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PROJECT

Activity Research Questions:


1. Many organizations offer a combination of goods and services to their customers. As you
learned from previous chapter(s), there are some key differences between production of
goods and delivery of services. What are the implications of these differences relative to
managing operations?
2. Contrast the strategies of PepsiCo, emphasizing its diet cola, and Coca-Cola, focusing on
reviving its Classic Coke brand. What is the basis of each ones strategy?
3. A Japanese company has two manufacturing plants, one in the United States and in
another country. Both produce the same item, each for sale in their respective countries.
However, their productivity figures are quite different. The analyst thinks this is because
the Japanese plant uses more automated equipment for processing while the other plant
uses a higher percentage of labor . Explain how that factor can cause productivity figures
to be misleading. Is there another way to compare the two plants that would be more
meaningful?
4. While it is true that increases in efficiency generate productivity increases, it is possible to
get caught in an efficiency improvement trap. Explain what this means.
5. In the past there, was concern about a productivity paradox. Related to IT services. More
recently, there have been few references to this phenomenon. Using the Internet, explain
the term productivity paradox. Why do you think that the discussion of that topic has
faded?

6. It has been said that forecasting using exponential smoothing is like driving a car by
looking in the rear-view mirror. What are the conditions that would have to exist for driving
a car that are analogous to the assumptions made when using exponential smoothing?
7. What capability would an organization have to have to not need forecasts?
8. Think of a new or revised product or service that you would like to see on the market.
Discuss the implications of producing that product or service relative to legal, ethical,
environmental, profitability, competitive, design, and production issues.
9. Compared to manufacturing, service requirements tend to be more time dependent, location
dependent, and volatile. In addition, service quality is often directly observable by
customers. Find a recent article in a business magazine that describes how a service
organization is struggling with one or more of these issues and make recommendations on
what an organization needs to do to overcome these difficulties.
10. There are several factors that must exist in order to make automation feasible, name the
two or three most important factors and briefly explain their importance.
11. A commercial bakery has recorded sales (in dozens) for three products, as shown below:
Day
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Blueberry Muffins
30
34
32
34
35
30
34
36
29
31
35
31
37
34
33

Cinnamon Buns
18
17
19
19
22
23
23
25
24
26
27
28
29
31
33

Cupcakes
45
26
27
23
22
48
29
20
14
18
47
26
27
24
22

(a) Predict orders for the following day for each of the products using an appropriate
nave method. Also Plot each data set.
(b) What should the use of sales data instead of demand imply??

Kristel L. Cruz, ECE


Answer to Question No. 1:
Production of goods and delivery of services are different from each other in the
sense that goods are not produced and consumed at the same time whereas services are
produced and consumed or delivered at the same time, making it imperative for managers
and operational guys to keep a close eye on the quality of the services being delivered
Most of manufactured goods, especially FMCG and industrial products need to be
supported by an excellent team of after sales service personnel. After all, in todays world
most products are getting commoditized and the discerning factor between one product
and its competition is often the quality of service that the manufacturer provides. Even
with the consumer goods like food items and cosmetics, there has to be a service section
to handle complaints and product returns.
Sometimes, a vendor can offer value-added services to his product as a package.
Today, many laptop manufacturers offer one year free maintenance, software installation,
and trouble-shooting as an add-in. This can also be extended at a nominal price for an
additional two to three years.
Therefore, its commercially advantageous for a firm to offer complimentary
services along with its product offerings.
The fact to be noted is that different types of personnel are required to manage the
operations related to manufacturing of goods and the delivery of services. Even if the
services are related to the goods being manufactured by the firm, the service personnel

need to have overall knowledge regarding the actual working of the equipment under
field conditions rather than how it was built.
Therefore, a firm dealing with both manufacturing and services needs to have
different sets of personnel to handle the operations related to these two sectors.

Answer to Question No. 2:


Pepsi seeks to take advantage of the current push to reduce calories, while Coke
seeks to recapture demand of its classic offering.

Answer to Question No. 3:


The automated processing would give a much higher labor productivity ratio than
the manual processing. Use multi-factor productivity for a more meaningful measure.

Answer to Question No. 4:


Focusing solely on efficiency may result in overlooking potential major
productivity gains that could be achieved by altering inputs, rather than simply refining
methods to achieve relatively modest gains.

Answer to Question No. 5:


The productivity paradox refers to massive investment in information
technology that occurred in the latter part of the last century that did not appear to result

in productivity gains. However, since that time, there have been consistent annual gains
in productivity, perhaps due in part, the IT investments.

Answer to Question No. 6:


The conditions that would have to exist for driving a car that are analogous to the
assumptions made when using exponential smoothing are that the immediate future will
be like the recent past. This would suggest:
a.
b.
c.
d.

No sharp curves or turns on the road


Constant traffic conditions
No traffic lights or stop signs
Constant road conditions

Answer to Question No. 7:


Instantaneous re-supply and/or completely flexible capacity.
Answer to Question No. 8:
A revised product may include a Voice controlled Washing machine. Washing
machines are required by people of all age groups and hence are a demanded product in
the market. Companies manufacturing washing machine can revise the product to include
voice command system which would operate as per the instructions given by the owner.
In order to manufacture this product new software should be included in the machines
which could recognize human voice and operate.

Answer to Question No. 9

Globe Telecom Network problem

Answer to Question No. 11:


(a) We need to use naive methods. This means that any simple appropriate
method can conducted. For example: Plotting each data set reveals that muffins orders
are almost stable, varying around an average (e.g. 33). The demand for cinnamon buns
has a trend. If we get the last three period, we realized that number increased two by
two so 33-31=2 and last one is 33+2=35. This is for the following day for cinnamon
buns. Demand for cupcakes has an apparent seasonal variation with peaks every five
days. Day 1=45, Day 6=48, Day 11=47 and the next peak would be Day 16=50.

(b) The use of sales data instead of demand implies that sales adequately reflect
demand. We are assuming that n stock-outs because demand equals sales if there are
no shortages.

Neriza Gamit
Answer to Question No. 1:
One major difference of product and service industries from an operations
perspective is the degree of customer contact present. This makes scheduling very
difficult in service industries as they cannot build up inventories and are very demand
sensitive. In this same way service industries are very sensitive to inputs as each process
can have very different inputs which require very different processes. Measurement of
productivity and quality assurance are much harder to measure in service industries as
measurement is not a simple quantity measure as it is in product industries, and quality
must be measured as services are delivered and cannot be inspected beforehand. All of
these differences make it much harder for operations managers in service industries to
make projecting and measurements of processes within their organizations.

Answer to Question No. 2:


a. Reposition

Brand

Image

Align

With Social

Values and

Attitudes

Brand recognition and identification has proven to be significant factor affecting


the competitive position of both Coke and Pepsi. This has proven to be a powerful
and influential tool in attracting consumer brand awareness and loyalty. Coke has
stuck with one basic slogan for years, without infusing new faces and sounds. Right
now they are associated with being the cola for the older generation. With this
reputation, they are missing out on the younger generation choosing Coke. To remain
strong in the long-term, Coke needs to find a way to appeal more to the younger

generation. Coke has successfully come out with new variations and sizes of drinks
that have evolved with customer demands, but have not built a strong brand image
where their products are identified with evolving social values and attitudes of the
younger generation. Coke should take steps to reposition their brand in alignment
with these social values and attitudes. They have a strong, recognized brand name,
but they need to reposition themselves better for the long term. The biggest challenge
that Coke will face with this alternative is the fact that they are already so well
established. With such an established brand name, it may be difficult to reposition
their brand in the minds of the younger generation.
b.

Focus

on

Foreign

Markets

At this point, domestic customers already know which cola they prefer. Those
preferences are fairly constant and it is unlikely that advertising and promotions will
significantly change those preferences in the long-term. However, this is not the case
in foreign countries. Advertisements and promotions could make all the difference in
these markets. Coke should concentrate on its foreign markets and tailor their
product, marketing, and brand strategies to each specific foreign market. By shying
away from the global approach, they will be able adapt more quickly and efficiently
to changing consumer demands and they will be more appealing to foreign markets.
In addition to the fact that tailoring product and marketing to specific markets will be
difficult and prevent them from gaining the economies associated with a global brand,
they also will face the challenge that their brand name is associated with the
American way of life and culture.
c. Further

Diversify

Portfolio

Coke should diversify its portfolio more with to minimize risk in case the CSD
business is slowing down for a longer time. They have already started doing this to a
degree, but they should further pursue this strategy. They should use their profits from
their cash cow products to finance new products and growth elsewhere. If they
diversify into areas that compliment their current product offerings, they will gain
significant economies of scale, because they will be targeting similar consumers,
using the same distribution system, and will be able to adapt their current marketing

strategies. There is, however, the possibility that they may drift too far away from
their core competency with this strategy and that they will not be successful in their
future undertakings. Also, although this strategy allows risk to be balanced, their still
is a great risk involved with moving to areas that are outside of their area of
expertise.

Answer to Question No. 3:


It may be more meaningful to compare productivity levels across sectors with
similar potential to absorb labour, and here too the gaps can be quite large. Productivity
in construction is more than twice the productivity in agriculture, and productivity in
manufactures is almost three times as large.

Answer to Question No. 4:

Efficiency is mainly concerns with the things are done, it deals with the quantity and
quality of a product and how things are being done, while productivity concerns with
an operations end results, hence using efficiency as a way to find the most appropriate
way to reach a goal in a given operation means that productivity will be more

impressive with every increase in efficiency.


Concentrating on efficiency improvement as opposed to the improvement of
productivity may not be successful at all as organization would not be focusing on the
use of different resources when it comes to doing things in a better way. This is
essentially means that such organization would lag behind competitors as far as

productivity is concerned and hence incurring more costs forward than competitors.
Therefore it is important to note that productivity as a concept is wider than efficiency
and organizations would look for increasing their efficiency by deriving the most out
of a set of assets, productivity dictates that for each production goal to be reached,
resources must be used efficiently.

Answer to Question No. 5:

The productivity paradox refers to massive investment in information


technology that occurred in the later part of the last century that did not appear to result in
productivity gains. However, since that time, there have been consistent annual gain in
productivity, perhaps due in part, the IT investments.
Answer to Question No. 6:
The conditions that would have to exist for driving a car that are analogous to the
assumptions made when using the exponential smoothing are that the immediate future
will be like the recent past. This would suggest:
a.
b.
c.
d.

No sharp curves or turn of the road


Constant traffic conditions
No traffic lights or stop signs
Constant road conditions.

Answer to Question No. 7:


Leadership. We often think of leadership as a set of people at the top of the
organization but it is actually a skill that can, and should, exist at every level. Leadership
is the capability to inspire and motivate people to fulfill a mission. At the top of the
organization leadership includes directing others while at lower levels it is accomplished
through influencing others. Your companys leadership performance has a lot to do with
how much the organization can accomplish in a given amount of time. Collaboration.
Collaboration is the ability to work productively with others.
Answer to Question No. 8:

A revised product may include aVoice controlled Washing machine. Washing


machines are required by people of all age groups and hence are a demanded product in
the market. Companies manufacturing washing machine can revise the product to include
voice command system which would operate as per the instructions given by the owner.

In order to manufacture this product new software should be included in the machines
which could recognize human voice and operate.
Answer to Question No. 9:

Date: June3, 2011


Name of article: Mayor Edwin Lee on San Frans Pension Problem and Keeping
Twitter

in

Town.

This article talks about how Twitter is facing challenges in a different region from
the service perspective. Location dependent: Twitter is headquartered in San Francisco
and is renting their facility within the city limits of San Francisco. They are having
difficulties in finding the appropriate size at a lower rental cost and the ability to lower
payroll taxes in San Francisco. According to Adam Lashinsky, senior editor at large of
Fortune Magazine, about 350 workers, 65 percent of them apparently are residents of
San Francisco: they bike to work and love working there (Lashinsky). Volatile: Twitter
is looking for other locations, in the South San Francisco area. South San Francisco
according to Lashinsky is out of the city and the county lines (Lashinsky). With the
decisions that Twitter will me making, it becomes volatile. The volatility would be
detrimental to the not only to the city and county but also to the employees.

Answer to Question No. 10:

Factor#1: Plan

Accordingly

Transitioning to an automated welding system can dramatically increase


production; however, it should never been done impulsively. It is expensive and does not
suit every application or facility. Instead, prior to implementing an automated welding
system, work with an integrator or robot OEM to develop a plan that accounts for factors
including: the part and volume to be automated, your facility and available personnel for
overseeing the system.

Completing an upfront evaluation of your current welding process, as well as the


outcome you desire is a good place to start. It will also help you avoid implementing an
automated welding system that requires constant supervision. After all, the goal is to have
an automated process that requires only nominal supervision, while still improving
productivity and weld quality.
A good first step is to consider whether you need a fixed or robotic welding
system. Fixed automation is extremely efficient and cost-effective, and works well for
welding parts that requires straight or curved welds along a single plane. An example
would be a lathe-type application in which a simple part is spun, welded and ejected from
the process. Another example would be a straight-line weld, in which the torch advances,
makes a six-inch weld and retracts to the neutral position in preparation for the next weld.
Conversely, a robotic welding system features guns mounted on arms with
articulated joints that can reach, rotate and pivot to gain access to the part. They can be
programmed to complete more intricate welds than a fixed automation system. If you
anticipate frequent job changes or need to weld complex parts, this type of automation
can offer the flexibility to be re-tasked as needed.
Also, think of your companys future welding needs when determining which type
of automation is best for you. For example, if you currently weld a part well suited to a
fixed automation system, but you arent certain you will be welding that part three years
from now, consider a robotic welding system. It can be reprogrammed and retooled to
accommodate your needs in the future.

Factor #2:

Evaluate

Your Application

Regardless of the type of automated welding system you choose, these systems
are significantly faster than semi-automated welding, provided the process suits the
application at hand. Simply put, your application needs to be repeatable. Parts with large
gaps, fit-up or access challenges are best left to a welding operator who can weld in
obstructed or precarious positions and compensate for such conditions. Similarly, parts

that require intricate clamping and tooling to hold them in place will often hinder the
productivity benefits of an automated welding system.
Instead, if you are considering an automated welding system, be certain that the
parts manufactured upstream are as simple and consistent as possible, and that they allow
the robot to execute the weld repeatedly. Working with a robot OEM or integrator is a
good way to determine if your parts are well suited to an automated welding system.
Provide them with a blueprint or an electronic CAD drawing of the part you wish to
weld. Doing so helps improve the quality of the planned weld and determine how the part
and its tooling can be fine-tuned to optimize the automated welding process.
Prior to automating, you should also assess the parts flow. For example, if you
want to your automated welding system to relieve a bottleneck at the welding cell, then
be certain that there are no delays in upstream part fabrication. Similarly, you should
ensure that there is no rework required before sending parts to the welding cell or that the
employees supplying parts to the robot can match the cycle time of the automated cell.
After all, the efficiency of each of these situations directly affects efficiency of the
automated welding systemif they are too slow, they can cause significant downtime
and negate the speed sought through an automated welding system.
If you cannot guarantee fast upstream workflow, you may want to consider an
automation solution for upstream applications. These machines feature sophisticated part
recognition systems that can pick up parts, manipulate them to the correct orientation and
deliver them to the automated welding cell. These systems add to the expense of
automating; however, they may be an option if you are concerned about the consistency
and cycle time of your manual upstream processes

Factor #3:

Assess Your Facility

You might consider working with a third-party integrator to help you decide
whether your f acility suits the installation of an automated welding system. System
integrators are knowledgeable about all aspects of facility modifications necessary for

automation, including important safety regulations that apply in the fabricators region,
country or state, in addition to those specified by OSHA and RIA (Robotic Industries
Association).
That said, the first step in assessing your facility is to determine your available space.
Remember, the physical footprint necessary for a robotic welding system, as well as the room
needed for the flow of raw materials is significantly greater than that of semi-automatic welding
processes. By considering your available real
estate, you can be certain that you have not only
the physical space to accommodate the new system, but you can also avoid having to customize
products, such as unicables, peripherals or torches to fit the work envelope. Instead, you can rely
on standard products that will work within your allotted area. And, dont worry if you have a
small facility. There are still ways to make automation work. One option is to purchase fewer
pieces of automation equipment that are capable of performing multiple tasks.
Regardless of the size of your facility, you should also consider the power sources
required to operate an automated welding systema 480-volt three-phase power source is
usually considered optimal. Also consider your gas and wire requirements. Due to the higher
volume of welding possible with an automated welding system, you will need to purchase, store
and place larger packages of wire (for example, 600 or 900 lb. drums compared to 40 lb. spools).
In terms of gas delivery, limiting robot downtime is the top priority. Investing in bulk delivery of
gas and using a manifold system can eliminate the downtime associated with frequent bottle
change-outs and is key to adding to the productivity of an automated welding system.

Factor#4:

Determine

Your Available

Personnel

and

Training

Automated welding systems need human supervision and maintenance. When


considering whether to automate your welding system, you should evaluate the skill set
of your available welding operators, as well as the resources you have for training them.
Welding system should you proceed with the purchase) are skilled welding operators or
those with previous robotic welding management experience. These individuals should,
after training, have the skills to program the robot and to troubleshoot the automated

welding process as needed. They should also be able to perform routine, preventive
maintenance on the system, as it can significantly decrease downtime in the long term
and increase the life of the system and its components. Consider vetting robot OEMs to
determine the availability and costs associated with the training of your personnel.
Typically, robotic integrators and OEMs training, which usually lasts one to three weeks
depending on the certification level desired. Also, look for robot OEMs or integrators that
have resources available after the training has been completed. These resources may
include online tutorials or troubleshooting information, additional onsite training and/or
service team members you can reach by phone with any questions you and your team
may have.

Answer to Question No. 11:

(a) We need to use naive methods. This means that any simple appropriate method
can conducted. For example: Ploting each data set reveals that muffins orders are almost
stable, varying around an average (e.g. 33). The demand for cinnamon buns has a trend.
If we get the last three period, we realized that number increased two by two so 33-31=2
and last one is 33+2=35. This is for the following day for cinnamon buns. Demand for
cupcakes has an apparent seasonal variation with peaks every five days. Day 1=45, Day
6=48, Day 11=47 and the next peak would be Day 16=50.

(b) The use of sales data instead of demand implies that sales adequately reflect
demand. We are assuming that n stock-outs because demand equals sales if there are no
shortages.

Camille L. Gonzales
Answer to Question No. 1:

The production of goods pertains to manufacturing of a product while the delivery


of goods pertains to service. There are some key differences with these aspects when it
comes in managing the operations. The tangibility of their output; production on demand
or for inventory; customer-specific production; labor-intensive or automated operations;
and the need for a physical production location. However, in practice, service and
manufacturing organizations share many characteristics. Many manufacturers offer their
own service operations and both require skilled people to create a profitable business.

Goods

PRODUCTION/ MANUFACTURING
DELIVERY / SERVICE
Produce physical goods that customers In a firm the output of
can see and touch

Inventory

consultancy, training is

intangible
Produce goods for stock, with inventory Do not hold inventory;
levels aligned to forecasts of market they create a service when

Customers

demand.
a client requires it.
Can produce goods without a customer Do not produce a service
order or forecast of customer demand. unless a customer requires
However, producing goods that do not it, Service firms generally
meet market needs is a poor strategy.

Labor

produce a service tailored

to customers' needs.
Can automate many of their production Recruits people with
processes

to

requirements,

reduce

their

although

labor specific knowledge and


some skills

in

the

service

manufacturing organizations are labor disciplines that it offers.


intensive, particularly in countries where Service delivery is labor

labor costs are low.

intensive and cannot be


easily

automated,

although

knowledge

management
enable

systems
degree

of

knowledge capture and


Location

sharing.
Manufacturers must have a physical Do not require a physical
location for their production and stock production
holding operations. Production does not people
necessarily

take

place

on

site.

The

creating

and

the delivering the service can

manufacturer's own site; it can take place be


at any point in the supply chain.

located

anywhere

knowledge from offices


around the world.

Answer to Question No. 2:

PepsiCo focuses on BETTER TOGETHER strategy. PepsiCo Inc. will


continue to leverage the benefits of coordinating its snack and beverage businesses
through its "Better Together" plan. The promise of Better Together is when the company
realized to innovate those common or complementary needs, as well as positioning their
brands as a portfolio to meet different needs, and drive co-merchandising and copromotional support.
The overall basis of the company focuses on four key priorities.
Building of their brands
Driving consumer-led innovation
Enhancing execution
Continuing to deliver productivity

The Basis of Coca Colas competitive strategy are: They have what they call
STRATEGY CLOCK this represents the different position of Coke brands in the
market wherein customers have different requirement in terms of value for money. With
this Coca Cola has therefore taken the Hybrid strategy in which they maintain its price
but tries to differentiate itself from competitors.
STRATEGY DIRECTION also one of their basis that focuses on
diversification which is a simple strategy that takes the organization away from both its
existing market and its existing product. Coca Cola today does not only deal in alcoholic
softdrinks but they also make juices and carbonated products.
Answer to Question No. 3:

William J Baumol explains. An increase in the pace of technological change can


have two profound side effects in the labor market. It can increase the rate and the
average duration of unemployment. Because firms may not consider it cost-effective to
retrain some types of workers to keep up with change, notably the less-educated and
older employees, these workers may be jobless for long periods of time, with some of
them perhaps never working again. If technological change causes workers to become
unemployed more often and for longer periods of time, not only will the level of
unemployment increase, but the "natural rate of unemployment," the hypothesized
minimum sustainable rate of unemployment, will increase as well.
Jobs Study.com stated that technology both eliminates jobs and creates jobs.
Generally it destroys lower wage, lower productivity jobs, while it creates jobs that are
more productive, high-skill and better paid. Historically, the income-generating effects of
new technologies have proved more powerful than the labor-displacing effects:
technological progress has been accompanied not only by higher output and productivity,
but also by higher overall employment.

Virtually all types of technological change result in increases in the demand for
labor in some labor markets and decreases in the demand for labor in other labor markets.
The introduction of assembly line production methods and the production of
interchangeable parts resulted in a substantial increase in labor productivity. This
technological innovation also resulted in an increase in the demand for unskilled workers
and a decrease in the demand for skilled artisans. The introduction of automated
manufacturing processes, on the other hand, has resulted in a decrease in the demand for
unskilled workers and an increase in the demand for quality control technicians and
computer programmers. In general, technological change will alter the composition of the
demand for labor, raising the demand for some types of labor and reducing the demand
for other types of labor. Those who lose jobs as a result of technological change that
reduces the demand for that category of labor are said to be structurally unemployed.
Even though technological change may adversely affect the demand for labor in some
labor markets, the overall effect of technological change on total employment may be
positive. Technological change tends to increase the rate of economic growth. Higher
rates of economic growth are generally associated with lower unemployment rates..
While the effect of technological change on the unemployment rate is ambiguous, this
may be little consolation to those workers whose job skills have been rendered obsolete
as a result of technological change. One of the issues that every industrialized society has
to deal with is the extent to which the government should be involved in the retraining of
structurally unemployed workers.

