in class review: midterm multiple choice. copyright © by houghton mifflin company. all rights...

In Class Review:Midterm Multiple Choice

Copyright © by Houghton Mifflin Company. All rights reserved. 9–2

5. Which of the following is not a franchise establishment?

a. Kentucky Fried Chicken

b. Avis, Inc.

c. Dairy Queen

d. JC Penney

e. Howard Johnson Co.


6. If Kmart states that it is going to spend $100 million in advertising in the upcoming year to help increase its market share, it is explaining part of its _________ plan.

a. operational

b. strategic

c. directional

d. tactical

e. contingency


15. The more complex and uncertain a company's environment, the more likely it is that the company will

a. increase the span of control, increasing the number of employees on board.

b. have a split between decentralized and centralized decision making.

c. decentralize the organization.

d. centralize the organization.

e. decrease the span of control, decreasing the work force.


16. The number of subordinates reporting directly to one manager is called

a. a centralized organization.

b. the span of control.

c. the management hierarchy.

d. the chain of command.

e. a decentralized organization.


18. A manager who can make decisions and issue directions that relate to the organization's goals has _________ authority.

a. functional

b. staff

c. line

d. delegation

e. advisory


23. Which one of the following is an example of Herzberg's motivation factors?

a. Supervision

b. Responsibility

c. Job security

d. Working conditions

e. Pay

Seventh EditionSeventh EditionCopyright © by Houghton Mifflin Company. All rights reserved.

PowerPoint Presentation by Charlie CookPowerPoint Presentation by Charlie Cook

9

Pride I Hughes I Kapoor Pride I Hughes I Kapoor

Chapter

Producing Quality Goods and Services


What Is Production? (cont’d)

• Competition in the Global Marketplace– The United States became the most productive country after

World War II.

– Competitors in European and Asian countries eventually recovered and began to compete with the U.S. firms in global markets.

– The most successful U.S. firms have focused on:• Reducing production costs by carefully selecting suppliers.

• Revamping their facilities with state-of-the-art equipment.

• Using computer-aided and flexible manufacturing systems.

• Improving control procedures to lower manufacturing costs.

• Building new manufacturing facilities overseas where labor costs are lower.


What Is Production? (cont’d)

• Careers in Operations Management– Analytic process—a process that breaks raw materials into

different component parts.

– Synthetic process—a process that combines raw materials or components to create a finished product.

– Successful operations managers must:• Be able to motivate and lead people.

• Understand how technology can make a manufacturer more productive and efficient.

• Appreciate the control processes that lower production costs and improve product quality.

• Understand the relationship between the customer, the marketing of a product, and the production of a product.


The Conversion Process

• The purpose of the resources conversion process is to provide utility to customers.

– Utility—the ability of a good or service to satisfy a human need.

– Four types of utility—form, place, time, and possession.

– Form utility—utility created by the converting raw materials, people, finances, and information into finished products.


The Conversion Process

INPUTS

Concept for anautomobileFinancing

•

•

OUTPUTS

Completedautomobile

•

CONVERSION

Design and productspecificationsPurchase of steel,glass, engines,stereo equipment,etc.Hiring of employees

•

•

Figure 9.1

The conversion process converts resources such as materials, finances, and people into useful goods, services, and ideas. It is a crucial step in the economic development of any nation.


Planning for Production (cont’d)

• Design Planning (cont’d)– Use of technology—

• Automation—the tradeoff of high initial investment costs and lower operating costs for automated equipment versus the low initial investment costs for manual equipment and high operating costs for human labor.

• Labor-intensive technology—a process in which people must do most of the work.

• Capital-intensive technology—a process in which machines and

equipment do most of the work.


Operational Planning

• Four Steps in Operational Planning:– Step 1: Selecting a Planning Horizon

• The period during which a plan will be in effect; commonly one year in length.

– Step 2: Estimating Market Demand• The market demand for a product is the quantity that customers

will purchase at the going price. Demand is estimated for the period of the planning horizon.

– Step 3: Comparing Market Demand with Capacity• If market demand and capacity are not equal, adjustments may

be necessary.

– Step 4: Adjusting Products or Services to Meet Demand• Operations managers must be prepared to adjust production

schedules to account for variations in customer demands for products or services.


Operations Control

• Four Aspects of Operations Control

Inventorycontrol

OPERATIONS CONTROL

Purchasing Scheduling Qualitycontrol

Figure 9.4

Implementing the operations control system in any business requires the effective use of purchasing, inventory control, scheduling, and quality control.


Operations Control (cont’d)

• Purchasing– All of the activities involved in obtaining required materials,

supplies, and parts from other firms.

