TAKE HOME QUIZ

OPERATION MANAGEMENT
CASE ANALYSIS

Hazel had worked for the same Fortune 500 Company for almost 15 years. Although
the company had gone through some tough times, things were starting to turn
around. Customer orders were up, and quality and productivity had improved
dramatically from what they had been only a few years earlier due to company-wide
quality improvement program. So it came as a real shock to Hazel and about 400 of
her co-workers when they were suddenly terminated following the new CEOs
decision to downsize the company.
After recovering from the initial shock, Hazel tried to find employment
elsewhere. Despite her efforts, after eight months of searching she was no closer to
finding a job than the day she started. Her funds were being depleted and she was
getting more discouraged. There was one bright spot, though: she was able to bring
in a little money by mowing lawns for her neighbors. She got involved quite by
chance when she heard one neighbor remark that now that his children were on
their own, nobody was around to cut the grass. Almost jokingly, Hazel asked him
how much hed be willing to pay. Soon Hazel was mowing the lawns of five
neighbors. Other neighbors wanted her to work on their lawns, but she didnt feel
that she could spare any more time from her job search.
However, as the rejection letters began to file up. Hazel knew she had to
make a decision. On a sunny Tuesday morning, she decided, like many others in a
similar situation, to go into business for herself-taking care of neighborhood lawns.
She was relieved to give up the stress of job hunting, and she was excited about the
prospect of being her own boss. But she was also fearful of being completely on her
own. Nevertheless, Hazel was determined to make a go of it.
At first, business was a little slow, but once people realized Hazel was
available, many asked her to take care of their lawns. Some people were simply
glad to turn the work over to her; others switched from professional lawn care
services. By the end of her first year in business, Hazel knew she could earn a living
this way. She also performed other services such as fertilizing lawns, weeding
gardens and trimming shrubbery. Business became so good that Hazel hired two

part-time workers to assist her and, even then, she believed she could expand
further if she wanted to.

GUIDE QUESTION
1. In what ways are Hazels customers most likely to judge the quality of her
lawn care services?
There are so many ways Hazels customers can assess the quality of her
Lawn

Care Services. To mention a few, the following can be considered:

Punctuality and timely service;
Customer service
Pricing as it is commensurate with the scope of service

In addition, the customer feedback would be the best reference for Hazels
clients and how efficient her service is. Given the fact as mentioned that she
had to expanded her business to the extent of hiring people, this is an
indicator that her clients have grown. Growing numbers of clients is a good
sign of customer satisfaction.
2. Hazel is the operations manager of her business. Among her responsibilities
are forecasting, inventory management, scheduling, quality assurance, and
maintenance.
a. What kinds of things would likely require forecasts?
Schedules on the houses or lawns that she can service in a day in
order to come out with an efficient project scheduling of clients as

well as clients availability to receive the service;

Forecasts on possible weather conditions to determine if she can

deliver her service

With the forecasted schedule, Hazel has to project the logistics

needed for the service

b. What inventory items does Hazel probably have? Name one inventory
decisions she has to make periodically.
As I researched about Lawn Services, these are the inventory items
I would expect Hazel to have: lawn mower, fertilizers, shovels,

gloves, and some herbicides (for weeds).

One inventory decision that she has to make based on the season
she is in (periodically) is the herbicides. Weeds grow less during

winter season, thus, the need for herbicides decrease. (As

researched)
c. What scheduling must she do? What things might occur to disrupt
schedules and cause Hazel to reschedule?
The scheduling Hazel must do is her appointment to her neighbors,
whether it is weekly, monthly and etc. There are also times where
she need to adjust the schedule due to weather conditions.
Equipment failure and health problems might also disrupt her
schedules.
d. How important is quality assurance to Hazels business? Explain.
Quality assurance entails customer satisfaction. And customer
satisfaction becomes customer feedback that can generate more
clients. Quality assurance is a very important factor to Hazels
business. It is the key to her success because if there would be no
quality, many of her clients will go ask another lawn care services.
e. What kind of maintenance must be performed?
The maintenance Hazel must performed is about her equipment
(blades sharpened, oil changed, motors overhauled, and etc). She
needs to take care of them to make sure that they are working as
intended.
Checking of fertilizers (expiration dates).
Proper communication with the customers via telephone lines
Making sure that the facilities are clean
3. What are some of the trade-offs that Hazel probably considered relative to:
a. Working for a company instead of for herself?
Working for a company may limit her capability potentials
Working for herself meaning she is her own boss, she can schedule
her time according to her preferences, the income might fluctuate
or it is not fixed, she is now the one managing
b. Expanding the business?
Expanding the business means more profit, but the downside is it
requires more capital and worst comes to worst it would lead to
profit lost if not managed properly. Also when expanding, there
would be more expenses, therefore, it would require Hazel to
increase the service fee. The tendency is her clients will look for
another lawn care services which offers low service fee.
c. Launching a web site?