Answer to Question No. 4:

Efficiency mainly concerns with the ways things are done, it deals with the
quantity and quality of a product and how things are being done, while productivity
concerns with an operations and end results, hence using efficiency as a way to find the
most appropriate way to reach a goal in a given operation means that productivity will be
more impressive with every increase in efficiency.

Concentrating on efficiency improvement as opposed to the improvement of


productivity may not be a successful at all as organization would not be focusing on the
use of different resources when it comes to doing things in a better way. This essentially
means that such organization would lag behind competitors as far as productivity is
concerned and hence incurring more costs going forward than competitors.
Therefore it is important to note that productivity as a concept is wider than
efficiency and organizations should look for increasing their efficiency by deriving the
most out of a set of assets, productivity dictates that for each production goal to be
reached, resources must be used efficiently.
Answer to Question No. 5:

The productivity paradox (also the Solow computer paradox) is the peculiar
observation made in business process analysis that, as more investment is made in
information technology, worker productivity may go down instead of up. There were a
number of theories proposed that explained the productivity paradox. There ranged from
ideas about inadequate measurement of productivity to the necessary lag period before
actual gains in productivity could be seen. Until recently these explanations were little
more than theories, but now many of them have hard evidence to support then due to
studies that show a large increases in productivity in companies that invested heavily in
IT. Four Explanations for the Paradox
Although it is too early to conclude that its productivity contribution has been
subpar, a paradox remains in our inability to unequivocally document any contribution
after so much effort. The various explanations that have been proposed can be grouped
into four categories:
1) Mismeasurement of outputs and inputs,
2) Lags due to learning and adjustment,
3) Redistribution and dissipation of profits,
4) Mismanagement of information and technology.

Answer to Question No. 6:

The process of gasoline consumption in a car. Example we estimate that at present


the numerical value of the constant is 30 miles per gallon. We therefore forecast that we
can go another 30 miles and burn approximately 1 gallon. Another is the process of
controlling a cars position under a constant acceleration can be describe by a quadratic
function of time.
Answer to Question No. 7:

Leadership. We often think that leadership is a set of people in the top


organization. But actually this is a skill that one man CAN and SHOULD exist in every
level. The ability to inspire and motivate people to fulfill a certain goal. This is by
influencing others. Leadership with collaboration could be the best capability of an
organization.
Answer to Question No. 8:

I want to see a unique security GPS device for kids. I often browse the internet
and I saw this thing. It was a watch type accessory for kids, nut the truth is that it is a
GPS wherein you can track the location of your child from anywhere because the GPS
can have access to your phone.
LEGALLY This may be a big help to erase the kidnap ransom or any crime. As the
devise is not only for kids but this can be used by all ages.
ETHICAL The device is not producing harm to the environment. The product will just
require a software. This is more than just a trade fair. The device is more than just a trade
fair. The supplier will be calmer.

ENVIRONMENTAL If the electronic products are to be recycled, it may involve


using modular systems or allowing the enclosure to be easily taken apart and separated
from the circuitry. It is also essential to dispose a product in landfill and to consider a
biodegradable product because non-biodegradable materials take many years to break
down Packaging is also one of the most important consideration because materials used
are often thrown away.
Answer to Question No. 9:

ARTICLE FROM CAPA AVIATION


Fate of Philippine Airlines in receivership since June 1998 with debts of
around $2.2bn is still unresolved. Since the last time Aviation Strategy covered the
troubled airline (October 1998) much has changed although from the creditors point
of view, PAL appears to have gone full circle in that chairman and majorityowned
Lucio Tan returned in an executive role as CEO last month (April).
Thats not a popular choice with creditors, many of whom blame Tan for the airlines
collapse last year. Creditor unease about Tans role could scupper PALs latest turnaround
plan, which was filed with the Philippines Securities and Exchange Commission (SEC)
on March 15. (The entire plan, including complete listings of creditors and detailed
financial

projections

can

be

downloaded

via

the

Internet

on

www.

philippineair.com/html/rehab.html it makes an interesting read!)


This plan was approved by creditors in lateMarch, providing new equity was made
available (as promised in the plan) and that the then management team which didnt
include Tan remained unchanged. Tan says his return will be accompanied by a much
needed injection of $200m in capital (increasing his stake from 70% to 90%), but this
does not appear to satisfy the creditors, who between them own 19 of the 22 aircraft
that are essential to PALs turnaround plan.

In particular the creditors are concerned that Tan may terminate the contracts of Regent
Star Services a consultancy consisting of five exCathay executives that has assisted
PAL in drawing up its current turnaround plan.
The plan is one that the creditors believe has a chance of success, leading to a
forecast improvement in financial results as shown in the charts, right. By 2003/04 PAL is
forecast to pull in revenue of more than $900m and a net profit of $151m.

The projected turnaround, which includes the sale of noncore assets, would
allow for gradual repayment of the $2.2bn owed to creditors (which include the US
ExportImport Bank, various European export credit agencies, Credit Agricole Indosuez,
the Japanese trading house Marubeni and several Philippine banks). No matter how much
cash Tan brings to the table at PAL, the continuing support of these creditors is vital.
(They had already rejected an earlier turnaround plan filed in December 1998.)

A credible plan?
Ignoring for the moment the rows between Tan and the creditors, does PALs
current turnaround plan make sense? The plan, as shown on the Internet site, is very
specific (and ambitious?) in its revenue and profit projections.

Essentially, PALs strategy is based on:


Deep costcutting, ranging from a smaller fleet and route network to reduced staffing
and the sale of all noncore assets, andrefocussing on core customer segments/ markets

i.e. domestic jet routes (turboprop services will not be offered) and key international
business routes (Japan, China, Singapore, Taipei, the Middle East and the US).
The revamped PAL would use a 22strong fleet to serve 12 international and 17 domestic
routes and would be based at a new second terminal at the Ninoy Aquino International
Airport in Manila. Code sharing would be a key part of PALs strategy on April 7 PAL
applied for a oneyear renewal of an unused authority to codeshare with American
Airlines on routes between Manila and Chicago, Dallas/Fort Worth, Miami and
Washington DC.

Answer to Question No. 10:

Key factors required for a Test Automation to be successful include:


Committed Management
Budgeted Cost
Process
Dedicated Resources
Realistic Expectations
Committed Management
Time Plan Approval
Investment of time needed, for delivering the framework
Necessary steps to be taken to make the stakeholders, management and the customer
understand the importance of this one-time investment
Scheduled time-plan approval

Commitment on Priority

Commitment from the management and senior managers on the priority assigned to
this activity, till the completion of framework development Cost and Budget Dedicated
Budget A dedicated budget to be allocated, which includes costs related to test tool,
development, deployment, resource and training. In addition, the maintenance cost for
automated tests and tools must be included.

Process
Well-defined Testing Process

Well-defined quality control procedures and test execution standards.

No Ad-hoc testing

Define the tests

Define the test-coverage

Define test criteria at each stage

Resource Related
Dedicated Resources A dedicated team is needed for effective test automation.
Non-dedicated team will execute the test automation with their own limitations, which
will lead to:

Focus of activities on a specific part of a project, such as a subsystem, without concern

for reuse in the future

Less sharing of tools and information between project teams

Automated tests that are poorly maintained, reused, and integrated due to the lack of

efficient collaboration and co-ordination among different teams

Realistic Expectations
Management and the project team must be keep realistic expectations and should keep
them in mind during the entire test automation life-cycle.

Achieving 100% automatic tests is an unreachable goal

All tests cannot be automated

Benefits of automation is reaped only after several cycles of test execution

No immediate payback for the investment

Ramp-up time will be required for tool selection, framework creation

Record and Playback helps minimally in test automation

No available tool in the market supports all the systems and GUI objects

Not all the testers can write scripts. Availability of specialized resources is a must.

Answer to Question No. 11:

(a) We need to use naive methods. This means that any simple appropriate method
can conducted. For example: Ploting each data set reveals that muffins orders are almost
stable, varying around an average (e.g. 33). The demand for cinnamon buns has a trend.
If we get the last three period, we realized that number increased two by two so 33-31=2
and last one is 33+2=35. This is for the following day for cinnamon buns. Demand for
cupcakes has an apparent seasonal variation with peaks every five days. Day 1=45, Day
6=48, Day 11=47 and the next peak would be Day 16=50.

(b) The use of sales data instead of demand implies that sales adequately reflect
demand. We are assuming that n stock-outs because demand equals sales if there are no
shortages.

Luningning Mercado
Answer to Question No. 1:

Most of manufactured goods, and industrial products need to be supported by an


excellent team of after sales service personnel. After all, in todays world most products
are getting commoditized and the discerning factor between one product and its

competition is often the quality of service that the manufacturer provides. Even with
consumer goods like food items,
cosmetics, there has to be a service section to handle complaints and product returns.
Sometimes, a vendor can offer a value-added services to his product as a package.
Today, many lap top manufacturers offer one year free maintenance, software installation
and troubleshooting as an add-on. This can also be extended at a nominal price for an
additional two or three years.
THEREFORE, ITS COMMERCIALLY ADVANTAGEOUS FOR A FIRM
TO OFFER COMPLIMENTARY SERVICES ALONG WITH ITS PRODUCT
OFFERINGS.

Answer to Question No. 2:

There are many implications due to the differences between services and
manufacturing operations. For example, in a service firm since the degree of customer
which contact is high, we have to make sure that employees are better trained in customer
service than employee in a manufacturing industry. In a pure-service industry firm, we
will build a lot of slack in scheduling because of uncertainty of input.

Answer to Question No. 3:

Efficiency is basically finding the best way to attain a given goal. It mainly
concerns itself with the way things are done. In most cases, an increase in efficiency is
accompanied by an increase in productivity. However, organizations enhancing their
efficiency should be vigilant to avoid being caught up in an efficiency improvement
trap.While efficiency deals with the quantity and quality of a product and mainly
concerns itself with how things are being done, productivity mainly concerns itself with

an operations end results. Itis hence clear that by using efficiency as a way to find the
most appropriate way to reach a goal in a given operation, the end results of the operation
i.e. productivity will be more impressive with every increase in efficiency. However,
organizations find themselves deep into the efficiency trap by concentrating so much on
cost cutting measures as opposed to the production of the right quantity of production
units. It is clear therefore that an organization concentrating on efficiency improvement
as opposed to focusing solely on efficiency may result in overlooking potential major
productivity gains that could be achieved by altering inputs rather than simply refining
methods to achieve relatively modest gains.
Answer to Question No. 4:

The productivity paradox is the peculiar observation made in business process


analysis that, as more investment is made in information technology, worker productivity
may go down instead of up. To answer such questions we need define each of these
terms firstly Productivity represents a measure of effective use of resources usually
expressed as the ratio of output to input While efficiency is about doing things in an
optimal way for example doing it the fastest or in the least expensive way. It could be the
wrong thing, but it was done optimally. Efficiency is basically finding the best way to
attain a given goal. It mainly concerns itself with the way things are done. In most cases,
an increase in efficiency is accompanied by an increase in productivity. However,
organizations enhancing their efficiency should be vigilant to avoid being caught up in an
efficiency improvement trap. While efficiency deals with the quantity and optimal way
we find Productivity deals with rate of proper output. It means that an organization that
focuses on improving efficiency rather than productivity might overlook other
improvements to productivity and thereby fall behind its competitors. How do we avoid
this trap? If focusing solely on operational efficiency is not sufficient, where should
company places it's focus? Some may find focusing on business value is an appropriate
perspective that does not minimize the importance of efficiency, but also does not blind
you to opportunities to innovate. How do you focus on business value? Focus on
whatever you do in your organization that directly benefits your customers.

By

customers, I am referring to outside customers the people who pay you for the value
you provide.
Answer to Question No. 5:

As a first step in moving beyond mean models, random walk models, and linear
trend models, non-seasonal patterns and trends can be extrapolated using a movingaverage or smoothing model. The basic assumption behind averaging and smoothing
models is that the time series is locally stationary with a slowly varying mean. Hence, we
take a moving (local) average to estimate the current value of the mean and then use that
as the forecast for the near future. This can be considered as a compromise between the
mean model and the random-walk-without-drift-model. The same strategy can be used to
estimate and extrapolate a local trend. A moving average is often called a "smoothed"
version of the original series because short-term averaging has the effect of smoothing
out the bumps in the original series. By adjusting the degree of smoothing (the width of
the moving average), we can hope to strike some kind of optimal balance between the
performance of the mean and random walk models.
Exponential smoothing is a sophisticated weighted averaging method that is still
relatively easy to use and understand. Each new forecast is based on the previous forecast
plus a percentage of the difference between that forecast and the actual value of the series
at that point. Lacking any other crystal ball, the best guide to the future is what
happened in the past , thus exponential smoothing is essential.

Richneil Dela Torre


Answer to Question No. 1:

Production Environment
Manufacturing and service operations both plan the environment in which work
takes place, but they focus on different elements. Manufacturing operations, for instance,

consider the manufacturing layout. For example, the manufacturing layout can be fixed,
process-focused or product-focused, such as in an assembly line factory. These issues
affect the manufacturer's workforce performance and total output. Service operations, by
contrast, plan the environment according to how it affects customers. For example,
service operations are concerned with how the atmosphere appears to customers.
Dimensions of the service environment include the layout of furnishings, arrangement of
signs and tangible cues, such as colors and sounds designed to enhance the customer
experience.
Operations Management
In a manufacturing environment, operations managers oversee the activities
required to produce goods from raw materials. Issues managers in this environment face
include managing the space to store raw materials, the flow of materials through the
manufacturing process, how much product to produce and quality of output. In a service
operation, operations managers schedule workers to handle customer demand. They must
coach and train employees to provide optimal services to customers. Service operations
that also sell physical goods also face inventory control issues, such as how much to
stock and when to order.
Answer to Question No. 2:

Competitiveness is the basis of their strategy. Companies must be competitive to


sell their goods and services in the marketplace. Competitiveness is an important factor in
determining whether a company prospers, barely gets by, or fails.
Answer to Question No. 3:

Measuring productivity only through technology could be very misleading. There


are other factors that is involved in productivity such as labor, capital, and energy. The
machine is just a single part of the equation. Having skilled worker to operate such
machine is big plus. How the machine is used also plays a big part. The plant lay out and
process should also be considered.

The ideal way to measure productivity is to use a multifactor productivity


measure. This ensures that almost all aspects of production is taken into consideration
such as machine, labor, capital, and energy.
Answer to Question No. 4:

Efficiency is mainly concerns with the way things are done, it deals with

thequantity and quality of a product and how things are being done, whileproductivity
concerns with an operations end results, hence using efficiency asa way to find the most
appropriate way to reach a goal in a given operationmeans that productivity will be more
impressive with every increase inefficiency.

Concentrating on efficiency improvement as opposed to the improvement

of productivity may not be successful at all as organization would not be focusingon the
use of different resources when it comes to doing things in a betterway. This essentially
means that such organization would lag behind competitors as far as productivity is
concerned and hence incurring morecosts going forward than competitors

Therefore it is important to note that productivity as a concept is wider

thanefficiency and organizations should look for increasing their efficiency byderiving
the most out of a set of assets, productivity dictates that for eachproduction goal to be
reached, resources must be used efficiently.

Answer to Question No. 5:

The productivity paradox (also the Solow computer paradox) is the peculiar
observation made in business process analysis that, as more investment is made in
information technology, worker productivity may go down instead of up.
The discussion has faded because there has been continuous and consistent
growth and gains in productivity, perhaps due in part, the IT investments.

Answer to Question No. 6:

The conditions that would have to exist for driving a car that are analogous to the
assumptions made when using exponential smoothing are that the immediate future will
be like the recent past. This would suggest:
a.
b.
c.
d.

No sharp curves or turns on the road


Constant traffic conditions
No traffic lights or stop signs
Constant road conditions

Answer to Question No. 7:

The organization should have the capability to predict the future correctly 100%
of the time.
Answer to Question No. 8:

A flying car. The first problem would arise in the legal and ethical side. There are
no regulations that would cover a flying car. What road would they take? What kind of
license would be issued? How safe it is to drive such a thing? How would they regulate
the travel route of such vehicle?
As for the profitability and production issues, is there a big enough market that
the company could profit? How would they price the said product? What would be the
cost of the parts? Repairs?
Answer to Question No. 9:

http://www.businessinsider.com.au/wal-marts-customer-service-issues-2013-4
Wal-Mart Could Be In Big Trouble If It Doesn't Fix Customer Service Fast
Walmart customers across the country are complaining that they cant find the products they
want, and that could lead to dangerous consequences for the retailer.

Walmart shelves are empty because it cut back on its workforce and the employees cant keep
up, customer service expert and best-selling author Grant Cardone told us. It doesnt work to
be everywhere if youre not offering an experience.
The retailers empty shelves problem was first reported by Renee Dudley at Bloomberg News,
who notes that companys workforce has fallen by 120,000 since 2008. In the same time the
company has added several hundred locations. In all, it employs 2.2 million people. Dudley said
she received thousands of emails from disgruntled customers who complained of Walmarts poor
selection, long check-out lines, and bad customer service. Cardone said that if Wal-Martdoesnt
amend the problem, it could go the same route as cable TV, which shows that the size of the
organisation doesnt matter. Weve seen 5 million people abandon cable in the past 18 months
because there are better alternatives out there, Cardone said. Wal-Marts threat is the internet,
and consumers wont hesitate to leave. Victor Ireland, a former Wal-Mart customer, told us that
he actively avoids the retailer because of its understaffed stores.
Checkout is a nightmare with long lines and few cashiers, and I actively avoid Walmart
stores for this very reason, Ireland told us. The hassle isnt worth the potential savings.
Cardone said that Walmart needs to hire more associates, and fast.
A negative experience can leave a bad taste in a customers mouth for a long time, Cardone
said. If youre not making life easier for them, theyre not going to come.

Wal-Mart need either need to hire additional associates or to improve the


efficiency of existing personnel in the retail store. As per the article had said, it is clear
that Wal-Mart is reducing their costs. They should hire temporary workers to cover the
customer service while they are improving their operations. Reduction of waiting time in
the check-out counter should be reduced. Finding the location of items could be
automated for their customers.
Answer to Question No. 10:

EMPLOYEE TRAINING Many business owners and managers operate under


the assumption that acquisition of fancy automated production equipment or data
processing systems will instantaneously bring about measurable improvements in
company performance. But as countless consultants and industry experts have noted,
even if these systems eliminate work previously done by employees, they ultimately
function in accordance with the instructions and guidance of other employees. Therefore,
if those latter workers receive inadequate training in system operation, the business will
not be successful.
MANAGEMENT PHILOSOPHY Many productive

business

automation

systems, whether in the realm of manufacturing or data processing, call for a high degree
of decision-making responsibility on the part of those who operate the systems. As both
processes and equipment become more automatically controlled, employees will be
watching them to make sure they stay in control, and fine tune the process as need.
These enabler tools are changing the employee's job from one of adding touch labor to
products to one of monitoring and supervising an entire process.
FINANCIAL ISSUES It is essential for small businesses to anticipate and plan
for the various ways in which new automation systems can impact on bottom-line
financial figures. Factors that need to be weighed include tax laws, long-term budgeting,
and

current financial

Answer to Question No. 11:

a.

health.

b. The sales data should be use to manage inventory, generate insights, plan merchandise, or
to be used for sales forecasting a minimum basis.

Joshua De Vera
Answer to Question No. 1:

One major difference of product and delivery of service industries from an


operations perspective is the degree of customer contact present. This makes scheduling
very difficult in service industries as they cannot build up inventories and are very
demand sensitive. In this same way service industries are very sensitive to inputs as each

process can have very different inputs which require very different processes.
Measurement of productivity and quality assurance are much harder to measure in service
industries as measurement is not a simple quantity measure as it is in product industries,
and quality must be measured as services are delivered and cannot be inspected
beforehand. All of these differences make it much harder for operations managers in
service industries to make projecting and measurements of processes within their
organizations.
Production of goods and delivery of services are different from each other in the
sense that goods are not produced and consumed at the same time whereas services are
produced and consumed or delivered at the same time, making it imperative for managers
and operational to keep a close eye on the quality of the services being delivered.
A new approach is needed to address the way firms operate today and to be as
useful to operations managers in terms of developing, planning, organizing, or controlling
the production and delivery of services or goods.
Answer to Question No. 2:

Based on what I have learned the basis of each ones strategy is first the Product:
The marketer has to do the survey to understand the needs and wants of the
customer and has to inform to the production department. Then the

Research

and

Development department will do the research accordingly. The production department


will produce the product to fulfill the requirement of the customers. All these factors
come under this part of the product mix. Pepsi Company is producing many brands of
soft drinks and doing the marketing of those products. They are taking care of the quality
of the products.
Second, Price: The Company will fix the price of a product based on some aspects,
those are; Production Cost, Variable Cost, and some other things and they will
finally add their desired profit to that cost and the final cost of that product will be

fixed. This is called the Maximum Retail Price. This step should be taken care because
the price of the product should be according to its quality, and also should be
taken care of the competitors price. If the price is too high when compared to the
competitor and not worth of its quality then the sales of that product becomes difficult
and the company will face the losses. The company should also have to think what will
be the return on investment.
Third, Place: The Company should think a lot before launching a product
in to the market. They have to identify where it is better to launch the new product first
so that they can get success. Generally every company selects a specific region
to launch their new products, because first they will go for the test marketing before
the mass production of the production. If the customers are satisfied with that product
then they will start the mass production and launch in all areas. In case they found any
fault with that product then they will redesign the product and rectify that problem and
re-launch the products. They will take care of the distribution channels also while
launching the new product in one area.
The company should also think of the inventory, because they have to stock the
goods for sometimes and will supply the product to the customers. For this they have to
arrange the warehouses.
Fourth, Promotion: In todays competitive environment, having the right
product at the right place, at the right time may not be enough to be successful.
Effective communication today many new companies are coming in to existence
and because of this the competition is also growing rapidly. Because of this reason they
have to compete with their competitors constantly. In some industries the new
companies may not come in to existence but the competition between the existing
companies is growing more and more. The soft drink industry is mainly suffering with
this particular problem.

