Operational Excellence and Competitive Advantage
Operational Excellence and Competitive Advantage
Welcome to the course. Please introduce yourself to your classmates and professor.
What are the top 2 operational challenges in your industry?
What differentiates the most competitive organizations from the laggards in your industry?
What do you hope to get out of this course as it relates to operations management in your workplace?
JWI550 OPERATIONAL EXCELLENCE
Week 2 Discussion
Value Stream Mapping
Read the Course Project overview on pp. 16-17 of the Course Guide. In preparation for Part A, identify a value stream relevant to your organization that needs improvement. Include specific references to this week’s course materials to support your response.
What value does this value stream deliver to the organization or contribute to its competitiveness?
What metrics are currently used (or should be used) to monitor the performance of this value stream?
What do you predict might be some improvement opportunities in this value stream?
JWI550 OPERATIONAL EXCELLENCE
Week 3 Discussion
Process Performance Impacts Competitive Advantage
Identify one key process that is within the value stream map you shared in Week 2. Include specific references to this week’s course materials, specifically Operations Management Reading: Process Analysis, to support your response.
What process metrics are used in this process?
Describe any shortcomings such as delays, bottlenecks, or quality issues in the process.
JWI550 OPERATIONAL EXCELLENCE
Week 4 Discussion
Process Types and Strategies
Choice of process types is a strategic decision in Operations Management. Answer the following and include references to this week’s course materials, specifically “Operations Management Reading: Designing, Managing, and Improving Operations,” to support your response.
Identify 2 different processes used in your industry and classify them into process types such as job shop, batch processing, assembly line, etc. Explain the rationale for your process type classifications.
Which companies or similar organizations in your industry would you consider to be recognized leaders in any of these process types? How does that compare to your organization?
What should management focus on in managing those process types?
JWI550 OPERATIONAL EXCELLENCE
Week 5 Discussion
Applying Lean in Your Organization
This week, you learned how Lean is used to reduce inventory, eliminate waste, and improve processes. In preparation for Course Project Part B, answer the questions below. Be sure to include specific references to this week’s course materials to support your response.
Now that you have completed your value stream assignment, what are some opportunities in your value stream where a Work-Out or Kaizen event can be applied?
Which Lean tools would be most useful in these events?
What challenges have you seen, or anticipate, in deploying Lean in your industry? How would you address those challenges?
JWI550 OPERATIONAL EXCELLENCE
Week 6 Discussion
Inventory and Supply Chain Management
One of the most important areas of focus in pursuing operational excellence is improving inventory and supply chain performance. As we have seen, supply chain shortcomings have regularly made headlines during the COVID-19 pandemic. In addressing the following questions, support your response with specific references to this week’s course materials.
Locate and post a link to a news story from the last six months published in The Wall Street Journal or other reputable source about an inventory or supply chain issue. This need not be directly related to COVID-19.
Briefly summarize the issue including what went wrong and the impact this had on customers.
What steps did the organization and/or its supply chain/logistics partners take to address the issue? What was the outcome?
Given the information available at the time, what could have been done differently to mitigate the impact on the supply chain?
JWI550 OPERATIONAL EXCELLENCE
Week 7 Discussion
Why Quality Matters
Option 1
There are a number of resources for both industry professionals and consumers that analyze and publish quality metrics. Examples include: Hospital Compare – published through Medicare.gov, J.D. Power – well known for its car reviews, and Quality Magazine and Quality Digest are two resources used by OM professionals.
Locate and post a link to a quality review resource that is used in your industry (select one that is different from what has already been posted by your peers).
What information do these resources provide about how they collect and analyze data, and develop reports and (if applicable) rankings?
Which metrics are most frequently used in assessing quality failures and the impact these failures have on costs?
How can this resource be used by OM professionals to support quality improvement initiatives?
OR
Option 2
Quality failures have impacts that go beyond costs. Quality failures can erode an organization’s competitive advantage.