Launching a Web site is a good idea, it would increase Hazels

market since the internet can be access easily. A good
advertisement online might increase her prospective clients
resulting to increase in profit. However, Hazel would incur a cost of
hosting the website, paying for the web design and other related

costs.
4. The town is considering an ordinance that would prohibit putting grass
clippings at the curb for pick up because local landfills cannot handle the
volume. What options might Hazel consider if the ordinance is passed? Name
two advantages and two drawbacks of each option.
Hazels option would probably be adding up additional services in
her business like collecting and disposing of the trash grasses. An
advantage of these is additional income and additional job
opportunity to the laborers. The disadvantages would be: cost of
additional equipments that would be use in the new service and it

would be time consuming because of much work to be done.

On the other hand, as per research, grass clippings are said to be
fertilizers. After mowing the lawn, there is no need to sweep the
clippings but instead it can be left on the lawn in as much it is going
to break on its own. This would cut the effort, cost on trash bags as
well as the fertilizer. This would help the environment. The
disadvantage is if the clients would be favourable to this kind of set

up.
5. Hazel decided to offer the students who worked for her a bonus of $25 for
ideas on how to improve the business, and they provided several good ideas.
One idea that she initially rejected now appears to hold great promise. The
student who proposed the idea has left, and is currently working for a
competitor. Should Hazel send that student a check for the idea? What are
the possible trade-offs?
No, Hazel should not send that student a check because that student is
now working to another company. Hazel might get sued if Hazel will
use that idea for her own sake because that idea is now the idea of her
competitor. Moreover, if Hazel will give up that idea, she is now open
for another idea that might be more profitable and beneficial to her.
Another thing is, Hazel can now focus on another concerns and issues

that needed to be resolved. Possible trade-offs are between the gain of

the competitors and the loss of a good idea maker.

TAKEHOME EXAM (PRELIM EXAM)

OPERATION MANAGEMENT
1. Briefly describe or discuss the following:
a. Operations management
Definition: Operations management refers to the administration of
business practices to create the highest level of efficiency possible
within an organization. It is concerned with converting materials and
labor into goods and services as efficiently as possible to maximize the

profit of an organization.
Discussion: Operations management (OM) is the business function responsible
for managing the process of creation of goods and services. It involves planning,
organizing, coordinating, and controlling all the resources needed to produce a
companys goods and services. Because operations management is a
management function, it involves managing people, equipment, technology,
information, and all the other resources needed in the production of goods and
services. Operations management is the central core function of every company.
This is true regardless of the size of the company, the industry it is in, whether it is
manufacturing or service, or is for-profit or not-for-profit.

b. Scope of Operations Management

The scope of operations management based on the interrelationship of
three aspects, namely:
1. Structural aspects, in the form of input that will be transformed
according to criteria of the desired products, machinery,
equipment, formulas and models.
2. Functional aspects, namely the link between the component
input, with interaction of the planning, implementation, control,
and improvements to obtain optimum performance, so that
operations can be run continuously.
3. Environmental aspects, is the tendency that occurs outside the
system, such as community, government, technology,

economics, political, social, cultural, demonstrated ability to

adapt.
Discussion: Each manager will carry out basic functions of
management processes. Management process consists of planning,
organizing, setting up employees, directing, and controlling.
Operations managers to implement these management processes in
decision making in operations management functions.
Based on the aspects mentioned above, the scope of operations
management is defined to be ten important decisions in operations

management are as follows:

1. The design of products and services
2. manage the quality
3. the strategy process
4. strategic location
5. Layout strategy
6. Human resources
7. Supply chain management
8. inventory management
9. scheduling
10. maintenance
c. Forecasting
Forecasting A planning tool that helps management in its
attempts to cope with the uncertainty of the future, relying

mainly on data from the past and present and analysis of trends.
Discussion: Wouldn't your life be so much easier if you just had
a crystal ball that you could gaze into and learn everything that
was coming your way? Unfortunately, such a thing does not
exist. However, just like we'd like to know the future, companies
need to have as good of an idea as possible about what is
coming their way. As a result, companies attempt to forecast
future events. Forecasting now may be understood as the
companys ability to try to figure out what is coming along in the

future by using information available today.

d. Capacity planning
Capacity planning is the process of determining the production
capacity needed by an organization to meet changing demands
for its products. In the context of capacity planning, design

capacity is the maximum amount of work that an organization is

capable of completing in a given period.

Discussion: The overall objective of capacity planning is to
reach an optimal level where production capabilities meet
demand. Capacity needs include equipment, space, and
employee skills. If production capabilities are not meeting
demand, high costs, strains on resources, and customer loss
may result. It is important to note that capacity planning has
many long term concerns given the long term commitment of
resources. Managers should recognize the broader effects
capacity decisions have on the entire organization. Common
strategies include leading capacity, where capacity is increased
to meet expected demand, and following capacity, where
companies wait for demand increases before expanding

capabilities.
e. Managing Inventories
Managing Inventories is the practice overseeing and controlling
of the ordering, storage and use of components that a company
uses in the production of the items it sells. Inventory
management is also the practice of overseeing and controlling of
quantities of finished products for sale. A business's inventory is
one of its major assets and represents an investment that is tied

up until the item sells.