The Companies have to continuously compete with their competitors to get good
market share and good profits. To face their competitors they have to know their position
and the competitors position in the market. For this, the Companys will compare itself
with their competitor that means they will do the comparative analysis in all aspects.
Item by Item comparison of two or more comparable alternatives,

processes,

products, qualifications, set of data and systems etc. for example changes in a financial
statements items over several accounting period maybe presented together to detect the
emerging trends in the firms operations and results, so that they will decide the basis of
the strategies.
Answer to Question No. 3:

The factor can cause to productivity figures to be misleading suffers from two
main weaknesses. In fact, the concept is theoretically flawed; inadequate to reflect the
essential characteristics of present technological change. The first criticism is recognised
in the literature, while the second has not received the emphasis it deserves. First, the
theoretical weakness of the notion of total factor productivity results from the fact that it
derives from a neoclassical production function an intellectual construction that has the
advantage of mathematical elegance, but no relation with the real world the second
problem appears when assumptions are too distant from experience. In such a case,
instead of being a useful device to neglect unnecessary details, assumptions lower the
theory to the rank of a mere logical exercise.
Answer to Question No. 4:

We all know that the efficiency is mainly concerns with the way things are done,
it deals with the quantity and quality of a product and how things are being done, while
productivity concerns with an operations end results, hence using efficiency as a way to
find the most appropriate way to reach a goal in a given operation means that
productivity will be more impressive with every increase in efficiency. Concentrating on

efficiency improvement as opposed to the improvement of productivity may not be


successful at all as organization would not be focusing on the use of different resources
when it comes to doing things in a better way.
It is important to note that productivity as a concept is wider than efficiency and
organizations should look for increasing their efficiency by deriving the most out of a set
of assets, productivity dictates that for each production goal to be reached, resources must
be used efficiently.
Answer to Question No. 5:

First let as describe the definition of Productivity Paradox: there is a discrepancy


between the investment in IT growth and the national level of productivity and productive
output. The term productivity paradox became popularized after being used in the title
of a 1993 paper by MITs Erik Brynjolfsson, a Professor of Management at the MIT
Sloan School of Management, and the Director of the MIT Center for Digital Business.
In his paper, Brynjolfsson argued that while there doesnt seem to be a direct,
measurable correlation between improvements in IT and improvements in output, this
might be more of a reflection on how productive output is measured and tracked.
Intangibles such as better responsiveness to customers and increased coordination
with suppliers do not always increase the amount or even intrinsic quality of output, but
they do help make sure it arrives at the right time, at the right place, with the right
attributes for each customer. Just as managers look beyond productivity for some of the
benefits of IT, so must researchers be prepared to look beyond conventional productivity
measurement techniques, he wrote in his conclusion.
Based on my research there are possible causes of the Productivity Paradox: First
measurement: the gains are real, but our current measures miss them; Second,
redistribution: there are private gains, but they come at the expense of other firms and

individuals, leaving little net gain; and lastly mismanagement: there are no gains because
of the unusual difficulties in managing IT or information itself. So I think these are the
possible reasons why this topic has faded.
Answer to Question No. 6:

The process of gradually perceiving environmental changes is called information


smoothing. Smoothing means that a decision-maker does not instantly believe that a
fluctuation in incoming information is indicative of a permanent change, and thus
attempts to smooth out insignificant fluctuations As a result, a person reacts gradually to
a persistent change in information, so as not to overreact to what may turn out to be shortterm changes. People base decisions for action on their perception of current conditions.
This perception is often derived from informally smoothed information.

Answer to Question No. 7:

I think the organizations capable have a leader or leadership and the employees
because its a set of people of the organization but it is actually a skill that can, and
should, exist at every level. Leadership is the capability to inspire and motivate people to
fulfil a mission. At the top of the organization leadership includes directing others while
at lower levels it is accomplished through influencing others and aside from that creates
an inspiring vision of the future,motivates and inspires people to engage with that vision,
manages delivery of the vision and lastlycoaches and builds a team, so that it is more
effective at achieving the vision, so I think thats the possible way that the organization
have to not need forecasts.
Answer to Question No. 8:

I think the best example of revised product is the washing machines are required
by people of all age groups. Companies manufacturing washing machine can revise the
product to include voice command system which would operate as per the instructions

given by the owner. In order to manufacture this product new software should be
included in the machines which could recognize human voice and operate companies
must be competitive to sell their goods and services in the marketplace. The first
implication that we need to consider is competitiveness is an important factor in
determining whether a company prospers, barely gets by, or fails. Business organizations
compete through some combination of their marketing and operations functions.
Marketing influences competitiveness in several ways, including identifying consumer
wants and needs, pricing, and advertising and promotion. First; Identifying consumer
wants and needs is a basic input in an organizations decision making process, and central
to competitiveness. The idea is to achieve a perfect match between those wants and needs
and the organizations goods and services. Second, Price and quality are key factors in
consumer buying decisions. It is important to understand the trade-off decision
consumers make between price and quality. Third, Advertising and promotion are ways
organizations can inform potential customers about features of their products or services,
and attract buyers.
Product and service design also included to the implication of producing of goods
and services it also reflect joint efforts of many areas of the firm to achieve a match
between financial resources, operations capabilities, supply chain capabilities, and
consumer wants and needs. Special characteristics or features of a product or service can
be a key factor in consumer buying decisions.Product design is cross-functional,
knowledge-intensive work that has become increasingly important in today's fast-paced,
globally competitive environment. It is a key strategic activity in many firms because
new products contribute significantly to sales revenue. When firms are able to develop
distinctive products, they have opportunities to command premium pricing. Product
design is a critical factor in organizational success because it sets the characteristics,
features, and performance of the service or good that consumers demand. The objective
of product design is to create a good or service with excellent functional utility and sales
appeal at an acceptable cost and within a reasonable time. The product should be
produced using high-quality, low-cost materials and methods. It should be produced on
equipment that is or will be available when production begins. The resulting product

should be competitive with or better than similar products on the market in terms of
quality, appearance, performance, service life, and price.
Quality: Product design shapes the product's quality. It defines the way that good
and service functions. Quality has at least two components. First, the product must be
designed to function with a high probability of success, or reliability; that is, it will
perform a specific function without failure under given conditions. When product
reliability increases, the firm can extend the product's warranty without increasing
customer claims for repairs or returns. Warranties for complex and expensive items such
as appliances are important selling points for customers. Second, quality improves when
operating or performance characteristics improve even though reliability does not. The
goals of product design should be greater performance, greater reliability, and lower total
production and operating costs. Quality and costs should not be viewed as a trade-off
because improvements in product and process technologies can enhance quality and
lower costs.
Legal and ethical issues in product design: in a legal way it is very clear that
organizations are responsible for the design and safe use of their products. Consumers
who believe they have been damaged by a poorly designed good or service have legal
recourse under both civil and criminal statutes. However, only the most serious and
obvious offenses are settled in this way. Legal and Ethical Consideration: Many
organizations are regulated by governmental agencies and these regulations are
responsible for preventing harmful substances from being used in product design. Harm
caused by the product is the responsibility of the manufacturers. Manufacturers are liable
for any injury or damages caused by their product due to its design or workmanship, also
known as product liability. When the product is defective and potentially causes harm,
manufacturers have several options to remedy the situation. They may have to recall their
products or fix the problem in the manufacturing stage. It is also possible that they may
face lawsuits if their products cause injury to consumers. Managers must ask themselves
if there is demand for their organizations product or service. If the company develops its

products or services according to the customers demands, their product will be


successful.
Answer to Question No. 9:

I found a recent article in business regarding these issues and I found out that
many companies are surprised by changes in the organization. Perhaps the greatest tumult
for todays organizations has been created by the rapid expansion of e-commerce. For
example, Amazon.com was ringing up on-line book sales for more than a year before
managers at Barnes & Noble even began thinking about a Web site. Barnes & Noble was
highly successful with its book superstore concept, but its early efforts in e-commerce
were marked by costly mistakes and missed opportunities. Even though the company
burned through $100 million in an effort to crush Amazon, Barnesandnoble.com was
still selling only 15 percent of books bought online compared to Amazons 75 percent.1
Firms in every industry, from auto manufacturing to telecommunications, face similar
uncertainty. Many factors in the external environment cause turbulence and uncertainty
for organizations. Anheuser-Buschs CEO, for example, admits that his company was
five years late in recognizing that microbreweries were going to take as much market
share as they did and five years late in recognizing that we should have joined them.2
Small retailers have long suffered threats from huge discount stores such as Wal-Mart and
Home Depot. Now, with electronics superstore Best Buy selling CDs for about half what
they cost in traditional music stores, some record-selling chains have been forced into
bankruptcy. In Western Europe, privatization of formerly state-owned enterprises has
caused tremendous uncertainty for companies such as Swisscom, which seems to be
thriving in the new environment, and Telecom Italia, which is not.3 In the United States,
the cattle industry has suffered declining prices because of increased imports of beef from
Canada, Mexico, and Argentina. The list could go on and on. The external environment,
including global competition, is the source of major threats facing todays organizations.
The purpose is to develop a framework for assessing environments and how
organizations can respond to them. First, we will identify the organizational domain and
the sectors that influence the organization. Then, we will explore two major

environmental forces on the organization the need for information and the need for
resources. Organizations respond to these forces through structural design, planning
systems, and attempts to change and control elements in the environment and even the
time and location dependent.
Organizations can use a variety of techniques to establish favourable linkages that
ensure the availability of scarce resources. Linkages provide control over vulnerable
environmental elements. Strategic alliances, interlocking directorates, and outright
ownership provide mechanisms to reduce resource dependency on the environment. U.S.
companies such as IBM, Apple, AT&T, and Motorola have been quick in recent years to
turn rivalry into partnership. Perhaps surprisingly, Japans electronics companies have
been slower to become involved in joint ventures and other strategic alliances.
For recommendations on what an organization needs to do to overcome these difficulties
or issues the manager or the management make some solution for the organization.

The first one is to have Leadership: There needs to be agreement from the top of
every organization around priorities, focus, and vision. Without that, it is too easy for
conflicting agendas to work their way in, and it can become very difficult to overcome
challenges that crop up. Second, Collaboration: We have a lot of really great minds at
shift really smart people with different perspectives and experiences. The best way to
overcome any organization challenge is to tap that vast knowledge, working together to
solve problems. There cant be a hierarchy, since great ideas come from everywhere.
Third, Communication: As you grow, it can become challenging to keep the lines of
communication open, especially with remote offices. Over the past year, SHIFT has taken
several approaches to ensuring we remain connected across the country. First, the senior
management team commits to meeting in person twice a year to discuss pressing issues in
the various offices and ways to overcome them. Secondly, we help our employees to stay
connected by encouraging cross-office travel and utilizing technologies such as Sales
force Chatter to have an ongoing dialogue across the offices. It is important to find ways
to get your teams to talk. Email is a great efficiency tool, not a collaborative one. By

getting together and talking both about work and their lives it builds both a trusting and
productive environment.

Fourth, Focus: Too often we succumb to shiny object syndrome. If everything is


a distraction, however, nothing can really be accomplished. It is important to identify the
end goal, create a plan to make it happen, and then remain focused on that plan moving
forward.

And Lastly, be open-minded to solutions, different approaches, and new


perspectives. Many of the programs shift has put in place over the course of our growth
came about unexpectedly.

Answer to Question No. 10:

For me these are the most important factors to be considered the first one is to
have a Commitment on Priority; Commitment from the management and senior managers
on the priority assigned to this activity, till the completion of framework development,
Second, Cost and Budget; A dedicated budget to be allocated, which includes costs
related to test tool, development, deployment, resource and training. In addition, the
maintenance cost for automated tests and tools must be included, Third, Dedicated
Resources; A dedicated team is needed for effective test automation. Non-dedicated team
will execute the test automation with their own limitations, which will lead to: Focus of
activities on a specific part of a project, such as a subsystem, without concern for reuse in
the futureless sharing of tools and information between project teams. Automated tests
that are poorly maintained, reused, and integrated due to the lack of efficient
collaboration and coordination among different teams.

Implement and Maximize Re-Usability: establish the developed libraries across


the organization and project team and product team. Test automation framework
development is a multi-stage process.
There are many different reasons to automate. Increased productivity is normally
the major reason for many companies desiring a competitive advantage. Automation also
offers low operational variability. Variability is directly related to quality and
productivity. Other reasons to automate include the presence of a hazardous working
environment and the high cost of human labour. Some businesses automate processes in
order to reduce production time, increase manufacturing flexibility, reduce costs,
eliminate human error, or make up for a labour shortage.
Answer to Question No. 11:

(a) We need to use naive methods. This means that any simple appropriate method
can conducted. For example: Ploting each data set reveals that muffins orders are almost
stable, varying around an average (e.g. 33). The demand for cinnamon buns has a trend.
If we get the last three period, we realized that number increased two by two so 33-31=2
and last one is 33+2=35. This is for the following day for cinnamon buns. Demand for
cupcakes has an apparent seasonal variation with peaks every five days. Day 1=45, Day
6=48, Day 11=47 and the next peak would be Day 16=50.
Blueberry Muffin:The nave forecast is 34
Cinnamon Buns: The trend forecast is 35
Cupcakes: The seasonal forecast is 50

(b) The use of sales data instead of demand implies that sales adequately reflect demand.
We are assuming that n stock-outs because demand equals sales if there are no shortages.

Sally Nio
Answer to Question No. 1:

In terms of goods, manufacturers is the tangibility of their output while the output
of a service firms is intangible such as consultancy, training or maintainance.
Manufacturers produce physical goods that customers can see and touch.
In inventory, service firms do not hold inventory. they create a service when a
client requires it. While manufacturers produces products that need inventory for the
stocks of raw materials, work in process, and finished products. Some manufacturers
maintain minimum stock levels, relying on the accuracy of demand forecasts and their
production capacity to meet demand on a just-in-time basis. Inventory also represents a
cost for a manufacturing organization.
In customers, Service firms do not produce a service unless a customer requires it,
although they design and develop the scope and content of services in advance of any
orders. Service firms generally produce a service tailored to customers' needs. While a
Manufacturers can produce goods without a customer order or forecast of customer
demand.
In labor, a service firm recruits people with specific knowledge and skills in the
service disciplines that it offers. Service delivery is labor intensive and cannot be easily
automated, although knowledge management systems enable a degree of knowledge
capture and sharing. While manufacturers can automate many of their production
processes to reduce their labor requirements, although some manufacturing organizations
are labor intensive, particularly in countries where labor costs are low.
In terms of location, Service firms do not require a physical production site. The
people creating and delivering the service can be located anywhere. For example, global
firms such as consultants Deloitte use communication networks to access the most

appropriate service skills and knowledge from offices around the world. In manufacturers
must have a physical location for their production and stock holding operations.
Production does not necessarily take place on the manufacturer's own site. It can take
place at any point in the supply chain.

Answer to Question No. 2:

When PepsiCo (PEP) launched their diet cola and announced that it will replace
aspartame in its diet soda products with a mixture of artificial sweeteners, acesulfame
potassium, and sucralose, consumers moved away from diet sodas due to health concerns
regarding the artificial sweeteners in the drinks. Since consumer believe that aspartame
has been associated with headaches, dizziness, and other critical health issues
like Alzheimers, birth defects, diabetes, and even cancer. In this case their sales brought
down and look for another alternatives in order get back their consumers by introducing
new Naked Juice flavors, such as Tropicana farmstand tropical green and Mountain Dew.
While Coca-Cola is focused on how cola is improve. By introducing four colas under one
brand Coca-Cola such as the original cola, Diet Coke, Coca-Cola Zero, and Coca-Cola
Life in order to benefit its widespread appeal.
Answer to Question No. 3:

I believe that if a manufacturing firm using a high technology of machines, the


firm can produce higher number of finished goods than a manufacturing firm that has a
big number of manpower. By using advanced technology, defective ouput will be
reduced.
Another factor is the culture. Working in United States gives more value to a blue
collar job that a white collar job because their culture believes that the work of a blue
collar job is quite heavy and risky.

Answer to Question No. 4:

Companies typically approach the business of improvement in very much the


same way their competitors do. They appoint some smart person to lead the effort, and
that person finds areas to improve, typically using improvement teams to attack waste
and remove obvious non-value adding activities. Meanwhile, the organization conducts
its business in the same manner it always has. Performance and efficiency might get
better, but they get better in the competitors company also, so as a result, nothing much
changes. That is efficiency improvement trap. In order to break off that trap, it must look
for levers that can truly differentiate the organization from the competition.

Answer to Question No. 5:

The productivity paradox was analyzed and popularized in a widely cited article,
which noted the apparent contradiction between the remarkable advances in computer
power and the relatively slow growth of productivity at the level of the whole economy,
individual firms and many specific applications.
The paradox has been defined as the discrepancy between measures of
investment in information technology and measures of output at the national level.
One hypothesis explain that productivity paradox is that computers are
productive, their productive gains are realized only after a lag period, during which
complementary capital investments must be developed to allow for the use of computers
to their full potential. Diminishing marginal returns from computers, the opposite of the
time lag hypothesis, is that computers, in the form of mainframes, were used in the most
productive areas, like high volume transactions of banking, accounting and airline
reservations, over two decades before personal computers. Also computers replaced a
sophisticated system of data processing that used unit record computers were everywhere.

Another hypothesis states that computers are simply not very productivity
enhancing because they require time, a scarce complementary human input. This theory
holds that although computers perform a variety of tasks, these tasks are not done in any
particularly new or efficient manner, but rather they are only done faster. Current data
does not confirm the validity of either hypothesis. It could very well be that increases in
productivity due to computers are not captured in GDP measures, but rather in quality
changes and new products.
The discussion of the topic regarding productivity paradox was faded when there
was a rebound in productivity after 2000. A number of explanations of this have been
advanced, including that:
1) Computer technology will be used for applications that have little impact on overall
2)

productivity word processing.


Inefficiencies from running manual paper-based and computer based processes in
parallel, requiring two sets of activities and human effort to mediate between them

usually considered a technology alignment problem.


3) Poor users interfaces that confuse users, prevent or slow access to time-saving
facilities are internally inconsistent both with each other and with terms used in work
processes a concern addressed in part by enterprise taxonomy.
4) Technology-driven change driven by companies such as Microsoft which profit
directly from more rapid upgrades.
5) An emphasis on presentation technology and even persuasion technology such
as PowerPoint, at the direct expense of core business processes and learning
addressed in some companies including IBM and Sun Microsystems by creating
a PowerPoint-Free Zone.
The fact that computers handle office functions that, in most cases, are not related
to the actual production of goods and services.

Answer to Question No. 6:

The following conditions that would have to exist in driving a car that are
analogous to the assumptions made when using exponential smoothing
1) Weather condition
2) Road condition
3) Perception of current condition

Answer to Question No. 7:

Leadership. A set of people at the top of the organization but it is actually a skill
that can, and should, exist at every level. Leadership is the capability to inspire and
motivate people to fulfill a mission. At the top of the organization leadership includes
directing others while at lower levels it is accomplished through influencing others.
Answer to Question No. 8:

A revised product that I want to be introduced in the market is the herbal


cigarettes. A cigarettes made of herbal /organic that will not harm to everyones health
and effect in the long run, the users will realize that the taste of this herbal cigarettes is no
longer good until such time deciding to quit from smoking.
We all know that tobacco is a global epidemic that is ravaging the countries and
regions that can least afford its last of disability, decease, lost productivity, and death.
The epidemic follows of course that has been documented in country after
country, driven an industry that puts profits ahead of life. Its own growth ahead of the
health of future generations, its own economic gain ahead of the sustainable development
of struggling countries.
Implication to legal - The Philippine Commission must adopt a proposal to revise
the Tobacco Products Directive. The proposal is a substantial revision of the regular

cigarettes to a herbal cigarettes that free from cancer and heart decease ,instead it will
benefits to the body such as stimulates the circulation of the blood and prevent from heart
decease. Current law proposes new and strengthened rules on tobacco products. Laws
including obliges manufacturers to report on the ingredients they use that will give
benefits to the users. It bans oral tobacco and the use of misleading descriptors such as
light, mild, or low tar. Health warning messages have to appear on tobacco
products. The Directive sets that no harmful ingredients such as tar, nicotine and carbon
monoxide yields of cigarettes and obliges manufacturers to report on the ingredients they
use.
The Commission is committed to a strong tobacco control policy to ensure a high
level of public health in the Philippine internal market. With tobacco being highly
addictive, it is important to prevent young people from taking up tobacco use. 70% of the
smokers start before the age of 18 and 94% before the age of 25 years.
Implication to moral and ethical issues.
The main objective of the revision is to improve the functioning of the internal
market, while assuring a high level of public health. Increasing the number of member of
smokers and really hard to control people to this kind of habitual, revision to a herbal
cigarettes that eliminates bad causes is a best remedy to this problem. The revised product
will give also the benefits of happiness and lessen the stress they feel but will not harm
the health of the users and the second hand users. But the effect of using this in the long
run will decrease gradually until such time the users will no longer want the taste of the
cigarette.
Implication related to environmental
In order to promote health and well-being. I will look at understanding health and
well being by including positive, negativeand holistic definitions of health. Considering
different aspects and cultures, which affect health. I am going to observe a client and
analyse the PIES while taking health measures for him. In the end of my assessment, I
would set targets for my client to improve his health and also provide leaflets and

brochures and include information from experts to motivate him to stick to the plan. I will
make him aware about the effects a bad lifestyle may have on him.
This coursework is laid in sections as section A, B, C and D. Section A will
contain definitions of health, how cultures look at health and the history of the health care
sector; how it changed over time. In section B, I will look at factors affecting health and
will also introduce my client while looking at the factors affecting his PIES. In section C,
I will collect life style records of my client and look at his PIES in detail and prepare
health plans. Section D will look at how my plans are SMART. This will give a
description about how the plans will benefit my client.
Implication related to profitability
Define a business idea, preferably one that you create, that might work as a startup firm in the United -explain how your firm could succeed in foreign markets by
applying any of the described global strategies. Select a country or countries (or a region)
to focus on and explain why that market would be best for your firm. (Remember to
discuss institutions.) -Provide a detailed assessment of the product or service and of the
country or region that will be your selected market.
Upon approval of the said revised product, this should be advertised all over the w
orld in order to give awareness to people. Price is affordable. The regular cigarettes that
previously in the market should be strictly faced out and strictly ban by the Philippine
Government . So that the users will automatic switch to a herbal cigarette. In this case,
buyers will buy this herbal cigarettes for having no choice of others and that will give
profits to the manufacturer, supplier and retailer. This product will be distributed first in
the Philippines then if the business be successful after a certain period of time, this will
be distributed to the international market.