Locate and post a news story from the last six months published in The Wall Street Journal or other reputable source about an internal or external quality failure.
Briefly summarize the issue including what went wrong and whether it was a performance quality or conformance quality issue.
What was the impact on costs to the organization and/or its customers?
How did the organization address the issue? What steps did they take to either the problem or provide a resolution to customers? Were these reasonable and fair? Explain.
What steps could have been taken to reduce or prevent this failure?
JWI550 OPERATIONAL EXCELLENCE
Week 8 Discussion
Applying Six Sigma
Six Sigma projects are widely used to improve the quality, cost, and time performance of processes, products, and services.
Watch the Six Sigma Foundations course and answer the following questions:
Provide an example of variation in the products or services in your industry and explain how this variation impacts customers.
Select one specific Six Sigma concept or tool seen in the Six Sigma Foundations course in LinkedIn Learning that you found to be most useful.
Explain why you selected this particular concept or tool. How easy or difficult would it be to apply this in your industry?
Support your responses with specific references to the Six Sigma Foundations course.
JWI550 OPERATIONAL EXCELLENCE
Week 9 Discussion
Product and Service Design
This week’s course materials present examples of how integrating product and service design into your pursuit of operational excellence can be an effective strategy to increase your organization’s competitive advantage. Support your response to the prompts below with specific references to this week’s course materials.
Identify two articles or videos from this week’s materials that you found to be most useful. What were your takeaways from these? Why?
Select any product or service that you are familiar with, either as a provider or as a consumer. Describe how effective its design is in meeting customer needs.
JWI550 OPERATIONAL EXCELLENCE
Week 10 Discussion
Lessons Learned in Operational Excellence
What are your key takeaways from this course?
What are your favorite tools that you studied in this course? What do you like most about them?
When answering this question, consider: ease of implementation, application to your particular organization, receptivity by your colleagues, etc.
How have you applied, or how will you apply, these tools? If applicable, what results were achieved?
What impact has this course had on your professional performance?
JWI550 OPERATIONAL EXCELLENCE
Assignment 1
Operations Management Project Part A: Value Stream Mapping and Analysis
Overview
A core tool in Operational Excellence is Value Stream Mapping. This tool helps stakeholders visualize complex work systems (including material and information flows) and address disconnects, redundancies, and gaps in how work gets done between the beginning and end of a value stream or end-to-end process.
• The primary type of value stream is one in which a product or service is requested by, and delivered to, an external customer. Examples include request to receipt, order to delivery, and quote to cash.
• Other value streams which support the delivery of value are called value-enabling or support value streams. Examples include recruiting, onboarding, IT support, and annual budgeting.
Since it is nearly always a mistake to initiate changes without have a clear picture of how the system is currently functioning, we are beginning our Course Project with the creation and analysis of a Value Stream Map.
Instructions
For this assignment, select a value stream in your organization that can benefit from analysis and improvement. As noted previously, the value stream (or end-to-end process) selected does not need to be overly large or complex. Select something which has the potential for meaningful improvement, but which is manageable within the scope of this assignment.
1) Develop a current state Value Stream Map of your selected value stream. Show the customer demand rate (or Takt), information flow, work flow, and summary timeline on the map.
2) Document key metrics for each process block:
• Process Time (PT)
• Lead Time (LT)
• Percent Complete and Accurate (%C&A)
• Any other appropriate metrics, such as number of operators, changeover time or setup time, batch size, and % uptime.
3) Calculate the current state summary metrics:
• Total lead time (TotalLT)
• Total process time (Total PT)
• Activity Ratio (AR)
• Rolled Percent Complete and Accurate (Rolled %C&A)
4) Describe the current state of the value stream and highlight any performance deficiencies and challenges, such as delays, excessive WIP, bottlenecks, capacity and workload imbalances, rework, poor quality yields, long lead times, and other operational issues.
Submission Requirements
Your work may be submitted in either Word or PowerPoint.
