Running head: DISCUSSION QUESTIONS 1

Operations Management Discussion Questions

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DISCUSSION QUESTIONS 2

Discussion Questions

Question 1

The expected value is the difference between the expected monetary value with

information and the expected monetary value without information. A decision maker using

the expected value analysis to make a decision needs to have a random variable with a set of

possible future conditions that will have a bearing on the results of the decision. They also

need to list down alternatives that can be used, as well as a known payoff for each alternative

under each possible future states. The expected value is computed for each alternative, and

the one with the highest expected value is selected. If the probabilities of the states of nature

are unknown, the decision maker can use the decision tree theory or the sensitivity analysis.

If the decision maker uses the sensitivity analysis in such a case, they will need to construct a

graph and then use algebra to determine the unknown probabilities.

Question 2

An advantage of job rotation is that it avoids the monopoly of job and responsibilities,

making it enjoyable for the manager. Job rotation also provides an opportunity for the

managers to broaden their knowledge. Job rotation has also been proven to be an effective

tactic to avoid fraudulent practices at the workplace. It also keeps the managers and people

working under them motivated. On the other hand, job rotation causes frequent interruptions

as a manager is shifted from one department to another. It is also disadvantageous because it

reduces the uniformity of quality. A person who is specially trained to do the job will perform

better than a person who is learning how to do it.

Other companies prefer to use the specialization system. In this system is that the

manager or employee can become an expert in their field of practice. This leads to higher

levels of productivity. Work is completed faster and more efficiently in this system. Again,

with this system, quality control costs are lower. There are disadvantages with this system as
DISCUSSION QUESTIONS 3

well. One is that the routine and monopoly make the managers and employees as well, bored

and tired of their job. Their performance, therefore, reduces and this affects the overall

productivity of an organization.

I would prefer the job rotation system. If there are properly set guidelines for the

practice, then its benefits will outweigh the setbacks. The reason for this is that the system

keeps employees motivated, alert, and active.

Question 3

A fast-food franchise owner needs to consider various factors before expanding his

business. One factor to consider is whether the marketplace is big enough to handle and

maintain the growth of the restaurant. One also needs to consider the costs expected to be

incurred. The costs to expect are additional staff, equipment, and acquisition of new space.

With these costs in mind, the next thing to consider is whether the expected revenue will

justify the expected costs of expansion. The franchise owner also needs to consider the

possible impact of the expansion on his customers. The suppliers also come into play when

making this decision. Opening one site will ensure that the customers continue enjoying high-

quality services, as opposed to having several sites.

Question 4

All processes generate output that exhibits some degree of variability. However, if

non-random variations are present, the process is considered unstable. Some corrective action

should be taken to improve the process by getting rid of the causes of nonrandomness. It is

also good to note that identifying the cause of randomness is not easy, especially when wider

limits are used. Wider limits make it difficult to detect non-random variations. Managers

should, therefore, monitor the sampling distribution on the control chart to ensure to values

exceed the set limits. This means that a manager has to define what needs to be controlled

right from the beginning.

Question 5

Environmental issues that may determine the decision for a company to outsource

manufacturing operations to a foreign country include the political status of the host country.

The business policies and regulations also matter. No company would agree to outsource its

manufacturing activities to a war-tone country, or a country where the business regulations

that the government sets are not friendly. Changes in the broader business landscape can also

facilitate the company’s decision to outsource its manufacturing operations. The availability

of raw materials and cost of labour is also a factor that a company needs to figure out when

making this decision. These two factors have a direct impact in the cost of the final product.

Question 6

The Eat Now Restaurant expanded its menu recently, and this has led to an upsurge of

customers at the restaurant. The customers are however not happy with the long queues and

the much time they need to wait to have their orders ready. Introducing mass customization to

this restaurant will enhance its capability to manufacture high volume of meal options on the

menu, without tradeoffs in cost, and quality. With such a system in place, customers will be

able to get what they want on the menu, within no time, therefore, reducing the waiting lines.

To set up the system, the restaurant’s owner will need to sync the point-of-sale system to the

product display, communication system, and monitoring of ordered dishes. With the system

in place, customers will have to pay an extra coin for the increased efficiency and speed of

service delivery. The cost of setting up such a system does not compare to the benefits the

restaurant stands to gain. Another approach that would be used to reduce waiting line times is

to have a system where customers can make their orders online even before they get to the

restaurant. Home deliveries are also an effective approach to that effect.