Solutions For Operations Management 3rd Edition / Operations Management Third Edition Solutions Manual.
Solutions For Gerard Cachon, Christian Terwiesch, 9781264098361, Solutions Manual / Cachon 3e Solutions; Terwiesch 3e Solutions.
Introduction to Operations Management
Specific Learning Objectives
LO1-1: Identify the drivers of customer utility.
LO1-2: Explain inefficiencies and determine if a firm is on the efficient frontier.
LO1-3: Explain the three system inhibitors.
LO1-4: Explain what work in operations management looks like.
LO1-5: Articulate the key operational decisions a firm needs to make to match supply with
demand.
What Students Learn in This Chapter
This chapter is the beginning of the book, and most likely the corresponding session is the first
session in the student’s first exposure to operations management. The goal of the session is for
students to gain some appreciation of the type of operational decisions that a business has to
make and to provide them some idea of what it will take to make these decisions well.
To achieve this goal, we like to start with a perspective the student is familiar with. In most
undergraduate settings, students will have little or no work experience. So, rather than starting
with the perspective of the business, we find it more engaging to start with the perspective of
the consumer. Faculty and students alike, all of us have been in the role of the customer in
consumer-facing industries, such as restaurants, travel, healthcare, entertainment, or education.
We suggest to use the example of restaurants. Even if students have work experience, a common
experience/example is helpful for discussion and all of us have been in some form of restaurant.
The book chapter takes the example of “where do you want to go for lunch today?” to establish
the different dimensions driving customer utility. Once we understand what consumers value,
we can start talking about the dimensions of operational performance. Students will see that
there are multiple dimensions of operational performance. Some operations focus on
responsiveness, some on quality, some on efficiency, etc. Unlike the case of finance, where we
all agree that more profits are better than less profits, students will appreciate that there exist
trade-offs among the operational dimensions of performance. Subway is operationally not better
or worse than a five-star restaurant. It simply has a different strategy.
The presence of trade-off then sets up the efficient frontier framework. Some firms are better at
multiple things, others are worse. Typically, students have services that they like a lot (e.g.
Starbucks or Chipotle) and often times, those are services that are also financially successful. This
allows for a discussion of what makes these services successful, which allows the faculty to
introduce concepts such as waste, variability, and inflexibility.
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CHAPTER NO 1: INTRODUCTION TO OPERATIONS MANAGEMENT
CONCEPTUAL QUESTIONS
1. Below are a number of slogans used for advertisement. Which
dimensions of customer utility do the slogans emphasize?
Answer: Slogan A emphasizes Fit; Slogan B emphasizes Timing;
Slogan C emphasizes Price; Slogan D emphasizes Location; and
Slogan E emphasizes Performance.
2. Which of the following is not a dimension or subdimension in a
customer’s utility function?
Answer: D. Customer Satisfaction
3. The efficient frontier is given by the cheapest company in the
industry. True or false?
Answer: False
4. There can be no more than two firms on the efficient frontier.
True or false?
Answer: False
5. Two retailers compete on costs and the ambience of their retail
stores. They are identical in all other dimensions of customer utility.
Retailer A is cheaper than retailer B. Retailer A also has the better
ambience. Does this mean that retailer A is on the efficient frontier?
Yes or no?
Answer: Yes
6. Which of the following is NOT one of the three system inhibitors?
Answer: C. Fatigue
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7. Which of the following is an example of a system inhibitor?
Answer: B. An emergency room doctor has no patients at the
moment.
8. Which of the following questions is NOT related to operations
management?
Answer: B. How much will the CEO be paid?
9. Which of the following is most related to the operations
management of an organic sheep farm?
Answer: A. The amount of land they rent for grazing sheep.
PROBLEMS AND APPLICATIONS
1. What are the subcomponents of inconvenience in a customer
utility function?
Answer: C. Location and Time
Feedback: Location and timing are the two major subcomponents of
inconvenience.
2. Which dimension of the customer utility function is particularly
emphasized with the concept of “custom built”?
Answer: B. Fit.
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Feedback: Fit is a subcomponent of the consumption utility that
captures how well the product or service matches with the unique
characteristics of a given consumer.
3. Which of the following characteristics is a subcomponent of the
consumption utility in a customer utility function?
Answer: A. Performance.
Feedback: Performance is a subcomponent of the consumption
utility that captures how much an average consumer desires a
product or service.
4. Which dimension of the customer utility function is particularly
emphasized with the “to-go” section?
Answer: D. Timing.
Feedback: The "to-go" section is designed for customers to purchase
food quickly and move on their way to their departure gate. The
primary focus is on the speed of service, which addresses the timing
element of the customer utility function.
5. Which dimension of the customer utility function is particularly
emphasized with the special edition coupe?
Answer: A. Performance.
Feedback: The "special edition" coupe has features that give it a
higher level of performance compared to the standard model. As a
result, the "special edition" vehicle clearly emphasizes the
performance dimension of the customer utility function.
6. Which of these hotels are on the efficient frontier? You may select
more than one answer.
Answer: Hotels B, C, and D.
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