• Since you will need to include a diagram to map the value stream for #1, you should select whatever software you are most comfortable working with. The Value Stream Map can easily be created in PowerPoint (see the symbols and template provided by the instructor), or neatly drawn by hand.
You may also use software such as Visio. In all cases, please scan or convert your map to a PDF or JPG, and paste it into Word or PPT before submitting.
• For #2, the information for each process block should be on the value stream map. For #3, it can be on the map or in tabular form. Show how the summary metrics are calculated. Keep your written answers brief and to the point. Accuracy is what matters. This should take no more than one page.
There are no additional points for overly elaborate responses.
• For #4, a thorough response with specifics should take no more than one page. As you discuss improvement opportunities, mention and make specific reference to the Value Stream Map, including names of process blocks and performance metrics.
JWI550 OPERATIONAL EXCELLENCE
Assignment 2
Operations Management Project Part B: Detailed Agenda(s) for Kaizen or Work-Outs
Overview
Kaizen events or Work-Outs are one- to five-day rapid improvement events widely used in the deployment of Lean and Operational Excellence. Jack was a huge fan of Work-Outs, which were so named because the focus was on getting the unnecessary work out of the system. These events were NOT just brainstorming sessions, but were well-planned and highly structured events that had:
? A well-defined process and set of expectations going in
? Sufficient time and freedom from distraction so participants could focus on the issues being discussed
? Participation by key stakeholders all the way from line workers to senior management
? Clearly defined requirements for decision and action
The second component of your Course Project is to construct a detailed agenda for such an event. The agenda must demonstrate how you will get input from key stakeholders involved with the selected process, use the Lean tools, and conclude the event with actionable improvement outcomes.
Instructions
Use your work from Part A of the Project to identify improvement opportunities in the value stream that are suitable for Kaizen events or Work-Outs.
1 ) List the potential Kaizen events, select the one to be deployed, and justify your selection. Then, define the Kaizen objective and scope for the selected event.
2 ) Develop a detailed agenda for your selected Kaizen event. Use a tabular format, showing:
• Days and times
• Session topics
• Lean tools to be used
• Deliverables or outputs
• Rationale
Day Time Session Topic/Objective Lean Tools Output/Deliverables Rationale
3) Explain your choice for number of days and sequence for session topics, and justify the Lean tools to be used and outputs from each session. Show how your Kaizen agenda supports the Kaizen objective and scope for the event. This discussion should be specific to your value stream and organization.
Submission Requirements
Your work is to be submitted in Word. Total length should be 3 to 4 pages, including the actual agenda. You are free to organize your submission in whatever way you feel best presents the material and makes it easy to understand. Typically, this will mean presenting each day’s tabular agenda in granular detail (15 minute to 2-hour timeslots with details for each session), and then providing supporting pages with additional explanations.
As guidance, design this as a document you would share with your team and/or your supervisor. It should be detailed enough to clearly explain how the event will be structured and why, but concise enough that it will actually get read.
Note: A generic agenda for a Kaizen event or a generic Lean discussion is not acceptable.
JWI550 OPERATIONAL EXCELLENCE
Assignment 3
Operations Management Project Part C: Six Sigma Project Charter
Overview
Six Sigma projects are powerful tools for achieving breakthrough improvements. Improvement projects utilize the DMAIC methodology, while design or re-design projects use the DMADV methodology. Such projects can be undertaken for large or small initiatives. But because they require a fair bit of work in planning and engaging the team, they are usually applied in situations where a significant change effort is likely to lead to an outcome well in excess of the work put into the project.
In the first two parts of your Operations Management Course Project, you have: (A) mapped and analyzed the value stream, and (B) organized a Kaizen or Work-Out to address improvement opportunities which do not require rigorous data analysis. Now, you are ready to move forward with one or more projects that leverage the power of Six Sigma’s tools and rigorous data-driven analysis. A project charter is needed for each proposed
Six Sigma project. Project charters enable management to understand, evaluate, and approve projects for launch.