Implication related to competitive design

Design opens up valuable opportunities for businesses. Its importance is often


underestimated, but good design can bring some significant business benefits.

The research and prototype stages of the design process can generate new product
ideas and allow you to discover your customers' needs and preferences.

Design can help turn these ideas into innovative and competitive products and
services that are suitable for the market. Using design to make business processes more
efficient and to strengthen marketing approach.

The following

guide explains the different ways that design can benefit a

business, from product development to business strategy. It also outlines what's involved
in the design process as well as how can manage the process and measure its success.

The business benefits of design


How businesses use design
Make design part of your business strategy
Using design to improve product development
Use design to win new customers and markets
The design process
Maximise the success of your design projects
THE BUSINESS BENEFITS OF DESIGN
Evidence shows that using design improves business performance. Businesses
that undervalue the importance of design may be missing vital opportunities.
Design can bring a range of commercial benefits if used systematically across
your business. These benefits include:

increased sales of your products or services

improved market position relative to your competitors


greater customer loyalty and fewer customer complaints
a stronger identity for your business
the ability to create new products and services and open up new markets
reduced time to market for new products and services

Designing for your customer


The effective use of design gives customers a reason for buying from you and not
from your competitors. It's a valuable source of differentiation - a well-designed product
or service will stand out from the competition.
Design also adds value to products and services. Customers are often willing to
pay more for well-designed products that can offer them benefits such as greater
usability, increased functionality and improved aesthetics.
Designing for efficiency
But as well as enhancing the products and services you sell, design can also
improve the way your business operates - the efficiency of its processes, the costeffectiveness of the raw materials it uses, the quality of its packaging.
As well as increasing the value of your products and services to customers, design
can cut production costs. Careful design of the manufacturing process, for instance, can
bring substantial savings. It can also make processes and the use of materials more
efficient and environmentally friendly, helping businesses comply with sustainability
regulations and legislation.
Implication related to production issues
Product design is cross-functional, knowledge-intensive work that has become
increasingly important in today's fast-paced, globally competitive environment. It is a key
strategic activity in many firms because new products contribute significantly to sales
revenue. When firms are able to develop distinctive products, they have opportunities to
command premium pricing. Product design is a critical factor in organizational success

because it sets the characteristics, features, and performance of the service or good that
consumers demand. The objective of product design is to create a good or service with
excellent functional utility and sales appeal at an acceptable cost and within a reasonable
time. The product should be produced using high-quality, low-cost materials and
methods. It should be produced on equipment that is or will be available when production
begins. The resulting product should be competitive with or better than similar products
on the market in terms of quality, appearance, performance, service life, and price.
Product design is more important than ever because customers are demanding
greater product variety and are switching more quickly to products with state-of-the-art
technology. The impacts of greater product variety and shorter product life cycles have a
multiplicative effect on the number of new products and derivative products that need to
be designed. In order to be competitive, this firm may produce at least eight different
brand with a life cycle of only five years, product design ceases to be an ad hoc,
intermittent activity and becomes a regular and routine action. For an organization,
delays, problems, and confusion in product design shift from being an annoyance to
being life threatening.
Improving manufacturability is an important goal for product design. It
can be a powerful tool to improve product quality and lower manufacturing cost. The
approach focuses on manufacturing issues during product design.
Answer to Question No. 9:

The top challenges with current agent desktop apps are driving faster changes to
the application, delivering quality service across self-service and agent-assisted channels,
and managing front-office to back-office servicing. Respondents with older agent
desktops find it more challenging to deliver quality service across self-service and agentassisted channels than those with newer desktop systems . "Organizations struggling with
older desktop technology can't innovate to offer differentiated experiences to keep
customers loyal to their brand," the report noted. "With the increasing popularity of self-

service and mobile channels, this inflexibility threatens their brand and their bottom
line."Nearly three-quarters 74% of organizations where customer service owns the
customer experience use six or fewer applications to solve a typical inquiry, versus 62 %
of organizations overall and 47% of organizations where sales owns the customer
experience.
The appropriate design of any one of them depends upon the other three. When
we look at service businesses that have grown and prospered companies. This article
outlines an approach for crafting a profitable service business based on these four critical
elements (collectively called the service model). This approach recognizes the
differences between service businesses and product businesses. learn that to build a great
service business, managers must get the core elements of service design pulling together
or else risk pulling the business apart.
The four critical elements of a service model :
1)

The Offering - The challenge of service-business management begins with design.

As with product companies, a service business cant last long if the offering itself is
fatally flawed. It must effectively meet the needs and desires of an attractive group of
customers. In thinking about the design of a service, however, managers must undergo an
important shift in perspective: Whereas product designers focus on the characteristics
buyers will value, service designers do better to focus on the experiences customers want
to have. For example, customers may attribute convenience or friendly interaction to your
service brand. They may compare your offering favorably with competitors because of
extended hours, closer proximity, greater scope, or lower prices. Your management team
must be absolutely clear about which attributes of service the business will compete on.
To create a successful service offering, managers need to determine which attributes to
target for excellence and which to target for inferior performance. These choices should
be heavily informed by the needs of customers. Managers should discover the relative
importance customers place on attributes and then match the investment in excellence
with those priorities.

2)

The Funding Mechanism - In a service business, developing a way to fund

excellence can be more complicated. Many times, pricing is not transaction based but
involves the bundling of various elements of value or entails some kind of subscription,
such as a monthly fee. In these cases, buyers can extract uneven amounts of value for
their money. Indeed, even non-buyers may derive value in certain service
environments. In a service business, therefore, management must give careful thought to
how excellence will be paid for. There must be a funding mechanism in place to allow the
company to outshine competitors in the attributes it has chosen.
3)

The Employee Management System - Companies often live or die on the quality

of their workforces, but because service businesses are typically people intensive, a
relative advantage in employee management has all the more impact there. Top
management must give careful attention to recruiting and selection processes, training,
job design, performance management, and other components that make up the employee
management system. More to the point, the decisions made in these areas should reflect
the service attributes the company aims to be known for.
4)

The Customer Management System - In a service environment, employees arent

the only people affecting the cost and quality of service delivered. The customers
themselves can be involved in operational processes, sometimes to a very large extent,
and their input influences their experiences (and often other customers too). and the
quality of the end product. A customer who dithers at a fast-food counter makes the
service less fast for everyone behind him. Customer involvement in operations has
profound implications for management because it alters the traditional role of the
business in value creation. The classic product-based business buys materials and adds
value to them in some way. The enhanced-value product is then delivered to customers,
who pay to receive it. In a service business, however, employees and customers are both
part of the value-creation process. A main benefit is that customer labor can be far less
expensive than employee labor. It can also lead to better service experiences. Consider
the issue of customer selection. Service designs may call for customers to perform

important tasks, but for the most part customers have no interview, no background check,
and no personality profile.
Any service company, no matter how long established, can benefit from a review
of its operations using the framework laid out in this article. Bringing the four elements
of service design into tighter alignment can be an ongoing process of small tweaks and
experiments in change, inspired by the kinds of questions included in the sidebar
Diagnosing Service Design. A management team planning to launch a new service will
find the framework particularly helpful. It flags the decisions that should be made early
and in tandem so that they dont clash down the road. And at the highest level, it
underscores two very important principles of service design. First, there is no such thing
as a good idea in isolation; there is only a good idea in the context of a specific service
model. Second, it is folly to attempt to be all things to all customers.
Answer to Question No. 10:

1) Human workers Automation of production does not imply a complete displacement of


human workers by automations, but the direction of human labor activities and the nature
of the human-machine interaction do undergo changes.
2) Human Labor this acquires new qualitativenuances, becoming more complex and
meaningful. The emphasis in human labor activities is transferred to technical servicing
of automatic machinery and analytic and administrative activities. Its goal is to improve
the efficiency of the labor and the quality of the manufactured products and to create
conditions for the minimum utilization of all production resources. activities.
The work done by a single worker becomes just as important as the work done by an
entire subdivision (production section, production shop, laboratory). With the change in
the nature of labor, the content of the workers skills changes simultaneously. Many of
professions based on heavy physical labor are eliminated.
The proportion of scientific and technical workers inproduction increases rapidly,
since they are needed not only to keep the complicated equipment functioning normally
but also to devise and design new and more sophisticated equipment.

Answer to Question No. 11:

(a) We need to use naive methods. This means that any simple appropriate method
can conducted. For example: Ploting each data set reveals that muffins orders are almost
stable, varying around an average (e.g. 33). The demand for cinnamon buns has a trend.
If we get the last three period, we realized that number increased two by two so 33-31=2
and last one is 33+2=35. This is for the following day for cinnamon buns. Demand for
cupcakes has an apparent seasonal variation with peaks every five days. Day 1=45, Day
6=48, Day 11=47 and the next peak would be Day 16=50.

(b) The use of sales data instead of demand implies that sales adequately reflect
demand. We are assuming that n stock-outs because demand equals sales if there are no
shortages.

Arnold Dacuma
Answer to Question No. 1:

In the case of goods, the ownership of the


product is transferable from sellers to buyers, whereas
in services there is no ownership involved. On the
quality issue, with goods it is homogeneous, once
produced the quality is uniform across all line of
products. They can be separated from the seller/
provider and not dependent on the source for its delivery to the purchaser. With regard to
service it is inseparable from the service provider and heterogeneous, where each time the
service is offered it may vary in quality, output, and delivery. It cannot be controlled and
is dependent on the human effort in achieving that quality hence is variable from
producer, customer and daily basis.
Another key distinction is perishability of services and the non-perishability of
goods. Goods will have a long storage life and are mostly non-perishable. Whereas
services are delivered at that moment and do not have a long life or cannot be stored for
repeat use. They do not bear the advantage of shelf life as in the case of goods like empty
seats in airlines. With the production and consumption taking place simultaneously in
services, it differs from goods on simultaneity and the provisions for quality control in
the process.
Both goods and services need not be driven by economic motives. Several times
goods and services are linked closely and cannot be detached. For example on purchase
of a car, the good is the car but the processing, the provision of accessories, after sales
activities are all services. It is essential to note that the difference between pure goods and
pure services are in contrast but most goods and services exist in between with a mix of
both. For instance, in a restaurant, food refers to goods while the service is the waiters
offering, the ambience, the setting of tables amongst others.
One major difference of product and service industries from an operations
perspective is the degree of customer contact present. This makes scheduling very
difficult in service industries as they cannot build up inventories and are very demand
sensitive. In this same way service industries are very sensitive to inputs as each process
can have very different inputs which require very different processes. Measurement of

productivity and quality assurance are much harder to measure in service industries as
measurement is not a simple quantity measure as it is in product industries, and quality
must be measured as services are delivered and cannot be inspected beforehand. All of
these differences make it much harder for operations managers in service industries to
make projecting and measurements of processes within their organizations.
Usually to measure the quality of services, the management would give postservice surveys to customers gauging the quality of service. Goods are easier to control,
manage and measure compared to services. The quantity and quality of products can be
determined since goods are tangible products.

Answer to Question No. 2:

Donald Kendall was the first person in Pepsi-Cola to


implement diversification strategy in managing and
leading Pepsi-Cola. First of all Donald Kendall started to
imply the related diversification strategy by introducing
new taste of Pepsi of which was the Patio Diet Cola. The type of cola that is without
sugar and zero calories; but to contain the artificial sweetener aspartame; and it can be
either sold with or without caffeine. Later on it was being replaced by Diet Pepsi-Cola in
the year of 1964.
Coca-Cola is getting into the spirit early by reimagining its
classic Holidays are Coming TV commercial together with a digital
platform allowing people to send seasonal messages to friends and
family. This is to attract consumer who experienced and grew up
drinking Coke, which will appeal to people who had enjoyed the
brand when they were very young.

Answer to Question No. 3:

The pressure on lower income groups is increasing. Today's on-going


technological progress goes hand in hand with the increasing complexity of work tasks, a
growing competition for jobs that demand fewer skills and lower education levels. One
plant is advantageous using machines while the other plant is using a labor-intensive
production, with low-income employees to hire more laborers.
A more meaningful measurement of the two plants aside from produced products
would be productivity and efficiency. Both plants should be measured according to the
materials used and the resulting products. Also, methods and processes should be
measured to check the efficiency of the systems of the two plants.

Answer to Question No. 4:

Efficiency is basically finding the best way to attain a given goal. It mainly
concerns itself with the way things are done. In most cases, an increase in efficiency is
accompanied by an increase in productivity. However, organizations enhancing their
efficiency should be vigilant to avoid being caught up in an efficiency improvement trap.
While efficiency deals with the quantity and optimal way we find Productivity deals with
rate of proper output. It means that an organization that focuses on improving efficiency
rather than productivity might overlook other improvements to productivity and thereby
fall behind its competitors.

Answer to Question No. 5:

With revolutionary technologies now driving the creation of new markets (digital
media and computerised wearables), services (energy management and DNA
sequencing), products (smartphones and robotics), and technology companies (e.g.
Apple), surely productivity growth must be surging. As a modern-day Economist might
say, the Internet of Everything is everywhere except in the productivity statistics.
Optimists maintain the official statistics fail to capture marked quality-of-life
improvements, which may be true, especially in the light of promising advances in

biotechnology and online education. But this overlooks an important aspect of the
productivity-measurement critique: the under-counting of work time associated with the
widespread use of portable information appliances.
The topic regarding the paradox has faded due to people being optimistic of our
current period and that innovations today are happening so fast that we are considering
our technological period as productive.

Answer to Question No. 6:

Intrinsic forecasting techniques are based on the assumption that what happened in
the past will happen in the future. This assumption has been likened to driving a car by
looking out the rear-view mirror. While there is some obvious truth to this, it is also true
that lacking any other crystal ball, the best guide to the future is what has happened in
the past. Past data is very important in this condition to project the future result. An ideal
characteristic of exponential smoothing is its being responsive to current data which
depends on the higher value of alpha. The weight given to latest actual demand is called a
smoothing constant and is represented by the Greek letter alpha (a). It is always
expressed as a decimal from 0 to 1.0.
Exponential smoothing provides a routine method for regularly updating item
forecasts. It works quite well when dealing with stable items. Generally, it has been found
satisfactory for short-range forecasting. It is not satisfactory where the demand is low or
intermittent.

Answer to Question No. 7:

All organization that enjoys planning would have to forecast or estimate their
plans. If an organization will not forecast production then they should have to gather the
order/demand for a service/product for them to have it delivered on the time it is needed.

The organization then would have a planned production every time but this is very ideal
and unlikely to be viable since there are factors that could interfere with the planning.

Answer to Question No. 8:

Solar-electric hybrid motorcycle- We are


seeing innovations made for cars. We now
have hybrid cars that run using solar energy
and/or electricity. We now have innovations
for motorcycles using electric-charged
batteries which yielded the e-motorbikes. If
I were to think of a new or revised product,
I would like to see motorcycles that run not just with the help of electric-charged-battery
but it should also be capable of harnessing the power of the sun making it a hybrid solar
motorcycle..
Legal implication- motorcycles are legal transport vehicle and will not spawn
legal issues.
Environmental implication- the product being fuel-free will help the campaign for
cleaner environment from air pollution.
Profitability- since solar furnaces/cells are still not widely commercialized in our
country, the price of the product could be a bit higher compared to normal motorcycles.
But the product is very viable since the cost of petroleum is expensive and the use of the
hybrid motorbike could be much cheaper in the long-run.
Competition- solar motorcycles are not yet available in the market and the savings
of buying a solar motorbike could be very attractive to potential riders and riders who are
considering to cut transportation expenses.

Design- the maker of the product will face a great challenge in making the
motorcycle consumer attractive. Hiding/ making and protecting the solar cells fit in the
structure of the motorcycle is a very important factor.
Production issue- there are companies here in the country who are offering solar
cells/furnaces to the market or it could be imported. Other materials could be sought
within the country.

Answer to Question No. 9:

The MRT or Manila Metro Rail Transit


System is a public transport service, is
one of favorite topics due to a lot of
system and facility issues contributing
to the failure of the company to deliver
good service to the commuting public.
MRT is a popular mode of transportation that extends almost the length of EDSA and is a
way to skip the traffic of the metro.
Due to many commuters prefer the MRT compared to other mode of transport and
being aged system, the MRT has developed countless operating issues, over-capacity,
operating system failure etc which their third-party counterparts failed to address. The
MRT administration should find partners who are credible and who can deliver good
service to fix the problems of the MRT.

Answer to Question No. 10:

1. Plan carefully
Transitioning
increase

to

production;

an

automated system can dramatically


however, it should never be done

impulsively. It is expensive and does not suit every application or facility. Instead, prior
to implementing an automated welding system, work with an integrator to develop a plan
that accounts for factors including: the part and volume to be automated, your facility and
available personnel for overseeing the system.
2. Assess the facility
Consider working with a third-party integrator to help you decide whether your
facility suits the installation of an automated welding system. System integrators are
knowledgeable about all aspects of facility modifications necessary for automation,
including important safety regulations. Also, check the available space for new machines
and the storage.
3. Determine the available personnel and training
The personnel who are most viable for training (and ultimately the oversight of
your robotic system should you proceed with the purchase). These resources may include
online tutorials or troubleshooting information, additional onsite training and/or service
team members you can reach by phone with any questions you and your team may have.

Answer to Question No. 11:

1. Moving average

3-DAY
5-DAY

MOVING AVERAGE FOR DAY 16


Blueberry Muffins
Cinnamon Buns
35
31
34
30

2. Exponential Smoothing
Formula: F t+1 = X + (1-) F
Whereas: X= past demand
F= predicted or moving average
Blueberry Muffins

Cupcakes
25
30

D16= (33) (0.8) + (34) (0.2) = 34


Cinnamon Buns
D16= (33) (0.8) + (30) (0.2) = 33
Cupcakes
D16= (22) (0.8) + (30) (0.2) = 24

Cinnamon Buns
Cinnamon
Buns

35
30
25

Blueberry Muffins
Blueberry
Muffins

40
35
30

Cupcakes
30
Cupcakes

20
10
0
Day 13

Day 14

Day 15

Day 16

(b) The use of sales data instead of demand gives more importance to historical
sales which considers trend patterns and/or seasonality. Unlike considering just the
demand which may not be a reliable basis for production since it does not consider
fluctuations or historical variations.

Reynaldo S. Angara
Answer to Question No. 1:

Production of goods and delivery of services are different from each other in the
sense that goods are not produced and consumed at the same time whereas services are
produced and consumed or delivered at the same time, making it imperative for managers
and operational guys to keep a close eye on the quality of the services being delivered.
Answer to Question No. 2:

Pepsi, with a strategy of targeting a core market instead of the total market,
demonstrated the opportunities created by narrowing the target market. Cokes strength
was its tradition, which meant that older consumers had a stronger attachment, whereas
younger consumers would more easily switch brands.

In many instances, younger

customers would want to drink something different than older consumers. Diet Pepsi
campaign capitalized on younger consumers desires to drink something different.
Teenagers drink more soft drinks than any other market segment.

All age groups

purchase substantial quantities of soft drinks, and this appeal also attracted consumers
who perceived themselves as young and physically active.
Answer to Question No. 3:

Automation produces less wastage and faster production of goods Higher


percentage of labor results to higher costs for compensation (US basic salary is high) and
more risks for wastage.
Answer to Question No. 4:

Efficiency is basically finding the best way to attain a given goal. It mainly
concerns itself withthe way things are done. In most cases, an increase in efficiency is
accompanied by an increasein productivity. However, organizations enhancing their
efficiency should be vigilant to avoidbeing caught up in an efficiency improvement
trap.While efficiency deals with the quantity and quality of a product and mainly
concerns itself withhow things are being done, productivity mainly concerns itself with
an operations end results. Itis hence clear that by using efficiency as a way to find the
most appropriate way to reach a goalin a given operation, the end results of the operation
i.e. productivity will be more impressivewith every increase in efficiency.However,
organizations find themselves deep into the efficiency trap by concentrating so muchon
cost cutting measures as opposed to the production of the right quantity of production
units.It is clear therefore that an organization concentrating on efficiency improvement as
opposed to focusing solely on efficiency may result in overlooking potential major
productivity gains that could be achieved by altering inputs rather than simply refining
methods to achieve relatively modest gains.
Answer to Question No. 5:

The productivity paradox is the peculiar observation made in business process


analysis

that,

as

more

investment

is

made

in

information

technology,

worker productivity may go down instead of up.To answer such questions we need define
each of these terms firstly Productivity represents a measure of effective use of resources
usually expressed as the ratio of output to input While efficiency is about doing things in
an optimal way for example doing it the fastest or in the least expensive way. It could be

the wrong thing, but it was done optimally. Efficiency is basically finding the best way to
attain a given goal. It mainly concerns itself with the way things are done. In most cases,
an increase in efficiency is accompanied by an increase in productivity. However,
organizations enhancing their efficiency should be vigilant to avoid being caught up in an
efficiency improvement trap. While efficiency deals with the quantity and optimal way
we find Productivity deals with rate of proper output. It means that an organization that
focuses on improving efficiency rather than productivity might overlook other
improvements to productivity and thereby fall behind its competitors. How do we avoid
this trap? If focusing solely on operational efficiency is not sufficient, where should
company places it's focus? Some may find focusing on business value is an appropriate
perspective that does not minimize the importance of efficiency, but also does not blind
you to opportunities to innovate. How do you focus on business value? Focus on
whatever you do in your organization that directly benefits your customers. By
customers, I am referring to outside customers the people who pay you for the value
you provide.
Answer to Question No. 6:

Exponential smoothing is a sophisticated weighted averaging method that is still


relatively easy to use and understand. Each new forecast is based on the previous forecast
plus a percentage of the difference between that forecast and the actual value of the series
at that point. Lacking any other crystal ball, the best guide to the future is what
happened in the past , thus exponential smoothing is essential.
Answer to Question No. 7:

In some situations, forecasters rely solely on judgment and opinion to make


forecasts. If management must have a forecast quickly, there may not be enough time to
gather and analyze quantitative data. At other times, especially when political and
economic conditions are changing, available data may be obsolete and more up-to-date
information might not yet be available. Similarly, the introduction of new products and

the redesign of existing products or packaging suffer from the absence of historical data
that would be useful in forecasting. In such instances, forecasts are based on executive
opinions, consumer surveys, opinions of the sales staff, and opinions of experts.
Answer to Question No. 8:

Portable Solar powered water desalinator. Legally, there may be no problem as


long as inventor can have a patent of it. This will be very good to the environment as it
utilize power of the sun and will not pollute the environment. Design and production
may be an issue. Presently, engineers are unable to design a small or portable version of
a desalinator. But if this can be made possible, this will be a very profitable product as
there are a lot of countries or areas surrounded by sea with little access to potable water.

