OTM 300 Midterm UW-Madison Exam With Accurate
Solutions 100% Verified
Chapter 1 - Chapter 1
Supply - ANSWER Products or services a business offers to its customers
Demand - ANSWER Simply, the set of products and services our customers want.
Utility - ANSWER A measure of the strength of customer preferences for a given product
or service. Customers buy the product or service that maximizes utility.
Consumption Utility - ANSWER A measure of how much you like a product or service,
ignoring the effects of price and of the inconvenience of obtaining the product or
service.
Performance - ANSWER A subcomponent of the consumption utility that captures how
much an average consumer desires a product or service.
Fit A subcomponent of the consumption utility that captures how well the product or
service matches with the unique characteristics of a given consumer.
Heterogeneous preferences The fact that not all consumers have the same utility
function.
Price The total cost of owning the product or receiving the service.
Inconvenience - ANSWER The loss of utility that arises from the time and effort of
,obtaining the product or service.
Transaction costs - ANSWER A synonym for inconvenience of obtaining a product or
service.
Location - ANSWER Where the consumer can obtain a good or service.
Timing - ANSWER The period of time that elapses between the consumer ordering a
product or service and the consumer obtaining the product or service.
Marketing - ANSWER The academic discipline that is about understanding and
influencing how customers derive utility from products or services.
Capabilities - ANSWER The dimensions of the customer's utility function a firm is able to
satisfy.
Trade-offs - ANSWER The need to sacrifice one capability in order to increase another
one.
Market segments - ANSWER A set of customers who have similar utility functions.
Pareto dominated - ANSWER A firm's product or service is inferior to one or multiple
competitors on all dimensions of the customer utility function.
Efficient frontier - ANSWER The set of firms that are not Pareto dominated
Inefficiency - ANSWER The gap between a firm and the efficient frontier.
Waste - ANSWER The consumption of inputs and resources that do not add value to the
customer.
, Variability - ANSWER Predictable or unpredictable changes in the demand or the supply
process.
Inflexibility - ANSWER The inability to adjust to either changes in the supply process or
changes in customer demand.
Chapter 2 - ANSWER Chapter 2
Process - ANSWER A set of activities that take a collection of inputs, perform some work
or activities with those inputs, and then yield a set of outputs.
Resource - ANSWER A collection of people and/or equipment that takes inputs and
produces outputs.
Process scope - ANSWER The processes and activities that are part of the process.
Flow unit - ANSWER The object that we are tracking in a process analysis
Process metric - ANSWER A measurement or scale of process performance and
capability
inventory - ANSWER The number of flow units in the process.
Flow rate - ANSWER The rate at which flow units travel through a process.
Flow time - ANSWER The time a flow unit spends in a process, from start to finish.
Little's law - ANSWER The law that describes the relationship between three key
process metrics: inventory, flow rate, and flow time.
Solutions 100% Verified
Chapter 1 - Chapter 1
Supply - ANSWER Products or services a business offers to its customers
Demand - ANSWER Simply, the set of products and services our customers want.
Utility - ANSWER A measure of the strength of customer preferences for a given product
or service. Customers buy the product or service that maximizes utility.
Consumption Utility - ANSWER A measure of how much you like a product or service,
ignoring the effects of price and of the inconvenience of obtaining the product or
service.
Performance - ANSWER A subcomponent of the consumption utility that captures how
much an average consumer desires a product or service.
Fit A subcomponent of the consumption utility that captures how well the product or
service matches with the unique characteristics of a given consumer.
Heterogeneous preferences The fact that not all consumers have the same utility
function.
Price The total cost of owning the product or receiving the service.
Inconvenience - ANSWER The loss of utility that arises from the time and effort of
,obtaining the product or service.
Transaction costs - ANSWER A synonym for inconvenience of obtaining a product or
service.
Location - ANSWER Where the consumer can obtain a good or service.
Timing - ANSWER The period of time that elapses between the consumer ordering a
product or service and the consumer obtaining the product or service.
Marketing - ANSWER The academic discipline that is about understanding and
influencing how customers derive utility from products or services.
Capabilities - ANSWER The dimensions of the customer's utility function a firm is able to
satisfy.
Trade-offs - ANSWER The need to sacrifice one capability in order to increase another
one.
Market segments - ANSWER A set of customers who have similar utility functions.
Pareto dominated - ANSWER A firm's product or service is inferior to one or multiple
competitors on all dimensions of the customer utility function.
Efficient frontier - ANSWER The set of firms that are not Pareto dominated
Inefficiency - ANSWER The gap between a firm and the efficient frontier.
Waste - ANSWER The consumption of inputs and resources that do not add value to the
customer.
, Variability - ANSWER Predictable or unpredictable changes in the demand or the supply
process.
Inflexibility - ANSWER The inability to adjust to either changes in the supply process or
changes in customer demand.
Chapter 2 - ANSWER Chapter 2
Process - ANSWER A set of activities that take a collection of inputs, perform some work
or activities with those inputs, and then yield a set of outputs.
Resource - ANSWER A collection of people and/or equipment that takes inputs and
produces outputs.
Process scope - ANSWER The processes and activities that are part of the process.
Flow unit - ANSWER The object that we are tracking in a process analysis
Process metric - ANSWER A measurement or scale of process performance and
capability
inventory - ANSWER The number of flow units in the process.
Flow rate - ANSWER The rate at which flow units travel through a process.
Flow time - ANSWER The time a flow unit spends in a process, from start to finish.
Little's law - ANSWER The law that describes the relationship between three key
process metrics: inventory, flow rate, and flow time.