Instructions
Use your work in Part A and Part B of your Course Project, as well as what you have learned so far in this course, to identify a potential Six Sigma project that can benefit the value stream and your organization.
1) List and describe potential Six Sigma project(s) that you would propose to senior management, recommend one project, and justifyyour selection.
2) Develop a detailed Project Charter for your recommended project. The project charter must include the following:
a. Problem statement
b. Goal statement or objectives
c. Project scope
d. Critical-to-quality requirements, or CTQs, of the processes within the scope of this project
e. Key metric Y (or key metricsY)
f. Expected operational and financial benefits of the project
g. Milestone dates for each phase of DMAIC (or DMADV)
h. Project team (titles of project team leader and members)
i. Champion (title of executive or senior manager)
Submission Requirements
Your work is to be submitted in Word. Total length should be 3-4 pages. Since this is a charter, put some thought into how best to present the material visually. Use the instructor-provided Project Charter Template as a guide. At an absolute minimum, you should include clear headers and sub-headers. You may also want to call out certain elements, like timelines or key milestones, using graphics, tables, or colors to make the charter visually appealing and easy to read.
JWI550 OPERATIONAL EXCELLENCE
Knowledge Check 1
Question 1Process Flow Diagram for Completing a Transaction with an Additional Worker All steps (A, B, C, D, and E) in the below process are necessary to complete each transaction or unit. Task times are shown for each step. A second worker has been hired to duplicate task D. Now transactions that have been through task C go to any one of the two workers on task D. The product still requires the five steps (A, B, C, D, E).
Refer to the Process Flow Diagram with an Additional Worker. Assume the entire process is running at the pace of the bottleneck. Consider only task D, with both workers performing task D. What is the capacity utilization for task D?
A. 100 %
B. 60 %
C. 50 %
D. 40 %
Question 2Process Flow Diagram for Completing a Transaction (such as a loan application, a call at a call center, an order in a fast food restaurant, a customer at a bank, or a unit being processed). Consider the following process flow diagram for completing a transaction unit. All tasks or steps (A, B, C, D, and E) are necessary to process and complete the transaction. Each task employs a single employee. Exact task times, in minutes/unit, are shown at each step. For example, it takes exactly 4 minutes to complete task C.
Refer to the Process Flow Diagram. Assume that the entire process is running at bottleneck pacing. Consider only task A, in isolation from the rest of the process. What is the approximate labor utilization at task A?
A. 5 %
B. 33 %
C. 42 %
D. 83 %
E. 100 %
Question 3Process Flow Diagram for Completing a Transaction (such as a loan application, a call at a call center, an order in a fast food restaurant, a customer at a bank, or a unit being processed). Consider the following process flow diagram for completing a transaction unit. All tasks or steps (A, B, C, D, and E) are necessary to process and complete the transaction. Each task employs a single employee. Exact task times, in minutes/unit, are shown at each step. For example, it takes exactly 4 minutes to complete task C.
Refer to the Process Flow Diagram. What is the minimum throughput time, that is, the fastest a rush order for one unit can go through the process?
A. 12 minutes
B. 26 minutes
C. 31 minutes
D. 36 minutes
E. None of these answers are .
Question 4Process Flow Diagram for Completing a Transaction (such as a loan application, a call at a call center, an order in a fast food restaurant, a customer at a bank, or a unit being processed). Consider the following process flow diagram for completing a transaction unit. All tasks or steps (A, B, C, D, and E) are necessary to process and complete the transaction. Each task employs a single employee. Exact task times, in minutes/unit, are shown at each step. For example, it takes exactly 4 minutes to complete task C.
Refer to the Process Flow Diagram. Consider the entire system (all steps). What is the entire system’s minimum cycle time?
A. 4 minutes/unit
B. 12 minutes/unit
C. 5 minutes/unit
D. 10 minutes/unit
Question 5Process Flow Diagram for Completing a Transaction with an Additional Worker All steps (A, B, C, D, and E) in the below process are necessary to complete each transaction or unit. Task times are shown for each step. A second worker has been hired to duplicate task D. Now transactions that have been through task C go to any one of the two workers on task D. The product still requires the five steps (A, B, C, D, E).