Answer to Question No. 10:

Two factors that must exist in order to make automation feasible are Quality and
Management. Poor quality products would not meet customer requirements
and would need repairs and reworks on the product to meet the standards.
With better scheduling, planning, coordinating and controlling activities omanage
ment the machine operations can be carried to improve productivity
Other factors that must exist in order to make automation feasible are: a) the level
of demand: The demand must be forecasted. Generally, we need high volume of output
to justify the high cost associated with automation. b) The degree of variability required
in the manufacturing or the service system. The higher the degree of variability required,
the less the chance of success for automation.

Answer to Question No. 11:

(a)

We need to use naive methods. This means that any simple appropriate method can

conducted. For example: Plotting each data set reveals that muffins orders are almost stable,
varying around an average (e.g. 33). The demand for cinnamon buns has a trend. If we get the
last three period, we realized that number increased two by two so 33-31=2 and last one is
33+2=35. This is for the following day for cinnamon buns. Demand for cupcakes has an apparent
seasonal variation with peaks every five days. Day 1=45, Day 6=48, Day 11=47 and the next
peak would be Day 16=50.
(b)

The use of sales data instead of demand implies that sales adequately reflect demand. We

are assuming that n stock-outs because demand equals sales if there are no shortages.

Ma. Cristina Santos


Answer to Question No. 1:

Service and manufacturing industry has many differences though some company
offers both. An example is Middleby Philippines they offer a service in a way that they
can maintain your equipment and they are available on call at the same time they offer
goods they are the only supplier of some equipment and parts of a certain machine
(monopoly). One difference of service and manufacturing is their output. Service offers
no tangible output for example Abs-Cbn offers entertainment, you cant touch it but you
like the feeling of happiness while watching. Manufacturing offers a tangible output, for
example Toyota cars, this is goods that can be seen and touch. Another difference is in
inventory, school dont hold inventory they create a service that is needed by the students
however in manufacturing they hold a minimum inventory for continuous production
such as production of computers, television. In terms of customers, service industry such
as restaurant create a service when it is demanded, service depend on the customers
requirement. However in manufacturing they can produce goods without a customers
demand, it is a continuous production for continuous needs of consumer. Another is in
labor, service industry recruits people with certain knowledge on a certain job. Also it
requires a proper scheduling of time and days work due to legalities and requirement
needed on the current situation (for instance peak hour in a restaurant). In manufacturing
they can schedule less labor and can automate many of their processes. And also in a
location aspects, in a manufacturing good location is one of their main decision making

they cant start production without a location. In service industry for instance an
accountant he can just be a home base job or visit.
Answer to Question No. 2:

PepsiCo and Coca-Cola are two big producers of cola. They have different target
customers. Pepsi focus always on the consumer of drink not on the drink. Coke focused
on the drink. Diet Pepsi focus its market and manufacturing for young adult especially
women with no kids and to diet conscious people. While coca cola brings back its coke
classic in replacement to non production of the new coke. The new coke is a preferred
cola of consumers compare to the other cola products however Coca-Cola is not prepared
on the effect to the old cola which lead the management to backlash. So in 1985 they
return the new coke classic in an improve ingredient. Pepsis strategy cater consumer to
use the product for what they deserve. They gave the message to consumers that their
need and health is important. While coca cola classic focus on the improvement of its
existing product. It emphasize that their goal is to improve what they have for the
betterment of consumer. They want consumer to realize that replacing what is original is
not necessary but improving it is what matter most. Coca cola classic focus more on a
family bonding, old times and friendship.
Answer to Question No. 3:

Two companies in a different place but with same product produce, and same
owner which means same policy however productivity is different because the other plant
uses more automation, less expense in labor and easier scheduling. While the other plant
uses labor intensive, scheduling is trickier because they still have to consider many
aspects in scheduling. They have to consider how many laborer and hours needed to
schedule for a certain job. Scheduling operation which uses labor intensive is difficult
due to legalities aspects unlike if operation is more on automation. The other plant that
uses automation will be more efficient but high maintenance cost and there is a tendency
of over production. Plant number 2 who uses more labor is a little slow production
compare to automated operation and more stations is needed(ex manufacturing of bear,

we a fur dept, sawing dept, cutting dept, embroider dept and others). However product
has a better quality for the plant that is labor intensive.
Answer to Question No. 4:

Efficiency increase is equivalent to better productivity. An efficient team gives an


excellent job especially in production / operation. Efficiency focus on how things are
done (quality and quantity). This means that focusing on increasing efficiency will result
to an impressive productivity. However concentrating on efficiency alone might also give
us a wrong decision making. Just like now our economy is growing fast and technology is
being advanced so fast and because of this we look for other resources that will increase
our efficiency. We seek for technological help however sometimes we forget
conservation. Efficiency and conservation are two different things that must be consider
in an operation. There are times that we incur more cost to our desired efficiency. For
instance in a restaurant high efficiency in service will give your business a good
impression. You will be known to have a good service and quality. However in order to
maintain an excellent and fast service we have to set more manpower. Having a high
volume of labor will not do well to our financial stability or profit/income result. You
might be overlooking the standard percentage of manpower to sales. Also in
manufacturing industry we used high power especial machine because they are more
efficient compare to our old machine. However we forget the consumption of this
machine. This machine has a highly maintenance cost and high consumption on energy or
diesel more than what is budgeted or the standard. This is the efficiency trap that we may
be blinded with. This can be prevented by understanding and knowing first all the factors
that will affect our operation. Management must consider everything not only efficiency
alone. We have to consider profitability of system that we implement.
Answer to Question No. 5:

Paradox is a concept that contradicts itself. Productivity paradox was analyzed


and popularized by Erik Bryn Jolfson, which noted the apparent contradiction between
the remarkable advances in computer power and the slow growth of productivity at the

level of the whole economy. Productivity paradox boost office automation however the
growth of accounts slows down.

It becomes a productivity paradox due failure of

massive investments in technology. This happened due to wrong measurement of gains


and wrong management; they didnt see the advantages of its difficulties in managing and
learning it. The question now is do productivity paradox already ended or does it already
has a improvement because the discussion has already faded? As per observation the
discussion already faded because it already has an improvement and people already learn
how to use it in a proper way. Just like today collection of taxes boost due to improved
system of BIR, they easily track payments and sale of businesses due to their online
submissions. NBI also uses information technology through online scheduling and
minimizes long lines, and to us it also becomes easier because we dont have to spend
long time waiting our names to be called because we have a time scheduled. Productivity
now increase compare to our old manual system.

Answer to Question No. 6:

In driving a car you have to always look on the rear view mirror in order for you
to know if there are many cars at your back. Or sometimes you look at the rear view
mirror to check the people at your back. Also you look at your rear view mirror if there is
someone following you for you to estimate your speed. Also he sees in rear view to now
if he can easily have a break or have a turn. In exponential smoothing you are also
estimating the demand of a product for you to know the quantity of product you are going
to produce. However you have to use your perception also because demand may change
from time to time. Just like a car at your back he may change his direction from time to
time that is why you have to see on your mirror. In product you have to perceive if the
demand will not change and if the produce product will be sold on time.
Answer to Question No. 7:

Forecasting is very important in all aspects of business. Every business does


forecast every year; they forecast sales, expenses and demands of customer. They need to

forecast in order to be appropriate in their target for the coming year. So I dont think in
any aspect a company will not used a forecast because it is where they depend on
prediction for the coming year.

Answer to Question No. 8:

If I am going to introduce a new product or service in the market it will be a


RECRUITMENT & TRAINING (specialized in fast-food set up). Legal implication of
this business will arise on contracts fulfillment of clients (such as fulfillment of payment
terms and the legal process on delayed payment) and of course we are responsible on the
safety of our employees or recruit. We need to have an insurance for our employees and
recruit because they will expose to risk while working in a fast-food (example is
accidentally thrown a boiling water while cooking noodle). Ethical implication will arise
when we deliver people that are not well trained on their task. Client gives their trust to
us the people that we will produce is already trained and have the idea of work that they
will do. To avoid this implication we have to make sure that they have undergone the
proper training before sending them out to war. In terms of profitability implications, we
have to make sure that our company will have a profit. Profit is important to an
organization in order to survive long time. So we must be very keen in pricing, we must
consider the fixed and variable cost of our operation. Competitiveness implication arises
in every business because some markets are very competitive. They can pirate your client
though competitive pricing and discounts. So to avoid this we must be very considerable
in making a price without of course suffering our profitability and quality.
Answer to Question No. 9:

The latest issue I knew regarding service industry who had a problem was Jollibee
because they lack supplies from the commissary. This happened because of transferring
from one accounting system to another. They have not predicted that it will be a big
problem especially in operation of the stores. They had a conflict on ordering system and
in terms of transferring datas. Some order were not transmitted and delivered on the

proper time that is why a problem occurred. First before implementing the new system
they must have assisted first the readiness of the people involved. Secondly they must do
it little by little or per area until such time that everybody are on the same track. However
the system now on delivery of goods is better than before. They easily track goods not
received upon encoding of managers.
Answer to Question No. 10:

Automation is the use of computers and machines that are automated in operating
a business. Automation is used to minimize variable cost of production. And the main
reason why most business uses automation is to increase productivity. Before using
automation we have to consider first functional knowledge of application. We have to
know how the machine work, its limitations and how to fix it if some minor problem
occur. After we have known that we have to transfer the knowledge to team involve. We
have to familiarize ourselves on the automation so that it will not incur delay and we can
achieve our goal to increase productivity. Secondly we have to know how profitable the
automation in our organization (ROI). We have to know how fast the return of investment
compare if it is not automated. We have to be sure that automation is more profitable than
not having it.
Answer to Question No. 11:

(b)We use sales data in order to forecast the materials needed for the next day.
Sales data show the demand day by day. It is the most accurate method to use in
forecasting a sales.

Janice Buenavista
Answer to Question No. 1:

There are five main differences between service and manufacturing organizations.
First, is the tangibility of their output, Second, the

production on demand or for

inventory, Third is the customer-specific production, Fourth, the labor-intensive or


automated operations and lastly, the need for a physical production location. However, in
practice, service and manufacturing organizations share many characteristics. Many
manufacturers offer their own service operations and both require skilled people to create
a profitable business.
First distinction is when it comes to the goods in terms of its tangibility of output.
The output of a service firm, such as consultancy, training or maintenance, or invaluable
services such as health services, banking, education, for example, is intangible while in
manufacturing, physical goods can seen and touched by customers. For example, A
person, when he catches a disease or meets an accident needs hospitalization, where
doctors use their expertise to treat him after diagnosis. He is given medicines and doctors
operate upon him, to bring relief to his symptoms. Thus, it is clear that no goods are
being produced, and the tangible products like drugs are quickly consumed by the
customer. However, the main focus is on the expertise of the doctors which is integral to
the entire treatment procedure. There is a direct contact between the professional and the
customer, and the consumer has active participation in the industry. Similarly, when a
person hires the services of an attorney, he is not getting a product but the consultancy
from an expert that is instrumental in getting a decision from the jury or a court of law in
his favor. In terms of their inventory, Service firms, unlike manufacturers, do not hold
inventory instead they create a service when a client requires it. Whereas, manufacturers
produce goods for stock, with inventory levels aligned to forecast market demand.
Service firms do not produce goods unless a customer requires it. Although they design
and develop the scope and content of services in advance of any orders. Service firms
generally produce a service tailored to customers' needs, such as consultancy, design and

installation. Manufacturers can produce goods without a customer order or forecast of


customer demand. However, producing goods that do not meet market needs is a poor
strategy. In terms of labor, service firm recruits people with specific knowledge and skills
in the service disciplines that it offers. Service delivery is labor intensive and cannot be
easily automated, although knowledge management systems enable a degree of
knowledge capture and sharing. Manufacturers can automate many of their production
processes to reduce their labor requirements, although some manufacturing organizations
are labor intensive, particularly in countries where labor costs are low. Lastly, location
wise, Service firms do not require a physical production site. The people creating and
delivering the service can be located anywhere. For example, BPOs (Business Process
Outsourcing Firms) use communication networks to access the most appropriate service
skills and knowledge from offices around the world. Manufacturers must have a physical
location for their production and stock holding operations. Production does not
necessarily take place on the manufacturer's own site; it can f each ones core
competencies, technologies, environments, and the welfare measures used in
manufacturing and service.

Answer to Question No. 2:

In order to remain at the cutting edge, both companies, PepsiCo and Coca Cola
identified its target market segments. Differences between this companies are evident
with respect to product, pricing, place and promotion. Coca-cola relies heavily on value
that quality is more than something we see or taste. Pepsi, on the other hand, relies on its
success resulting from superior products and high standards of performance.

Key differences are: First, Coke is too carbonated and Pepsi tastes smoother.
When drinking coke you have that feeling that you are satisfied after eating a meal. That
burp feeling is essential to end our meals. While that of pepsi, its diet cola is ideal for
those who are reducing or conscious of their bodies. Second, in terms of advertising.

Coke's traditional logo is very common, and tasters and drinkers can associate with it,
"When asked to taste blind, they showed no preference. However, when the participants
were shown company logos before they drank, the Coke label, the more famous of the
two, had a dramatic impact: three-quarters of the tasters declared they preferred
Coke." People obviously find the classic Coke advertisements more appealing. Since the
Pepsi label has changed numerous times, they do not feel such a connection. Final say,
Coca Colas ads places more concern about family bonding and happiness slogans
while that of PepsiCo is more on popularity and fame. They use endorsers as popular as
Michael Jackson and Ricky Martin.

Answer to Question No. 3:

With increased automation and labor productivity, the Japanese plant employing
automated plants, labor costs could be as low as five percent of the manufactured product
cost. When direct labor costs are very low, the overhead cost reaches several hundred
percent of direct labor cost. Consequently, a small change in direct labor cost could alter
the total cost very substantially. The negative impacts of this are many. They include the
reluctance of the management to invest in equipment and process technology because
additional investment would increase the overhead burden rate. If the production process
is purely automated workforce will not be required. Automation results in increase in
output and in the decrease of workforce resulting in cutting of labor costs. Automation
means elimination of manual labor tasks and unskilled workers. As automation is
implemented, a shift from direct labor jobs to indirect labor jobs will occur. Direct labor
work tends to be well-defined, manual, and repetitive. The skill level required is
generally low. Indirect factory labor work is sometimes manual but not as well defined
and not as repetitive. Many of the jobs for indirect labor require skill and training. Such
as Equipment maintenance because a breakdown of one key machine can stop production
is the entire plant. Skilled, highly trained technicians are needed to maintain and repair
the equipment in a highly automated factory. Another is a Computer programmer for
plant computer systems and computer-controlled. New production technologies and
computer systems will be developed, and there will be a need to incorporate these

technologies in factory operations to remain competitive. Next a Plant supervisor it may


be professional managers and engineers responsible for managing plant operations.
Although manual labor will be eliminated when automation is in place, there will still be
a need for someone who will supervise the assembling department. Automation means a
decrease in direct-labor costs and, therefore, an increase in the allocation of fixed costs. If
fixed costs were previously allocated using direct labor, then the change in the production
system will probably render the current method obsolete. The automated processing
would give a much higher labor productivity ratio than the manual processing. We could
use multifactor productivity as a more meaningful measure.
Answer to Question No. 4:

Efficiency improvement trap means that an organization that focuses on


improving efficiency rather than productivity might overlook other improvements to
productivity and thereby fall behind its competitors. Efficiency is concerned in making
things done while productivity is in terms of operations and end results. Therefore
companies who brings more emphasis on efficiency, like employing cost reduction and
techniques tends to result in lower productivity. Productivity means output per labor hour
and as we all know, we target a high productivity to achieve our end goal, that is to make
money, putting more emphasis increasing our throughput or cost of goods sold, reducing
of inventory because high inventory is tied up in our cash and lastly, reduction of
operating expenses. In order to realize our goal to earn money, there must be a balance of
the two measures.
Answer to Question No. 5:

Anything that has to do with computers and computing is some form of


information technology. Whenever organizations choose to buy computers, databases,
networks, software, or many other computer related materials, they are making an
investment in IT.. The productivity paradox (also the Solow computer paradox) is the
peculiar observation made in business process analysis that, as more investment is made

in information technology, worker productivity may go down instead of going up. There
were a number of theories proposed that explained the productivity paradox. There
ranged from ideas about inadequate measurement of productivity to the necessary lag
period before actual gains in productivity could be seen. Until recently these explanations
were little more than theories, but now many of them have hard evidence to support then
due to studies that show a large increases in productivity in companies that invested
heavily in IT. The way the productivity paradoxunfolded is best described by Stuart
MacDonald and his colleagues in his paper,Measurement or Management?: Revisiting the
Productivity Paradox of Information Technology. According to MacDonald, the paradox
began to take place in the early 1970s and progressed through 5 stages. Stage 1. These
were the early days, when not much was known about the implications of IT investment
and expectations were huge. The idea of IT investment was so novel that there was a
broad notion that IT was going displace labor entirely. Ever since this early period of
investment in IT, it was assumed that labor productivity was the correct way to measure
the impact IT had. Stage 2.This stage started in the late 1970s and marked the first
indications that the result of IT investment was less than expected. Even though this was
the case, companies continued to funnel huge amounts of capital into computing. Most
companies didn't even bother to try and evaluate their IT investment. Those that did
usually only used return on investment calculations. Stage 3. This stage, which spanned
the early 1980s, was marked by the realization that IT was only to be used in terms of
productivity. Instead, companies began to use IT strategy. Several companies (American
Airlines, American Hospital Supplies, and Citibank) strategically used IT to create a
competitive advantage over their competitors. The Fourth Stage, By the late 1980s IT
investments migrated to management information systems. In this new area IT was no
longer expected to be directly productive. It was also during this time that numerous
explanations for the productivity paradox emerged. Although none of them individually
provided a concrete explanation, collectively they hinted at a larger problem. The last
stage is after the late 1980s, most of the investment in IT has been in telecommunications.
With this new area of investment, expectations of productivity increases were further
lowered.

The 'IT Productivity Paradox' is the concept that, despite massive investment and
resourcing by companies and organizations worldwide in their IT systems, there still
seems to be little pay-off. Information systems can no longer be viewed as a support
service for a business - information technology now has a lead role to play in the strategic
planning processes of any organization.

Answer to Question No. 6:

Driving a car by looking at the rear-view mirror is analogous to the assumptions of


exponential smoothing in the sense that when using a rear mirror as a guide, it only
provides a limited view or control in the sense that we move forward without putting a
regard to the backward side or past side.As the definition of the Exponential Smoothing
says that this method assigns exponentially decreasing weights as the observation get
older. So as we go past our way, our view tends to become narrower and narrower until
such that time that we cannot see the image anymore and we cannot predict what would
gonna happen after we lost sight of the behind as we pass by.
Answer to Question No. 7:

Every organization must not be complacent when it comes to sales and production
not with standing the fact that they own a large market share for their product. Still they
need to forecast or predict future demand in order to plan their production and of course
to generate sales and to for earn a profit.

But sometimes forecasting is not done

regularly to companies where there seems to be a fixed demand or almost same range of
demands after considering the cost-benefit implications.
Answer to Question No. 8:

I would like to offer an Interior Design business to my clients. Designing is about


expression of our creativity from collections of our various experiences and values and

applying it to our craft. If you travel a lot, you got to share the culture and society of the
people you visit from. Being imaginative, a keen observant and open minded is also a
must. All the more be respectful for every tradition a certain culture or society might
have. It is by designing that you got to see the creativity, initiative and resourcefulness of
a particular person or a society where he lives. That is what usual big time clients wants.
That is to design their comfort homes or structures in such a way that it reflects a certain
society where they want to belong to, or to a society that they want to experience with,
without having to go away from their homes. I do want a green business, that is to
incorporate designs that are eco-friendly, the reduce, reuse and recycle program. By that
way, we are also embracing Corporate Social responsibility which is one of the key
nowadays to be highly competitive. Of course, before I would have to produce a good
output, I must have to build personal connections with my client so as to really come up
to the design in which they really want to have.
Answer to Question No. 9:

As I recall this happened when Suncellular launched its product/service when


they had to design their packages as to unlimited call and text and unlimited surf but
then again its quality is being sacrificed such that the internet line is too slow or
unreliable Not only that, signals disappears when nighttime comes, so sometimes people
tend to compare it that when daytime is up, signals are good, but when the sun is not
around (at nighttime), there are no signals or slow response. So if I were the customer of
this business I would rather settle for a more costly internet rather than to sacrifice the
quality of internet service. The result is that, instead of penetrating the low to middle
class, the company would generate just amount of sale not enough to compensate for the
expenses incurred to launch the new project. This would have been addressed if the
management would have designed its internet package into a more strong and dependable
internet, that is giving a higher price without sacrificing the quality.
Answer to Question No. 10:

Automation encompasses all the basic functions of the enterprise.It is


indispensable part of the manufacturing industries nowadays. It is only feasible in the
case of a highly developed production based on modern technology and sophisticated
methods of control using highly reliable production equipment. Human function is
limited to the overall monitoring and control of the entire complex. Also in its financial
aspect, going from manual to automation entails a large cash outlay, most especially with
the investment of machines, mechanism, development cost, execution cost, as well as
maintenance cost, etc. Therefore, capital budgeting decisions must be well considered
and long range planning must be done because once the automation is done, its effect is
irreversible. There will also be massive lay off of workforce as manual labor is replaced
by fully automated machines. Cost benefit analysis must be done. Also consider the ROI
or Return on Investment, how soon will the business recover its large investment and by
this time could the products generated are still marketable or could the company
maintained a large market share, how about the consideration about obsolescence?

Answer to Question No. 11:

(a) We need to use naive methods. This means that any simple appropriate method
can conducted. For example: Ploting each data set reveals that muffins orders are almost
stable, varying around an average (e.g. 33). The demand for cinnamon buns has a trend.
If we get the last three period, we realized that number increased two by two so 33-31=2
and last one is 33+2=35. This is for the following day for cinnamon buns. Demand for
cupcakes has an apparent seasonal variation with peaks every five days. Day 1=45, Day
6=48, Day 11=47 and the next peak would be Day 16=50.

