s competitive strategy?
Chief Operating Officer
5. Order the following major concepts that have helped define the OSCM field on a time line.
Use 1 for the earliest to be introduced, and 5 for the most recent.
3 Supply chain management
1 Manufacturing strategy developed
5 Business analytics
2 Total quality management
4 Electronic commerce
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6. Which major OSCM concept can be described as an integrated set of activities designed to achieve
high-volume production using minimal inventories of parts that arrive at workstations exactly when
they are needed?
Just-in-time (JIT) production
7. Operations and supply chain leverages the vast amount of
data in enterprise resource planning systems to make decisions related to managing resources.
analytics
8. A process is if it operates at the lowest possible cost.
Efficient
9. A customer picks a product over a similar product due to the value of the
product.
Value
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Analytics Exercise: Comparing Companies Using Wall Street Efficiency Measures
Each student is asked to pick an industry and compare three companies within that industry based on
Efficiency Ratios The following is typical of what you might obtain:
BP Shell ExxonMobi
l
Management Efficiency
Days sales outstanding 29.47 42.70 34.40
Days inventory 28.85 26.51 31.51
Payables period 61.31 53.23 68.69
Cash conversion cycle -2.99 15.98 -2.87
Receivables turnover 12.39 8.55 10.64
Inventory turnover 12.65 13.77 11.58
Asset turnover 1.04 0.93 0.78
Students are then asked to identify which company appears to have the most productive employees.
With this data we see that ExxonMobil does very well in that its cash conversion cycle is -2.87 days. This
is amazing! The Inventory Turnover is highest for Shell indicating that the company is the most efficient
from an operations and supply chain processes view. BP has the highest Asset Turnover, which relates to
the use of its facility and equipment assets.
Overall, these are all three very strong companies relative to there operations and supply chain
processes.
Of course, the data generated by each student will be different and an interesting interchange can be
developed with students each presenting what they found from their research. It is very interesting to do
comparisons across industries; retailers versus oil companies, and computer makes versus software
companies, for example.
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