– The objective of purchasing is to ensure that the required materials are available when needed, in the proper amounts, and at minimum cost.

– Factors affecting the choice of suppliers:

• Price

• Quality

• Reliability

• Credit terms

• Shipping costs



• Inventory Control– The process of managing inventories in such a way as to

minimize inventory costs, including both holding costs and potential stock-out costs.

– Types of Inventory• Raw materials inventory—materials that will become part of

the product during the production process

• Work-in-process inventory—partially completed products

• Finished-goods inventory—completed goods

– Costs of Inventory• Holding costs—the investment and storage costs of inventory

• Stock-out costs—the costs of not having inventory available when needed



• Inventory Control (cont’d)– Materials requirements planning (MRP)—a computerized

system that integrates production planning and inventory control.

– Manufacturing resource planning (MRP II)—extends planning to the entire organization by providing a single common set of facts to be used by all managers to make decisions.

– Enterprise resource planning (ERP)—a sophisticated software system that can monitor all aspects of the organization and its associates such as suppliers.

– Just-in-time inventory system—a system designed to ensure that materials or supplies arrive at the facility just when they are needed so that storage and holding costs are minimized.



• Scheduling– The process of ensuring that materials and other resources are

at the right place at the right time.• Routing of materials—the sequence of work stations that the

materials will follow.

• Timing of materials—when the materials will arrive at each work station.

– Gantt Chart• A graphic scheduling device that displays the tasks to be

performed on the vertical axis and the time required for each task on the horizontal axis.

– PERT (Program Evaluation and Review Technique)• A scheduling technique that identifies the major activities

necessary to complete a project and sequences them based on the time required to perform each one.


A Gantt Chart

1. Design on computer

Completed

Planned 1 2 3

Week 1

4 5

2. Purchase parts

3. Fabricate fiberglass bodies

4. Fabricate frames

5. Build drive trains

6. Assemble carts

7. Test carts

8 9 10

Week 2

11 12 15 16 17

Week 3

18 19 22 23 24

Week 4

25 26

Figure 9.5

This chart details the job of building three dozen electric golf carts between August 1 and August 25.

Source: Robert Kreitner, Management, 8th ed. Copyright © 2001 by Houghton Mifflin Company. Reprinted with permission.


Simplified PERT Diagram for Producing This Book

START

FINISH

Designthe book(6)

Editmanuscript(10)

Activity Event

Critical path Number of weeks to complete activity( )

Mark manuscriptfor typesetting(2)

Settype(4)

Printand bind(9)

Obtaindesignsample(1)

Obtaincostestimates(3)

1 5

Prepare pagesfor printing(5)

Obtain andapprovecover proof(3)

9

2 3

4

Preparecover(1)

Make uppages(5)

6 10

7

8

Figure 9.6

A PERT diagram identifies the activities necessary to complete a given project and arranges the activities based on the total time required for each to become an event. The activities on the critical path determine the minimum time required to complete the project.



• Quality Control– The process of ensuring that goods and services are produced

in accordance with specifications.

– The major objective of quality control is to see that the organization lives up to the standards it has set for itself.

– Statistical Process Control (SPC)• An information-gathering system that plots data on control

charts and graphs to identify and pinpoint problems in product quality.

– Statistical Quality Control (SQC)• A set of techniques used to sample both work in progress and

finished products to find problems in the production process and improve product quality.

– Inspection• The examination of the quality of work in process.



• Quality Control (cont’d)– Improving Quality Through Employee Participation

• Total Quality Management (TQM)

• Quality Circles

• World Quality Standards– International Organization for Standardization (ISO)

• ISO 9000—certification for meeting quality control standards in procedures for the development and production of products.

• ISO 14000—certification for incorporating environmental concerns into operations and product standards.


The Management of Productivity

• Productivity– A measure of output per unit of time per worker.

• Productivity Trends– The United States has the highest level of productivity in the

world, but other nations are catching up as the U.S. rate of productivity growth lags behind other nations.

• Causes of U.S. Productivity Declines– Major changes in the composition of the U.S. work force with

the entry of younger, less experienced workers

– A slowing of the rate of investment by U.S. businesses

– Growth of the U.S. service sector without a corresponding increase in the rate of productivity growth

– Increased government regulation


The Management of Productivity

• Improving Productivity– Eliminate government policies hindering productivity growth.

– Increase cooperation between management and labor.

– Increase employee motivation and participation.

– Change the incentives for work by paying for what employees contribute, and not just for their time.

– More investment by business in facilities, equipment, and employee training.

in class review: midterm multiple choice. copyright © by houghton mifflin company. all rights...

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span of control

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