(b)The use of sales data instead of demand


implies

that

sales

adequately

reflect

demand. We are assuming that n stock-outs


because demand equals sales if there are no
shortages.

Rowell C. Marasigan
Answer to Question No. 1:
Most of manufactured goods, especially FMCG and industrial products need to be
supported by an excellent team of after sales service personnel. After all, in todays world most
products are getting commoditized and the discerning factor between one product and its
competition is often the quality of service that the manufacturer provides. Even with consumer
goods like food items and cosmetics, there has to be a service section to handle complaints and
product returns.

Sometimes, a vendor can offer value-added services to his product as a package.


Today, many laptop manufacturers offer one year free maintenance, software installation
and trouble-shooting as an add-in. This can also be extended at a nominal price for an
additional two to three years.
Therefore, its commercially advantageous for a firm to offer complimentary
services along with its product offerings.
The fact to be noted is that different types of personnel are required to manage the
operations related to manufacturing of goods and the delivery of services. Even if the
services are related to the goods being manufactured by the firm, the service personnel

need to have overall knowledge regarding the actual working of the equipment under
field conditions rather than how it was built.
Therefore, a firm dealing with both manufacturing and services needs to have
different sets of personnel to handle the operations related to these two sectors.
Differences Between Goods and Services
1. Goods are tangible while services are intangible.
2. Customers participate in many service processes, activities, and transactions.
3. The demand for services is more difficult to predict than the demand for goods.
4. Services cannot be stored as physical inventory.
5. Service management skills are paramount to a successful service encounter.
6. Service facilities typically need to be in close proximity to the customer.
7. Patents do not protect services.
There are many implications due to the differences between service and
manufacturing operations. For example, in a service firm, since the degree of customer
contact is high, we have to make sure that employees are better trained in customer
service than employees in a manufacturing industry. In a pure-service industry firm, we
will build a lot of slack in scheduling because of the uncertainty of input.
Production of goods and delivery of services are different from each other in the
sense that goods are not produced and consumed at the same time whereas services are
produced and consumed or delivered at the same time, making it imperative for managers
and operational guys to keep a close eye on the quality of the services being delivered.
One major difference of product and service industries from an operations
perspective is the degree of customer contact present. This makes scheduling very
difficult in service industries as they cannot build up inventories and are very demand
sensitive. In this same way service industries are very sensitive to inputs as each process
can have very different inputs which require very different processes. Measurement of

productivity and quality assurance are much harder to measure in service industries as
measurement is not a simple quantity measure as it is in product industries, and quality
must be measured as services are delivered and cannot be inspected beforehand. All of
these differences make it much harder for operations managers in service industries to
make projecting and measurements of processes within their organizations.

Answer to Question No. 2:

In 2005 PepsiCo announced plans to make Diet Pepsi its flagship brand in the
United States, and increase the amount it plans to spend on advertising its diet cola.
Meanwhile, rival Coca-Cola planned to focus on its Classic Coke brand, although it, too,
increased advertising expenditures on its diet cola.
PepsiCo's strategy is mainly based on establishing a differentiation advantage.
PepsiCo is successfully taking advantage of its opportunities (sustainability and healthy
product diversification) while responding to its threats (ensuring the sustainability of
natural resources such as water and potato fields) through several of its new programs
and adaptation to global consumers' tastes and needs with innovation and speed-tomarket. Transform the Pepsi company into a healthier product maker and better corporate
social citizen.
Coca-Cola overall mission has not changed too drastically over time, as long-term
growth and value creation have been its strategy for many decades.

Coca-Cola's greatest strengths reside in its intangible resources. It is mainly


thanks to its reputation and brand equity, that it can differentiate itself from its
competitors.
Coca- Cola has used three strategies to stay ahead of competitors like Pepsi.
First, it has stuck to its tried-and-true formula for Coke (barring the brief,
disastrous mid-1980s flirtation with New Coke) and flanked it with new products such as
Diet Coke Plus and Coca-Cola Zero. Its leaders have combined flexibility with foresight.
They jettisoned New Coke when the market rejected it and quickly moved on to other
new products.
Second, Coca-Cola has been intensely productfocused. While Pepsi has become
more of a snacks and foods company, Coca-Cola has retained its identity as a beveragesfirst firm. This sharp focus has allowed it to retain global leadership in the soft drinks
sector for over a century an unprecedented achievement. Coke has increasingly turned
to healthy fruit beverages, milk based drinks and clean bottled water in synchrony with
the changing external societal and lifestyle environment.
Third, Coca-Colas management has poured its inventive skill into marketing and
distribution by virtue of its key bottlers partnership strategy. Coca-Cola has thereby kept
costs low, mitigated risk, outsourced the front-end to bottlers and emerged as the worlds
largest franchiser and outsourcer. Innovation delegation Coke has elevated this maxim
to a fine art. By making bottlers the key to its global strategy, Coca-Cola has been able to
concentrate on marketing. What De Beers has done to the diamond industry, Coca-Cola
has done on a far larger scale to the beverages industry.
Its bottlers partnership strategy has allowed Coca-Cola to focus on its own core
competency the secret, century old Coke formula and brand building. Those are the
two pillars on which Coke has built its past and on which it will secure its future.

Answer to Question No. 3:

The results are misleading as you would expect the capital equipment productivity
measure to be higher in one country than the other.
The use of partial productivity measures in international productivity comparisons
may lead to very misleading results. We believe that this has consequences that extend
beyond comparisons.
Conclusions of efficiency differences based on partial productivity measures can
be very misleading.
Perhaps the most important question that needs to be addressed is the extent to
which capital/labor substitution affects efficiency. Our measure of relative total factor
productivity sidesteps this issue. Yet there is a literature (eg. Kaldor, 1967; Diwan, 1970)
which stresses that capital substitution affects labor productivity in a way that is not
caught by the total factor productivity measure used.
But the major problem will lie in finding a measure of relative capital intensity
that avoids the problem of imprecise measures of the relative price of capital equipment
and structures.
Numerous factors affect productivity. Generally, they are methods, capital,
quality, technology, and management. A commonly held misconception is that workers
are the main determinant of productivity. According to that theory, the route to
productivity gains involves getting employees to work harder. However, the fact is that
many productivity gains in the past have come from technological improvements.
Familiar examples include Fax machines, Automation, Copiers, Calculators, The Internet,
Computers, Voice mail, cellular phones, E-mail, Computerized billing, Software.
However, technology alone wont guarantee productivity gains; it must be used
wisely and thoughtfully. Without careful planning, technology can actually reduce
productivity, especially if it leads to inflexibility, high costs, or mismatched operations.

Another current productivity pitfall results from employees use of computers for nonwork-related activities (playing games or checking stock prices or sports scores on the
Internet). Beyond all of these is the dip in productivity that results while employees learn
to use new equipment or procedures that will eventually lead to productivity gains after
the learning phase ends. Other factors that affect productivity include the following:
Standardizing processes and procedures wherever possible to reduce variability
can have a significant benefit for both productivity and quality.
Quality differences may distort productivity measurements. One way this can
happen is when comparisons are made over time, such as comparing the productivity of a
factory now with one 30 years ago. Quality is now much higher than it was then, but
there is no simple way to incorporate quality improvements into productivity
measurements.
Use of the Internet can lower costs of a wide range of transactions, thereby
increasing productivity. It is likely that this effect will continue to increase productivity in
the foreseeable future. Computer viruses can have an immense negative impact on
productivity.
Searching for lost or misplaced items wastes time, hence negatively affecting
productivity. Scrap rates have an adverse effect on productivity, signaling inefficient use
of resources. New workers tend to have lower productivity than seasoned workers. Thus,
growing companies may experience a productivity lag. Safety should be addressed.
Accidents can take a toll on productivity.
A shortage of information technology workers and other technical workers
hampers the ability of companies to update computing resources, generate and sustain
growth, and take advantage of new opportunities.

Layoffs often affect productivity. The effect can be positive and negative. Initially,
productivity may increase after a layoff, because the workload remains the same but
fewer workers do the workalthough they have to work harder and longer to do it.
However, as time goes by, the remaining workers may experience an increased risk of
burnout, and they may fear additional job cuts. The most capable workers may decide to
leave.
Labor turnover has a negative effect on productivity; replacements need time to
get up to speed.
Design of the workspace can impact productivity. For example, having tools and
other work items within easy reach can positively impact productivity. Incentive plans
that reward productivity increases can boost productivity.
And there are still other factors that affect productivity, such as equipment
breakdowns and shortages of parts or materials. The education level and training of
workers and their health can greatly affect productivity. The opportunity to obtain lower
costs due to higher productivity elsewhere is a key reason many organizations turn to
outsourcing. Hence, an alternative to outsourcing can be improved productivity.
Moreover, as a part of their strategy for quality, the best organizations strive for
continuous improvement. Productivity improvements can be an important aspect of that
approach.
A company or a department can take a number of key steps toward improving
productivity:
1. Develop productivity measures for all operations. Measurement is the first step in
managing and controlling an operation.
2. Look at the system as a whole in deciding which operations are most critical. It is overall
productivity that is important. Managers need to reflect on the value of potential
productivity improvements before approving improvement efforts. The issue is
effectiveness. There are several aspects of this. One is to make sure the result will be
something customers want. For example, if a company is able to increase its output

through productivity improvements, but then is unable to sell the increased output, the
increase in productivity isnt effective. Second, it is important to adopt a systems
viewpoint: A productivity increase in one part of an operation that doesnt increase the
productivity of the system would not be effective. For example, suppose a system
consists of a sequence of two operations, where the output of the first operation is the
input to the second operation, and each operation can complete its part of the process at a
rate of 20 units per hour. If the productivity of the first operation is increased, but not the
productivity of the second operation, the output of the system will still be 20 units per
hour.
3. Develop methods for achieving productivity improvements, such as soliciting ideas from
workers (perhaps organizing teams of workers, engineers, and managers), studying how
other firms have increased productivity, and reexamining the way work is done.
4. Establish reasonable goals for improvement.
5. Make it clear that management supports and encourages productivity improvement.
Consider incentives to reward workers for contributions.
6. Measure improvements and publicize them.
Dont confuse productivity with efficiency. Efficiency is a narrower concept that
pertains to getting the most out of a fixed set of resources; productivity is a broader
concept that pertains to effective use of overall resources. For example, an efficiency
perspective on mowing a lawn given a hand mower would focus on the best way to use
the hand mower; a productivity perspective would include the possibility of using a
power mower.
Answer to Question No. 4:

It means that an organization that focuses on improving efficiency rather than


productivity might overlook other improvements to productivity and thereby fall behind
its competitors.

To answer such questions we need define each of these terms firstly. Productivity
represents a measure of effective use of resources usually expressed as the ratio of output
to input while efficiency is about doing things in an optimal way for example doing it the
fastest or in the least expensive way. It could be the wrong thing, but it was done
optimally. Efficiency is basically finding the best way to attain a given goal. It mainly
concerns itself with the way things are done. In most cases, an increase in efficiency is
accompanied by an increase in productivity. However, organizations enhancing their
efficiency should be vigilant to avoid being caught up in an efficiency improvement trap.
While efficiency deals with the quantity and optimal way we find Productivity deals with
rate of proper output. It means that an organization that focuses on improving efficiency
rather than productivity might overlook other improvements to productivity and thereby
fall behind its competitors.
Efficiency is basically finding the best way to attain a given goal. It mainly
concerns itself with the way things are done. In most cases, an increase in efficiency is
accompanied by an increase in productivity. However, organizations enhancing their
efficiency should be vigilant to avoid being caught up in an efficiency improvement
trap.While efficiency deals with the quantity and quality of a product and mainly
concerns itself with how things are being done, productivity mainly concerns itself with
an operations end results. It is hence clear that by using efficiency as a way to find the
most appropriate way to reach a goal in a given operation, the end results of the operation
i.e. productivity will be more impressive with every increase in efficiency. However,
organizations find themselves deep into the efficiency trap by concentrating so much on
cost cutting measures as opposed to the production of the right quantity of production
units.
Focusing solely on efficiency may result in overlooking potential major
productivity gains that could be achieved by altering inputs rather than simply refining
methods to achieve relatively modest gains.
Efficiency is mainly concerns with the way things are done, it deals with the
quantity and quality of a product and how things are being done, while productivity
concerns with an operations end results, hence using efficiency as a way to find the most

appropriate way to reach a goal in a given operation means that productivity will be more
impressive with every increase inefficiency.
Concentrating on efficiency improvement as opposed to the improvement
of productivity may not be successful at all as organization would not be focusing on the
use of different resources when it comes to doing things in a better way. This essentially
means that such organization would lag behind competitors as far as productivity is
concerned and hence incurring more costs going forward than competitors.
Therefore it is important to note that productivity as a concept is wider than
efficiency and organizations should look for increasing their efficiency by deriving the
most out of a set of assets, productivity dictates that for each production goal to be
reached, resources must be used efficiently.
How do we avoid this trap? If focusing solely on operational efficiency is not
sufficient, where should company places it's focus? Some may find focusing on business
value is an appropriate perspective that does not minimize the importance of efficiency,
but also does not blind you to opportunities to innovate. How do you focus on business
value? Focus on whatever you do in your organization that directly benefits your
customers. By customers, I am referring to outside customers the people who pay you
for the value you provide.
Answer to Question No. 5:

The productivity paradox (also the Solow computer paradox) is the peculiar
observation made in business process analysis that, as more investment is made in
information technology, worker productivity may go down instead of up. This
observation has been firmly supported with empirical evidence from the 1970s to the
early 1990s. This is highly counter intuitive. Before investment in IT became widespread,
the expected return on investment in terms of productivity was 3-4%. This average rate
developed from the mechanization/automation of the farm and factory sectors. With IT

though, the normal return on investment was only 1% from the 1970s to the early
1990s.
There were a number of theories proposed that explained the productivity
paradox. There ranged from ideas about inadequate measurement of productivity to the
necessary lag period before actual gains in productivity could be seen. Until recently
these explanations were little more than theories, but now many of them have hard
evidence to support then due to studies that show a large increases in productivity in
companies that invested heavily in IT.
The productivity paradox refers to massive investment in information
technology that occurred in the latter part of the last century that did not appear to result
in productivity gains. However, since that time, there have been consistent annual gains
in productivity, perhaps due in part, the IT investments.
The productivity paradox was set firmly in the context of a productivity
slowdown which had afflicted the developed economies since the early 1970s: the
average growth in total factor productivity (labour productivity) for 18 OECD countries
fell from 3.25% (4.41%) per year over the years 19611973 to 1.09% (1.81%) per year
over the years 19741992. Why has the productivity slowdown persisted for so long in
spite of large absolute increases in research and development, scientific knowledge and
technological innovations? This seems to be the essence of the productivity paradox.
(Diewert and Fox, 1997, p. 3)
Four Explanations for the Paradox
Although it is too early to conclude that IT's productivity contribution has been
subpar, a paradox remains in our inability to unequivocally document any contribution
after so much effort. The various explanations that have been proposed can be grouped
into four categories:
1) Mismeasurement of outputs and inputs,

2) Lags due to learning and adjustment,


3) Redistribution and dissipation of profits,
4) Mismanagement of information and technology.
The first two explanations point to shortcomings in research, not practice, as the
root of the productivity paradox. It is possible that the benefits of IT investment are quite
large,

but

that

proper

index

of

its

true

impact

has

yet

to

be

analyzed. Traditional measures of the relationship between inputs and outputs fail to
account for non-traditional sources of value. Second, if significant lags between cost and
benefit may exist, then short-term results look poor but ultimately the pay-off will be
proportionately larger. This would be the case if extensive learning, by both individuals
and organizations, were needed to fully exploit IT, as it is for most radically new
technologies.
A more pessimistic view is embodied in the other two explanations. They propose
that there really are no major benefits, now or in the future, and seek to explain why
managers would systematically continue to invest in IT. The redistribution argument
suggests that those investing in the technology benefit privately but at the expense of
others, so no net benefits show up at the aggregate level. The final type of explanation
examined is that we have systematically mismanaged IT: there is something in its nature
that leads firms or industries to invest in it when they shouldn't, to misallocate it, or to use
it to create slack instead of productivity. Each of these four sets of hypotheses is assessed
in turn below.
Discussions of the Productivity Paradox has faded
The original productivity paradox has been resolved. On average IT spending
does pay off, and there is no need to fear that technology investments are a systematic
waste of scarce resources. Rather, managers should be concerned with whether their own
IT investments are paying off, and what they can do to maximize the returns on those
investments.

Answer to Question No. 6:

The conditions that would have to exist for driving a car that are analogous to the
assumptions made when using exponential smoothing are that the immediate future will
be like the recent past. This would suggest:
a.

No sharp curves or turns on the road

b.

Constant traffic conditions

c.

No traffic lights or stop signs

d.

Constant road conditions


Intrinsic forecasting techniques use historical data to forecast. These data are

usually recorded in the company and are readily available. Intrinsic forecasting
techniques are based on the assumption that what happened in the past will happen in the
future. This assumption has been likened to driving a car by looking out the rear-view
mirror. While there is some obvious truth to this, it is also true that lacking any other
crystal ball, the best guide to the future is what has happened in the past.
Answer to Question No. 7:

Instantaneous re-supply and/or completely flexible capacity.

Leadership. We often think of leadership as a set of people at the top of the


organization but it is actually a skill that can, and should, exist at every level. Leadership
is the capability to inspire and motivate people to fulfill a mission. At the top of the
organization leadership includes directing others while at lower levels it is accomplished
through influencing others. Your companys leadership performance has a lot to do with
how much the organization can accomplish in a given amount of time.

Collaboration. Collaboration is the ability to work productively with others. At


the low end of performance, collaboration provides the ability to effectively break down
complex tasks and distribute the parts across a group of people or organizations. At
higher levels of performance collaboration creates organizational synergy, producing a
performance boost where the whole is greater than the sum of its parts. Some
organizations might require a higher degree of collaboration than others but every
organization needs to collaborate at some level.

Adaptability. At no time in our history has adaptability been so critical. Products,


services, organizations, companies, and even whole industries come and go in a
heartbeat. Adaptability is the organizations ability to give up the existing skills,
processes, and technologies that have led to its past success and create new skills and
approaches that ensure success tomorrow. Organizations need to be adaptable just to
survive and highly adaptable if they expect to thrive.

Creativity. The problems we face today are much more complex and time-critical
than those of the past. They often cannot be solved by brute force alone. Creativity
describes the organizations ability to think differently and allow different thinking to
influence day to day and strategic decisions. At the low end of the performance curve
organizations can be trapped in tradition and best practices, unable to solve persistent
problems. At the high end they are often challenged to prioritize among numerous new
ideas.

Innovation. Innovation goes beyond creativity to turn creative ideas into reality.
It is the ability to translate a good concept into a compelling value proposition that others
are willing to support and invest in. When innovation ability is high, companies go

beyond innovative products to design innovative processes, organizational structures,


management practices, and employment engagement approaches.

Answer to Question No. 8:

A revised product may include a voice controlled Washing machine. Washing


machines are required by people of all age groups and hence are a demanded product in
the market. Companies manufacturing washing machine can revise the product to include
voice command system which would operate as per the instructions given by the owner.
In order to manufacture this product new software should be included in the machines
which could recognize human voice and operate. It has an app which lets you control its
washing machines with your device. By building voice control into it, not only will you
be able to control your washing machine with your phone, youll even be able to
(literally) tell it what to do. Granted, youll be speaking into your handset, and not at the
machine.
These services allow users to control their washing machine at remote
places through voice commands. The operation of washing machines can be
controlled remotely through voice instructions, such as power off.
Smart Voice services consist of intelligent voice recognition
solutions, which help washing machines understand more than 40 different
instructions, including five basic instructions displayed on smart phone
screens.
For example, washing machines can understand various instructions in
washing process, such as How many minutes are left? What are you
doing? or What is the current status?
The voice controlled washing machine will be compliant as to the
legal, ethical, and environmental requirements.

This revised product will sure to be profitable, competitive in the


market,

with

sophisticated

design,

and

produced

with

high

quality.

Answer to Question No. 9:

WASHINGTON (AP) U.S. businesses cut back on their orders for heavy
machinery, computers, autos and airplanes in April, reducing demand for long-lasting
manufactured goods by the largest amount in six months.
Orders for durable goods fell 3.8 percent and a key category that serves as a proxy
for business investment was down 2.8 percent, the Commerce Department reported
Wednesday.
The weakness was widespread across a number of industries and likely was
influenced by supply chain disruptions stemming from the Japanese earthquake in March.
Demand for motor vehicles and parts, an industry heavily dependent on Japanese
component parts, saw a decline in orders of 4.4 percent in April, the biggest drop since
last August.
Jennifer Lee, senior economist at BMO Capital Markets, said that the April
durable goods report was just another sign that &quote; the U.S. economy is
encountering its fair share of speed bumps at the moment.
The April decline left orders at $189.9 billion in April, still 18.3 percent above the
recession low hit in March 2009. The big drop in April came following a 4.4 percent
increase in March, a gain that was revised up from a previously reported 2.9 percent
increase.
In addition to the weakness in autos, demand for commercial aircraft fell 30
percent in April. Analysts had expected a big drop in this highly volatile category because
new orders at Boeing slowed sharply in April.
Orders for nondefense capital goods excluding aircraft, a category viewed as a
good indication of business investment plans, fell 2.6 percent in April after a big 5.4

percent rise in March. Despite the April drop, economists are forecasting strong gains in
business capital spending for the rest of this year as companies boost purchases of
equipment to take advantage of a one-year tax break that Congress passed in December.
Excluding all transportation categories, orders would have been down 1.5 percent
in April after rising 2.5 percent in March.
Other industries seeing a drop in demand in April included primary metals such as
steel, down 1.5 percent, and computers, down 4.4 percent. Demand for machinery fell 3.4
percent in April.
Analysts expect the April declines to be temporary. Strong demand domestically
and overseas has kept U.S. factories humming, making manufacturing one of the
strongest sectors of the economy since the recession ended in June 2009. The overseas
demand has been supported by a weaker dollar, which makes U.S. products cheaper in
foreign markets. U.S. factories have added 167,000 jobs over the past six months, the
best stretch of hiring gains in manufacturing since 1997.
Recommendations:
1.
Perform SWOT analysis.
2.
Formulate SO, ST, WO, WT strategies.
3.
Choose among the alternative solutions.
4.
Implement the chosen strategy.
Answer to Question No. 10:

Assess Your Facility


You might consider working with a third-party integrator to help you decide
whether your facility suits the installation of an automated welding system. System
integrators are knowledgeable about all aspects of facility modifications necessary for
automation, including important safety regulations that apply in the fabricators region,
country or state, in addition to those specified by OSHA and RIA (Robotic Industries
Association).

