INSTRUCTORS SOLUTIONS MANUAL

INSTRUCTOR’S SOLUTIONS MANUAL

for

Operations Management Sustainability and Supply Chain Management Fourth Canadian Edition

Jay Heizer

Barry Render

Chuck Munson

Paul Griffin

NOTE: For Complete File, Download link at the end of this File 1 / 4

Copyright © 2023 Pearson Canada Inc. 1

CHAPTER

Operations and Productivity

DISCUSSION QUESTIONS

• The text suggests four reasons to study OM. We want to under-

stand (1) how people organize themselves for productive enterprise, (2) how goods and services are produced, (3) what operations managers do, and (4) this costly part of our economy and most enterprises.

2. Possible responses include: Adam Smith (work specialization/

division of labour), Charles Babbage (work specialization/division of labour), Frederick W. Taylor (scientific management), Walter Shewart (statistical sampling and quality control), Henry Ford (moving assem- bly line), Charles Sorensen (moving assembly line), Frank and Lillian Gilbreth (motion study), Eli Whitney (standardization).

• See references in the answer to Question 2.
• The actual charts will differ, depending on the specific organ-

ization the student chooses to describe. The important thing is for students to recognize that all organizations require, to a great- er or lesser extent, (a) the three primary functions of operations, finance/accounting, and marketing; and (b) that the emphasis or detailed breakdown of these functions is dependent on the spe- cific competitive strategy employed by the firm.

• The answer to this question may be similar to that for Question 4.

Here, however, the student should be encouraged to utilize a more detailed knowledge of a past employer and indicate on the chart additional information such as the number of persons employed to perform the various functions and, perhaps, the position of the functional areas within the overall organization hierarchy.

• The basic functions of a firm are marketing, accounting/

finance, and operations. An interesting class discussion: “Do all

firms/organizations (private, government, not-for-profit) perform these three functions?” The authors’ hypothesis is yes, they do.

• The 10 decisions of operations management are product de-

sign, quality, process, location, layout, human resources, supply- chain management, inventory, scheduling (aggregate and short term), and maintenance. We find this structure an excellent way to help students organize and learn the material.

• Four areas that are important to improving labour productivi-

ty are: (1) basic education (basic reading and math skills), (2) diet

of the labour force, (3) social overhead that makes labour avail- able (water, sanitation, transportation, etc.), and (4) maintaining and expanding the skills necessary for changing technology and knowledge, as well as for teamwork and motivation.

• Productivity is harder to measure when the task becomes

more intellectual. A knowledge society implies that work is more intellectual and therefore harder to measure. Because Canada (and many other countries) are increasingly “knowledge” societies, productivity is harder to measure. Using labour-hours as a meas- ure of productivity for a postindustrial society vs. an industrial or agricultural society is very different. For example, decades spent developing a marvellous new drug or winning a very difficult legal case on intellectual property rights may be significant for post-industrial societies, but not show much in the way of productivity improvement measured in labour-hours.

• Productivity is difficult to measure because precise units of

measure may be lacking, quality may not be consistent, and exogenous variables may change.

• Mass customization is the flexibility to produce in order to

meet specific customer demands, without sacrificing the low cost of a product-oriented process. Rapid product development is a source of competitive advantage. Both rely on agility within the organization.

• Labour productivity in the service sector is hard to

improve because (1) many services are labour intensive and (2) they are individually (personally) processed (the customer is paying for that service—the haircut), (3) it may be an intellectu- al task performed by professionals, (4) it is often difficult to mechanize and automate, and (5) it is often difficult to evaluate for quality.

• Taco Bell designed meals that were easy to prepare; with

actual cooking and food preparation done elsewhere; automation to save preparation time; reduced floor space; manager training to increase span of control.

ETHICAL DILEMMA

With most of the ethical dilemmas in the text, the instructor should generate plenty of discussion. The authors are hesitant to endorse a particular correct answer, and students may well be on both sides of this dilemma.Many students will be inclined to accept the child labour laws of their home country. For instance, Americans accept teenagers working. But Germans (and others) are more likely to expect teenagers to be home studying or in an apprentice program; they frown upon teenagers working. Students raised in more affluent environments may not understand children working.However, those who had to scrape by in their youth or had parents that did may be more sympathetic to 10-year-olds working.From an economic and self-preservation perspective many 10-year-olds do work and need to work. There are still a lot of poor people in the world. Such a decision may endorse the moral philosophy perspective defined as a utilitarianism decision.

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2 CHAPTER 1 OPERATIONS AND PRODUCTIVITY

Copyright © 2023 Pearson Canada Inc.

A utilitarianism decision defines acceptable actions as those that maximize total utility, that is, the greatest good for the greatest number of people.From a Canadian corporate management perspective, companies cannot tolerate the publicity that goes with hiring 10- year-olds. These companies need to have standards that prohibit such actions by their subcontractors. The moral philosophy per- spective might call this the virtue ethics position—the decision that a mature person with a good moral character would deem correct.