Discussion: Inventories that are mismanaged can create
significant financial problems for a business, whether the
mismanagement results in an inventory glut or an inventory
shortage. Successful inventory management involves creating a
purchasing plan to ensure that items are available when they
are needed but that neither too much nor too little is
purchased and keeping track of existing inventory and its use.
Two common inventory-management strategies are the just-intime (JIT) method, where companies plan to receive items as
they are needed rather than maintaining high inventory levels,
and materials requirement planning (MRP), which schedules
material deliveries based on sales forecasts.

f.

Assuring quality
Assuring quality is a way of preventing mistakes or defects in
manufactured products and avoiding problems when delivering
solutions or services to customers; which ISO 9000 defines as
"part of quality management focused on providing confidence

that quality requirements will be fulfilled".

Discussion: In developing products and services, quality
assurance is any systematic process of checking to see whether
a product or service being developed is meeting specified
requirements. Many companies have a separate department
devoted to quality assurance. A quality assurance system is said
to increase customer confidence and a company's credibility, to
improve work processes and efficiency, and to enable a

company to better compete with others.

g. Motivating and training employees
One key factor in employee motivation and retention is the
opportunity employees want to continue to grow and develop

job and career enhancing skills which is done through training.

Discussion: Employees appreciate the opportunity to develop
their knowledge and skills without ever leaving work or the
workplace. Internal training and development brings a special
plus. Examples, terminology, and opportunities reflect the
culture, environment, and needs of the workplace. Usually,
employees who feel better about of their work and themselves
work harder to accomplish goals and keep the same mindset.
However, it is important to understand that employee
motivation should target both managers and employees. They
always go hand-in-hand.

2. Differentiate Manufacturing and Service Organizations. ( cite example/s if

possible)
Manufacturing Organizations are that primarily produce a tangible
product and typically have low customer contact while Service
Organization that primarily produce an intangible product such as

ideas, assistance or information which requires more customer contact

Examples:

Manufacturing Organization:
Furniture
Sardines
Shoes
Bags
Clothes
o Service Organization
Technician
Accountant
IT Specialist
Lawyer
Tutor
3. Discuss the importance of Operations Management? (please discuss
o

comprehensively by applying it in your chosen company)

For a University or an educational institution, the importance of
operations management is vital to achieve its promise of ensuring a
safe, caring and effective learning environment. This would signify
quality services in terms of academics and customer satisfaction.
Likewise, this would help the effectiveness and efficiency of all its
resources.
4. How has technological changes affected your own organization?
The technological changes affected the University by developing
new systems and processes in school operations. Primarily, the
implementation of the system of education which is the primary
service rendered to students (clients) has changed. Investments on
the new technology has to be made to adapt to the service
requirements. Example: From use of the blackboard as a channel of
lectures changed to whiteboards or glass boards which got rid with
the use of chalk; Computer presentations are now used for a
learning resource, etc. Records management system is also another
change that the university has to adapt for better and faster
service. Employee management for timekeeping and the like also
uses technology system. In other words, the net result of
technological change for all organizations is a greater requirement
for strategic planning. All of us must continually ask the question
"What do we have to do now to attain our objective tomorrow?"
Through this process we can anticipate changes, including those

brought about by technology, evaluate the various alternatives

available to us to cope with those changes, and be prepared for the
future as it arrives.
5. Why do people do things that are unethical?
Pressure can drive people to do things they wouldnt normally do.
Pressure to succeed, pressure to get ahead, pressure to meet
deadlines and expectations, pressure from co-workers, bosses,
customers, or vendors to engage in unethical activities or at least

look the other way.

Some people make unethical choices because they are not sure
about what really is the right thing to do. Often, ethical problems

are complicated, and the proper choice may be far from obvious.
Of course, some people do not just do something wrong in a weak
moment or because they are not sure about what is the right thing
to do. Some people know exactly what they are doing and why. Selfinterest, personal gain, ambition, and downright greed are at the

bottom of a lot of unethical activity in business.

Misguided loyalty is another reason for unethical conduct on the
job. People sometimes lie because they think in doing so they are
being loyal to the organization or to their bosses. Examples of this
type of behavior are not hard to find. For example, managers at
automobile companies who hide or falsify information about defects
that later cause accidents and kill people or managers at
pharmaceutical companies who hide information about dangerous
side effects of their drugs. No doubt these managers believed they
were protecting their employers. They may well have seen

themselves as good, loyal employees.

Then there are those who simply never learned or do not care about
ethical values. Since they have no personal ethical values, they do
not have any basis for understanding or applying ethical standards
in business. These people do not think about right and wrong. They
only think, "Whats in it for me?" and "Can I get away with it?"