1. Why should one study operations management?
We study OM for four reasons. We study how people organize themselves for productive enterprise. We study OM because we want to know how goods and services are produced. We study OM to understand what operations managers do. We study OM because it is such a costly part of an organization. Productivity can be measured in a variety of ways, such as by labor, capital, energy, material usage, and so on. At Modern Lumber, Inc., Art Binley, president and producer of apple crates sold to growers, has been able, with his current equipment, to produce 240 crates per 100 logs. He currently purchases 100 logs per day, and each log requires 3 labor-hours to process. He believes that he can hire a professional buyer who can buy a better-quality log at the same cost. If this is the case, he can increase his production to 260 crates per 100 logs. His labor-hours will increase by 8 hours per day. What will be the impact on productivity (measured in crates per labor-hour) if the buyer is hired? (a) Current labor productivity 240 crates/ 100 logs X 3 hours/log 240/300= .8 crates per labor -hour= 240
(b)Labor productivity with buyer = 260 crates/(100 logs X 3 hours/log) + 8 hours =260/308=.844 crates per labor-hour
Using current productivity (.80 from [a]) as a base, the increase will be 5.5% (.844/.8 = 1.055, or a 5.5% increase).
Chapter 2 Operations Strategy in a Global Environment
1. Based on the descriptions and analyses in this chapter, would Boeing be better described as a global firm or a transnational firm? Discuss. Boeing a top U.S. exporter, the company supports airlines and U.S. and allied government customers in 150 countries. Key activities in a transitional company are neither centralized in the parent company nor decentralized so that each subsidiary can carry out its own tasks on a local basis. Boeing would be described as a transnational...