Refer to the Process Flow Diagram with an Additional Worker. If the entire system (all processes) is operating at full capacity, what is the system cycle time?
A. 4 minutes/unit
B. 12 minutes/unit
C. 5 minutes/unit
D. 10 minutes/unit
Question 6Process Flow Diagram for Completing a Transaction (such as a loan application, a call at a call center, an order in a fast food restaurant, a customer at a bank, or a unit being processed). Consider the following process flow diagram for completing a transaction unit. All tasks or steps (A, B, C, D, and E) are necessary to process and complete the transaction. Each task employs a single employee. Exact task times, in minutes/unit, are shown at each step. For example, it takes exactly 4 minutes to complete task C.
Refer to the Process Flow Diagram. Assume that the process operates eight hours a day. What is its daily capacity, in units per day?
A. 13 units/day
B. 40 units/day
C. 48 units/day
D. 96 units/day
E. None of these answers are .
Question 7 INSTRUCTIONS
NOTE: To make your calculations as straightforward as possible in the following exercises, assume unless stated otherwise that:
There are sufficient transactions or inputs, so tasks are never starved.
Task times have negligible variability and, over time, workers neither speed up nor slow down.
There are no equipment breakdowns or maintenance.
When there are buffers shown in process flow diagrams, they are large enough to accommodate any amount of work in process (WIP).
Travel time and time to move transactions from one operation to another are negligible.
All operations run with 100% yield; that is, the operations produce no defective transactions.
All processes are in steady state; thus, you may ignore any startup effects.
Process Flow Diagram for Completing a Transaction (such as a loan application, a call at a call center, an order in a fast food restaurant, a customer at a bank, or a unit being processed). Consider the following process flow diagram for completing a transaction unit. All tasks or steps (A, B, C, D, and E) are necessary to process and complete the transaction. Each task employs a single employee. Exact task times, in minutes/unit, are shown at each step. For example, it takes exactly 4 minutes to complete task C.
Refer to the Process Flow Diagram. Consider only task A, in isolation from the rest of the process. What is task A’s cycle time?
A. 10 minutes/unit
B. 5 minutes/unit
C. 12 minutes/unit
Question 8Process Flow Diagram for Completing a Transaction with an Additional Worker All steps (A, B, C, D, and E) in the below process are necessary to complete each transaction or unit. Task times are shown for each step. A second worker has been hired to duplicate task D. Now transactions that have been through task C go to any one of the two workers on task D. The product still requires the five steps (A, B, C, D, E).
Refer to the Process Flow Diagram with an Additional Worker. What is the minimum throughput time, that is, the fastest a rush order of one unit can go through the process?
A. 12 minutes
B. 26 minutes
C. 31 minutes
D. 36 minutes
E. None of the answers are .
Question 9NOTE: To make your calculations as straightforward as possible in the following exercises, assume unless stated otherwise that:
There are sufficient transactions or inputs, so tasks are never starved.
Task times have negligible variability and, over time, workers neither speed up nor slow down.
There are no equipment breakdowns or maintenance.
When there are buffers shown in process flow diagrams, they are large enough to accommodate any amount of work in process (WIP).
Travel time and time to move transactions from one operation to another are negligible.
All operations run with 100% yield; that is, the operations produce no defective transactions.
All processes are in steady state; thus, you may ignore any startup effects.
Process Flow Diagram for Completing a Transaction (such as a loan application, a call at a call center, an order in a fast food restaurant, a customer at a bank, or a unit being processed). Consider the following process flow diagram for completing a transaction unit. All tasks or steps (A, B, C, D, and E) are necessary to process and complete the transaction. Each task employs a single employee. Exact task times, in minutes/unit, are shown at each step. For example, it takes exactly 4 minutes to complete task C.
