Exam 3: Measuring Performance in Operations

_____ provide the basis for decisions at the level at which they are applied-the value chain, organization, process, department, workstation, job, and service encounter.

The balanced scorecard model uses the same categories as the Baldrige Award.

Budget variance is a financial performance measure at an organizational level.

Goods-producing and service-providing organizations both benefit from understanding the value of a loyal customer performance relationship.

Which of the following expressions is used to measure productivity?

Patrick rents car from a local car rental company. On an average, he spends $100 a month. The company's contribution margin is 35 percent and the average customer defection is 50 percent. Determine the value of a loyal customer.

The value of a loyal customer quantifies the total revenue or profit each target market customer generates over the buyer's life cycle.

A computer manufacturer currently has a 15 percent customer defection rate. Their accounting department estimates the incremental contribution to profit and overhead as 30 percent. Customers purchase computers every four years at an average cost of $1,200. In an effort to reduce the defection rate, the company is improving both the quality of its computers and its post-sale service. Determine the value of a loyal customer if the defection rate drops to 5 percent.

With interlinking models, managers can objectively make internal decisions that impact external outcomes.

Using the information below, determine the productivity (measured as output per dollar input) for each quarter and calculate the percentage change in productivity. First Quarter Second Quarter Total Units Sold 12,000 11,500 Labor Hours 10,000 9,500 Labor Cost/Hour \ 8.00 \ 8.00 Material Usage (lbs.) 6,000 5,500 Material Cost/lb. \ 12.00 \ 11.50 Other Costs \ 25,000 \ 23,000

Discuss the seven categories of the Malcolm Baldrige National Quality Award.

The Malcolm Baldrige National Quality Award Program was created to help stimulate American organizations to improve quality, productivity, and overall competitiveness.

The primary purpose of the Malcolm Baldrige National Quality Award Program is to provide a framework for performance excellence through self-assessment to understand an organization's strengths and weaknesses, thereby setting priorities for improvement.

_____ is the ratio of the output of a process to the input.

Speed is usually measured in clock time, whereas variability is measured by quantifying the variances around average performance or targets.

Which of the following categories in Baldrige model of organizational performance addresses how an organization designs, manages, and improves its work systems to deliver customer value?

In the Baldrige Award criteria, the strategic planning category focuses on how an organization selects, gathers, analyzes, manages, and improves its data, information, and knowledge assets.

Errors in service creation and delivery are sometimes called service upsets.

Why is measurement important?

Using the information provided in the table below, determine the percentage change in productivity from 2009 to 2010. OUTPUTS Units 110,000 150,000 INPUTS Direct Labor Costs \ 250,000 \ 310,000 Energy Cost \ 6,000 \ 5,800 Raw Material Cost \ 40,000 \ 42,000