END-OF-CHAPTER PROBLEMS

120 boxes (a) = 3.0 boxes/hour 40 hours 1.1

125 boxes (b) = 3.125 boxes/hour 40 hours

(c) Change in productivity = 0.125 boxes/hour (d) 0.125 boxes Percentage change = = 4.166% 3.0

1.2 (a) Labour productivity is 160 valves/80 hours = 2 valves per hour.(b) New labour productivity = 180 valves / 80 hours = 2.25 valves per hour (c) Percentage change in productivity = .25 valves / 2 valves = 12.5% 1.3

57,600

0.15 = , where number of labourers

(160)(12)( )

employed at the plant

L L  So

57,600

= = 200

(160)(12)(0.15)

L labourers employed

1.4 The U.S. Bureau of Labor Statistics (stats.bls.gov) is prob- ably as good a place to start as any. Results will vary for each year, but overall data for the economy will range from .9% to 4.8% and mfg. could be as high as 5% and services between 1% and 2%. The data will vary even more for months or quarters.The data are frequently revised, often substantially.Units produced 100 pkgs (a) = = 20 pkgs/hour Input 5 1.5 133 pkgs (b) = 26.6 pkgs per hour 5

6.6 (c) Increase in productivity = = 33.0% 20

1.6 Resource Last Year This Year Change Percent Change

Labour

1, 000

= 3.33

300

1, 000

= 3.64

275 0.31 0.31

= 9.3%

3.33

Resin

1, 000

= 20 50

1, 000

= 22.22

45 2.22 2.22

= 11.1%

20

Capital

1, 000

= 0.1

10, 000

1, 000

= 0.09

11, 000

–0.01

–0.01

= –10.0%

0.1

Energy

1, 000

= 0.33

3, 000

1, 000

= 0.35

2, 850

0.02

0.02

= 6.1%

0.33

1.7 Last Year This Year Production 1,000 1,000 Labour hr. @ $10 $3,000 $2,750 Resin @ $5 250 225 Capital cost/month 100 110 Energy 1,500 1,425

$4,850 $4,510

[(1,000/4,850) (1,000/4,510)]

(1,000/4,850)

− =

0.206–0.222 –0.016

= = 0.078 fewer resources

0.206 0.206

⇒ 7.8% improvement*

• with rounding to 3 decimal places.

Output Productivity = Input 1.8 65 65 (a) Labour productivity = =

(520 × 13) $6,760

= 0.0096 rugs per labour $

65Multifactor (b) productivity(520 × $13) + (100 × $5) + (20 × $50)

65 = = 0.00787 rugs per $

$8,260

1.9 (a) Labour productivity = 1,000 tires/400 hours = 2.5 tires/hour.(b) Multifactor productivity is 1,000 tires/(400 ×

$12.50 + 20,000 × $1 + $5,000 + $10,000) =

1,000 tires/$40,000 = 0.025 tires/dollar.(c) Multifactor productivity changes from 1,000/40,000 to 1,000/39,000, or from 0.025 to 0.02564; the ratio is 1.0256, so the change is a 2.56 % increase.

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CHAPTER 1 OPERATIONS AND PRODUCTIVITY 3

Copyright © 202 3 Pearson Canada Inc.

1.10 Last Year This Year Change Percent Change

Labour hrs.1,500

= 4.29

350

1,500

= 4.62

325

0.33 4.29

= 7.7%

Capital invested 1,500

= 0.10

15, 000

1,500

= 0.08

18, 000

– 0.02

0.1

= –20%

Energy (BTU ) 1,500

= 0.50

3, 000

1,500

= 0.55

2,750

0.05 0.50 = 10% Productivity of capital did drop; labour productivity increased as did energy, but by less than the anticipated 15%.

Note: Rounding is used in the calculations.

1.11 Multifactor productivity is:

375 autos/[($20 × 10,000) + ($1,000 × 500) +

($3 × 100,000)] = 375/(200,000 + 500,000 +

300,000) = 375/1,000,000

= 0.000375 autos per dollar of inputs

1.12 (a) Before: 500/20 = 25 boxes per hour;

After, 650/24 = 27.08 (b) 27.08/25 = 1.083, or an increase of 8.3% in productivity (c) New labour productivity = 700 / 24 = 29.167 boxes per hour

1.13 1,500 × 1. 25 = 1, 875 (new demand) Outputs = Productivity Inputs 1,875

= 2.344

labour-hours 1,875 New process = 800 labour-hours 2.344 800 = 5 workers 160 1,500 Current process = = 2.344 labour-hours 1,500 = labour-hours 640 2.344 640 = 4 worke 160 ≅ ≅ rs

Add one worker.

1.14 (a) Labour change:

1,500 1,500

= = 0.293 loaves/$

(640 × $8) 5,120

1,875 = 0.293 loaves/$

(800 × $8)

(b) Investment change:

1,500 1,500

= = 0.293 loaves/$

(640 × $8) 5,120

1,875 1,875

= = 0.359 loaves/$

(640 × 8) + (100) 5,220

− −

.293 .293

(c) Percent change : = 0 (labour)

.293

.359 .293

Percent change : = 0 .225

.293 = 22.5% (investment)

Note: Rounding is used in the calculations.

×× ×× 1,500 Old process =

(640 8) + 500 + (1,500 0.35)

1,500

= = 0.244

6,145 1,875 New process =

(800 8) + 500 + (1,875 0.35)

1,875

= = 0.248

7,556.25

0.248-0.244

Percent change = = 1.6% 0.244 1.15

6,600 vans (a) = 0.10 labour-hours = 66,000 labour-hours x x 1.16

There are 300 labourers. So, 66,000 labour-hours = 220 labour-hours/labourer on average, per month 300 labourers

6,600 vans (b) Now = 0.11, so 60,000 labour-hour labour-hours 60,000 labour-hours so, 200 labour-hours/labourer 300 labourers on average, per mont

x x = = h

$ output 52($90) + 80($198) = Labour-hour 8 (45)

20,520

= = $57.00 per labour-h our 360 1.17

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