Refer to the Process Flow Diagram. Consider only task A, in isolation from the rest of the process. What is task A’s cycle time?
A. 10 minutes/unit
B. 5 minutes/unit
C. 12 minutes/unit
Question 10Process Flow Diagram for Completing a Transaction with an Additional Worker All steps (A, B, C, D, and E) in the below process are necessary to complete each transaction or unit. Task times are shown for each step. A second worker has been hired to duplicate task D. Now transactions that have been through task C go to any one of the two workers on task D. The product still requires the five steps (A, B, C, D, E).
Refer to the Process Flow Diagram with an Additional Worker. Assume the entire process is running at the pace of the bottleneck. Consider only task B. What is the capacity utilization for task B?
A. 100 %
B. 60 %
C. 50 %
D. 40 %
JWI550 OPERATIONAL EXCELLENCE
Knowledge Check 2
Question 1Which of the following process types is the best fit for producing high volumes of a commodity liquid detergent?
A. Job shop
B. Batch flow process
C. Machine-paced line
D. Continuous flow process
Question 2Which of the following process types is the best fit for producing a wide range of consumer electronics (several product categories, where the mix of demand among the categories is quite stable) characterized by very short product life cycles and a rapid rate of new product introduction?
A. Job shop
B. Batch flow process
C. Cell
D. Continuous flow process
Question 3True or false: A highly customized product could typically be produced more efficiently in a continuous flow process than in a job shop.
True
False
Question 4Reliance on human judgment and expertise becomes ______ efficient when the degree of proceduralization of a process is _____.
A. least; high
B. least; low
C. least; medium
D. most; medium
Question 5With multiple departments arranged by resource type, conventional general hospitals are _____. The routes by which patients flow though departments are highly variable and depend on the condition for which a patient is being treated. However, at the beginning of cold and flu season, a hospital designates an area only for flu shots. There are four stations in the area for flu shots: registration, blood pressure check, shot administration, and debriefing. All patients flow through the four stations in the same order. This type of process most closely resembles a(n) ____.
A. job shops; unpaced line
B. continuous flow processes; machine-paced line
C. unpaced lines; machine-paced line
D. job shops; batch flow process
Question 6Which of the following is most important in designing and/or managing continuous flow processes?
A. Scheduling work so that workers are fully utilized
B. Keeping raw material inventories low
C. Matching system capacity to demand
D. Keeping work-in-process inventories low
Question 7How does the cost of learning change as the division of labor increases (having more workers, doing more narrowly defined tasks)?
A. It tends to decrease at first but eventually starts growing again.
B. It tends to increase at first but eventually starts decreasing.
C. It tends to decrease with the growing degree of division of labor.
D. It is unchanged by the division of labor.
Question 8True or false: Consider the differences between a high-end stock brokerage, where each client is assigned to a specialist and each client receives an individualized portfolio, versus a mutual fund, where there is a much higher volume of clients, with each client receiving the exact same portfolio (the bundle of securities that the fund holds). In Figure 4: Product-Process Matrix in the reading, the high-end stock brokerage would be positioned above and to the left of the mutual fund.
True
False
Question 9Last month, a processing facility (such as a check processing facility or a distribution center) transitioned from an unpaced assembly line to a machine-paced assembly line, so that now work is done to the product while it stays on the conveyor belt. Yesterday, the worker at the bottleneck station was replaced by another worker who works more slowly than the original worker (and nothing was done to compensate). Which of the following is most likely to result?
A. Inventory piles up before the new bottleneck worker.
B. Quality problems occur.
C. Cycle time increases.
D. The direction of the workflow changes.
Question 10Which of the following is usually TRUE?