That
your

As part of your facility facility is to determine your


evaluation, consider the cost of space. Remember, the physical

available
footprint
system,

said, the first step in assessing

as

flow of raw

purchasing larger wire packages and necessary for a robotic welding


the appropriate storage areas for well as the room needed for the
materials is significantly greater

them.

than that of

semi-automatic welding processes. By considering your

available

real estate, you can be certain that you have not only the

physical space to accommodate the new system, but you can also avoid having to customize
products, such as unicables, peripherals or torches to fit the work envelope. Instead, you can rely
on standard products that will work within your allotted area. And, dont worry if you have a
small facility. There are still ways to make automation work. One option is to purchase fewer
pieces of automation equipment that are capable of performing multiple tasks.
Regardless of the size of your facility, you should also consider the power sources
required to operate an automated welding systema 480-volt three-phase power source
is usually considered optimal. Also consider your gas and wire requirements. Due to the
higher volume of welding possible with an automated welding system, you will need to
purchase, store and place larger packages of wire (for example, 600 or 900 lb. drums
compared to 40 lb. spools). In terms of gas delivery, limiting robot downtime is the top
priority. Investing in bulk delivery of gas and using a manifold system can eliminate the
downtime associated with frequent bottle change-outs and is key to adding to the
productivity of an automated welding system.
Determine Your Available Personnel and Training
Automated welding systems need human supervision and maintenance. When
considering whether to automate your welding system, you should evaluate the skill set
of your available welding operators, as well as the resources you have for training them.
The personnel who are most viable for training (and ultimately the oversight of
your robotic welding system should you proceed with the purchase) are skilled welding
operators or those with previous robotic welding management experience. These
individuals should, after training, have the skills to program the robot and to troubleshoot

the automated welding process as needed. They should also be able to perform routine,
preventive maintenance on the system, as it can significantly decrease downtime in the
long term and increase the life of the system and its components. Consider vetting robot
OEMs to determine the availability and costs associated with the training of your
personnel. Typically, robotic integrators and OEMs training, which usually lasts one to
three weeks depending on the certification level desired. Also, look for robot OEMs or
integrators that have resources available after the training has been completed. These
resources may include online tutorials or troubleshooting information, additional onsite
training and/or service team members you can reach by phone with any questions you
and your team may have.
Justify the Expense
Finally, before transitioning to automation, you will need to justify the expense
either to your superiors, or to yourself if you are the decision maker. To do so, first
consider whether the volume of parts you need to produce necessitates automation.
Remember, the key benefit of an automated welding system is the ability to produce high
volumes of quality welds. If you have a smaller facility with lower runs of parts,
however, you may still be a good candidate for an automated welding system. With the
help of the integrator or robot OEM, you may be able to select two or three smaller
volume applications and program a robot to weld those different parts instead.
Calculating payback requires you to assess your current part cycle times and
compare them to the potential cycle times of an automated welding system. Determining
this volume is a critical factor to estimating your potential return-on-investment, as up to
75 percent of the cost of a semi-automatically welded component is the labor. That said,
even if you will produce the same number of parts, you might be able to justify the
investment by the amount of labor you can reallocate elsewhere in your operation.
Specifically, you can use the skills of your semi-automatic welding operators toward the
completion of challenging welds that cannot be completed with an automated welding
systemadding further to your overall productivity.
Smaller companies that transition to an automated welding system, or those with
frequently changing parts, often seek a shorter payback period (no more than 12-15

months) in order to justify the investment. Conversely, if you know that your production
needs will not change for years, you may be able justify a longer payback period.
Final Thoughts
Remember, the key to successful automation is planning. Work with a trusted
integrator or robot OEM to assess your current welding process and to determine the best
type of automation for your application. Dont forget to consider your available
personnel, options for training and any facility accommodations needed for a new
automated welding system. Each of these factors is crucial to realizing the advantages of
automation and can help you achieve a faster return on the investment.
Answer to Question No. 11:

(a)

Plotting each data set reveals that blueberry


muffin orders are stable, varying around an
average. Therefore, the nave forecast is the
last value, 33. The demand for cinnamon buns
has a trend. The last change was from 31 to 33
(33 31 = 2). Using the last value and adding
the last trend change, the forecast is 33 + 2 = 35. Demand for cupcakes has an apparent
seasonal variation with peaks every five days. Day 1 = 45, Day 6 = 48 and Day 11 = 47.
Since the peaks occur every five days, the next peak would be at Day 16.

(b)

The use of sales data instead of demand implies that sales adequately reflect demand. We

are assuming that no stock-outs occurred because demand equals sales if there are no shortages.

Eduardo Octobre
Answer to Question No. 1:

Generic differences between goods and services include:


Goods are tangible while services are intangible.
Customers participate in many service processes, activities, and transactions.
The demand for services is more difficult to predict than the demand for goods.
Services cannot be stored as physical inventory.
Service management skills are paramount to a successful service encounter.
Service facilities typically need to be in close proximity to the customer.
Patents do not protect services.
Compared to manufacturing, service requirements tend to be more time dependent,
location dependent, and volatile. In addition, service quality is often directly observable
by customers.
The scope of operations management ranges across the organization. Operations
management people are involved in product and service design, process selection,
selection and management of technology, design of work systems, location planning,
facilities planning, and quality improvement of the organizations products or services.
The operations function includes many interrelated activities, such as forecasting,
capacity planning, scheduling, managing inventories, assuring quality, motivating
employees, deciding where to locate facilities, and more.
The operations manager is the key figure in the system: He or she has the ultimate
responsibility for the creation of goods or provision of services. The kinds of jobs that
operations managers oversee vary tremendously from organization to organization largely
because of the different products or services involved. Thus, managing a banking
operation obviously requires a different kind of expertise than managing a steelmaking
operation. However, in a very important respect, the jobs are the same: They are both
essentially managerial. The same thing can be said for the job of any operations manager
regardless of the kinds of goods or services being created.

The chief role of an operations manager is that of planner and decision maker. In
this capacity, the operations manager exerts considerable influence over the degree to
which the goals and objectives of the organization are realized.
Operations Manager must be adept for both industry emphasizing continuous
Total Quality Improvement.
Answer to Question No. 2:

Pepsi seeks to take advantage of the current push to reduce calories, while
Coke seeks to recapture demand of its classic offering.
PesiCo segmentation of target market enabled them to outsold Diet Coke. The
growing trend towards dieting and healthier living, the risk of gaining extra belly fat and
increasing risk of developing diabetes, results in consumers preference of zero or lowcalorie alternatives. Pepsi revolves around their youthful image and social responsibility
focusing on teenagers, music, and cool, trendy next generations.
Pepsi knocks out Diet Coke as a second most popular soda in the US.
In the mid-1980s, the Coca-Cola Company made a decision to introduce a new
beverage product. The company had evidence that taste was the single most important
cause of Cokes decline in the market share in the late 1970s and early 1980s.A new
product dubbed New Coke was developed that was sweeter than the original-formula
Coke. Almost 200,000 blind product taste tests were conducted in the United States, and
more than one-half of the participants favoured New Coke over both the original formula
and Pepsi. The new product was introduced and the original formula was withdrawn from
the market. This turned out to be a big mistake! Eventually, the company reintroduced
the original formula as Coke Classic because of a strong consumer preference and the
symbolic value and emotional involvement people had with the original Coke.

Coke remains the number one soda in the world.


Answer to Question No. 3:

While it is true that the manufacturing plant in Japan would give a much higher
labor productivity ratio and is more efficient and cost-effective in their operations and the
US manufacturing is less efficient and not cost-effective because it is labor intensive, the
best way to compare them is the use of multi-factor productivity measurement.
Another way of comparing is the use of time-based strategies that focus on
reducing the time needed to accomplish various tasks.
Answer to Question No. 4:

Focusing solely on efficiency may result in overlooking potential major


productivity gains that could be achieved by altering inputs rather than simply refining
methods to achieve relatively modest gains.
Answer to Question No. 5:

The productivity paradox (also the Solow computer paradox) is the peculiar
observation made in business process analysis that, as more investment is made in
information technology, worker productivity may go down instead of up.
The productivity paradox refers to massive investment in information
technology that occurred in the latter part of the last century that did not appear to result
in productivity gains. However, since that time, there have been consistent annual gains
in productivity, perhaps due in part, the IT investments.
Answer to Question No. 6:

Forecasting with a time-series model is like driving a car with the windshield
glass completely blackened out, and the driver drives it looking out the rear-view mirror.
If you happen to be driving on a highway full of curves, this is prescription for disaster.
Time series model are quick and easy but for the above reason we use them only as a
guide to see the stage for an in-depth modeling effort.
Therefore, there must be no sharp curves or turns on the road, no traffic light or
stop signs, constant traffic and road conditions.
Answer to Question No. 7:

If the organization is capable of rapid, on the spot, or instantaneous re-supply and


completely flexible capacity.
Answer to Question No. 8:

I would like to see a two-layered king size bed made of eco-friendly, rigid and
sturdy fiberglass materials. This product is so unique and a new innovation. Since this
product will be in introductory stage, research and development can contribute to
productivity by helping to uncover new and better ways for designing, fabrication, and
assembly of products and new ways of providing of improving it. Input from the
marketing group is essential because they generally have the closest relationship with the
customers and the best understanding of the market demand for various products. We
need a design engineer (especially in manufacturing) to provide a detailed design of the
product. We also need to include the manufacturing people in this process because they
have the best understanding of the companys manufacturing capabilities and quality
issues. We also may need input from the finance department especially if the product or
service design requires capital expenditures.
The technology had a very significant impact on product service and design. The
Computer Aided Design systems enabled many firms to reduce their product

development lead time and also improve the communication between various groups
involved in designing the product or service. The improved technology also made it
easier to implement, remanufacture, design for assembly, design for disassembly and
design for recycling.
Answer to Question No. 9:

Article:
Moving companies can only stay in business if they optimize the loads in their
trucks. Sending a half full truck across the country will often mean taking a loss. Smaller
move loads are sometimes delayed so they can be "fit" into another shipment, and that
can mean delays. My experience is it's built into the contracts that customers sign. My
experience has also been that moving companies explain all this up front, because it's in
their interest to do so.
No moving company wants an enraged customer who didn't understand the
potential delays, and there are others that can occur. For example, a mechanical failure
on one's personal vehicle is annoying, but it doesn't create nearly the problems that a
broken down semi-trailer can cause on a road in remote Colorado. You don't call AAA
for this.
It's possible that moving companies are not always the best at communicating with
customers, but then again, there's not a single industry that doesn't have bad apples,
hardly a reason to blast a whole industry. I don't imagine Stephanie cares much. Maybe
she should.
Forgotten is that the business-customer relationships is an exchange of value, and
that each party must receive enough value to continue to exist. This is clearest in
business-to-business relationships, but still applies to end customers.
Airlines - Oh My
In the same vein (like I'd rather rip open my artery than fly these days), airlines
suffer from some of the same issues regarding volatility of costs, and they have to deal
with political issues, security, and have hugely expensive systems in place to manage
their businesses.
I sometimes stare in wonder when my luggage actually DOES appear where it's
supposed to appear, but the reasons why customer service is so terrible for airlines are
much the same as with moving companies.

They operate in an environment where they do not directly control the costs
required to stay in existence. The barriers facing any airline these days are huge, so it's
really not surprising that flights are delayed, cancelled, held on the tarmac and on and
on. The result is a terrible experience, one reason that I pretty much refuse to fly these
days. I recognize that most airlines are doing what they can, and for me the experience is
so unpleasant, I'd rather drive. Or stay home.
It's NOT because airline employees and executives don't care about customers.
It's because it's NOT possible to satisfy customers, let alone delight them and stay in
business.
Recommendation:
a. Improve quality of services.
b. Effectiveness and efficiency of service personnel.
c. Customer satisfaction is the major key to the success of any operation; without it the
company cannot survive.
d. Forecasting allows the company to plan the workforce levels and capacity.
c. Capacity planning allows the company to balance the trade-off between waiting lines
and idle time.
d. A good location can have a significant impact in attracting customers, thus improving
sales.
e. Planning and controlling
f. Good layout of the store can assist in maximizing customer service and sales by
strategically directing customers through the store. An effective layout can also
improve the efficiency of the operations.
g. Effective scheduling of company workers and work hours can improve both customer
service and efficiency. An effective schedule provides convenient store hours,
minimal customer waiting lines, and minimal employee idle time.

Answer to Question No. 10:

Factors that must exist in order to make automation feasible are:

1. The level of demand: The demand must be forecasted. Generally, we need high
volume of output to justify the high cost associated with automation.
2. The degree of variability required in the manufacturing or the service system:
The higher the degree of variability required, the less the chance of success for
automation.
3. Strategic fit with the overall goals and objectives of the company: If the type of
automation does not lend itself to flexible manufacturing, but the objectives and goals
of the company involve low volume large variety of products, we could have
significant capacity-demand mismatch problems due to this misalignment.
Answer to Question No. 11:

a. Plotting each data set reveals that blueberry muffin orders are stable, varying around
an average. Therefore, the nave forecast is the last value, 33. The demand for
cinnamon buns has a trend. The last change was from 31 to 33 (33 31 = 2). Using
the last value and adding the last trend change, the forecast is 33 + 2 = 35. Demand
for cupcakes has an apparent seasonal variation with peaks every five days. Day 1 =
45, Day 6 = 48 and Day 11 = 47. Since the peaks occur every five days, the next peak
would be at Day 16.
b. The use of sales data instead of demandimpliesthatsalesadequatelyreflectdemand.
Weareassumingthatnostock outsoccured because demand equals sales if there are no
shortages.

Marianne C. Estrada
Answer to Question No. 1:

Both services and goods provide consumers with utility, which is the ability of a
product to satisfy a human want. Time utility is created when marketers make products
available when consumers want them; place utility is created when products are made
available where they are convenient for consumers; ownership utility is created when
products become available for consumer to own and use; and, form utility is created
merely through transforming raw materials into finished goods. But there are also
differences that affect its managing operations; one is focus on performance - goods are
produced, while services are performed.

Because services are more intangible and

customized than most products, service operations tend to be more complex than goods
production. Another one is focus on process and outcome - manufacturing operations
focus on the outcome of the production process, but the products of most service
operations are combinations of goods and services.

Also focus on service

characteristics - intangibility, services that cannot be touched, tasted, or smelled;


customization, services that are designed for individuals needs; and, unstorability,
services that cannot be packaged and stored, characterize service transactions. Included
also are focus on customer-service link - service operations often acknowledge the
customer as part of the service transaction itself and focus on quality considerations customers use different criteria to judge services and goods; consumer perceptions of
service quality are highly subjective because of the intangible nature of services.

Answer to Question No. 2:

Pepsi Co and Coca Cola uses the brand equity strategy. Brand equity is defined
as the differential effect of brand knowledge on customer response. Three elements of
this definition need to be emphasized. The most critical element is differential effect, or
differentiation. Without this, a brand is not different from the next one, and therefore, it
can never seek a premium. In some instances, differentiation is easy to create (e.g.,
automobiles, breakfast cereal); in other instances this can be much more challenging

(e.g., gasoline, bottled water). Regardless, however, it is equally important to strive for
differentiation.
According to Kellers Brand Equity Model where it is stated that in order to
build a strong brand, you must shape how customers think and feel about your product.
You have to build the right type of experiences around your brand, so that customers have
specific, positive thoughts, feelings, beliefs, opinions, and perceptions about it. They
made use of slogans also like 2004 - Coke Ko To! for Coca Cola and "Pepsi. Sarap
Magbago - 2010."
The next element is brand knowledge. Your customers should know about the
differentiation and what it is. They should be aware of it, and should appreciate that the
differentiation is meaningful to them.

Answer to Question No. 3:

Productivity is usually defined in terms of output per unit of time, whereas


efficiency incorporates other variables, particularly the ratio of output to input. Efficiency
incorporates the cost of what is done in relation to achievement, and in human terms this
requires the consideration of the penalties to the human operator.
In industrial situations, productivity is relatively easy to measure: the amount
produced can be counted and the time taken to produce it is simple to record. Productivity
data are often used in before/after comparisons of working methods, situations or
conditions. It involves assumptions about equivalence of effort and other costs because it
is based on the principle that the human operator will perform as well as is feasible in the
circumstances. If the productivity is higher than the circumstances must be better. There
is much to recommend this simple approach provided that it is used with due regard to
the many possible complicating factors which can disguise what is really happening. The
best safeguard is to try to make sure that nothing has changed between the before and
after situations except the aspects being studied.

Efficiency is a more comprehensive but always a more difficult measure. It


usually has to be specifically defined for a particular situation and in assessing the results
of any studies the definition should be checked for its relevance and validity in terms of
the conclusions being drawn. For example, is bicycling more efficient than walking?
Bicycling is much more productive in terms of the distance that can be covered on a road
in a given time, and it is more efficient in terms of energy expenditure per unit of distance
or, for indoor exercise, because the apparatus required is cheaper and simpler. On the
other hand, the purpose of the exercise might be energy expenditure for health reasons or
to climb a mountain over difficult terrain; in these circumstances walking will be more
efficient. Thus, an efficiency measure has meaning only in a well-defined context.

ANALYSIS OF ACTIVITIES, TASKS AND WORK SYSTEMS


Vronique De Keyser
It is difficult to speak of work analysis without putting it in the perspective of
recent changes in the industrial world, because the nature of activities and the conditions
in which they are carried out have undergone considerable evolution in recent years. The
factors giving rise to these changes have been numerous, but there are two whose impact
has proved crucial. On the one hand, technological progress with its ever-quickening pace
and the upheavals brought about by information technologies have revolutionized jobs
(De Keyser 1986). On the other hand, the uncertainty of the economic market has
required more flexibility in personnel management and work organization. If the workers
have gained a wider view of the production process that is less routine-oriented and
undoubtedly more systematic, they have at the same time lost exclusive links with an
environment, a team, a production tool. It is difficult to view these changes with serenity,
but we have to face the fact that a new industrial landscape has been created, sometimes
more enriching for those workers who can find their place in it, but also filled with
pitfalls and worries for those who are marginalized or excluded. However, one idea is
being taken up in firms and has been confirmed by pilot experiments in many countries:
it should be possible to guide changes and soften their adverse effects with the use of

relevant analyses and by using all resources for negotiation between the different work
actors. It is within this context that we must place work analyses todayas tools
allowing us to describe tasks and activities better in order to guide interventions of
different kinds, such as training, the setting up of new organizational modes or the design
of tools and work systems. We speak of analyses, and not just one analysis, since there
exist a large number of them, depending on the theoretical and cultural contexts in which
they are developed, the particular goals they pursue, the evidence they collect, or the
analysers concern for either specificity or generality.
Another way is the application of ergonomics. Ergonomics is the systematic
study of people at work with the objective of improving the work situation, the working
conditions and the tasks performed. The emphasis is on acquiring relevant and reliable
evidence on which to base recommendation for changes in specific situations and on
developing more general theories, concepts, guidelines and procedures which will
contribute to the continually developing expertise available from ergonomics.
Answer to Question No. 4:

Efficiency is mainly concerns with the way things are done, it deals with the
quantity and quality of a product and how things are being done, while productivity
concerns with an operations end results, hence using efficiency as a way to find the most
appropriate way to reach a goal in a given operation means that productivity will be more
impressive with every increase in efficiency.
Concentrating on efficiency improvement as opposed to the improvement of
productivity may not be successful at all as organization would not be focusing on the use
of different resources when it comes to doing things in a better way. This essentially
means that such organization would lag behind competitors as far as productivity is
concerned and hence incurring more costs going forward than competitors
Therefore it is important to note that productivity as a concept is wider than
efficiency and organizations should look for increasing their efficiency by deriving the

most out of a set of assets, productivity dictates that for each production goal to be
reached, resources must be used efficiently.

Answer to Question No. 5:

The productivity paradox (also the Solow computer paradox) is the peculiar
observation made in business process analysis that, as more investment is made in
information technology, worker productivity may go down instead of up. This
observation has been firmly supported with empirical evidence from the 1970s to the
early 1990s. This is highly counter intuitive. Before investment in IT became widespread,
the expected return on investment in terms of productivity was 3-4%. This average rate
developed from the mechanization/automation of the farm and factory sectors. With IT
though, the normal return on investment was only 1% from the 1970s to the

early

1990s.
There were a number of theories proposed that explained the productivity paradox. There
ranged from ideas about inadequate measurement of productivity to the necessary lag
period before actual gains in productivity could be seen. Until recently these explanations
were little more than theories, but now many of them have hard evidence to support then
due to studies that show a large increases in productivity in companies that invested
heavily in IT.

1. USING EXPONENTIAL SMOOTHING IN MODELS


Exercise: Road Conditions
This exercise discusses a driver expectations of weather conditions March
usually marks the end of winter and the beginning of spring, though it is always unclear
when this transition will come. Todd is trying to decide whether or not to remove the
snow tires from his car. On one hand, he does not want to remove them if winter has not
really passed and there is still a possibility of snowfall. On the other hand, his snow tires
wear fairly rapidly on dry road, so he wants to remove them if spring has indeed arrived.

Using the generic structure from Section 4, formulate a model to represent Todds
perception of whether spring has come. This perception determines whether he should
changeover his tires. Todd bases his perception on the road conditions (the actual iciness
of the road) he encounters daily. Road iciness can be measured on a scale from either 0 to
1, or from 0 to 100, representing the fraction or percentage of the road covered by ice,
respectively. Todd will change his tires if his expectation of road coverage ever drops
below 10% (indicating that spring has arrived). Assume that it takes Todd a week to
become convinced that an improvement in road conditions is permanent. Also assume
that Todd initially expects the road to be half covered by ice.
After building the model, sketch how you estimate Todd perceptions will changes
when confronted with the changing weather conditions shown in Figure 8. (You should
sketch your estimate on the graph.) Will Todd change his snow tires? If yes, when?
Solution to Exercise
Figure 9 shows a possible road
condition perception model.

Todd decision of whether to remove his snow tires can be modeled as an


exponential smoothing of ACTUAL ICINESS OF ROAD. If Todd sees a sudden drop
in the amount of ice on the road, he is unlikely to believe that spring has arrived and that
the roads will remain clear, unless the warm weather holds for an extended period of
time.

