Exam 9: Production and Operations Management

Mini-Case "These are exciting times for our company. We've made a lot of changes over the past two years that have really improved our operations and lowered our costs. Now we are ready to expand into new markets. Minimotors is on its way to becoming a global player." The speaker was Sparky Weyer, president and CEO of Minimotors, Inc., a growing manufacturer of small (some of them downright tiny) electric motors used in a variety of power tools and appliances. Sparky was meeting with potential financial backers in an effort to obtain funding for some expensive new machinery he wanted to purchase. "You may have heard about some of the ways we've cut costs," Sparky continued. "We've developed a new arrangement with several of our biggest suppliers. They've agreed to make more frequent deliveries tied directly to our production schedules. This will help us reduce our inventory costs dramatically. We've also greatly reduced the number of defective motors we produce by carefully keeping tabs on all of our manufacturing processes. In fact, we have set a goal of reducing our defects to 3.4 parts per million. The main purpose of my meeting with you today is because we want to install some sophisticated new machinery and software that will allow us to quickly design and produce motors to the exact specifications of our customers. The machinery is computer-controlled and can produce custom-designed products at very little increase in cost compared to our mass produced motors. We feel this flexibility and quick response time will give us a tremendous competitive advantage and help us attract new customers. Installing the new equipment and training our workers to use it properly will be a complex project, but I'm confident that once we get everything up and running we'll be able to strengthen our position as the leading maker of high-quality electric motors." -The equipment and software Sparky wants to acquire will allow the computers used to design motors to be linked directly to the computer-aided equipment on the factory floor. Sparky is proposing to set up a(n):

Although important, the Green Economy will do little to add value to the U.S. economy.

Manufacturing firms focus exclusively on the production of goods and allow other firms to provide services.

Frolichstein Fabrics promotes itself as a specialty manufacturer that will produce according to customer specifications. This firm will probably be best served by using an intermittent process in production.

Speeding up the process of responding to consumer wants and needs is a key to global competitiveness.

The end result of PERT analysis is an estimate of the total cost of completing a project.

During the deep recession of 2008-2009,

Reviewing the PERT Network below: If it takes 1, 2, or 3 weeks for each activity (represented by a box) to be completed, the critical path is represented by:

is the creation of goods and services using land, labor, capital, entrepreneurship, and knowledge.

SitRite Furniture Company uses labor and machinery to transform wood, plastic, metal and cloth into comfortable chairs, sofas, and love seats. This process creates:

Telecommuting has diminished in popularity as a strategy for linking employees with work.

A product manufacturing layout is used to produce large quantities of a few types of products.

ISO 14000 is a collection of the best practices for managing an organization's impact on the environment.

Land, labor, capital, and knowledge are inputs into the production process.

standards are concerned with the best practices for managing an organization's environmental impacts.

uses computers to help design products.

is the operations management planning function that searches for quality material resources, finds the best suppliers, and negotiates the best price.

The advantage of computer integrated manufacturing software is that it allows computer aided design machines to communicate directly with computer aided manufacturing machines.

Operations managers are adjusting from a relatively stable environment to one that is constantly changing and evolving.

The quality standard for service industries such as luxury hotels is meeting the customers' requests.