A. a. Cells have a slower quality feedback loop than do job shops.
B. Cells have a faster quality feedback loop than do job shops.
C. Cells have a similar quality feedback loop to that of job shops.?
D. Quality feedback loops cannot be compared in general terms between cells and job shops.
JWI550 OPERATIONAL EXCELLENCE
Knowledge Check 3
Question 1A car-service center orders new tires using the continuous review system. The expected demand is 420 tires per year, and the lead time (the time necessary for the shipment of tires to arrive after it has been ordered) is one week on average. The manager decides to hold safety stock of 20 tires. Find the reorder point, the number of tires in stock when it is time for the car-service center to order the next tire delivery. Assume 52 weeks in each year.
A. 20
B. 26
C. 28
D. 30
Question 2A company has days of inventory equal to 23.6 days. Which of the following best describes the meaning of this number?
A. The company replenishes its inventory every 23.6 days on average.
B. It takes about 23.6 days for an inventory replenishing order to come through.
C. An item typically stays 23.6 days in inventory before being sold.
D. It is estimated that the whole inventory can be sold in 23.6 days.
Question 3What does it mean when we say that a furniture-making company has a reorder point of 150 for its stock of chairs?
A. The manager orders stock replenishment every 150 days in a periodic review system.
B. Stock replenishment orders are always for 150 chairs.
C. Stock replenishment orders take 150 days to fulfill.
D. The manager orders stock replenishment as soon as the current inventory is at or below 150 chairs.
Question 4A restaurant requires 200 lbs of coffee beans per year. The coffee beans are delivered in 10-lb bags. To keep the coffee quality high (that is, at peak freshness), the restaurant does not store the coffee beans for more than a year. There is no perceptible carrying cost for keeping the coffee bean bags in the restaurant storage. Ordering cost is $5. How often should the restaurant order the coffee beans in order to minimize the cost of replenishment?
A. 1 bag once every month
B. 10 bags once every 6 months
C. 20 bags once every year
D. 200 bags once every year
Question 5An event that indicates that it is time to order stock replenishment is called a replenishment trigger.
A. True
B. False
Question 6A company replenishes its inventory using a periodic review system, and it uses service factor z to calculate the safety stock required for a target in-stock rate. What would be the consequence of using a negative service factor z less than zero?
A. At the ends of order intervals, the company is more likely to be out of stock than not.
B. At the ends of order intervals, the company will be always out of stock.
C. Using negative z is mathematically forbidden in this calculation because it is akin to division by zero.
D. Only the absolute value of z matters because normal distribution is symmetric.
Question 7The formula for the critical fractile of a single-period model in terms of the cost of underage, cu, and the cost of overage, co, is cu/(cu + co).
A. True
B. False
Question 8In a periodic review inventory model, the order quantity is calculated as:
A. Expected demand during the order interval + safety stock
B. The target order-up-to inventory level – current inventory on hand and on order.
C. The maximum target inventory level – the minimum target inventory level.
D. The optimal order quantity given by the economic order quantity formula.
E. Expected demand during lead time + safety stock.
Question 9A company replenishes its inventory using a periodic review system. How will the annual inventory turns of the company be affected if the company increases the frequency of this review system?
A. It will not be affected at all.
B. It will decrease.
C. It will increase.
D. There is no way to tell from this information.
Question 10A newsvendor sells all of her newspapers toward the end of most days because she always orders fewer copies of newspapers than the average daily demand. Assume that this is a rational choice rather than a mistake. Which of the following is the explanation for this strategy?
A. The cost of overage is zero.
B. The cost of overage must be greater than the cost of underage.
C. The cost of underage must be high.
D. The cost of underage must be greater than the cost of overage.
JWI550 OPERATIONAL EXCELLENCE
Knowledge Check 4
Question 1The degree to which a product or service meets the specifications of its design and achieves the specified performance is called ___.
A. quality
B. conformance quality
C. performance quality
D. zero defect
Question 2Which of the following is NOT a quality attribute for watching a video on YouTube or a similar website?