Similarly, if the roads are suddenly covered with ice one day, Todd will probably
not immediately give up hope for an early spring. Consequently, if the weather is highly
fluctuating, Todd is unlikely to change his expectations much either way. A simulation of
this model is shown in Figure 10. Despite the fact that road iciness does drop below 10%
at one point during the month, Todd road condition expectation does not. Thus, Todds
will not change his tires.

Answer to Question No. 6:

Organizational change is not always successful. Identify factors that can cause
change initiatives to fail and the five pillars that can cause them to succeed. Highlight an
organization that failed to adapt and evaluate which of these factors and pillars were
demonstrated by this organization.
Change is the constant thing in the universe and every organization need to
change as per the changing environment so as to sustain its position in the competitive
market. It has been found that around 70 percent of the total organizational change fails
because of the several factors or reasons. Some of the factors which results in failure of
the organizational change are:
1. Resistance of the employees to accept the change in the positive manner.
2. Failure to recognize the change in the true sense and systematically implement the
change.
3. Cultural issues also resist the issues. Moreover, faster decision making, less
bureaucracy and less employee empowerment and engagement results in the failure of
the change initiatives.
There are several change initiatives which cause the change...
Answer to Question No. 9:

Alcoho-Lock includes a Bluetooth connection and an alcohol sensor, and works


with a free dedicated Android phone app. You breathe onto the lock and your phone

displays the amount of alcohol detected. You can then unlock your bike using the app
interface. You can still unlock your bike even if you have been drinking, but the display
suggests you dont ride your cycle but instead push it home.
Even better, if booze is detected, Alcohol-Lock also sends an alert to a preregistered partners phone. Then its up to them to call or otherwise prevent their
partner from riding home drunk to convince them with the power of love, as
KOOWHO puts it.
Alcoho-Lock is set to go on sale later in the year by request only, priced
between 30-40,000 ($240-320).
In Japan, it is common for cyclists in cities to ride home after drinking alcohol.
However, police have been tightening up the rules and checks on dangerous cycling
lately, including a new law in June.
2. Easton Service Organizations Struggling
With budgets stretched to the limits, the
community of Easton may be faced
with some harsh realities as fewer
people are able to be helped.

Safe Harbor may be safe, but service


organizations in Easton say there's
still a storm on the horizon.
Earlier this month, the city's homeless shelter announced it would continue to
operate, starting Oct. 1. At the same time, the organization said it would still need
community support to keep running.
Now, other service organizations are sending out the same message.

"This crisis presents an opportunity to remind the Easton community that we have
a human services infrastructure in place and it is in dire need of support, said Director
Janice Komisor. What isnt broken, people dont see, but Safe Harbors safety net has a
hole in it.
ProJeCt of Easton works with more than 5,000 people per year and is also feeling
the strain of reduced funding. ProJeCt provides emergency assistance as well as language
and literacy programs with the goal of helping individuals and families achieve self
sufficiency.
We contribute to the quality of life here, Komisor said.
Kim Kmetz, manager of the Easton Main Street Initiative, spoke of the delicate
balance required to provide residents, merchants and visitors with an environment
comfortable for everyone.
Its a challenge in a town that is the county seat, Kmetz said. People are drawn
here because these services are available.
With two paid staff and 50-60 volunteers, Main Street Initiative works to sustain
the economic vitality of downtown Easton. Kmetz noted that an important part of this
effort is making people feel the town is clean and safe.
People on the street may not be a threat, but they may appear that way. Its very
important not only to residents and business owners but also to visitors who bring in
revenue that these people are helped and get the assistance and guidance they need to
improve their situation.
All organizations are feeling the impact of funding reductions.
Funding is leaking in every direction. All organizations are asking the same
people for help, Komisor said. We are all links in a chain and if one link is broken, each
organizations ability to serve is stressed.

Easton Mayor Sal Panto addressed the issue at the most recent city coucil
meeting.
"As the federal government balances its budget on domestic discretionary
spending, more and more services are being required of local government," Panto said.
"As more and more federal funding is cut, state funding follows, trickling down to
local governments, which are asked to do more."
Many organizations are turning to the city for help, but the city is struggling with
its own budget constraints. Tough decisions have to be made.
ProJeCts Komisor stated that the quality of life for the entire Easton community
will suffer as the social service organizations continue to experience cuts. She suggested
an infrastructure is needed to synchronize efforts among all organizations.
The work we do is invisible because we fix so many problems. If a shelter like
goes away, it creates a lot more issues, but we all need help, Komisor said. Random
acts of kindness dont solve this problem anymore. We need a coordinated effort.
Answer to Question No. 10:

Record and Playback Record and playback just does not work. Just in case you
are tempted by its ease, any automation expert can tell you that this often comes at a huge
cost of never ending maintenance efforts and rework.
Top 5 things you should consider for test automation investments ith the software
industry getting

Wmore focused and attuned towards directly impacting customer

satisfaction than ever before, it has become all the more important for software to become
more responsive. Software changes are more frequent and demand stringent Quality
parameters which enforce a highly efficient and automated development and quality
process. Test Automation for this reason has seen a sea change in its adoption levels in
the recent years. Though there are multiple factors that are responsible for delivering

successful test automation, the key is selecting the right approach. Now, depending on
your requirement for automation, approaches can vary. Here are basic approaches
popularly adopted, Qualitia Software Pvt. Ltd. 1 2. Use of a well designed framework A
reliable Test Automation Framework makes even the most complex test automation
extremely easy promotes reuse of critical components, increasing productivity make
adopting changes easy and reduce maintenance efforts support any test automation tool
of your choice (both current and future). be adopted and used as a standard automation
framework across the organization allows test engineers with application/domain
knowledge to automate tests irrespective of their knowhow on automation. All of which
contribute towards shortening the testing cycle time after time, during each regression.
Nothing is more important than having a right framework that will ensure test automation
success. Whatever approach that you use, there are some benefits that are worth
considering.
GUIDELINES
Here are some guidelines to effectively evaluate a framework before you buy
Use some of the most complex applications and tests for evaluation Make sure that
you test the framework for maintenance. What happens if your test cases workflow or
objects change? Adopting such changes can get pretty painful. Make sure that the
framework is easy to use for your entire QA team and the learning curve for new adopters
is not very steep. Dont miss out on any of the "well designed framework" benefits that
we discussed above. Check that the framework is extendable and flexible enough to
handle complexities unique to your applications. Understanding limitations of a
framework is a virtue. What appears to be a complete solution upfront can easily results
in an illusion unless efforts are taken to know the shortcomings. Check for references
and talk to others who have adopted this framework and solicit their candid feedback.

Answer to Question No. 11:

(a) We need to use naive methods. This means that any simple appropriate method
can conducted. For example: Ploting each data set reveals that muffins orders are almost

stable, varying around an average (e.g. 33). The demand for cinnamon buns has a trend. If we
get the last three period, we realized that number increased two by two so 33-31=2 and last
one is 33+2=35. This is for the following day for cinnamon buns. Demand for cupcakes has
an apparent seasonal variation with peaks every five days. Day 1=45, Day 6=48, Day 11=47
and the next peak would be Day 16=50.

(c)

The use of sales data instead of demand implies that sales adequately reflect

demand. We are assuming that n stock-outs because demand equals sales if there are no
shortages.

2. A company records indicates that monthly sales for a seven-month period are as
Month

Sales (000,

Feb

unit)
19

Mar

18

Apr

15

May

20

Jun

18

July

22

Aug

20

follows:.
(a) Plot the monthly data as can be seen
in the table above.
(b) Forecast the monthly sales using
linear trend equation,

(c)

A five-month moving average and exponential Smoothing technique? Assume

that smoothing constant and march forecast value are 0.20 and 19 respectively.
(d)

The nave approach

(e)

A weight average method conducting 0.60 for August, 0.30 for July, and
0.10 for June.

(f)

Which method seems least appropriate? Why?


Ans:
(a)

(b)
T (or x)
1
2
3
4
5
6
7
Sum= 28

Squae of t
1
4
9
16
25
36
49
Sum of square=
140

Y
19
18
15
20
18
22
20

tY
19
36
45
80
90
132
140

Sum= 132

Sum= 542

x y- x xy
n x -( x)
2

a=

b=

n xy- x y
n x2 -( x)2

=7

Zarvie-An Arcega

Many organizations offer a combination of goods and services


to their customers. As you learned from previous chapter(s),
there are some key differences between production of goods
and delivery of services. What are the implications of these
differences relative to managing operations?
One major difference of product and service industries from an
operations perspective is the degree of customer contact present. This
makes scheduling very difficult in service industries as they cannot build up
inventories and are very demand sensitive. In this same way service
industries are very sensitive to inputs as each process can have very
different inputs which require very different processes.
Measurement of productivity and quality assurance are much harder to
measure in service industries as measurement is not a simple quantity
measure as it is in product industries, and quality must be measured as
services are delivered and cannot be inspected beforehand. All of these
differences make it much harder for operations managers in service
industries to make projecting and measurements of processes within their
organizations.
There are many implications due to the differences between service and
manufacturing operations. For example, in a service firm, since the degree
of customer contact is high, we have to make sure that employees are better
trained in customer service than employees in a manufacturing industry. In
a pure-service industry firm, we will build a lot of slack in scheduling because
of uncertainty of input.

Contrast the strategies of PepsiCo, emphasizing its diet cola,


and Coca-Cola, focusing on reviving its Classic Coke brand.
What is the basis of each ones strategy?
They are changing and adopting the strategies frequently. They are
changing their schemes and offers according to their competitors. They have
to analyze their competitors strategies and techniques comparing with their
companys strategies and techniques. The study on comparative Analysis of
Pepsi and Coke is very useful to Pepsi Company. The comparison is
done on all aspects of the Company. From this analysis the company
can know their position in the soft drinks market. Through this Analysis
Pepsi Company can know the merits and demerits of the Company
comparing with Coke Company

The companies try to establish an image to the public is that their brands
are closely related to our environment and culture in which we are living.
This is the main secret of the Ads of the Soft Drinks. Sometimes they directly
hit the egos of the customers and to satisfy their ego they will show
the solution, that is the product of the company. This should be taken care by
the Advertising department. For this reason they will use different locations
of the country and diff erent cultures of the country and diff erent
religions of the country in their Advertisements. They mean to say is we are
close to y o u r l i v e s .
T h i s c o m p a r a t i v e a n a l y s i s i s t o t a l l y d o n e o n t h e re t a i l e r s
o p i n i o n t h a t means this comparative analysis is also helpful to
know the belief and faith of the retailers on Pepsi Company. The total
data for the study was collected based on the comparison between
the two Companies, Pepsi and Coke. From this Pepsi Company can
get the positive and negative points of their Company comparatively
with Coke Company. During this study some retailers gave some
suggestions to improve the quality of the service (supply) and the image
of the Company in the market and some
people gave some complaints on the dealers of the company
t h a t t h e y a re n o t providing the suffi cient information about the
off ers, service and the other things regarding the company. The
company can use these suggestions for its improvement and by considering
the complaints they can rectify the problems that they are facing from the
company or the company dealers.
A Japanese company has two manufacturing plants, one in the
United States and in another country. Both produce the same
item, each for sale in their respective countries. However,
their productivity figures are quite different. The analyst
thinks this is because the Japanese plant uses more
automated equipment for processing while the other plant
uses a higher percentage of labor. Explain how that factor can
cause productivity figures to be misleading. Is there another
way to compare the two plants that would be more
meaningful?
Sometimes organizations will combine two or more of these or other
approaches into their strategy. However, unless they are careful, they risk
losing focus and not achieving advantage in any category. Generally
speaking, strategy formulation takes into account the way organizations
compete and a particular organizations assessment of its own strengths and
weaknesses in order to take advantage of its distinctive competencies. The
special attributes or abilities that give an organization a competitive edge.
those special attributes or abilities possessed by an organization that give it
a competitive edge. The most effective organizations use an approach that
develops distinctive competencies based on customer needs as well as on

what the competition is doing. Marketing and operations work closely to


match customer needs with operations capabilities. Competitor
competencies are important for several reasons. For example, if a competitor
is able to supply high-quality products, it may be necessary to meet that
high quality as a baseline. However, merely matching a competitor is usually
not sufficient to gain market share. It may be necessary to exceed the
quality level of the competitor or gain an edge by excelling in one or more
other dimensions, such as rapid delivery or service after the sale.
While it is true that increases in efficiency generate
productivity increases, it is possible to get caught in an
efficiency improvement trap. Explain what this means.
Efficiency is mainly concerns with the way things are done, it deals with
the quantity and quality of a product and how things are being done, while
productivity concerns with an operations end results, hence using efficiency
as a way to find the most appropriate way to reach a goal in a given
operation means that productivity will be more impressive with every
increase in efficiency.
Concentrating on efficiency improvement as opposed to the
improvement of productivity may not be successful at all as organization
would not be focusing on the use of different resources when it comes to
doing things in a better way. This essentially means that such organization
would lag behind competitors as far as productivity is concerned and hence
incurring more costs going forward than competitors
Therefore it is important to note that productivity as a concept is wider
than efficiency and organizations should look for increasing their efficiency
by deriving the most out of a set of assets, productivity dictates that for each
production goal to be reached, resources must be used efficiently.
In the past there, was concern about a productivity
paradox. Related to IT services. More recently, there have
been few references to this phenomenon. Using the Internet,
explain the term productivity paradox. Why do you think
that the discussion of that topic has faded?
Its a depressing adage weve all heard time and time again: an increase
in technology does not necessarily translate to an increase in productivity.
Put another way by Robert Solow, a Nobel laureate in economics, You can
see the computer age everywhere but in the productivity statistics.
In other words, just because our computers are getting faster, that
doesnt mean that that we will have an equivalent leap in productivity. In
fact, the opposite may be true! New York Times writer Matt Richel wrote in an
article for the paper back in 2008 that stated, Statistical and anecdotal

evidence mounts that the same technology tools that have led to
improvements in productivity can be counterproductive if overused.
Theres a strange paradox when it comes to productivity. Rather than an
exponential curve, our productivity will eventually reach a plateau, even with
advances in technology. So what does that mean for our personal levels of
productivity? And what does this mean for our economy as a whole? Heres
what you should know about the productivity paradox, its causes, and what
possible solutions we may have to combat it.

What is the Productivity Paradox?


There is a discrepancy between the investment in IT growth and the
national level of productivity and productive output. The term productivity
paradox became popularized after being used in the title of a 1993 paper by
MITs Erik Brynjolfsson, a Professor of Management at the MIT Sloan School
of Management, and the Director of the MIT Center for Digital Business.
In his paper, Brynjolfsson argued that while there doesnt seem to be a
direct, measurable correlation between improvements in IT and
improvements in output, this might be more of a reflection on how
productive output is measured and tracked.
Intangibles such as better responsiveness to customers and increased
coordination with suppliers do not always increase the amount or even
intrinsic quality of output, but they do help make sure it arrives at the right
time, at the right place, with the right attributes for each customer.
Just as managers look beyond productivity for some of the benefits
of IT, so must researchers be prepared to look beyond conventional
productivity measurement techniques, he wrote in his conclusion.
How Do We Measure Productivity, Anyway?
And this brings up a good point. How is exactly is productivity
measured?
In the case of the US Bureau of Labor Statistics, productivity gain is
measured as the percentage change in gross domestic product per hour of
labor.
But other publications, such as US Today, argue that this is not the best
way to track productivity, and instead use something called Total Factor
Productivity (TFP). According to US Today, TFP examines revenue per

employee after subtracting productivity improvements that result from


increases in capital assets, under the assumption that an investment in
modern plants, equipment and technology automatically improves
productivity.
In other words, this method weights productivity changes by how much
improvement there is since the last time productivity stats were gathered.
But if we cant even agree on the best way to track productivity, then
how can we know for certain if weve entered the productivity paradox?
Possible Causes of the Productivity Paradox
Brynjolfsson argued that there are four probable causes for the paradox.
Mismeasurement: the gains are real, but our current measures miss them;
Redistribution: there are private gains, but they come at the expense of
other firms and individuals, leaving little net gain;
Time lags: the gains take a long time to show up; and
Mismanagement: there are no gains because of the unusual difficulties in
managing IT or information itself.
There seems to be some evidence to support the mismeasurement
theory, as shown above. Another promising candidate is the time lag, which
is supported by the work of Paul David, an economist at Oxford University.
According to an article inThe Economist, his research has shown that
productivity growth did not accelerate until 40 years after the introduction of
electric power in the early 1880s. This was partly because it took until 1920
for at least half of American industrial machinery to be powered by
electricity.
Therefore, he argues, we wont see major leaps in productivity until
both the US and major global powers have all reached at least a 50%
penetration rate for computer use. The US only hit that mark a decade ago,
and many other countries are far behind that level of growth.
The Paradox and the Recession
The productivity paradox has another effect on the recession economy.
According to Neil Irwin, Sky-high productivity has meant that business
output has barely declined, making it less necessary to hire back laid-off
workersbusinesses are producing only 3 percent fewer goods and services
than they were at the end of 2007, yet Americans are working nearly 10
percent fewer hours because of a mix of layoffs and cutbacks in the
workweek.

This means that more and more companies are trying to do less with
more, and that means squeezing two or three peoples worth of work from a
single employee in some cases. According to Irwin, workers, frightened for
their job security, squeezed more productivity out of every hour [in 2010].
Looking forward
A recent article on Slate puts it all into perspective with one succinct
observation: Perhaps the Internet is just not as revolutionary as we think it
is. Sure, people might derive endless pleasure from itits tendency to
improve peoples quality of life is undeniable. And sure, it might have
revolutionized how we find, buy, and sell goods and services. But that still
does not necessarily mean it is as transformative of an economy as, say,
railroads were.
Still, Brynjolfsson argues that mismeasurement of productivity can
really skew the results of people studying the paradox, perhaps more than
any other factor.
Because you and I stopped buying CDs, the music industry has
shrunk, according to revenues and GDP. But were not listening to less music.
Theres more music consumed than before, he explains. On paper, the way
GDP is calculated, the music industry is disappearing, but in reality its not
disappearing. It is disappearing in revenue. It is not disappearing in terms of
what you should care about, which is music.
Perhaps the paradox isnt a death sentence for our productivity after all.
Only time (and perhaps improved measuring techniques) will tell.
It has been said that forecasting using exponential smoothing
is like driving a car by looking in
the rear-view mirror. What are the conditions that would have
to exist for driving a car that are analogous to the
assumptions made when using exponential smoothing?
The conditions that would have to exist for driving a car that are
analogous to the assumptions made when using exponential smoothing are
that the immediate future will be like the recent past. This would suggest:

No sharp curves or turns on the road


Constant traffic conditions
No traffic lights or stop signs
Constant road conditions

What capability would an organization have to have to not


need forecasts?

One of the biggest challenges in building capability models is getting


people to move from functional thinking (the things we do) to capability
thinking (the ability we have to do things). The reason this is so difficult is
that organizations generally create organizational functions around
capabilities so they often look very similar. For example, most organizations
have a marketing capability and a marketing function where most of the
marketing capability resides. Even when marketing is distributed across
different lines of business we still think of it as a function first. One of the
common ways to develop a capability model is to look at the functions an
organization has and uncover the capabilities behind that function. This leads
to capability models that are tightly related to functions.
But what about capabilities that are truly distributed across the entire
organization and dont have a corresponding function? These capabilities are
not intuitively obvious and are often missing from the capability models I
see. Here are five essential capabilities every organization should have:
Leadership. We often think of leadership as a set of people at the top of the
organization but it is actually a skill that can, and should, exist at every level.
Leadership is the capability to inspire and motivate people to fulfill a mission.
At the top of the organization leadership includes directing others while at
lower levels it is accomplished through influencing others. Your companys
leadership performance has a lot to do with how much the organization can
accomplish in a given amount of time.
Collaboration. Collaboration is the ability to work productively with others.
At the low end of performance, collaboration provides the ability to
effectively break down complex tasks and distribute the parts across a group
of people or organizations. At higher levels of performance collaboration
creates organizational synergy, producing a performance boost where the
whole is greater than the sum of its parts. Some organizations might require
a higher degree of collaboration than others but every organization needs to
collaborate at some level.
Adaptability. At no time in our history has adaptability been so critical.
Products, services, organizations, companies, and even whole industries
come and go in a heartbeat. Adaptability is the organizations ability to give
up the existing skills, processes, and technologies that have led to its past
success and create new skills and approaches that ensure success tomorrow.
Organizations need to be adaptable just to survive and highly adaptable if
they expect to thrive.

Creativity. The problems we face today are much more complex and timecritical than those of the past. They often cannot be solved by brute force
alone. Creativity describes the organizations ability to think differently and
allow different thinking to influence day to day and strategic decisions. At the
low end of the performance curve organizations can be trapped in tradition
and best practices, unable to solve persistent problems. At the high end they
are often challenged to prioritize among numerous new ideas.
Innovation. Innovation goes beyond creativity to turn creative ideas into
reality. It is the ability to translate a good concept into a compelling value
proposition that others are willing to support and invest in. When innovation
ability is high, companies go beyond innovative products to design
innovative processes, organizational structures, management practices, and
employment engagement approaches.
10. There are several factors that must exist in order to make
automation feasible, name the two or three most important factors
and briefly explain their importance.
11. A commercial bakery has recorded sales (in dozens) for three
products, as shown below:
Day

Blueberry
Muffins

Cinnamon buns

Cupcakes

30

18

45

34

17

26

32

19

27

34

19

23

35

22

22

30

23

48

34

23

29

36

25

20

29

24

14

10

31

26

18

11

35

27

47

12

31

28

26

13

35

29

27

14

34

31

24

15

33

33

22

Predict orders for the following day for each of the products using an
appropriate nave
method. Hint: Plot each data set.
b. What should the use of sales data instead of demand imply?
(a) We need to use naive methods. This means that any simple
appropriate method can conducted. For example: Ploting each data set
reveals that muffins orders are almost stable, varying around an average
(e.g. 33). The demand for cinnamon buns has a trend. If we get the last
three period, we realized that number increased two by two so 33-31=2
and last one is 33+2=35. This is for the following day for cinnamon buns.
Demand for cupcakes has an apparent seasonal variation with peaks
every five days. Day 1=45, Day 6=48, Day 11=47 and the next peak
would be Day 16=50.

(b) The use of sales data instead of demand implies that sales adequately
reflect demand. We are assuming that n stock-outs because demand
equals sales if there are no shortages.