A. Resolution of the video (e.g., 720p)
B. An ad on Google directing people to the video
C. Being able to pause the video while watching
D. A short ad that must play before the main video
Question 3Each of the following is an example of external failure costs EXCEPT:
A. warranty claims.
B. loss of customer loyalty and goodwill.
C. rework as a result of final inspection.
D. litigation/reputational costs.
Question 4Which of the following is an example of appraisal costs?
A. “Secret shopper” tests of retail services
B. Product design verification
C. Responding to customer complaints
D. Process downtime
Question 5Which of the following is NOT a method used in modern approaches to quality management?
A. When something goes wrong, the whole system is responsible for situations that lead to errors.
B. Find and fix the root cause so the problem does not recur in the production process.
C. Locate defects through inspection and remove defective products before they reach the customer.
D. Eliminate the need for incoming inspection by sharing process information between suppliers and customers.
Question 6Which of the following is an example of internal failure costs?
A. Refunding service fees
B. Product recalls
C. Lost sales/market share
D. Process downtime
Question 7Each of the following is an example of prevention costs EXCEPT:
A. testing and inspecting purchased materials and components from suppliers.
B. training and development.?
C. working with suppliers to increase quality.?
D. collecting data from each step of production to validate the process.
Question 8The concept of an optimal quality level is considered controversial. Some companies argue that the goal of zero defects is not a reasonable one. In which of the following products would management be most likely to argue that the goal of zero defects is very desirable?
A. Living-room furniture such as couches
B. Aircraft tires
C. Aircraft entertainment systems
D. All of the answers are
Question 9Which of the following is an example of the quality dimension of core performance?
A. The availability of an app to manage a bank account
B. An online order menu that allows customers to choose their own pizza toppings
C. An online store with options to customize athletic shoes
D. The speed of an Internet connection from a network provider
Question 10In the context of quality management, which of the following terms is a formal statement of the attributes of a product or service?
A. Contract
B. Specification
C. Agreement
D. Warranty
JWI550 OPERATIONAL EXCELLENCE
Knowledge Check 5
• Question 1 What is key to sustaining operational excellence in daily work?
A. Launch more operational excellence projects
B. Value creation for customers
C. Process discipline
D. Pep talks on operational excellence
• Question 2 The number of proven causes on a cause-effect diagram after brainstorming and 5-whys is: A. Zero
B. One
C. At least five
D. Unlimited
• Question 3 What is NOT one of the three E’s in the Triple E model for sustainable change?
A. Empower
B. Encourage
C. Enable
D. Enlighten
• Question 4 CTQs are the performance characteristics of a process, product, or service that are critically important to:
A. Suppliers
B. Process owners
C. Customers
D. Employees
• Question 5 To encourage operational excellence, rewards and recognition should be _______.
A. Based on inputs from employees in the organization
B. Consistent and aligned across all departments and functions
C. Distributed equally to all employees
D. Limited to employees directly involved in revenue-generating activities.
• Question 6 If causes of poor performance are easily determined using the collective knowledge and experience of the right people, then select and launch a _______.
A. Process management effort
B. Lean project using workout(s) or kaizen event(s)
C. Six Sigma DMAIC project
D. Design for Six Sigma DMADV project
• Question 7 If there are no procedures, lack of adherence to procedures, or lack of measurement and accountability, then that process requires _________ on an on-going basis.
A. DMAIC projects
B. DMADV projects
C. Lean projects
D. Process or value stream management
• Question 8 The following graphs and charts are used for displaying variation of continuous data EXCEPT:
A. Boxplots
B. Pareto charts
C. Dot plots
D. Histograms
• Question 9 Challenges in implementing and sustaining Operational Excellence include the following EXCEPT:
A. Fear of job loss
B. Too many key performance metrics (KPIs)
C. Projects are selected by senior managers
D. Not enough bandwidth due to too many initiatives and projects
• Question 10 To drive operational excellence, senior management should do all of the following EXCEPT:
A. Ensure there is alignment of projects with annual and strategic goals
B. Review proposed projects, evaluate, and select projects
C. Encourage all employees to select and launch projects
D. Assign senior managers to be project champions
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